Matt Franz : Zealous For Knowledge

Do Less

The Wall Street published an article the other day with the headline “How To Succeed In Business: Do Less“. The author argues that a narrower focus on the true drivers of value will make you more successful without working insane hours. A scientific study of top performers found:


Rather than simply piling on more hours, tasks or assignments, they cut back. They unknowingly applied a dictum invented 700 years ago by William of Ockham, a European friar, philosopher and theologian. Ockham is famous for a principle that came to be called (in a Latinized spelling of his name) Occam’s razor. It stipulates that the best explanation in matters of philosophy, science and other areas is usually the simplest one.

At work, this principle means that we should seek the simplest solutions—that is, the fewest steps in a process, fewest meetings, fewest metrics, fewest goals and so on, while retaining what is truly necessary to do a great job. I usually put it this way: As few as you can, as many as you must. The French writer Antoine de Saint-Exupéry neatly formulated the same idea in his memoir: “Perfection is finally attained not when there is no longer anything to add, but when there is no longer anything to take away.”

I’m a big believer in simplicity. But entropy is real businesses are not immune. Systems move from order to disorder unless you are constantly pushing back and going out of your way to make things be as simple as possible.

A great real world example of this is what William Thorndike did at CNX Resources (formerly Consol Energy). When he took over as chairman of the board he too a hard look at management’s incentive comp. The first rule of economics is that people respond to incentives, so you have to be very careful about what you incentivize.

The goal of any company should be to generate large, growing, and sustainable free cash flows. These can either be returned to shareholders or reinvested for growth. Thorndike decided to make generating free cash flow the sole metric its executives are measured by. Because this is ultimately what matters and creates value.

Simple incentive schemes are great because there is no question in anyone’s mind about what their real goal should be or what they stand to gain from it. It also leaves less room to game the system. The less time executives are spending thinking about how they will be paid, the more time they can spend finding ways to generate cash flows.

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