Nov 132014

Book Short: Continuing to make “sustainability” a mainstream business topic

Book Short:  Continuing to make “sustainability” a mainstream business topic

The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World, by my friend Andrew Winston, is a great book.  It just got awarded one of the Top 10 business books of 2014 by Strategy+Business, which is a great honor.

Andrew builds nicely on his first book, Green to Gold:  How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage (post, book link) (and second book, which I didn’t review, Green Recovery), as I said in my review of Green to Gold, to bring:

the theoretical and scientific to the practical and treat sustainability as the corporate world must treat it in order to adopt it as a mainstream practice — as a driver of capitalistic profit and competitive advantage.

Andrew’s central thesis, with plenty of proof points in the book for our planet of 7 Billion people, rapidly heading to 9-10 Billion, is this:

Whether you take a purely fiscal view of these challenges or look through a human-focused lens, one thing is clear: we’ve passed the economic tipping point. A weakening of the pillars of our planetary infrastructure— a stable climate, clean air and water, healthy biodiversity, and abundant resources— is costing business real money. It’s not some futuristic scenario and model to debate, but reality now, and it threatens our ability to sustain an expanding global economy… If this hotter, scarcer, more transparent, and unpredictable world is the new normal, then how must companies act to ensure a prosperous future for all, including themselves?

Andrew’s writing is accessible and colorful.  The book is full of useful analogies and metaphors like this one:

Climate can also seem easy to write off because the warming numbers don’t sound scary. A couple degrees warmer may sound pleasant, but we’re not really talking about going from 75 to 77 degrees Fahrenheit on a nice spring day. As many others have pointed out, the right metaphor is a fever. Take your core body temperature up one degree, and you don’t feel so great. Five degrees, and you’re sick as a dog. Ten degrees, and you’re dead.

The book also does a really nice job of looking at the externalities of climate change in a different way.  Not the usual “I can pollute, because there’s no cost to me to doing so,” but more along the lines of “If I had to pay for all the natural resources my business consumes, I would treat them differently.”

Some of Andrew’s points are good but general and maybe better made elsewhere (like the problems of short-termism on Wall Street), but overall, this book is a great think piece for all business leaders, especially in businesses that consume a lot of natural resources, around how to make the challenge of climate change work for your business, not against it.

Two things occurred to me during my read of The Big Pivot that I think are worth sharing for the people in my life who still don’t believe climate change is real or threatening.  The first is Y2K.  Remember the potentially cataclysmic circumstance where mission critical systems all around the world were going to go haywire at midnight at the turn of the millennium?  The conventional wisdom on why nothing major went wrong is that society did enough work ahead of time to prevent it, even though the outcomes weren’t clear and no one system problem alone would have been an issue.  I was thinking about this during the book…and then Andrew mentioned it explicitly towards the end.

The second is something I read several years ago in my personal news bible, The Economist.  I couldn’t find the exact quote online just now, but it was something to the effect of “Even if you don’t believe man created climate change, or that climate change is real and imperiling to humanity and can be fixed by man, the risks of climate change are so great, the potential consequences so dire, and the path to solve the problem so lengthy and complex and global…it’s worth investing in that solution now.”

Let’s all pivot towards that, shall we?  If you want to download the introduction to the book for free, you can find it on Andrew’s web site.  Or for a three-minute version of the story, you can watch this whiteboard animation on YouTube.

Nov 062014

Sources of Urgency

Sources of Urgency

Sometimes I wish we were in the hardware business.  Why?  It’s not the margins, that’s for sure.  It’s because hardware businesses usually have externally-imposed deadlines that create urgency in an organization around deliverables.

If you are making a chip that Dell is putting in all of its boxes, and your contract with Dell stipulates that the chip will be ready for testing on X Date and for shipping on Y Date, you darn well better hit the deadline.  If you are making software that gets installed or pre-loaded on all Samsung TVs, same thing.  Maybe it’s not the hardware business per se, but you certainly don’t see this kind of mentality in SaaS businesses very often, either because of the lack of true OEM and ship dates, or because of the now fluid nature of agile software development.

Without that kind of externally-imposed deadline, instilling true urgency gets a lot harder for a leader.  Sure, you can stick an arbitrary deadline out there and rally people to work towards it, but it’s much harder to define the consequences of missing the deadline.  Since there are in many cases no tangible and immediate business consequences, it feels a little more hollow for a leader to say “Why?  Because I said so.”  Yes, you have firing as the ultimate accountability tool in your toolkit, but again, it’s hard to feel good about using that tool when the deadline is arbitrary.

Probably the default method most companies like ours have settled on over the years is around quarterly goals.  That kind of cadence removes the arbitrary part of the problem, but it doesn’t remove the tangible business consequences part of the problem – and often, it doesn’t align with actual project deadlines.  Public companies probably can use quarterly financial results as something more tangible, but those often don’t align with deliverables quarter for quarter.  Customer conferences or marketing events can be other deadlines as well, which are less arbitrary.

I realize my blog is usually more about sharing stories than asking questions, but in this case, I’d love to hear from any reader who has a good answer to this very important management challenge.  If I get a great response, I will reblog it!

Filed under: Business

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Oct 232014

Does size matter?

Does size matter?

It is the age-old question — are you a more important person at your company if you have more people reporting into you?  Most people, unfortunately, say yes.

I’m going to assume the origins of this are political and military. The kingdom with more subjects takes over the smaller kingdom. The general has more stars on his lapel than the colonel. And it may be true for some of those same reasons in more traditional companies. If you have a large team or department, you have control over more of the business and potentially more of the opportunities. The CEO will want to hear from you, maybe even the Board.

In smaller organizations, and in more contemporary organization structures that are flatter (either structurally or culturally) or more dynamic/fluid, I’m not sure this rule holds any more. Yes, sure, a 50-person team is going to get some attention, and the ability to lead that team effectively is incredibly important and not easy to come by. But that doesn’t mean that in order to be important, or get recognized, or be well-compensated, you must lead that large team.

Consider the superstar enterprise sales rep or BD person. This person is likely an individual contributor. But this person might well be the most highly paid person in the company. And becoming a sales manager might be a mistake — the qualities that make for a great rep are quite different from those that make a great sales manager. We have lost a few great sales reps over the years for this very reason. They begged for the promotion to manager, we couldn’t say no (or we would lose them), then they bombed as sales managers and refused as a matter of pride to go back to being a sales rep.

Or consider a superstar engineer, also often an individual contributor. This person may be able to write code at 10x the rate and quality of the rest of the engineering organization and can create a massive amount of value that way. But everything I wrote above about sales reps moving into management holds for engineers as well.  The main difference we’ve seen over the years is that on average, successful engineers don’t want to move into management roles at the same rate as successful sales reps.

It’s certainly true that you can’t build a company consisting of only individual contributors. But that isn’t my point. My point is that you can add as much value to your organization, and have as much financial or psychic reward, by being a rock star individual contributor as you can by being the leader of a large team.

Filed under: Business, Management

Oct 092014

Book Short: Way, Way Beyond Books

Book Short:  Way, Way Beyond Books

The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, was a great read.  Amazon is a fascinating, and phenomenally successful company, and Jeff is a legendary technology leader.  The Everything Store is a company and personal biography and totally delivers.

Forget about the fact that Amazon is now almost $100B in revenues and still growing like mad.  I find it even more amazing that a single company could be the largest ecommerce site on the planet while successfully pioneering both cloud computing services and e-readers.  The stories of all these things are in the book.

As a CEO, I enjoyed reading more of the vignettes behind the things that Amazon is reputationally known for in the tech world – doors as desks, their unique meeting formats, the toughness of the culture, the extensive risk taking of growth over profits, and what works and does not work about Bezos’ authoritative and domineering style.  And it’s always great to be reminded that even the biggest and best companies had to cheat death 10 times over before “arriving.”

This is good fun and learning for anyone in the business world.  It reminded me most of Walter Isaacson’s biography of Steve Jobs ,which I wrote about here, although it’s more of a company history and less of a biography than the Jobs book.

Filed under: Books, Entrepreneurship

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Sep 252014

PTJD

Post Traumatic Job Disorder.

As we have been scaling up Return Path, we have been increasingly hiring senior people in from the outside. We believe in promoting from within and do it all the time, but sometimes you need an experienced leader who has operated at or ahead of the scale you’re at.  Someone with deep functional expertise and a “been there, done that” playbook. When you get a hire like this right, it’s amazing how much that kind of person gets done, how quickly.

One of the pitfalls of those hires, though, is cultural fit. Many of the larger organizations in the world don’t have the kind of supportive, employee-centric cultures that we have here, or that startups tend to have in general. They tend to be much more hierarchical, political, command-and-control. There is a real risk that hiring a senior person who has been trained in environments like that will blow up on you — that, as I’ve written before, the body will reject the organ transplant.

I’ve taken to calling the problem PTJD, or Post-Traumatic Job Disorder. Some of the stories I’ve heard from senior people about their experiences with their bosses or even CEOs at prior companies include such things as:  being screamed at regularly, having had a gun pulled on you, having had a knife pulled on you, having been ignored and only spoken to once or twice a year, being the victim of sexual harassment. Nice.

Just like PTSD, many people can recover from PTJD by being placed in a different environment with some up-front reprogramming and ongoing coaching. But also like PTSD, there are times where people can’t recover from PTJD. The bad habits are too engrained. They are (virtually) shell shocked.

Assuming you do the same reprogramming and coaching work on any PTJD employee, the difference between an employee who recovers and one who does not recover is really hard to smoke out in an interview process. Almost all candidates like this (a) are very polished and now how to interview well, and (b) genuinely think they want to work in a more relaxed, contemporary environment.

Here are five things I’ve learned over the years that can help identify a PTJD candidate who is unlikely to recover, before you make the hire:

  1. Look for candidates who have bigger company experience, but who also have startup and growth/scaling experience.  As I’ve written before, stage experience is important because the person is more likely to really understand what he or she is getting into — and what their playbook of action is.
  2. Try to understand, if a candidate has been in a workplace that breeds PTJD, whether that person was just in the machine, or if the person actually ran the machine. In other words, a senior manager might be a better fit to recover from PTJD than a senior executive.
  3. Note that not all big companies are dysfunctional or lead to PTJD, so try to understand the reputation of the person’s employer. For example, in New York, it’s a pretty safe bet that someone coming from American Express has not only been well trained, but well cared for.
  4. Do reference checks differently. Do them yourself. Do them as if you were doing a 360 on the person (manager, peer, subordinate, even a junior person from another department). Do reference checks on the references (seriously – ask the references about each other) so you understand the biases each of them brings to the conversation with you.
  5. Focus on the first 90 days. Be relentless about how you onboard a potential PTJD victim. Give them more care, structure, praise, guidance, and criticism than you might otherwise give. Use an outside coach to augment your work, and assign a good executive buddy internally. And listen carefully to the feedback from the organization about the person, doing a deep 360 after a few months to see if the person is recovering, can recover, or can’t recover. If the latter, time to cut your losses early.

Thanks to some of my new executive colleagues here for inspiring this post, and I hope none of my friends who have served in the military take offense at this post. I am drawing an analogy, but I’m not truly suggesting that PTJD compares in any way, shape, or form to the horrors of war.

Sep 112014

The 2×4

The 2×4

I took a Freshman Seminar in my first semester at Princeton in 1988 with a world-renowned professor of classical literature, Bob Hollander.  My good friend and next-door neighbor Peggy was in the seminar with me.  It was a small group — maybe a dozen of us — meeting for three hours each week for a roundtable with Professor Hollander, and then writing the occasional paper.  Peggy and I both thought we were pretty smart.  We had both been high school salutatorians from good private schools and had both gotten into Princeton, right?

Then the first paper came due, and we were both a bit cavalier about it.  We wrote them in full and delivered them on time, but we probably could have taken the exercise more seriously and upped our game.  This became evident when we got our grades back.  One of us got a C-, and the other got either a D or an F.  I can’t remember exactly, and I can’t remember which was which.  All I remember is that we were both stunned and furious.  So we dropped by to see Professor Hollander during his office hours, and he said the same thing to each of us:  “Matt, sometimes you need a 2×4 between the eyes.  This paper is adequate, but I can tell it’s not your best work, it’s decent for high school but not for college, and almost all the others in the class were much more thoughtful.”

Ouch.

Ever since then, Peggy and I have talked about the 2×4, and how it helped us snap out of our own reality and into a new one with a significantly higher bar for quality.  That phrase made it into Return Path‘s lexicon years ago, and it means an equivalent thing — sometimes we have to have hard conversations with employees about performance issues.  The hardest ones are with people who think they are doing really well, when in reality they’re failing or in danger of failing.  That disconnect requires a big wakeup call — the 2×4 between the eyes — before things spiral into a performance plan or a termination.

Delivering a 2×4 between the eyes to an employee can feel horrible.  But it’s the best gift you can give that employee if you want to shake them back onto a successful trajectory.

Sep 022014

Startup CEO: The Online Course Part II

Startup CEO: The Online Course Part II

Startup CEO the online course offered by the Kauffman Fellows Academy is back this fall starting September 15!  As many of you know, the course is based on my book Startup CEO: A Field Guide to Scaling Your Business.

When the course first ran earlier this year, I wasn’t sure what to expect.  Hundreds of students from six continents signed up, all eager to learn as much as they could about entrepreneurship and how to develop their startups.  The students worked together in teams to develop their startup ideas on the unique online educational platform NovoEd.  I was amazed at the enthusiasm of students who dove into lectures and the book and then exchanged ideas in the forums.  It was very powerful to see cohorts of students from all over the world sharing their experiences together, almost like the CEO peer group that I write about in the book.

The real power of it really hit me when I was in Brazil  this last spring at a dinner and one of the attendees approached me and told me he was one of the Startup CEO students and how much he was enjoying the course.

To bring the class to life, we began holding Google hangouts moderated by KFA VP and former CNN correspondent Rusty Dornin.  The students could write in questions live during the hangout or watch the recorded version later.  The hangouts were not only informative but fun.

Here are a few comments from students in the winter course:

The lectures and the hangouts were incredibly insightful. I’m sure I’ll avoid a good number of mistakes I would have surely made without taking this class!

“I enjoyed the high quality of the lecturers and their very practical experience and guidance. This included the excellent visiting lecturers and whilst I was unable to join the hangouts in real time (I’m in Australia) I was able to watch the recordings

In addition, Brad Feld and Jason Mendelson’s course Venture Deals  based on their popular book Venture Deals: Be Smarter than Your Lawyer and Venture Capitalist will begin September 29th.  Brad Feld and other celebrated investors will also be featured in hangouts for the course and Brad loves to dive into the forums.

I am looking forward to this next round and our global discussion of how to create and manage successful startups.

Aug 282014

Physical Therapist or Chiropractor?

Physical Therapist or Chiropractor?

I was talking to a good friend the other day who is an executive coach. He was telling me that his clients are all over the map in terms of role (CEO or functional senior exec), need (small issue to large issue), company size and stage. But most important, he noted that his clients have different ways of learning, and that he has to tailor his coaching style to the client.

I had two main takeaways from this interaction.

First, he had a particularly memorable way of phrasing the differences in client learning styles that inform his approach. Some of his clients, he noted, need a physical therapist. They need someone to work with them every week, using whatever issues that come up that week as a means of stretching and building muscles. Other clients need a chiropractor. They are all good but once in a while need to stop by for him to wrench their spine for a few minutes and get things back in line. This is a brilliant metaphor.

Second, for anyone who manages, coaches, or mentors out there, if you can’t tailor your style to meet the needs of your direct reports or mentees, you aren’t being as effective as possible. We all learn and work in different ways. Good management isn’t ramming a set style down people’s throats. It’s getting the most out of people given who they are. I wrote a bit about this years ago and it’s still so true.

Filed under: Leadership, Management

Aug 142014

How to Manage Your Career

I gave a presentation to a few hundred Return Path employees in January at an all-hands conference we did called “How to Manager Your Career.”

The presentation has three sections — The Three Phases of a Career, How to Get Promoted, and How to Wow Your Manager.

While it’s not as good without the voiceover and interactivity, I thought I’d post it here…see the presentation on Slideshare.

As I said to my audience, if there’s one thing to take away from the topic, it’s this:

Managing your career is up to one, and only one person – you. 

It doesn’t matter how great a corporate culture you have, or how supportive your manager is.  You’re the only person who cares 100% of the time about your career, and you’re the only person with a longitudinal view of what you love, what you’re great at, where you’ve been, and where you want to go.

Jul 312014

Book Short: Best Book Ever

Book Short:  Best Book Ever

The Hard Thing About Hard Things, by Ben Horowitz, is the best business book I’ve ever read.  Or at least the best book on management and leadership that I’ve ever read.  Period.

It’s certainly the best CEO book on the market.  It’s about 1000 times better than my book although my book is intended to be different in several ways.  I suppose they’re complementary, but if you only had time left on this planet for one book, read Ben’s first.

I’m not even going to get into specifics on it, other than that Ben does a great job of telling the LoudCloud/Opsware story in a way that shows the grit, psychology, and pain of being an entrepreneur in a way that, for me, has previously only existed in my head.

Just go buy and read the book.

Filed under: Books

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