HOW WILL YOU MEASURE YOUR LIFE?

 Create a Strategy for Your Life

 Allocate Your Resources
 Create a Culture
 Avoid the “Marginal Costs” Mistake
 Remember the Importance of Humility
 Choose the Right Yardstick

Three important lessons:

1. Your relationships need your attention. Always. Even when you don’t think they do. Why
don't we always dedicate the time they need to them? There are two reasons for this:
a) Working more presents an immediate reward. It's really easy to see the benefit of an
extra hour at work - you'll do something that'll advance your career and make you
more money.
b) Those who you have your best relationships with never ask for your time. That's why
they're the best! They just support you, no matter what you do. So they don't ask for
much.
c) They need consistent dedication and lots of effort, even when it seems like they
don’t.

2. Ask yourself what your job in relationships is, to better understand others and intuitively
do the right thing.
a) Thinking of your relationships like you do about the thing you’re supposed to give up
a bit of – work – will actually make you better at them.
b) “What job does X need me to do the most?”
c) This flips the relationship on its head, approaching it from their perspective, instead
of yours, and forces you to dig deep. It helps understand the other party better and
then come up with good ways to fulfil their needs.

3. Don’t fall into the trap of marginal thinking.

a) If you’re going to make a decision, will the decision benefit you or will it cost you?
What’s the margin on that decision?
b) In business, marginal thinking manifests in the form of companies relying on what
they already have in place and what’s worked in the past, instead of investing in the
future. As Blockbuster (vs Netflix) learned the hard way, we end up paying for the
full cost of our decisions, not the marginal costs, whether we like it or not.
c) The marginal cost of doing something “just this once” always seems to be negligible,
but the full cost will typically be much higher.
d) Look, I know that as a general rule, most people shouldn’t do this. But in this
particular extenuating circumstance, just this once, it’s OK.” The marginal cost of
doing something wrong “just this once” always seems alluringly low.
HAPPINESS TRAPS – HOW WE SABOTAGE OURSELVES AT WORK
 Annie McKee wonders why so many leaders are unhappy at work and what can be done
about it.
 “Close to two-thirds of employees in the United States are bored, detached, or jaded and
ready to sabotage plans, projects, and other people.”
 Based on her extensive experience as a coach, all too often, it is not the external forces at
work here but rather, what we are doing to ourselves.
 McKee identifies three “happiness traps.”
o Ambition (the desire to win at all costs)
o Doing what is expected rather than what we want.
o Overworking – that seem to be desired traits until they are taken to the extreme.
 McKee emphasizes the importance of coaching in making this journey of self-discovery.
 Being engaged, fulfilled, and valued at work has a “host of benefits.”
THE AMBITION TRAP
The drive to achieve goals and further our careers push us to be and do our best. But when ambition
is coupled with hyper competitiveness and a single-minded focus on winning, we get into trouble.
We become blind to the impact of our actions on ourselves and others; relationships are damaged,
and collaboration suffers; we start chasing goals for the sake of hitting targets; and work begins to
lose its meaning.
THE “SHOULD” TRAP
Doing what we think we should do rather than what we want to do is a trap that all of us risk falling
into at some point in our work lives.
Too many of our workplace norms—what I call “shoulds”—force us to deny who we are and to make
choices that hinder our potential and stifle our dreams.

THE OVERWORK TRAP

Some of us react to the very real pressures of the “always on” 21st-century workplace by spending
every waking moment working or thinking about work. We don’t have time for friends, exercise,
healthful food, or sleep.
THE TALENT MYTH

In "The Talent Myth," Gladwell argues against the belief that organizations thrive primarily by
attracting and retaining top talent. He suggests that success is more about fostering a conducive
environment and teamwork rather than relying solely on individual stars. When applying this
perspective to Enron, several issues come to light.

1. Culture of Competition: Enron fostered an intensely competitive culture where individual

performance was heavily emphasized. This led to a cutthroat environment where employees were
incentivized to focus on personal success rather than collaboration or ethical behavior.

2. Short-Term Focus: Top performers at Enron were often rewarded based on short-term gains, such
as meeting financial targets or securing lucrative deals. This created a culture where employees were
encouraged to prioritize immediate results over long-term sustainability or ethical considerations.

3. Lack of Accountability: With an emphasis on individual talent, there was often a lack of
accountability for unethical or fraudulent behavior. Employees who achieved impressive financial
results were often given free rein, leading to unchecked misconduct and the eventual downfall of
the company.

4. Groupthink: Despite having many talented individuals, Enron's corporate culture discouraged
dissent and critical thinking. This lack of diversity in perspectives allowed risky and unethical
practices to go unchallenged, contributing to the company's eventual collapse.

5. Ethical Blind Spots: Enron's focus on financial success at all costs created ethical blind spots
among its top performers. Many employees were willing to turn a blind eye to questionable
practices or actively engage in fraudulent behavior to maintain their status and rewards within the
organization.

Recommendations:

 Organizations should prioritize building a strong organizational culture based on trust,

transparency, and collaboration.
 They should also focus on creating systems and structures that encourage teamwork and
discourage unethical behavior.
 Instead of solely relying on individual talent, organizations should invest in developing and
nurturing their entire workforce.

In conclusion, while individual talent is undoubtedly important, it should not be viewed as the sole
determinant of success. By fostering a culture of collaboration, transparency, and ethical behavior,
organizations can avoid the pitfalls associated with the talent myth and create a more sustainable
and successful business environment.
HOW TO HIRE WITHOUT GETTING FOOLED BY FIRST IMPRESSIONS
The case emphasizes the importance of looking beyond first impressions when hiring to ensure that
candidates are assessed accurately and fairly. Here are some key points:

1. Awareness of Bias: Hiring managers should be aware of the potential for bias in their decision-
making process. First impressions can be influenced by unconscious biases, such as stereotypes or
personal preferences, which may not accurately reflect a candidate's qualifications or potential.

2. Structured Interviews: Implementing structured interview processes can help mitigate the impact
of biases. Structured interviews involve asking all candidates the same set of questions in the same
order, allowing for fairer comparisons between candidates based on their responses to standardized
criteria.

3. Assessment Tools: Using assessment tools, such as cognitive ability tests or personality
assessments, can provide additional insights into candidates' suitability for a role. These tools can
help evaluate candidates based on objective criteria rather than subjective impressions.

4. Holistic Evaluation: Instead of relying solely on first impressions, hiring managers should take a
holistic approach to candidate evaluation. This involves considering a range of factors, including skills,
experience, cultural fit, and potential for growth, to make a more informed hiring decision.

5. Training for Interviewers: Providing training for interviewers on how to recognize and mitigate
bias can improve the quality and fairness of the hiring process. Interviewers should be equipped with
the skills and knowledge to conduct effective interviews and evaluate candidates objectively.

Key to identify the right candidate is to look for Real and Psuedo Cues (Grab your attention but are
irrelevant to the job).

Examples of Pseudo Cues: Halo effect due to physical appearance, “Smart Talk” - Skilled at “sounding
confident, articulate, and eloquent, having interesting information and ideas, and possessing a good
vocabulary,” their talk often serves as a substitute for action.

Use analytics to identify the right person. Use your past data to analyze who has succeeded and
failed in that role, which independent variables (GPA, major, extracurriculars, interview answers)
predict success or failure? Hire for the future. Our image of who fits often comes from the past, from
the types of people who’ve successfully filled the role (or similar roles) before but candidates would
also need to deal with future projects and uncertainties.

By implementing these strategies, organizations can improve their hiring processes and make more
informed decisions that are based on the true merits of candidates rather than superficial
impressions.

1. Focus on behaviours instead of traits.

2. Listen for learners.
3. Listen for conflict management skills.
4. Look for nonverbal cues.
ANN HOPKINS
The Ann Hopkins case revolves around gender discrimination and its legal implications in the
workplace.

Ann Hopkins was a highly qualified senior manager at the accounting firm Price Waterhouse (now
part of PricewaterhouseCoopers). Despite her exceptional performance and strong credentials,
Hopkins was denied partnership at the firm. The reason cited for her denial was her supposedly
"abrasive" and "macho" demeanor, which some partners felt didn't align with the firm's image.

Hopkins sued Price Waterhouse for gender discrimination, arguing that she was denied partnership
solely because she didn't conform to traditional gender stereotypes. The case raised important
questions about the role of gender bias in employment decisions and the legal standards for proving
discrimination.

During the trial, evidence emerged suggesting that gender bias played a significant role in the
partnership decision-making process at Price Waterhouse. Female partners were often evaluated
based on subjective criteria and faced greater scrutiny than their male counterparts. Additionally,
Hopkins presented evidence of her outstanding performance and qualifications, further undermining
the firm's justification for denying her partnership.

The case ultimately went to the Supreme Court, which ruled in favor of Hopkins. The court held that
Price Waterhouse's reliance on subjective criteria and gender stereotypes in evaluating Hopkins's
candidacy for partnership constituted unlawful discrimination under Title VII of the Civil Rights Act.

The Ann Hopkins case set an important precedent for gender discrimination law in the United States.
It underscored the need for objective and fair evaluation criteria in employment decisions and
highlighted the legal protections available to individuals who experience discrimination based on
gender or other protected characteristics. Additionally, the case served as a catalyst for greater
awareness and scrutiny of gender bias in the workplace.
WHAT MOST PEOPLE GET WRONG ABOUT MEN AND WOMEN
Explores common misconceptions about gender differences in the workplace.

1. Overgeneralization: Many people fall into the trap of overgeneralizing gender differences, if all
men or all women possess certain traits or behaviors. Individuals vary widely regardless of gender,
and stereotyping can lead to biased decision-making in hiring, promotion, and team dynamics.

2. Attribution Bias: There's a tendency to attribute success or failure differently based on gender. For
example, men may be more likely to receive credit for their achievements, while women's successes
are sometimes attributed to luck or external factors. Similarly, women may face harsher criticism or
blame for mistakes compared to men in similar situations.

3. Expectations and Stereotypes: Societal expectations and stereotypes about gender roles can
influence how men and women are perceived and treated in the workplace. These stereotypes can
limit career opportunities for women, leading to fewer leadership positions and lower pay compared
to their male counterparts.

4. Leadership Styles: While there may be some differences in leadership styles between men and
women on average, these differences are often overstated. Both men and women can exhibit a wide
range of leadership behaviors, and effective leadership is more about individual strengths and skills
rather than gender.

5. Diversity and Inclusion: Embracing diversity and fostering an inclusive workplace culture is
essential for challenging gender stereotypes and biases. Organizations should strive to create
environments where all employees feel valued and respected regardless of gender, and where
everyone has equal opportunities for advancement and success.

Overall, the article highlights the importance of challenging assumptions about gender and
recognizing the individuality and diversity of experiences within the workplace. By addressing gender
bias and promoting equality, organizations can create more inclusive and productive environments
for all employees.
ICICI BANK INCENTIVE SYSTEMS
Sandeep Bakhshi, CEO of ICICI Bank, spearheaded a "people-first" strategy prioritizing employee
well-being and satisfaction. This initiative involved bolstering employee welfare programs, improving
work-life balance, and fostering avenues for career growth and development.

Addressing the bank's high attrition rate of 20%, Bakhshi made strategic changes to regain employee
trust. He discontinued the bell curve assessment method, opting instead for a more transparent
approach to performance evaluation. Revamping salary and incentive policies, he emphasized that
performance evaluations wouldn't impact compensation. While this move reduced performance-
related pressure, it also affected motivation and incentive alignment with targets. Additionally,
promotions were based on tenure rather than performance.

To foster a positive work culture, Bakhshi made himself accessible to all employees. He introduced
team awards and implemented a no-firing policy, while actively recruiting new talent to maintain
adequate staffing levels. However, challenges persisted, particularly among younger employees
seeking more challenging roles and stronger incentives. The resulting attrition posed challenges for
ongoing projects, requiring young, tech-savvy talent for successful completion. Bandwidth issues and
delays ensued due to frequent departures.

In conclusion, Bakhshi's approach highlights the importance of aligning organizational culture with
employee needs. While his "people-first" strategy aimed to enhance satisfaction and retention,
challenges persisted, demonstrating the need for a nuanced approach tailored to individual
preferences and organizational goals.
RAISING THE BAR ON GOALS

"Raising the Bar on Goals" by Larrick, Wu, & Heath focuses on the setting of goals in organizations
and how to ensure that goals are challenging yet attainable.

Setting goals is a crucial aspect of organizational management, as it provides direction, motivation,

and a basis for performance evaluation. However, there's often a tension between setting goals that
are too easy, which may lead to complacency, and goals that are too difficult, which may result in
frustration and demotivation.

The article proposes a framework for setting goals that involves considering both the difficulty and
specificity of the goals. While specificity is important for clarifying expectations and providing
guidance, difficulty ensures that employees are sufficiently challenged to strive for improvement.

The authors suggest that many organizations tend to set goals that are too easy or vague, which can
result in suboptimal performance. Instead, they advocate for setting "stretch goals" that are both
specific and challenging, pushing employees to reach beyond their current capabilities.

Additionally, the article emphasizes the importance of providing support and resources to help
employees achieve these stretch goals. Organizations should offer training, feedback, and
incentives to encourage employees to stretch themselves and strive for excellence.

Overall, the article argues that by raising the bar on goals and setting challenging yet achievable
targets, organizations can foster a culture of continuous improvement and drive higher levels of
performance.
PAY FOR PERFORMANCE: WHEN DOES IT FAIL?
"Pay for Performance: When Does it Fail?" by Kumar & Pillutla examines the effectiveness of pay-for-
performance systems in organizations and identifies conditions under which such systems may not
produce the desired outcomes.

The authors acknowledge that pay-for-performance systems are widely used to motivate
employees and drive organizational performance. However, they argue that these systems can fail
under certain circumstances, leading to unintended consequences such as reduced motivation,
unethical behavior, and organizational dysfunction.

One key factor contributing to the failure of pay-for-performance systems is the presence of task
complexity. When tasks are complex and require creativity, innovation, or teamwork, the use of
monetary incentives may backfire. Employees may focus solely on tasks with clear performance
metrics, neglecting important but less measurable aspects of their roles.

Another condition under which pay-for-performance systems may fail is when employees perceive
the system as unfair or arbitrary. If there is a lack of transparency in how performance is evaluated
or if employees feel that their efforts are not adequately rewarded, motivation and morale may
suffer.

The authors also highlight the potential for pay-for-performance systems to create a competitive
rather than collaborative work environment. When individual rewards are tied solely to individual
performance, employees may prioritize their own success over the success of the team or
organization.

Additionally, the article discusses the role of intrinsic motivation in driving employee performance.
Monetary incentives may crowd out intrinsic motivation, particularly for tasks that employees find
inherently rewarding. In such cases, pay-for-performance systems may undermine employee
engagement and satisfaction.

Overall, the authors argue that while pay-for-performance systems can be effective in certain
contexts, they are not a one-size-fits-all solution. Organizations should carefully consider the
complexity of tasks, the perceived fairness of the system, and the importance of intrinsic motivation
when designing and implementing pay-for-performance policies. Additionally, complementary non-
monetary incentives and rewards may be necessary to support and reinforce desired behaviors in the
workplace.
OUTSMART YOUR OWN BIASES
Outsmart Your Own Biases delves into the concept of cognitive biases and provides strategies for
individuals and organizations to mitigate their impact.

The case begins by highlighting that everyone, regardless of intelligence or expertise, is susceptible to
cognitive biases. These biases are systematic errors in thinking that can affect decision-making and
judgment. While biases are a natural part of human cognition, they can lead to suboptimal outcomes
in both personal and professional contexts.

To outsmart biases, the case suggests several strategies:

1. Awareness: The first step in overcoming biases is to become aware of them. Individuals should
familiarize themselves with common biases, such as confirmation bias, availability bias, and
anchoring bias, and recognize when they may be influencing their decisions.

2. Pause and Reflect: When faced with important decisions, it's essential to pause and reflect rather
than relying on instinct or intuition. Taking a step back allows individuals to consider alternative
perspectives, question assumptions, and identify potential biases that may be at play.

3. Seek Diverse Perspectives: Engaging with diverse perspectives can help counteract biases by
challenging assumptions and providing alternative viewpoints. Collaborating with colleagues from
different backgrounds and disciplines can lead to more robust decision-making processes.

4. Utilize Decision Tools: Decision-making tools and frameworks can help structure thinking and
reduce the influence of biases. For example, using decision trees, scenario analysis, or checklists can
provide a systematic approach to evaluating options and considering relevant factors.

5. Feedback and Accountability: Creating a culture of feedback and accountability within

organizations can help identify and address biases. Encouraging open dialogue and constructive
criticism allows individuals to challenge each other's thinking and hold each other accountable for
biased decision-making.

By implementing these strategies, individuals and organizations can improve their ability to recognize
and mitigate biases, ultimately leading to more informed and effective decision-making processes.
JUDGMENT UNDER UNCERTAINTY: HEURISTICS AND BIASES
Explores how individuals make decisions and judgments in uncertain situations.

1. Heuristics: When faced with uncertainty or incomplete information, people often rely on mental
shortcuts or "heuristics" to make judgments and decisions more quickly and efficiently. These
heuristics can lead to accurate judgments in many situations but can also result in systematic errors
or biases.

2. Representativeness Heuristic: Involves judging the likelihood of an event based on how similar it is
to a typical or prototypical example. While this heuristic can be useful, it can also lead to errors when
individuals ignore base rates or fail to consider other relevant information.

3. Availability Heuristic: Involves estimating the likelihood of an event based on how easily it comes
to mind. Events that are more vivid, memorable, or salient are often judged as more likely, even if
they are statistically improbable.

4. Anchoring and Adjustment: Involves making estimates or judgments by starting from an initial
"anchor" and then adjusting away from it. People tend to insufficiently adjust from the initial anchor,
leading to biased judgments.

5. Biases and Errors: The paper identifies several cognitive biases that result from the use of
heuristics, including the conjunction fallacy, the availability bias, and the planning fallacy. These
biases can lead to systematic errors in judgment and decision-making, even when individuals are
aware of them.

6. Implications: The insights from Tversky and Kahneman's research have important implications for
various fields, including economics, psychology, and public policy. By understanding the heuristics
and biases that influence human judgment, researchers and practitioners can develop strategies to
improve decision-making processes and mitigate the effects of cognitive biases.
MAKING DUMB GROUPS SMARTER
"Making Dumb Groups Smarter" by Cass Sunstein and Reid Hastie explores the concept of collective
intelligence within groups.

The article challenges the traditional notion that group intelligence is solely determined by the
average intelligence of individual members. Instead, it argues that factors such as communication
patterns, social sensitivity, and the distribution of conversational turn-taking play a crucial role in
determining a group's performance.

Research cited in the article suggests that groups with higher levels of social sensitivity and
effective communication tend to perform better across various tasks, including brainstorming,
decision-making, and problem-solving. Additionally, groups where members engage in equal
participation and share speaking turns more evenly tend to be more collectively intelligent.

Based on these findings, the article proposes several strategies for enhancing group intelligence:

1. Foster Social Sensitivity: Encourage group members to be empathetic and understanding towards
each other, which can improve communication and collaboration.

2. Promote Equal Participation: Ensure that all group members have opportunities to contribute to
discussions and decision-making processes. Techniques such as round-robin brainstorming or
rotating leadership roles can help achieve this.

3. Emphasize Effective Communication: Encourage open and respectful communication within the
group, where ideas are freely shared and discussed. Effective communication fosters creativity and
innovation.

4. Monitor Turn-Taking: Pay attention to the distribution of conversational turns within the group
and ensure that no individual dominates the discussion. Balanced participation leads to better group
outcomes.

Overall, the article highlights the importance of understanding and leveraging social dynamics within
groups to enhance collective intelligence and improve performance.
GROUPTHINK
Irving Janis's 1971 work "Groupthink: Psychological Studies of Policy Decisions and Fiascoes" delves
into the phenomenon of groupthink, wherein the desire for consensus within a group overrides
critical thinking and independent analysis. Here's a summary:

1. Definition: Janis defines groupthink as a mode of thinking that occurs when members of a group
prioritize consensus and harmony over critical evaluation of alternatives. Groupthink often leads to
flawed decision-making processes and can result in poor outcomes or "fiascoes."

2. Characteristics: Janis identifies several characteristics of groupthink, including an illusion of

invulnerability, collective rationalization, belief in inherent morality, stereotyping of outsiders, self-
censorship, pressure for conformity, and the illusion of unanimity.

3. Causes: Groupthink tends to occur in cohesive groups where there is strong group identity, high
levels of insulation from outside perspectives, directive leadership, and high stress or time pressure.
These conditions can inhibit dissenting opinions and encourage conformity to the dominant group
view.

4. Consequences: Groupthink can lead to a variety of negative consequences, including poor

decision-making, failure to consider alternative perspectives, suppression of dissent, and escalation
of commitment to flawed courses of action. These consequences can have serious implications for
organizations, governments, and societies.

5. Prevention and Mitigation: Janis suggests several strategies for preventing or mitigating
groupthink, including promoting open communication and debate within the group, encouraging the
expression of dissenting opinions, seeking out diverse perspectives, appointing a "devil's advocate"
to challenge the group's assumptions, and fostering a culture of critical thinking and independent
judgment.

Overall, Janis's work on groupthink has had a significant impact on our understanding of group
dynamics and decision-making processes. By recognizing the signs of groupthink and implementing
strategies to counteract it, organizations can improve their decision-making effectiveness and avoid
the pitfalls associated with flawed group decision-making.
Cognitive biases are systematic patterns of deviation from rationality or sound judgment, which can
affect decision-making processes. Here are some common types of biases:

1. Confirmation Bias: This bias involves seeking out or interpreting information in a way that
confirms preexisting beliefs or hypotheses while disregarding contradictory evidence.

2. Availability Bias: This bias occurs when people overestimate the importance of information that is
readily available to them, often due to recent exposure or vividness of the information.

3. Anchoring Bias: Anchoring bias refers to the tendency to rely too heavily on the first piece of
information encountered (the "anchor") when making decisions, even if the anchor is irrelevant or
arbitrary.

4. Overconfidence Bias: This bias involves overestimating one's own abilities, knowledge, or
judgment, leading to excessive confidence in decision-making and a tendency to underestimate risks
or uncertainties.

5. Loss Aversion Bias: Loss aversion bias refers to the tendency to prefer avoiding losses over
acquiring equivalent gains. People may be more motivated to avoid losses than to achieve gains of
the same magnitude, leading to risk aversion and conservative decision-making.

6. Hindsight Bias: Hindsight bias, also known as the "I-knew-it-all-along" effect, involves the tendency
to perceive past events as having been more predictable than they actually were. This bias can lead
to overestimating one's ability to predict outcomes and underestimating the role of chance or
uncertainty.

7. Sunk Cost Fallacy: This bias occurs when people continue to invest resources (time, money, effort)
into a project or decision, even when it's clear that the investment is unlikely to yield positive
returns, because they have already invested so much.

8. Groupthink: Groupthink is a bias that occurs when members of a group prioritize consensus and
harmony over critical thinking and independent judgment. This can lead to a lack of creativity, poor
decision-making, and failure to consider alternative viewpoints.

9. Confirmation Bias: This bias involves seeking out or interpreting information in a way that
confirms preexisting beliefs or hypotheses while disregarding contradictory evidence.

10. Negativity Bias: Negativity bias refers to the tendency to focus more on negative information or
experiences than positive ones. This bias can lead to heightened sensitivity to threats or risks and a
tendency to overlook positive aspects of situations.

These are just a few examples of the many cognitive biases that can influence decision-making. Being
aware of these biases and actively working to mitigate their effects can help individuals make more
rational and objective decisions.