A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

A few days ago Fred Wilson wrote about the importance of culture and fit.

Some entrepreneurs and CEOs buy into “hire the best talent available” mantra. That can work if everything goes swimmingly well. But as I said, it often does not, and then that approach is fraught with problems. The other approach is hire for culture and fit. That is the approach I advocate.

That’s the same approach I’ve advocated for decades.

What many forget is that “the best talent available” refers to whoever will perform best in your culture as part of your team and focus on your company’s success.

Too many founders, CEOs, other execs and even lower level managers seem to hire for bragging rights instead.

I wrote about hiring and culture here last Sept and included a link to an article I wrote for MSDN way back in 1999 that explained how to use your culture as a screening tool when hiring.

I’ve always told clients that the fastest way to success is to always hire the right person at the right time and for the right reasons.

Good hiring is like cooking Chinese—80% of the time used is spent prepping and the balance doing.

There really are no shortcuts; especially not hiring other people’s stars.

Not to sound self-serving, but I’ve been surprised at how closely the ideas I’ve always believed in parallel Wilson’s thoughts.

Even Option Sanity™ parallels his ideas on allocating equity.

Option Sanity™ is culture in action.

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock allocation system.  It’s so easy a CEO can do it.

Warning.
Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

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“If you act like your wedding day is the greatest moment in your life, it’s all downhill from there.” –Elizabeth Johnson

What looks like a throw-away line actually packs a lot of wisdom.

Any moment you consider the greatest moment of your life sets up the same downhill scenario.

If your college graduation is greatest, what comes next?

If you consider the founding of your company, product launch, revenue or even profitability the greatest day of your life what will its acquisition or IPO be?

If the birth of your children rates as the greatest, what will their graduation, marriage, and their children’s births be?

Instead of setting up a downhill move from your life highlights, you can open the future to more just by removing the ‘est’.

If they are ‘great’ moments instead of ‘greatest’ then you are setting your self up for ‘greater’ moments.

Isn’t that a better life scenario?

It is only when you are dying that you can choose the ‘est’ in retrospect.

And I’m willing to bet that you will be hard-pressed to choose just one.

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In our wired era being available 24/7 generates both bragging rights and work/life balance complaints and nowhere more so than the high-powered world of management consulting.

It was in this world, as represented by a small team at Boston Consulting Group, that HBS professor Leslie A. Perlow initiated an experiment four years ago on the extreme benefits of “predictable time off” (PTO).

She shares the story and documents her findings in a new book called Sleeping With Your Smartphone.

Supposedly, the unpredictability working across time zones requires constant availability, but is that true?

“What caught our attention was that the more people were on, the more unpredictable their work time seemed to become.”

The key to success was predictability.

Perlow’s research started with a small team and three basic steps.

“First, team members have to agree on a specific unit of time each week that everyone can turn off. Not at the same time, obviously, since team members have to cover for each other. In our first experiment, it was one night a week. But whatever the goal, it has to be valued by the team, as a group. It has to be small but doable. And it has to be concrete and measurable.”

“Second, the team needs to meet weekly to discuss the challenges and successes they’re facing as they try to achieve the goal. These meetings are crucial for PTO to work, but they offer much more. They’re a regular forum for productive conversations about work, conversations that empower people to speak up. In theory, people are speaking up about process, which allows the team to meet the time-off goal. But really they’re speaking about all aspects of the work experience.”

“Finally, the team’s leaders — bosses, managers — have to show support for the project and for team members’ efforts. That’s not just about allowing colleagues to speak up and to use their time off. It’s also about doing the same themselves.”

Four years later 86% of the consulting staff in Boston, New York, and Washington, DC are practicing PTO.

According to BCG’s CEO, Hans-Paul Bürkner, the process unleashed by these experiments “has proven not only to enhance work-life balance, making careers much more sustainable, but also to improve client value delivery, consultant development, business services team effectiveness, and overall case experience. It is becoming part of the culture—the future of BCG.”

Retention is up, job satisfaction is up, productivity is up, client satisfaction is up.

Given proven results and a reliable methodology to follow, PTO can be instituted by any manager at any level even where the over-arching culture is hostile.

Nor is there any need for HR approval.

Go ahead; reap all those rewards and be a hero to your team—all it takes is 20 bucks and synergistic MAP, both of which are in your direct control.

Image credit: Harvard Business School

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Guilt is a positive force or at least it can be as long as it is the right kind.

First, some background.

When people mess up they have one of two reactions, guilt or shame.

What is important to understand is that they neither the same nor is one the flip side of the other.

Whereas someone who feels guilty feels bad about a specific mistake and wants to make amends, a person who’s ashamed of a mistake feels bad about himself or herself and shrinks away from the error.

In other words, guilt embraces and focuses on fixing whatever, whereas shame runs away and hides.

This is important to you because in both controlled experiments and real-world feedback the guilt prone tend to have more initiative, AKA leadership.

In all the groups tested, the people who were most likely to be judged by others as the group’s leaders tended to be the same ones who had scored highest in guilt proneness. Not only that, but guilt proneness predicted emerging leadership even more than did extraversion,

As a manager, no matter your level, it is important to remember that everybody makes mistakes, causes errors or just plain screws up.

When interviewing, learning about mistakes, errors and screw-ups along with reactions and subsequent actions is often more important than knowing what candidates did correctly or their greatest strengths.

Initiative is one of the most valuable components of MAP and it’s difficult to evaluate when interviewing; after all, candidates are unlikely to say they don’t have any.

And that is why smart mangers hire MAP, not skills.

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The most recent act of executive ultra-stupidity brought down not only Brian Dunn, Best Buy’s CEO, but also Richard Schulze, its founder who was CEO for 40 years and Chairman for ten.

All over what was, according to Dunn and the 29-year-old woman subordinate, a platonic friendship, albeit one with some very tasty perks for the gal.

Schulze is out because he learned about it last December, but didn’t mention it to his board, HR or ethics officer. (Hell of a way to cap 50-plus years of amazing success.)

The report cited the effects of the relationship, including disruption in the workplace, damaged employee morale and perceived favoritism that undermined the employee’s supervisor’s attempts to manage her.

“Further, the C.E.O.’s relationship with this employee led some employees to question senior management’s commitment to company policy and the ethical principles the company champions,” the report said. “During interviews, some employees said that they felt that the rules appeared to apply to every employee except the C.E.O.,” it said.

When will they learn?

When will ‘but me’ be exorcised from executive/management thinking?

When will management learn the importance of walking their talk and that the higher the position the more important that becomes?

Three questions, but just one five-letter answer—never.

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I never heard of Robert W. Service until I came across something he said and looked him up.

The quote that caught my interest was this, “It isn’t the mountain ahead that wears you out; it’s the grain of sand in your shoe.” You have to admit that along with the obvious accuracy of the statement there is a good deal of wisdom there also.

I certainly didn’t connect Service with his main claim to fame, but if you are old enough you, too, have probably heard this line from his most famous poem, “Pitched on his head, and pumped full of lead, was Dangerous Dan McGrew, While the man from the creeks lay clutched to the breast of the lady that’s known as Lou.” For those of you unfamiliar it’s called The Shooting of Dan McGrew and you can read it here.

Service believed in the value of shutting up or, to use his more polite wording, “Be sure your wisest words are those you do not say.”

Lastly, a bit of wisdom that is well worth adding to your life guidance principles, “A promise made is a debt unpaid.”

See you all tomorrow; have a wonderful day.

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Facebook’s IPO is all over the news and who am I to ignore a topic of obvious interest? Suffice it to say that IMHO valuing Facebook above McDonald’s, Citigroup and Amazon is totally ridiculous—but what do I know?

However, I’m not alone.

A survey done by WhisperNumber.com polled 1,100 registered traders and investors, found that 71% do not consider Facebook a long-term investment and will not be buying share after Facebook’s initial public offering.

And comparing Facebook to Google isn’t a no brainer; it’s a no brains-er.

But when Facebook amended its S-1 on Monday…the company reported a season decline in revenues hitting $1.058 billion compared to $1.131 billion in the quarter before — the questions started cropping up about whether it was too much to ask that Facebook soar in the markets like Google had. Just prior to Google’s IPO, on the other hand was gearing up quarter after quarter pre-IPO and experienced sequential revenue growth of 27.2% from Q4 to Q1 before its IPO.

Bottom line is that for garden-variety investors (that us) making a profit from Facebook isn’t likely (unless, IMHO again, the market crashes and you still have spare change to invest. And even if you there would probably be better places to use it.)

But if history offers any lesson, average investors face steep odds if they hope to make big money in a much-hyped stock like Facebook.

The IPO should create at least 1000 new millionaires, but it’s unlikely that wealth will be ostentatiously displayed; the exception being when funding another startup—or buying a bicycle.

The hand-painted Italian bicycles that flash across Silicon Valley on Saturday mornings have become the new Ferrari — and only the cognoscenti could imagine that they cost more than $20,000.

My favorite bit of IPO wisdom addressed to all those newbie Facebook millionaires comes from Seattle-based entrepreneur and investor Jonathan Sposato, who earned his first taste of wealth at Microsoft 20 years ago, then founded Picnik, which was bought be Google, and is currently GeekWire’s chairman.

For some, stock wealth launched entrepreneurship and philanthropy. For others, materialism and conspicuous consumption. It was a lottery ticket, plain and simple. And statistically, 90% of all lottery ticket winners go broke after 3 years. And while people seldom talk about money in our culture, avoiding the topic makes history repeat itself, and stigmatizes issues around money.

Thus, I offer some very candid advice for my younger colleagues at Facebook, who are about to have a life-changing event.

Finally, here is some useful advice in the form of what to consider when offered equity in lieu of cash.

The shares-versus-dollars decision presents a common dilemma for startup staffers and consultants. Early-stage companies often don’t have the ready money to just write a cheque, so they have to lure talent with the promise of stock. (…) If you are in the fortunate position of weighing a juicy stock offer, what issues should colour your decision?

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A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

After reading Alexander Haislip’s post, I scurried around and removed the “CEO” from as many profiles as I could find/remember.

Back in 1999 I started RampUp Solutions I called myself “founder” and I was happy with that, but I kept being told I should use ‘CEO’, so I did. (Hey, even smart people can give poor advice.)

However, I was never comfortable with the title because I’ve worked with dozens of CEOs and knew that I didn’t/couldn‘t do what they do.

Not only did not, but could not.

Now, thirteen years later, my gut reaction has been confirmed; not only the reaction, but the reasons.

Ask yourself: would you still be CEO if it were a $100 billion business or would you require what’s euphemistically called “adult supervision?”

Considering what passes for a $100 billion business these days you may want to add ‘sustainable’ to the description.

There is nothing wrong with bringing in a “real” CEO and learning the ropes—think Larry Page and Google—but assuming a title of which you aren’t really capable smacks of a five-year-old dressing up in mommy’s/daddy’s clothes.

Actually, I’m surprised I didn’t delete those three letters years ago when I shared some of the things I’ve heard CEO really means. Call it a major case of disconnect.

I hope Haislip’s and my post inspires you to find the time to expunge CEO from your social profiles and other places, including your business cards.

You might also want to take a hard look at other company titles, especialy on the executive level.

Option Sanity™ reduces pretension.
Come visit Option Sanity for an easy-to-understand, simple-to-implement stock allocation system.  It’s so easy a CEO can do it.

Warning.
Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

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Marty Zwilling wrote a great essay detailing exactly what to do to guarantee your team’s DEmotivation.

It’s great because in addition to being oh-so-true it’s tongue-in-cheek sarcastic enough that it might even penetrate the minds of those guilty of what it says.

Zwilling writes for entrepreneurs, but most of the actions he describes apply equally well to any manager at any level, as well as parents and pretty much any human interaction.

Call it universal DEmotivation.

Here are the headings, but you should really read the article to know for sure if you are guilty of some more covert version.

1. Be sure your team doesn’t know what is important to you.
2. Never explain your actions.
3. Hire team members who will follow your instructions.
4. Keep people on their toes with a threat of consequences.
5. Team meetings are for delivering the latest decisions.
6. Agree to milestones and then accelerate them.
7. Thank your employees for the little extras.
8. Be careful not to get too involved in your employees own goals.

In the decades I worked as a recruiter and those since starting RampUp Solutions I’ve heard these or variations of them listed as reasons people left their company.

Because when you get right down to it, people quit managers, not companies, and that is especially true when a manager is also a founder.

SUBMIT YOUR STORY
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Be the Thursday feature – Entrepreneurs: [your company name]
Share the story of your startup today.
Send it along with your contact information and I’ll be in touch.
Questions? Email or call me at 360.335.8054 Pacific time.

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An excellent article on loyalty citing research from various Wharton professors on the subject of worker loyalty is a valuable read.

It’s good for bosses and employees alike; the former can use it to analyze and improve their approach, while the latter can give a printout (anonymously, if necessary) to their boss.

One of the most valuable findings is that in some ways nothing has changed on the employee retention front over the years.

Human nature, Harter adds, “doesn’t change when the economy changes. It might take on a different dynamic” during a recession, but what remains constant is “the need to be connected — to a manager, a co-worker and/or a purpose, and also the need to be recognized.” People’s perceptions of their own standards of living “did drop as the economy dropped,” he says. But that same drop was not registered in workplaces where employees said they have “someone who encourages their development. There is something about having a mentor, or someone in your life who helps you see the future in the midst of chaos, that can make a difference.”

Wharton marketing professor Deborah Small cites a body of research on what is called “procedural fairness,” indicating that much of what employees feel about an organization “is not the outcomes they get, but the processes. If people feel like processes are handled fairly in the organization, even if they don’t get the best for themselves,” that would tend to encourage loyalty.

Recognition, fairness, being valued and encouraged to grow are still the most powerful intangibles when it comes to retention and their source is still the immediate boss and maybe their boss.

As I wrote last year, caring begets caring and the actions that show you care aren’t found in compensation packages.

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