Top Lessons from “How Will You Measure Your Life?”

What's up, everyone. This is Alex Lieberman, co-founder and Executive Chairman of Morning Brew. Welcome back to Founder’s Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. Today, I’m sharing two of my favorite lessons from my current founders book club book, which is How Will You Measure Your Life? by Clayton Christensen, James Allworth and Karen Dillon. Let's hop into it.

Two lessons from How Will You Measure Your Life?

So for those of you that recently hopped on the Founder's Journal train, you may have not heard the episode where I talked about my book club, probably three months ago, I started a founder's book club. I just wanted to kind of create a community of other founders who were into reading. And it also just gave me a fun little project to organize. First book we read was The Sovereign Individual. I would say that is a fan favorite of the crypto community. Second book we read was the Will Smith memoir, called Will. And the third book we're reading is How Will You Measure Your Life? And I'm really excited about this book for a few reasons. One is because Clayton Christensen, one of the authors, a renowned American economist, unfortunately he passed away a few years ago, but he is known for so many of his different theories, including jobs-to-be-done, which I actually think I did a past Founder’s Journal on, as well as Innovator's Dilemma. And the really cool thing about this is the other two authors I was able to connect with them on Twitter. And so I think we're going to actually have them join our book club discussion. And so without further ado, I want to share two of my favorite lessons from reading the book so far. 

#1: This is what strategy actually is

The first is this idea of strategy. When you're the word strategy, what do you think of? Maybe you think of Ben Thompson, who writes Stratechery. Maybe you think of a company's “game plan” that they set years in advance. I want to tell you how Clayton Christensen and the other authors of this book think about strategy. Very simply, strategy is what you want to achieve and how you will get there. That is the highest level definition. And that is a definition, not just in business, in career and in life. Within business strategy includes three things: What your priorities are, how a company responds to opportunities and threats as they present themselves, and finally how a company allocates its resources. And so if you think about what is strategy at Morning Brew using the example of us as a media business, it would be our priorities are launching franchises or new brands to expand ourselves as a media business. And our goal is to launch, let's call it a dozen new franchises over the next year. How we respond to opportunities and threats would be let’s say a show is doing really well. How do we triple down on it? Or if a show is not doing well, when do we decide to pull the plug and say, no, it's not worth the investment of time or money? And then how a company allocates its resources right now, the way we think about it is we're putting a ton of capital into investing in great content to allow our business to continue to accelerate at a speed that isn't typical of most media businesses. Now, as I said before, strategy doesn't just have to relate to business. And that's the cool thing about this book is every theory or lens or framework that Christensen and Co. teach is not just from the perspective of how do you use this in your company? It also talks about it through the lens of relationships or your career. So strategy in our careers looks the exact same way. It's just in a different context. We have intentions of what we want to happen in our careers. We have unanticipated things that happen in our jobs that force us to evolve our strategy. And we have to decide how we want to allocate our resources, which as a person or a professional in our career, is time, energy, and talent. The interesting thing about strategy is most people will think about a company strategy or try to figure out a company strategy by looking at their job boards to see what roles they're hiring for, or looking at a recent press release with a big announcement, or looking at interviews of the CEO or someone in the C-suite. But that is not strategy. All of those things that I just mentioned are what I would consider to just be lip service about the mission of the company, but until you put your money where your mouth is, or just your resources, as we just talked about, it's not your strategy. And so if you're just ever curious about figuring out a company strategy, here's my one trick for doing it. Go to LinkedIn, filter a company by its employees that started within the last six months, look at the roles and responsibilities of those people and you will be able to know what a company's strategy is based on how they're allocating money to the types of employees that they're hiring. 

So Christensen and the other authors go on to talk about what people get wrong about strategy. And the big thing that people get wrong is that people think of strategy as this finite document rather than a living breathing organism, but it is a living breathing organism. Because if you think about it, most of the time for most companies, the initial strategy that you set is actually very wrong. And when it comes down to it, strategy is this careful balance of having pre-set goals for call it the next year to three years, but combining that with opportunistic action based on new information that the market or your customer is giving you. 

And so now I have a story for you to illustrate what strategy actually is in the sense that it is this constantly evolving machine. So this is a story about Honda. In the 1960s, Honda's management in Japan decided that they wanted to get involved in the US motorcycle market. And at the time, the US motorcycle market was dominated by a few major players, including Harley-Davidson. And Honda strategy for the US market was simple. They wanted to make similar big premium motorcycles to competitors like Harley, but they just wanted to charge a lot less because Japanese labor was very inexpensive. So they didn't have to charge as much for the bikes. Turns out that this strategy almost killed the company. Honda sold very few bikes. And from the market's perspective, customers just looked at these Honda's as just a poor man's Harley-Davidson. Plus because the way that motorcyclists in the US ride their bikes is so different from Japan, there were things that Honda didn't account for. One thing was their bikes in the US leaked oil any time owners of the bikes would drive at high speeds for long distances, which is very common for a US rider, but not a Japanese rider. While this was all going on, Honda ended up shipping a few of their smaller style motorcycles to LA. And it wasn't for any other reason, other than they just wanted to send some of them here, but they didn't expect it to be a business or anything. And these smaller bikes were called the Super Cub. And in Japan, the Super Cub was really popular because they had really crowded, small streets and it was used for people to make deliveries to shops on narrow roads. Well, what ended up happening was Honda's resources in LA got tighter and tighter as the US business was doing poorly. And so the company started letting its employees ride around these Super Cubs to do errands within the city. One Saturday, a Honda employee took their Super Cub outside of LA into the Hills that are west of the city to just ride through the hills and the dirt. And they absolutely loved it. This employee proceeded to invite their friends to ride the next weekend on these same Hills. And he started calling these Super Cubs, dirt bikes. All of a sudden these bikes were getting noticed. And a buyer from Sears, you know Sears, asked whether they could include it in the catalog for their company. Originally Honda management was like, no, we don't want to do this because this is a huge deviation from the strategy we had, which was competing with Harley-Davidson, but they honestly didn't have a choice because this was all they could possibly do to keep their US business alive. And so Super Cubs, AKA dirt bikes, ended up being a massive hit with the customer not being the classic motorcyclist, but instead being off-road bikers. And what Honda did in this example was they shifted from a deliberate strategy, one that was set and finite on day one that they were hoping to achieve over the next many years, basically taking a big portion of the big motorcycle market from Harley-Davidson and a few others. They shifted from that perspective to what is known as an emergent strategy, where an unanticipated opportunity showed itself in the market and that is what strategy looks way more like. It looks way more like getting information, finding an opportunity, and building out a new strategy rather than an executive team sitting in an ivory tower, writing a strategy doc, and then dictating what the company is going to do for the next 10 years. And so this was just such an interesting way that Christensen and other authors laid out their thinking about strategy. 

#2: The difference between incentives and motivation

Now, I want to share one more lesson about the author's thoughts from How Will You Measure Your Life? And the topic of this one is incentives versus motivations. Very simply Christensen says that incentives are not motivation even though people use the terms synonymously. Here's how to think about it. You can pay people to behave in a certain way. That's an incentive. You can give sellers bonuses when they hit quotas. You can give an engineer a salary bump for paying specific attention to a really important client. But then there's anomalies that are really hard to explain. How do you explain really hardworking people who work at nonprofits and charities where the incentives are absolutely not incentivizing them to work hard? They work in really difficult conditions. They earn a fraction of what their private sector counterparts do. Yet, it is rare to hear from nonprofit managers about their staff not being motivated and complaining about not enjoying their work. It's the same exact idea with the military. A lot of military officials get deep satisfaction and the military is considered to be a highly effective organization if you want to think about it in that way, but the pay, obviously isn't anything special. And so by thinking of basically these exceptions to the rule, it makes you realize you need to actually come up with a new rule for thinking about what motivates people. And so the shift here is from something that was originally called incentive theory to something that is now known as motivation theory. And it goes like this: Incentives get people to do things. Motivation gets people to do things because they want to do those things. And further, there are two types of elements in our work that we all need to think about as they connect to motivation and incentives. The first factor is called hygiene factors. Basically, these are parts of your work in your job that if not done right, you end up being dissatisfied: job title, compensation, job security, work conditions, who your manager is. If those things are not taken care of, you will be dissatisfied in your job. Hygiene factors are all of those things that I just mentioned that you need to take care of as an employer so that your employees are not dissatisfied. But here's the key: Improving hygiene factors does not make someone love their job. At very best, it just makes someone not hate their job. Basically, the insight here that Christensen shares is that the opposite of job dissatisfaction isn't loving your job. All it is is the absence of job dissatisfaction. But if you want to actually love your job, you can't focus on hygiene factors. You need to focus on motivating factors. And motivation factors include: challenging work, recognition, responsibility, and personal growth. And the sad part about all of this is you end up finding so many people in their careers, I'm sure you can think of dozens just in your network, who optimize their entire careers for a hygiene factors like pay and title, but they never pay attention to motivation factors, which is why they never end up in a role that they love, they just end up in roles that they don't hate. And I've even had my own experience with not being dissatisfied, but not loving my role. When I moved from the CEO role to the executive chairman role at Morning Brew, and I basically went from spending 70 hours a week to 30 hours a week on the business, you know, while I was being paid well, and I had a fancy title, all that did was that kept me from not hating my role or from not being dissatisfied in my role, but I was not loving my role. And I was not loving my role because I didn't feel like at that time I had the substance of work to really feel like I was pushing myself and growing. 

I want to hear from you

With that, I hope you enjoyed these two lessons from How Will You Measure Your Life? One, all about strategy and business, career, and life and the other about incentives and motivation. Now I have one ask of you. If you enjoyed this episode, I would love for you to share it on social media and tag me. If you share it on Instagram, tag me @alexlieb. If you share it on Twitter, it's @businessbarista. If you do that, I will respond back and amplify your posts and hopefully we can blow up the show together. Finally, I need to thank the team behind the show that makes this thing possible. Our show is produced and engineered by Dan Bauza. Our associate producer is Bella Hutchins. Brian Henry is our executive producer. Alan Haburchak is Morning Brew’s director of audio. Holly Van Leuven is our fact checker. Noah Friedman is our video producer and editor. And I'm your host, Alex Lieberman. Thanks so much again for listening and I'll catch you next episode.