Setting Up For The Second Half of 2024

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    Hi there!

    I’m currently writing this from an Airbnb in Kuala Lumpur where I’m doing a retreat for 10 days. I’m writing for five hours a day, and then training Judo for another five hours each day.

    The goal? Apart from training hard with my old Judo coach, and revisiting some of the lessons from my Judo experiment a year ago, my goal is to finish the two essays on the Amazon-style Weekly Business Review (WBR).

    As a result, this is a short post to say that you’re going to get a sequence of cases over the next few weeks, at least until the WBR essays are done. I feel a sense of deep responsibility in getting the WBR essays right. I think there’s only a handful of people who have implemented the Amazon-style WBR outside of Amazon, from scratch, and whilst most of them are far more experienced with it than I am, I suspect none of them are incentivised to write about the practice as urgently. So the essays are my high order bit; I intend to finish them, polish them and get approval from Colin Bryar, and then release the essays as a way to close up the Data Driven Series.

    But till then, you’ll get a series of cases; so let’s talk about that:

    1. I spent most of last year writing about Capital Expertise, and I want to revisit one particular aspect of it. In Part 7 of that series, we talked about a specific pattern to business success: that is, how skill at capital allocation can allow you to build a large business, even if you don’t succeed in finding a billion dollar idea with your initial attempt. I wrote that this is contrary to the vast majority of startup advice you get, mostly because such a strategy is designed to make you — and only you — rich. This year I want to examine this a bit more: how do companies become large through conglomeration? What does a good capital allocator look like, especially when they grow through rigorous acquisition? And what makes for a good conglomerate?
    2. This sets us up for a second topic: the nature of Asian businesses. If you sit back and think about it, most large, successful Asian businesses are conglomerates. There is a reason for this. In 2022 I wrote that I’d like to explore this question in greater detail. Sequencing a series on ‘Chinese businessmen’ (to use a phrase I once used, years ago) after a sequence on conglomerates makes the topic slightly easier to write about.

    To that end, I’m pleased to announce two concept sequences this week:

    1. A sequence on Capital Allocation, with cases on Danaher, Katharine Graham, Koch Industries, and TransDigm.
    2. A sequence on Incentive Design, with cases on Munger, Tolles, Olson and TransDigm (this is a repeat case).

    The vast majority of cases in the coming weeks will be added to these two concept sequences. Even if you’ve read some of these cases before, I’d encourage you to reread the cases in each sequence, in order — with the concepts in mind. That helps with the pattern recognition aspect of business expertise (as we’ve discussed, given Cognitive Flexibility Theory).

    Earlier this year I said that Commoncog will shift to focus on the case library by the second half of the year. This is on-track — I have a backlog of unpublished cases around conglomeration for this very reason — but I’m currently hiring writers and iterating on a scalable process for case production. This is taking up more of my time than expected. As a result, I’m going to release cases without much synthesis for the next few weeks, at least until the WBR essays are out.

    After which you should start to see more commentary. For now, assume that the cases are being released in a specific order, for unspecified reasons.

    I’ll have more to say soon.


    Originally published , last updated .

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