Aug 272007

More Good Inc.

More Good Inc.

Last year I was pleased and proud to write about our debut on the Inc. 500 list of America’s fastest growing companies.  At that time I wrote that “Now our challenge, of course, is STAYING on the list, and hopefully upping our ranking next year!”  Well, I am again please and proud to announce that we, in fact, stayed on the list.  (You can read all the Inc. coverage here and see our press release about the ranking here.)

Unfortunately, we didn’t make the second part of our goal to up our rank.  But, we did up our growth – our three-year revenue growth rate was 18% higher than last year.  This is a testament to the hard work of our team (now 150 strong!) and wouldn’t be possible without the support of our many great clients (now 1,500 strong!).  Most importantly, we see no end in sight.  In fact, 2008 promises to be an even bigger year for us as we poise for continued growth.  By the way, would you like to be part of a team that has now ranked as one of America’s fastest growing companies two years in a row?  Check out our Careers page and join the team that is advancing email marketing, one company at a time.

Filed under: Business, Entrepreneurship

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Aug 222007

Father/Mother Knows Best?

Father/Mother Knows Best?

USA Today had an interesting article today about how founder-led companies perform better than their non-founder-led counterparts, with a 15-year stock price appreciation of 970% vs. the S&P 500 average of 222%.  That’s pretty powerful data.

The general reasons cited in the article include

founders having deep industry knowledge…having a powerful presence in the company…having a huge financial stake in the success of the business…not looking for the next job so can take a long-term perspective…being street fighters early on

I think all those are true to some extent.  And it’s certainly true, as one of the CEOs interviewed for the article said, that it’s not because founders are smarter or harder working.  But to add to the dialog, I think there are two other big reasons founders may be more successful at generating long-term returns for their companies.  One is much more tactical than the other.

1. Founders have a deep, emotional connection to the business.  For many of us, and certainly for the 15-year-plus variety mentioned in the article, a founder’s company represents his or her life’s work.  Whether or not your name is on the door like Michael Dell, as a founder, your personal reputation and in many cases (perhaps in an unhealthy way), your sense of self worth is tied to the success of the business.  I’m not suggesting that “hired” CEOs don’t also care about their reputations, but there is something different about the view you have of a business when you started it.

2. Founders have longer tenures.  The article didn’t say, but my guess is that for the 15 years analyzed, the average tenure of the founder-led companies was 15 years…and the average for the S&P 500 was something like 5 years.  And while 5 years may seem like a long time in this day and age of job hopping, it’s not so long in the scheme of running and building an enterprise.  It takes years to learn an industry, years to build relationships with people, and years to influence a culture.  Companies that trade out CEOs every few years are by definition going to have less solid and consistent strategies and cultures than those who have more stability at the top, and that must influence long-term value as much as anything else.

I’m sure there are other reasons as well…comment away if you have some to add!

Aug 162007

A Culture of Appreciation

A Culture of Appreciation

As I mentioned in my last post in the Collaboration is Hard series, we’ve tried to create a culture of appreciation at Return Path that lowers barriers to collaboration and rewards mutual successes.  We developed a system that’s modeled somewhat after a couple of those short Ken Blanchard books, Whale Done and Gung Ho! It may seem a little hokey, and it doesn’t work 100% of the time, but in general, it’s a great way to make it easy for people to say a public “thanks” to a colleague for a job well done.

The idea is simple.  We have an “award request” form on our company Intranet that any employee can use to request one of five awards for one or more of their colleagues, and the list evolves over time.  The awards are:

ABCD – for going Above and Beyond the Call of Duty

Double E – for “everyday excellence”

Crowbar – for helping someone in sales “pry our way in” to a new customer

Damn, I Wish I’d Thought of That – for coming up with a great insight for the business (credit for the name of course goes to our former colleague Andy Sernovitz)

WOOT – for Working Out Of Title and helping a colleague

Our HR coordinator Lisa does a quick review of award submissions to make sure they are true to their definitions and make sure that people aren’t abusing the system, and the awards are announced and posted on the home page of the Intranet every week and via RSS feed in near-real time.

Each award carries a token monetary value of $25-$200 paid with American Express gift checks, which are basically like cash.  We send out the checks with mini-statements to employees every quarter.

It’s not a perfect system.  The biggest shortcoming is that it’s not used evenly by different people or different groups.  But it’s the best thing we’ve come up with so far to allow everyone in the company to give a colleague a virtual pat on the back, which encourages great teamwork!

Aug 092007

Spam Filter and False Positive Reality Check

Spam Filter and False Positive Reality Check

For a variety of reasons, we had to take our spam filter offline for a day or two here, so I am getting a good look at what raw, unfiltered email traffic looks like.  It’s not pretty.  I have two main observations:

- Spam filters are getting pretty good at eliminating false negatives (e.g., catching real spam).  There’s a virtual tidal wave in my inbox of crap that I never see.  I have multiple, very old, very public email addresses feeding the same inbox, so I am probably seeing more than most, but wow.  Spam is a far worse problem on networks than it is in actual inboxes

- Spam filters are still generating a decent amount of false positives (e.g., filtering out things that aren’t spam).  I have so much email — and so much filtered email — that I have stopped looking through my Spam Folder in good detail.  It just takes too long.  But what I am discovering in my unfiltered world today is a bunch of newsletters (both content and marketing) that are making it to my inbox for the first time in months, maybe years.  And I am having that reaction of "oh yeah, I did wonder what happened to that…"

Conclusion:  world of filtering still very much a work in progress.

Filed under: Email

Aug 082007

Collaboration is Hard, Part III

Collaboration is Hard, Part III

In Part I, I talked about what collaboration is:

partnering with a colleague (either inside or outside of the company) on a project, and through the partnering, sharing knowledge that produces a better outcome than either party could produce on his or her own

and why it’s so important

knowledge sharing as competitive advantage, interdependency as a prerequisite to quality, and gaining productivity through leverage

In Part II, I suggested a few reasons why collaboration is difficult for most of us

It doesn’t come naturally to us on a cultural level, it’s hard to make an up-front investment of time in learning when you don’t know what you’re going to learn, and there’s a logistical hurdle in setting up the time and framework to collaborate

So now comes the management challenge — if collaboration is so important and yet so hard, how do we as CEOs foster collaboration in our organizations?  Not to say we have the formula down perfect at Return Path — if we did, collaboration wouldn’t show up as a development item for so many people at reviews each year — but here are five things we have done, either in small scale or large scale, to further the goal (in no particular order):

  1. We celebrate collaboration.  We have a robust system of peer awards that call out collaboration in different ways.  I will write about this in longer form sometime, but basically we allow anyone in the company to give anyone else in the company one of several awards (all of which carry a cash value) at any time, for any reason.  And we post the awards on the Intranet and via RSS feed so everyone can see who is being appreciated for what reason.  This tries to lower the cultural barriers discussed in the last post.
  2. We share our goals with each other.  This happens on two levels, and it’s progressed as the company has gotten more mature.  On a most basic level, we are very public about posting our goals to the whole company, at least at the department level (soon to be at the individual level), so everyone can see what everyone else is working on and note where they can contribute.  But that’s only half the battle.  We also have increasingly been developing shared goals — they show up on your list and on my list — so that we are mutually accountable for completing the project.
  3. We set ourselves up for regular collaborative communication.  Many of our teams and departments use the Agile framework for work planning and workflow management, including the daily stand-up meeting as well as other regularly scheduled communication points (see other posts I’ve written about Agile Development and Agile Marketing).  Agile takes out a lot of the friction caused by logistical hurdles in collaborating with each other.
  4. We provide financial incentives for collaboration.  In general, we run a three-tiered incentive comp program.  Most people’s quarterly or annual bonuses are 1/3 tied to individual goals achievement (which could involve shared goals with others), 1/3 tied to division revenue goals (fostering collaboration within each business unit), and 1/3 tied to company financial performance (fostering at least some level of collaboration with others outside your unit).  This helps, although on its own certainly isn’t enough.
  5. We provide collaboration tools.  Finally, we have had developed reasonably good series of internal tools — Wiki, Intranet, RSS feeds — over the years, all of which are about to be radically upgraded, to encourage and systematize knowledge sharing.  This allows for a certain amount of "auto collaboration" but hopefully also allows people to realize how much there is to be gained by partnering with other subject matter experts within the company when projects call for it, alleviating in part the "you don’t know what you don’t know" problem.

So that’s where we are on this important topic.  And I’m only finding that it gets more important as the company gets bigger.  What are your best practices around fostering collaboration?

Filed under: Leadership

Aug 022007

A Model for Transparency

A Model for Transparency

Rob Kalin from Etsy (a marketplace for handmade goods) wrote an outstanding blog post today that Fred describes as a transparent window into what makes the company tick.

I’d like to riff off of two themes from the post.

First, the post itself and the fact that Rob, as CEO of the business, is comfortable with this degree of transparency and openness in his public writing.

I still think that far few CEOs blog today.  There is probably no better window into the way a company works or the way a management team thinks than open and honest blogging.  One member of our team at Return Path described my blogging once as “getting a peek inside my brain.”  The handful of CEOs that I’ve spoken to about why they don’t blog have all had a consistent set of responses.  They’re too busy.  They don’t know how.  They want to delegate it to Marketing but someone told them they can’t.  They’re concerned about what “legal” will say.  They’re public and are worried about running afoul of SEC communication rules (perhaps Whole Foods’ CEO notwithstanding).

I’m not sure I buy any of that.  CEOs who see the value of blogging will find a way to have the time and courage to do it.  And any blogger is entitled to say some things and not say others, as competitive needs or regulations (or common sense!) dictate.

But today’s reality is that running a successful company means spending more time communicating to all constituents — both internal and external.  And with the democratization of information on the Internet, it’s even more important to be accurate, open, honest, and consistent in that communication.  Blogging is an easy and powerful way of accomplishing that end.  Between my personal blog here and Return Path’s blog, I have a reach of something like 25,000 people when I write something.  Talk about a platform for influence in my company and industry.  So while CEOs don’t have to blog…in the end the CEO who doesn’t blog will find him or herself (and his or her company) at a competitive disadvantage versus those who do.

One important note on this as well is that the willingness of a CEO to blog seems to vary inversely with the size of the company.  The bigger the company, the more risk-averse the CEO seems to be.  That’s not surprising.

Second, Rob’s point around the company’s challenge with communications:

Having a consistent message vs. letting humans be human…large corporations try to sanitize all their outgoing messages for the sake of keeping face…I want Etsy to stay human. This means allowing each person’s voice to be heard, even if it’s squeaky or loud or soft. I will not put a glossy layer of PR over what we do. If we trip, let us learn from it instead of trying to hide it; when we leap, let’s show others how to leap.

Rob’s right, this is a tough one.  And I think in the end it comes back to the market again.  Just as CEOs who don’t blog will ultimately find themselves at a competitive disadvantage, companies that complete whitewash all their messaging will also find themselves at a competitive disadvantage because the companies’ personalities won’t come through as strongly, and the company’s message won’t seem as genuine.  And to the same point as above, the more the Internet takes over communications and information, the more critical it is that companies are open and honest and transparent.

That doesn’t mean that a good contemporary Marketing effort can’t include providing guidance to a team on key message points or even specific language here and there, but it does mean that letting people inside a company speak freely on the outside, and with their own voices, is key.  We do that on the Return Path blog — most of us, most of the time, write our own posts.  Sometimes we have someone in marketing take a quick pass through a post to edit it for grammar, but that’s usually about it.

Thanks to  Rob for the great thoughts.  It would be great to see more CEOs out there doing the same!

Aug 012007

Collaboration is Hard, Part II

Collaboration is Hard, Part II

In Part I, I talked about what collaboration is:

partnering with a colleague (either inside or outside of the company) on a project, and through the partnering, sharing knowledge that produces a better outcome than either party could produce on his or her own

and why it’s so important

knowledge sharing as competitive advantage, interdependency as a prerequisite to quality, and gaining productivity through leverage

In Part II, I’ll answer the question I set out to answer originally, which is why is collaboration so hard?  Why does it come up on so many of our development plans year in, year out?  As always, there isn’t an answer, but here are a few of my theories:

  1. It doesn’t come naturally to most of us.  Granted, this is a massive sweeping generalization, but Western culture (or at least American culture) doesn’t seem to put a premium on workplace teaming the way, say Japan does, or even Europe to a lesser extent.  The "rugged individual," to borrow a phrase from our historical past, is a very American phenomenon.  Self-reliance seems to be in our DNA, and the competitive culture that we bring to our workplace is not only to beat out competitive companies to our own, but often to beat out our colleagues to get that next promotion or raise.  The concept that "I win most when we all win" is a hard one for many of us to grasp.  Even in team sports, we celebrate individual achievement and worship heroes as much as we celebrate team championships.
  2. You don’t know what you don’t know.  (with full attribution for that quote to my colleague Anita Absey.)  Since knowledge sharing and learning is at the heart of collaboration, and since collaboration doesn’t come naturally to us, that leads me to my second point.  Even if you are acting in your own self-interest most of the time at work (not that you should act that way), logic would dictate that you would be interested in collaborating just so you can learn more and do a better job in the future.  But the fact that you don’t know what you don’t know might make you far less likely to partner with a colleague on a project since you are committing an investment of your time up front with an uncertain outcome or learning at the end of it.  Only when we have had historical success collaborating with a particular individual — and learned from it and improved ourselves as a result — are we most comfortable going back to the collaboration well in the future.
  3. It’s logistically challenging.  This may sound lame, but collaboration is hard to fit into most of our busy lives.  We all work in increasingly fast-paced environments and in a very fluid and dynamic industry.  Collaboration requires some mechanics such as lining up multiple calendars, multiple goal sets, and compromising on lots of aspects of how you would do a project on your own that present a mental hurdle to us even when we think collaboration might be the right thing to do.  With that hurdle in place, we are only inclined to collaborate when it’s most critical — which doesn’t develop the good habit of collaborating early and often.

I’m sure there are other reasons why Collaboration is Hard, but this is a start.  As I think about it, I will work on a necessary Part III as well here — how to foster collaboration in your organization.

Filed under: Leadership

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