Quote of the week:

“Everything should be made as simple as possible, but no simpler.” – Albert Einstein

Deconstructing IKEA’s success

“Many companies strive for excellence, but few achieve a level of success that becomes a benchmark in their industries,” writes the investor Javier Pérez Álvarez in a smart recent essay that analyzes the success of companies like IKEA and Constellation Software. Álvarez observes that these businesses tend to exhibit “chain-link systems,” where “the efficacy of a business strategy is not solely dependent on the strength of its individual components, but rather on how these components are interconnected and mutually reinforcing.” He explains:

“Imagine a chain where each link’s strength is crucial, yet the chain’s overall integrity is dependent on how each link interlocks with the next. In a business context, this implies that various strategic elements – from marketing and operations to product development and customer service – must not only be individually robust but also cohesively aligned to support and enhance each other.”


Simple techniques to improve your learning

Investing requires both creativity and the ability to consistently learn new things. But learning isn’t necessarily intuitive. It’s a process that can (and should) be refined if you want to achieve above-average results. “Once you understand the keys to learning, everything changes—from the way you ask questions to the way you consume information,” writes Shane Parrish in a thoughtful guide to “accelerated” learning. “People will think you have a superpower.” 

“The greatest enemy of learning is what you think you know. When you think you know something, learning something new means you might have to change your mind, so it’s easy to think there’s no room for new ideas. But not wanting to change your mind will keep you stuck in the same place. Overcoming our egos can be one of the big challenges of learning. Therefore, being willing to admit when you’re wrong and adjust your thinking is the thing that will help you learn the most. The first step to learning is recognizing your ignorance and deciding to do something about it.”

A few more links I enjoyed: 

“In practical life, if you want to succeed, you’ve got to do two things. You got to have a certain amount of confidence. And you have to know what you know—and what you don’t know. You have to know the edge of your competency. And if you know the edge of your competency, you’re a much safer thinker and a much safer investor than you are if you don’t know it… it’s better to have an IQ of 160 and think it’s 150 than an IQ of 160 and think it’s 200. That guy is going to kill you because he doesn’t know the edge of his own competence and he thinks he knows everything.”
“Most people are wired to seek status and success, not necessarily happiness. It’s remarkable to watch someone fight back against that trend. From the outside they appear frugal. But in fact they’ve rejected what the world tells them they should want and looked deeper, finding their happiness elsewhere.”

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