Mercedes 2.4% Audi 1.2% Mini 0.8% Volvo 0.8% Mitsubishi 0.8% Landrover 0.6% Saab 0.2%
I prefer being given the correct answers rather than figuring them out myself. I don't like to think a lot about my decisions as I rely only on gut feelings. I don't usually review the mistakes I have made. I don't like to be criticized.
Image focus is an offensive concept– it implies image is more important that substance Memphis State John Calipari 5 years no tournament Graduation rate 0% Attendance 40% Relentless marketing to players, recruits, fans and corporate boosters “ When you are building a basketball program you are trying to create a love affair.” FedEx Fred and advisor (He asks me about management and organization) Sold 1000 tickets at a barbeque at his house 2.5 million on advertising– all private money Image matters – class attendance, 4 star meals, waiting room (plasma and Xbox), traveling academic advisors Graduation rate 79% Marketing in China 300 Million kids play the sport Host coaches in Memphis Met national team Hires Chinese coaching intern Calipari at UMass Logo Opened his own store He pushed orders Kept adverting $$ for Radio & TV shows Pushed season tickets – got a cut Scheduled high profile games appearance fees $63,000 to more than $1 million
Existing technology used in South Africa Pentagon arguing for ships fighters and radar Pentagon brass afraid they would end up surplus $1 million each Ordered $20 Billion worth 16,000 vehicles Bought ballistic steel before deciding who would build the vehicles 60 years no president has failed to replace Sec of defense– even in the same party
2009 Taking over after bankruptcy
--1990’s Congress and the President declared it the decade of the brain. --Lewis L. Judd, former director of the National Institute on Mental Health said “The pace and progress of mental health is so great that 90% of what we know about the brain has been learned in the last 10 years. Positron Emission Tomography (PET) and MRI allows scientists to see the brain work -- if she has a 4 lane highway for empathy, she will feel the emotions of everyone– if not, she will hurt people’s feelings by saying the wrong thing at the wrong time Synapses are the connections between the cells By age three– up to 15,000 synaptic connections per neuron
Emotional part of the brain sends a smile message and the voluntary mussel module sends a concerned look message One talent prospers at the expense of another Impulses and gut reactions The rat brain loves short cuts (heuristics) Dumping stocks in a down market is the same as fleeing a lion-- ,loss avoidance
People vs. Deer World’s worst sentence “ People have two legs, animals have four, except fish which have none.” Old joke Reactive life vs. Proactive life Free will can be measured on a continuum
Once your mind is inhabited by a certain belief you will tend only to consider factors proving you right. Therefore the more information you get the more certain of you are certain of your rightness
Critical ThinkingLeading Innovation and Value Creation Andrew L. Urich, J.D. Puterbaugh Professor of Ethics & Legal Studies Spears School of Business Oklahoma State University firstname.lastname@example.org www.andrewurich.com
Critical ThinkingDon’t try this at home! I prefer being given the correct answers rather than figuring them out myself. I dont like to think a lot about my decisions as I rely only on gut feelings. I dont usually review the mistakes I have made. I dont like to be criticized. I don’t have the courage to move outside my self-imposed limits.
Applied Critical ThinkingRemove Boundaries Thinking has boundaries– bounds, limits, borderline Beyond the boundary line is the Frontier Location of most advanced, newest activity
GM History 1950’s - Half of all cars in the US
GM History 1980 - 853,000 to 284,000 worldwide
1999“The most versatile vehicle on earth”“Lifestyle support vehicle”
1999“The most versatile vehicle on earth”“Lifestyle support vehicle”
1999“The most versatile vehicle on earth”“Lifestyle support vehicle”
1st Q 2009Passenger cars Toyota 19.4% GM 15% Honda 12.4% Nissan 10.2% Ford 10.0% Hyundai 6.2% Chrysler 5.2% Mazda 3.4% BMW 3.2% VW 3.2% Kia 2.6% Subaru 2.6% Volvo 0.8% Saab 0.2%
What is Critical Thinking?Using your brain to create value for yourself and yourorganization!Making decisions and taking action based on reason,evidence and analysis. Focus on what matters Identify drivers of value Embrace diversity1. Face reality
Focus on What MattersJD Power Top 10 Reliability2004 2007 Buick 145 Porsche 110 Lexus 145 Lincoln 114 Cadillac 162 Buick 115 Mercury Mercury 168 168 Lexus Lexus 115 115 Honda Honda 169 169 Mercury Mercury 121 121 Toyota 178 Toyota 128 Toyota 178 Toyota 128 BMW 182 Honda 132 BMW 182 Honda 132 Lincoln 182 Ford 141 Lincoln Subaru 182 192 Ford Mercedes 141 142 Subaru Jaguar 192 197 Mercedes Acura 142 143 Jaguar 197
Focus on What Matters BMW “We don’t make automobiles [we make] moving works of art that express the drivers love of quality.” GM: Car guys and bean counters– no marketing
What Matters Most? Iraq and Afghanistan Mine Resistant Ambush Protected
Value FocusLoss of Trust & Respect Trust Issues Consumers Dealers Workers Beat up suppliers Banks, Public opinion Shareholders - Bondholders
Value FocusLoss of Trust & Respect Loss of commitment Playing favorites Keep your head down and get along Stop working start having meetings (Sr. VP of Nothing) Lack of Fun Innovation Creativity
Embrace Diversity Group think Stability over conflict Continuity over disorder Status quo over change 50 year old decision making structure Conformity over rebellion Same design centers Run off renegades De Lorean fired at GM -- Iacocca fired at Ford
Face Reality Market Value versus Cumulated Strategic Investments at General Motors 1980 GM = $13 Billion 1980-1997 $167 Billion or $332 Billion R&D and capital spending 1997 GM = 40 Billion
Face RealityRoss Perot on the Subject From 1980 to 1985 GM spent $45 billion in capital investments but only increased worldwide market share by 1%....... "For the same amount of money, we could buy Toyota and Nissan outright, instantly increasing market share to 40%.” Gorilla dust
Face RealityAsk Rick Wagoner why GM isn’t more like Toyota. (69/70) “We’re playing our own game – taking advantage of our own unique heritage and strengths.”
Face Reality “I dont know anything about cars. A business is a business, and I think I can learn about cars. Im not that old, and I think the business principles are the same.” Ed Whiteacre
Who’s RealityBob Lutz Global warming “is a total crock of [expletive].” “Hybrids like the Toyota Prius make no economic sense.” “Imminent GM bankruptcy was always fiction, created by Wall Street and the media.”
Bureaucracy & the Status Quo Risk taker to Risk avoidance Cash poor to Cash comfortable Contribution to Playing favorites Opportunities to Problems Create value to Doing your job Marketing & sales to Finance & bean-counting Momentum to Inertia Working to Meetings END
Applications Have you clarified exactly how you create value for your organization? Focus on value creation and avoid activities that are not central to your strategy. Appreciate and seek diverse (and contrarian) points of view A fun and exciting atmosphere fosters creativity and productivity Rage against bureaucracy and the status quo.
ApplicationsManagement Issues Leader sets the tone Processes often get in the way Bloomberg abolished titles Conflict breeds creativity Presentations– one-way communication Promote and reward risk taking and attempts at innovation
Applications Jack Welch Bureaucracy Busting Be relentless and outrageous Celebrate impassioned boundaryless people Love the people who hate meetings Encourage managers to swing for the fences Create a culture of excitement END
Critical Thinking “There is no reason anyone would want a computer in their home.” President of world’s second largest computer company (DEC) arguing against the PC in 1977
Critical Thinking “The world potential market for copying machines is 5000.” IBM turning down the eventual creators of Xerox
Critical Thinking “I think there is a world market of about five computers.” Founder of IBM in 1943
Critical Thinking “Who the hell wants to hear actors talk?” Warner of Warner Brothers arguing against the need to add sound to silent movies
Critical Thinking Obama and McCain spent $1 Billion on their 2008 campaigns – Absurd? Coca-Cola spent almost $2 billion trying to get us to drink sugar water in 2008.
Critical ThinkingProfessor Robert C. Merton, Harvard University, Cambridge, USA andProfessor Myron S. Scholes, Stanford University, Stanford, USA
Critical Thinking “Sensible and responsible women do not want to vote.” President Grover Cleveland, 1905
Critical Thinking “We don’t like their music and guitar music is on the way out anyway.”Decca record executive turning down the Beatles, 1962
Critical Thinking “Television won’t last because eventually people will get tired of staring at a plywood box every night.” Daryl Zanuck, 20th Century Fox Movie Producer, 1946
Critical Thinking “Everything that can be invented has been invented.” Commissioner of US Patent Office arguing to President McKinley to close down the Patent Office in 1899
Why Don’t They Give Us anOwner’s Manual For Our Brain?
The Brain’s Inner WorkingsThe Wiring 100,000,000,000 neurons (brain cells) 15,000 synaptic connections each By age 15 half are gone and the superhighways are up and running. These mental pathways become the filter–producing recurring patterns of thinking, feeling and behavior. Examples: Empathy–confrontation–authoritarian– dogmatic–emotions–tolerance for uncertainty.
The Brain’s Inner WorkingsThe Parts The brain is full of zero sum games Ever find yourself feeling conflicted? Competing modules MRI research on picturing yourself as old Stanford study No payments until next year Disagree– brain off Agree-- pleasure Parts of the brain Amygdale-fear responses Fleeing the stock market like you are fleeing a lion Prefrontal cortex – recently evolved – controls voluntary actions Logical and analytical Limbic system - oldest physical part of the brain The rat brain – Impulses gut reactions
Amygdale: Fear Responses Total US Stock Market 1982 value = $1.2 Trillion Return 1982 to 2007 13.3% Theoretical 2007 value $28.2 Trillion Actual value $18.7 Trillion Lost to market timing $9.5 Trillion NASDAQ 9.6% Return 1973 – 2002 4.3% Actual average return to NASDAQ investor Zweig, Jason, Money Magazine, December 2007, page 76
Your Strength Strength is a recurring pattern of thought, feeling, or behavior that can be productively applied. Strength is more important than experience, brainpower, and willpower. You cannot teach strength.
Your Strength What to notice, what to ignore What to love, what to hate Your motivations, ego, altruism How you think - practical or strategic Your attitude - optimistic or cynical Your filter is your Strength
The Strength of GreatAccountants Innate love of precision Happiest moment is when the books balance Gallup survey
Using Your BrainYour Unique Strength + Critical Thinking =Success Your value and ability to prosper and reach your goals come from: “sensing, judging, creating, and building relationships.” Thomas Stewart, Intellectual Capital We all have the same information – it’s what you do with it that counts.
ApplicationsUsing Your Brain Exploit your strength! Don’t correct weaknesses, work around them. Skills and knowledge can be taught, Strength cannot. Here’s what we can change! Core beliefs New skills and knowledge Your values Self-awareness Capacity for self-regulation Hidden strengths
“Our minds are like inmates, captive to our biology, unless we manage a cunning escape.” Nassim Taleb The Black Swan
Why Do We Do What We Do?Albert Einstein “Fear or stupidity has always been the basis of most human action.” Worst paper ever…. “People have two legs, animals have four, except fish which have none.”
Basis of Human Action andDecision Making? Beliefs Act out your beliefs Desires Pursue your desires Instinct Succumb to instinct
BeliefsYou act out what you believe? I believe the world is a dangerous place. I believe people should______. I am skeptical of all claims. An “ideal” manager does ______. The best investment philosophy is___.
Desires Cialdini knows where our desires come from Are we honest about our desires? Mark Cuban and flattery Desire to feel good Desire to feel safe I have to scare you first. First I create the disease – then I create the cure.
Living by Instinct “Nature, Mr. Allnut, is what we are put in this world to rise above” Rose Thayer (Katherine Hepburn) The African QueenHuman Animals – Instinct…...................Human Beings – Critical Thinking Wealth/Greed................................... Altruism and charity Seek security at all cost....................Get out of your comfort zone Preserve status quo..........................Change Meeting society’s expectations...........Be authentic to yourself (following the herd).......................... (think for yourself) Traditional gender roles.................... Equality of the sexes Tribalism (nationalism)..................... Multi-culturalism Praise authority................................ Question authority Praise and follow the leader.............. I don’t need a leader Consistency is safe............................Strive for improvement Guided by personal experience...........Critical thinking Freewill???........................................Free Will!!!!! Surviving........................................Living
Basis of Human Action and DecisionMaking? Beliefs, Desires & Instinct You do what you feel obligated to do. You do what is the easiest. You do what makes you feel safe. You do what you’ve always done.
You Might Be ThinkingCritically If….. You change a core belief. You get outside your comfort zone. You admit you were wrong about something important. You increase your self-awareness. You do something you wouldn’t do. What if I like what I do?
Punch-line Early in life we get theories of the world – the theories make sense – but making sense is not the same as being correct. Beware of your Brain’s wiring! Your brain is programmed
Do We Always Think the Same Way?Did GM Think About This? Global Product Development Tom Stephens, who runs the companys power-train unit Carl-Peter Forster London, Germany and Greece BMW, Opel
Requirements of Critical Thinking1. Awareness of choices and real consequences2. Self-awareness3. Value focused proactive mindset4. Avoid thinking pitfalls
1. Awareness of Choices and Real Consequences If you choose one of 10 known options when there are, in fact, more than 100 options, have you really exercised critical thinking? Cognitive bias: Ignoring alternatives
Junkfinger Test Tattoos Traffic tickets Brushes with the law Being sick Promptness Pets
If You Don’t Want to Fall in theGrand Canyon--Don’t Go to Arizona What I do today affects what happens tomorrow.
Junkfinger Test In the Business World Inconsistency Excuses Making enemies at work Always talking, never listening Accept things as they are Acting uninterested – not engaged Lose credibility
Goldfinger Behavior and attitude that put you in a position for good things to happen: 1. ? 2. ? 3. ? 4. ? 5. ?
Most people end up where theirbehavior indicates they want to be.
2. Self-awareness Metacognition“The truth will set you free………. but first it will piss you off.” Werner Erhard, founder, est Training“The greatest of all faults, I should say, is to be conscious of none.” Thomas Carlyle (1795 – 1881) Scottish writer
3. Be proactive (3 kinds of people) What Do You Really Want? (PersonalPhilosophy) Do most people suppress their personalities and their dreams? Picture your 70th birthday Reeboks says “Life’s short– Play hard.” I say “Life’s long– Do something.”
Value CreationGoals and Goal Setting What do I really want? How do I set effective goals? How do I increase the likelihood of good things happening and reduce the likelihood of bad things happening?
The Trick to SettingEffective Goals Worry about the means not the end. In other words, set goals that are within your control that can lead to good things– as opposed to outcome based goals.
End based goal: Impress the boss/Get promoted Act with enthusiasm, show your passion and demonstrate self- confidence Don’t just do what you’re told– Develop the habit of doing things impressively Identify the prototype employee and emulate that person Professional Image Program PRO-ACTIVITY HOUR: Spend one hour a week planning and reflecting on how success is measured and why certain people are favored
Ends based goal: Be a millionaire/Retire early Study investing and business opportunities for three hours a week Draft a budget and stick to it Figure out what “matters” and do the those things first Get two jobs
Ends based goal: Vice president by age 35 Arrange four networking lunches per month Volunteer for high profile/difficult projects Find a mentor and stay connected Try and make every co-worker/client into a friend and supporter
End based goal: Find a good spouse Put yourself in places where “good spouses” hang out Don’t date losers while you’re waiting for a winner Project the image that attracts “good spouses” Be proactive not passive
Priorities of ManagementAndy Roddick Work Hard Have fun Be a good teammate Learn from mistakes Win
4. Thinking PitfallsCritical Thinking vs. Traditional Thinking
Cannot Predict the Future vs. Spreadsheets and Models Predict Future Late 70s Energy Crisis Early 80s Latin American Bank Defaults Mid 80s Junk Bonds, Michael Milken Late 80s S&L Crisis Mid 90s Derivatives crisis Late 90s Dot-Com Collapse 2000 Long-Term Capital Management 2008 Sub-prime Mortgage Debacle Before 2015 Unexpected disaster
Cannot Predict Probability vs. Theory Predicts Probability “Most negatives in housing are behind us.” Alan Greenspan, October 2006
Cannot Predict Probability vs. Theory Predicts Probability “I don’t see (sub-prime mortgages) imposing a serious problem.” Treasury Secretary Henry Paulson, April 2007
Cannot Predict Probability vs. Theory Predicts Probability “We see no serious broader spillover to banks from the sub-prime market.” Fed Chairman Ben Bernanke, October 2007
Cannot Predict Probability vs. Theory Predicts Probability “The effective management of risk is one of the core strengths that has made Lehman Brothers so successful.” Still found on Lehman Brothers website one month after collapse.
Focus on Unknown Unknowns vs. Focus on the Known Risk Management - Mirage Hotel in Vegas Hundreds of Millions on Cheating Detection Employee Monitoring Probability and Diversification Theft Protection Four biggest losses: Tiger attacks Siegfried or Roy Contractor wires hotel with dynamite Forms not turned in to IRS Owner’s child kidnapped
Focus on Unknown Unknowns vs. Focus on the KnownSource: 2006 Report to the Nation on Occupational and Fraud Abuse by the Association of CertifiedFraud Examiners (ACFE)
Observation to Theory vs. Theory to Practice Coin flips heads 50 times in a row--what are the odds tails comes up next? Ideology = Tails is due Scientific probability theory = 50/50 Critical Thinking = Crooked coin
Embrace Uncertainty and Ambiguity vs. Must Have an Answer or Explanation Underestimate the role of luck in life Overestimate it in games of chance Think we can measure it in decision-making
Thinking vs. Computing The energy conferences Dot-com’s new world
Critical ThinkingApplications Awareness keeps your brain on track Question your beliefs and assumptions Be honest about your desires Struggle to think critically Lifelong learning Put yourself in positions for good things to happen Set goals and make things happen Doubt and wonder
The Secret to Happiness Self-delusion Hypocrisy Ignorance
The Secret to Happiness Ignorance is Bliss “People who do things badly are supremely confident in their abilities—more confident, in fact, than people who do things well. Not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to realize it.” Dunning, David Journal of Personality and Social Psychology December 1999.
The Secret to Happiness Why? Researchers believe that the same skills required for competency are the same to recognize incompetence.
The Secret to Success Focus on what matters Identify drivers of value Embrace diversity Face reality Wonder, worry and doubt!
Critical ThinkingImagine “Imagination is more important than knowledge.” Einstein “The reasonable man (woman) adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on unreasonable men (women).” George Bernard Shaw
Thank You I appreciate your time and attention. email@example.com
References Ailes, Roger. You Are the Message. New York. Doubleday, 1988. Bazerman, Max H. Smart Money Decisions, Wiley & Sons, 1999 Buckingham, Marcus, First, Break All the Rules, Simon & Schuster, 1999. Cialdini, Robert B. Influence: Science and Practice. 3rd Ed. New York: Harper Collins, 1993. Ghemawat, Pankaj, Strategy the Business Landscape, Addison Wesley, NY 1999. Golman, Daniel, Emotional Intelligence, Bantam Books, New York, 1995. Hirshberg, Jerry, (Founder Nissan Design International) The Creative Priority, Harper Business, NY, 1999 Koch, Charles G., The Science of Success, Wiley & Sons, 2007. Lakoff, George, Moral Politics, Paul, Richard. Critical Thinking. Santa Rosa, CA: Foundation for Critical Thinking, 1993. Pink, Daniel H. The Whole New Mind, Riverhead Books, NY, 2006. Schramm, Carl J. The Entrepreneurial Imperative (HarperCollins) 2006.