July 30, 2009

Five W's

It feels way too long since I posted something about or by Charlie Munger, so I will share the following story Munger tells in, arguably the greatest business book ever written, Poor Charlie's Almanack.

The story centers around one of the business practices of Carl Braun, who founded and ran the C.F. Braun Engineering Company.

"He (Carl Braun) had another rule from Psychology, which, if you're interested in wisdom, ought to be part of your repertoire ----like the elementary mathematics of permutations and combinations.

His rule for all of the Braun Company's communications was called the Five W's---you had to tell who was going to do what, where, when, and why. And if you wrote a letter or directive in the Braun Company telling somebody to do something, and you didn't tell him why, you could get fired. In fact, you would get fired if you did it twice.

You might ask why is that so important? Well, again, that's a rule of psychology. Just as you think better if you array knowledge on a bunch of models that are basically answers to the question, why, why, why, if you always tell people why, they'll understand it better, they'll consider it more important, and they'll be more likely to comply. Even if they don't understand your reason, they'll be more likely to comply."

No comments:

Post a Comment