Roman Gorge's Blog

The Invincible company was a first book that I could not open with my Kindle Paperwhite. The reason is that it is written as a visual story with a lot of graphical elements, diagrams and tables. It is a new format for me, but I have enjoyed it.

Strategyzer is a company that develops Innovation Software Management products, runs trainings and writes books about strategy, innovation and business models. I came across their most well-known book The Invincible Company because I like core idea they convey:

“Innovation is not a magic that happens by itself. It is a craft that can be analyzed and taught”

The other question how you do this and what patterns you should adopt and avoid.

What is in the book?

The Invincible Company book consists of four major pieces:

• Business Model Portfolio. A great tool that guides a reader how to analyze existing products portfolio and what actions to take for both Explore (aka Innovation) and Exploit (aka mature products) parts of the portfolio. This is an interesting exercise that I tried to apply for AWS Support products – the line of business I am currently managing myself.
• Portfolio Management – how to manage Explore and Exploit portfolios. This part was very interesting for me because it provides a workflow to design, test, scale and retire business ideas and models. Here you will find also has number of case studies where companies were able to successfully manage innovation process or transform themselves to avoid disruption. For example, Fujifilm had the same business model as Kodak but it survived photo industry digitalization and re-invented itself. Why and how? The book explains it.
• Invent Pattern Library. Collection of patterns from successful companies. How they explored new markets, how they created new value propositions, how they found new revenue streams or changed cost structure. Every pattern has associated case study, assessment and trigger questions for leaders. These questions help to build a scorecard for existing portfolio and be a conversation starter to initiate a change.
• Improve Pattern Library. Also a collection of patterns but related to business model shifts – “From Product to Recurring Service”, “From Low Touch to High Touch” and etc. What different companies did to improve their business models and how did they do it. The most interesting case study for me was TED – TED transformed from an invite-only, niche conference to a mass, online destination for the intellectually curious. Again, for every pattern there is a conversation starter – “strategic reflection”.

A combination of appealing graphical design, a lot of case studies and trigger questions make this book an excellent source of insights. I highly recommend it for everybody who is doing portfolio management or involved in any innovation processes creation or management.

5 out of 5.

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Every company is trying to build processes with predictable outcomes. Every company is trying to automate as much as possible routine operations. Why? There are multiple reasons, for sure. But one of the most obvious ones is – to save time and resources for innovation and expanding a business.

Habits play the same role in human life as processes and mechanisms play in a life of a company. We have a limited amount of mental energy, our attention span is short and we are distracted easily. All of us need a system that will efficiently maintain daily routines and help us move forward without visible conscious effort. It is not possible to focus and progress in ten different things simultaneously.

The cornerstone of such system is habits. There are two types of habits – those that make us better and efficient every day and those that hurt and degrade us with time. Let’s call them efficient and inefficient for simplicity. Why does it matter? A simple mathematical equation below gives the answer.

0.99^³⁶⁵ = 0.0255

1.01^³⁶⁵ = 37.783

Do 1% less every day for a year and you will degrade significantly. Do 1% more every day for a year and you will thrive. Progressive overload is a great example.

However, it is difficult to adopt new efficient habits and get rid of inefficient ones. I believe everyone had experience this challenge in some point of time. This is where the book Atomic Habits by James Clear comes to help. It provides exceptionally clear recommendations how to implement habits and break them. The book gives The 4 Laws:

• The 1st Law: Make It Obvious
• The 2nd Law: Make It Attractive
• The 3rd Law: Make It Easy
• The 4th Law: Make It Satisfying

How to create a good habit

It looks very easy and straightforward but I know from my personal experience that it is way more difficult to implement in reality. A couple of years ago I have read another excellent book – Pragmatic Thinking by Andy Hunt. I have implemented some of them and they stuck with me while others were abandoned over time. Now I understand why and how to fix it.

Somebody may ask, well, I have my goals. Isn’t it enough? I would like to quote the view of the author:

The purpose of setting goals is to win the game. The purpose of building systems is to continue playing the game. True long-term thinking is goal-less thinking. It’s not about any single accomplishment. It is about the cycle of endless refinement and continuous improvement. Ultimately, it is your commitment to the process that will determine your progress.

Clear, James. Atomic Habits (p. 27). Random House. Kindle Edition.

Overall, I highly recommend Atomic Habits book to everyone.

As of November 2021 there are 28 million public repositories at GitHub. Internet literally runs on open source software. After recent log4j drama there were a lot of debates (here is a very good example) about how critical parts of modern IT world are maintained by online communities and how it can be improved.

So, I asked myself a question – how exactly you can build a thriving open source project and create community around to support and maintain it? I came across the book Social Architecture by Pieter Hintjens (a founder of ZeroMQ project) gives his view on processes and guidelines how to successfully achieve such goal.

The book starts with definition and description of 20 key ideas or tools that online community should have to be successful in the long term. Transparency, decentralization, strong mission and non-tribalism are among others.

After that book moves to explaining the idea that innovation is not done by a small group of people but rather it comes from a well-defined process:

The innovative nature of the Internet comes not from a small, select band of Einsteins. It comes from RFCs anyone can use and improve, made by hundreds and thousands of smart, though not uniquely smart, individuals. It comes from open source software that anyone can use and improve. It comes from sharing, remixing, and scale of community. It comes from the continuous accretion of good solutions, and the disposal of bad ones.

Hintjens, Pieter. Social Architecture: Building On-line Communities (p. 38). Pieter Hintjens.

Basically, the book states that well-defined protocols how community members interact with each other is a mandatory pre-requisite for Collective Intelligence and, as outcome, successful open source product.

The author explains what types of licensing exist today and what are the pros and cons for each type. Other practical explanations about watermarks and how to register them are also in place.

The second half of the book describes how ZeroMQ community has been built and operates today. The most interesting part for me was dive deep into Collective Code Construction Contract (C4) that describes in RFC-like format how community should build, distribute and maintain open source software.

One more refreshing idea that I found in the book is that ZeroMQ community does not use roadmaps and do not release features. They use Simplicity Oriented Design and see a product as an endless chain of patches stack one on top of another. Every patch represents the most simple solution to a very specific problem. This idea, probably, not new but allows to look differently on traditional approach with long roadmaps and constant prioritization of engineering resources.

Overall, the book has number of interesting ideas and real life examples. 4.5 out of 5.

Have a look on my other book reviews!

Wikipedia defines cognitive bias as “systematic pattern of deviation from norm and/or rationality in judgment”. And the list of biases in the same article is impressive. Humans are quite irrational and our judgement does not always follows rules of logic. The one cannot remove biases and mental shortcuts – it is not possible to override thousands years of human brain evolution. But, the one can detect situations where biases are triggered and stay alerted.

Daniel Kahneman got his Nobel prize back in 2002 for his prospect theory that basically created behavioral economics. The theory also challenged assumption that Humans are economically rational species. Here it is in a nutshell:

• Faced with a risky choice leading to gains, individuals are risk-averse, preferring solutions that lead to a lower expected utility but with a higher certainty
• Faced with a risky choice leading to losses, individuals are risk-seeking, preferring solutions that lead to a lower expected utility as long as it has the potential to avoid losses

A book Thinking, Fast and Slow provides detailed explanation how this theory applies to various situation in our daily life and how it impacts our decision making process. (Spoiler: it impacts a lot and we not even aware about it). However, this is just a small part of knowledge that I got from the book.

The book starts with a description of simplified version of a human “thinking” mechanism that consist of two systems that play different roles in cognitive process. It explains how associative machine works, how cognitive ease derails us from original question and makes us to substitute it and etc.

Then the book goes into details of selected biases and heuristics – availability, anchoring, stereotyping, framing and others. There are a lot of mechanisms that allow us jump to conclusions without mental effort and the book gives overview how they work and how small change in a question’s frame can sway an answer to an opposite direction.

The author concentrates a lot on two important topics – overconfidence and choice. I was surprised that there are numerous studies which clearly demonstrate how bad we are in predicting the future and how often experts’ intuition is wrong. The book also gives an explanation how overconfident view, planning fallacy and optimism are important drivers for economy.

Choice, risk assessment, value assignment are parts of prospect theory and covered in the book as well. These chapters helped to understand my own thinking process when it comes to risky decisions and gambling. It also gave an insight why the same outcome may have different psychological effect depending on the context and framing.

The last part of the book is about two selves – experiencing self and remembering self. This part gave me rational explanation why our memories of events are more important than actual experience we had during the events.

After finishing the book I became even more critical to my judgements and intuition. So, I am more prepared now to employ critical thinking when it is necessary. There are several mechanisms that I will keep for my professional life – pre-mortem to fight planning fallacy, outside view and base rate. Read the book and I am sure you will find it useful too.

Overall, 5 out 5. Thinking, Fast and Slow is a perfect book for everybody. I highly recommend it.

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