Category: Corporate culture

Can your team pass the chemistry test?

 

giants

The Giants’ new head coach, Pat Shurmur, center, is making every effort to build chemistry on his team.CreditBill Kostroun/Associated Press

As any reader of this blog knows, I’m a football fan in addition to being a  fan of company founders.

That brings me to the article from The Times, The Giants Try to Pass Chemistry. It covers the many ways new coach Pat Shurmur has been attempting to build team chemistry, from altering the locker room formation to making up nicknames for players to sitting in the cafeteria and having lunch with as many players as possible in the hope that they buy into the team mission and do things like, well, forming a photography club.

As the author Zach Schonbrun writes:

Put simply, the Giants failed chemistry a year ago under Ben McAdoo, who was fired after 12 games. Resentment about the hard practices on Saturdays; the suspensions of three defensive backs; a player calling a teammate a “cancer”; and the benching of the team’s franchise quarterback, Eli Manning, for Geno Smith produced enough inner turmoil that even an owner, John Mara, deemed things had been “spiraling out of control.”

Team chemistry is another term for corporate culture. And corporate culture is one the areas of entrepreneurship I emphasize in mentoring founders. In fact this blog has an entire section on corporate culture.

Paul Tesluk, dean of the University at Buffalo’s School of Management, researches organizational psychology and leadership development. He has studied sports teams such as the Buffalo Sabres of the N.H.L. to understand the role that chemistry plays in on-field success — or, in the Giants’ case, failure. According to Professor Tesluk:

While not all winning teams have great chemistry, losing teams never do. Without the right structures in place, the Giants were effectively doomed from the start, “Our natural instinct is to look at the raw talent of the individuals,” Tesluk said. “If you don’t have things like stability and leadership, or you don’t take into account how you build a team culture, you can only go so far on raw talent. That’s a really valuable lesson for the workplace as well.”

One of the aspects of corporate culture I focus on is communications. In fact one of my maxims I’ve used for years is that 90% of all problems can be traced back to poor communications. And today with the social media the dominant form of communications that fictional percentage certainly hasn’t gone down.

A study by Harvard Business Review in 2012 looked at the role of various aspects of communication — specifically energy, engagement and exploration — in building successful chemistry at workplaces such as post-operating wards, call centers and banks. They deemed good communication to be as instrumental to success as skill, personality and intelligence combined.

Most people think a head pro football coach has to worry about his 53 players, but his responsibilities go far beyond that. In a recent article about Mike Vrabel, coach of the Tennessee Titans, mentioned that including his coaches and staff, he’s responsible for over 90 men. (And they are all men – no women in pro football, yet.) The Giants and all pro football teams have complex organizations. As Tesluk says, “You’ve got this flexible, shared, distributed leadership, and it’s not just residing in one or two superstars, It’s respect for the scrappy player who might help set up the superstar for making the great shot. That mutual respect and keeping egos in check, that’s a tough thing to do in professional sports. But it has to start there.”

Star engineers, designers, marketers and sales people all tend to have large egos as well. What keeps those egos in check is a strong corporate culture that embodies the unsaid values and norms of the organization. I call culture the invisible hand of management. The stronger your corporate culture the more the organization becomes self managing.

I tell founders that they will know they’ve built a strong corporate culture when they feel it’s safe to finally take a vacation. And more importantly, that the company runs well without them for a week or two.

Frankly I rarely hear the term “team chemistry” used by mentors, but it should be, as it’s a more down to earth term than “corporate culture” and one that founders may find easier to latch on to. And founders, as you build your teams, which may well far exceed the 90+ a head football coach has to worry about, make sure you are building team chemistry in addition to building your product or service.

One good way to do that is to bring in a successful founder to speak to your team. Or show a video, as the New York Yankees recently did when they held the 20th reunion for their 1998 World Series team. The video message delivered by superstar Yankee Derek Jeter was that nobody on that team cared who the hero was or who got the headlines. They only cared about winning. That’s a message that applies equally well to venture teams as it does to sports teams.

 

 

Doing the right thing or doing things right?

dilbert

I’m a pretty faithful reader of Dilbert and I can’t remember a strip of his about entrepreneurs. But given that Dilbert works in a seemingly large bland, established corporation that is no surprise. But this is at least the second time I’ve found a Dilbert strip that worth commenting on for founders.

Not only is this strip very funny, there’s a lesson behind it, as there are with many of Scott Adam’s strips. It’s the difference between doing things right and doing the right thing. When it comes to startups we all focus on doing the right thing – that’s the big idea, vision of the founder that drives the formation of the venture, that will captivate investors, and convince millions of customers to use and pay for the product of that vision. And there is no question that startups start with the idea. In fact since I’ve been a kid I’ve always questioned the status quo and often felt that I knew a better way of doing things. That’s what drove me to start my first company, Real Time Audio. As a music fan since being totally enthralled by Gene Vincent’s Be Bop a Lula while at summer camp I attended a lot of music events. And as an audiophile – someone obsessed with reproducing music as realistically as possible in their home – I felt that most concert and club sound was terrible. I knew I could do better. That was the idea, provide audiophile standard sound for bands. Unfortunately, being beyond totally ignorant about business I didn’t realize how capital intensive the sound reinforcement business was. And while I quickly got customers it was only those bands who couldn’t afford their own P.A. and thus could afford to pay me much either. So that vision fell by the wayside.

What brings up the difference between doing the right thing and doing things right has been the recent trials and tribulations of Elon Musk. I admire him and follow him as I regard him as being one of today’s great entrepreneurs. He looked at how NASA sent up rockets and very wastefully let the booster section fall back into the sea, wasting millions of dollars. His big idea for SpaceX – doing the right thing – was to build re-usable booster rockets, which could be retrieved and used over and over again, saving millions of dollars and thousands of hours of operations time. SpaceX has been a big success.

But he’s not in the news lately for the successes at SpaceX – he’s in the news for problems at Tesla. And there’s little doubt that his vision of doing the right thing by building cars than would run on electric power and not fossil fuels has been the right big idea – every car company in the world is now on a crash course – whoops! – to catch up with him.

And up until recently with the production woes of the Model 3, Tesla has done things right to an extraordinary degree. Doing things right is all about execution and the Tesla Model S is the only car to ever receive a perfect score of 100 from Consumer Reports, just one of many indicators that Musk could execute not just at a world-class level, but world leading, standard-setting level.

But as he’s admitted, he’s been in production hell with the Model 3. Worse yet, according to a recent news report, in the past year or so he’s lost 30 top executives! So not only has he repeatedly failed to meet his production goals for the Model 3, he’s lost top flight personnel to Apple and other companies. What’s wrong with this picture? What’s wrong is that Musk feels he must work 120 hour work weeks to get the Model 3 up to the necessary production levels. He’s sleeping on the factory floor. Well here’s the lesson for founders – in a word, delegation.

Building great companies means building great teams. And to do that the founder has to hire the best people in the world, not just people who could “do the job.” Steve Jobs doesn’t receive enough recognition for his incredible ability to attract, retain, and engage incredibly talented people, many of whom have gone on to great success since leaving Apple. Perhaps because he was at best a mediocre engineer, he had to delegate. There was no way he could write the code necessary for an operating system nor design extremely complex hardware like the iPhone. So he was forced to delegate. Apple executed at the highest level; its customer satisfaction levels lead the industry. And while Jobs did work long hours, especially during his first tenure at Apple, I don’t recall any stories about him sleeping on the floor of Apple’s factories or flying around the world to solve problems on production lines. That wasn’t his job. His job was to have the company do the right thing: combine a phone, Internet communicator, and music device all into one form factor, with a revolutionary touch interface. It was everyone’s job at Apple to do things right. And they did. Apple was and is famed for it’s level of execution., When the screw up, as every company does, it’s worldwide news.

Why can’t Elon Musk retain great talent? Why is he sleeping on factory floors and driving himself to exhaustion? Obviously he can’t delegate. And as a brilliant engineer, unlike Jobs, he can actually add value not just in design of Tesla’s cars, but in how they are manufactured. But execution is where the company has fallen. And until he starts replacing those thirty top execs and who knows how many top flight staffers he’s also lost, he will be sleeping on factory floors. Jobs was a micro-manager, just as Musk is, but the difference is he enabled his people to exceed their own expectations and they were able to take enormous pride in the products they produced, used and loved – yes loved – by millions. While I can name at least half a dozen of the original Mac team I can not tell you the name of a single person at Tesla other than Elon Musk!

So founders, as Bill Belichick, Head Coach of the five-time Super Bowl winning New England Patriots says, “Do your job!” Your job is to set the company direction, and provide the resources for your teams to execute your big idea – the right thing, to constantly communicate and make mid-course corrections as necessary. But you need to step back and your employees each figure out how to do things right. Because the true driver of excellence is not salary, stock options, titles or the number of staff who report to you. Those are all extrinsic drivers, the true driver is intrinsic: the feelings of accomplishment, teamwork, pride, and knowing you have done world class work. If as a founder – no matter how great an engineer you are – you constantly step in and don’t let your staff figure out how to do things right, if you never delegate. you too will find yourself not only sleeping on a factory floor, but having a Board of Directors that may decide to replace you with someone else.

My big lesson as I went from an individual contributor mixing sound to an executive with dozens of people reporting to me and a budgets of millions of dollars, was the definition of management was getting things done through other people. And getting things done was the reason so many founders who had the vision, who knew what the right thing to do was, recruited me to run their operations – to do things right.

While Elon Musk is about as far from the  Dilbert’s dumb boss as you can get, he’s acting exactly the same way. Whether he pulls out of this nose dive and gets back to his winning ways is not the point. The point for founders is to learn from his mistakes so you don’t make them yourself. Recruit a great team, give them clear direction, and get the hell out of their way!

I’m not alone in disliking founders using the term “disruption”!

prime movers

From the homepage of Floodgate Fund.

The pervasive use of the term disruption by founders has really bothered me for quite some time. It seems like every startup has to be disrupting some industry. Uber and Airbnb with their disruption of the taxi business and the hotel industry respectively seem to be the models for every startup. But what does disruption have to do with solving a hair-on-fire problem for a customer? Disruption might be a byproduct of solving a problem for large set of customers who switch from using an established product to yours, but it’s a byproduct, not a goal.

I figured I’m just out of touch. as despite reading a ton of tech news every day thanks to The Wall Street Journal, The New York Times business section and Flipboard, I’ve yet to come across anyone who shared my discomfort with the constant emphasis on disruption.

Yes, Google totally disrupted the newspaper industry by destroying its display ad business, along with Craigslist, who destroyed their classified ads. But neither company set out to destroy the newspaper industry. I’ve read enough about Google to be confident that Larry and Sergey did not set out to disrupt the newspaper industry! They set out to organize the world’s information and make it universally accessible and useful.

So I was glad to see the article A prominent Silicon Valley investor says entrepreneurs need to stop copying Mark Zuckerberg so much and quit talking about ‘breaking things,’ ‘disruption,’ and ‘robots eating the jobs’ by Zoe Bernard on Business Insider.

I knew the name Mike Maples from his time as an executive at Microsoft. His son, Mike Maples, Jr.,  is a successful serial entrepreneur who started the venture capital firm Floodgate Fund.

There are a lot of quotes from Mr. Maples in this article, but there are two that make clear his position on the use of language by entrepreneurs:

“When an entrepreneur says, ‘I’m going to disrupt ‘X,’ I think: Why are you trying to disrupt anyone?” says Maples. “If your advisor told you to say that, then you’re getting bad advice. Advisors who talk that way are doing a bad job. The whole ecosystem from entrepreneurs to advisors to venture capitalists writ large need to do a better job at understanding the raison d’être of startups in the first place.”

For Maples, this raison d’être of startups is straightforward: “The best founders I know aren’t disrupting something, they’re creating things,” says Maples. “It comes from love and passion and innovation. True innovation doesn’t come from eating someone else’s business.”

So here’s a motto for you founders;

Move fast and make things!

And thanks Mike for helping me not feel quite so alone.

 

 

How to increase your teams accountability

Apple_1998_Logo

Just about all managers know that meetings need agendas. Most know that those meetings need to end with next steps/to-do’s. But how many know what DRI stands for and more importantly how the concept of the DRI can significantly increase the accountability and productivity of your teams?

I’m not sure when I first came across the Apple acronym DRI, which stands for Directly Responsible Individual – probably in one of the many books and articles I’ve read about Steve Jobs. Jobs and Apple have fascinated me ever since buying my Apple II in 1980, which ended up months later propelling me into the personal software development world.

Apple’s culture is unique in many ways. For one there is only one bottom line – the company’s. Unlike most large companies which have profit centers, subsidiaries, divisions and a plentitude of CEOs, Apple has just one CEO. Everyone is rowing in the same boat, in the same direction. That’s the top down view. But what about the bottoms up view? What happens day-to-day to keep Apple at not only the top of the tech world but at the top of the business world?

I venture to say that the DRI is a key contributor. TripAdvisor adopted the DRI concept from Apple and it’s very clearly explained in Matthew Mamet’s article on Medium, Directly Responsible Individuals.

Every action item from every meeting has an assigned DRI. Note the three key words: Directly. There’s no weaseling out of this one! You can not delegate it. You must do it! Responsible. The DRI is in charge and accountable. Individual. That’s a person’s name, not a team, not a group.

But DRI is not just for group meetings, it’s embedded in the Apple culture. When you want to know who to contact about a project you ask, Who’s the DRI?

Instead of emailing an entire team, emails go to the DRI and others are on the cc line. If you are the DRI and get an email then you take ownership of the reply.

It’s a maxim that the best culture of a company is to get everyone to act like an owner. At Apple everyone is. Even the staff at Apple stores get stock options, highly unusual in the world of retail. Only Starbucks also has stock options for its barristas. And the single bottom line illustrates better than any employee handbook that it’s one company, not an agglomeration of small companies, fighting each other to the death over resources instead of fighting competitors, and more importantly, focusing on their customers.

At TripAdvisor, and I imagine at Apple, whenever they are working on a new or challenging problem the first task is to establish the DRI. DRIs are a means to an end: accountability. And accountability itself is a means to another end: productivity. As Matthew Mamet points out that at TripAdvisor:

By seeking to create a culture of accountability with the group, we avoid dependencies on managers to tell the team what to do, and increase reliance on the team to self-organize and know how to proceed. 

I’m not sure how many companies like TripAdvisor have taken up the DRI model, but if you are a founder it’s something I strongly advise you to consider. One problem I often see with a group of founders is the “who’s on first?” problem – “I thought Joe was doing, that.” “Oh, I though Jean was.” “Whoops! I was supposed to!” Founders often start up joined at the hip, but the sooner they separate and start focusing on separate areas of the company the better. Even founders need to be DRIs!

Can you tell the difference between “urgent” and “important”?

woman-leaping-onto-a-beach-e1531933401375

What of the most common problems I had as an entrepreneur and as a manager in my startups was that early on I couldn’t tell the difference between urgent and important. Recruited serendipitously into the high tech startup world, a place I never dreamed of inhabiting, I was constantly anxious about failing. That anxiety lead to treating every request, whether overt or simply perceived, as urgent. I would drop everything else and attend to whatever seemed like it had to be done immediately. Finally due to sheer overload I realized that just because one of the founders requested I do something didn’t mean it was urgent. I started to evaluate demands on my time and start prioritizing those demands by what was truly important for the success of the company and my own success.

Once I started my own company and was a founder myself I started to see this issue crop up in my own employees. I realized that if I didn’t stamp it out it would cause real problems, so I began coaching my direct reports that just because I asked them to do something didn’t make it urgent. And that they needed to coach their teams in the same way. Startups can be frenetic and I found that freneticism kills productivity. It results in a lot of wasted energy and worse yet, serious mistakes made due to lack of forethought.

So the article Urgency bias is killing your productivity by Lila MacLellan on
Quartz at Work caught my attention. Meng Zhu, an associate professor of marketing at Johns Hopkins University’s Carey Business School, conducted a study of college students that showed people would opt for a task that was perceived as urgent over a non-urgent task with a higher reward. The study concluded that “Our brains are so drawn to urgency … that we choose objectively worse options over objectively better options,”

So how do you counter “urgency bias”? How to you prioritize the blizzard of tasks that you face every day in a startup? A tool credited to the President Eisenhower enables people to categorize their tasks.

urgency

As I wrote in another blog post, someone once said that the three most important words in the English language are, Wait a minute. So before you respond to that email, in fact before you even sit down in front of your computer, decide what’s important to accomplish that day. I started this practice when I was General Manager of Addison-Wesley’s Educational Software Division. A-W was an old-fashioned company where everyone showed up at work promptly at 9 a.m. and worked until 5 or 6. And meetings could start as early as 9 a.m. as well. So I got into the habit of getting into the office at 7:30. I knew that not only would there be no meetings, there would be no interruptions from staff. I would sit quietly in my office – yes we had offices in those days – and review my priorities, then would write by hand a list of tasks I needed to get done that day, in priority order. I sure wish I had the Eisenhower box then! Only once I had my day’s to do list did I boot up my PC to check my mail  to see if any message in my inbox would cause me to revise my priority list.

Professor Zhu suggests that managers can harness the urgency bias to work in their favor. By breaking large projects down into smaller tasks, each with its own urgent deadline, the team can be kept motivated over a long period of time.

Another interesting finding from professor Zhu’s research is that people who perceive themselves s as busy were more likely to select a task they they believed was urgent, just to get it over and done with.

The faster your startup is moving the more critical it becomes that the entire team carefully discerns the important from the urgent and acts accordingly. Whether you use the Eisenhower box or don’t turn on any of your devices in the morning before putting together your priority list of tasks, the first step is to recognize that just because a task appears urgent doesn’t make it important enough to hop to the top of your to do list.

 

A team of all stars is necessary but not sufficient

astroball

It’s long been a truism in sports that the best team in the league can beat a team of
all-stars handily. The reason given is that the league champion has practiced and played together innumerable times compared to an all star team. But the review of the book Astroball in The Wall Street Journal makes clear that there’s another critical element to winning teams. While Ben Reiter’s Astroball may seem to be about team sports, which it certainly is, many of its insights apply equally well to startup teams. Note his sub-title: The New Way to Win It All. 

The VC mantra back when I was building companies was hire the best person in the world for the job. However, it’s become clear since the late 1990s that’s not the best way to build a winning team in business. The savviest CEOs and founders hire for company fit as well as individual talent.Just as startups all seek the elusive product-market fit, a startup team needs to work together effectively. There’s no room for prima donnas, or to use the startup tech term, no room for assholes. But whether you follow the old style of trying to hire the best individual for their position or today’s model of hiring the individuals who will not only make sterling individual contributions but who also fits the company culture, there is still a missing element.

Here’s the money quote from the Journal review of Astroball:

This roster-creation, all by itself, did not bring home the championship. Building an exceptional team is one thing, but making it work as a team is another. “Fault lines” exist in all complex organizations—including baseball teams. If these lines can be bridged or eradicated, a team is likely to win more ball games. To use another bit of old-fashioned terminology, a team needs chemistry.

So where does chemistry come from? In the case of the Astros it came when they signed veteran outfielder Carlos Beltran, who immediately took on the role of chief chemist. In addition to creating a postgame ceremony that awarded prizes for excellence in the field coupled with a fine system for those who failed to attend, he had a strong desire to close the gap between English and Spanish speakers on the Astros team.

Your chief chemist may well be a founder, or might be your CEO. But in the case of Course Technology, the educational publishing company I co-founded in 1989, our chief chemist was Howard Diamond, the fireball VP of Marketing and Sales who galvanized the company though his then unique sales team model. Like other publishers Howard established geographic territories for each team. But unlike any other sales team, Howard’s team was made up of three people: an inside sales rep, a field sales rep, and a customer service rep. The three of them shared in the yearly bonus based on the performance of their team. These teams became self-managing for excellence. We quickly found that Howard’s teams easily beat out the old-fashioned teams of competitors where every sales person was in it for only for themselves and customer support was relegated to a backroom, somewhere, some place.

So when you are building your team if you or your co-founder is that chemist who can close gaps, whether between English and Spanish speakers or between sales and customer support, you are all set. But if not, start looking for that chemist, almost always a veteran who has been proven to not just close gaps in the company but to erase them completely.

All star teams in sports lack chemistry. Don’t model your team after the Washington Redskins where owner Dan Synder has never learned the lesson that you can’t buy your way to a championship. Not only do you need to hire for company fit, you need the secret sauce, and that sauce is leadership.

Predicting the future – part II

crown

Netflix has been investing heavily in its content to lure and keep subscribers. Above, a scene from its show “The Crown.” PHOTO: ROBERT VIGLASKY/NETFLIX/ASSOCIATED PRESS

I knew NetFlix was planning on something other than mailing DVDs around the country by their choice of company name. That choice of name was made well before streaming video was even feasible. But Reed Hastings saw the future and the future was not physical media but digital media – bits and bytes. Netflix wasn’t his first rodeo, he started a software company, Pure Software, previously. After the company was acquired Hastings spent two years planning his next startup and how he could avoid making the same mistakes he had made in his next startup.

As soon as streaming of video to millions of people became technically feasible Netflix did a hard and fast pivot from mailing DVDs to streaming bits and bytes. But Hastings isn’t a one time seer, someone who just got luck.

While the article in The Wall Street Journal Netflix Reports Weaker-Than-Expected Number of New Subscribers is about how Netflix lost 5.24% of its stock value, it correctly hung the problem on forecasting – predicting the future! – as noted in the sub-title:Video site blamed faulty internal forecasting, not business reasons like price increases.

Buried under a barrage of news and statistics about Netflix’s business is yet another example of Netflix’s long term vision:

Ted Sarandos, Netflix’s chief content officer, said he isn’t worried, noting that the percentage of Netflix viewership coming from Disney and Fox library content is “a number that’s been on the decline for several years.” He said Netflix made a bet long ago that big media companies will eventually want to strike out on their own with streaming, and that underpinned its push into original shows and movies.

Its bet that big media companies would eventually discover streaming and thus be very reluctant to license their content to Netflix was behind yet another hard and fast pivot: from licensing third party content – movies and TV shows – to creating its own. Analysts expect Netflix to spend $12 billion on original video series and movies this year, dwarfing rivals like Amazon.com and HBO, let alone the traditional Hollywood studios.

So while Netflix is very large, it’s also very nimble – highly unusual, as most big companies get bureaucratic and sclerotic.  I saw an interview on TED with Hastings and he was very proud of the fact that he made no, as is none, as in zero decisions the past quarter! His management philosophy is and has been pushing decision making down to those closest to the customers and closest to the content developers. He not only makes company critical information widely accessible, he empowers his employees to act on it. The key to scaling as successfully as Netflix has been their system of making decisions at the “lowest” level in the organization, unlike most top down, hierarchical media companies.

While Netflix is about as far from a startup as Amazon or Microsoft, these four lessons apply to every startup: one, have a vision for where your market is going. What megatrends – in their case streaming of video – will impact your business and be ready to make necessary changes. Two, share information and opinions aggressively. Three, turn the hierarchical, top down management model on its head – empower those closest to the customer to make big decisions. And four, watch what customers actually do, rather than listen to what they say.

Long-time Netflix users remember it asking to rate different movies. Based on those ratings, Netflix would give recommendations. About a decade ago, Hastings and his company realized that people weren’t honest. “Schindler’s List would always get five stars, but an Adam Sandler movie… would only get three.” However, when Netflix looked at the watching stats of the same users, the former wouldn’t get watched, but the latter would be enjoyed over and over again.

Finally Hastings, as CEO, takes ownership of other’s mistakes rather than placing blame for his mistakes on others:

During the quarter, Netflix fired chief communications officer Jonathan Friedland after he used a racial slur in two work conversations. Mr. Friedland said in a series of tweets that he spoke insensitively and it came up during a discussion of words that offend in comedy. In a memo to employees after the incident, Mr. Hastings blamed his own privilege for leading him to minimize race issues and said Netflix had work to do to improve.

Yep, I’m biased and I admit it

goalie

Colombia’s goalkeeper David Ospina concedes a penalty goal against England in the World Cup. Surprisingly, research suggests that a goalie’s best strategy in blocking penalty kicks may be not to move at all. PHOTO: ANTON NOVODEREZHKIN/TASS/GETTY IMAGES

Reading the article in The Wall Street Journal Don’t Just Dive Into Action: Stop to Think First was like looking into a mirror: that’s me, I’ve got a bias for action. My wife might say I’m impulsive, but it’s not quite the same thing. It’s not that I act without forethought, it’s that I feel a need to take action. The most obvious example – and you may recognize yourself in this one – is traffic. I would rather take the long way round to get where I’m going, even if it takes as long or longer than sitting in traffic on the most direct route. I’d just rather be driving than sitting. And I’d rather drive myself than take an Uber.

There’s a very interesting study of soccer goalies’ strategies for defending against penalty kicks. The conclusion of the study seems obvious to me: goalies have the best chance of stopping the kick if they just stay put – they don’t move left or right. However, what is surprising in this study of professional goalies is that they jump to the left 49.3% of the time, to the right 44.4% of the time and stay put in the center only 6% of the time!

The author, Bradley R. Staatss, calls this action bias, rather than my term, bias for action, but they are the same thing: We would rather be seen doing something than doing nothing. When the going gets tough, the tough get going, right? However, I totally disagree with his opinion on the motivation for action bias: This idea is so deeply ingrained that we are afraid to give the appearance of doing nothing, even when it is the best strategy. I doubt anyone is watching me when I take a detour to avoid sitting in traffic, even if it takes me longer and burns more gas.

He cites additional studies in favor of action bias as being driven by the opinion of others and appearances. I’d love to see a study of entrepreneurs. I believe that we all have a bias for action, we want to make things happen. And this may, on the whole, help us move our ventures forward. However, I read once that the three most important words in the English language are, Wait a minute. And Mr. Staats does make the case than when the going gets tough, the tough take the time to stop and think.

And he tells a great story about how during a meeting with his Harvard Business School professor when he was rushing through his to-do list and talking a mile a minute, the late professor David Upton held up his hand to get him to pause and said, “Brad, don’t avoid thinking by being busy.”

This advice is more in line with my blog post Results vs. Activities. If you are like me and have a bias for action, not only might it be wise to take a few moments to stop and think, you should also analyze the action you are about to take. Will it deliver a result, a measurable outcome? Making six business development phone calls a day is an activity, getting a meeting with a potential business partner is a result. So don’t fight your bias for action, just take a minute to distinguish an activity that may make you feel good because you are doing something rather than nothing, from a goal-driven task that benefits your venture.

—The Journal article was adapted from Mr. Staats’s new book, Never Stop Learning: Stay Relevant, Reinvent Yourself and Thrive, published by Harvard Business Review Press. He is a professor of operations at the University of North Carolina’s Kenan-Flagler Business School.

 

The three F’s you want on your report card

reportcard

The web is saturated with listicles and I’m going to add one more. It’s so simple and so basic this list often overlooked in the competition to deliver a clip of silver bullets to would-be entrepreneurs.

Fast

The first of the three F’s you want to get on your report card is Fast. Mark Zuckerber’s initial Facebook mantra was, “Move fast and break things.” That was brilliant, as the immediate reaction to “moving fast” amongst the risk-averse is the fear of breaking things. By giving explicit permission to make mistakes and to fail he encouraged risk taking amongst his cadre of engineers. Today as a far more mature company with heavy security and privacy responsibilities that mantra has gone into deep storage.

But it’s one thing to move fast and break things in what is in many ways a trivial business – social media. But if you are in the business of developing medical devices or new drug treatments you may want to move fast, but need to be very careful about breaking things. So before you decide that speed is the ultimate weapon that startup’s possess against incumbent companies, know your market and your customers and make sure everyone is clear about what level of quality is going to be necessary to attract and retain customers. Early adopters are by definition far more tolerant of bugs, missing features, inconsistent performance and other irregularities. But once you start moving up the adoption curve that tolerance decreases logarithmically, not linearly!

Where speed is necessary and where it tends to be lacking in large bureaucratic companies is in decision-making. Entrepreneurs need to be comfortable with having about 80% of the information needed to make a decision; large companies insist on getting as close to 100% as possible, which reduces risk but slows them down. So architect your organization so that decisions are made as close to the customer as possible. Top down, hierarchical decision making, inherited from the military model, is slow and ponderous. A bottoms-up, networked decision making model is not only faster but because it is close to the customer is likely to make better product and support decisions.

Another place to be fast is in responsiveness. Here again you can impress new customers who may be frustrated by how slow and unresponsive customer support is from their current supplier. Jeff Bezos drilled responsiveness to customers into the DNA of Amazon and despite its meteoric growth you can still easily return a product you don’t like and get your money refunded in hours, not weeks or months.

Flexible

Pivot is the verb du jour in startup circles. It seems that if you haven’t pivoted you aren’t a real company. And it’s true that many successful businesses end up very different from the pitch deck that got them funded. Uber is the canonical example, having started in the black car/limo business and it’s buying up electric scooter and bike companies as it now realizes it isn’t in the limousine business, it’s in the urban transportation business. As I used to tell my team, “You need to be flexible. But if you are too flexible you’ll get floppy.” The best way to insert backbone into a company is by clearly elucidating and communicating the company’s core values. You may change your sales model from selling direct to selling through channel partners. You could call that a pivot, but it’s really being able to flex your model without breaking it. Again, pushing flexibility down and across is the organization is necessary. Your startup won’t be competitive if senior management is acting with flexibility but the company lives in fear of deviating from the exec team’s dictates. Flexibility should be driven by extrinsic factors, such as change in target customer or direct attacks by competitors, not by intrinsic factors, such as having just raised another round of capital. The planning for use of proceeds should have proceeded raising that round. Being too flexible in decision making gives the staff the feeling of being “jerked around.”  That’s bad for morale and for the company’s reputation. Flexibility is necessary in a startup, but it should be measured, not helter-skelter and overly reactive to changes in the business climate.

Focus

Last and decidedly not least, but most important, is focus. I’ve never heard of a company failing by being too focused. The worst thing  that can happen to a startup that is tightly focused on a small niche is that investors will say that your market is too small. Keep in mind their goal is building billion dollar valuation companies, and if you are building automotive tool sets for left-handed people you may well be able to dominate that niche, but since cars today are basically computers on wheels the days of the DIY mechanic are long gone. You can always expand your markets once you dominate a niche. Contracting when you’ve targeted a market that is far too large, like hobbyists, is costly and a ding to the company’s reputation. Where I find the least amount of focus in is engineering-driven companies. Engineers love building things and are trained to do so. However, that can often result in a company with a fully developed solution search of a market. Don’t try to change your engineering culture, but make sure you are constantly iterating product development to become even more deeply focused on a specific set of customer needs. As the saying goes, “When you have a hammer, everything looks like a nail.” Get your engineers involved with customer development, whether it involves them taking the same online survey you send out to prospects, accompanying the sales team on a call, answering support questions, attending usability lab sessions to watch real customers use their products to perform specified tasks, or being involved in competitive intelligence. Your business needs to focus on specific markets, customers and customer problems. Everyone in the company needs to be aligned with that focus. Once again, tight and accurate focus is another way to compete with and dislodge large incumbent companies. Keep in mind that focus is a means to an end:  aligning the company’s resources on product/market fit, it’s not an end in itself. Focus is a process that needs to permeate a company, from top to botton.

Finale

It won’t help you if  you are fast, flexible but unfocused! Your goal needs to be straight F’s. Failing on one of these three F’s will cause your venture to fail. There’s a lot more to building a successful company, but building these essential traits into your startup from the get-go will improve your chances of surviving the Darwinian battle for business.

What critical skill made Steve Jobs and Bill Gates successful?

gates jobs

According to Elon Musk what Jobs and Gates had in common was their ability to attract top talent and earn employee loyalty.

Despite being rivals at various points in their careers, Apple co-founder Steve Jobs and Microsoft co-founder Bill Gates shared many commonalities.

“They’re obviously very driven and they’re very talented,” says SpaceX and Tesla founder Elon Musk in an interview with Autobild.tv.

Yet what really helped them build such successful companies, says Musk, was their ability to attract top talent and earn employee loyalty.

“The ability to attract and motivate great people is critical to the success of a company, because a company is just a group of people that are assembled to create a product or service,” Musk explains, noting that people sometimes forget this “elementary truth.”

“If you’re able to get great people to join the company and work together towards a common goal,” he says, “then you will end up with a great product.” Musk adds that a great product attracts buyers, and the more buyers you have, the more successful your company will be.

So what can founders who may not be quite as brilliant as Jobs or Gates learn from their examples? Despite what you might assume, neither Apple nor Microsoft paid the highest salaries or had the best benefits in the industry. What they each had was a brilliant vision and mission, the ability to communicate that vision and inspire their teams to exceed what  they thought were their maximum capabilities.  The classic story about Steve Jobs recruiting John Sculley as Apple CEO tells it all. Sculley was at that time the youngest ever President of Pepsi and king of the CPG market – consumer packaged goods. When Sculley dithered about joining Apple Jobs said to him,  “Do you want to sell sugared water for the rest of your life or do you want to change the world?”

Gates’ vision of a personal computer on every desk and in every home, running Microsoft software, drove the company to unparalleled success for years. It wasn’t until the rise of mobile as the platform of choice, displacing the PC, and Gates replacing himself with Steve Ballmer as CEO, that Microsoft stumbled.

But the most important take away from the CNBC.com article Elon Musk says this crucial skill is what made Steve Jobs and Bill Gates successful comes not from Jobs nor Gates, but from Elon Musk.

“We want our leaders to find ways of motivating and inspiring their teams, reduce the noise in their work and help remove blockers,” Musk tells Glassdoor. “If you are a manager or leading at any level at SpaceX, we stress that your team is not there to serve you. You are there to serve your team and help them do the best possible job for the company.”

It took me a few years as a manager to realize that my job was to help my team succeed, and that was the job of every manager. While you might not have quite the inspiring vision of Gates or the mission of Steve Jobs, you can certainly emulate Elon Musk who requires that senior executives lead their employees through “selflessness.”

And this culture of managers serving their teams will also help you to both recruit and motivate new employees, the number one priority of founders and senior managers.

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