Friday, April 11, 2008

Impact holes are available

People in this world are always trying to reach the state where whatever they do is meaningful. I think there are opportunities available all around us to pursue and create an impact.

Chris Davis of Davis mutual fund gave an example of CarMax in an over-crowded auto industry. He mentioned that CarMax looked at a hole in auto sales and filled it. It was about the used car sales. Customers, going to regular auto car salesman, have to negotiate while Carmax gives a unique proposition of fixed price on used car. They even pay their salesman fixed commission whether a customer buys a $40,000 used Mercedes or a $8000 Corolla.

Similar to the above example, we have holes around us where we work or live. These holes cannot be seen by mere eyes. They can be identified by those who have a model of world in their minds. Because the model will have similar holes as those of the real world. At work, everyone is looking for growth but no one seems to be looking for creating an impact. How about creating an impact and forgetting about growth? Once, we see that hole and try to fill it by creating an impact, we get into something that might be slightly (or maybe much) bigger than us. And wouldn't growth be automatic?

It is the mental model that will lead us to perceive the holes. But, alas, we are not able to see them. Is there a way to see them? Is there a way to change our perspective so that we can see them?

I think the last question is an answer itself. We will have to try and work on creating our mental models and then refining them ad infinitum. Aren't we all looking for that pay raise that should have been much more than what we got? But the question that we have to ask is that if we created that Impact. I think many of us take certain things as granted.

Look at the impact that GOOGLE has made. It has changed our lives. Our kids will know google as a verb. Two guys on a journey to create an impact. Thats pretty much it. So before we blame anyone else for everything that is going wrong in our lives we need to figure out the impact that we have created for this world. And only after that we should be able to figure out if the world compensated us well.

Charlie Munger is a big proponent of mental models. The Munger Network of Mental Models is a explanation by Richard Rockwood on how mental models can be created, refined and applied.

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