Mar 142013

Luck Matters (and You Can Only Make Some of It)

Luck Matters ( and You Can Only Make Some of It)

There was a great article recently in the Financial Times that’s worth reading here.  (Warning – you might have to complete a free registration in order to read this article.)  The premise is that most outliers, to use Malcolm Gladwell’s term, achieve their super status at least partly through luck.  And once that status is achieved, the good things just pile on from there.  This concept is as much Gladwell’s as that term is.

I always say that “you can make your own luck.”  And to some extent, that’s true.  Hard work and persistence and creativity can eventually open up doors on their own, no question about it.  While this article doesn’t say there are limitations to that axiom, it does note that hard work, persistence, and creativity PLUS some good luck is the more likely path to being #1 in your field.

Think about it this way – why is the most gifted golfer of the last 15 years someone who grew up in Southern California with a father who loved golf, and not, say, someone from the sub-Saharan region of Africa?  The latter person might have the equivalent amount of raw talent as Tiger Woods, maybe even more grit and determination.  But he’s probably never even heard of golf.

So what’s the lesson here for business leaders?  First, count your blessings.  You’re probably where you are for a bunch of reasons, some of which have nothing to do with you.  Second, look for other people to work with you who are lucky as well.  I read somewhere once that Tony Hsieh of Zappos asks every person he interviews if he or she is a lucky person – and that question pulls a lot of weight for him.  Finally, put your head down and work hard.  While this point is 100% valid, the thing is…you can’t do anything about it anyway, so you might as well push as hard as you can to do the best you can with what you’ve got!

May 102012

Learning Through Extremes, or Shifting Gears part II

OnlyOnce is 8 years old this week, which is hard to believe. So it is fitting that I got halfway through a new post this morning, then a little alarm bell went off in my head that I had written something similar before.  The topic is around moderation versus extremes.  I first wrote about this topic in 2005 in a post called Shifting Gears but I have thought about it more recently in a different way. 

Instead of phrasing this as a struggle between “Meden Agan,” which is Greek for “everything in moderation,” and “Gor oder gornischt,” which is Yiddish for “all or nothing,” I’d like to focus here on the value of occasionally going to an extreme. And that value is around learning. Let me give three examples:

-We were having a buy vs. build conversation at work a few months back as we were considering an acquisition. Some people in the room had an emotional bias towards buy; others toward build. So we framed the debate this way:  “Would you acquire the company for $1 instead of building the technology?” (Yes!) “Would you buy it for $10mm?” (No!) Taking the conversation to the extremes allowed us to focus on a rational answer as opposed to an emotional one — where is the price where buy and build are in equilibrium?

– With my colleague Andrea, I completed a 5-day juice fast a few weeks back. It was good and interesting on a bunch of levels. But I came away with two really interesting learnings that I only got from being extreme for a few days:  I like fruits and veggies (and veggie juices) a lot and don’t consume enough of them; and I sleep MUCH better at night on a relatively empty stomach

– Last year, I overhauled my “operating system” at work to stop interviewing all candidates for all jobs and stop doing 90-day 1:1 meetings with all new employees as well. I wrote about this in Retail, No Longer. What finally convinced me to do it was something one of my colleagues said to me, which was “Will you be able to keep these activities up when we have 500 employees?” (No) “So what is the difference if you stop now and save time vs. stopping in 6 months?” Thinking about the extreme got me to realize the full spectrum

It may not be great to live at the extremes, but I find extremes to be great places to learn and develop a good sense of what normal or moderate or real is.

Mar 292012

Book Short: Awesome Title, So-So Book

Book Short:  Awesome Title, So-So Book

Strategy and the Fat Smoker (book, Kindle), by David Maister, was a book that had me completely riveted in the first few chapters, then completely lost me for the rest.  That was a shame.  It might be worth reading it just for the beginning, though I’m not sure I can wholeheartedly recommend the purchase just for that.

The concept (as well as the title) is fantastic.  As the author says in the first words of the introduction:

We often (or even usually) know what we should be doing in both personal and professional life.  We also know why we should be doing it and (often) how to do it.  Figuring all that out is not too difficult.  What is very hard is actually doing what you know to be good for you in the long-run, in spite of short-run temptations.  The same is true for organizations.

The diagnosis is clear, which is as true for organizations as it is for fat people, smokers, fat smokers, etc.  The hard work (pain) is near-term, and the rewards (gain) are off in the future, without an obvious or visible correlation.  As someone who has had major up and down swings in weight for decades, I totally relate to this.

But the concept that

the necessary outcome of strategic planning is not analytical insight but resolve,

while accurate, is the equivalent of an entire book dedicated to the principle of “oh just shut up and do it already.”  The closest the author comes to answering the critical question of how to get “it” done is when he says

A large part of really bringing about strategic change is designing some new action or new system that visibly, inescapably, and irreversibly commits top management to the strategy.

Right.  That’s the same thing as saying that in order to lose weight, not only do you need to go on a diet and weigh yourself once in a while, but you need to make some major public declaration and have other people help hold you accountable, if by no other means than causing you to be embarrassed if you fail in your quest.

So all that is true, but unfortunately, the last 80% of the book, while peppered with moderately useful insights on management and leadership, felt largely divorced from the topic.  It all just left me wanting inspirational stories of organizations doing the equivalent of losing weight and quitting smoking before their heart attacks, frameworks of how to get there, and the like.  But those were almost nonexistent.  Maybe Strategy and the Fat Smoker works really well for consulting firms – that’s where a lot of the examples came from.  I find frequently that books written by consultants are fitting for that industry but harder to extrapolate from there to any business.

Feb 092012

The Best Laid Plans, Part IV

The Best Laid Plans, IV

I have had a bunch of good comments from readers about the three posts in this series about creating strategic plans (input phase, analysis phase, output phase).  Many of them are leading me to write a fourth post in the series, one about how to make sure the result of the plan isn’t shelfware, but flawless execution.

There’s a bit of middleware that has to happen between the completion of the strategic plan and the work getting done, and that is an operating plan.  In my observation over the years, this is where most companies explode.  They have good ideas and capable workers, just no cohesive way to organize and contextualize the work.  There are lots of different formats operating plans can take, and a variety of acronyms to go with the formats, that I’ve heard over the years.  No one of these formats is “right,” but I’ll share the key process steps my own team and I went through just over the past few months to turn our strategic planning into action plans, synchronizing our activities across products and groups.

  • Theme:  we picked a theme for the year that generally held the bulk of the key work together – a bit of a rallying cry
  • Initiatives:  recognizing that lots of people do lots of routine work, we organized a series of a dozen “move the ball forward” projects into specific initiatives
  • Communication:  we unveiled the theme and the initiatives to ALL at our annual business meeting to get everyone’s head around the work to be done in the upcoming year
  • Plans:  each of the dozen initiative teams, and then also each team/department in the company (they’re different) worked together to produce a short (1-3 page) plan on a template we created, with a mission statement, a list of direct and indirect participants, important milestones and metrics
  • Synchronization:  the senior management team reviewed all the plans at the same time and had a meaningful discussion to synchronize the plans, making edits to both substance and timing
  • Scorecard:  we built our company scorecard for the year to reflect “green/yellow/red” grading on each initiative and visually display the most important 5-6 metrics across all initiatives
  • Ongoing reporting:  we will publish the scorecard and updated to each initiative plan quarterly to the whole company, when we update them for Board meetings

As I said, there’s no single recipe for success here, but this is a variant on what we’ve done consistently over the years at Return Path, and it seems to be working well for us.  I think that’s the end of this series, and judging from the comments I’ve received on the blog and via email, I’m glad this was useful to so many people.

Feb 022012

The Best Laid Plans, Part III

The Best Laid Plans, Part III

Once you’ve finished the Input Phase and the Analysis Phase of producing your strategic plan, you’re ready for the final Output Phase, which goes something like this:

Vision articulation.  Get it right for yourself first.  You should be able to answer “where do we want to be in three years?” in 25 words or less.

Roadmap from today.  Make sure to lay out clearly what things need to happen to get from where you are today to where you want to be.  The sooner-in stuff needs to be much clearer than the further out stuff.

Resource Requirements.  Identify the things you will need to get there, and the timing of those needs – More people?  More marketing money?  A new partner?

Financials.  Lay them out at a high level on an annual basis, on a more detailed level for the upcoming year.

Packaging.  Create a compelling presentation (Powerpoint, Word, or in your case, maybe something more creative) that is crisp and inspiring.

Pre-selling.  Run through it – or a couple of the central elements of it – with one or two key people first to get their buy-in.

Selling.  Do your roadshow – hit all key constituents with the message in one way or another (could be different forms, depending on who).

The best thing to keep in mind is that there is no perfect process, and there’s never a “right answer” to strategy — at least not without the benefit of hindsight!

People have asked me what the time allocation and elapsed time should or can be for this process.  While again, there’s no right answer, I typically find that the process needs at least a full quarter to get right, sometimes longer depending on how many inputs you are tracking down and how hard they are to track down; how fanatical you are about the details of the end product; and whether this is a refresh of an existing strategy or something where you’re starting from a cleaner sheet of paper.  In terms of time allocation, if you are leading the process and doing a lot of the work yourself, I would expect to dedicate at least 25% of your time to it, maybe more in peak weeks.  It’s well worth the investment.

Jan 192012

The Best Laid Plans, Part II

The Best Laid Plans, Part II

Once you’ve finished the Input Phase (see last week’s post) of producing your strategic plan, you’re ready for the Analysis Phase, which goes something like this:

Assemble the facts.  Keep notes along the way on the input phase items, assemble them into a coherent document with key thoughts and common themes highlighted.

Select/apply framework.  Go back to the reading and come up with one or more strategic frameworks.  Adapted them from the academic stuff to fit our situation.  Academic frameworks don’t solve problems on their own, but they do force you to think through problems in a structured way.

Step back.  Leave everything alone for two weeks and try not to think about it.  Come back to it with a fresher set of eyes immediately before starting on the final outputs.

Reality check.  Go back to one or two of the constituents you originally met with to begin laying out your thoughts to them – “try them on for size” – and get the unfiltered visceral reactions.

Next up:  the Output Phase.

Jan 122012

The Best Laid Plans, Part I

The Best Laid Plans, Part I

One of my readers asked me if I have a formula that I use to develop strategic plans.  While every year and every situation is different, I do have a general outline that I’ve followed that has been pretty successful over the years at Return Path.  There are three phases — input, analysis, and output.  I’ll break this up into three postings over the next three weeks.

The Input Phase goes something like this:

Conduct stakeholder interviews with a few top clients, resellers, suppliers; Board of directors; and junior staff roundtables.  Formal interviews set up in advance, with questions given ahead.  Goal for customers: find out their view of the business today, how we’re serving them, what they’d like to see us do differently, what other products we could provide them.  Goal for Board/staff: get their general take on the business and the market, current and future.

Conduct non-stakeholder interviews with a few industry experts who know the company at least a little bit.  Goal: learn what they think about how we were doing today…and what they would do if they were CEO to grow the business in the future.

Re-skim a handful of classic business books and articles.  Perennial favorite include Good to Great, Contrarian Thinking, and Crossing the Chasm.

Hold a solo visioning exercise.  Take a day off, wander around Central Park.  No phone, no email.  Nothing but thinking about business, your career, where you want everything to head from a high level.

Hold senior staff brainstorming.  Two-day off-site strategy session with senior team and maybe Board.

Next up:  the Analysis Phase.

Jan 102012

Articulating the Problem is the First Step Toward Solving It

A while back, we were having some specific challenges at Return Path that were *really* hard to diagnose.  It was like peeling the proverbial onion.  Every time we thought we had the answer to what was going on, we realized all we had was another symptom, not a root cause.  We’re a pretty analytical bunch, so we kept looking for more and more data to give us answers.  And we kept coming up with, well, not all that much, besides a lot of hand-wringing.

It wasn’t until I went into a bit of a cave (e.g., took half a day’s quiet time to myself) and started writing things down for myself that I started to get some clarity around the problem and potential solutions.  I literally opened up a blank Word document and started writing, and writing, and writing.  At first, the thoughts were random.  Then they started taking on some organization.  Eventually, I moved from descriptions of the problem to patterns, to reasons, to thoughts about solutions. 

But what really put me on a track to solutions (as opposed to just understanding the problem better) was starting to *talk* through the problems and potential solutions.  It didn’t take more than a couple conversations with trusted colleagues/advisors before I realized how dumb half of my thoughts were, both about the problems and the solutions, which helped narrow down and consolidate my options considerably.

Even better than solving the problems, or at least a driver of being able to solve them, is feeling more in control of a tough situation.  That’s probably the best thing I’ve learned over the years about the value of articulating problems and solutions.  For a leader, there is no worse feeling than being out of control…and no better feeling than the opposite.  Some level of control or confidence is required to get through tough times.

I suppose this post is not all that different from any 12-step program.  First, admit you have a problem.  Then you can go on to solve it.  But the point I am trying to make is more than that – it’s not just admitting you have a problem.  It’s actually diving in deep to the potential causes of the problem, and writing them down and (better) speaking them out loud a few times, that puts you on the road to solving those problems.

Filed under: Return Path, Strategy

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Apr 262011

Guest Post: Staying Innovative as Your Business Grows (Part Two)

As I mentioned in a previous post, I write a column for The Magill Report, the new venture by Ken Magill, previously of Direct magazine and even more previously DMNews. I share the column with my colleagues Jack Sinclair and George Bilbrey and we cover 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. I recently posted George’s column on Staying Innovative as Your Business Grows (Part One). Below is a re-post of George’s second part of that column from this week, which I think my OnlyOnce readers will enjoy.

Guest Post: Staying Innovative as Your Business Grows (Part Two)

By George Bilbrey
Last month, as part of the Online Entrepreneur column, I shared some of Return Path’s organizational techniques we use to stay innovative as we grow. In this article, I’ll talk about the process we’re using in our product management-and-development teams to stay innovative.

The Innovation Process at Return Path
As we grew bigger, we decided to formalize our process for bringing new products to market. In our early days we brought a lot of new products to market with less formal process but also with more limited resources. We did well innovating one product at a time without that kind of process largely because we had a group of experienced team members. As the team grew, we knew we had to be more systematic about how we innovated to get less experienced product managers and developers up to speed and having an impact quickly.

We had a few key objectives when designing the process:

We wanted to fail fast – We had a lot of new product ideas that seemed like good ones. We wanted a process that allowed us to quickly determine which ideas were actually good.

We wanted to get substantial customer feedback into the process early – We’d always involved clients in new product decisions, but generally only at the “concept” phase. So we’d ask something like “Would you like it if we could do this thing for you?” which often elicited a “Sure, sounds cool.” And then we’d go off and build it. We wanted a process that instead would let us get feedback on features, function, service levels and pricing as we were going so we could modify and adjust what we were building based on that iterative feedback.

We wanted to make sure we could sell what we could build before we spent a lot of time building it – We’d had a few “build it and they will come” projects in the past where the customers didn’t come. This is where the ongoing feedback was crucial.

The Process
We stole a lot of our process from some of the leading thinkers in the “Lean Startup” space – particularly Gary Blanks’ Four Steps to the Epiphany and Randy Komisar’s Getting to Plan B. The still-evolving process we developed has four stages:

Stage 1: Confirm Need

Key Elements

• Understand economic value and size of problem through intense client Interaction
• Briefly define the size of opportunity and rough feasibility estimate – maybe with basic mockups
• Key Question: Is the need valid? If yes, go on. If no, abandon project or re-work the value proposition.

Stage 2: Develop Concept

Key Elements

• Create a high fidelity prototype of product and have clients review both concept and pricing model
• Where applicable, use data analysis to test feasibility of product concept
• Draft a more detailed estimate of effort and attractiveness, basically a business model
• Key Question: Is the concept Valid? If yes, go on. If no, abandon project.

Stage 3: Pilot

Key Elements

• Build “minimum viable product” and sell (or free beta test with agreed to post beta price) with intense client interaction and feedback
• Develop a marketing and sales approach
• Develop a support approach
• Update the business model with incremental investment requirements
• Preparation of data for case studies
• Key Question: Is project feasible? If yes, go on. If no, abandon project or go back to an earlier stage and re-work the concept.

Stage 4: Full Development and Launch

Key Elements

• Take client feedback from Pilot and apply to General Availability product
• Create support tools required
• Create sales collateral, white papers, lead generation programs, case studies and PR plan.
• Train internal teams to sell and service.
• Update business model with incremental investment required
• Go forth and prosper

There are a several things to note about this process that we’ve found to be particularly useful:

A high fidelity prototype is the key to getting great customer feedback – You get more quality feedback when you show them something that looks like the envisioned end product than talking to them about the concept. Our prototypes are not functional (they don’t pull from the databases that sit behind them) but are very realistic HTML mockups of most products.

Selling the minimum viable product (MVP) is where the rubber meets the road – We have learned the most about salability and support requirements of new products by building an MVP product and trying to sell it.

Test “What must be true?” during the “Develop Concept” and “Pilot Phases” – When you start developing a new product, you need to know the high risk things that must be true (e.g., if you’re planning to sell through a channel, the channel must be willing and able to sell). We make a list of those things that must be true and track those in weekly team meetings.

This is a very cross functional process and should have a dedicated team – This kind of work cannot be done off the side of your desk. The team needs to be focused just on the new product.

While not without bumps, our team has found this process very successful in allowing us to stay nimble even as we become a much larger organization. As I mentioned in Part 1, our goal is really to leverage the strengths of a big company while not losing the many advantages of smaller, more flexible organizations.

Mar 142011

Guest Post: Staying Innovative as Your Business Grows (Part One)

As I mentioned in a previous post, 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. I share the column with my colleagues Jack Sinclair and George Bilbrey and we cover 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 George’s column from this week, which I think my OnlyOnce readers will enjoy.

Guest Post: Staying Innovative as Your Business Grows (Part One)

By George Bilbrey

As part of The Magill Report’s Online Entrepreneur column, I’d like to share some of Return Path’s learning about how to stay innovative as you grow. In Part One, I’m going to cover some of the organizational techniques we’ve been employing to stay innovative. In Part Two, I’ll talk about some of the practices we’re using in our product management and development teams.

When we were starting our deliverability business at Return Path, staying innovative was relatively easy. With a total of four people (two employees, two consultants) involved in selling, servicing, building and maintaining product, the environment was very conducive to innovation:

• Every employee had good conversations with customers every day—We could see the shortcoming of our tools and got great, direct feedback from our clients.

• Every employee was involved in every other function in a very detailed way—This gave everyone a strong intuition as to what was feasible. We all knew if the feature or function that the client was asking for was within the realm of the possible.

• We were very, very focused on creating customers and revenue—We were a startup. If we drove revenue above costs, we got to take home a salary. Every conversation and decision we made came down to finding out what would make the service (more) saleable. It was stressful, but productively stressful and fun.

We were lucky enough to come up with good concept and the deliverability services market was born. Our business grew rapidly from those two full-time employees to where we are today with about 250 employees in eight countries supporting more than 2,000 customers.
Growing our business has been one of the most challenging and fun things I’ve ever had the chance to take part in. However, growth does have some negative impacts on innovation if you don’t manage it right:

• Supporting the “core” comes at the expense of the new—As you grow, you’ll find that more and more of your time is spent on taking care of the core business. Keeping the servers running, training new employees, recruiting and other internal activities start to take up more and more of your time as the business grows. Clients ask for features that are simple linear extensions of your current capabilities. You don’t have time to focus on the new stuff.

• Staying focused gets harder as the business get more intricate—As your business grows, it will become more complex. You’ll build custom code for certain clients. You’ll need to support your stuff in multiple languages. You find that you have to support channel partners as well as direct customers (or vice versa). All this takes away from the time you spend on “the new” as well.

• Creating “productive stress” becomes difficult—At the point our business became profitable, life became a lot better. There was less worry and we could invest in cool new innovative things. However, it’s hard to drive the same urgency that we had when we were a start-up.

Of course, a bigger profitable company has advantages, too. For one, there are the profits. They come in awfully handy in funding new initiatives. And while they can remove the “productive” stress that comes from needing revenue to keep a venture going, they can also remove the distracting stress of needing revenue to keep a venture going. Second is the ability to capitalize on a well-known brand—the result of many years of marketing, PR, and thought leadership within the industry. Third, we have access to a much broader array of clients now, which I’ll explain the importance of in a minute. Finally, back-end support and process—an accounting team that gets the invoices out, an HR team that helps make strategic hires—makes the folks engaged in product development more productive.

So what have we done to leverage these strengths while also combating the forces of inertia? We’ve done a lot of different things, but the major focus has been, well, focus. For the two to three key initiatives that we think are fundamental to growing our business, we’ve built a “company inside the company” to focus on the project at hand. A good example of this is our recent Domain Assurance product, our first product to address phishing and spoofing. Initially, we tried to run the project by assigning a few developers and part of a product manager’s time with some part-time support from a sales person. It didn’t work. We weren’t able to move forward quickly enough and some of our folks were getting fried.

Our answer was to create a dedicated team inside our business that focused entirely on the phishing/spoofing product space. The key components of the “company inside the company” were:

• Fully dedicated, cross-functional resources—Our team represented very much the kinds of folks you’d find in an early stage company: development, system administration, sales and marketing. This team worked as a team, not as individuals. Many of these resources were fully dedicated to this new initiative.
• Deadline-driven productive stress—When we launch new products, they go through four discrete stages (I’ll explain this in more detail in my next column). We set some pretty tight deadlines on the later stages.

• Customer involvement, early and often—The team involved customers in building our new product from the very beginning. From continuously reviewing early wireframes, prototypes and then beta versions of the product, we got a lot of client and prospective client feedback throughout the process.

We’re still working on the exact right formula for our “company inside a company” approach, but our experience to date has shown us that the investment is worth it.

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