It was the year 1987, where a bunch of analysts and investors have teamed up to meet the new CEO of Alcoa.
Alcoa is one of the largest aluminum manufacturing firms where employees work in a dangerous environment. Millions have invested in the stock.
The Ballad of Paul O'Neill:
Get a cup of coffee.
Today, I will talk about one of the brilliant management stories I have ever read. Let's get started.
It was the year 1987, where a bunch of analysts and investors have teamed up to meet the new CEO of Alcoa.
Alcoa is one of the largest aluminum manufacturing firms where employees work in a dangerous environment. Millions have invested in the stock.
Recently management has made missteps letting competitors take away profits and market share.
It was a sign of relief when investors heard about a management change.
The new CEO is Paul O Neill, who is a former Govt bureaucrat.
AGM has started. Paul entered the stage. His only emphasis is *worker safety* He aimed to bring down worker injuries to zero.
He talked nothing about firm profits, capital ratios, taxes.
The investors were confused. They thought he is crazy and sold their shares.
But to their surprise, the firm market value has increased from $ 3 billion in 1986 to $ 27.53 billion in 2000 while net income improved from $ 200 million to $ 1.484 billion.
What's more, all the growth occurred while Alcoa becoming one of the safest firms in the world.
How did Paul manage to turn a dangerous firm into a profitable and a safe one?
The answer lies in understanding keystone habits.
The loop of a habit is Cue, routine, reward.
You see ice cream (cue), buy and eat it (routine), Feel happy (reward)
We are not talking about habits in detail though. That is a topic for another day.
Keystone habits are habits that have the power to create a chain reaction and change the entirety of the form.
For instance, take this, you exercise ➡️eat a good diet ➡️ be productive at work ➡️ create healthy relationships ➡️ improve your life.
This is what exactly Paul has done. He attacked a single habit *Worker safety* and watched it bring changes across the organization.
Paul identified a simple cue: worker injury.
He developed a routine: Anytime someone was injured, the unit president had to report to Paul within 24 hours.
The reward is the people who report on time get a promotion.
The unit presidents are busy people. To report on time, they need vice presidents to be alert.
Vice presidents have to follow up with floor managers. And the managers with employees.
As soon as, an injury happened, Paul got an alert from unit presidents. He understood why it happened.
He took corrective action to ensure from not happening of the same mistake.
For instance, if molten metal was injuring workers when it splashed, then the pouring system was replaced.
If a machine kept breaking down, it was replaced.
This improved production and adoption of new technology improved firm efficiency.
The second big thing Paul has done is he linked up Alcoa's offices across the world with electronic networks.
The premise is simple. To get to know about worker injuries as quickly as possible.
At first, people have used the network to discuss safety issues. Then as email habits became more comfortable, they started posting info on other topics such as local mkt conditions, sales quotas, and business problems.
"I would send in my accident report, and I knew everyone else read it, so I figured, why not send pricing info or intelligence on other firms," a manager said.
"It was like we had discovered a secret weapon and the competition couldn't figure out how we were doing it"
More from Marketing
I studied hundreds of top copywriting examples with @heyblake.
Use these 30 copywriting tips to convert readers into customers 🧵
Tip from Alex: Repeat Yourself
Reason: Your main benefit shouldn’t be expressed subtly. Repeat it three times. Make it known.
Example: Apple’s M1 Chip
Tip from Blake: Start with goals for the copy.
Reason: You need to know what you are writing, for whom, and what action it should lead to. No guesswork.
Example: My content engine at https://t.co/jYMMlbgFCw
Tip from Alex: Use Open Loops
Reason: Open loops peak a reader's interest by presenting an unsolved mystery to the reader. Our brains are hardwired to find closure. Make your product the final closure. Example: Woody Justice
Tip from Blake: Write short, snappy sentences.
Reason: People have short attention spans. And big blocks of text are super hard to read. Make it
Example: Every blog from @Backlinko
Use these 30 copywriting tips to convert readers into customers 🧵
Tip from Alex: Repeat Yourself
Reason: Your main benefit shouldn’t be expressed subtly. Repeat it three times. Make it known.
Example: Apple’s M1 Chip
Tip from Blake: Start with goals for the copy.
Reason: You need to know what you are writing, for whom, and what action it should lead to. No guesswork.
Example: My content engine at https://t.co/jYMMlbgFCw
Tip from Alex: Use Open Loops
Reason: Open loops peak a reader's interest by presenting an unsolved mystery to the reader. Our brains are hardwired to find closure. Make your product the final closure. Example: Woody Justice
Tip from Blake: Write short, snappy sentences.
Reason: People have short attention spans. And big blocks of text are super hard to read. Make it
Example: Every blog from @Backlinko
Reading this article, the story sounds pretty wild. But I spent a weird amount of time with Martin Shkreli, and I’m not surprised the journalist fell in love w him
A few years back my team built an app called Blab. It was like clubhouse before clubhouse.
When he first joined the app I had no idea who he was. I just saw that his live streams instantly had 3-4K viewers. More than anyone on our tiny platform.
I googled him and it came up: “Martin Shkreli, most hated man in America”
I assumed he was bad news
And he was... but also he wasn’t.
He was a douchebag, but he was in on the joke. He was a dick, but he was also very entertaining.
In the mornings he would live stream himself analyzing stocks or walking through drug discovery pathways.
In the afternoon he’d let people call in and debate him live on air. A CNN reporter tried to get him to go on TV, he refused, and said debate me here on Blab, no edits, no tv time limits.
At night he’d host late night convos - and eventually fall asleep on cam
The guy was a pain in the ass but man he drove traffic.
We had big celebs like Tony Robbins, the Jonas brothers etc... he outperformed them all.
At one point he was bringing in 100k users per month directly to his channel. And Bc he was so entertaining, they stuck.
A few years back my team built an app called Blab. It was like clubhouse before clubhouse.
Christie Smythe covered white-collar crime for Bloomberg News and lived "the perfect little Brooklyn life" with her husband. Then she threw it all away for one of her sources: infamous pharma bro Martin Shkreli. https://t.co/Xk0zXmYkgF
— ELLE Magazine (US) (@ELLEmagazine) December 20, 2020
When he first joined the app I had no idea who he was. I just saw that his live streams instantly had 3-4K viewers. More than anyone on our tiny platform.
I googled him and it came up: “Martin Shkreli, most hated man in America”
I assumed he was bad news
And he was... but also he wasn’t.
He was a douchebag, but he was in on the joke. He was a dick, but he was also very entertaining.
In the mornings he would live stream himself analyzing stocks or walking through drug discovery pathways.
In the afternoon he’d let people call in and debate him live on air. A CNN reporter tried to get him to go on TV, he refused, and said debate me here on Blab, no edits, no tv time limits.
At night he’d host late night convos - and eventually fall asleep on cam
The guy was a pain in the ass but man he drove traffic.
We had big celebs like Tony Robbins, the Jonas brothers etc... he outperformed them all.
At one point he was bringing in 100k users per month directly to his channel. And Bc he was so entertaining, they stuck.
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