The Diary of a CEO

 · 24 mins read

:memo: Please Note
  • The following book summary is the result of a collection of personal notes, highlights and thoughts extracted from the book.
  • Most of the content is a direct quotation from the book and original authors work.

The Diary of a CEO by Steven Bartlett is a compelling exploration of the lessons, challenges, and insights the author gained as a young entrepreneur. The book looks into themes like leadership, self-awareness, and resilience.

Takeaway Points

Pillar 1: The Self

Fill your 5 buckets in the right order

  1. What you know (your knowledge)
  2. What you can do (your skills)
  3. Who you know (your network)
  4. What you have (your resources)
  5. What the world thinks of you (your reputation)

To master it, you must create an obligation to teach it

‘If you want to learn something, read about it. If you want to understand something, write about it. If you want to master something, teach it.’ - Yogi Bhajan

If you want to master something, do it publicly and do it consistently.

Being able to simplify an idea and successfully share it with others is both the path to understanding it and the proof that you do. One of the ways we mask our lack of understanding of any idea is by using more words, bigger words and less necessary words.

The Feynman technique follows a few key steps:

  1. Learn
  2. Teach it to a child
  3. Share it
  4. Review (check if they really understood what you explained)

You don’t become a master because you’re able to retain knowledge. You become a master when you’re able to release it.

You must never disagree

Healthy conflict strengthens relationships because those involved are working against a problem; unhealthy conflict weakens a relationship because those involved are working against each other.

If you want to keep someone’s brain lit up and receptive to your point of view, you must not start your response with a statement of disagreement. When you find yourself disagreeing with someone, avoid the emotional temptation, at all costs, to start your response with ‘I disagree’ or ‘You’re wrong’, and instead introduce your rebuttal with what you have in common, what you agree on, and the parts of their argument that you can understand.

The art of becoming a great communicator, conversationalist or partner is first listening so that the other person feels ‘heard’, and then making sure you reply in a way that makes them feel ‘understood’.

Our words should be bridges to comprehension, not barriers to connection. Disagree less, understand more.

You don’t get to choose what you believe

Authority figures are powerful forces for belief change, but the most powerful force of all is first-party evidence from our own five physical senses. As the phrase goes, seeing is believing. There are four factors that determine whether a new piece of evidence will change an existing belief:

  1. A person’s current evidence.
  2. Their confidence in their current evidence.
  3. The new evidence.
  4. Their confidence in that new evidence.

Don’t try and break or argue with someone’s existing evidence; instead focus on implanting completely new evidence, and make sure you’ve highlighted the incredibly positive impact this new evidence will have on them.

Interestingly, people won’t lower the conviction of their beliefs when you attack them or try to convince them with data, but they will lose conviction when asked to explain or analyse the details of their beliefs.

Stop telling yourself you’re not qualified, good enough or worthy. Growth happens when you start doing the things you’re not qualified to do.

You Must Lean in to Bizarre Behavior

When you don’t understand, lean in more. When it challenges your intelligence, lean in more. When it makes you feel stupid, lean in more. Leaning out will leave you behind. Don’t block people that you don’t agree with, follow more of them. Don’t run from ideas that make you uncomfortable, run towards them.

Change is only going to get faster - so expect your feelings of cognitive dissonance - the feeling that something doesn’t make sense and conflicts with what you already know, to increase.

‘When a friend makes a mistake, the friend remains a friend and the mistake remains a mistake.’ - Shimon Peres

Taking no risks will be your biggest risk. You have to risk failure to succeed. You have to risk heartbreak to love. You have to risk criticism for the applause. You have to risk the ordinary to achieve the extraordinary. If you live avoiding risk, you’re risking missing out on life.

Ask don’t tell - the question/behavior effect

Questions, unlike statements, elicit an active response – they make people think.

The question/behaviour effect is even more powerful with questions that can only be answered with either yes or no. The question/behaviour effect is at its strongest when questions are used to encourage behaviour that fits the receiver’s personal and social ambitions (when answering yes to the question would bring them closer to who they want to be).

Never compromise your self story

Self story: our personal belief of who we are, encompassing all our thoughts and feelings about ourselves – physically, personally and socially. It includes our beliefs about our capabilities, our potential and our competence.


Figure 1: Self Story Loop (Image by author).

‘The true test of a man’s character is what he does when no one is watching.’

Never fight a bad habit

A habit loop consists of three key elements:

  • CUE: The trigger for habitual behaviour (e.g., a stressful meeting or negative event).
  • ROUTINE: The habitual behaviour (e.g., smoking a cigarette or eating chocolate).
  • REWARD: The result/impact on you of the habitual behaviour (e.g., a feeling of relief or happiness).

If you want to overcome a habit, do not fight against it (we are action-oriented creatures, not inaction-oriented creatures). Work with your habit loop and use positive action to replace it. Do not take on more than one bad habit at once; the more you try and change, the less your chances of changing anything.

Always prioritize your first foundation

There is no greater form of gratitude than taking care of yourself.

‘Those who think they have no time for bodily exercise will sooner or later have to find time for illness.’ - Edward Stanley

Pillar 2: The Story

Useless Absurdity will define you more than useful practicalities

Our public story will be defined not by all the useful practical things that you do – in many cases, not even by the products that you sell – but by the useless absurdity that your brand is associated with (the most absurd thing about you says everything about you).

Normality is ignored. Absurdity sells.

Avoid Wallpaper at all costs

Habituation: is a phenomenon in which the brain adjusts to repeated stimuli by ignoring or downgrading their significance.

The optimal level of exposure: new things grab our attention, but we like things when they’re familiar.

Wallpaper: the overuse of popular terms, phrases and calls to action to the point that the brain habituates to them and tunes them out – is the enemy of effective and successful storytelling and marketing.

You must piss people off

Indifference - when people don’t love you or hate you - is the least profitable outcome for a marketer (‘Make people feel something – either way.’).

Some people will love you. Some people will hate you. Some people simply won’t care. You will only connect to the first two. But not to the third. Indifference is the least profitable outcome.

Shoot your psychological moonshot first

A psychological moonshot is a relatively small investment that drastically improves the perception of something (creating illusion of value). Psychological moonshots prove that it’s nearly always cheaper, easier and more effective to invest in perception than reality.

Psychological principles that impact a customer’s satisfaction: the peak–end rule, idleness aversion, operational transparency, uncertainty anxiety and the goal-gradient effect.

The peak–end rule: customers will judge their entire experience on just two moments – the best (or worst) part, and the end.

Idleness aversion: people who are busy are happier than people who are idle – even if they are not busy of their own volition (i.e., you’ve coerced them into some activity).

Operational transparency: explaining each step going on behind the scenes increases customer trust.

Uncertainty anxiety: the objective is to reduce any uncertainty anxiety the customer might have (e.g. delivery time, product quality)

The goal-gradient effect: It’s been repeatedly proven that what motivates us most is how close we are to achieving a goal: we work faster the closer we are to success.

Do not wage a war on reality, invest in shaping perceptions. Our truth is not what we see. Our truth is the story we choose to believe.

Friction can create value

Making things easier isn’t necessarily the path to a psychological moonshot; sometimes you have to do the opposite: increase friction, wait times and inconvenience, to achieve the same increase in perceived value.

The frame matters more than the picture

The way that something is packaged has a big impact on how it’s received. How something is framed affects how consumers perceive and value the brand.

Framing isn’t about lying and deception; it’s about knowing how to present your product or service through the most factual and compelling lens.

Reality is nothing more than perception and context is king.

Use Goldilocks to your advantage

The Goldilocks effect is a type of ‘anchoring’. Anchoring is a cognitive bias where individuals rely too heavily on seemingly irrelevant information (the ‘anchor’) when making decisions.

In the context of the Goldilocks effect, by presenting two ‘extreme’ options next to the option you’re hoping to sell, you can make the middle option appear more attractive or reasonable.

Our decisions aren’t driven by sense, they’re driven by the nonsense created by social cues, irrational fear and survival instincts.

Let them try and they will buy

The endowment effect is a cognitive bias that causes people to overvalue an item simply because they own it, regardless of its objective value.

Getting your product into customers’ hands remains an incredibly powerful tool for salespeople, marketers and brands. Next time you’re trying to make someone love something and pay a good price for it, don’t just tell them how great it is, use the power of the endowment effect and take a page out of Apple’s book: let them touch it, play with it, test drive it and try it out.

Through the lens of ownership, the ordinary becomes the extraordinary.

Fight for the first 5 seconds

The first five seconds, in any story, is do or die (get their attention or lose them). When you’re thinking about storytelling, cater to your most uninterested customer first.

Attention might just be the most generous gift that anyone can give.

Pillar 3: The Philosophy

You must sweat the small stuff

The secret to Toyota’s philosophy is a principle known by its Japanese name, ‘kaizen’, which means ‘continuous improvement’. In the kaizen philosophy, innovation is seen as an incremental process; it’s not about making big leaps forward, but rather making small things better, in small ways, everywhere you can, on a daily basis.

The kaizen philosophy vehemently rejects the notion that only a select few members of a company’s hierarchy are responsible for innovation; it insists that it has to be an everyday task and concern of all employees, at all levels.

Kaizen philosophy says you must create a standard, make sure everyone meets the standard, ask everyone to find ways to improve the standard, and repeat this process for ever.

True innovation is nearly always born from the sweat and determination of persistent individuals and great teams bound together by the right culture and philosophy, not from eureka moments, accidental fortune or intentional genius.

A small miss now creates a big miss later

In aviation there’s a principle called the ‘1 in 60 rule’, which means that being off target by 1 degree will lead to a plane missing its end destination by 1 mile for every 60 miles flown

The smallest seeds of today’s negligence will bloom into tomorrow’s biggest regrets.

You must outfail the competition

We all know failure is feedback, and we can agree that feedback is knowledge, and as the cliché asserts, knowledge is power. Therefore, failure is power, and if you want to increase your chances of success, you must increase your failure rate. Those who fail to constantly fail are destined to be the eternal followers. Those that out-fail their competition will be followed for ever.

Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.

Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that; they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high-judgement individuals or small groups. As organizations get larger, there seems to be a tendency to use the heavyweight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.

No contracts, no lawyers, no layers of sign-off, no delays - trust, speed and empowerment.

Get to 51 per cent certainty, and make the decision. Perfect decisions exist only in hindsight;

5 principles to outfail the competition:

  1. Remove bureaucracy: Systems like this are a tax on human ingenuity, energy and entrepreneurism. Bureaucracy defends the status quo long past the time the quo has lost its status.
  2. Fix the incentives: If you want to predict what a group of people will do over the long term, you need to look at their incentives, not their instructions.
  3. Promote and fire: Influence trickles down, you need the people at the highest point in the company to be the most avid disciples of your cultural values.
  4. Measure accurately (measure to improve and establish KPIs): Too often employees don’t step forward with new ideas because they’re unclear on the process they should follow. Education is the easiest way to remove operational psychological friction.
  5. Share the failure: build intellectual capital across the company about the different experiments tried, what succeeded and what failed.

You must become a Plan A thinker

The only way you go forward, is because you cannot go back.’ I couldn’t go back. I had nowhere ‘back’ to go. Not having a Plan B became the most incredible motivational force in my life. When the human mind excludes all other possibilities and fixates on a single path, that path draws in every available ounce of your passion, perseverance and power, leaving no room for hesitation or deviation.

Additionally, while some can feel frozen by their fear of failure, research shows that the fear of failure can actually provide the impetus needed to get to your goal. In a similar vein, other research has shown that the more you perceive negative emotions in the event of failure, the more driven you will be to succeed. However, if you have a back-up plan, the incentive to succeed is lessened because you have removed the fear of failure.

Don’t be an ostrich

When an ostrich senses danger, it buries its head in the sand. The idea is that if the ostrich can just hide from the threat, the danger will eventually pass.

‘Denial can be healthy, enabling individuals to cope with rather than become immobilized by anxiety, or it can be unhelpful, creating a self-deception that alters reality in ways that are dangerous.’

In a relationship, if you’re having the same conversation over and over again, you are having the wrong conversation. You’re avoiding the uncomfortable conversation you should be having.

Pain in every walk of life is unavoidable, but the pain that we create by trying to avoid pain is avoidable.

4 step approach to dealing with discomfort and avoiding procrastination:

  1. Pause and acknowledge
  2. Review Yourself
  3. Speak your truth
  4. Seek the truth: This means to listen. But not just listening to hear, listening to understand. Not from the perspective of an adversary that’s looking for victory, but from the perspective of a partner, patiently intent on overcoming a difficulty.

If you want long-term success in business, relationships and life, you have to get better at accepting uncomfortable truths as fast as possible. When you refuse to accept an uncomfortable truth, you’re choosing to accept an uncomfortable future.

You must make pressure your privilege

‘Pressure is a privilege – it only comes to those that earn it.’

Changing how you respond to stress and pressure can help you harness the creative power of stress while minimising its detrimental effects:

  1. See it
  2. Share it
  3. Frame it
  4. Use it

‘Hard’ is the price we pay today for an ‘Easy’ tomorrow. Comfortable and Easy are short-term friends but long-term enemies. If you’re looking for growth, choose the challenge.

The Power of Negative Manifestation

That pivotal question is: ‘Why will this idea fail?. Follow these 5 steps to do a pre-mortem analysis:

  1. Set the stage
  2. Fast forward to failure
  3. Brainstorm reasons for failure
  4. Share and discuss
  5. Develop contingency plans

There are five main reasons why we shy away from engaging with this question:

  • Optimism Bias
  • Confirmation Bias
  • Self-serving Bias
  • Sunk Cost Fallacy Bias
  • Groupthink Bias

You can predict someone’s success in any area of their life by observing how willing and capable they are at dealing with uncomfortable conversations. Your personal progression is trapped behind an uncomfortable conversation.

Your skills are worthless, but your context is valuable

  1. Our skills hold no intrinsic value. Our skills are worth nothing. As the phrase goes, value is what someone is willing to pay.
  2. The value of any skill is determined by the context in which it is required. Every skill holds a different value in a different sector.
  3. The perception of a skill’s rarity influences how much people value it.
  4. People will assess the worth of your skill based on how much value they believe it can generate for them.

To be considered the best in your industry, you don’t need to be the best at any one thing. You need to be good at a variety of complementary and rare skills that your industry values and that your competitors lack.

The discipline equation: death, time and discipline!

The allocation of your time will determine if you succeed or fail in your life’s work, if you’ll be healthy and happy, if you’ll be a successful partner, husband, wife or parent. Our time - and how we allocate it - is the centre point of our influence.

Discipline is the ongoing commitment to pursuing a goal, independent of fluctuating motivation levels, by consistently exercising self-control, delayed gratification and perseverance.

\[DISCIPLINE = THE VALUE OF THE GOAL + THE REWARD OF THE PURSUIT - THE COST OF THE PURSUIT\]

Being selective about how you spend your time, and who you spend your time with, is the greatest sign of self-respect.

‘We don’t have to be smarter than the rest. We have to be more disciplined than the rest.’ - Warren Buffett

Pillar 4: The Team

Ask who not how

Every company, whether they realise it or not, is simply a recruitment company. Every CEO and founder will be judged simply on their ability to 1. hire the best individuals, and 2. bind them with a culture that gets the best out of them – where they become more than the sum of their parts, where 1 + 1 = 3.

‘I consider the most important job of someone like myself is recruiting. . . . I’ve built a lot of my success off finding these truly gifted people and not settling for B and C players, but really going for the A players. It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.’ - Steve Jobs

Create a cult mentality

‘You should run your start-up like a cult.’ - Peter Thiel, PayPal co-founder

The four stages of a company’s life are the cult, growth, enterprise and decline phases. In the cult or ‘zero to one’ phase, the founding team members are typically so consumed by their delusional belief, enthusiasm and urgency, that they go ‘all-in’, sacrificing their social life, relationships and, unfortunately, their wellbeing, to try and get their baby off the ground. In the growth phase, the company is a mess behind the scenes. Employees are overworked, under-resourced and often inexperienced. They don’t have the systems, processes or people they need to handle the growth, but they feel like they’re on a rocket ship to somewhere great, so they hold on to the ship with great excitement, terror and hope regardless. In the enterprise phase, people are stable. Their lives tend to have greater balance, employee retention improves, and expectations, processes and systems are defined. The final phase, decline, comes to all companies eventually – usually because of the risk-aversion, complacency and ostrich effect.

What are the ingredients of a cult?

  1. A sense of community and belonging
  2. A shared mission
  3. An inspirational leader
  4. An “US” vs “Them” mentality

The 10 steps to building a company culture:

  1. Define the company’s core values and align them with aspects such as mission, vision, principles or purpose to create a solid foundation for the organisation.
  2. Integrate the desired culture into every aspect of the company, including hiring policies, processes and procedures across all departments and functions.
  3. Agree upon expected behaviours and standards for all team members, promoting a positive work environment.
  4. Establish a purpose that goes beyond the company’s commercial goals, fostering a deeper connection for employees.
  5. Use myths, stories, company-specific vocabulary and legends, along with symbols and habits, to reinforce the company culture and embed it in the collective consciousness.
  6. Develop a unique identity as a group and cultivate a sense of exclusivity and pride within the team.
  7. Create an atmosphere that celebrates achievements, progress, and living the company culture, boosting motivation and pride.
  8. Encourage camaraderie, community and a sense of belonging among team members, encourage mutual dependence and a collective sense of obligation, reinforcing the interconnected nature of the team.
  9. Remove barriers and enable employees to express themselves authentically and embrace their individuality within the organisation.
  10. Emphasise the unique qualities and contributions of both employees and the collective, positioning them as distinct and exceptional.

Cults are in the long term unsustainable, we need therefore to shift culture over time. A sustainable culture should have: people are authentically engaged with a mission they care about; trusted with a high degree of autonomy; sufficiently challenged in their work; given a sense of forward motion and progress; and surrounded by a caring, supportive group of people that they love to work with and that provide them with ‘psychological safety’.

If the culture is strong, new people will become like the culture. If the culture is weak, the culture will become like the new people.

The 3 bars to building great teams

“I couldn’t wait to fire individuals who were negative and didn’t fit. They were ruining my good kids. People who are negative always need somebody to be negative with them. You’ve got to get rid of them. I never carried a negative person that didn’t fit the culture for more than a couple of months. These people are thieves in the night, they take your energy away, and your most valuable asset is your energy.”

They found that negative behaviour completely outweighed positive behaviour, meaning that a single ‘bad apple’ can spoil the team’s culture, while one, two or three good workers cannot un-spoil it.

No one person leaving a good company kills it, but sometimes one person staying can.

Assessing employee performance: ‘If everyone in the organisation had the same cultural values, attitude and level of talent as this employee, would the bar (the average) be raised, maintained, or lowered?’

Leverage the power of progress

The bigger the task and the less competent we feel about accomplishing it, the greater the procrastination. The key to overcoming that discomfort and preventing procrastination is to ‘smallify’ the task into easy, achievable micro-goals.

How to create the perspective of progress in teams:

  1. Creating meaning: When work feels meaningless, motivation evaporates.
  2. Setting clear and actionable goals.
  3. Providing autonomy.
  4. Removing friction.
  5. Broadcasting the progress.

The most professionally rewarding feeling in the world is a sense of forward motion.

You must be an inconsistent leader

For us as leaders, to become the complementary puzzle piece for each member of our team, we must be as inconsistent, emotionally variable and fluctuating as the people in our teams are.

It is impossible to seamlessly blend into a team as a jigsaw piece unless you comprehend the unique shape of each of your team members. More significantly, he knew that every member of his team was propelled by vastly different motivators. When you’re in the business of motivating people, emotional management is everything.

Learning never ends

Quotes

‘Everything should be as simple as possible, but not simpler.’ — Einstein

‘One can have no smaller or greater mastery than mastery of oneself; you will never have a greater or lesser dominion than that over yourself; the height of your success is gauged by your self-mastery, the depth of your failure by your self-abandonment. Those who cannot establish dominion over themselves will have no dominion over others.’ - Leonardo da Vinci

Book Authors: Steven Bartlett

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