Jan 272011

Book Short: Vulnerability Applied to Leadership

Book Short:  Vulnerability Applied to Leadership

Getting Naked:  A Business Fable About Shedding The Three Fears That Sabotage Client Loyalty (bookKindle), is Patrick Lencion’s latest fable-on-the-go book, and it’s as good a read as all of his books (see list of the ones I’ve read and reviewed at the end of the post).

The book talks about the power of vulnerability as a character trait for those who provide service to clients in that they are rewarded with levels of client loyalty and intimacy.  Besides cringing as I remembered my own personal experience as an overpaid and underqualified 21 year old analyst at how ridiculous some aspects of the management consulting industry are…the book really made me think.  The challenge to the conventional wisdom of “never letting ‘em see you sweat” (we *think* vulnerability will hurt success, we *confuse* competence with ego, etc.) is powerful.  And although vulnerability is often uncomfortable, I believe Lencioni is 100% right – and more than he thinks.

First, the basic premise of the book is that consultants have three fears they need to overcome to achieve nirvana – those fears and the mitigation tactics are:

  1. Fear of losing the business:  mitigate by always consulting instead of selling, giving away the business, telling the kind truth, and directly addressing elephants in the room
  2. Fear of being embarrassed:  mitigate by asking dumb questions, making dumb suggestions, and celebrating your mistakes
  3. Fear of feeling inferior:  mitigate by taking a bullet for the client, making everything about the client, honoring the client’s work, and doing your share of the dirty work

But to my point about Lencioni being more right than he thinks…I’d like to extend the premise around vulnerability as a key to success beyond the world of consulting and client service into the world of leadership.  Think about some of the language above applied to leading an organization or a team:

  • Telling the kind truth and directly addressing elephants in the room:  If you’re not going to do this, who is?  There is no place at the top of an organization or team for conflict avoidance
  • Asking dumb questions:  How else do you learn what’s going on in your organization?  How else can you get people talking instead of listening?
  • Making dumb suggestions:  I’d refer to this more as “bringing an outside/higher level perspective to the dialog.”  You never know when one of your seemingly dumb suggestions will connect the dots for your team in a way that they haven’t done yet on their own (e.g., the suggestions might not be so dumb after all)
  • Celebrating your mistakes:  We’re all human.  And as a leader, some of your people may build you up in their mind beyond what’s real and reasonable.  Set a good example by noting when you’re wrong, noting your learnings, and not making the same mistake twice
  • Taking a bullet for your team, making everything about your team and honoring your team’s work:  Management 101.  Give credit out liberally.  Take the blame for team failings.
  • Doing your share of the dirty work:  An underreported quality of good leaders.  Change the big heavy bottle on the water cooler.  Wipe down the coffee machine.  Order the pizza or push the beer cart around yourself.  Again, we’re all human, leaders aren’t above doing their share to keep the community of the organization safe, fun, clean, well fed, etc.

There’s a really powerful message here.  I hope this review at least scratches the surface of it.

The full book series roundup as far as OnlyOnce has gotten so far is:

Jan 202011

Book Short: Calm in a Crisis, Explained

Book Short:  Calm in a Crisis, Explained

Deep Survival: Who Lives, Who Dies, and Why, by Laurence Gonzales, is not a business book.  Even though the author says a few times “this can be applied to business, too,” the application is left 100% up to the reader.  But that’s my only criticism of the book, and it’s not a big one at that.  Deep Survival is an unexpected and somewhat odd way to think about how to lead an organization, but it’s very powerful, and incredibly well written.

The author essentially has made a career, or at least a hobby, of studying major accidents and delineating the qualities that separate those who survive from those who don’t. Most of his examples are from extreme sports — sailing across the Atlantic solo, doing highly technical rock and glacier climbs, and the like.  Certainly one easy takeaway from the book is that perhaps one can have a lot of fun and be challenged in life without putting oneself at risk in those ways!

But that’s not the author’s point.  And it’s not even that preparedness makes the difference, as you might expect (in fact, sometimes that hurts).  His point is that the correct combination of rational and emotional impulses makes the difference.  His specific 12 points are:

  • Look, see, believe (keep those cognitive functions working)
  • Stay calm, use humor and fear to focus
  • Think/analyze/plan, get organized with manageable tasks
  • Take correct, decisive action
  • Celebrate successes
  • Count your blessings
  • Play…or do other things to occupy your mind’s idle moments
  • See the beauty around you
  • Believe that you will succeed
  • Surrender – don’t let the fear of failure stand in your way
  • Do whatever is necessary
  • Never give up

But reading those points doesn’t really substitute for reading the book, especially since some seem contradictory!  Thanks to my friend Greg Sands for this great read.

Jan 132011

What a View, Part III

What a View, Part III

We are in the middle of our not-quite-annual senior team 360 review process this week at Return Path.  It’s particularly grueling for me and Angela, our SVP of People, to sit in, facilitate, and participate in 15 of them in such a short period of time, but boy is it worth it!  I’ve written about this process before — here are two of the main posts (overall process, process for my review in particular, and a later year’s update on a process change and unintended consequences of that process change). I’ve also posted my development plans publicly, which I’ll do next month when I finalize it.

This year, I’ve noticed two consistent themes in my direct reports’ review sessions (we do the live 360 format for any VP, not just people who report directly to me), which I think both speak very well of our team overall, and the culture we have here at Return Path.

First, almost every review of an executive had multiple people saying the phrase, “Person X is not your typical head of X department, she really is as much of a general business person and great business partner and leader as she is a great head of X.”  To me, that’s the hallmark of a great executive team.  You want people who are functional experts, but you also need to field the best overall team and a team that puts the business first with understandings of people, the market, internal dependencies, and the broader implications of any and all decisions.  Go Team!

Second, almost every review featured one or more of my staff member’s direct reports saying something like “Maybe this should be in my own development plan, but…”  This mentality of “It’s not you, it’s me,” or in the language of Jim Collins, looking into the mirror and not out the window to solve a problem, is a great part of any company’s operating system.  Love that as well.

Ok.  Ten down, five to go.  Off to the next one…

Jan 122011

5 Ways to Spot Trends That Will Make You (and Your Business) More Successful

5 Ways to Spot Trends That Will Make You (and Your Business) More Successful

I’ve recently started writing a column for The Magill Report, the new venture by Ken Magill, previously of Direct magazine and even more previously DMNews. Ken has been covering email for a long time and is one of the smartest journalists I know in this space. My column, which I share with my colleagues Jack Sinclair and George Bilbrey, covers how to approach the business of email marketing, thoughts on the future of email and other digital technologies, and more general articles on company-building in the online industry – all from the perspective of an entrepreneur. Below is a re-post of this week’s version, which I think my OnlyOnce readers will enjoy.

Last week I published my annual “Unpredictions” for 2011. This tradition grew out of the fact that I hate doing predictions and my marketing team loves them. So we compromise by predicting what won’t happen.

But the truth is that the annual prediction ritual – while trite – is really just trend-spotting. And trend-spotting is an important skill for entrepreneurs. Fortunately it’s a skill that can be acquired, at least it can with enough deliberate practice (another skill I talk about here).

Here are five habits you should consider cultivating if being a better trend spotter is in your career roadmap.

Read voraciously. I read about 50 books every year.  About half of them are business books, and I also mix in a bit of fiction, humor, American history, architecture and urban planning, and evolutionary biology.  I keep up with more than 50 blogs and I read all the trade publications that cover email.  I also read the Wall Street Journal and The Economist regularly.  What you read is a little less important than just reading a lot, and diversely.

Use social media (wisely). Julia Child once said that the key to success in life was having great parents. My advice to you is quite a bit simpler:  make friends with smart people. Facebook, Twitter, LinkedIn and others have given us a window into the world unlike any other. Status updates, tweets, and – maybe most important of all – links shared by your network of friends and colleagues gives you a sense of what people are talking about, thinking about and working on. And you can’t just lurk.  You actually have to be “in” to get something “out.”

Follow the money. Pay attention to where money gets invested and spent. This includes keeping an eye on venture capital, private equity, and the public markets, as well as where clients (mostly IT and marketing departments) are spending their dollars and what kinds of people they are hiring. Money flows toward ideas that people think will succeed. A pattern of investments in particular areas will give you clues to what might be the big ideas over the next five to 10 years.

Get out of the office: I think it’s hugely important for anyone in business, and especially entrepreneurs, to spend time in the world to get fresh perspectives. I’m not sure who coined the phrase, but our head of product management, Mike Mills, frequently refers to the NIHITO principle – Nothing Interesting Happens in the Office.  Now that’s not entirely true – running a company means needing to spend a huge amount of time with people and on people issues, but last year I traveled nearly 160,000 miles around the world meeting with prospect, clients, partners and industry luminaries. You don’t have to be a road warrior to get this one right – you can attend events in your local area, develop a local network of people you can meet with regularly – but you do have to get out there.

Take a break. While you need information to understand trends, you can quickly get overloaded with too much data.  Trend spotting is, in many ways, about pattern recognition. And that is often easier to do when your mind is relaxed.  Ever notice that you have moments of true epiphany in the shower or while running? Give yourself time every week to unplug and let your mind recharge. As Steven Covey says, “sharpen that saw”!

Jan 032011

Macroeconomics for Startups

Macroeconomics for Startups

I’m not an economist.  I don’t play one on TV.  In fact, I only took one Econ class at Princeton (taught by Ben Bernanke, no less), and I barely passed it.  In any case, while I’m not an economist, I do read The Economist, religiously at that, and I’ve been reading so much about macroeconomic policies and news the past 18 months that I feel like I finally have a decent rudimentary grip on the subject.  But still, the subject doesn’t always translate as well to the average entrepreneur as microeconomics does – most business people have good intuitive understandings of supply, demand, and pricing.  But who knows what monetary policy is and why they should care?

So here’s my quick & dirty cut at Macroeconomics for Startups.  What do some of the buzzwords you read about in the news mean to you?

· Productivity Gains – This is something frequently cited as critical to developed economies like ours in the US.  Here’s my basic example over the past 10 years.  When I left my job at MovieFone in 1999, there were approximately eight administrative assistants in a company of 200 people – one for each senior person.  Today, Return Path has less than one administrative assistant in a company of the same size.  We all have access to more tools to self-manage productivity than we used to.  Cloud computing is another great example here of how companies are doing more with less. We have tons of software applications we use at Return Path, none of which require internal system administration, from Salesforce.com for CRM to Intacct for accounting. Ten years ago, each would have required dedicated hardware and operational maintenance.

· Fiscal Policy vs. Monetary Policy –  Fiscal Policy is manipulating the economy through government taxing and spending.  Monetary Policy is manipulating the economy by controlling interest rates and money supply.  For a small company that has revenue and accounts receivable, you probably are more inclined to Monetary Policy as it has more to do with your ability to access debt capital from banks through credit lines.  But if you’re in an industry where government grants or support is critical, Fiscal Policy can mean more to you in the short run.  Of course, if you’re losing money as many startups are, business tax credits and the like aren’t so relevant.

· Inflation – As my high school econ teacher defined it, “too many dollars chasing too few goods.”  Inflation may seem like a neutral thing for a business – your costs may be going up, but your revenue should be going up as well, right?  And we can inflate our way out of debt by simply devaluing our currency, right?  The main problem with inflation is that too much of it discourages investment and savings, which has negative long term consequences.  To you, rapid inflation would mean that the money you raise today is worth a lot less in a year or two.  That said, inflation is certainly better than Deflation, which can paralyze an economy.  Think about it like this – if you’re in a deflationary environment, why would you spend money today if you think prices will be lower tomorrow?

· Strong Dollar, Weak Dollar – Sounds like one of those things that’s politically explosive…of course we all want a strong dollar, right?  Why have a mental image of Uncle Sam that’s anything other than muscular?  And yes, it’s a lot more fun to travel to Europe when a latte costs you $4, not $8.  But the reality is that a strong dollar doesn’t necessarily serve all our interests well.  For a startup, sure, you can buy an offshore development team in India for less money than a development team in Silicon Valley, and for a more established company it makes it much cheaper to try and expand to Europe and Asia.  But an artificially strong dollar means that few people outside the US can afford to buy your product or service.  This is related to…

· Trade Surplus/Deficit and Exchange Rates – The net of a given country’s exports minus imports, and how much one currency is worth in terms of the other.  There’s been much talk lately about whether and how much China is manipulating its currency and holding it down, and if so, what impact that has on the global economy.  Why should you care?  If China is articifically keeping the value of the yuan down, it just means that the Chinese people can’t afford to buy as much stuff from other countries – and that other countries have an artificial incentive to buy things from China.  If the Chinese government allowed the yuan to appreciate more, the exchange rate vs. the dollar would rise, and your product or service would find itself with a lot more likely buyers in the sea of 1.3B people that is China.

I’m sure there are other terms of note and startup applications, but these are a handful that leap to mind.