Rather than seeking out contrary or little-understood points of view, many of us need so badly to be told we’re right that we’ll pay people to do it.

I’d rather have a lot of talent and a little experience than a lot of experience and a little talent.

Failure is not fatal, but failure to change might be.

Do not let what you cannot do interfere with what you can do.

One way to stimulate a creative mindset is to avoid the typical focus of organizations on what is and to ask, instead, what if questions. Doing this regularly tests your ability to see things anew.

There are three different ways frms are agile. They can be agile within their operations. That’s kind of the Toyota story or the Southwest Air story; a clearly defned industry. You’re constantly spotting and seizing opportunities quicker than your rivals.

The second way is through portfolio agility. You can pull resources from slower declining businesses and put them against faster growing or more promising opportunities.

A third category is what I call strategic agility, and that’s seizing the opportunities that arise—golden opportunities that arise every so often. That might be entering the market when the [Berlin] Wall falls or [seizing] the opportunity to buy assets on the cheap, as is possible in many industries right now in the current downturn. It’s the ability to seize those rare opportunities when they arise.

a key distinction for managers to focus on is the one between coordination and cooperation.

Coordination—the ability to work together—involves the alignment of "hard" phenomena: activities, processes, and information. Most companies begin with this and simply assume that mandating shared tasks and information exchange will suffice. It does to a degree but can be severely limiting in how much firms can achieve. At best, they are able to respond in a somewhat coordinated fashion when customers come to them. What they don't get is proactive development of new ideas that can be taken to the market before the market comes to them. To achieve this loftier goal, you need the second half of collaboration, which is cooperation.

Cooperation—the willingness to work together—involves the alignment of "soft" phenomena: goals, attitudes, and behaviors, people-related issues. Most companies focus on coordination among silos and pay insufficient attention to encouraging employees to cooperate. And when they do consider cooperation, they rely too heavily on incentives alone as the panacea. Those who get it right recognize that changing behavior requires a multipronged effort that ultimately shifts the culture of the organization.

The obligations people create for themselves are stronger and more psychologically binding than the directions they are given by someone else.

We human beings are not prepared at all for the explosion of new practices the Internet will produce. Education is going to be in networks and it will not be about knowledge. It will be about being successful in relationships, about how to make offers, how to build trust, how to cultivate prudence and emotional resilience.

Our rational brain has a problem focus when it needs a solution focus. If you are a manager, ask yourself, What is the ratio of the time you spend solving problems versus scaling successes? We need to switch from archaeological problem solving to bright-spot evangelizing.

Success is constantly a journey. You're always trying to better understand the sources of your success and the things that could imperil you. If you actually think that you have all those answers, you stop asking the questions. Well, what happens if, in fact, you were wrong about part of it? And then things start to go awry because you've lost that inquisitiveness, the will to try to truly understand. You may, in fact, put the accelerator on the wrong variables because you were wrong about why you were successful in the first place. And so I think the sense of a relentless curiosity and a relentless quest to understand ... reflects the way that certain leaders navigated a world that was very foggy.

That's the thing that's so hard, to understand things at the moment. Well, if you have really great people around you to begin with and you ask them the right questions, you're probably more likely to at least have reasonably good answers than if you just assert the statement. ...And it's sort of an empirical observation about the Socratic nature of many of the best people that we've studied. They're great with questions. The funny thing is, when they didn't know the answer, they usually knew the right question to ask.

What has made the biggest impression on me in terms of an approach to any kind of organized performance, an approach to life that you just see it across, no matter what lens you put on, you see it? It’s this idea of the primacy of “Who” over “What.” We see it in the research that we're doing on tumultuous environments. Because if you can't predict what the world is going to do, you can't possibly predict the “What.” Then, your ultimate hedge against the “What” is to have the right people who can deal with whatever the world is going to throw at you. That is the great hedge against uncertainty. And when you think about it, the great leaders were ones who really did focus first on getting people in place and then figure out what to do.

You have a great enterprise that has a very strong set of values that's married to a very insightful strategy. That is then translated into a set of disciplined decisions, mechanisms, cultural practices and a variety of other things that really bring the strategy to life so that you can make good on it. And when you look at that chain, the great danger comes when you become dogmatic about what’s at the lower level of that chain, when you become dogmatic about the practices, when you become dogmatic about the specific strategies, about the fact that we're successful because we do these things. The folks who originally came up with those things never really had any particular allegiance to those specific things. They had an allegiance to the understanding that led to doing those specific things.

…when product performance outstrips the ability of customers to use that performance in an industry, the competitive game changes. Under those circumstances you have to decouple components businesses from assembly businesses. But I’d rather decouple than divest because the money shifts to the place where nonstandard integration next needs to occur.

The important thing is that over time, scientific progress transforms things that used to have to be dealt with in a problem-solving mode down to the pattern-recognition space; and from pattern recognition into the rules-based mode. This is the mechanism by which less-trained people are enabled to do more sophisticated things. This is always the way disruption happens. It enables a larger population of less-experienced people to do more sophisticated things.

When there are unpredictable interdependencies, the integrated player is going to win… If I know what to spec, and I can measure it, and there are no unpredictable interdependencies between what you do and what I must do in response, then an economist would say that is sufficient information for a market to emerge between you and me.

Capitalism has taught us that markets are always more efficient than hierarchical managerial coordination. But… in the absence of sufficient information… management has to provide the coordinating mechanism between what the supplier provides and what the user needs... Management always beats markets when there is not sufficient information.

The outsourcing gurus have been…saying everybody ought always to do this. But it is really contingent on where you are on the spectrum from “not good enough” to “more than good enough,” relative to each tier of the market. It is when the product is not good enough that proprietary integration gives you a competitive edge. You cannot outsource and be competitively successful in this situation. But at the other end, where standard components assembled in standard ways can yield acceptable performance, you must outsource.

The capabilities of business units reside in their processes and their values, and by their very nature, processes and values are inflexible and meant not to change.

When management waits until the data is clear, the game is over. But that means management has to take action on a theory rather than evidence. Unfortunately, the word theory gets a bum rap at the Harvard Business School and in business in general because it’s associated with the term theoretical, which connotes impractical. But actually theory is very practical. It says this will happen and this is why; it’s a statement of cause and effect. In our teaching we have so exalted the virtues of data-driven decision making that in many ways we condemn managers only to be able to take action after the data is clear and the game is over. In many ways a good theory is more accurate than data. It allows you to see into the future more clearly.

If we consider what the work of attention is like, how continuously it goes on, and how imperceptibly it builds up structures of value round about us, we shall not be surprised that at crucial moments of choice most of the business of choosing is already past.

We as leaders don't do a good enough job of explaining to people that the quality of the community cannot be seen in terms of the best-off part of the community; it's measured in terms of how the most vulnerable people are doing.

As you gain more and more responsibility in organized life, you become more and more of an amateur, because you're less and less specialized. Because of the complexity of work, you have to count more on others. But that also means you're more exposed to risk. When you get to be the CEO, nobody gives you a perfect setting in which to make a decision. They only give you gray areas. All the black and white decisions are made elsewhere. So as the black and white choices merge into gray choices, the level of risk rises. You're also more at risk because you don't have as much time as you used to. But that's part of the job -- and the risk -- of leadership.

Any organization, in order to survive and achieve success, must have a sound set of beliefs on which it premises all its policies and actions…. Beliefs must always come before policies, practices, and goals. The latter must always be altered if they are seen to violate fundamental beliefs.

Profit is not the proper end and aim of management. It is what makes all the proper ends and aims possible.