Book Report on “Originals” by Adam Grant

Preface: “original, n. A thing of singular or unique character; a person who is different from other people in an appealing or interesting way; a person of fresh initiative or inventive capacity.” – Adam Grant

Book Report on “Originals” by Adam Grant

Introduction: “Originals: How Non-Conformists Move the World” by Adam Grant is a profound exploration of how individuals can champion new ideas and drive innovation. Grant, a renowned organizational psychologist, delves into the challenges of identifying and nurturing original ideas, the importance of producing a large volume of work, and the role of feedback and collaboration in refining those ideas. He also examines how birth order and parenting practices influence creativity and risk-taking and offers strategies for fostering originality in both individuals and organizations.

Generating and Selecting Original Ideas: Grant emphasizes that while people are capable of generating a substantial number of original ideas, they often struggle to identify which ones will be successful. This difficulty arises from our inherent bias towards our ideas and our misguided perceptions of their quality. Grant argues that conviction in our ideas can be dangerous, as it leaves us vulnerable to false positives and prevents us from generating the variety needed to reach our creative potential. To overcome this, he suggests turning to colleagues who have no particular investment in our ideas and enough distance to offer honest appraisals. These individuals, often other creators, are the most accurate forecasters of an idea’s potential.

The Importance of Quantity: One of the key insights from “Originals” is the importance of producing a large volume of work to increase the chances of hitting on successful ideas. Grant points out that even the most eminent creators, such as Thomas Edison and Mozart, produced a vast quantity of work, much of which was unremarkable. Edison filed nearly 1,100 patents, and Mozart composed 600 pieces of music, but they are remembered for only a handful of their creations. This highlights that producing a huge volume of work is the single most important thing someone can do to be original. By continually generating new ideas, individuals increase their chances of finding those that will be successful.

The Role of Feedback and Collaboration: Grant stresses the importance of seeking feedback from others to assess the merit of our ideas. Since we are not reliable judges of the quality of our own ideas, it is crucial to turn to colleagues who can provide objective evaluations. This feedback helps refine ideas and identify those with the most potential. Additionally, Grant warns against relying solely on intuition, especially when lacking experience in a particular domain. Intuition is only trustworthy when people have built up experience making judgments in a predictable environment. Therefore, analysis and feedback from experienced colleagues are far better sources of insight when considering new ideas.

Raising Original Children: Grant explores the impact of birth order and parenting practices on creativity and risk-taking. He notes that laterborns consistently show greater ease with taking risks, accepting radical ideas, and embracing societal progress compared to firstborns. However, Grant argues that these patterns are more influenced by parenting practices than birth order itself. Parents tend to be more flexible and relaxed with later borns, allowing them more freedom to explore and take risks. To raise original and creative children, Grant suggests giving them the freedom to take risks and encouraging constructive rebellion. This involves steering children towards honorable and proactive behaviors while avoiding destructive paths.

Combating Groupthink: Groupthink, the tendency to seek consensus instead of fostering dissent, is identified by Grant as the enemy of originality. He argues that traditional theories of cohesion breeding conformity are a myth and examines the real causes of groupthink. To prevent groupthink, leaders should hire and solicit input from a diverse set of team members. Dissenting viewpoints, even when wrong, stimulate divergent thinking and lead to innovative solutions. Grant also advises against relying too heavily on assigning a purposeful “devil’s advocate,” as this often lacks sincerity and fails to draw out a diversity of ideas. Instead, leaders should unearth genuine dissenters and create opportunities for open-minded debate.

Fostering Originality in Organizations: Grant discusses the concept of “commitment firms,” organizations that value culture over all and hire people who conform to established characteristics. While these firms may initially outperform others, they eventually suffer from a lack of diversity in thoughts and values, leading to stagnation and failure to adapt in volatile markets. To foster originality, leaders should promote the expression of original ideas and create an environment that values dissent and diverse perspectives. This involves moving away from the maxim that team members should only bring up problems when they have solutions. Instead, leaders should invite complaints and feedback, creating an invaluable safeguard for the organization.

Conclusion: “Originals” by Adam Grant provides a comprehensive guide to identifying, nurturing, and championing original ideas. By emphasizing the importance of producing a large volume of work, seeking feedback from others, and fostering a culture of dissent and diversity, Grant offers valuable insights for individuals and organizations looking to drive innovation and creativity. The book also highlights the role of parenting practices in raising original children and the dangers of groupthink in stifling originality. Overall, “Originals” is a must-read for anyone seeking to understand and cultivate the habits of successful non-conformists.

The Clean Vehicle Credit and You

Preface: “For by Him were all things created, that are in heaven, and that are in earth, visible and invisible, whether they be thrones, or dominions, or principalities, or powers: all things were created by Him, and for Him” -Colossians 1:16

The Clean Vehicle Credit and You

The Inflation Reduction Act of 2022 may or may not have reduced inflation, but it did introduce a streamlined clean vehicle credit for qualifying clean energy vehicles placed in service from April 18, 2023, through to 2032. Since this new version of the credit is slightly less complicated than it was in prior years, and since it will be in effect for the better part of another decade, it’s worth taking a few minutes to understand it.

The Clean Vehicle Credit includes three different types of credit: one for new clean vehicles, another for previously owned clean vehicles, and yet another for “qualified commercial clean vehicles.” Let’s look first at the credit for new vehicles.

Credit for New Clean Vehicles 

To take the credit for a new clean vehicle, the vehicle must:

      • Have at least four wheels.
      • Be EITHER an electric vehicle (EV) with a battery capacity of at least 7 kilowatt hours capable of being recharged from an external source of electricity OR a fuel cell vehicle (FCV). Note that hybrids that are not plug-in will not qualify.
      • Have been manufactured primarily for use on public streets, roads, and highways.
      • Be placed in service by you in 2023 or later.
      • Be for your own use or for lease to others, not for resale.
      • Be used primarily in the United States.
      • Have undergone final assembly in North America.
      • Meet either mineral or battery component requirements, or both.
      • Have a gross vehicle weight rating (GVWR) of less than 14,000 lbs.
      • Have a manufacturer-suggested retail price (MSRP) of less than $55,000 ($80,000 for vans, SUVs, and pickup trucks).
      • EVs (but not FCVs) must be manufactured by an IRS-designated “qualified manufacturer.” An updated list can be found here.

The value of the credit for a new vehicle is:

      • $3,750 if it meets the critical minerals requirement, and
      • $3,750 if it meets the battery components requirement,

for a total of $7,500 if it meets both. Don’t worry, you don’t need to start studying up on minerals and battery components. Sellers of qualifying vehicles should be licensed dealers who are required to provide you with information you will need to claim the credit, including the credit value of the vehicle. This information will be linked to the car’s vehicle identification number (VIN). You will include the VIN on your tax return, and if it matches, the IRS should allow you the credit.

The credit is non-refundable, meaning the amount of the credit you can take is limited to your tax liability in the year you take it. An unused amount of the credit cannot be carried forward or back.

The credit is also limited by your income. If your modified adjusted gross income (MAGI) is over the limit, you are not eligible for any credit. There is no phase-out. Rather, the credit completely disappears if you earn even one dollar over the limit. For this purpose, MAGI is your adjusted gross income plus any excluded foreign income.

The one saving grace is that you can choose to use your MAGI from either the year you take delivery of the vehicle or the year before. As long as one of them is below the threshold, you can take the credit.

The most recent MAGI limits provided by the IRS for the Clean Vehicle Credit are as follows:

      • $300,000 for married couples filing jointly or a surviving spouse
      • $225,000 for heads of households
      • $150,000 for all other filers

These numbers are likely to be adjusted for inflation.

If you receive any Clean Vehicle Credit through a passthrough entity such as a partnership, S-corporation, or trust, then the income limit applies to your MAGI, not the entity’s.

A new vehicle that was used partly for business and partly for personal use must be prorated so that part of the credit is a business credit and part is personal credit.

Credit for Previously Owned Clean Vehicles

To get the credit for a used vehicle, the vehicle must:

      • Have a model year at least two years earlier than the calendar year you bought the vehicle
      • Have had a sales price of less than $25,000
      • You must not have taken the credit for a previously owned clean vehicle in the last three years
      • The used vehicle must meet all the remaining requirements for new vehicles.

The value of the credit for a used vehicle is the lesser of:

      • $4,000 or
      • 30% of the purchase price of the vehicle.
      • Like the credit for new vehicles, it is non-refundable.

Like the credit for new vehicles, the used vehicle credit will not be allowed if your MAGI exceeds certain limits in either the year you take delivery of the vehicle, or the year before. The current income limits for the used vehicle credit are:

      • $150,000 for married filing jointly or a surviving spouse
      • $112,500 for heads of households
      • $75,000 for all other filers

As with the new vehicle credit, you must buy the vehicle from a licensed dealer who will provide you with a report on the value of the tax credit for the vehicle and you will need to enter the VIN on your tax return in order to get the credit.

The used vehicle credit cannot be taken as a business credit.

Qualified Commercial Clean Vehicle Credit

Businesses cannot take the credit for a used vehicle. However, businesses can take the credit for a “qualified commercial clean vehicle,” the most valuable and least restrictive type of the Clean Vehicle Credit.

Unlike the credit for individuals, it is not subject to an income limitation or to an MSRP cap, it has no mineral or battery component requirement or assembly in North America requirement.

It can also be taken for vehicles that weigh more than 14,000 lbs. In this case, if the vehicle is an EV, it must have a battery capacity of at least 15 kilowatt hours. For a qualifying heavier vehicle, the maximum credit is $40,000 instead of $7,500.

The only catch is that the vehicle must be a depreciable asset used for business or for lease.

The Qualified Commercial Clean Vehicle Credit is also more complex to calculate. It is the least of:

      • 30% of the vehicle’s cost (15% if the vehicle is a plug-in hybrid) or
      • $7,500 ($40,000 for vehicles weighing more than 14,000 lbs) or
      • The “incremental cost” of the vehicle, which is the cost of the clean vehicle over the cost of a comparable gas or diesel-powered vehicle.

While you cannot take the Qualified Commercial Clean Vehicle Credit on a car for your personal use, this credit may mean it is cheaper for you to lease a qualifying vehicle if the leasing company is able to take the credit. This option also allows you to benefit from the credit if your income is too high to allow you to take the Clean Vehicle Credit in your own name.

Transferring the Credit to the Seller

If you are buying a new or used vehicle that you intend to use for personal use and that qualifies for the Clean Vehicle Credit, you may arrange at the time of sale to sign your Clean Energy Credit over to the seller in exchange for a reduction in the sale price. This may allow you to receive the full value of the credit regardless of your tax liability. However, this does not exempt you from the income limitation. You must still apply for the credit on your tax return and include the vehicle’s VIN. If you do not qualify, for example, because your income is too high, the amount you received from the seller will then be added to your tax. In this case, you do not need to repay the seller, the IRS will consider the amount to be repaid as part of your tax liability for the year.

The option to transfer the credit to the seller must be for the entire credit amount and not just part of it. The option to transfer may be chosen for the Clean Vehicle Credit for either a new or used vehicle, but not for more than a total of two vehicles in the same year.

Transfer of the credit is optional. The buyer is not required to elect it and the seller is not required to offer it.

In Closing

The Clean Energy Credit is a potentially valuable credit available from now until 2032. If you are considering buying an EV or FCV, look into the credit before you decide to buy. Not all vehicles you think of as “clean” vehicles necessarily apply. Not all taxpayers may take the credit or your benefit from the credit may be limited.

A good place to begin researching the eligibility of particular models can be found here.

When you buy a qualifying vehicle, make sure you get a time-of-sale report from the seller that includes all the information you will need to claim the credit.

Finally, you must reduce the cost basis of a vehicle you buy by any amount of the credit you are able to claim on it.

10 Characteristics of Successful Entrepreneurs

Preface: “The way to get started is to quit talking and begin doing.” — Walt Disney

Being a successful entrepreneur requires more than a great idea; it takes determination, resilience, and the ability to adapt to an ever-changing landscape. For those looking to understand what sets successful entrepreneurs apart, this insightful article from Harvard Business School outlines the key characteristics that drive entrepreneurial success. [Read more here].

Book Review: “Competing Against Luck” by Clayton M. Christensen

Preface: “If you do not know how to ask the right question, you discover nothing.” – Clayton Christensen

Book Review: “Competing Against Luck” by Clayton M. Christensen

Summer is a perfect time to catch up on reading, and “Competing Against Luck” from Clayton M. Christensen has been a popular choice around our office.

Clayton M. Christensen was a renowned American academic and business consultant, best known for his groundbreaking work in business innovation. As a professor at Harvard Business School, he gained international fame for developing the theory of “disruptive innovation,” which describes how new entrants can disrupt established markets by offering simpler, more affordable alternatives to existing products or services.

In “Competing Against Luck,” Christensen delves into the intricacies of successful innovation and introduces the powerful “Jobs to Be Done” theory. This concept transforms the way businesses approach customer needs and product development, providing a framework for creating products that truly meet customer demands.

For an in-depth look, visit the page here.

Understanding Child Labor Laws: Key Insights for Employers

Preface: “Train up a child in the way he should go, And when he is old he will not depart from it.” – Proverbs 22:6 (KJV)

Understanding Child Labor Laws: Key Insights for Employers

Navigating child labor laws can be challenging for employers, especially with varying regional regulations. A new article offers essential guidance on hiring young employees, covering legal requirements and best practices to ensure compliance. This resource is invaluable for businesses aiming to foster a safe and lawful working environment for all employees.

Read the full article here.