The Personal MBA^TM

Check out this fantastic, in-depth interview with John Mackey, the CEO of Whole Foods. The interview is ostensibly about Mackey’s shift in political beliefs that resulted from growing his business from a small natural food market to a large corporation with a market capitalization of $5.45 billion, but there’s a lot of core business knowledge to be gained from the interview as well. (You know the interview is good when the CEO comments, “You’re asking me the most difficult and complex questions that I have ever been asked in any interview before.”)

Here is John’s perspective on the value of reading, particularly reading books whose premise you don’t currently understand or agree with:

I’m committed to understanding, realizing, and experiencing truth. It is essential that we read books that disagree with our own personal viewpoints — that challenge us, stretch us, upset us, and break us out of our comfortable world views, whatever they may be. I’m far less interested in being right or belonging to some school of thought than I am in personally learning and growing. Most people are afraid to open themselves to new ideas and new viewpoints because they are afraid it will require them to change. And they’re right — it will cause them to change. However, I enjoy this kind of change because I see it as personal growth.

During the course of the interview, Mackey brings up a fundamental issue that’s been a topic of spirited conversation among businesspeople all over the world: is the primary purpose of a business maximizing profits for shareholders (i.e. the Milton Friedman view), or is it appropriate for a for-profit business to prioritize other purposes over immediate shareholder returns? Mackey’s view is well-articulated and thought-provoking:

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If you're new to the Personal MBA, you'll want to check out the manifesto and recommended reading list to see what we're all about.

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NOTE: this post is part #2 of an interview with Seth Godin about his new book, The Dip. In this post, Seth is answering questions from PMBA readers. You can read part #1 of the interview here.

Steve Olson asks: “The problem with the insanity of the cul-de-sac is identifying when we are on it. How do you identify Dips for what they are as opposed to cul-de-sacs?”

Seth: I think the things to look for are:

1. Is it getting more difficult?
2. Can you measure it?
3. Have others gotten through this Dip before?

If the answers are ‘no’, then it’s a dead end, probably.

Judy asks: “How does someone separate their ego from their analysis? I see someone enamored of the idea of the Dip who is actually caught in a Cul de Sac… but is not ready to hear that truth… It is easier sometimes to persevere than to admit you picked the wrong road.”

Seth: Exactly! Part of the reason I wrote the book is so you could give it to people. The only way someone is going to quit smart is for them to realize that they want to reach a goal, and you can’t do that for them.

Olena asks: “What was your (biggest) personal dip, and what would you have done differently in your life had you thought of the dip theory earlier?”

Seth: The list is really long. I started a record label called Zoomtone. We did all the hard stuff… the artists, the recordings, the art, the initial promotion. What I didn’t do was plan for the Dip. I was waiting for a miracle. It didn’t happen. The lesson learned: if you don’t have the time or resources to plan for the Dip, you actually don’t have the time or resources to start.

Ryan J. Parker asks: “How long is too long? Is it better to focus on getting through a dip that you can push through sooner rather than later, or is it best to try and push through the dip that might be years off? Assume, of course, that the dip that takes longer to push through has more risk involved, but an appropriate amount of reward for pushing through. Depending on what you’re trying to do, being the best in the world can take a significant amount of time, and I’d like to hear your thoughts on how long is too long.”

Seth: I think what you need to do is find a Dip where the effort is proportional to the reward and the risk. Running for President or trying to be #1 on the billboard have great outcomes, but are extremely risky and time consuming. You need to make your call on what makes it worth it for you.

Benjamin Atkinson asks: “Can you provide an example of a company that crossed the Dip, dug it deeper to make it harder on competitors and ended up being outflanked by a competitor? I see risk in focusing too intently on the Dip I have crossed, to the exclusion of other opportunities/threats.”

Seth: Microsoft built the Valley of Death around the OS and Word and Excel… very deep and very long. Alas, Linux and the web totally change the dynamic, making most of the valley they built not worth so much any more.

Thanks so much to Seth for this fantastic interview! If you found this interview interesting, pick up a copy of The Dip - it’s a quick read that will make you see your projects in a whole new way.

NOTE: this post is part #1 of an interview with Seth Godin about his new book, The Dip. In this post, Seth is answering questions asked by Josh Kaufman. You can read part #2 of the interview here.

The new Personal MBA manifeso and reading list will have a heavy emphasis on mental models: simple concepts that represent how the world really works. Mental models are powerful and flexible tools that can help you understand a wide variety of situations, and collecting useful models is one of the primary purposes of self-education.

Seth Godin’s new book, The Dip, is a primer on the art of strategic quitting and an excellent example of just how powerful mental models can be. This book examines a tremendously important but often unasked question: when should you quit? In answer, Seth created two very powerful mental models that have permanently changed the way I think about goals and projects.

“The Dip”

The Dip is a mental model that represents the path to “best in the world” status for everything worth doing. You start out with a lot of energy, making huge strides toward your goal. You’re firing on all cylinders. You’re excited and motivated.

Then you hit the wall.

Things get tough. You start to tackle the less sexy aspects of your goal, like taking organic chemistry, doing your business’ taxes, refining your product for the 5126th time, writing your doctoral thesis, or studying for the bar exam. Progress is slow and painful. You’re tempted to give up, and that’s exactly what most people do. But you see the future beyond the Dip, and you want it, so you press on.

On the other side of the Dip, however, things are bright and sunny. You’re among the best in the world. Competition is limited, and because you’re at the top of the heap, you’re in high demand. You’ve built a significant “moat” between yourself and others who would like to be in your shoes. The time you spent pushing through the Dip was worth it, and you’ll continue to reap the rewards until someone (maybe you) pushes through an even bigger Dip that changes the game yet again.

“The Cul-de-Sac”

The Cul-de-Sac is a model that represents things that ultimately aren’t worth doing. You grind your way forward, giving a lot but gaining precious little ground. Your current path is literally a “dead end” that won’t lead you where you want to go, but it’s tempting to keep plodding along. Drastic change is scary, and it’s easy to stay stuck in comfortable mediocrity, so most people do.

In this handy little book, Seth argues that the Dip is your friend if you believe you can be the best in the world at something, and your eternal foe if you don’t. Anticipating the Dip and mustering the force of will to propel yourself through it gives you a significant competitive advantage over people who can’t cut it - the Dip weeds out the less dedicated competition. On the flip side, if you can’t be the best in the world, the Dip will ensure you suffer the indignity of endless mediocrity until you get the picture and quit. The value at the top is created by scarcity, and the Dip is directly responsible for creating that scarcity.

Seth’s advice is pretty simple: quit the dead ends and invest in the Dips. Immediately identify the areas of your life or business where you’re in a cul-de-sac and quit without reservation or remorse, freeing your time and energy to attack the Dips worth conquering. Before attacking a Dip, take a realistic assessment of yourself and decide whether or not you have the skills and determination to persevere through the hard times. If you don’t, do something else. As Seth mentions several times in the book: “If you’re not going to be #1, you might as well quit now.”

For additional information about The Dip, check out Seth’s manifesto, which was just published on ChangeThis, as well as the book’s official blog.

I recently asked Seth a few questions about The Dip, and he was kind enough to share his perspective:

JOSH: The advice you give in your book is to stick with the Dips that are likely to pan out (the ones that will make you the best in the world), quit the Dips that won’t, and immediately quit Cul-de-Sacs to focus your resources. How should a smart person choose which Dips to lean into and which ones to walk away from?

SETH: Ah, well that’s the art of it, isn’t it?

It’s sort of like asking, “what’s remarkable” about the Purple Cow theory. The answer is, I DON’T KNOW! But I think you do. I think deep down, each individual can see a little about around the corner, do a little bit to understand why they are having so much trouble getting stuck.

That said, it’s also possible for an outsider to take a look at what you’re doing and see what can be measured and what can’t, what’s realistic and what isn’t. Long-shots make good movies-of-the-week, but it’s not necessarily the way to build a long term career.

JOSH: I’m particularly intrigued about the competitive advantage of breaking through big Dips. (I think you refer to them as “Valleys of Death”.) Since the Dip weeds out non-committed competitors, once you make it through, the Dip serves as a deterrent to future competition. Should businesspeople (particularly entrepreneurs) actively seek out ideas that are worthwhile but insanely difficult?

SETH: I think the challenge is to cross a smaller Dip and then work like mad to build the Dip behind you bigger. The Valley of Death that Microsoft built, for example, kicked in AFTER they had the operating system in their favor.

JOSH: How does the Dip apply to traditional business education and business self-education?

SETH: The bet behind the University of Chicago MBA is this: it’s the Dip. If you manage to get in, manage to pay for it and manage to graduate, boom, you’re on the other side. Now you’re going to be rich and happy for a long time.

What’s happened? The Dip hasn’t gotten bigger (like the Valley of Death) - it’s gotten smaller. It’s worth less. It’s a huge opportunity cost in exchange for… what exactly? If you want to be a consultant or an investment banker, it’s still an essential Dip. But if you want to run a factory or a non-profit or start a business, the Dip that’s represented by the degree (not the education or the network, I’m just talking about the degree) is slim indeed.

I think instead, getting the network and the education (without the very expensive diploma) frees you up to accomplish some amazing things, to work your way through Dips that MBAs are too busy to get to.

JOSH: Everyone who begins the Personal MBA quickly encounters the Dip. It’s easy to buy in to the idea and get excited about reading the first few books, but before long, tackling the next book becomes an uphill battle. Assuming a person knows why they’re completing the PMBA and believes doing so will make them exceptional at what they do, do you have any tips for staying motivated when the going is rough?

SETH: Well, that’s one of the great side effects of paying tuition. It forces the mind to focus. So why not put $15,000 in an escrow account (borrow it if you have to) and instruct, in writing, a lawyer to donate all the money to the George W. Bush library, the Flying Spaghetti Monster Defense Fund (or some other cause you’re not excited about) if you don’t finish the curriculum. That’ll create an external force that will keep you pushing when it feels a lot easier to quit.

(Josh’s aside: this is the primary reason I’m setting up PMBA coaching! It’s easier to keep going when you have someone providing a bit of external motivation.)

JOSH: In your opinion, what would help the Personal MBA break through the business education “Conceptual Dip” to be the absolute best business self-education resource in the world?

SETH: I think what’s missing from the Personal MBA is easy transferability. In other words, it’s not trusted yet. Safety-seeking managers don’t trust themselves to hire people with a PMBA. The good news is that every day, more people with a PMBA end up in hiring positions, or end up doing great things… so it is spreading, and it’s getting more powerful every day.

Thanks, Seth!

Now it’s your turn!

Seth has graciously agreed to take questions from PMBA members, so submit your questions in the comments below. Seth and I will pick the best 2-3 questions, and the lucky question-askers will get a reply from Seth plus a free copy of The Dip! (Please ensure you put a valid e-mail address in the comments so I can contact you later about the books.) Ask away!