Category Archives for "Book Summaries"

The Accidental Theorist

The Accidental Theorist

A culmination of twenty-seven essays, Krugman tackles economic issues across a whole spectrum. His style is unreserved and he's unafraid to state his case.

Though his essays are adaptions from past publications one underlying theme remains consistent throughout - systematic thought always beats flawed conclusions based off of empirical errors and logical fallacies. 

Love him or loathe him, there is almost certainly something for everyone to learn from reading the book. The following summary-review is a brief taster of what can be learnt.

Book Review

Politically-motivated idealogues

Though the twenty-seven essays do not share a common genre, one of Krugman's most persistent frustrations was apparent: politically-motivated idealogues.

An excellent example of this frustration could be found in The Lost Fig Leaf. Ex-presidential candidate Bob Dole stated in a speech:

"Somewhere, a grandmother couldn’t afford to call her granddaughter, or a child went without a book, or a family couldn’t afford that first home because there was just not enough money. … Why? Because some genius in the Clinton administration took the money to fund yet another theory, yet another program..."

Krugman rebuked this with some facts about the current government spending:

These figures accounted for 82.2% of 1994 U.S. fiscal spending.

What's important to note is that many items on the list were supported by Dole's policies, such as defense.

Moreover, many welfare expenditures were benefitting the allegedly victimised elderly (remember that "grandmother [who] couldn't afford to call their granddaughter..."), such as Social Security.

On Capitalism

Krugman has described his political alignments as 'liberal' or "what social democratic means in Europe."

Nonetheless, his opening spiel on Part 1: Jobs, Jobs, Jobs condemns the inhumanities of capitalism, whilst simultaneously validating it as an unsurpassed system:

"At the heart of capitalism's inhumanity ... is the fact that it treats labor as a commodity. Economics textbooks may treat the exchange of labor for money as a transaction much like the sale of a bushel of apples, but we all know that in human terms there is a huge difference ... An unsold commodity is a nuisance, an unemployed worker a tragedy; it is terribly unjust that such tragedies are created every day by new technologies, changing tastes, and the ever-shifting flows of world trade. There would be no excuse for an economic system that treats people like objects except that, as Churchill said of democracy, capitalism is the worst system known except all those others that have been tried from time to time..."

His remarks seem 'old-fashioned', considering the rising discussion regarding a post-capitalist world. But perhaps they should be considered, after all, it is rare for new economic ideas to come about.


Anyone who's come across Krugman's works understands his arguments are difficult to dispute. Further, his writing style - though light-hearted - breaks down the most complicated arguments many audiences can understand.

Whether or not his economic dispositions are right, I cannot be sure - after all, systematic thought can be inherently dysfunctional -  however, one thing can be agreed, all economists should be in the fight against pernicious logical fallacies and inapt empirical evidence.

Innovation and Entrepreneurship

Innovation and Entrepreneurship

Unlike many popular books on entrepreneurship, Drucker avoids talking about the characteristic traits of entrepreneurs. In fact, he actually challenges they exist, but more on that later... Instead, his book aims to represent innovation and entrepreneurship as part of systematic work within the organisation that needs to be organised by an executive.

In Part 1, Drucker challenges the misconceptions surrounding innovation and entrepreneurship. He propagates the notion of change as normal (and necessary) and it is entrepreneurs who drive that innovation. Moreover, he continues, to discuss the dos and don'ts of developing a viable innovation.

In Part 2, Drucker focuses on the institution that is the vehicle of innovation. This section focuses on entrepreneurial management in existing businesses, public-service institutions and startups.

In Part 3, Drucker discusses how to bring innovations to market successfully: "The test of innovation, after all, lies not in its novelty, its scientific content, or its cleverness. it lies in its success in the marketplace."

These three sections are flanked by an introduction and conclusion relating innovation and entrepreneurship to the economy and society as a whole.

Please note that Part 3 was excluded from the summary due to its size.

Book Summary

Part I: The Practice of Innovation

1. Systematic Entrepreneurship

The standard definition of an entrepreneur is frequently drawn from economics. French economist J.B. Say claimed, "The entrepreneur... shifts economic resources out of an area of lower and into an area of higher productivity and yield." Drucker challenges this textbook definition of the entrepreneur. Specifically, he differentiates between the 'businessman' and the entrepreneur.

All new small businesses share many factors in common. "But to be entrepreneurial, an enterprise has to have special characteristics over and above being new and small," Drucker argues, "they create something new, something different; they change or transmute values."

Entrepreneurship should be thought of as a behaviour rather than a personality trait. Drucker's definition of an entrepreneur is not specified by character traits. He claims, "he has seen diverse temperaments act as entrepreneurs..." Since anyone capable of decision-making can learn "to be an entrepreneur and behave entrepreneurially."

The entrepreneur according to mainstream economic theory optimises what already exists. However, "the entrepreneur" argues Drucker "always search for change, responds to it, and exploits it as an opportunity."

2. Purposeful Innovation and the Seven Sources for Innovative Opportunity

What makes a "resource" a resource is that it has some pragmatic purpose - thus endowing it with economic value. Innovation increases the utility of a resource. "Equally, whatever changes the wealth-producing potential of already existing resources constitutes innovation."

"Innovation then... can be defined the way economist J.B. Say defined entrepreneurship, as changing the yield of resources. Or, as a modern economist would tend to do, it can be defined in demand terms rather than in supply terms, that is, as changing the value and satisfaction obtained from resources by the consumer."

The type of innovation Drucker promotes is called "Systematic Innovation." Where - innovation is a distinct activity within an organisation - and innovation is a purposeful and organised search for changes and analysis of opportunities these changes might offer.

There are seven main sources of innovative opportunity. The first four sources are found within the enterprise or industry. The other three sources involve changes outside of the enterprise or industry.

The four internal sources of innovation are:

  • "The unexpected" - This source can be thought of as a 'black swan,' an unforeseen event. For example, the New Coke blunder of 1985. Now a cautionary tale of altering established brands.
  • "The incongruity" - This occurs when companies over-develop their products without their end-user in mind. The difference between what consumers want and what the company delivers represent "the incongruity."
  • "Process needs" - As can be inferred from its name, innovation based on process needs involves investigating flaws within internal enterprise functions.
  • "Unforeseen trends" - Markets and industries can be disrupted overnight from technological developments. Organisation leaders need to treat these trends as opportunities to profit from, rather than as threats.

The three external sources of innovation are:

  • "Demographics" - Constantly forming demographics will affect the demand for companies' products and ultimately what products they should be offering. Once again, these changes should be viewed as an opportunity rather than a threat.
  • "Dynamic perceptions" - With the aid of social media networks, trends develop faster than ever. Changed perceptions of certain products or industries become apparent very quickly. As customary with the change, changed perceptions can also be acted on from an innovative standpoint, such as developing specialised products that align with new perceptions. 
  • "New knowledge" - "Knowledge-based innovation" is the stereotypical understanding of what innovation is. Technological and scientific breakthroughs typically get lots of publicity. This source of innovation is likely to be considered the riskiest.

3. The Bright Idea

A 'bright idea' is an idea that has been thought up at random. "Attempts to improve the predictability of innovations based on bright ideas have not been particularly successful."

The old adage of inventing until you succeed is an inferior way of innovation. Thomas Edison's quote on the lightbulb: "I have not failed. I've just found 10,000 ways that won't work." represents an ineffective method of innovating successful products. "This belief that you'll win only if you keep on trying out bright ideas is, however, no more rational than the popular fallacy that to win the jackpot at Las Vegas one only has to keep on pulling the lever."

4. Principles of Innovations

The best innovations are:

  1. Purposeful. They aim to resolve a well-defined problem, such as those that arise from one of the 'sources of innovative opportunities' (written above).
  2. Simple. "It should do only one thing, otherwise, it confuses."
  3. Effective. "Innovations start small. They are not grandiose. They try to do one specific thing."

And remember, the most effective innovations don't try to innovate for the future. The goal of innovation is to solve current issues. 

Part II: The Practice of Entrepreneurship

The Entrepreneurial Business

There is a common belief that big businesses are incapable of innovation. However, it seems to Drucker that the largest businesses are also the biggest innovators.

For a business to become entrepreneurial, innovation must be routine. "To allow it to innovate, a business has to be able to free its best performers for the challenges of innovation. Equally it has to be able to devote financial resources to innovation." Moreover, innovative performance should be included among measures by which the business measures its success.

The cleanest organisational structure for entrepreneurship, though suitable only in the very large company, is a totally separate innovating operation or development company. 

When innovating in large companies, the end goal should be to create a major new business. Not just another addition to a pre-existing product line.

"One method 3M and Johnson & Johnson use effectively is to promise that the person who successfully develops a new product, a new market, or a new service and then builds a business on it will become the head of that business: general manager, vice president, or division president... It does not commit the company to anything except in the case of success."

"It is only fair that their employer share the risk. They should have the option of returning to their old job at their old compensation rate if the innovation fails. They should not be rewarded for failure, but they should certainly not be penalised for trying."

Entrepreneurship in the Public Service Institution

According to Drucker, entrepreneurship in the service institution is hardest to implement and "most innovations in public-service institutions are imposed on them either by outsiders or by catastrophe."

Part of the problem with service institutions, Drucker argues, is that public-service institutions exist to perform some moral good. Meaning "they tend to see their mission as a moral absolute rather than as an economic one and subject to a cost/benefit analysis." 

To improve a service institution its objectives should be clear and well-defined. And most importantly, quantifiable, so the effect of changes can be measured.

"Finally, public-service institutions need to build into their policies and practices the constant search for innovative opportunity. They need to view change as an opportunity rather than a threat."

The New Venture

Entrepreneurial management in the 'start-up sphere' has four requirements:

  1. A focus on the market. It is near impossible to conduct market research for a genuinely new product. Further, the original assumed target market may reject the product, however, an alternative market may find a better use for the product.
  2. Financial foresight (particularly for cash flow and future capital needs). The faster a startup grows the faster the threat of liquidity issues arise.
  3. Building a top management team before the startup actually needs one.
  4. A decision from the founding entrepreneur to determine their place in the company as the start-up grows and develops.


Part III of the book was excluded from the summary due to its size. However, Parts I and II effectively synthesise the bulk of Drucker's ideas and theories.

Innovation and entrepreneurship are ongoing activities. The best innovations are typically opportunistic and therefore not planned, but take advantage of developing trends. Moreover, the best innovations "are pragmatic rather than dogmatic and modest rather than grandiose" thus enabling business (and society as a whole) to remain dynamic, flexible and self-renewing. 

"This requires executives in all institutions that they make innovation and entrepreneurship a normal, ongoing, everyday activity, a practice in their own work and in that of their organisation. To provide concepts and tools for this task is the purpose of this book."

And remember, innovation doesn't have to be risky. As Drucker states: "Successful innovators are conservative ... They are not 'risk-focused'; they are 'opportunity focused.'"

The Art of War

Sun Tzu's: Art of War

Since its writing over 2,500 years ago, The Art of War has influenced history, unlike any other book. It has been the source of guidance for world leaders, generals, and politicians alike. And because of this, it's built up a sort of 'mysticism' around it.

Contributing to its mysticism; an abundance of pop. culture references to the book have brought it to public fame. For example, Gordon Gecko in the movie Wall Street (1987) is seen quoting Sun Tzu several times in the movie to his protégé, Bud Fox.

The principles taught by Sun Tzu in his book apply to a range of highly diverse fields and disciplines. Renowned 5 Star General Douglas MacArthur, was known to keep a copy on his desk. And NFL coach, Bill Belichick, record holder of the most Superbowl wins, has commended the book on several occasions. 

In this summary, you’ll be served the greatest takeaways from my read of a world-influencing book. 

Book Summary

Deception and manipulation

Almost an underlying mantra repeated throughout the book: “All warfare is based on deception.”

The fundamental basis of all of Sun Tzu’s tactics is on manipulating your adversary's thoughts and assumptions. So, proclaims Sun Tzu: “when you’re competent; fake incompetency … [and] when near, make it appear that you are far away.”

Playing with your enemy’s psychology is a tool of enormous destruction. Sun Tzu makes the benefits of this clear and suggests to confuse, enrage and intimidate your enemy where possible. But most importantly, to divide, conquer and drive a wedge between alliances, forcing former friends to plot against one another.

Waging war; things to consider

Though Churchill's quotes may have impacted parliament, Sun Tzu is likely to have wholeheartedly disagreed with Churchill's belief in 'victory at all costs'. 

Indeed, Sun Tzu did believe 'victory is the main object in war'. However, as is made clear, bloodshed is expensive, and where alternative solutions exist, those should be taken. The most frequently cited Art of War quotes would confirm: "The supreme art of war is to conquer the enemy without fighting."

Offensive strategy

A master of the battlefield, one piece of Napoleon's philosophy on war can be summed up in his quote: “You must not fight too often with one enemy, or you will teach him all your art of war.” Ironically, at his Waterloo defeat, Napoleon lost to Wellington, who had been studying Napoleon's strategies.

This echo of Sun Tzu's wisdom offers a lesson - to be unpredictable. It's vital to mix your techniques, keep them unknown, and to assume formlessness. Else, you risk being second-guessed and losing any advantages of surprise. 

Sun Tzu suggests the two most effective methods of defeating an enemy are:

  1. to attack their strategy
  2. to disrupt their alliances

Note the focus on conserving your resources. On the other hand, the two sub-optimal solutions include attacking a general's main force and pillaging their cities.

Circumstances predicting victory

Interestingly, it is believed a pre-ancient abacus may have been used to predict battles' outcomes. Certain factors would be measured, and a battle outcome calculated.

What those factors were, and how the abacus worked, is unknown. However, in his chapter on Offensive Strategy, Sun Tzu claims there are five conditions to attain victory:

  1. Those with the wisdom to know when they can and cannot fight
  2. Those who understand how to use both small and large forces
  3. When your army is united in purpose
  4. Those who are patient and wait for the enemy to show their weak spots
  5. When commanders are not interfered with by their sovereign (king/queen)

Where, when and how to attack

Sun Tzu declares being invincible lies in your defence and any chance of victory in the attack. My interpretation of this is there is no use in being a purely defensive or offensive fighting unit. The only long-term way to succeed is to balance your offence and defence. As Sun Tzu advises "defend when your strength is inadequate and attack when your strength is abundant."

It's an adage in Chess to wait for your opponent to make a perfect mistake before striking. Similarly, this is true while waiting to attack on the battlefield. To quote the Art of War: "When an advancing enemy crosses water do not meet them at the water's edge. It is advantageous to allow half his force to cross then strike." 

Weaknesses and strengths

Never be rushed

"Generally, he who comes to the field of battle first and waits for his enemy is at ease; he who comes later to the battlefield and rushes into the fight is weary."

Baiting your foe

A strategy when performed correctly can control the direction of your enemy. To attract an enemy you must offer some advantage. And equally, to direct him away from certain areas, offer some disadvantage. Using this logic, it becomes possible to influence the flow of your enemy, such that you dupe him into a trap.

Hold your cards close

When your plans are unknown, your enemy is forced to prepare everywhere, causing resource dispersal. As stated in the book: "The enemy must not know where I intend to give battle. Forcing him to prepare in a great many places. Making him weak not left, right or centre, but weak everywhere."

Unknown territory

Highly relevant to making decisions in times of uncertainty. For ease of summary, I've broken the main points of this chapter down into bite-sized chunks: 

  • Use local guides to obtain advantages of the ground. Without knowledge of the land's layout, you'll most likely find yourself taking inefficient, potentially perilous routes.
  • Ensure a steady supply of resources. As illustrated by Napoleon's crushing defeat in Russia, foraging for resources in the enemy's lands is not a smart idea. When entering unknown territory; ensure a steady supply of resources.
  • Move when advantageous and create confusion in the situation via dispersal and concentration of forces. 
  • Be wary of bait, and above all, watch your greed. Examine how you're thinking when making decisions and be aware of your emotions at play.
  • Always leave your enemy room to escape. With no other options, they'll be forced to fight to the death. Which can result in mass depletion of your resources.​


Sun Tzu states there are three types of terrain: accessible, entrapping, and indecisive. Each type has their unique characteristics that shape your strategy.

  1. Accessible terrain is defined as ground both yourself and the enemy can travel through. Typically, the general who arrives first holds the advantage and can set up their troops at the optimal points.
  2. Entrapping terrain is defined as territory easy to leave, but difficult to return to. With this type of ground, you may leave to attack the enemy. However, if you need to retreat, it's not possible to do so. This is unprofitable.
  3. Finally, 'indecisive ground' is equally disadvantageous to you and your enemy. This generates uncertainty and leaves both opposing generals indecisive.


From the outset Sun Tzu makes it clear that conflict should be a measure of last resort; "To subdue the enemy without fighting is the acme of skill." The chief responsibility of all strategists is to resolve differences with minimum losses of resources and life. 

This relates well to business, as Phil Knight, founder of Nike, wrote in his book, Shoe Dog, "business has some war like parallels." This reflects the book's success in the modern world and the dynamism of its principles, and how they can be applied to various industries.

The 22 Immutable Laws of Marketing

The 22 Immutable Laws of Marketing

The 22 immutable laws is a classic beginner's read to marketing and recommended by almost every marketer and their mother.

Al Ries and Jack Trout state that marketers must adhere to certain rules to be successful. They argue that just like there are laws of nature, there are also laws of marketing. And if you violate these laws, your marketing strategies will deteriorate into a simple game of hit and miss.

This summary aims to deliver the distilled essence of the laws which "govern success and failure in the marketplace."

Book Summary

The Laws

1. The Law of Leadership

Companies are often too cautious of moving into newly developing fields. First, they wait for a market to develop, then they produce a better product (with their brand stamped on top).

From the outset, this might appear to be an intelligent approach. However, from Ries and Trouts’ experience, the first brand to market also often tends to remain the leading brand, e.g. Coca-Cola in cola.

Of course, this is just a rule of thumb and other factors come into play. As they say “some firsts are just bad ideas that will never go anywhere.”

“One reason first brands tend to maintain their leadership is that the name often becomes generic.” Xerox, the first plain-paper copier, has become a standard slang word for hard paper copies. And the same principle can be seen with Google and search engines.

2. The Law of the Category

Though being first to a market category can be a huge catalyst for sales success, it isn’t always a necessity. Counter to typical brand-oriented thinking, it’s possible to develop new sub-categories. For example, positioning a beer as being first in the German category, rather than positioning it as first for the whole beer market category.

3. The Law of the Mind

Not all companies take advantage of being first to a marketplace. “Being first in the marketplace is important only to the extent that it allows you to get in the mind first.” Duryea introduced the first car. Yet, many people might suggest Ford was the first to produce cars. This is because Ford is well-known as one of the first mass-producers of cars.

4. The Law of Perception

The premise of the perception law is based around stereotypes. What sells a car isn’t its horsepower, price or style. But rather the perceptions around it. German car brands are well-engineered and Japanese brands are associated with quality. It is these perceptions which sell the car and not its actual characteristics.

5. The Law of Focus

Contrary to the instincts of many c-suite executives, reducing your brand's attributes and word associations may help it to grow. “If given words are computer, copier, chocolate bar, and cola, the four most associated words are IBM, Xerox, Hershey’s, and Coke.” Narrowing the focus of a brand’s connotations gives it meaning. For instance, Heinz’s “Slowest ketchup in the west” slogan gave their ketchup connotations of thickness.

6. The Law of Exclusivity

Related to the law of focus, the exclusivity law states when a competitor already ‘owns’ a word in your prospect’s mind, it is pointless to steal that word connotation. For example, the car brand Volvo is associated with safety, it would be pointless for any other car brand to try and steal that “safe car stereotype,” it is ‘owned’ by Volvo.

7. The Law of the Ladder

Nowadays, in most European countries at least, it is appreciated that Coca-Cola is the best-selling cola, and Pepsi is second best. How you structure your marketing strategy will be based on which position of the ‘ladder’ you occupy (the higher the better).

The story of Avis rent-a-car perfectly exemplifies what recognising your position on the ladder can do to sales. After 13 years of failure, Avis acknowledged their position with the slogan, “Avis is only No.2 in rent-a-cars. So why go with us? We try harder.” This marketing move did a 180 on their failure and they “started to make money, lots of money.” Unfortunately, after being acquired by ITT, their advertising theme switched to “Avis is going to be No.1” After which they continued on their previous trajectory of failure.

There is a maximum number of positions on the ladder. Ries and Trout state you’ll generally never find a prospect who can remember more than seven major brands in any market category.

8. The Law of Duality

More a statement of fact than a law, the duality law suggests in the long-run marketing categories are dominated by two major brands – “usually the old reliable brand and the upstart.” A solid example is the ‘titanic struggle’ between Pepsi and Coke.

9. The Law of the Opposite

This law reminded me of Robert Greene’s book, The 33 Strategies of War.

In the first chapter, on 'the polarity strategy,' Greene advocates positioning yourself as the anti-thesis of your enemy.

Or, in the case of marketing, as the non-standard alternative for your prospect. In other words, don’t try to be a better version of your competitor, aim to be different.

10. The Law of Division

Market categories tend to diverge over time, however, “many corporate leaders hold the naïve belief that categories are combining." The PC revolution of the late twentieth century has brought about new sub-categories including laptops, tablets, smartphones and MP3 players. 

Managers of leading brands in one sub-category often fall victim to the fallacy that their brand will succeed in another sub-category. This happened when Volkswagen attempted to break out of the small-car category in America.

11. The Law of Division

Avoid discount sales like the plague. Though discount sales may improve revenue in the short-run, it conditions customers not to purchase at “regular” prices. Additionally, quick-thinking customers who take note of the regular discount sales may be inclined to believe your brand is overpriced.

12. The Law of Line Extension

“By far the most violated law in our book is the law of line extension. What’s even more diabolical is that line extension is a process that takes place continuously, with almost no conscious effort on the part of the corporation.”     –Al Ries & Jack Trout

A line extension is where a brand extends its product range to include alternative options. For instance, if Heinz were to produce a ketchup with reduced sugar, this would be a ‘line extended product.’

However, Ries and Trout claim these extensions hurt a brand’s reputation in the long run. They argue when a brand tries to become everything to everyone it will diminish a brand’s core positioning - who it is made for and what it is. 

13. The Law of Sacrifice

The opposite to the law of line extension, the sacrifice law provides a case to reduce your: product line, target market and constant change.

A brand is a reputation and perception of a product, built over time. The best way to maintain it is to be consistent with:

  • What you sell (product line)
  • Who you sell to (target market)
  • And your marketing strategy

14. The Law of Attributes

Too often, companies attempt to emulate and imitate the marketplace leader. The rationale behind this decision is that “they must know what works.” However, as acknowledged in the law of the opposite, if prospects wanted to purchase the leader’s product, they’d do that. Instead, other brands must differentiate themselves from the leader – to provide an alternative from the standard.

15. The Law of Candour

“It may come as a surprise to you that one of the most effective ways to get into a prospect’s mind is to first admit a negative and then twist it into a positive.” A great example: “With a name like Smucker’s, it has to be good.”

To use this law effectively, your brand’s negative must be widely perceived as a negative, e.g. Volkswagen Beetles are ugly. And secondly, you must quickly shift the negative to the positive.

16. The Law of Singularity

In developing a powerful angle for your marketing campaign, you should be well-acquainted with the marketplace, as well as, consumers’ hidden needs and desires. Advertising legend, David Ogilvy would talk with car drivers at petrol stations while searching for his angle to market petrol.

17. The Law of Unpredictability

“The danger of working with trends is extrapolation. Many companies jump to conclusions about how far a trend will go.” Moreover, it is inherently difficult to determine whether a trend is a trend or just a fad.

18. The Law of Success

In developing a successful brand, it is easy for a marketer to become egoistic. “Objectivity is what’s needed … brilliant marketers have the ability to think like a prospect thinks. They put themselves in the shoes of their customers. They don’t impose their own view of the world on the situation.”

19. The Law of Failure

When a campaign is clearly failing, it is pragmatic to cut your losses and rethink it completely. Unfortunately, “too many companies try to fix things rather than stop things.”

20. The Law of Hype

A tell-tale sign of a company in trouble is media hype. “When things are going well, a company doesn’t need the hype … the only revolutions you can predict are the ones that have already started.”

21. The Law of Acceleration

Avoid letting your brand ever fall susceptible to becoming a fad. “The best, most profitable thing to ride in marketing is a long-term trend.” However, should your brand fall victim to being a fad, aim “to never totally satisfy the demand.”

22. The Law of Resources

No matter how fantastic your product is, it won’t go very far without ample money for advertising. “You need money to get [your brand] into a mind. And you need money to stay in the mind once you get there.” Even with adequate funds, the ultimate issue in marketing becomes separating the good ideas from the bad ones.


This book is a timeless marketing classic and serves well as an introduction to positioning brands. 

However, I’d be hesitant to recommend to anyone with intermediate knowledge of marketing. Though there are some fundamental ideas in the book for a novice marketer, it’s rather basic.

The Winner Effect

The Winner Effect

The Winner Effect offers fascinating - and often astonishing - answers to questions on winning and power.

Winning and being in positions of power can have profound psychological effects on individuals and alter their ability to make rational decisions. Moreover, people are affected differently by winning. Ian Robertson breaks down the 'whys?' behind questions like this and more. For example, "Are men more likely to be power junkies than women?"

Book Summary

The Winner Effect

A term used in biology, the 'winner effect' refers to how animals that have won a few fights "against weak opponents are more likely to win later bouts against stronger contenders." This effect, as Robertson has shown, applies to humans too.

"Success changes the chemistry of the brain, making you more focused, smarter, more confident and more aggressive ... But the downside is that winning can become physically addictive."

The children of successful parents

Pablo Picasso was one of the most influential artists of the twentieth century. His work is known worldwide.

On the other hand, his son, Paulo Picasso, developed fatal alcoholism, a result of depression.

Considering his father's success it would only be natural to assume that Paulo would equally be set up to replicate similar achievements. So, why didn't this happen? 

In a similar theme, a study by Morten Bennesden found in "handovers to new CEOs in over 5,000 companies ... where the succession was to a family member rather than an outsider, the profitability of the company dropped by at least 4 per cent around the time of the succession..." This finding further stokes the question as to why the children of over-achievers fail to meet their parents' reputations.

Harvard Psychologist, David McLelland discovered high-achievers tended to set "moderately challenging targets for themselves: that is, demanding but attainable."

Though for the children of over-achievers, such as Paulo Picasso, "How can you set goals for  yourself that don't look trivial and paltry compared with their great work?"

Personal goals that are set too high can lead to disabling psychological effects, particularly as super-challenging targets are less likely to be met, and thus a winner effect unlikely to occur.

Moreover, an element of egoism may be at play. Behind all great geniuses is a lot of work. As Daniel Goleman popularised in his book, Outliers, he claimed world-class expertise required 10,000 hours of work.

Yet many successful parents hide this hard work. Robertson asserts this is because:

"they attribute their success to something inside themselves - an entity, in other words. They contemplate their sparkling success in the world and can only assume that they have been born geniuses..."  

A consequence of this egoism is a crippling effect on a child's motivation and desire to excel. 

Power's effect on personalities and behaviour

The psychological make-up of leaders has been an important factor in shaping history. In this chapter, Robertson explores what effect power can have on the mind, focusing on UK ex-prime minister Tony Blair. 

Holding extreme power causes the corrosion of a person's ability to detach from their own perspective - "a potentially fatal shortcoming."

This psychological flaw could be seen in Hitler's move to invade East Europe without adequate supplies and "whole regiments were sent east without proper [winter] clothing. It is estimated that, as a result, around 14,000 German soldiers had to have hands or feet amputated because of frostbite."

Hitler's abnormal confidence in a quick victory in Russia resulted in an infamously reckless campaign. Worse yet, it only echoed Napoleon's fatal mistake a mere ~130 years earlier, also infamously reckless. 

Interestingly "power-needy people are particularly attuned to facial signals of the impact they are having." This is significant because facial expressions signal where we stand in a hierarchy. An angry face might suggest we're overstepping our place. Whereas, a surprised face, on the other hand, signals we've made an impact on a person.

The Riddle of the Flying CEOs

Chapter 5 asks whether winning has a downside.

The power gained from winning arguably 'goes to the head' of some people leading to erratic behaviour and distorted decision-making capabilities. 

During the 2008 financial crisis, the CEOs of the big three automakers flew to Washington to plead for $25 billion in taxpayer money to avoid bankruptcy. 

All three CEOs flew in private jets which naturally brought about much criticism and media attention. Who in their right mind would fly a private jet asking for a bailout loan? This brings us onto the question of this chapter: how does power affect peoples' ability to think and act?

A study by Kathleen Vohs found students with money-primed brains were typically less helpful to a passing student who spilt pencils on the floor beside them. Compared to other students, the money-primed group picked up significantly fewer pencils.

Not mentioned in the book, another report by Kathleen Vohs found university students majoring in economics made more self-interested moves in social dilemma games than students of other disciplines. Further suggesting money (or power) might alter individuals' decisions. "The students then rated how acceptable it was for them" to have picked up fewer pencils. "Sure enough, the higher power people were significantly more forgiving of themselves than of others, compared with the lower power ones."

A study by Deborah Gruenfield and colleagues at Stanford University found "if we arouse power feelings in otherwise ordinary people, they begin to see others as objects." This arguably provides evidence suggesting higher-power people have a reduced ability to empathise with others.

Differences between men and women

Later in the chapter, Robertson questioned whether gender played a role in the brain-changing effects of power. Specifically, if women were less vulnerable to these effects.

In essence, his findings were this: "Women on average do not have any lower need for power than men ... And women respond to competition and power in very similar ways to men."

"But there are differences: it seems men are more power aware - they pay attention to signs of power more than women do, and they remember more facts about powerful than less powerful people ... Finally, men sniff out the power relationships in a room quicker than women do."


A person's need for power is an important factor in shaping their character, yet it isn't something we typically think about in regards to character - "we are more likely to consider classic personality features such as whether someone is introverted or extroverted."

A person's need for power can affect marriages and relationships as much as politics and businesses. People with a high need for power tend to "climb up the career ladder more quickly than less power-hungry colleagues."

The downsides of high power needs include: being more likely to abuse partners; aspirations to dominate others; and starting to see people as objects, rather than people.

This book is undoubtedly a must-read for anyone in a position of authority. Reading it will likely prompt you to examine yourself and behaviour. "By learning to be aware of the physical roots of power and success, we can better learn to control how power affects us and those around us."

The Power of Simplicity

The Power of Simplicity: An Alternative Way to Manage

The management profession is polluted by trends and unnecessary lingo. This book attempts to slash through all that and establish the fact that keeping it simple, and using what you know works is the best method of management.

The book is about simplicity and therefore the principles are simple. "Through case studies and interviews with successful executives, [Jack Trout] shows managers how to cut through jargon, articulate their vision, and regain control of the vital elements of their business in order to make it thrive."

ATTENTION: Before continuing, please understand this book is written for the manager who desires to improve the day-to-day flow of their workplace. It's a vocational text and far from academic.

Common Sense

Foremost, this book is centred around common sense. Trout recommends the following guiding principles to develop this:

  1. "Get your ego out of the situation.
  2. "Avoid wishful thinking."
  3. "Listen more."
  4. "You've got to be a little cynical" - if something sounds too good to be true, it's reason to be wary

Complex Language

Jargon runs rampant through the management industry. It's not just silly, it's dangerous.

People rarely challenge terms they don't understand, they risk sounding 'simple.' And when unknown words go unchallenged "some expensive mistakes can be made. Never be afraid to say, "I don't get it.""


"A Gallup Poll in May 1998 found that a typical office worker sends and receives an average of 60 emails a day."

That poll was conducted 22 years ago. Now, in 2020, The Radicati Group estimate the typical office worker receives 121 emails a day. That's double!

"Absorb only what is business critical and of the highest quality. Remove yourself from mailing lists, un-bookmark websites, everything."

Competition and strategy

Trout extends his principle of simplicity to strategy, he says: "Organisations must learn that it's not about do or die for your company. It's about making the other guy die for his company."

In terms of developing a strategy, the objective is simple: "You must supply your customers with a reason to buy from you instead of your competitor. If you don't offer that reason, then you had better offer a very good price."

There are four types of marketing warfare described in the book, they are as follows:

  1. Defensive warfare. For No.1 marketplace leaders.
  2. Offensive warfare. For No.2s and 3s in the marketplace.
  3. Flanking warfare. For small or new players looking to gain a market foothold (Dell is cited as an example of this).
  4. Guerilla warfare. For small companies with mini-marketing budgets.

In addition, you should be fluid and willing to adapt your strategy to meet marketplace developments and changing situations. Though be careful, detecting trends can be a complicated business.

Trout sees strategy as emerging from market conditions, rather than pre-set goals made in a boardroom. He argues goal setting creates a certain degree of inflexibility: "When focused on a goal, you tend to dismiss other opportunities." For example, Boeing's move into the commercial jet business (with the 707) was a 'bold move' rather than a goal. 

Customer Service

Customer service is based on three key principles:

  1. You should treat customers so they buy more.
  2. Are happier and don't need to complain
  3. And most importantly, make them smart to be your customers. 

Annual Budgets

Executives must be 'thick-skinned and ruthless' when it comes to budgeting. You want maximum returns for maximum profit. So, "try to avoid having a lot of money spread over too many projects ... This is an allocation game, not a spread-it-around game."


Leadership starts from the ground up. And as Trout claims "most of the world's greatest military strategists started at the bottom."

This is synonymous with Sun Tzu's writings in the Art of War, where Sun Tzu promoted the fact that great generals needed to understand all levels of command, from a single unit to a whole army.

More than just staying in touch with the front-lines, excellent leaders offer credentials for their company. Modern examples might include Elon Musk of Tesla, who in effect, acts as a brand.

New Ideas

New ideas are brainstormed to solve problems. But the best ideas are borrowed, "military designers borrowed from Picasso's art to create better camouflage for tanks." 

Dale Carnegie, an American writer on interpersonal skills, claimed "the ideas I stand for are not mine. I borrowed them from Socrates. I swiped them from Chesterfield. I stole them from Jesus. and I put them in a book..."


Unsurprisingly, the book is rather 'simple.' The ideas contained within it were not groundbreaking but came from a place of common sense - though, common sense isn't always common practice.

Former CEO of GE, Jack Welch, also affirmed the need for simplicity in leadership. In an interview with the Harvard Business Review Welch says:

"Insecure managers create complexity ... Real leaders don't need clutter ... every person in their organisation - highest to lowest - [needs to] understand what the business is trying to achieve. But it's not easy."

The book is not an academic text and is bested suited for a vocational reader. So, if you're a manager in need of decluttering your organisation, then this is the book for you.