Lessons Learned from Goal Setting .. Stories from Success

Posted on March 29, 2013 by Radha Mukkai

In my previous blog post, I looked at my failures around goal setting and discussed behavioral patterns I felt were the root causes for my failures. In this post, I will write about behavioral patterns that led to my success based on analysis of my accomplishments.

  • List Making

I work for an IT Consulting firm and my work is about delivering successful project for our Clients. When I look back at projects where I have been very successful, I realized that list making and taking effective action was one of the constant attributes for my success.

One of the projects I am particularly fond of was a large Business Intelligence effort that lasted about a year. I created goals and a list of tasks every week and constantly refined and adjusted the list every week to reflect the priorities at that time. I had a clear vision of what needed to be accomplished and adjusted my plans weekly to ensure we were still on target. List-making has been a very useful tool in my productivity arsenal and it has helped give me a tremendous focus. I use lists very deliberately if I ever find myself being overwhelmed by a problem or situation. I step back, analyze the problem and figure out exactly what needs to be achieved. Then, I break down the goal or task into smaller tasks. The act of writing down on pen and paper each individual task and crossing them off is very satisfying.

  • Support System

I have found that a strong support system has been the bedrock for nearly all my successes. For projects I have successfully delivered at work, I have always had Project Managers and other leads that I could rely on for advice and support. I have observed that having people around you as a sounding board makes a tremendous difference.

I have observed that it is important to surround yourself with people who can ask great questions instead of providing the answers. This helps you look at issues in a different light and take appropriate action.

  • Grit

It is very rare to have a project that does not have any obstacles or minor roadblocks. The ability to successfully navigate and surmount these obstacles is key to success. In the BI effort I mentioned earlier, my team faced several hurdles. At each point, I tried not to get frustrated and re-adjusted my plans accordingly. I made a conscious effort to stay in what I call my “power zone” instead of the victim zone. The power zone is a term I have used to define a mental attitude and outlook in which I am creative, resourceful and focused on figuring out a way to make things happen. The victim zone is a mental attitude and outlook in which I blame outside circumstances and feel powerless to take effective action. Naming these mental attitudes has helped me become more self-aware and allowed me to evaluate the mode I am operating in. If I believe I am falling into the victim zone, I do my best to shift my mental perspective.

  • Ritual

Penelope Trunk mentions that we are more likely to meet our work goals than personal goals. I definitely agree with that. One of the reasons this is true is probably because of the money involved. I believe another reason is that there is a rhythm to work. You consistently put in 8 hours or more everyday. You may not make significant progress every single day. However, the progress you make every day adds up. This ritual is critical to success.

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Lessons Learned from Goal Setting .. Stories from Failure

Posted on March 29, 2013 by Radha Mukkai

I have been setting goals for myself since 2007 and have had many failures and few successes. This year, I decided to re-visit my previous efforts and see if I noticed any patterns that were holding me back. I was mentally aware of some of these patterns. The exercise of re-visiting previous goals and analyzing my efforts proved to be quite valuable.

Here are some of the general patterns I noticed. I hope reviewing this list could help you in your own goal setting efforts.

  • Too many goals

I was looking at a personal dairy entry from 2007 and noticed that I had listed about 7 goals. There were goals such as learning C#, learning ruby, leading a training class and so on. The problem with setting too many goals was that the list overwhelmed me and I could not prioritize the list and decide what I was going to pick and focus on. When I saw too many goals, I tried to step back and figure out what is it I truly wanted. This was a tough question for me and caused confusion and prevented my efforts at prioritization. Essentially, I felt stuck. A good mentor could easily have told me – Just pick one! 😉

I approached goal-setting as an exercise in creating a list of everything I would get done. I failed to realize that goal setting is truly about picking something, sticking to it, and getting it done. The act of completing a task energizes much more than creating a huge list. It is a waste of time to list out all your goals if that doesn’t lead to action.

  • Failing to re-organize my life around a goal

I vastly under-estimated the need to re-organize my life to achieve a big goal. One goal that I constantly struggle with is the need to exercise more. I have begin to realize the “systemic effects” that one big goal can have on your life. Let’s say you want to exercise regularly. You need to figure out a schedule that works for you. If you decide you want to exercise in the morning, you need to wake up earlier so that you can still reach the office on time. If you need to wake up earlier, you need to sleep earlier. All the activities that you do on a day-to-day basis has to be re-adjusted to meet this goal. This is a huge challenge and undertaking. You literally have to re-plan your entire day around this one goal.I believe this is the reason coaches ask you to pick one goal and stick to it. The self-discipline that you get from achieving the goal will help you with other goals that you set.

  • Lack of Support system

I truly believe the lack of a coach or mentor hindered my ability to achieve some of the goals I set. I bet any coach or mentor could have seen my goal list and immediately pointed out the flaws in my approach. I could have gained a lot by having a coach who could have asked great (and tough!) questions. Nearly all goal-setting systems specifically emphasize having a good support system.

  • Vague goals

Some of the goals I had listed out lacked clarity. I remember one goal I set for myself – Learn Ruby. What did “Learn Ruby” mean? How would I know that I had learned Ruby? What resources would be required to learn Ruby? I had to break this goal down into specific and tiny chunks that could be completed. It’s the same principle we follow on software projects. If you don’t know what done means, you are never going to get there!

  • Obsessive need to be perfect

Last year, I decided to exercise at least 5 days a week. No exceptions. I figured out a schedule. I decided when I had to sleep, what time I had to get up, and how I would go about my day to day activities to meet this goal. I got very obsessive about this. I did not want to fail. I did not want to take a day off. The first two weeks went fine. I was literally trying not to miss a day. In the third week, I fell sick and I missed a day and I was very upset and frustrated. In the fourth week, I literally lost my drive to keep working on the goal. I quit! The goal was overwhelming me and I was obsessed with being perfect. I am an big fan of Karen Mottekaitis and listen to her podcast often during my drive. In her interview with Ariane de Bonvoisin, Ariane mentions that we need to be human instead of perfect when dealing with change. This hit me like a ton of bricks! And it made so much sense!

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Further exploring the term, “Define Reality”

Posted on October 17, 2012 by Radha Mukkai

I have been thinking on and off about that post I wrote about Defining Reality. The inspiration for that post came from Max DePree. DePree believed that defining reality was the primary job of the leader.

I observed several instances over the past couple of weeks where I could sense the truth behind Max’s philosophy and ideas.

I was skimming through a book by Suze Orman, The Laws of Money: 5 Timeless Secrets to Get Out and Stay Out of Financial Trouble, over the weekend while at a friend’s home. One of the 5 laws that Orman mentions in the book is: Look at What You Have, Not at What You Had. The law stresses the importance of assessing yourself and your finances truthfully. Orman states:

The principle behind this law ties in to the Tenth Commandment, about not “coveting” anyone else’s belongings or relationships, life situation, or talents. Nor are you supposed to long for something that is past, over and done with, gone. That is a terrible waste of your energy, time, and money, and no good can come of it. Let yourself see the truth about what you really have right now.

After reading the paragraph, I could immediately sense a strong parallel with DePree’s ideas and what Orman was advocating.

Last week, while searching for some material about team work and the effectiveness of team work, I came across an interview with Richard Hackman 1 on teamwork. The interviewer posed the following question to Hackman – You’ve said that for a team to be successful, it needs to be real. What does that mean? I was immediately intrigued by the question as it touches on the concept that DePree advocates – Defining Reality and was curious to see Richard’s answer.

Hackman provided the following answer:

At the very least, it means that teams have to be bounded. It may seem silly to say this, but if you’re going to lead a team, you ought to first make sure that you know who’s on it. In our recent book Senior Leadership Teams, Ruth Wageman, Debra Nunes, James Burruss, and I collected and analyzed data on more than 120 top teams around the world. Not surprisingly, we found that almost every senior team we studied thought that it had set unambiguous boundaries. Yet when we asked members to describe their team, fewer than 10% agreed about who was on it. And these were teams of senior executives!

The materials above did help me get a better understanding of the phrase, Defining Reality. At the same time, I found myself grappling with the phrase and was trying to determine what DePree wanted to communicate and what he truly meant by the phrase, Defining Reality. I felt there was some nuance with the phrase and was struggling to decipher the subtleties.

I had a breakthrough when I could determine the root of my struggles while reading the blog, Obsessive-Compulsive Data Quality, by Jim Harris. In his blog post, The Point of View paradox, Jim discusses how “our points of view influences the way we think and the way we act”. Jim starts this blog post by mentioning Stephen Covey.

One of my all-time favorite non-fiction books is The 7 Habits of Highly Effective People by Stephen Covey.

One of the book’s key points is that we need to carefully examine our point of view, the way we “see” the world—not in terms of our sense of sight, but instead in terms of the way we perceive, interpret, and ultimately understand the world around us.

As Covey explains early in the book, our point of view can be divided into two main categories, the ways things are (realities) and the ways things should be (values).  We interpret our experiences from these two perspectives, rarely questioning their accuracy.

The distinction between realities: the way things are and values: the ways things should be helped crystallize some of the struggles I had with the phrase, Define Reality. Define Reality guides you to focus on the present – the here and now. I believe one of the responsibilities of a leader is to set a vision for the future. In my mind, I was trying to reconcile the idea of Defining Reality, which I felt emphasized the present, with the idea of a vision and values, that emphasized the future.

I stepped back and tried to explore the phrase, Define Reality, further. Was the phrase truly emphasizing the present? I felt, Define Reality, was stopping me from thinking about the future. I asked myself if I was interpreting DePree correctly.  Is this what DePree was trying to communicate? Was I misinterpreting DePree’s intention? Were my ideas about the term, Define Reality, too narrow? I felt a little lost in the sea of questions I posed to myself!

I conducted a thought experiment to unravel these questions – Are we defining reality when we express our feelings and thoughts truthfully about where we wish to go, what we would like to achieve and the values we want to live by? I believe the answer to the question is yes, if our dreams, goals and values that we want to pursue are something that we truly believe in and not merely wishes and fads. If we speak about values that we truly do not believe in, we are not defining reality, we are defining fantasies. If we talk about dreams that we are not willing to work hard for, we are not defining reality, we are defining fantasies.

I would be lying if I say that I was able to crystallize the concept of Defining Reality completely in my head. However, these exercises make me feel like I am headed in the right way! ;->

I would love to hear your comments and thoughts about this.

  1.  Richard is a professor at Harvard University who teaches and conducts research in social and organizational pscychology. Here’s a brief bio of Hackman. ↩
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Root cause of software project failure

Posted on October 16, 2012 by Radha Mukkai

While reading Glen Alleman’s blog, I came across an article in CrossTalk – The Journal of Defense Software Engineering – that discusses the core problem of project failure. The article was titled, Knowledge: The Core Problem of Project Failure. I found the article very interesting as the author, Timothy Perkins, asserts that knowledge is the core problem of project failure.

I tried to relate the article to my own personal experiences working in the IT consulting/professional services industry. I have noticed poor project planning, unclear requirements, unrealistic schedules, ineffective communication as some of the common causes for software project failure. I found the article insightful as it explores some important questions about project failures and tries to expose the root causes.

Having led and participated in more than 10 Independent Expert Program Reviews1 (IEPRs) for the Software Technology Support Center and the Tri-Service Assessment Office, and having spent my military career as a project/program manager, several individuals have asked if there is a common thread among programs or projects that are having difficulty. The answer is yes. Some expect the thread to be project planning, others risk management, and others expect one of the other project management themes. However, the root causes can be reduced to two issues: either project managers do not have the knowledge they need, or they do not properly apply the knowledge they have.

I tried to explore the assertion that Knowledge was the core problem from various angles and determine if I found it to be equally valid. While examining the premise of the article, I asked myself what caused project managers  to not apply the knowledge they had. I loved the simplicity of the assertion and it did not feel simplistic. At the same time, I was questioning if the root cause could be boiled down to knowledge. Would digging deeper help us uncover other factors?

The article seemed to emphasize personal responsibility on the part of the project manager to navigate the projects toward success. I was reminded of Jerry Weinberg’s books on Quality Software Management where Jerry mentions the importance of mental models that Project Managers employ and the ability to act courageously in situations where PMs feel afraid, threatened, and under emotional  strain. I could sense some parallels with what Jerry talks about in his book and the article.

Given the emphasis on the project manager and knowledge, I wondered if software teams and other team members had an equal responsibility on navigating the project towards success. If the proper knowledge was not applied, couldn’t the team members provide the necessary leadership? How much does the environment and culture play a part in the success or failure? By focusing on the individual, were we missing the environment? I was reminded of Deming’s quote on the system playing a major role in performance.

The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance.

I was also reminded of Barry Oshry’s work and his Top-Middle-Bottom systemic model. I believe Oshry’s thoughts and ideas about the Mindless Middle may help explain why project managers do not apply the knowledge they have.

Overall, I found the article very stimulating and believe it provides clarity around some thorny questions about software project failure.

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You get what you ask for!

Posted on October 4, 2012 by Radha Mukkai

I had a discussion with an acquaintance recently and the discussion reinforced some of the lessons that I have learned in my own professional career. The acquaintance mentioned an application that they had developed in the past year. The application was was designed primarily for data entry and storing information provided by the users. After deploying the application, the organization soon realized that they had missed an important feature based on user feedback – They did not provide any means for users to view or retrieve the data they had entered! The acquaintance mentioned that the programmers were not to blame as they only designed what they had been asked for.

There were many lessons I could glean based on this interesting discussion.

  • You only get what you ask for!

I was immediately reminded of an experiment that Jerry Weinberg and Donald Gause mention in their book, Exploring Requirements: Quality before Design. The experiment was interesting and here are the details:

In a typical experiment, five teams were given the same requirement for a computer program except for a single sentence that differed for each team. One team was asked to complete the job with the fewest possible hours of programming, another was to minimize the number of program statements written, a third was to minimize the amount of memory used, another was to produce the clearest possible program, and the final team was to produce the clearest possible output.

The results were quite fascinating. Each team aced the objective it was given. Jerry and Don shared the following conclusion:

In short, each team produced exactly what it was asked to produce, and didn’t produce what it wasn’t asked to produce. Before these experiments, we had often heard software buyers complaining about the inability of programmers to give them what they wanted. The experiments convinced us that in many cases, the buyers simply did not tell the programmers clearly what they wanted.

This is exactly what happened with the incident I related earlier. It was a little surreal to hear about a real-life example of the experiment!

  • Information Age and Data

In an age where we find ourselves overwhelmed by data and information, an application that only allows for data entry seems to be anathema to the Information Age. One of the many insights I gained from reading Data Driven was that data needs to flow to be of value. If data is just sitting in a database, it does not add any value. It needs to be able to flow to the right users and decision makers who can make effective use of this data. We cannot lock data up without hearing from the users!

  • We cannot ignore the Requirements Process 

Software projects may or may not have a requirements document. However, there is always going to be a requirements process – the process of determining what the Client wants. I believe that as software engineers, we have a responsibility to ensure that we ask the right questions and ensure that Clients and users receive a quality product.

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More inspiration from John Bogle!

Posted on September 21, 2012 by Radha Mukkai

In a recent post, I talked about John Bogle and how John’s podcast interview with Greg Gallant inspired me. After listening to the podcast, I started to explore and read material authored by or involving John Bogle.

I noticed that  John had written a book titled Character Counts where he talks about the creation and building of the Vanguard Group. I was piqued by the book and decided to buy it (this was about 3-4 years back). The book is chock-full of inspirational and thoughtful messages, speeches, and ideas. I highly recommend the book!

I felt it would be a good idea to share some of the material in the book that I enjoyed and have bookmarked.

In the chapter, The Impossible Dream, John mentions a poem from the musical play The Man of La Mancha that seems to be dear to his heart. I enjoyed reading the poem and am filled with energy and a desire to strive for excellence in whatever I do. I hope you enjoy this, too!

The Impossible Dream.1

To dream the impossible dream,
To fight the unbeatable foe,
To bear with unbearable sorrow,
To run where the brave dare not go.

To right the unbearable wrong,
To love, pure and chaste from afar,
To try when your arms are too weary,
To reach the unreachable star,

This is my quest, to follow that star,
No matter how hopeless, no matter how far,
To fight for the right without question or pause,
To be willing to march into hell for a heavenly cause.

And I know if I’ll only be true to this glorious quest,
That my heart will lie peaceful and calm, when I’m laid to my rest,

And the world will be better for this,
That one man, scorned and covered with scars,
Still strove with his last ounce of courage,
To reach the unreachable stars.

I also enjoyed a quote mentioned in the beginning of the chapter Rejoice!. The quote helps me in understanding and accepting that good things can happen from what we may perceive as bad or tough circumstances.

The Letter of Paul to the Romans (5:3)

Rejoice in your sufferings in the knowledge that suffering produces endurance, endurance produces character, character produces hope, and hope does not disappoint us.

I was reminded of a verse in Sri Aurobindo’s epic poem, Savitri after reading the quote above.

None can reach heaven who has not passed through hell.

There is a belief in Hinduism that suffering and challenges in life are nature’s way of elevating us to the next level of consciousness and accomplishment. The above quotes seem to be hinting at these subtle truths.

In the chapter, The Road Less Traveled By, John narrates an Aesop fable that I found very meaningful.

Aesop’s fable, Hercules and the Wagoner:

A wagoner was driving his team along a muddy lane when the wheels of his wagon sank so deep in the mire that no efforts of his horses could move them. As he stood there, looking helplessly on, and calling loudly at intervals upon Hercules for assistance, the god himself appeared and said to him, “Put your shoulder to the wheel, man, and goad on your horses, and then you may call on Hercules to assist you. If you won’t lift a finger to help yourself, you can’t expect Hercules or any one else to come to your aid.”

John mentions immediately after narrating the fable that, God helps those who help themselves. This fable helped me realize that instead of acting as a victim of circumstances, I could rely on my personal power to effect the changes I want.

  1. Copyright © 1965. Words by Joe Darion. Music by Mitch Leigh. Andrew Scott Music, Helena Music Company. ASCAP. ↩
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Hidden Assumptions in a Project Schedule

Posted on September 20, 2012 by Radha Mukkai

I got an important insight while reading the book, Roundtable on Project Management. The book contains conversations between practitioners about project management that was compiled from discussions in Jerry Weinberg’s SHAPE forum. The book filled with pragmatic advice from people who understand the challenges of project work.

The book talks about assumptions underlying a single line in a project schedule. A single line on a project schedule describes a task that needs to be accomplished, along with the planned time to complete the task and who is responsible for the task. Some of the assumptions hidden in this line are:

  • The Project Manager or Technical Lead understand the “scope” of work for the task and this understanding is also shared by the person responsible for completing the task. Team members have clarity on what needs to be accomplished to complete the task.
  • The person assigned to the task has the capabilities to perform the task and can successfully drive the task to completion.
  • The planned hours assigned for the task is credible.

If any of the assumptions are incorrect, we have a problem! This reminds me of the message from Max DePree about Defining Reality. Preparing a credible project schedule is a good first step to define reality on a project. Without a credible project schedule, we are defying reality and not defining it (and defying reality seldom leads to desired outcomes or results!).

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Mindless Middles

Posted on September 20, 2012 by Radha Mukkai

Barry Oshry wrote a recent blog post on the challenges of working as a Middle. 1

Oshry states:

Middles regularly face potential sewer pipe situations. The instructions come and you pass them on. That’s what Middles do. Unfortunately, that’s what Middles may do blindly and reflexively without examining the instructions and considering the consequences they are likely to have. This is what it means to be a Mindless Middle. The challenge for Middles is at all times to maintain their independence of thought and action, and then to have the courage to act on that judgment.

I read the blog post and nodded my head in approval. I tried to think of situations where I had behaved mindlessly as a middle and none came to mind! Then, the next day, as I was driving to work, I realized that there were instances where I had been the sewer pipe and was the Mindless Middle that Oshry talks. What struck was that I did not feel like I was being mindless at those instances!The bigger problem is that it is hard to recognize or realize that we are being mindless. It is hard to observe what you cannot see!

When I replay the instances where I was mindless in my head, I realized that there was a strong inclination on my part “to follow the orders” and not “rock the boat”. The story that Barry narrates also made a lot of sense. As a Middle, it is easy to believe we are powerless. By shedding light on this phenomenon, Barry shows us that there is another way that is available to Middles and that we do have the power to act and use good judgment.

I was reminded of Barry’s lesson while reading about the incident at the end of the NFL game between New York Giants and Tamba Bay Bucs. At the end of the game, with the Giants in a victory formation, Bucs coach Greg Schiano asked his players to knock Eli Manning. Giants’ coach Tom Coughlin was livid at this tactic and yelled at Schiano during the post-game handshake. Coughlin felt that Schiano’s call to go after the quarterback and offensive line during a kneel-down formation could have hurt somebody. The entire Giants team felt it was a cheap shot and was unwarranted.

After reading about the incident, I thought about the Bucs players. I believe, NFL players understand the health risks of playing the game and would not want to intentionally hurt or injure a player. I saw the Bucs Players acting as the Middle in this scenario. They got a clear instruction from the Top, their head coach, to go after the quarterback. Could some of the Bucs players resented this move from their coach? Did one of them feel they were putting the Giants in a risky situation and could potentially jeopardize a player’s career by injuring them? Wasn’t this the same situation that Barry Oshry mentions? Did one of the players not go after Eli even with clear instructions from their coach? I don’t have the answers to these questions.

The other day, I saw an article from Justin Tuck, NY Giants player, who said that he would have said No if one of his coaches asked him to do something similar.

Tuck said:

“If Perry Fewell told me to dive at a guy’s knee, when we were losing, I would say ‘No,’ ” Tuck said.

I reflected on Barry’s article and this football incident and realized that being “mindful” as a Middle requires a lot of courage. I believe Barry has given us the power of increased awareness and the power to use our good judgment even in tough circumstances.

  1. You can learn more about Oshry’s system model at the following link ↩
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Define Reality

Posted on September 13, 2012 by Radha Mukkai

In the book, Leadership Is An Art, Max DePree talks about the responsibilities of a leader. Max DePree has the following to say:

The first responsibility of a leader is to define reality. The last is to say thank you. In between the two, the leader must become a servant and a debtor. That sums up the progress of an artful leader.

I found Max’ characterization of a leader’s responsibilities very refreshing. Most definitions I had studied talk about having a vision, influencing people, and getting work done.

I thought about what Define Reality meant and whether it was applicable to Project Managers (PM) and Technical Leaders (TL) working on a software project. The concept made a lot of sense and I felt it was a great way of looking at a leader’s responsibility. I tried to brainstorm various ways in which PMs and TLs could define reality on a project and came up with the following list:

  • Clearly understand what they know and do not know
  • Ensure that stakeholders clearly understand what is happening on the project
  • Set clear expectations with team members  on what needs to be accomplished and when
  • They are congruent and do not feel afraid or embarrassed to express their thoughts, feelings, and opinions
  • Understand the constraints (time/schedule, money, scope, personnel, resources) facing the project
  • I also felt that “Define Reality” was a process. The PM or TL has to perform the following activities throughout the course of the project:
    1. Understand as accurately as they possibly can all the aspects that affect the success of the project –
    2. Ensure that they communicate this understanding to all stakeholders
    3. Refine their understanding of the project as they go along by being open to any pertinent information
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Inspiration from John Bogle

Posted on September 13, 2012 by Radha Mukkai

John Bogle has been an inspiration in my journey of personal and professional growth. Whenever I read or listen to John Bogle, I always walk away with an uplifting feeling. Mr. Bogle’s personality flows through in his speech and writing. His messages have always struck me as authentic, idealistic, and bold. I see John Bogle as a determined and courageous visionary who has lived his life in harmony with the principles and values that he believes in. Suffice to say, I have the highest respect and admiration for Mr. Bogle. 1

I came across John Bogle thanks to Joel Spolsky. In one of his posts, Joel mentioned his interview with Greg Gallant at Venture Voice. I started listening to Greg’s podcast and eventually he interviewed John Bogle.

The interview resonated with me and I gained a lot of respect and insights after listening to John Bogle. 2  I would like to share some of my insights with you:

  • Distinct Voice

John Bogle’s voice made a big impression on me. I found it to be distinct, powerful, and unique. Mr. Bogle’s voice carries the force of his personality. If you listen to the interview, I would recommend you pay close attention to the voice modulations.

When John talks about principles that are dear to his heart, his voice depicts confidence and determination.

During the interview, John narrates the instance when he was fired. His voice shows his anguish at a grave mistake he made. John then immediately talks about taking responsibility for his actions and his voice now exudes courage and the strength of his convictions.

While discussing entrepreneurship and what it means to him, I could sense a deep joy in his heart.

  • Power of Values 

Starting at the 28:00 minute mark in the interview, Greg discusses Vanguard’s business model which is “predicated on keeping the cost low” and asks John for his advice to entrepreneurs on “keeping cost low“. When I mentally formulated a response to this question, I was thinking about cutting wasteful spending, paying attention to expenses etc. The response from John Bogle blew my mind. Here is John’s response:

Well, the first thing that happens, is you have to realize, that about half of the cost, little bit less than half maybe, that a mutual fund incurs are profits to its managers. Profit margin in this business is pretty close to 50%. So, if you eliminate that, which the Vanguard structure does and it basically rebates that profit to the shareholders. You all of a sudden have cost 50% below the competitors. So to give you kind of a homely example, if the average cost is 1%. You are all the way down to 0.50 or 0.60 simply by getting the entrepreneurial profit out of the equation. A good start! The rest of it is aggressive cost control.

Frankly, I was stunned. John looked at the entrepreneurial profits as the first place to start cutting costs! Wow! I believe it takes a person who sincerely and deeply cares about  his role as the steward of his Client’s financial interests to pursue this course of action.

John goes onto expound his philosophy of cost control. I was reminded of Roy Posner’s article on The Power of Personal Values while listening to this portion of the talk. Roy mentions that

A value is a belief, a mission, or a philosophy that is meaningful. Whether we are consciously aware of them or not, every individual has a core set of personal values. Values can range from the commonplace, such as the belief in hard work and punctuality, to the more psychological, such as self-reliance, concern for others, and harmony of purpose.

The “business value” of cost control permeated throughout Vanguard. Vanguard lived, executed and based their decisions using this value as a guide. I am not surprised by the tremendous growth of Vanguard given such a relentless focus on values such as Customer Service and Cost Control. Keeping costs low was not just a slogan. It felt like a way of life that Vanguard had chosen to serve a higher purpose!

  • Vision and Determination

John Bogle has the powerful mix of idealistic vision that he matches up with his indomitable determination and will to achieve his goals and live according to his beliefs. I would recommend that you listen starting from the 23:40 minute mark of the interview where Greg talks about how he was able to mix idealism and execution. John has a wonderful quote at this point:

First, The Lord has created few people with greater feeling of determination than I have. I asked my kids once. What word would they use to describe me. I asked them separately. All of them said the same thing. Determined.

John mentions 3 qualities that characterizes him – Determined, an intellectual turn of mind that is driven by Curiosity 3 and not brilliance, and a Contrarian who is not afraid to fight the good fight and do what it takes to do the right thing. 4

  • Building a company

John talks about building a company and the values at Vanguard starting from the 32:30 minute mark. Vanguard uses a lot of nautical metaphors in everyday communication. The name, Vanguard, was inspired by the battleship HMS Vanguard commanded by Lord Nelson in the Battle of the Nile. Vanguard refers to its employees as crew members, the cafeteria is called the galley. They heavily use nautical phrases such as – Stay the course, Press on regardless. 

I found a person who enjoyed his work and was very thoughtful about the culture in Vanguard.

  • Deeper message 

There are a lot of great quotes, honest messages towards the end of the interview (starting 49:15 minute mark). Here are some of my favorite ones:

If I were persuaded it would never happen, would I start doing things differently? Not at all. I would do them even stronger. You know, Somebody has to stand up and be counted in this life.

Entrepreneurship is about the joy of creating. That’s what Tom Peters tells us and he is right. The joy of success for its own sake. The joy of changing the world a little bit for the better.

Nobody in this business had more fun than I had. Nobody. And it’s fun to take on the establishment. It’s fun to have some determined ideas and see them implemented.
There is nothing like the satisfaction of a good fight well won.

The mutual fund industry didn’t need Vanguard. No industry needs Vanguard. But, all industries need A Vanguard. That is, a company that says, I see what you are doing, understand what you are doing, I am going to do it differently. And may the best ideas win.

I think I have left no doubt how much I enjoyed this interview. I do have to mention the excellent job Greg did as the interviewer. He asked thoughtful questions and gave John the center stage. He led the conversation beautifully and the conversation had a great feel to it. Thank you, Greg!

 

  1. While writing this post, I was reminded of the famous line in the movie, As Good As It Gets, uttered by Jack Nicholson to Helen Hunt – You make me want to be a better man. John Bogle inspires me to be the best person I can be! ↩
  2. The MP3 of the interview on the venture voice page is broken. I was able to download the MP3 using the following link. ↩
  3. John mentions that curiosity is about asking questions such as Why does that happen? How does that happen? Is there a better way to do it? These questions are quite relevant to software projects, too! ↩
  4. John Bogle had a strong sense of who he was and the principles he stood for. He understood his strengths and weaknesses. He mentions how he frequently argues with himself about principles, policies, and outcomes. He seems to live Socrates’ ideal – Know Thyself ↩
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