The Personal MBA - Master the art of business | Summarized Books

The Personal MBA - Master the art of business

MBA programs don't equip you with what you need to succeed in the business world

Contrary to popular belief, MBA programs do not make people more successful. The primary reason is that the schools offering these programs teach very few things that are of substantial value in the working world.

Glance through the curriculum of any business school and you’ll discover that everything is structured around a few assumptions about what you will do after you get your degree: you’ll either become a consultant, work as a financier at an investment bank, become a corporate accountant, or become a C-level executive at a big industrial manufacturing operation.

And because the coursework is essentially structured around running your massive operation efficiently and/or doing complex quantitative analysis, these programs do not equip students to effectively tackle any of the other vital things that 99% of working business people do day in and day out.

Truth is, no MBA program can equip you for the business world like educating yourself. By studying the basics of sound business practice and developing a network, you can get the major perks and benefits of business education at a fraction of the cost.

According to Josh Kaufman, it’s far better to spend your time and energy teaching yourself what you actually need to know to succeed in the business world, rather than waste your hard-earned cash learning irrelevant theories.

The consensus is clear: today, MBA programs are a waste of money and time. Many elite schools teach outdated assembly-line education about PowerPoint presentations and profit-and-loss statements.

After two years of studying sanitized case studies, students are bundled off into middle management to find out how business really works. Josh Kaufman has made a career out of distilling the core principles of business and delivering them quickly and concisely to people at all stages of their careers.

In the coming chapters, you will learn the essentials of marketing, negotiation, sales, and strategy.

Identify the things that people don’t have enough of and provide them

Every successful business produces something valuable. The world is full of opportunities to make people’s lives better, and your job as a businessperson is to identify things that people lack, then find a way to provide those things. The value you create can be of different forms, but the goal is always the same: to improve someone else’s life. Without creating value, a business can’t exist.

The most successful businesses in the world are the ones that generate the most value for other people.

At the heart of every business is a collection of 5 Interdependent processes. Each of these processes streams into the next:

• Value creation: find out what people need or want, then create it

• Marketing: call attention and build demand for what you’ve created

• Sales: turn prospective customers into paying customers

• Value delivery: give your customers what you’ve promised and guarantee their satisfaction

• Finance: bring in enough money to keep going and make your struggle worthwhile

Business is not rocket science — it’s simply a process of identifying a problem and finding a way to solve so that it benefits both parties. Anyone who tries to overcomplicate business is either trying to impress you or trying to sell you something you don’t need.

Did you know? The reason why most businesses thrive for a while and then die off — or don't thrive at all — is that at one point or another, they start to put revenue before people. To succeed in the business world, you must make it your ideal to sell on value versus price.

Marketing: the art and science of finding people who are actively interested in what you have to offer

The best businesses in the world look for ways to attract the attention of qualified prospects rapidly and with little cost. The more prospects you attract, the better off your business will be.

Marketing is not the same as selling. While “direct marketing” techniques often try to underrate the time between drawing attention and asking for the sale, marketing and selling are two distinct things. Marketing is a way to get noticed; Sales is about closing the deal.

The cardinal marketing sin is being boring.

Modern life is filled with demands on your attention. Everyone has a lot of things to do and too little time to do them all.

The number 1 rule of marketing is that your potential customer’s attention is limited. Keeping up with everything in your world would need a lot more attention than you have to work with. To get someone’s attention, you have to get to them through their filters. High-quality attention must be achieved. When you seek someone’s attention, it’s useful to take a moment to remember that you’re competing against everything else in their world. Be noticed; you need to earn that attention by being more interesting or useful than the competing alternatives.

People ignore what they don’t care about. One of the primary functions of the human brain is perceptual filtering: determining what to pay attention to and what to ignore. The fastest way to be ignored by anyone is to start talking about something they have no interest in.

Receptivity illustrates how open a person is to your message. It has two main components: what and when. People tend to be receptive only to specific areas of things at certain times.

The medium you use in transmitting your message matters. The form of the message influences how receptive people are to the information that the message contains. If the form of your message implies that it was built just for them, you’re far more likely to get your prospect’s attention.

Sales: successful businesses sell what they have to offer

Every successful business trades what it has to offer. Having millions of prospects isn’t reasonable if no one can pull out their wallet and say, “I’ll take one.” The sales procedure starts with a prospect and ends with a paying customer. No sale, no business.

The best businesses in the world gain the trust of their prospective customers and help them understand why the offer is worth paying for. No one likes to be taken advantage of, so sales mostly include helping the prospect understand what’s vital and convince them you’re able to deliver on what you promise.

A transaction occurs when there’s an exchange of value between two or more parties.

Sales are the point in the business cycle where resources flow into the business, which makes finalizing transactions critically important. Businesses overcome by bringing in a profit, and there’s no way to do that without completing transactions.

Transactions can only be done with economically valuable things. If you have nothing your prospective customers want, they won’t buy from you. This may seem obvious, but it’s unbelievable how many prospective business people enter the market without something the market wants. That’s why it is important to develop and test a Minimum Economically Viable Offer (MEVO); it’s the best way to find out if you’ve created something valuable enough to sell before you invest your life savings.

When you start a new business, the goal is to get to the point where you make your first profitable Transaction as fast as you possibly can because that’s the point where you shift from being a project to being a business.

Finance: the art and science of money inflow and outflow of a business

People enjoy when they learn about value creation, marketing, sales, and value delivery — they’re understandable and easy to visualize. When it comes to finance, however, it’s a different ball game. Finance creates associations of “bean counting,” mathematical formulas, and spreadsheets overflowing with numbers. It doesn’t have to be that way — finance is quite straightforward if you pay attention to what’s most important.

Finance is the art and science of watching the money come in and out of business, then decide how to distribute it and determine whether or not what you’re doing is producing the results you want. It’s really not more complicated than that. Yes, there can be loads of fancy models and jargon, but ultimately, you simply use numbers to determine whether or not your business is operating the way you planned and whether or not you get enough results.

The best businesses develop a devoted cycle: they create huge amounts of value while maintaining low expenses consistently, so they make more than enough profit to keep going without occupying too much value. This results in being able to pad their pocketbooks and improve the lives of their customers since the constant existence of the business will improve the lives of everyone involved.

Profit Margin is the difference between how much income you earn and how much you spend to gain it.

Profit is important because it’s what keeps businesses in operation. Without producing profits, a business can’t compensate its owners, who may have invested significant time, money, and energy into the operation. If the owners don’t see results in their investment, they’ll simply close the business.

Sufficiency is the point where a business concern is bringing in enough profit that the people who are running the business find it worthwhile to keep going for the foreseeable future. If you don’t bring in sufficient revenue to cover the operating expenses, that’s a major issue.

To keep going, you must be able to pay the employees and the owners for the time, effort, and attention they’re giving to the venture. If their investments aren’t worthwhile, they’ll stop doing what they’re doing and start doing something else.

There are 4 ways to increase your business’s revenue:

• Increase the number of customers you render services to

• Increase the average size of each Transaction by making more sales

• Heighten the frequency of transactions per customer

• Increase your prices

Take care of your brain and body

Now that we’ve covered the essentials of how to make a business work, we’re going to talk about understanding how people work. Businesses are built by people for people. How we assimilate information, make decisions, and decide what to do or what not to do is critically important when creating and sustaining a successful business venture. Once you understand how the human mind works, it’s easy to find better ways to do things and work more effectively with others.

Human biology is optimized for conditions that were in existence 100,000 years ago, not for the world in which we live in today. Food is everywhere; predators are not. You no longer have to be constantly on the move; instead, you spend most of your time immersed in passive activities, like sitting behind a desk at a computer. As a result, we face a lot of new threats to our brains and bodies, like obesity, heart disease, diabetes, Alzheimer’s disease, and chronically low energy.

Your brain and body simply aren’t optimized for the modern world.

Some of the challenges of working in the modern world are that our brains and bodies are tuned for physical and social survival, not sixteen-hour work-days.

Don’t be too hard on yourself. Chugging Red Bull and pulling all-nighters can only take you so far. If you want to do good work, you have to take care of yourself. If you don’t provide your body with what it needs to run, you’ll run out of gas long before you reach your goals. Your mind is firstly a physical system.

If you want to get things done, you can’t constantly be running on “empty.” Taking care of yourself should be your primary concern if you want to get important things done without burning out.

Here are a few important guidelines to help you get the most out of each day:

• Eat healthy food: pay attention to what you ingest. Also, do away with refined sugar and processed foods as much as possible

• Exercise regularly: going for a walk or run or doing a bit of yoga can help clear your mind and give you more energy for the rest of the day.

• Sleep for at least 7-8 hours each night

• Get enough sun, but not too much

Give your brain the raw materials it needs to run. If you ever feel angry, unhappy, or lethargic for no reason, your body may not be getting enough of the raw materials essential to produce the neurotransmitters responsible for making you feel good.

Accomplishment becomes easy when you learn to work with yourself

Your body and mind are the tools you use in fulfilling tasks. Learning how to work effectively with yourself makes accomplishing your goals more enjoyable. It is easy to get stressed about everything In today’s busy business environment. Learning how to work effectively can be the difference between a fulfilling career and a draining one.

When we aim to increase our “productivity,” what exactly are we shooting for? Ideally, you want to concentrate your energy and attention on a single subject at a time.

Monoidealism is when you focus your energy and attention on only one thing, without conflicts. It is sometimes called a “flow” state, a term fashioned by psychologist Mihaly Csikszentmihalyi.

Monoidealism or “flow” is the state of human attention at its most productive: clear, focused attention and effort channelled at one (and only one) subject for an extended period.

So how exactly do you put yourself into a monoideal position? First, eradicate potential distractions and interruptions. Depending on the level of cognitive activity needed to complete your work, it takes 10 to 30 minutes before your mind gets absorbed with what you’re doing. Phone calls, coworkers, and other unexpected demands on your attention will break your monoideal state, so priority number one is to ensure that you don’t get distracted.

Second, eliminate inner conflicts. Sometimes it’s difficult to begin a task because you’re experiencing a conflict between two control systems in your mind. Eliminating these conflicts before you start working will help you attain a monoideal state much more quickly.

Every project and task that you decide to work on takes a particular amount of attention, energy, and concentration to get it done. The question is: how can you achieve everything you need to do most effectively?

Accomplishment becomes easy when you learn to work with yourself

Your body and mind are the tools you use in fulfilling tasks. Learning how to work effectively with yourself makes accomplishing your goals more enjoyable. It is easy to get stressed about everything In today’s busy business environment. Learning how to work effectively can be the difference between a fulfilling career and a draining one.

When we aim to increase our “productivity,” what exactly are we shooting for? Ideally, you want to concentrate your energy and attention on a single subject at a time.

Monoidealism is when you focus your energy and attention on only one thing, without conflicts. It is sometimes called a “flow” state, a term fashioned by psychologist Mihaly Csikszentmihalyi.

Monoidealism or “flow” is the state of human attention at its most productive: clear, focused attention and effort channelled at one (and only one) subject for an extended period.

So how exactly do you put yourself into a monoideal position? First, eradicate potential distractions and interruptions. Depending on the level of cognitive activity needed to complete your work, it takes 10 to 30 minutes before your mind gets absorbed with what you’re doing. Phone calls, coworkers, and other unexpected demands on your attention will break your monoideal state, so priority number one is to ensure that you don’t get distracted.

Second, eliminate inner conflicts. Sometimes it’s difficult to begin a task because you’re experiencing a conflict between two control systems in your mind. Eliminating these conflicts before you start working will help you attain a monoideal state much more quickly.

Every project and task that you decide to work on takes a particular amount of attention, energy, and concentration to get it done. The question is: how can you achieve everything you need to do most effectively?

To be successful in business, you must learn to work with people

Working with other people is a normal part of business and life; you can’t escape it, even if you want to. All individuals have their motivations and desires. If you want to be successful in this world, it pays to understand how to get things done with and through other people.

All human relationships hinge on power. We don’t have direct access to the inner processes that make people get things done. All we have control over is to act in ways that encourage people to do what we suggest.

The use of power takes one of 2 basic forms: influence or compulsion. Influence is the ability to convince someone else to want what you suggest. Compulsion is when you force someone else to do what you command.

Encouraging an employee to “go the extra mile” as a result of a sense of loyalty or craftsmanship is influence. Forcing employees to work over the weekend by threatening to fire them if they refuse is compulsion. The actions that employees take may be similar, but their feelings when taking those actions are different.

On the whole, influencing is much more effective than compulsion. The vast majority of people will naturally resist being forced to do something against their will or better judgment, so to constantly rely on compulsion to get things done is a poor strategy. Bossing people around only serves to make them despise you, and they’ll look for ways to retaliate or quit working with you at the earliest available opportunity. However, influence is sustainable.

The more power you have, the more things you can accomplish. Accordingly, there’s nothing morally wrong with deliberately striving to increase your power, provided the rights of other people are respected. The more power you have, the more you’ll get accomplished, but with great power comes great responsibility.

Conclusion 

Having an MBA is not a guarantee for a successful business career. Most MBA programs teach very few things that are of substantial value in the working world. Their curriculums are outdated and based on a few assumptions which have very little to do with what actually happens in the business world.

No MBA program can equip you for what you’ll come across in the working world. The business sector is brutal, and the only way you can give yourself an edge is by educating yourself on its fundamental principles. By studying the basics of sound business practice and developing a network, you can get the major perks and benefits of business education at a fraction of the cost.

Josh Kaufman strongly believes that you’d do yourself a lot of good if you spend your time and energy teaching yourself what you actually need to know to succeed in the business world, rather than waste your resources learning irrelevant theories.

Lastly, a fundamental principle you must always bear in mind is that every successful business provides value that other people need at a price they’re willing to pay in such a way that will satisfy the purchaser’s needs and expectations, and provide the business enough income to make it worthwhile for the owners to continue operating. Having a clear understanding of this principle will help you get the best of all the other key concepts we’ve discussed so far in this summary.

Try this

For the next few days, think of ways you can make people’s lives better, ways you can create value for them. Once you can figure this out, you are ready to embark on your journey towards a successful business career. Remember, if you find something broken that you can fix for many people, then you’ve found yourself a gold mine.