Category — Books

Every Friday Free From Money reviews a book you might find useful for your personal or professional life

Over the period of a long career, we are constantly transitioning from one place to another. Over time, we can develop habits that hold us back. The irony is that many of these traits are the ones that can help someone succeed in the short term.

The problem stems from cognitive dissonance, which causes us to overestimate our contributions to the team and underestimate the things we do wrong or the problems we create.

The author argues that our success can actually make us delusional, and that superstition can prevent us from taking the proper action towards change. After all, if it worked before, won’t it work in the future? The problem is that as you get higher in the company food chain, the way you behave and the things you say can have a drastically different meaning to others in the organization.

Consider something mundane, like preparing slides for a presentation. If one of your peers suggests that the background color should be blue instead of black, you would think about it, and maybe discuss it. If your boss were to make the same suggestion though, you would probably change the color to blue without hesitation.

Traits that might make one person look assertive can make a boss look pushy. Someone who’s detail orientated might be considered a micro manager once they’re in charge of others. Overall there are 21 habits the author lists that you should be on the lookout for.

Here are the twenty one habits that can hold you back in the workplace:

1. Winning too much

2. Adding too much value

3. Passing judgement

4. Making destructive comments

5. Starting with “no,” “but,” or “however”

6. Telling the world how smart we are

7. Speaking when angry

8. Negativity

9. Withholding information

10. Failing to give proper recognition

11. Claiming credit we don’t deserve

12. Making Excuses

13. Clinging to the past

14. Playing favorites

15. Refusing to express regret

16. Not listening

17. Failing to express gratitude

18. Punishing the messenger

19. Passing the buck

20. An excessive need to be ‘me’

21. Goal obsession

The keys to overcoming these obstacles is to determine which ones affect you through feedback from others, make the changes, and then continue to follow up over the following months, both to let others know that you are making progress as well as to let yourself see that you are making progress.

The author lays out how to get feedback, how to apologize, and how to be gracious for the gift of information. He also discusses the power of listening, a subject covered extensively in the book How to Win Friends and Influence People. Listening provides two benefits. First, the key to being a good conversationalist is to make the other person feel like they are the most important person in the room. Second, the majority of learning comes from listening. So the only way you can get better is to listen to what others have to say.

Recommendation:

I really enjoyed this book, and I think it’s a good read for anyone working on a team, not just managers. Many of these traits, like not listening, passing the buck, or withholding information, can be a huge detriment to a team, no matter what your role is. Beyond that, recognizing areas that you can improve is the key to becoming a strong leader.

The company I work for has a leadership coursework that solicits anonymous feedback from subordinates, peers, and managers. Everyone that has gone to the class has appreciated the learning experience, and I wouldn’t be surprised if the course was based on the lessons from this book. Learning from others is usually the fastest way for us to grow as people, and this book will help you to learn from others.

What Got You Here Won’t Get You There is a part of the Personal MBA reading list under Management and Leadership

Every Friday Free From Money reviews a book you might find useful for your personal or professional life

“One of the most anxiety-inducing side effect of the information era is a feeling that you have to know it all.”

- Richard Saul Wurman

In today’s modern age, free information can easily overwhelm the biggest of tech geeks. Bit Literacy attempts to create a system for users to master their digital realm by learning more about their computers as well as becoming more efficient with the computer.

Let’s take a brief walk through Bit Literacy:

Ch. 1 - Bits

Before the advent of computers, media had a physical weight to it. If you had too much reading material you would know it by the size of the paper stack next to your desk. Music didn’t have a digital format. News was delivered to you in the morning paper, or you watched it at a specific time of the day.

Now information lives in the form of ‘bits’ on your computer. The cost to send them is near zero, so it’s easy to become overloaded with too much.

Ch. 2 - Users

Modern knowledge workers need a way to manage their information. There are many companies trying to sell you products to help you take more in. They tell you that the load is easy to bear if only you had the right tools. What we really need is a new mindset on how to handle information, which is what Bit Literacy is all about.

Ch. 3 - The Solution

When information is free most of us tend to gather and hoard it, scattered across our hard drives, feed readers, and email. The solution, as the author puts it, is to “let the bits go.” Bit Literacy means engaging the information staring you in the face and moving it to its proper place. The problem isn’t technology. Nothing you buy will ever read a book for you or follow up on your emails. The solution is to become more efficient with what we have and work to lighten your information overload.

Ch. 4 - Managing Incoming E-mail

Knowledge workers need an efficient means to take their email and move it to the correct place. Part of the problem, according to the author, is that we use our inbox for things it wasn’t meant to do like keeping passwords, addresses and phone numbers, or as a to do list. I am guilty of many of these things, and now that I have been called out I plan on changing how I handle incoming emails.

Ch. 5 - Managing To-Dos

Managing your to do list is where work really begins. The problem with using email as a to do list is that not everything comes through email. The problem with a paper based to do system is the lack of scalability. As your task list grows a paper based system can become unwieldy. So the author addresses his requirements for a Bit Literate to do system. The one thing I really didn’t like about this chapter is the author’s peddling of his own company’s to do list software.   

Ch. 6 - The Media Diet

This was by far my favorite chapter in the book, and the chapter the quote above comes from. Like any diet, media needs to be taken in moderation. I am an information junkie, and many times I can feel overwhelmed by the amount of information I try to consume through websites, magazines, books, RSS feeds, email newsletters, movies, and TV shows.

The problem, again, is that there is no technology that can process all of this information for you. It’s simply a matter of getting through it. Over time of course you might build up more than you could ever hope to get through, so it becomes necessary to filter what information you spend time on, and also to constantly prune what you get day to day. Some magazines go downhill. Dump them. Many RSS feeds from blogs are not worth the time to read. Delete them out of your reader. Same goes for everything. If you don’t get value out of it, let it go.

Ch. 7, Ch. 9, Ch. 10, Ch. 11

These four chapters give tips on managing photos, file formats, naming files, and storing files. I didn’t get much value out of these chapters since I consider myself to be well versed in file formats, organization, and naming. I also pursue photography as a hobby, so the photo organization tips were not useful for me. You may feel different.

Ch. 8 - Creating Bits

This chapter is probably where the “Elements of Style for the Digital Age” quote comes from, and was the other useful section of the book for me.

Other chapters discuss how you can become overloaded with information. This chapter is about keeping you from overloading others with too much information. When you display pictures, only show the best ones. There’s no need for duplicates. When creating a website the purpose should be clear immediately. When writing an email it should be easy for the recipient to quickly figure out what you are trying to say.

The author provides guidelines for creating a bit literate message, whether it is an email or an entire presentation. I imagine the structure could even be applied to websites or other forms of visual communication.

Overall this chapter is quite good, and should be required reading in some form or another for anyone using email at work.

Ch. 12 - Other Essentials

This chapter outlines other ways the knowledge workers can become more productive, and this is where geekiness really begins to shine. The author recommends learning to type quickly to improve efficiency, and gives some ideas on how to increase your writing speed using text expanders (which he annoyingly calls bit levers, as if trying to be clever) as well as switching over to a non-standard keyboard.

He also has a few other tips on computer productivity. For most computer savvy users this stuff will be old news, but for someone still trying to learn how to effectively use a computer it would probably be handy. These tips include learning to use macros, understanding how to take a screen shot, learning keyboard commands, and setting up your f-keys for one click launching of applications.

Ch. 13 - The Future of Bit Literacy

This chapter boils down to two things. First, the bit literate user should avoid DRM (Digital Rights Management). If you pay for data, such as music, you should own it with no restrictions. Second, the author recommends staying away from proprietary file formats, such as Microsoft Word files, as much as possible. These are two very good tips, and I completely agree with both of them.

Recommendation:

I like the basic premise of Bit Literacy, but for me most of the book was either common sense or knowledge that I already had. I am well versed in different file formats, to a point where I think the author’s breakdown of the different formats was far too simplistic. For lossless audio he mentions uncompressed .wav and .aiff formats, but does not mention the lossless compression formats like WMA, FLAC, or Apple Lossless. In the photos section he makes no mention of RAW, which is quickly becoming a standard for shooters with dSLR cameras. Granted, these shooters are probably more computer literate than most, but its still there.

This is a good book, but I read the entire thing in a few hours. Check it out from the library, take some good notes, and then reference those. Unlike other productivity books, such as Getting Things Done, you will probably not feel the need to go back and reread this one.

Bit Literacy is a part of the Personal MBA reading list

Every Friday Free From Money reviews a book you might find useful for your personal or professional life

“Things that matter most must never be at the mercy of things that matter least”

Johann Wolfgang von Goethe

The 80/20 Principle, aka The Pareto Principle, is a theory originally formed based on the observation that 20% of a country’s population produces 80% of the wealth.

In this book, author Richard Koch argues that the Pareto Principle can be applied to many different situations in both business and in our private lives.

Here is a brief walkthrough of The 80/20 Principle:

Part One: Overture

Most systems have an imbalance in them where a minority of causes or inputs create a majority of the results or output. This is caused by small fluctuations in seemingly minor events, similar to chaos theory. Feedback loops keep a system moving in one direction until hitting a tipping point, at which point small efforts make a big difference.

There are two ways to apply the 80/20 principle: 80/20 thinking and 80/20 analysis. Thinking 80/20 requires you to investigate the facts and quantify the output. The analysis provides insight from the collection of thoughts. One point to remember when reading. First, the fact that 80 and 20 add up to 100 is a coincidence. The point is that a small amount of input creates a majority of the results. It could be that 20% of your effort only creates 70% of the output, or maybe it creates 90%.

Part Two: Corporate Success Needn’t Be a Mystery

In this section the author explores how to apply the 80/20 principle to a business. Generally a business will want to focus on the few areas where it can excel, in those areas where it has a competitive advantage.

Segmentation - understanding each portion of your business and how it affects profitability through revenue and margins, is key to the business analysis. The most profitable areas are the areas where you should focus your effort. The author pushes for business simplicity; a focus on key areas can help your business excel by cutting waste. In addition to finding the 20% of the business that fuels the most profits, its important to find the core customers and provide exceptional service to them.

Overall thinking 80/20 means you begin to move towards high-value uses, high-value assets, and high-value customers. We need to realize that change will happen, equilibrium is an illusion. Take a look at Microsoft Windows. After over a decade of domination, Mac OS X and Linux are slowly building up steam and bringing a serious challenge. When Michael Dell suggested Apple pay back share holders, he never thought that Apple would have the resurgence that it did by leveraging their success with the iPod.

Part Three: Work Less, Earn and Enjoy More

Brining the 80/20 principle into your personal life means recognizing that very few events contribute to our overall happiness. We should try to leverage those good times, and focus less on the low value times. The same goes for productivity. It’s difficult to be productive all hours of the day, so you should do high value activities in the times you are most productive.

Applying the 80 principle to your career is similar to applying it in a business. Finding the appropriate career requires doing something that you are both good at and that you enjoy doing. When you do this you will likely excel above your peers and be rewarded for your contribution. The author outlines his thoughts on the 10 rules to career success, as well as 4 ways to leverage your time to create the most rewards.

Recommendation:

The 80/20 Principle is a mixed bag. I think it is definitely a step in the right direction for someone looking for an analysis framework. But I feel like some of the ideas in the book are dangerous to follow.

For instance, the author suggests that if an investment is successful you should double and redouble your bet. This kind of leverage can be good for your profits, but it can also be disastrous for your portfolio should your analysis prove to be wrong. If you are a business you might find out that just because an area of business was profitable doesn’t mean that you should bet the farm on it. The banks that have gone under from bad mortgage debt are proof of that.

In the chapter on time management the author makes the ludicrous statement that Warren Buffet became rich by doing a limited amount of analysis and being lazy with his investment portfolio, since there is very low turnover compared to most trader’s portfolios. Anyone who knows about Warren Buffet’s investment style knows that his investment method, while simple, is far from easy or “lazy.” I think these kinds of beliefs can get people into trouble.

There also seems to be very limited application of the 80/20 principle itself. There are only so many ways that you can tell a reader that small inputs create large output. Overall I think this book is worth reading, but it’s probably better to skim through it. You can actually start putting the 80/20 principle to work right away. Reading 20% of this book will probably give you an 80% understanding of the principle.

The 80/20 Principle is a part of the Personal MBA reading list under Finance & Analysis.

Everyday I find myself on the train for an hour and a half, which equates to a whole lot of reading time. So I have decided to undertake a significant challenge this year and read 52 books in 52 weeks. I will also review these books, which you will see on the site as well as on Amazon.

The majority of books I plan to read come from the Personal MBA reading list. I will also throw in a bunch of personal finance and investment books since those are major topics of discussion here.

Overall I hope that reading will start to generate more posting ideas, as well as enhance my own knowledge for both my personal and professional life. At the end of the year I will create a list of my favorites, and give some recommendations for anyone with certain goals.

Wish me luck!

Every Friday Free From Money reviews a book you might find useful

Over the past few years commodities have earned a reputation as being high flyers for investment portfolios, mostly due to the belief that developing countries are going to use more and more resources. In this book author Jeffery Christian attempts to dispel the rumors that exist in the commodities markets, as well as offering thoughts on how to make money whether markets are going up or down.

Here is a quick walk through Commodities Rising:

Chapter 1: The Commodities Rush Is On

The first chapter sets the stage for the rest of the book, explaining why the author felt a need to write this book. Since 2003 there has been a large run up in the price of commodities, thanks to increased demand from both developing economies and from increased investor demand. Investors have piled into commodities in the past few years for various reasons which are explained in later chapters.   

Chapter 2: Myth of the Commodities Super Cycle and the Chinese Consumer Giant

The super cycle theory puts forth that there will be an extended run in commodities, potentially lasting for over a decade thanks to the rapid development of countries like China, India, and Russia. Furthermore, new production of in-demand commodities can’t come on fast enough, which will drive prices even higher.

The reality, according to the author, is that these countries are not using raw materials nearly as fast as the investment community believes. On top of that, despite the rapid growth in incomes, per-capita incomes in the developing countries is still extremely low. In 2007 China’s per-capita GDP was $5,400 a year, versus over $45,800 per year in the U.S. These are not the kind of numbers that you would expect to support gold at over $1k an ounce

Chapter 3: Commodities and the Global Economy

Chapter 3 examines the relationship between commodity prices and economic indicators. Commodities are often used as an indicator of inflation expectations and economic activity levels, whether those relationships are valid or not. The author jokes that gold has forcasted 13 of the past 3 bouts of inflation, and that commodity prices have a complex relationship with economic output levels that go beyond a simple ratio or formula.

Chapter 4: Commodities as an Asset Class

Ever since David Swensen revealed the secret to his returns on the Yale endowment portfolio, commodities have become known as an acceptable asset class for a well-diversified portfolio. Commodities have a low correlation with other assets like stocks and bonds, which has the potential to smooth out returns in a portfolio.

Chapter 5: Commodity Investment Vehicles

There are many ways to invest in commodities, including forwards and futures, ETFs, mutual funds, and hedge funds. Chapter 5 briefly covers these investment vehicles, and gives some of the pros and cons of using them. For example an investor can gain more leverage using futures, or they may prefer to hold the physical asset if they are investing in precious metals.

Chapter 6: Commodity Strategies

Once you’ve learned what tools you can use for investing, you will need to learn some techniques for applying them. A few ideas are covered, including using the Commitment of Traders Report to get market insight, using principal protected accounts and structured products, and why you shouldn’t use ratios as a trading tool.

Chapters 7 - 11

The next 5 chapters describe the different types of commodities that are typically invested in, including precious metals, base metals, energy commodities, and agriculture. Each section contains a brief history of the commodity, historical price movements, a look at the supply and demand factors, and the common ways people invest. Precious metals, for instance, are often held by investors in physical form. Natural gas traders on the other hand will probably not want to store a highly explosive gas in their backyard, and thus futures, options, and equity investments tend to be a more practical route.

These chapters could be very useful for someone just getting started in commodities but is unsure where exactly they should start.

Chapter 12: The Fundamentals Still Apply

No matter what hype you hear on the news or in the financial press, prices are still driven by basic supply and demand. There may be short term swings one way or another due to speculation, but in the end understanding market dynamics is the key to long term success. This chapter attempts to help you clarify what you should think about when looking at supply and demand. For instance, does a particular supply number include recycled materials?

Recommendation:

If you’re considering adding commodities to your investment portfolio then Commodities Rising should be on your reading list. Taking a few hours to read this book could save you thousands of dollars, no matter what side of the trade you decide to take.

Once you’ve become familiar with the basic hedging strategies suggested in this book you will likely want to find out more from another more advanced book. But this book should get you going in the right direction.

Ever since the days when Thomas Malthus predicted that an economy’s population would starve once population growth exceeded food growth, demographics has played an important role in economics. So it makes sense for anyone interested in economics and investment to also try and understand demographics.

Most population projections predict that populations will rise to huge numbers, and that some 12 billion people will inhabit the earth. These projections are based on the fact that for the past 650 years the population has gone up. But according to Ben Wattenberg it is actually highly likely that the world population will grow to a much smaller number, after which the population will actually begin to decline. These projections are based on the total fertility rates of countries around the globe, most of which are far below the replacement level needed to sustain a population.

1. The Story of This Book

It takes 2.1 children per couple to sustain a population. Birthrates in developed economies have fallen below replacement rates, and even less developed countries have falling birthrates. Within the next few decades, populations in the developed countries will begin to fall, particularly the European countries. And thanks to the accuracy levels of population projections, you can be fairly certain that these trends will hold for a least another 20 years if things don’t change.

2. And Then There Were Many Fewer

Child or car. Cars are expensive, and babies are expensive. Thanks to modern materialism (good or bad), couples are now deciding between having more babies, or having more stuff. Out of 44 developed countries, 43 are below the replacement level. I think you know what many of them are choosing.

3. Less Developed, Less Fertility

Along with the developed countries, less developed countries have seen slowing fertility rates as well. The most drastic example is China, which saw a change from over 6 children per woman to 1.8 due to the one child policy implemented in 1979. You can chalk the slowdown in other countries up to the usual suspects of urbanization, increased education, better use of contraception, and an increasing number of women entering the work force.

4. America the Exceptional: The Baby Makers

The United States is unique because it has had huge population growth, yet it has still become the richest country in the world. Fuel is relatively cheap in the U.S., which makes suburban living a possibility. America has more single family detached housing than anywhere else in the world, which has no doubt had some impact on the number of children families can raise.

5. America the Exceptional: Immigrant Takers

Immigration is actually one of America’s competitive advantages; despite Total Fertility Rates being below the replacement level immigration has allowed the U.S. to grow larger. Unfortunately discrimination against foreigners goes back to the beginning of the country, but Wattenburg argues that immigrants are necessary for the U.S. to remain strong.

6. The Culture of Alarmism

The United Nations typically makes three population projections, including a high, medium, and low variants. There is a huge gap between the numbers, and groups with an agenda tend to use projections that suit there needs. Environmentalists, for example, tend to use the high numbers to stress the impact of population growth. Real estate agents often touted land as a good investment because a growing population will always need somewhere to live. Over time these numbers become ingrained in our heads, whether they are likely or not.

7. Why?

There are numerous reasons laid out in the book for why populations are growing. Education, contraception, urbanization, and money are the big ones. I’ll leave the rest for you to read about in the book.

8. The Graybe Boom

Better health care and new medicines are increasing life spans further and further. Coupled with falling fertility rates, this increase in ages is causing an overall increase in the population, which spells trouble for pension plans, social security, and medicare/medicaid. The author presents ideas for possible solutions, such as changing social security cost of living adjustments from a wage based index to a CPI based index. In the end it’s up to the politicians who run the programs who need to make the difficult choices, and so far no one is stepping up to the plate.

9. Business

As populations age some businesses will win and others will lose. For instance it’s probably not a good idea to invest in Baby Gap. The truth is that we don’t really know what happens when populations decline because it hasn’t happened before.

10. The Environment

Population growth has a huge impact on the environment, both through consumption of resources and pollution. Pollution levels have also been historically linked to affluence, a relationship which is explored by the book.

11. Geopolitics

Nations with larger populations are typically viewed as being stronger. Large populations lead to large militaries, and on top of that having a large military is expensive. If the population of the United States declines and another country becomes the world’s dominant force, how will that shape the global landscape?

12. Is There an Immigration Solution?

The less developed countries have too many people, while the developed countries have too many. Doesn’t it make sense to bring workers from poorer areas to countries where they have better opportunities? Ben Wattenberg argues that developed countries need to be more aggressive with immigration laws to bring in more people, both skilled and unskilled.

Increasing immigration also has secondary benefit. Migrant workers tend to send money home to their families, bypassing any corrupt government officials or organizations. So by allowing immigration we can not only better allocate skills but also wealth.

13. Numbers Matter

The final chapter reiterates the premise that past population projections are being adjusted down by the United Nations based on new fertility rates, and that less developed countries have more of a chance than ever to move ahead economically.

Recommendation:

If you are interested in macro economics, politics, or investing then Fewer is a must read. A country’s population and demographics have a huge impact on its dynamics. Even if the projections in this book turn out to not be right, it’s worth understanding the implications of a decrease in the population.   

For someone simply interested in general personal finance though I don’t think it would be as useful, other than to provide background on a very important issue in this country. Social security will eventually affect us all, and population declines will likely have an effect on financial and real estate markets. If you have time to read and can find it in a library, Fewer might still be worth checking out.

When it comes to personal finance authors, Suze Orman is a staple. She has her own television show on CNBC and has written numerous books on the subject. So I was excited to read her latest book to see what advice she had for me and my generation. Unfortunately, I was very disappointed by this book. To me the tone of this book is very condescending, which made it tough to read at times. In addition to the tone, some of the advice makes me feel wary of suggesting this book.

My first issue is Suze Orman’s emphasis on your FICO score. While I believe it’s important to have credit history, and it is absolutely important to make sure there are no errors on your report, I don’t think it’s important to worry about things like having the right “credit mix” on your account. There are far more important things to worry about than the ratio of revolving credit to fixed installment loans. Also worrisome is Suze Orman’s involvement with the Fair Isaac Corporation. If she is being paid by Fair Isaac, is her advice really unbiased?

Another piece of advice that really made me take notice was that it is okay to use your credit card to cover living expenses when you are starting off in your career, since your future earnings potential will help you pay off that debt. She suggests pouring yourself into your work to get ahead. Looking back on how I racked up my credit card debt, using it to cover living expenses was how my card got so high. I probably bought a few things in there I shouldn’t have, but the majority of the balance came from using it to pay for groceries. So to me, suggesting that you should use a credit card to cover your living expenses is a slippery slope that you shouldn’t tread on. And I believe in working hard to get ahead in your career, but telling people to go into debt for their careers is a good way to keep them working for years trying to pay off that debt.

To her credit, Suze Orman does cover a lot of ground in this book. Her range of topics includes, your career, your credit, student debt, retirement, investing, buying a home, and money in a personal relationship. For someone just starting out this book might be a very handy if they don’t get annoyed by the lecture-style writing. Which is why I’m torn recommending this book. There is a ton of great information, and honestly a lot of good advice.

I would recommend picking this book up and thinking of it as a list of tools and ideas for you to use when you need them. Read another personal finance book, like Your Money Or Your Life to build up a proper attitude towards money and philosophy on financial living.

“The Money Book for the Young, Fabulous & Broke” (Suze Orman) is available for purchase from Amazon.com

“Gold is reserved for those who know its laws and abide by them.”

The Richest Man in Babylon is an older book written by George Clason around 1926.  To give you a real idea of the age of the book, its author served in the Spanish-American War (that was in 1898 for those of you wondering).  The book is not written as one constant story; instead it is a collection of parables the author wrote over a period of time, all assembled into one collection.  Each parable has a theme to it, such as seven cures for a lean purse and the five laws of gold.

The writing style is unique.  Most of the story is told through character dialogue, in a language that I can only describe as Shakespeare without the rhyme.  You will see the words “thou” and “thy” frequently throughout the book.  It took me a few pages to get used to the style, but after that I hardly noticed it.

What I like most about this book is the length.  My copy is only 155 pages, but those pages cover most of the major personal finance lessons with easy to understand stories that still manage to get the message across.

 The Seven Cures for a Lean Purse is the first lesson.  The 7 steps to accumulating money (in my own words):

1.   Pay yourself first

2.   Spend less than you make

3.   Take advantage of compound interest

4.   Exercise risk management and don’t lose money

5.   Own your own home

6.   Create passive income so eventually you can stop working

7.   Improve your ability to earn more money 

The rest of book continues to build on these 7 ideas, as well as add a few new ones.  

Recommendation:

If you are looking for a short but great lesson on personal finance this is the book to go too.  The lessons in this book are timeless, and since it’s such a quick read it’s definitely worth a look.  If you’re just getting started on learning the basics of personal finance this is a great place to start.  

The Richest Man in Babylon is available for purchase from Amazon.com 

Now, Discover Your Strengths is a book based on the premise that the traditional model of becoming better by fixing your weaknesses is incorrect. Instead you would be better off finding out your greatest strengths and developing those to improve your performance. And lucky you, the authors provide an online quiz meant to help you discover your personal strengths.

The book begins discussing successful individuals and what they have in common. Generally people who make it to the top enjoy what they do, and they work in roles that emphasis their strengths rather than their weaknesses. One example is Warren Buffet, who thrives on investing in simple, boring companies. When tech companies were the top performers, he chose not to join in, since the complex products and aggressive accounting techniques were not his forte.

The authors introduce three requirements to develop strengths, which are covered through the book:
• Distinguishing natural talent from knowledge and skills. Knowledge comes in two flavors, factual and experimental, which can both be learned. Skill is what organizes experimental knowledge, allowing you to make use of it. Natural talent is what drives performance, but cannot be learned. The main focus of the book is to discover and define your talents.
• Identify your dominant talents. What activities do you pick up quickly? What do you enjoy doing, and do you excel at? The book continuously promotes the strengths finder profile, an online test that narrows down your five dominant talents.
• Find the proper language to describe your talents. Language is focused on the negatives, rather than positives. The book provides some excellent examples of how language leans to the negative. People who are meticulous and orderly are called anal; people who can’t wait to act are impatient or impulsive. The strength finder profile turns this around by naming each strength, defining it, and giving an example of someone that exhibits it.

Later chapters go on to discuss how to use the results of the strength finder, covering both individuals who would like to develop themselves, and managers who would like to use the results to build a better team. Techniques for creating a strengths-based organization include finding ways to reward employees while keeping them in the roles that they excel in, as well as focusing on the results of a goal rather than the means used to get there. Employees should be encouraged to use their talents to achieve goals, rather than forcing them to follow rigid routines.

While I enjoyed the book and felt that the premise was interesting, there is one problem that I feel overcomes the positives. The only way to access the profile test is to use a code present in the book. I borrowed the book from a friend, so the code had already been used. Without taking the strengths finder profile online, I was unable to accurately narrow down my strengths, making the later parts of the book less interesting. If I really wanted to take the test I would have to purchase my own copy of the book. I don’t know if this was an oversight by the authors, or a scheme to sell more books.

Furthermore, there is an entire chapter covering strengths based management, which assumes every employee takes the strengths finder profile. This of course would require every single one of them to buy the book.

Recommendation:

If you don’t know your strengths, and would like to find out more about yourself, this is an excellent place to start. This would also be a good book for managers. Even without requiring employees to take the profile test, there are enough suggestions for improving effectiveness and increasing morale that it could be a useful tool for some, although some of the topics are broad and very generalized.

For non-managers who are already familiar with their strengths it may be less useful. I feel like there is something missing, like examples on how to actually build on your strengths. It might be that this information is covered in other books in the series, and eventually I would like to look into those too.
Now, Discover Your Strengths is available for purchase from Amazon.com