The financial doctrines so zealously followed by American companies might help optimize capital when it is scarce. But capital is abundant. If we are to see our economy really grow, we need to encourage migratory capital to become productive capital - capital invested for the long-term in empowering innovations.
During the early stages of an industry, when the functionality and reliability of a product isn't yet adequate to meet customer's needs, a proprietary solution is almost always the right solution - because it allows you to knit all the pieces together in an optimized way.
If you develop a product that gets what the customer is trying to get done, you don't have to advertise; people will just pull it into their lives.
I helped start a ceramics company called CPS Technologies. We took it public in 1987 at $12 a share. Three months later, there was this horrible cliff: Black Monday. Fidelity had bought 15 percent of our stock, and their algorithm caused them to dump it all onto the market that day. We dropped from $12 to $2.
Most people have never thought through how they're going to allocate their time. You need to make a decision in advance.
In our personal lives, we have a lot of businesses going on. I have a profession, I'm a father, a spouse, a good member of my community. How much of my time and energy can I allocate to each of those things? What I allocate becomes the strategy I have for my family, and everything else.
I haven't met too many people that don't intend to have a fulfilling life. High-achievers, however, end up allocating their resources in a way that seriously undermines their intended strategy.
The iPod is a proprietary integrated product, although that is becoming quite modular. You can download your music from Amazon as easily as you can from iTunes. You also see modularity organized around the Android operating system that is growing much faster than the iPhone. So I worry that modularity will do its work on Apple.
Efficiency innovations provide return on investment in 12-18 months. Empowering innovations take 5-10 years to yield a return. We have ample capital - oceans of capital - that is being reinvested into efficiency innovation.
The whole enterprise of teaching managers is steeped in the ethic of data-driven analytical support. The problem is, the data is only available about the past. So the way we've taught managers to make decisions and consultants to analyze problems condemns them to taking action when it's too late.
A great book seeks to explain causality, not correlation. It works to point out the circumstances in which it works, and where it doesn't. And in so doing, it is broadly applicable.
There are companies trying to build business within Saudi Arabia, and what they find is that if they try to bring on locals and teach them how to become senior executives, they just don't show up to work. They are not predictable as to when they'll come in and how much of their hearts are into that opportunity.
Management teams aren't good at asking questions. In business school, we train them to be good at giving answers.
What's unique about the Mormon Church is that it encourages inquiry. I really do think my research and religion are all on the same page. I never could have come up with the notion of disruptive innovations, which went against a lot of conventional wisdom, if I hadn't been raised to always be asking questions.
I think this is one reason why the Lord invented the Internet - so members can teach one another how to succeed in assignments the Lord has given us, and to give us opportunities to inspire and bear testimony in a horizontal way.
The principles of disruptive innovation are indeed intended to be guidelines to assist managers both in introducing disruptive innovations as well as identifying disruptive developments in their market.
When considering a career move, consider the most important assumptions that have to prove true and how you can swiftly and inexpensively test if they are valid. Also, remain realistic about the path ahead of you.
Every city and town in America would be bankrupt if they kept their books the way private-sector companies keep their books - because of the obligation cities and towns have taken upon themselves to provide health care for their retirees.
For online universities, like Liverpool and the University of Phoenix, if prices drop by 60%, they still make money. But for the vast majority of traditional universities, if the prices fall by 10%, they are bankrupt; they have no wriggle room.
I brought one big question with me to Harvard. Why do smart companies fail?