How Will You Measure Your Life? by Clayton Christensen cover

How Will You Measure Your Life? by Clayton Christensen

Date read: 2014-10-02.
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Deals with the question: how can we find satisfaction in life? Avoid the trap of marginal thinking. The best time to invest in relationships is when we don't think it's necessary. We project what we want and assume that others want the same thing. To improve any relationship ask 'what job does X need me to do the most?' and then do it.


There are no quick fixes for the fundamental problems of life.

I Don’t Have an Opinion, the Theory Has an Opinion

A good theory doesn’t change its mind: it doesn’t apply only to some companies or people, and not to others.

Good theory can help us categorize, explain, and, most important, predict. People often think that the best way to predict the future is by collecting as much data as possible before making a decision. But this is like driving a car looking only at the rear view mirror—because data is only available about the past.

That’s a hallmark of good theory: it dispenses its advice in “if-then” statements.

Solving the challenges in your life requires a deep understanding of what causes what to happen.

Finding Happiness in Your Career

A strategy is what you want to achieve and how you will get there.

In the business world, this is the result of multiple influences: what a company’s priorities are, how a company responds to opportunities and threats along the way, and how a company allocates its precious resources. These things all continuously combine, to create and evolve a strategy.

The starting point for our journey is a discussion of priorities. These are, in effect, your core decision-making criteria: what’s most important to you in your career?

The problem is that what we think matters most in our jobs often does not align with what will really make us happy. Even worse, we don’t notice that gap until it’s too late.

The final element is execution. The only way a strategy can get implemented is if we dedicate resources to it. Good intentions are not enough—you’re not implementing the strategy that you intend if you don’t spend your time, your money, and your talent in a way that is consistent with your intentions.

What Makes Us Tick

It’s impossible to have a meaningful conversation about happiness without understanding what makes each of us tick.

When we find ourselves stuck in unhappy careers—and even unhappy lives—it is often the result of a fundamental misunderstanding of what really motivates us.

One of the best ways to probe whether you can trust the advice that a theory is offering you is to look for anomalies—something that the theory cannot explain.

Two-factor theory, or motivation theory—that turns the incentive theory on its head. It acknowledges that you can pay people to want what you want—over and over again. But incentives are not the same as motivation.

True motivation is getting people to do something because they want to do it. This type of motivation continues, in good times and in bad.

Satisfaction and dissatisfaction are separate, independent measures. This means, for example, that it’s possible to love your job and hate it at the same time. This theory distinguishes between two different types of factors: hygiene factors and motivation factors.

On one side of the equation, there are the elements of work that, if not done right, will cause us to be dissatisfied. These are called hygiene factors. Hygiene factors are things like status, compensation, job security, work conditions, company policies, and supervisory practices. Bad hygiene causes dissatisfaction. You have to address and fix bad hygiene to ensure that you are not dissatisfied in your work. Interestingly, Herzberg asserts that compensation is a hygiene factor, not a motivator.

This is an important insight from Herzberg’s research: if you instantly improve the hygiene factors of your job, you’re not going to suddenly love it. At best, you just won’t hate it anymore. The opposite of job dissatisfaction isn’t job satisfaction, but rather an absence of job dissatisfaction.

So, what are the things that will truly, deeply satisfy us, the factors that will cause us to love our jobs? These are what Herzberg’s research calls motivators. Motivation factors include challenging work, recognition, responsibility, and personal growth. Feelings that you are making a meaningful contribution to work arise from intrinsic conditions of the work itself. Motivation is much less about external prodding or stimulation, and much more about what’s inside of you, and inside of your work.

The point isn’t that money is the root cause of professional unhappiness. It’s not. The problems start occurring when it becomes the priority over all else, when hygiene factors are satisfied but the quest remains only to make more money.

I concluded, if you want to help other people, be a manager. If done well, management is among the most noble of professions.

The second realization I had is that the pursuit of money can, at best, mitigate the frustrations in your career—yet the siren song of riches has confused and confounded some of the best in our society.

In order to really find happiness, you need to continue looking for opportunities that you believe are meaningful, in which you will be able to learn new things, to succeed, and be given more and more responsibility to shoulder.

The theory of motivation suggests you need to ask yourself a different set of questions than most of us are used to asking.

  • Is this work meaningful to me?
  • Is this job going to give me a chance to develop?
  • Am I going to learn new things?
  • Will I have an opportunity for recognition and achievement?
  • Am I going to be given responsibility?

These are the things that will truly motivate you. Once you get this right, the more measurable aspects of your job will fade in importance.

The Balance of Calculation and Serendipity

You have to balance the pursuit of aspirations and goals with taking advantage of unanticipated opportunities. Managing this part of the strategy process is often the difference between success and failure for companies.

As Professor Henry Mintzberg taught, options for your strategy spring from two very different sources. The first source is anticipated opportunities—the opportunities that you can see and choose to pursue. When you put in place a plan focused on these anticipated opportunities, you are pursuing a deliberate strategy.

The second source of options is unanticipated—usually a cocktail of problems and opportunities that emerges while you are trying to implement the deliberate plan or strategy that you have decided upon.

The unanticipated problems and opportunities then essentially fight the deliberate strategy for the attention, capital, and hearts of the management and employees.

The company has to decide whether to stick with the original plan, modify it, or even replace it altogether with one of the alternatives that arises. The decision sometimes is an explicit decision; often, however, a modified strategy coalesces from myriad day-to-day decisions to pursue unanticipated opportunities and resolve unanticipated problems. When strategy forms in this way, it is known as emergent strategy.

When the company’s leaders made a clear decision to pursue the new direction, the emergent strategy became the new deliberate strategy. But it doesn’t stop there. The process of strategy then reiterates through these steps over and over again, constantly evolving.

In other words, strategy is not a discrete analytical event—something decided, say, in a meeting of top managers based on the best numbers and analysis available at the time. Rather, it is a continuous, diverse, and unruly process.

Understanding this—that strategy is made up of these two disparate elements, and that your circumstances dictate which approach is best—will better enable you to sort through the choices that your career will constantly present.

But if you haven’t reached the point of finding a career that does this for you, then, like a new company finding its way, you need to be emergent. This is another way of saying that if you are in these circumstances, experiment in life.

As you learn from each experience, adjust. Then iterate quickly. Keep going through this process until your strategy begins to click.

There’s a tool that can help you test whether your deliberate strategy or a new emergent one will be a fruitful approach. It forces you to articulate what assumptions need to be proved true in order for the strategy to succeed. The academics who created this process, Ian MacMillan and Rita McGrath, called it “discovery-driven planning,” but it might be easier to think about it as a “What has to prove true for this to work?

Ask the project teams to compile a list of all the assumptions that have been made in those initial projections. Then ask them: “Which of these assumptions need to prove true in order for us to realistically expect that these numbers will materialize?”

The assumptions on this list should be rank-ordered by importance and uncertainty. At the top of the list should be the assumptions that are most important and least certain, while the bottom of the list should be those that are least important and most certain.

Only after you understand the relative importance of all the underlying assumptions should you green-light the team—but not in the way that most companies tend to do. Instead, find ways to quickly, and with as little expense as possible, test the validity of the most important assumptions.

Once the company understands whether the initial important assumptions are likely to prove true, it can make a much better decision about whether to invest in this project or not.

Before you take a job, carefully list what things others are going to need to do or to deliver in order for you to successfully achieve what you hope to do. Ask yourself: “What are the assumptions that have to prove true in order for me to be able to succeed in this assignment?” List them. Are they within your control?

Equally important, ask yourself what assumptions have to prove true for you to be happy in the choice you are contemplating.

  • Are you basing your position on extrinsic or intrinsic motivators?
  • Why do you think this is going to be something you enjoy doing?
  • What evidence do you have?

Every time you consider a career move, keep thinking about the most important assumptions that have to prove true, and how you can swiftly and inexpensively test if they are valid.

Your Strategy Is Not What You Say It Is

Real strategy—in companies and in our lives—is created through hundreds of everyday decisions about where we spend our resources. As you’re living your life from day to day, how do you make sure you’re heading in the right direction?

Watch where your resources flow. If they’re not supporting the strategy you’ve decided upon, then you’re not implementing that strategy at all.

Everything related to strategy inside a company is only intent until it gets to the resource allocation stage.

When Jobs returned as CEO in 1997, he immediately set to work fixing the underlying resource allocation problem. Rather than allowing everyone to focus on their own sense of priorities, Jobs brought Apple back to its roots: to make the best products in the world, change the way people think about using technology in their lives, and provide a fantastic user experience. Anything not aligned with that got scrapped; people who did not agree were yelled at, abased, or fired.

If you study the root causes of business disasters, over and over you’ll find a predisposition toward endeavors that offer immediate gratification over endeavors that result in long-term success.

Here is a way to frame the investments that we make in the strategy that becomes our lives: we have resources—which include personal time, energy, talent, and wealth—and we are using them to try to grow several “businesses”in our personal lives.

These include having a rewarding relationship with our spouse or significant other; raising great children; succeeding in our careers; contributing to our church or community; and so on.

Unfortunately, however, our resources are limited and these businesses are competing for them. It’s exactly the same problem that a corporation has. How should we devote our resources to each of these pursuits?

The danger for high-achieving people is that they’ll unconsciously allocate their resources to activities that yield the most immediate, tangible accomplishments. This is often in their careers, as this domain of their life provides the most concrete evidence that they are moving forward.

Finding Happiness in Your Relationships

Your career priorities—the motivators that will make you happy at work—are simply one part of a broader set of priorities in your life, priorities that include your family, your friends, your faith, your health, and so on.

Similarly, the way you balance your plans with unanticipated opportunities, and allocate your resources—your time and energy—does not stop when you walk out the door of your office. You’re making decisions about these every moment of your life.

You have to make sure that your own measures of success are aligned with your most important concern. And you have to make sure that you’re thinking about all these in the right time frame—overcome the natural tendency to focus on the short term at the expense of the long term.

I’ve had to force myself to stay aligned with what matters most to me by setting hard stops, barriers, and boundaries in my life.

Work can bring you a sense of fulfillment—but it pales in comparison to the enduring happiness you can find in the intimate relationships that you cultivate with your family and close friends.

The Ticking Clock

By the time serious problems arise in those relationships, it often is too late to repair them. This means, almost paradoxically, that the time when it is most important to invest in building strong families and close friendships is when it appears, at the surface, as if it’s not necessary.

A Theory of Good and Bad Capital

At a basic level, there are two goals investors have when they put money into a company: growth and profitability. Neither is easy.

Professor Amar Bhide showed in his Origin and Evolution of New Business that 93 percent of all companies that ultimately become successful had to abandon their original strategy—because the original plan proved not to be viable.

In other words, successful companies don’t succeed because they have the right strategy at the beginning; but rather, because they have money left over after the original strategy fails, so that they can pivot and try another approach. Most of those that fail, in contrast, spend all their money on their original strategy—which is usually wrong.

When the winning strategy is not yet clear in the initial stages of a new business, good money from investors needs to be patient for growth but impatient for profit.

It demands that a new company figures out a viable strategy as fast as and with as little investment as possible—so that the entrepreneurs don’t spend a lot of money in pursuit of the wrong strategy.

Given that 93 percent of companies that ended up being successful had to change their initial strategy, any capital that demands that the early company become very big, very fast, will almost always drive the business off a cliff instead. A big company will burn through money much faster, and a big organization is much harder to change than a small one.

That is why capital that seeks growth before profits is bad capital. But the reason why both types of capital appear in the name of the theory is that once a viable strategy has been found, investors need to change what they seek—they should become impatient for growth and patient for profit. Once a profitable and viable way forward has been discovered—success now depends on scaling out this model.

Investing for Future Happiness

While most of us do have a deliberate strategy of creating deep, love-filled relationships with members of our family and our friends, in reality we invest in a strategy for our lives that we would never have aspired to: having shallow friendships with many but deep friendships with none; becoming divorced, sometimes repeatedly; and having children who feel alienated from us within our own homes, or who are raised by a stepparent sometimes thousands of miles away.

If you defer investing your time and energy until you see that you need to, chances are it will already be too late. But as you are getting your career off the ground, you will be tempted to do exactly that: assume you can defer investing in your personal relationships. You cannot. The only way to have those relationships bear fruit in your life is to invest long before you need them.

What Job Did You Hire That Milkshake For?

Many products fail because companies develop them from the wrong perspective. Companies focus too much on what they want to sell their customers, rather than what those customers really need.

What’s missing is empathy: a deep understanding of what problems customers are trying to solve. The same is true in our relationships: we go into them thinking about what we want rather than what is important to the other person. Changing your perspective is a powerful way to deepen your relationships.

IKEA is structured around a job that customers periodically need to get done. A job? Through my research on innovation for the past two decades, my colleagues and I have developed a theory about this approach to marketing and product development, which we call “the job to be done.” The insight behind this way of thinking is that what causes us to buy a product or service is that we actually hire products to do jobs for us.

What Job Are You Being Hired For?

Understanding the job requires the critical ingredients of intuition and empathy. You have to be able to put yourself not just in her shoes, but her chair—and indeed, her life. More important, the jobs that your spouse is trying to do are often very different from the jobs that you think she should want to do.

We project what we want and assume that it’s also what our spouse wants.

A husband may be convinced that he is the selfless one, and also convinced that his wife is being self-centered because she doesn’t even notice everything he is giving her—and vice versa. This is exactly the interaction between the customers and the marketers of so many companies, too.

Given that sacrifice deepens our commitment, it’s important to ensure that what we sacrifice for is worthy of that commitment.

It’s natural to want the people you love to be happy. What can often be difficult is understanding what your role is in that.

Thinking about your relationships from the perspective of the job to be done is the best way to understand what’s important to the people who mean the most to you. It allows you to develop true empathy.

But you have to go beyond understanding what job your spouse needs you to do. You have to do that job. You’ll have to devote your time and energy to the effort, be willing to suppress your own priorities and desires, and focus on doing what is required to make the other person happy.

Understand Your Capabilities

The factors that determine what a company can and cannot do—its capabilities—fall into one of three buckets: resources, processes, and priorities.

Capabilities are dynamic and built over time; no company starts out with its capabilities fully developed.

The most tangible of the three factors is resources, which include people, equipment, technology, product designs, brands, information, cash, and relationships with suppliers, distributors, and customers.

The ways in which those employees interact, coordinate, communicate, and make decisions are known as processes. These enable the resources to solve more and more complicated problems.

Processes include the ways that products are developed and made, and the methods by which market research, budgeting, employee development, compensation, and resource allocation are accomplished. Unlike resources, which are often easily seen and measured, processes can’t be seen on a balance sheet.

The third—and perhaps most significant—capability is an organization’s priorities. This set of factors defines how a company makes decisions; it can give clear guidance about what a company is likely to invest in, and what it will not.

The theory of capabilities gives companies the framework to determine when outsourcing makes sense, and when it does not. There are two important considerations.

First, you must take a dynamic view of your suppliers’capabilities. Assume that they can and will change. You should not focus on what the suppliers are doing now, but, rather, focus on what they are striving to be able to do in the future.

Second, and most critical of all: figure out what capabilities you will need to succeed in the future. These must stay in-house—otherwise, you are handing over the future of your business.

Understanding the power and importance of capabilities can make the difference between a good CEO and a mediocre one.

Children need to do more than learn new skills. The theory of capabilities suggests they need to be challenged. They need to solve hard problems. They need to develop values.

When you find yourself providing more and more experiences that are not giving children an opportunity to be deeply engaged, you are not equipping them with the processes they need to succeed in the future. And if you find yourself handing your children over to other people to give them all these experiences—outsourcing—you are, in fact, losing valuable opportunities to help nurture and develop them into the kind of adults you respect and admire.

Children will learn when they’re ready to learn, not when you’re ready to teach them; if you are not with them as they encounter challenges in their lives, then you are missing important opportunities to shape their priorities—and their lives.

The Schools of Experience

Unlike the “right stuff” model, McCall’s thinking is not based on the idea that great leaders are born ready to go. Rather, their abilities are developed and shaped by experiences in life. A challenging job, a failure in leading a project, an assignment in a new area of the company—all those things become “courses” in the school of experience.

Does that mean that we should never hire or promote an inexperienced manager who had not already learned to do what needs to be done in this assignment? The answer: it depends.

In a start-up company where there are no processes in place to get things done, then everything that is done must be done by individual people—resources. In this circumstance, it would be risky to draft someone with no experience to do the job—because in the absence of processes that can guide people, experienced people need to lead.

But in established companies where much of the guidance to employees is provided by processes, and is less dependent upon managers with detailed, hands-on experience, then it makes sense to hire or promote someone who needs to learn from experience.

The challenges your children face serve an important purpose: they will help them hone and develop the capabilities necessary to succeed throughout their lives.

The natural tendency of many parents is to focus entirely on building your child’s résumé: good grades, sports successes, and so on.

It would be a mistake, however, to neglect the courses your children need to equip them for the future. Once you have that figured out, work backward: find the right experiences to help them build the skills they’ll need to succeed. It’s one of the greatest gifts you can give them.

The Invisible Hand Inside Your Family

One of the most powerful tools to enable us to close the gap between the family we want and the family we get is culture. We need to understand how it works and be prepared to put in the hard yards to influence how it is shaped.

Culture is a way of working together toward common goals that have been followed so frequently and so successfully that people don’t even think about trying to do things another way. If a culture has formed, people will autonomously do what they need to do to be successful.

Those instincts aren’t formed overnight. Rather, they are the result of shared learning—of employees working together to solve problems and figuring out what works.

Every time they tackle a problem, employees aren’t just solving the problem itself; in solving it, they are learning what matters. In the language of capabilities from the previous chapters, they are creating an understanding of the priorities in the business, and how to execute them—the processes. A culture is the unique combination of processes and priorities within an organization.

If these paradigms of how to work together, and of what things should be given priority over other things, are used successfully over and over again, ultimately employees won’t stop and ask each other how they should work together. They will just assume that the way they have been doing it is the way of doing it. The advantage of this is that it effectively causes an organization to become self-managing. Managers don’t need to be omnipresent to enforce the rules.

Schein’s articulation of how culture is created allows executives to create a culture for their organization—provided that they follow the rules. It starts with defining a problem—one that recurs again and again. Next, they must ask a group to figure out how to solve that problem. If they fail, ask them to find a better way to solve it. Once they’ve succeeded, however, the managers need to ask the same team to solve the problem every time it recurs—over and over again.

The more often they solve the problem successfully, the more instinctive it becomes to do it in the way that they designed. Culture in any organization is formed through repetition. That of doing things becomes the group’s culture.

The parallels between a business and a family should be clear. Just like a manager who wants to count on employees using the right priorities to solve problems, parents want to set those priorities, too, so that family members will solve problems and confront dilemmas instinctively, whether or not the parents are there guiding or observing.

A culture can be built consciously or evolve inadvertently. If you want your family to have a culture with a clear set of priorities for everyone to follow, then those priorities need to be proactively designed into the culture—which can be built through the steps noted above. It needs to be shaped the way that you want it to be in your family, and you have to think about this early on.

Make no mistake: a culture happens, whether you want it to or not. The only question is how hard you are going to try to influence it. Forming a culture is not an instant loop; it’s not something you can decide on, communicate, and then expect it to suddenly work on its own.

Just This Once…

Most of us will face a series of small, everyday decisions that rarely seem like they have high stakes attached. But over time, they can play out far more dramatically.

It happens exactly the same way in companies. No company deliberately sets out to let itself be overtaken by its competitors.

If we knew the future would be exactly the same as the past, that approach would be fine. But if the future’s different—and it almost always is—then it’s the wrong thing to do.

The right way to look at this new market was not to think, “How can we protect our existing business?” Instead, Blockbuster should have been thinking: “If we didn’t have an existing business, how could we best build a new one? What would be the best way for us to serve our customers?”

Hence, the paradox: Why is it that the big, established companies that have so much capital find these initiatives to be so costly? And why do the small entrants with much less capital find them to be straightforward?

The answer is in the theory of marginal versus full costs. Every time an executive in an established company needs to make an investment decision, there are two alternatives on the menu. The first is the full cost of making something completely new. The second is to leverage what already exists, so that you only need to incur the marginal cost and revenue. Almost always, the marginal-cost argument overwhelms the full-cost. For the entrant, in contrast, there is no marginal-cost item on the menu.

That is the peril of marginal thinking, of doing something just this once, of only applying your rules most of the time. You can’t.

100 Percent of the Time Is Easier Than 98 Percent of the Time

In our minds, we can justify these small choices. None of those things, when they first happen, feels like a life-changing decision.

The marginal costs are almost always low. But each of those decisions can roll up into a much bigger picture, turning you into the kind of person you never wanted to be.

The first step down that path is taken with a small decision. You justify all the small decisions that lead up to the big one and then you get to the big one and it doesn’t seem so enormous anymore. You don’t realize the road you are on until you look up and see you’ve arrived at a destination you would have once considered unthinkable.

Because life is just one unending stream of extenuating circumstances. Had I crossed the line that one time, I would have done it over and over and over in the years that followed.

That’s the lesson I learned: it’s easier to hold to your principles 100 percent of the time than it is to hold to them 98 percent of the time. The boundary—your personal moral line—is powerful, because you don’t cross it; if you have justified doing it once, there’s nothing to stop you doing it again. Decide what you stand for. And then stand for it all the time.

And that’s the trap of marginal thinking. You can see the immediate costs of investing, but it’s really hard to accurately see the costs of not investing.

The only way to avoid the consequences of uncomfortable moral concessions in your life is to never start making them in the first place.

The Importance of Purpose

Whether they want one or not, every company has a purpose—it rests in the priorities of the company, and effectively shapes the rules by which managers and employees decide what is most important in each unique situation.

But if an organization has a clear and compelling purpose, its impact and legacy can be extraordinary. The purpose of the company will serve as a beacon, focusing employees’ attention on what really matters.

The Three Parts of Purpose

  1. A likeness of a company is what the key leaders and employees want the enterprise to have become at the end of the path that they are on.

  2. For a purpose to be useful, employees and executives need to have a deep commitment—almost a conversion—to the likeness that they are trying to create.

  3. One or a few metrics by which managers and employees can measure their progress. These metrics enable everyone associated with the enterprise to calibrate their work, keeping them moving together in a coherent way.

These three parts—likeness, commitment, and metrics—comprise a company’s purpose. Companies that aspire to positive impact must never leave their purpose to chance.

The type of person you want to become—what the purpose of your life is—is too important to leave to chance. It needs to be deliberately conceived, chosen, and manageda. The opportunities and challenges in your life that allow you to become that person will, by their very nature, be emergent.

Finally, please remember that this is a process, not an event. It took me years to fully understand my own purpose. But the journey has been worthwhile.

Each of us may have a different process for committing to our likeness. But what is universal is that your intent must be to answer this question: who do I truly want to become?

If you take the time to figure out your purpose in life, I promise that you will look back on it as the most important thing you will have ever learned.

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