Months 13-14 Detailed Schedule

Weeks 45-50: Phase 5A - Strategy & Finance

You’ve learned to understand yourself, understand others, lead, and navigate conflict. Now learn to think STRATEGICALLY - to see the whole chessboard, make winning choices, and understand the numbers behind every business decision.

How to Use This Schedule

Daily Time Commitment: 30-60 minutes

• Morning option: During baby’s first nap
• Evening option: After baby’s bedtime
• Split option: 15 min morning + 15-30 min evening

Flexibility Rules:

• Miss a day? Just continue where you left off
• Behind schedule? Skip optional items (marked with *)
• Ahead? Move to next day or go deeper on current material

Icons:

• :movie_camera: Video/Course
• :books: Reading
• :headphones: Audiobook-friendly
• :memo: Writing/Reflection
• :wrench: Setup task
• :brain: AI practice
• :zap: Quick task (< 15 min)

Phase 5A Overview

Week 45: Good Strategy Bad Strategy - The Kernel

Goal: Complete “Good Strategy Bad Strategy” + Master the Kernel framework

Day 309 (Monday)

Video: Search “Richard Rumelt strategy” on YouTube - many talks available

The Core Problem:

Most organizations don’t have a strategy. They have goals, aspirations, budget allocations, or slogans - but not strategy.

Rumelt’s Definition:

“A good strategy is a coherent response to the most important challenge.”

Key Insight:

• Strategy isn’t about vision or mission statements
• It’s about identifying the crux of a challenge and focusing resources there
• 80% of “strategies” are actually just goals dressed up

Day 310 (Tuesday)

The Kernel of Good Strategy:

Every good strategy has exactly THREE elements:

┌─────────────────────────────────────────────────────┐
│                    THE KERNEL                        │
├─────────────────────────────────────────────────────┤
│  1. DIAGNOSIS                                        │
│     What's really going on?                          │
│     The core challenge, simplified                   │
├─────────────────────────────────────────────────────┤
│  2. GUIDING POLICY                                   │
│     What's our overall approach?                     │
│     The direction, not the details                   │
├─────────────────────────────────────────────────────┤
│  3. COHERENT ACTIONS                                 │
│     What coordinated steps will we take?             │
│     Actions that reinforce each other                │
└─────────────────────────────────────────────────────┘

Example: Southwest Airlines

The actions REINFORCE each other. One plane type = easier training AND faster maintenance AND simpler parts inventory.

Day 311 (Wednesday)

The Four Hallmarks of BAD Strategy:

The Fluff Test: Can you remove the buzzwords and still have meaning?

• BAD: “We will leverage our core competencies to deliver customer-centric value”
• GOOD: “We will focus on three products that we make better than anyone else”

AI prompt:

I'm facing this challenge: [describe your situation]

Help me apply Rumelt's Kernel:
1. What's the DIAGNOSIS? (What's really going on? What's the core problem?)
2. What's the GUIDING POLICY? (What approach should we take?)
3. What are possible COHERENT ACTIONS? (What steps reinforce each other?)

Challenge my diagnosis - am I seeing the real problem or just symptoms?

Day 312 (Thursday)

The Power of Focus:

“Strategy is about saying NO.”

Most organizations try to do everything. Great strategy concentrates resources.

Leverage Points:

• Find where a small effort produces large results
• Identify the pivot point in the system
• Attack the weakest link in the chain

The Schwerpunkt: German military concept: the point of main effort

• ALL resources concentrated at the decisive point
• Everything else supports this focus
• Overwhelming force at the critical moment

Questions for Focus:

1. Where are we spread too thin?
2. What would we stop doing if we had to choose?
3. Where would concentration of effort make the biggest difference?

Day 313 (Friday)

Proximate Objectives:

Good strategy sets objectives that are:

• Feasible - Actually achievable
• Close enough - Not too distant to matter
• Clear enough - You know when you’ve achieved them

Bad: “We will dominate the market” Good: “We will win 3 of the top 5 accounts in Region A by Q4”

Strategy as Hypothesis:

• Strategy is a bet about the future
• It’s a hypothesis to be tested
• Good strategists adapt when evidence contradicts the bet

The Kennedy Example: JFK’s moon speech was great strategy:

• Diagnosis: We’re behind in space race, national prestige at stake
• Guiding Policy: Focus on one dramatic achievement
• Coherent Action: Moon landing by end of decade
• Proximate: Clear timeline, clear success criteria

Day 314 (Saturday) - Lighter Day

Strategy Diagnosis Exercise:

Choose an organization you know (your company, a competitor, a nonprofit you’re involved with):

Day 315 (Sunday) - Review + Transition

Good Strategy Bad Strategy Summary:

The Ultimate Test:

“If your strategy could apply to any organization, it’s not a strategy.”

Week 45 Checkpoint

Before moving to Week 46, you should have:

• Read “Good Strategy Bad Strategy”
• Understood the Kernel (Diagnosis, Guiding Policy, Coherent Actions)
• Identified examples of bad strategy around you
• Diagnosed at least one real challenge
• Created 5+ flashcards
• Obtained “Playing to Win”

Week 46: Playing to Win - The Strategy Choice Cascade

Goal: Complete “Playing to Win” + Master the 5-Question framework

Day 316 (Monday)

Video: Search “Roger Martin strategy” on YouTube

The Core Premise:

Strategy is about making choices that position you to win. Winning is a choice, not just an outcome.

The P&G Story: A.G. Lafley turned P&G around by making hard strategic choices:

• Cut weak brands
• Focused on categories where they could be #1 or #2
• Chose where to compete and where to withdraw

Strategy = Integrated Set of Choices: Not a plan. Not a vision. CHOICES.

Day 317 (Tuesday)

The Strategy Choice Cascade:

┌─────────────────────────────────────────────────┐
│   1. What is our WINNING ASPIRATION?            │
│      (Purpose, inspiring definition of winning) │
└────────────────────────┬────────────────────────┘
                         ↓
┌─────────────────────────────────────────────────┐
│   2. WHERE will we play?                        │
│      (Markets, customers, channels, categories) │
└────────────────────────┬────────────────────────┘
                         ↓
┌─────────────────────────────────────────────────┐
│   3. HOW will we win?                           │
│      (Value proposition, competitive advantage) │
└────────────────────────┬────────────────────────┘
                         ↓
┌─────────────────────────────────────────────────┐
│   4. What CAPABILITIES must we have?            │
│      (Skills, processes, systems needed)        │
└────────────────────────┬────────────────────────┘
                         ↓
┌─────────────────────────────────────────────────┐
│   5. What MANAGEMENT SYSTEMS are needed?        │
│      (Metrics, structures, culture)             │
└─────────────────────────────────────────────────┘

The Flow:

• Each level constrains and enables the next
• Choices must be COHERENT across all levels
• Change at one level may require changes at others

Day 318 (Wednesday)

Question 2: WHERE to Play

The Power of Choice:

• Choosing WHERE is also choosing WHERE NOT
• You can’t be everywhere
• Better to dominate a small space than be mediocre in a big one

P&G Example:

• Where: Hair care, skin care, household cleaning
• Where NOT: Pharmaceuticals (divested), food (divested)

AI prompt:

I'm thinking about strategy for [my career / my team / my business].

Help me work through "Where to Play":
1. What geographies/markets make sense?
2. Which customer segments should I focus on?
3. What categories or offerings should I prioritize?
4. What channels should I use?
5. Where should I explicitly NOT play?

What are the trade-offs of these choices?

Day 319 (Thursday)

Question 3: HOW to Win

There are only TWO fundamental ways to win:

You MUST choose. Being “stuck in the middle” is the worst position.

Differentiation Questions:

• What do we do that no one else does?
• What do we do better than anyone else?
• What do customers value that we uniquely provide?

Cost Leadership Questions:

• How can we reduce costs without reducing quality?
• What efficiencies can we achieve through scale?
• Where can we eliminate waste?

The Activity System: Your “How to Win” must be supported by a system of reinforcing activities:

• Each activity makes others stronger
• Competitors can’t copy one piece - they’d have to copy the whole system

Day 320 (Friday)

Question 4: What CAPABILITIES must we have?

Capabilities are the activities and competencies that enable your “How to Win”:

Activity Map:

• List the activities that support your strategy
• Draw connections between them
• Look for activities that reinforce each other

Question 5: What MANAGEMENT SYSTEMS are needed?

Strategy Without Systems = Intentions Without Execution

Day 321 (Saturday) - Lighter Day

Personal Strategy Cascade:

Apply the 5 Questions to your career:

1. What is your WINNING ASPIRATION?

• What does professional success look like for you in 5 years?
• Not just a job title - what impact do you want to have?

2. WHERE will you play?

• What industry? What function? What type of organization?
• What will you explicitly NOT pursue?

3. HOW will you win?

• What makes you the best choice for the roles you want?
• Cost (efficient, reliable) or Differentiation (unique skills, rare expertise)?

4. What CAPABILITIES must you have?

• What skills do you need to develop?
• What experiences should you seek?

5. What MANAGEMENT SYSTEMS do you need?

• How will you learn and improve?
• How will you measure your progress?

Day 322 (Sunday) - Review + Transition

Playing to Win Summary:

Rumelt + Martin Together:

Both frameworks complement each other.

Week 46 Checkpoint

Before moving to Week 47, you should have:

• Read “Playing to Win”
• Drawn the 5-Question Cascade
• Applied the 5 Questions to yourself or your organization
• Understood Cost Leadership vs. Differentiation
• Created 10+ flashcards (cumulative)
• Obtained “Thinking in Bets”

Week 47: Thinking in Bets - Decision-Making Under Uncertainty

Goal: Complete “Thinking in Bets” + Improve decision-making quality

Day 323 (Monday)

The Core Premise:

Life is more like poker than chess. We make decisions with incomplete information, and luck plays a role.

The Annie Duke Story:

• PhD dropout who became a professional poker player
• Won World Series of Poker bracelet
• Now teaches decision science

The Key Insight:

Good decisions can have bad outcomes. Bad decisions can have good outcomes. We can’t judge decision quality by outcome quality.

Day 324 (Tuesday)

Resulting:

The mistake of judging decisions by their outcomes:

Examples:

The Fix: Judge the PROCESS, not the OUTCOME:

• What information did you have?
• How did you think it through?
• Was your reasoning sound?

Day 325 (Wednesday)

Thinking in Probabilities:

Instead of: “Will this work?” (Yes/No) Ask: “What’s the probability this will work?” (0-100%)

Why This Matters:

• Forces you to acknowledge uncertainty
• Allows for partial confidence
• Enables better comparison of options

How to Calibrate:

AI prompt:

I'm making a decision about: [describe decision]

Help me think probabilistically:
1. What are the possible outcomes?
2. What's my estimated probability for each?
3. What evidence supports these estimates?
4. What would make me update these probabilities?
5. Am I being overconfident? Underconfident?

Day 326 (Thursday)

Beliefs as Bets:

Every belief is a bet. How much would you wager on it?

If you believe “this project will succeed”:

• Would you bet $10 on it? $100? $1000?
• The answer reveals your true confidence

Motivated Reasoning: We don’t seek truth - we seek confirmation:

• We find evidence that supports what we already believe
• We discount evidence that challenges us
• We’re not objective evaluators

Truth-Seeking Groups: Create environments where accuracy matters more than ego:

• Ground rules: seek truth, not validation
• Express uncertainty openly
• Reward updating beliefs when evidence changes

Day 327 (Friday)

Mental Time Travel:

The 10-10-10 Framework: Before deciding, ask:

• How will I feel about this in 10 MINUTES?
• How will I feel in 10 MONTHS?
• How will I feel in 10 YEARS?

This counters short-term emotional thinking.

Backcasting:

1. Imagine the decision WORKED brilliantly
2. Work backward: What caused that success?
3. Make sure those factors are in place

Pre-Mortem:

1. Imagine the decision FAILED completely
2. Work backward: What caused that failure?
3. Address those risks now

Example Pre-Mortem:

“It’s one year from now. This project failed completely. What happened?”

• We ran out of budget
• Key person left
• Market shifted
• We built the wrong thing
• Competition beat us

Now address each risk BEFORE it happens.

Day 328 (Saturday) - Lighter Day

Pre-Mortem Exercise:

Choose a decision you’re facing or a project you’re planning:

The Decision/Project: _______________

It’s [1 year] from now and it FAILED. What happened?

Day 329 (Sunday) - Review + Transition

Thinking in Bets Summary:

Week 47 Checkpoint

Before moving to Week 48, you should have:

• Read “Thinking in Bets”
• Practiced probabilistic thinking on real decisions
• Conducted at least one pre-mortem
• Used 10-10-10 on a decision
• Created 15+ flashcards (cumulative)
• Obtained “The Personal MBA”

Week 48: The Personal MBA - Business Fundamentals

Goal: Complete “The Personal MBA” + Understand core business concepts

Day 330 (Monday)

TED Talk: The First 20 Hours - not about MBA, but shows Kaufman’s approach

The Core Premise:

You don’t need a $200,000 MBA to understand business. Here are the essential concepts distilled.

The 5 Parts of Every Business:

┌─────────────────────────────────────────────────┐
│              THE 5 PARTS                         │
├─────────────────────────────────────────────────┤
│  1. VALUE CREATION                               │
│     Create something people want                 │
├─────────────────────────────────────────────────┤
│  2. MARKETING                                    │
│     Attract attention and build demand          │
├─────────────────────────────────────────────────┤
│  3. SALES                                        │
│     Turn prospects into customers               │
├─────────────────────────────────────────────────┤
│  4. VALUE DELIVERY                               │
│     Give customers what you promised            │
├─────────────────────────────────────────────────┤
│  5. FINANCE                                      │
│     Bring in enough money to continue           │
└─────────────────────────────────────────────────┘

If any part is zero, the business fails.

Day 331 (Tuesday)

Value Creation Fundamentals:

The Iron Law of the Market:

Find a market before you build a product.

Markets > Ideas:

• Great idea + No market = Failure
• Okay idea + Hungry market = Success

Economic Value:

Economic Value = Perceived Benefits - Perceived Costs

People buy when benefits > costs (including time, effort, risk).

12 Standard Forms of Value:

Day 332 (Wednesday)

Marketing:

Marketing is getting attention and building desire.

Key Concepts:

Sales:

Sales is helping people make the decision to buy.

Key Concepts:

AI prompt:

Let's analyze [business name]'s business model:

1. VALUE CREATION: What value do they create? What form?
2. MARKETING: How do they attract attention?
3. SALES: How do they convert prospects?
4. VALUE DELIVERY: How do they deliver the value?
5. FINANCE: What's their revenue model?

What's working well? What could be improved?

Day 333 (Thursday)

Value Delivery:

Deliver what you promised, as efficiently as possible.

Key Concepts:

Finance:

Money in must exceed money out (eventually).

Key Concepts:

4 Ways to Increase Revenue:

1. Increase number of customers
2. Increase transaction size
3. Increase transaction frequency
4. Increase prices

Day 334 (Friday)

Mental Models for Business:

Working with Your Mind:

Day 335 (Saturday) - Lighter Day

Business Analysis Exercise:

Choose a business you admire (or one you want to understand):

What makes them successful?

What could threaten them?

Day 336 (Sunday) - Review + Transition

The Personal MBA Summary:

Week 48 Checkpoint

Before moving to Week 49, you should have:

• Read “The Personal MBA”
• Analyzed a business using the 5 Parts
• Understood the 12 Forms of Value
• Created 20+ flashcards (cumulative)
• Obtained “Financial Intelligence”

Week 49: Financial Intelligence (Part 1) - Income Statement & Balance Sheet

Goal: Understand the Income Statement and Balance Sheet

Day 337 (Monday)

Why Financial Literacy Matters:

“Numbers tell a story. You need to know how to read that story.”

The Three Financial Statements:

The Art in the Numbers:

• Financial statements aren’t “truth” - they’re estimates
• Accounting involves judgment and assumptions
• Same business can look different with different choices

Day 338 (Tuesday)

The Income Statement (P&L - Profit & Loss):

REVENUE (Sales)                         $1,000,000
 - Cost of Goods Sold (COGS)              -400,000
                                        ──────────
= GROSS PROFIT                            600,000
 - Operating Expenses                     -350,000
                                        ──────────
= OPERATING PROFIT (EBIT)                 250,000
 - Interest                                -20,000
 - Taxes                                   -60,000
                                        ──────────
= NET PROFIT (Bottom Line)               $170,000

Key Terms:

Critical Insight:

Revenue ≠ Cash. You can have $1M in sales and $0 in the bank (customers haven’t paid yet).

Day 339 (Wednesday)

Key Margins:

Example Analysis:

Company A has better pricing power and efficiency.

AI prompt:

Here are the key numbers from [company]'s income statement:
- Revenue: $___
- COGS: $___
- Gross Profit: $___
- Operating Expenses: $___
- Net Profit: $___

Help me understand:
1. What are the key margins?
2. What do these numbers tell us?
3. What questions should I ask?
4. How does this compare to typical businesses?

Day 340 (Thursday)

The Balance Sheet:

The fundamental equation:

ASSETS = LIABILITIES + EQUITY
(What you own) = (What you owe) + (Owner's share)

Assets (What You Own):

Liabilities (What You Owe):

Equity (Owner’s Share):

• What’s left after liabilities
• Includes initial investment + retained earnings
• Retained earnings = profits kept in the business

Day 341 (Friday)

Balance Sheet Ratios:

Reading the Balance Sheet:

Working Capital:

Working Capital = Current Assets - Current Liabilities

• Positive = Can pay short-term obligations
• Negative = Potential cash crisis

Day 342 (Saturday) - Lighter Day

Balance Sheet Exercise:

Find a public company’s annual report (10-K) or look up their financials online:

Calculate:

• Current Ratio =
• Debt-to-Equity =
• Working Capital =

What story do the numbers tell?

Day 343 (Sunday) - Week 49 Review

Week 49 Summary:

Key Ratios Learned:

• Gross Margin, Operating Margin, Net Margin (Income Statement)
• Current Ratio, Debt-to-Equity (Balance Sheet)

Week 49 Checkpoint

Before moving to Week 50, you should have:

• Read Financial Intelligence Parts 1-4
• Understood the Income Statement structure
• Understood the Balance Sheet equation
• Analyzed at least one real company’s statements
• Created 25+ flashcards (cumulative)

Week 50: Financial Intelligence (Part 2) - Cash Flow & Integration

Goal: Master the Cash Flow Statement + Integrate all financial concepts

Day 344 (Monday)

The Cash Flow Statement:

“Cash is king. A company can be profitable and still die from lack of cash.”

The Three Sections:

Cash Flow from Operations:

• The most important section
• Shows if core business generates cash
• Positive = healthy; Negative = concerning

Profit vs. Cash:

The Critical Insight:

Companies don’t go bankrupt from lack of profit. They go bankrupt from lack of CASH.

Day 345 (Tuesday)

Reading Cash Flow:

Healthy Patterns:

Free Cash Flow:

Free Cash Flow = Operating Cash Flow - Capital Expenditures

• Money available for dividends, debt repayment, acquisitions
• The ultimate measure of financial health

AI prompt:

Here's a summary of [company]'s cash flow:
- Operating Cash Flow: $___
- Investing Cash Flow: $___
- Financing Cash Flow: $___
- Change in Cash: $___

Help me understand:
1. Is this a healthy cash flow pattern?
2. Is the business generating cash from operations?
3. What are they investing in?
4. How are they financing the business?
5. What concerns should I have?

Day 346 (Wednesday)

Essential Ratios Summary:

Profitability Ratios:

Liquidity Ratios:

Leverage Ratios:

Day 347 (Thursday)

Complete Financial Analysis Exercise:

Choose a public company and find their financials:

Income Statement:

Balance Sheet:

Cash Flow:

Your Assessment:

• Is this company financially healthy? Why/why not?

Day 348 (Friday)

Phase 5A Reflection Questions:

1. Apply Rumelt’s Kernel to a challenge you face:

   • Diagnosis: _______________
   • Guiding Policy: _______________
   • Coherent Actions: _______________

2. Apply Playing to Win to your career:

   • Winning Aspiration: _______________
   • Where to Play: _______________
   • How to Win: _______________
   • Capabilities Needed: _______________
   • Systems Needed: _______________

3. Pick a recent decision. What probability of success would you honestly assign? What are you uncertain about?

4. Analyze a business you use through the 5 Parts lens (Value Creation, Marketing, Sales, Delivery, Finance).

5. Look up a company’s financials. What’s their:

   • Gross margin? ___
   • Operating margin? ___
   • Current ratio? ___
   • Debt-to-equity? ___
   • Free cash flow? ___

6. What’s the most important strategic insight you’ve gained in Phase 5A?

Day 349 (Saturday) - Review Day

Strategy Cheat Sheet:

The Kernel (Rumelt):

1. Diagnosis - What’s the challenge?
2. Guiding Policy - What’s the approach?
3. Coherent Actions - What steps reinforce each other?

The 5 Questions (Lafley/Martin):

1. Winning Aspiration
2. Where to Play
3. How to Win (Cost or Differentiation)
4. Capabilities
5. Management Systems

Decision-Making (Duke):

• Think in probabilities
• Avoid resulting
• Pre-mortem risks
• 10-10-10 for perspective

The 3 Statements:

• Income = Did we profit?
• Balance = What do we own/owe?
• Cash Flow = Where’s the money?

Day 350 (Sunday) - Phase 5A Completion

Phase 5A Complete!

What You’ve Accomplished

Phase 5A (Weeks 45-50):

• “Good Strategy Bad Strategy” - Rumelt (The Kernel)
• “Playing to Win” - Lafley & Martin (5-Question Cascade)
• “Thinking in Bets” - Duke (Probabilistic thinking)
• “The Personal MBA” - Kaufman (Business fundamentals)
• “Financial Intelligence” - Berman & Knight (Financial statements)
• Applied frameworks to real situations
• Analyzed real company financials
• 25+ flashcards

Time Invested

• Months 13-14 Total: ~42-48 hours
• Daily average: ~55 minutes
• Running total: ~365-410 hours

You Now Understand:

• What strategy actually IS (not goals or aspirations)
• How to make strategic choices (the 5 Questions)
• How to make better decisions under uncertainty
• The fundamentals of any business (5 Parts)
• How to read and interpret financial statements
• Key ratios for assessing business health

Next Steps: Phase 5B Preview

Phase 5B: Entrepreneurship & Innovation

You can think strategically. Now learn to BUILD.

Key insight: Entrepreneurship is applied strategy. Now put your strategic thinking into action.

Continue to Phase 5B: Entrepreneurship

Troubleshooting

”I’m behind schedule”

Options:

1. Prioritize: If you can only read 3 books: “Good Strategy Bad Strategy” + “Playing to Win” + “Financial Intelligence”
2. Skim Personal MBA: It’s a reference - you can read key chapters
3. Use summaries: PersonalMBA.com has free concept summaries
4. Extend: Take 7-8 weeks instead of 6

”Finance feels overwhelming”

• Start with the Income Statement - it’s most intuitive
• Khan Academy has excellent free videos
• Find a company you know and look at their numbers
• The goal is literacy, not expertise

”I don’t have a business to strategize about”

• Apply frameworks to your career
• Apply to your team or department
• Analyze companies you admire (or companies you’re curious about)
• Strategy thinking applies everywhere

”These books seem repetitive”

• They build on each other
• Rumelt = Diagnosis-focused
• Martin = Choice-focused
• Together they’re complementary

Quick Reference Card

The Kernel (Rumelt)

1. Diagnosis - What’s the real challenge?
2. Guiding Policy - What approach will we take?
3. Coherent Actions - What reinforcing steps?

The 5 Questions (Lafley/Martin)

1. Winning Aspiration
2. Where to Play
3. How to Win
4. Capabilities
5. Management Systems

Decision Quality (Duke)

• Probability thinking, not certainty
• Judge process, not outcomes
• Pre-mortem risks
• 10-10-10 time travel

5 Parts of Business (Kaufman)

1. Value Creation
2. Marketing
3. Sales
4. Value Delivery
5. Finance

The 3 Statements

• Income: Revenue - Costs = Profit
• Balance: Assets = Liabilities + Equity
• Cash Flow: Operating + Investing + Financing

Key Ratios

• Gross Margin, Operating Margin, Net Margin
• Current Ratio, Debt-to-Equity, ROE
• Free Cash Flow

Thirteen and fourteen months complete. You understand yourself (Phase 1), others (Phase 2), leadership (Phase 3), conflict (Phase 4), and now strategy and finance (Phase 5A). Phase 5B teaches you to build and create - entrepreneurship in action.

Continue to Phase 5B: Entrepreneurship

Previous: Months 11-12 Schedule | Next: Month 15 Schedule