The Measured Life: 8 Life Lessons from Clayton Christensen's Works

I turned a year wiser recently. In the Jewish tradition, birthdays are seen as the date when you were given a mandate to change the world. Every birthday, I practice a tradition of slowly reading and reflecting on a book that will help me better understand that mandate - the meaning of my life and my purpose.

The book I chose this year is "How Will You Measure Your Life ? - Finding Fulfilment Using Lessons from Some of the World's Greatest Businesses" by the late Harvard Business School (HBS) Professor Clayton Christensen.

Who Is Professor Clayton Christensen?

HBS Professor Clayton Christensen is one of the most influential management thinkers of all time (ranked top in the Thinkers 50 list). He is the architect of the theory of disruptive innovation - a highly influential framework that changed how we view innovation (and also made "disruption" a pervasive part of our business vocabulary).o.

The powerful (and chilling) insight of the theory is:

Things that make successful companies successful are the same things that eventually led to their decline.

Professor Christensen gave a speech entitled How Will You Measure Your Life at the TedX Boston and wrote a book of the same title applying these theories to our personal lives.

In this article, I will outline the 8 key lessons I learned from the book.

LESSON 1: FINDING YOUR PURPOSE - LIKENESS, COMMITMENT AND METRICS

Companies: Every company has a purpose that shapes the rules by which managers and employees decide what is most important in each situation. Having a purpose will allow the company to outlive any one manager or employee.

Person: Finding the purpose of our life should be deliberately conceived, chosen and managed. This is too important to be left to chance.

Purpose shapes the priorities and the rules by which we decide what is important and what is not. That we need to live a purpose driven life is obvious. But how do we find our purpose?

Defining the purpose should not be left to fate or the environment. It should be deliberately chosen. Clayton Christensen recommends a rigorous process to define our purpose. There are three parts to defining purpose:

1. Likeness : The Type of Person You Want to Become

The first element of purpose involves asking the question of what type of person we want to become. This is the simplest and involves making an intellectual choice on the likeness of who we want to be.

2. Commitment: Commit to Become Your Likeness

Professor Christensen shared his experience in 20s while he is on Rhodes scholarship at Oxford University. He reserved a time from 11:00 PM to midnight to reflect on who do he really want to become - his likeness. This commitment - the sacred hour he dedicated - strengthened his deep conviction on his purpose - every day.

Had he succumbed to the urgency of the moment (at that time, studying the latest techniques in econometrics), he would not have been able to get the clarity that he wants.

3. Metric: Choose the Right Yardstick

The third part is to choose the right metric by which your life will be judged. Clarifying this will allow us to live our daily lives with integrity. This will simplify the choices we have to make.

Professor Christensen's works are highly influential to Silicon Valley and to the business world in general (for example, Netflix CEO Reed Hastings consider him as the person who most shaped his mind as a CEO). Yet, Professor Christensen chose a bigger metric to follow:

I've concluded that the metric by which God will assess my life isn't dollars but the individual people whose lives I've touched

Having this clarity early on allowed him to live a happy and fulfilled life - not just as an influential thought leader but also as a father, husband, church leader and teacher.

LESSON 2: THE POWER OF THEORY AND EXPERIMENTATION

Companies: Companies who succeed in a disruptive environment are those who looked beyond their past experience and prepared for the unanticipated opportunities and challenges.

People: Learning from experience - directly and vicariously is necessary but not sufficient. We need to search for a robust theory (or theories that will guide our lives).

Humans have long been fascinated with the science of flight. They observed and concluded that because birds and other flying creatures have wings and feathers, the ability of humans to fly rests in replicating these wings and feathers.

Human flight has proved to be elusive until Daniel Bernoulli discovered the relationship between pressure, velocity and density and the importance of the principle of lift in flight.

Easy answers about life's most important problems are everywhere and are packaged in nice boxes: think and grow rich, the power of positive thinking, awaken the giant within.

Theories are powerful tools that teaches us how to think. These theories help us avoid finding easy answers - like finding better wings and more feathers - and instead encourage us to think deeper.

Instead of looking at correlations (flying creates = wings and feathers), we are invited to think deeply about causality (what causes flight? - lift).

As what the philosopher Immanuel Kant said:

Experience without theory is blind, but theory without experience is merely intellectual play

Theories guide us to structure our thoughts and understanding of how life works. However, these theories must be tested against how well they work in the real world. To test theories, one should look for anomalies. When does the theory fail? For example, the wings and feather theories can be disputed by looking at bats, ostriches and flying squirrels.

Bats have wings but no feathers and yet they are good flyers.

Ostrich have wings and feathers and yet they cannot fly.

Flying squirrels have no wings and no weathers and yet they can fly (my son corrected me - they can glide but not fly).

LESSON 3- HAVING A STRATEGY FOR YOUR LIFE

Companies: Companies need strategy to align its employees, management and shareholder to pursue a common goal.

People: In life, we need a strategy to have clarity on what we want to achieve in our life and how to get there.

Without a strategy for life, we end up doing things that does not align with our purpose (likeness) but we end up doing anyway just because it is urgent.

Having a strategy enables us to clarify two important things in life:

What you want to achieve

How to get there

The process of setting a strategy for life involves:

1. Setting priorities - what truly matters to us
2. How to balance calculation (certainty) and serendipity (call for adventure)
3. Execution - how do we allocate resources to implement our life strategy.

LESSON 4- PRIORITIES - WHAT TRULY MATTERS

Companies: Companies needs to think incentives and motivation to drive behavior that aligns with the goals of the organization.

People: In life, we have to find out what makes us tick. What makes us happy and truly matters for us will be key to define our life's purpose.

American psychologist Frederick Herzberg came up with the two factor theory of job satisfaction. His highly influential work on motivation theory changed how we think about what truly matters for satisfaction and happiness.

His first finding is that satisfaction and dissatisfaction are two separate independent measures.

Hygiene factors are factors of motivation that if not done right will cause us dissatisfied. Examples of hygiene factors are status, compensation, work conditions, etc.

Motivation factors are the factors that truly satisfies us and will cause us to love our jobs. Examples of motivation factors are challenging work, responsibility, growth opportunities and recognition.

Herzberg found out that in order to find happiness, one should look for opportunities that are meaningful - where you will be able to learn new things, succeed and be given more and more responsibilities.

People who tap dance to work (to borrow from Warren Buffett's famous description of how he views his work) have a strong competitive advantage compared to those who don't. The funny thing is that people who tap dance to work - they also get more of the "hygiene factors" and financial rewards in the long run.

Is the work meaningful to me?

Is my work giving me a chance to reach my full potential?

Will I have an opportunity for recognition and achievement?

Am I going to to be given responsibility?

LESSON 5: BALANCING CALCULATION AND SERENDIPITY

Companies: Companies set a deliberate strategy to capture anticipated opportunities. However, in an industry where a new and potentially technology could disrupt the industry. Companies need to set an emergent strategy to capture unanticipated opportunities.

People: In our career choice, we often prioritize the intersection of what we are good at and what the world needs from us at this moment and get rewarded by the hygiene factors (deliberate strategy). However, we must have an emergent strategy to capture unanticipated opportunities and be ready to pivot when necessary.

Deep within the psyche of every human being are two conflicting needs - the need for stability and safety versus the need to be surprised and respond to the call of adventure.

Clayton Christensen's most famous work on disruptive innovation shows how incumbents in many industries get disrupted by new entrants.

The surprising conclusion of his work is that incumbents get so good at what they do that they decide to focus on their more complex and high value products at the expense of the simple and low value products. This gives an opportunity for new entrants to offer innovative basic products to customers ignored by the larger incumbents.

Conclusion - incumbents fail not because they are bad but because they focused too much on what they are good at failing to capture "unanticipated opportunities". To concretize this, we can look back at a powerful episode in business history where the then CEO Steve Ballmer laughed at IPhone - as the most expensive phone in history and compared Microsoft's phones selling at millions for less than a hundred dollar versus IPhone.

There are two sources of opportunities - anticipated and unanticipated opportunities. Having a deliberate strategy allows one to capture anticipated strategy. At the heart of every disruption is the emergence of new challenges and opportunities. Having an emergent strategy that allows one to also capture unanticipated opportunities is key to thrive in a highly disruptive world.

I recently had a conversation with a former banker who decided to leave his lucrative job in banking to go and capture emerging opportunities in the crypto and Web 3.0 space. This is something that I have been struggling to find an answer for.

The answer I found is adopting a career barbell approach where I spend 80% of my time in pursuing a deliberate strategy but at the same time retain the humility and growth mindset to spend 20% of my time in pursuing an emergent strategy.

If you have found an outlet in your career that provides both the requisite hygiene factors and motivators, then a deliberate approach makes sense.

But if you haven't reach the point of finding a career that does this for you, like a new company finding its way, you need to be emergent.

LESSON 6- EXECUTION - THE PARADOX OF RESOURCE ALLOCATION

Companies: Companies have the difficult task of balancing the present priorities and the future vision. Due to the need to perform in the short-run, companies sometimes sacrifice the future in favor of the present.

People: In life, the tyranny of the urgent frequently supersedes the what matters most for us. In making the tradeoffs on a day-to-day basis, we often choose the noisy and the urgent over the quiet and the important.

American Pastor John Wimber said:

Show me where you spend your time, money and energy and I will tell you what you worship.

We can talk about strategy all we want but the true strategy is manifested in where we spend our resources. To get the strategy beyond intent, it should get to the resource allocation stage.

Clayton Christensen outlined this paradox in his book the Innovator's Dilemma. Dominant companies lose their market share not because they neglected customers but because they listened to their customers and served them well. This led them to prioritize the most probable and tangible accomplishments.

In life, we make these trade-offs on a daily basis. People compete for our time and attention everyday.

In most cases, we choose to spend our time and attention on activities that lead to immediate and tangible results - the urgent. Whereas people who matter - family and friends, rarely shout the loudest when they need your time and attention.

On the other hand, what matters most too often takes long-term effort (for example, raising good children). What you do for what matters most (families and relationships) do not offer immediate results and gratification and this is where the resource allocation problem becomes challenging.

LESSON 7- INVEST IN FUTURE HAPPINESS

Companies: Companies fail to invest in the future because the potential and the opportunity costs of not investing is not clearly seen.

People: In life, the efforts we make on things that matter in the long run take time to blossom while efforts we make on the urgent gives us immediate gratification. This makes it difficult to choose what matters most today.

I was lucky that early on I was able to read an article about George H.W. Bush. In that article, the writer recounted how he asked the former President what is his proudest accomplishment.

George H.W. Bush is the most accomplished president when he assumed office. He could have said a lot of things: successful oil executive, CIA Director, U.S. President, Vice President to Ronald Reagan, a decorated war hero, Chairman of the Republican Party during the Watergate years and a lot of other things. And yet what is his proudest accomplishment? At age 90 - this is his answer:

That my children still come home to me...

Remember that the time when he said this - his son is a former U.S. President who is twice elected (unlike him) and his other son was a U.S. presidential candidate and the Governor of Florida - in other words, successful and busy with their own lives. Why would they come home still?

This to me profoundly shaped how I viewed life and prioritize. That my children still come home to me... this sums up a powerful mental model that encapsulates what we should aspire for. When children come home to you, despite not needing to that means that you have successfully established a home, a oasis.

The answer is simple but not easy - create lasting memories, spend quality time while they are young and always be there when you need them the most. It also means that you would still be needed for your wisdom - so learn and evolve continuously. But most importantly, be symbolize a spiritual home that they always come back to.

Professor Christensen urge us to:

Invest in future happiness

Invest in a strategy for our lives that is consistent with the likeness we aspire to. Have few deep friendships and have children and spouse who would want to come home to us even if they do not need to.

An opposite cautionary tale about another U.S. President I admire - Lyndon Johnson. Lyndon Johnson is one of the most accomplished politician in the United States. He started his Presidency with the determination of being one of the greatest. He accomplished so much - the Civil Rights, Social Security and many others. His exercise of executive power is still being studied (most notably, by Robert Caro). He dreamt of a Great Society. Yet, he was forced not seek re-election due to the Vietnam War.

Years after losing power, he confided to his former White House Intern (and future star historian) Doris Kearns Goodwin that his biggest regret in life is that he sought his immortality in the American people and not in his children. The American people forgot him. Now, at the twilight of his life, his children have moved on and it's too late - the game is over.

Stephen Covey said:

Things which matter most must never be at the mercy of things which matter least

LESSON 8 - THE DANGERS OF MARGINAL THINKING

Companies: No single decision causes a company to decline. Rather, it is a series of seemingly small and harmless decisions and compromises that resulted in its demise.

Personal: Series of small decisions and actions that seemingly harmless and inconsequential turned out to be dramatic.

In the late 1990s, when Amazon sold its its first book, it is competing against Borders and Barnes & Noble - both billion dollar retail giants with millions of dollars of budget to compete against the then unknown internet startup.

Borders, the global retailer, looked at having an internet strategy and realized that it was a small niche market that would not move the needle. They even conducted a survey to prove that their customers prefer to visit physical bookstores. Thus, Borders decided to not waste its time in coming up with an internet strategy.

In 2011, Borders filed for bankruptcy.

It's easy to blame Borders in hindsight for making this strategic error. However, when we honestly reflect what happened from Border's perspective - it's not so easy.

Coming from an economics and finance background, I am trained to think marginally - what is the marginal revenue/ cost of a new project? I imagine going back in time when Amazon have very few customers and have sold very few books - and I calculate the marginal revenue from having an internet strategy to compete against an upstart like Amazon - why bother? Think boldly - expand more stores globally. People prefer bookstores - open more physical stores - that's what I would have done.

But let's say I have the foresight that Amazon will be this successful. I go to the Board of Directors of Borders and make a case. I show the marginal revenue - negligible! I show the potential of an online superstore to sell not just books - science fiction! I show the potential revenue - but it will cannibalize our own stores products - no growth! I can imagine that even with the benefit of an oracle it would have been difficult to convince Border's Board to take Amazon seriously.

According to Professor Christensen, the danger of marginal cost thinking is that we immediately see the marginal cost of investing but we do not immediately see the cost of not investing.

In life, we also make the same mistake. When confronted with decisions that is seemingly small in terms of consequence, we compromise our principles just this once.

Just this once... I will pass small insider tips from my Board meetings to my hedge fund manager friend (Rajat Gupta of McKinsey).

Just this once... I will hide my trading loss position by creating a fictitious account (Nick Lesson of Barings).

The first step down the path of destruction is that one small decision that leads to a series of small decisions. These small decisions lead us to that one big decision that does not look so big anymore because we have already justified in our mind all the small concessions we made in the past.

Which is why Professor Christensen said:

It is easier to stick to your principles 100% of the time than 98% of the time

As a devout Mormon, he shared one incident when he was 16 years old. He was a player for a football team. There was a high stakes championship game on a Sunday. However, he made a personal commitment to God that he will religiously observe Sabbath. So, he decided he is not going to play.

His coach and his teammates (who are his good friends) tried to pressure him - can't you break this rule just this once? It's a championship game - we have been dreaming about this and God will understand! For God's sake, this is just one of the 4,000 Sundays you will have in your lifetime!

He decided not to play. And according to him, it turned out that this is one of the most important decisions he made in his life.

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.

Conclusion

Early 2020, Professor Christensen died of complications from cancer. People rushed to pay tribute to this 'Gentle Giant'.

Silicon Valley legends like Reed Hastings and Marc Anderseen paid tribute on how his works changed their thinking. His colleagues at Harvard paid tribute and acknowledged not just his intellectual achievements but his being an extraordinary teacher touching the lives of his students. His Mormon churchmates described him as a man of faith dedicated to touch people's lives through his missionary work in the Church.

In the end it is the tributes of his family that best summed up what his life stood for:

" A beacon of light as monumental as the two lanterns Robert Newman hung in the spire of nearby Boston’s Old North Church on the night of Paul Revere’s ride