Jun 302011

The Value of Constraints

The Value of Constraints

The beauty of Twitter is that a tweet can only be 140 characters long.  With that as a constraint, you end up seeing some amazingly creative messages on Twitter that manage to convey both a specific tone and a lot of content — in close quarters!

The same logic can apply to business more generally.

  • If you give your team two hours to solve a complex problem, you’ll be amazed at how far they can get with it, even if they don’t have enough time to do thorough research
  • If you have to balance your budget every year, you’ll be amazed at the clarity of decision-making you find yourself with (Wonder why Congress can’t figure out how to spend less money?  They don’t have to!)
  • If you only have 5 minutes to make a presentation to your executive team on a complex topic, you’ll be amazed at how quickly you can figure our your main three points, and stick to them

It’s very simple – constraints force economy and clarify objectives.   If you MUST make hard choices, you do.  If you HAVE TO set priorities, you do.  If you have to streamline your thinking, you do.  Of course, you may not be able to convey the subtleties and richness of character of War and Peace in 140 characters, but that doesn’t mean there’s no value to constraints.  Try out one of the above exercises sometime and see what you get.

Jun 232011

Triple Book Short: For Parents

Triple Book Short: For Parents

People who know me know that I am a voracious reader.  Among other things, I probably read about 25-30 books per year — and I wish I had time for more.  I probably read about 50% business books, which I blog about.  Most of my other reading is in a couple specific topical areas that interest me like American History and Evolutionary Biology.  Over the last few years, Mariquita and I have discovered and read a handful of books about parenting that have been foundational for us as we work deliberately at raising our three kids, and two of them have roots in some of the same philosophies, psychologies, and research as a lot of contemporary business literature.  So for parents everywhere, I thought I’d devote a book short to these three books.

The first one is Healthy Sleep Habits, Happy Child, by Marc Weissbluth.  Having kids who sleep long and well has been the foundation for us to have a well functioning household.  Well rested kids are much easier than tired ones.  Well rested parents are more effective.  We have found that the principles in this book have consistently served us well on this front.  All three of our kids more or less slept through the night starting at 6-8 weeks and have been great sleepers since then.

Unconditional Parenting, by Alfie Kohn is basically, for those in the HR/OD field, “Action/Design” for parenting.  The principles in this book have applied to kids as young as 1 year old, and the examples in the book go through the teenage years.  Our main learnings from this book have been around moving away from more traditional forms of reward, punishment, and control and towards helping our kids make decisions as opposed to follow directions by understanding our kids perspective on things, working to help them articulate their own understanding of a situation, and helping them see the perspective of others.

Raising an Emotionally Intelligent Child, by John Gottman, builds on a lot of the same underlying work that Daniel Goleman writes about in articles and business books around Emotional Intelligence (in fact, Goleman wrote the forward to this book as well).  The book lays out a process the author calls Emotional Coaching to help kids learn empathy and problem solving by showing kids empathy, teaching them to understand and label their own emotions, and working with them to craft solutions on their own, but doing the whole process in a very calm and 1:1 manner.  One of my favorite parts of the book, which is so unusual in business books and any kind of self-help book, is that the author has a whole section devoted to when NOT to use this process.

Parenting is a very personal thing, and there isn’t a right or wrong way to go about it.  I have a friend who is fond of saying that parenting is a little bit like the way comedian George Carlin used to describe “other drivers” on the highway.  People who are going slower than you are “a**holes” and people who are going faster than you are “crazy.”  Only you drive the “right way.”  So true, but if you’re a parent, there’s no more important thing to be deliberate about practicing than parenting, and these books have been a good practice guide for us.  We have found a full read of these three books to be very helpful to us in our work with our kids, and we have been very lucky that our main babysitter has been aligned with us on philosophy (and has been willing to read these books with us).

Jun 162011

Keeping It All In Sync?

Keeping It All In Sync?

I just read a great quote in a non-business book, Richard Dawkins’ River out of Eden, Dawkins himself quoting Darwinian psychologist Nicholas Humphrey’s revolting of a likely apocryphal story about Henry Ford.  The full “double” quote is:

It is said that Ford, the patron saint of manufacturing efficiency, once

commissioned a survey of the car scrapyards in America to find out if there were parts of the Model T Fird which never failed. His inspectors came back with reports of almost every kind of breakdown:  axles, brakes, pistons — all were liable to go wrong. But they drew attention to one notable exception, the kingpins of the scrapped cars invariably had years of life left in them. With ruthless logic, Ford concluded that the kingpins on the Model T were too good for their job and ordered that in the future they should be made to an inferior specification.

You may, like me, be a little vague about what kingpins are, but it doesn’t matter. They are something that a motor far needs, and Ford’s alleged ruthlessness was, indeed, entirely logical. The alternative would have been to improve all the other bits of the car to bring them up to the standard of the kingpins. But then it wouldn’t have been a Model T he was manufacturing but a Rolls Royce, and that wasn’t the object of the exercise. A Rolls Royce is a respectable car to manufacture and so is a Model T, but for a different price. The trick is to make sure that either the whole car is built to Rolls Royce specifications or the whole car is built to Model T specifications.

Kind of makes sense, right?  This is interesting to think about in the context of running a SaaS business or any internet or service business.  I’d argue that Ford’s system does not apply or applies less.  It’s very easy to have different pieces of a business like ours be at completely different levels of depth or quality.  This makes intuitive sense for a service business, but even within a software application (SaaS or installed), some features may work a lot better than others.  And I’m not sure it matters.

What matters is having the most important pieces — the ones that drive the lion’s share of customer value — at a level of quality that supports your value proposition and price point.  For example, in a B2B internet/service business, you can have a weak user interface to your application but have excellent 24×7 alerting and on-call support — maybe that imbalance works well for your customers.  Or let’s say you’re running a consumer webmail business.  You have good foldering and filtering, but your contacts and calendaring are weak.

I’m not sure either example indicates that the more premium of the business elements should be downgraded.  Maybe those are the ones that drive usage.  In the manufacturing analogy, think about it this way and turn the quote on its head.  Does the Rolls Royce need to have every single part fail at the same time, but a longer horizon than the Model T?  Of course not.  The Rolls Royce just needs to be a “better enough” car than the Model T to be differentiated in terms of brand perception and ultimately pricing in the market.

The real conclusion here is that all the pieces of your business need to be in sync — but not with each other as much as with customers’ needs and levels of pain.

Jun 092011

Sometimes, Things Are Messy

Sometimes, Things Are Messy

Many people who run companies have highly organized and methodical personality types – in lots of cases, that’s probably how they got where they got in life.  And if you work long enough to espouse the virtues of fairness and equality with the way you manage and treat people, it become second nature to want things to be somewhat consistent across an organization.

But the longer we’re in business at Return Path and the larger the organization gets, the more I realize that some things aren’t meant to fit in a neat box, and sometimes inconsistency is not only healthy but critical for a business to flourish.  Let me give a few examples that I’ve observed over the past few years.

  • Our sales team and our engineering team use pretty different methodologies from each other and from the rest of the company in how they set individual goals, monitor progress against them, and compensate people on results
  • The structure of our sales and service and channel organizations in Europe are very different from our emerging ones in Latin America and Asia/Australia – and even within Europe, they can vary greatly from country to country
  • Although we have never been a company that places emphasis on job titles, our teams and leadership levels have become even more inconsistent over the years – sometimes a manager or director has a bigger span of control or more impact on the business than a VP does, sometimes individual contributors have more influence over a broad section of groups than a manager does, etc.

It’s taken me a while to embrace messiness in our business.  I fully acknowledge that I am one of the more hyper-organized people around, which means this hasn’t come naturally to me.  But the messiness has been very productive for us.  And I think it’s come from the combination of two things:  (1) we are a results-oriented culture, not a process-driven culture, and (2) we give managers a lot of latitude in how they run their teams.

I’m certainly not saying that striving for some level of consistency in organization is a bad goal – just that it’s probably not an absolute goal and that embracing messiness sometimes makes a lot of sense.  Or perhaps phrased more actionably, allowing individual managers to use their own judgment and creativity in setting up teams and processes, as long as they follow high-level guidelines and values can be an incredibly productive and rewarding way of maximizing success across an enterprise.

Jun 022011

Try It On For Size

Try It On For Size

I’ve always been a big fan of taking a decision or a change in direction I’m contemplating and trying it on for size.  Just as you never know how a pair of pants is really going to fit until you slip them on in a dressing room, I think you need to see how decisions feel once you’re closing in on them.

Here’s why:  decisions have consequences.  No matter how prescient leaders are, no matter if they’ve been trained in chess-like (three-moves-ahead) thinking, they can almost never perfectly foresee all the downstream reactions and effects of decisions.  Figuring out how to create “mental fittings” is a skill that I think is critical for CEOs and other leaders.

When I try something on for size, I’m usually trying to accomplish one of a few things.  Sometimes, I’m simply trying to see how words sound when they come out of my mouth.  As Homer Simpson periodically muses, “did I think that, or did I say that out loud?”  There’s no substitute for articulating a new phrase, or theory, out in the open and seeing if it sounds the way YOU expect it to.  Other times, I’m trying to see how different messages or stories play with different audiences.  Will employees think it’s exciting when we announce X, or scary, or confusing?  Will a customer understand the new positioning of our company when you include the new product?  Will investors understand the story in 9 words or less?  Finally, there are times when my objective in trying something on for size is to understand specific downstream effects of a decision.  Throwing something out into the open and taking copious notes as people give you their “blink” concerns and reactions are invaluable.

Of course, the main thing to avoid when trying decisions or changes in direction on for size is creating chaos!  There are a few ways to create chaos.  One is by having your “try it on for size” conversation with an employee turn into a de facto decision because the employee takes your words and then deliberately acts on them.

Alternatively, the same thing could happen inadvertently because even though the employee knows intellectually not to act on your comments, he or she starts to incorporate them subconsciously, thinking they are likely to become the law of the land.

Another is by creating false expectations and disappointment if you decide an idea doesn’t fit when you try it on, and then you scrap it, leaving behind a trail of the idea for others to see and discuss.  All the same can be said with customers or investors or any other stakeholder.  Your words as CEO or any kind of a leader can be quite powerful, and trying something on for size can have real unintended consequences if not done carefully.

In all cases, the best antidotes are communication and judgment.  Make sure if you are trying something on for size internally that you communicate early and often to your audience that all you are doing is just that – trying something on, and follow up with people afterwards to make sure your intent really sunk in.  But judgment is also critical.  Pick your target audience for a fitting on carefully, make sure to blend trusted internal AND external associates, and make sure to rotate who you talk to about new things so you don’t develop a consistent bias in your idea generation.