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If The Shoe Fits: Growth At All Costs — Unsustainable AND Unethical

March 24th, 2017 by Miki Saxon

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

This is a short post, aside from the quotes, and I honestly don’t care if you skip my part and just read the  main links, especially the last on from DHH.

5726760809_bf0bf0f558_mIt’s exactly two years since I saw a successful lifestyle business founder, Andrew Wilkinson of MetaLab and Flow, loudly and publicly say that he would rather be a horse than a unicorn.

Meaning, he would rather build his businesses organically and self-funded than take outside investment.

I wondered if his attitude was a harbinger of returning sanity.

Ha! Wilkinson’s attitude was an outlier, as opposed to a trend.

However, early as he was I see more successful founders following a similar path.

A few days ago I read a Medium post from Mara Zepeda, Co-founder and CEO of Switchboard, and Jennifer Brandel Co-founder and CEO of Hearken, coining a new term, zebra, to denote a sustainable approach to growth.

A year ago we wrote “Sex & Startups.” The premise was this: The current technology and venture capital structure is broken. It rewards quantity over quality, consumption over creation, quick exits over sustainable growth, and shareholder profit over shared prosperity. It chases after “unicorn” companies bent on “disruption” rather than supporting businesses that repair, cultivate, and connect. After publishing the essay, we heard from hundreds of founders, investors, and advocates who agreed: “We cannot win at this game.”

Adam Eskin, founder and CEO of expanding restaurant chain Dig Inn and a former private equity associate at Wexford Capital puts it this way,

“Having a background in private equity, we don’t just want to grow this business for growth’s sake, lose passion for what we do, or the reasons why we’re here. I think that’s what some folks can end up doing when they raise this kind of capital.”

As a tech person, who has been seduced into believing that valuation is everything, why should you listen to an outlier or non-tech founder, let alone a couple of women?

Perhaps you’ll be more inclined to listening to the guy whose tech generates raves and may even be the source code of your company.

DHH (David Heinemeier Hansson), creator of Ruby on Rails, Founder & CTO at Basecamp (formerly 37signals), writer of best-selling books and winning LeMans racecar driver.

There is no higher God in Silicon Valley than growth. No sacrifice too big for its craving altar. As long as you keep your curve exponential, all your sins will be forgotten at the exit. (…)  The solution isn’t simple, but we’re in dire need of a strong counter culture, some mass infusion of the 1960s spirit. To offer realistic, ethical alternatives to the exponential growth logic. Ones that’ll benefit not just a gilded few, but all of us. The future literally depends on it.

Image credit: HikingArtist

 

Ryan’s Journal: How To Measure Culture

March 23rd, 2017 by Ryan Pew

https://www.flickr.com/photos/beantin/8976529844/

I am in sales and as a result I have a ton of metrics that I must account for. How many calls did I do? What is my conversion rate? Are you having a prospecting or velocity issue with closing deals? Is your sales funnel robust enough? 

I think you get the idea. These and many other metrics are all important as they can lead to a greater success as you iterate.

By most accounts sales is easy to measure the successes and failures. It’s like sports, who has the most points at the end of the game?

Culture though can be a bit tougher to measure. It’s not a tangible good and as I consider the subject I wonder how can we best measure it?

It’s pretty easy to see the extremes of company cultures and see if they are positive or negative.

Uber had been in the news a lot lately, even their president stepped down after saying they did not align with his values.

On the other hand Google landed the top spot again by glassdoor.com with their annual best places to work.

With a little thought you can see one culture is more negative and the other is pretty positive.

Those are fairly easy examples, but what about all the thousands of other companies in small towns and cities? How do we know if they are indeed a positive place to be and what metrics should we use to measure?

I worked for one company that ranked as a top workplace in the local metro area. This was touted by its recruiters and quite frankly was a selling point for me when I came on board. I had had a terrible experience in a previous company and I was ready for a change!

However, after some time of working at my new place we were given the opportunity to participate in the annual survey that would measure top workplaces.

This poll was, in reality, mandatory and we had to provide so much demographic data that it was very easy to determine who had filled out what survey.

The result was we all wrote very positive reviews and then we were voted top workplace again. I believe the total is four years in a row at this point.

I bring this up as an example of how one metric, annual best workplace surveys, could be wildly skewed and may not be the best metric to utilize.

Where else should we turn to measure? Pay could be a factor of course. Tenure and turnover are factors too.

I had a teacher in college tell me to always ask my interviewer what the turnover for employees under two years was. He felt this was a good measure of the health of the company and the role I was pursuing.

I still ask that question and have found that when turnover is high, culture is low.

At this point I don’t have a silver bullet and will do more research to see if there is a magic quadrant we should be seeking.

I’ll update you next week on whether someone a whole lot smarter than me already did the tough work, or if I stumbled onto a way to start a company measuring culture that is the new hot thing in town.

Image credit: James Royal-Lawson

How To Become An Adult

March 22nd, 2017 by Miki Saxon

Sometimes people seem to forget that kids grow up and become adults.

Or they used to.

The responsibility for most of the problem can be laid at the feet of their parents and their helicopter approach to raising their offspring. Most ironically, they complain when job candidates sport the same attitudes as their own kids.

Other factors retarding adulthood include the escapism offered by today’s video games, especially for under-30 males, the lack of interpersonal skills driven by social media, along with social media’s unsubtle efforts to foster addiction in the name of profit.

And, of course, the largest factor being family and friends, whose emotional and financial support, enable a relatively comfortable living situation.

The difficulty today’s young adults are having in becoming actual adults was the impetus for (what else) a startup.

Rachel Weinstein, a psychotherapist, and Katie Brunelle, a former elementary school teacher and coach, responded by creating the Adulting School, a place for people to gain the skills they need to feel like an adult, from goal-setting and sheet-fitting to how to manage money or hang a picture.

Simon Senek, a British author and motivational speaker, also blames parents for the false expectations of so many Millennials, who never were given the chance to learn/live the process of achievement.

“Everything you want you can have instantaneously, except for job satisfaction and strength of relationships,” Senek argues. “There’s no app for that; they are slow, meandering, uncomfortable processes.”

Whatever you think about a school that teaches adults how to be adults the real question is: in what direction will the next generation go?

Image credit: the Adulting School

Ducks in a Row: How Good Is Your Face-To-Face?

March 21st, 2017 by Miki Saxon

https://www.flickr.com/photos/44412176@N05/4197328040/

Why is it that the most difficult part of management, i.e., people management, constantly moves backwards?

Managers from the Greatest Generation tried to manage by memo.

That lasted until the 1970s when Boomer and Gen X managers took a giant step backwards and started trying to manage by email.

Millennials have taken an even larger step in that direction by trying to manage by text and have swept many of the previous contingents along with them.

Granted, people at all levels often look for and find ways, frequently turning to available technology, to avoid, or at least minimize, the most frustrating and difficult parts of their jobs.

However, that doesn’t work when the frustrating part is 90% of the job.

Every time this comes up I find myself quoting something Terry Dial said to me decades ago.

“People are 90% of our costs as well as the key to customer service and satisfaction. The only thing that should take priority over hiring a new employee is keeping a current one.”

Wally Bock puts it this way (and offers excellent advice on how to do it.)

In the Marines, I learned that when you’re responsible for a group, you have two jobs. One of them is to accomplish the mission. The other is to take care of the people.

I personally guarantee that you won’t accomplish the former if you ignore the latter.

You cannot “care for your people” by email or text — it requires face time.

It requires one-on-one conversations — wherever they take place — and not just about performance.

Conversations need to be human, that means family, hobbies, food, sports, etc.

Face-to-face humanizing contact is critical for teams, too, whether they are in a different office around the block or around the globe.

As Valerie Berset-Price, founder of Professional Passport says,

“Building trust is a multisensory experience,” she says. “Only when people are physically present together can they use all of their senses” to establish that needed trust. Without a bond, conflict or disengagement can more easily arise and is more difficult to resolve.

So whether you consider yourself a manager, a leader, a boss, or just a plain working stiff honing your in-person communication skills will not only improve your career opportunities, but also all parts of your life.

PS I just saw this article on IBM’s move to have teams in-person face-to-face.

Image credit: gorfor

Knowing Why/When To Quit

March 20th, 2017 by Miki Saxon

https://www.flickr.com/photos/botter/70228/

Occasionally I share stuff I receive from clients and sometimes from readers, as I’m doing today. I ask if I can share it and usually the response is ‘yes’, with the caveat that I change enough to ensure that nobody will recognize the writer.

I think “Caz’s” situation and its outcome are very applicable right now. I hear from a lot of you, all asking how to know when to “pull the plug.”

As always, I’m available by phone or email if you want/need to hash things out; contact info in the right-hand frame.

Hi Miki,

It’s been awhile and a lot has happened, with both family — the adoption went through and I’m a new dad! — and I’ve got a new job.

As you know, I’ve been getting more and more concerned about my future at “Locus Systems.”

You also know I’m extremely culture sensitive and the culture has been changing quite a bit, moving more and more towards a fear-based approach.

In addition, we launched a new product about 2 years ago and landed a total of maybe 20 customers.

While the product itself worked and there is a real need, the market just didn’t respond.

This in turn led to our CEO, who owns the company, to push the sales teams harder. In the end he said the failure was on the individual sales teams, not the product.

I have a strong business background and know that for no discernible reason good products sometimes just don’t find the market demand expected.

This whole ordeal has led to a lot of resentment on the part of the sales teams and management.

Some of our best team members started leaving; I’m talking about people who sell $4MM plus a year, so great salespeople.

Each time someone left the CEO would make it a point to remind everyone that that person lacked the vision and we were better off without them.

Give me a break!

On a personal level commissions started being delayed. We always waited 2 months or so for our commission, but it was creeping into a 3-4 month time frame, sometimes longer.

All this led me to a realization that I was probably on a sinking ship. I don’t mind struggling, and you know I’m a fighter, but when the CEO and management are essentially belittling employees and putting all failures on them it’s time to go. 

So I started looking.

I found a great opportunity with “Jasper, Inc.,” another young software company that’s growing organically and has what seems like a terrific culture — all the good stuff you’ve written about (why I started reading you in the first place).

I found the opportunity locally, but the company doesn’t care where I live. That means we aren’t restricted to one town. I always wanted to be able to choose where I live and not have my job dictate that to me.

Although I just started, I’m really enjoying it. The opportunity came as a bit by surprise, but quite frankly, the conditions, benefits and pay are all superior to what I had. 

I’d like to stay in touch. This role will give me more financial freedom then I have had in the past and that may come in handy down the road ;-)

Caz

Image credit j. botter

Ryan’s Journal: International Women’s Day

March 17th, 2017 by Ryan Pew

https://www.flickr.com/photos/ufv/33321834446/Folks. I am about a week behind on recognizing International Women’s Day, but wanted to speak about it today.

There is always an element of folks out there who cry that we are dividing each other more by recognizing every different group of people, but I disagree.

At this point we have roughly 7 billion people in the world and they are each unique. That’s pretty cool if you ask me and I find that recognizing the differences that make us unique can be a unifier.

One reason I want to address this holiday is because I have been personally affected in a profound way by strong female leaders, both in life and work.

These women were mothers, wives, bosses, employees and, in some cases, warriors. I call that out because throughout history there was not always the option for women to follow their own path — it was chosen for them.

I am the father of two beautiful girls, they are identical twins and they light up my life. My wife and I are blessed (and challenged) by them daily. In June I get to experience it again with the addition of our third girl.

If I am being completely transparent, I was never a feminist. I didn’t think men were the superior sex, but I didn’t think the status quo was an issue either. While having girls has helped to change my thinking, the journey began many years ago.

I served five years as a United States Marine and enjoyed the opportunity to be a part of something greater. Now, the Marine Corps has around 200,000 active Marines and about 7% who are female. It’s a male dominated world where recent news has uncovered that misogyny is alive and well unfortunately. I don’t bring this up to shame the institution but to call out the opportunity for improvement.

Within this environment though I had the pleasure to serve under a female Marine officer by the name of Meredith Brown. At the time she was a Major and retired as a Lt. Col.

She was a no-nonsense person who expected results and demanded excellence. I recall how I used to write reports for her and she would pull out a red pen and begin striking things out. As she did that though, she took the time to show why the corrections needed to be made and expected that I wouldn’t repeat the errors.

Now you may be thinking, this lady sounds rough! I will tell you though, she knew what she was doing. I was a young man who needed guidance and she also saw something in me that perhaps I didn’t see myself. As a Marine she was tough but also fair to a fault. She was the first strong woman in my professional career and I valued our time greatly. We still speak to this day and she continues to give sound advice.

How does this fit into culture? Because as a society we have determined that sex, color, background, race or other factors that could be discriminated against are not how we should be judged.

We have deemed actions to be our judgment. Does this always happen? Absolutely not, but we strive for it.

If I had been an older man in a different Marine Corps, I would have never had the opportunity for a female Marine to lead me. I would have operated in a bubble and be unable to see another point of view without great difficulty.

So next time we have a day that celebrates a unique quality about a specific group of people I suggest we take the time to embrace it.

See something from a different perspective, walk in another person’s shoes, so to speak, and learn.

Culture is continuous.

Image credit: University of the Fraser Valley

Ryan’s Journal: When Culture Betrays

March 16th, 2017 by Ryan Pew

https://www.flickr.com/photos/roryfinneren/2791004393/in/photostream/

Most of my writing is based on what is going on in my life right now. I have found it’s easier to write about what I know and tap into the emotion of it all. One thing I learned recently is culture can be a double-edged sword and should be respected as such.

If any of you are reading more than Entertainment Weekly I am sure you have seen the meltdowns that are occurring at Uber, the falling stock prices at Valeant Pharmaceuticals and maybe the second bankruptcy of Radio Shack.  All of these are a result of a culture that betrayed the very members it was meant to protect.

How do we watch out for that in our personal lives?

One way I do it is by seeking constant feedback. I have found I have a significant blind spot when it comes to measuring myself, so I suck up my pride and go to those I know will give me a real answer. Perhaps these companies could have done the same?

When looking at these three cases I have found one commonality, pride. Let’s examine each and see what you think.

Uber is pretty public at this point. The CEO had a history of being bold, in your face and decisive. This has its place but can also become unbalanced. Additionally, somewhere from the top down the idea that women should not be treated equal came out and as a result you have cases of sexual misconduct and favoritism playing out.

Valeant was a darling of Wall Street for many years. Its former CEO was incentivized to get his stock to a certain price point. If he did that he was rewarded with stock options that were incredible. Harvard did a study on it and thought the scheme was amazing. What people didn’t know though was the CEO was utilizing accounting methods that favored the stock price. He also utilized a private pharmacy that was undisclosed to the public to deliver his prescriptions. This had an added benefit to the stock. Both methods were found to be unethical, the stock crashed and shareholders lost billions.

Radio Shack recently filed for a second bankruptcy. They have been unable to turn around their stores to get to a profitable point. I am not too old to remember going into these stores as a child and enjoying them. They offered some great products, were knowledgeable and if you were a radio geek you could find just the part you needed. Unfortunately they didn’t expect a rise in cell phones, online ordering and other buying trends. These have all contributed to its losses. They are still around but I wonder for how much longer.

I bring all of these up as examples where the culture of each led to misses and failures.

Culture in my mind is the mentality of a company — its thought processes.

On an individual basis are you allowing your culture to betray you?

Image credit: Rory Finneren

Educationally Speaking

March 15th, 2017 by Miki Saxon

https://www.flickr.com/photos/waldec/4507270630/

No matter your circumstances, married/involved/single, there are probably kids somewhere in your world.

I read a lot of articles about education, but three about kids really stood out for me and I believe will be of value to you.

The first looks at the unpleasant fact that our so-called modern education is producing workers more fit for 19th and early 20th Century jobs than those that will be available when they enter the workforce. In other words, acing standardized tests does not prepare you for anything more than functioning in rote.

In the future, if you want a job, you must be as unlike a machine as possible: creative, critical and socially skilled. So why are children being taught to behave like machines?

Speaking of behind-the-times teaching.

The only thing that can be said for the traditional approach to math, which, along with critical thinking, is one of the most critical skills needed in the future, is that it stinks.

Whether you look at the results by age (including adults), race or gender math skills are sadly lacking in the US and many other countries.

But it doesn’t have to be that way.

John Mighton, a Canadian playwright, author, and math tutor who struggled with math himself, has designed a teaching program that has some of the worst-performing math students performing well and actually enjoying math. There’s mounting evidence that the method works for all kids of all abilities.

Finally, or maybe foremost, is culture.

Just as in companies, the culture in a school is the determining factor on whether kids learn — or not.

The prevailing culture of many schools, especially the vaunted charter schools, has been one “no excuses.” A culture focused on regimentation and inflicted mostly on poor children of color.

But as any idiot knows, regimentation is not going to produce the next Marc Benioff or Larry Elison, So what does?

Ascend Public Charter Schools network began to retrain teachers to focus on social and emotional development. This provided the framework for creative problem solving to help prevent conflicts between students, or between teachers and students, from escalating.

Does it work? Is it making a measurable difference? Short answer is a resounding ‘yes’.

Around the same time that Ascend was transforming its culture, it put in place a new curriculum, more closely aligned with progressive schools, that focuses on intellectual inquiry rather than received knowledge. At Ascend’s lower and middle schools in Brownsville, passing grades on the annual state English test increased to 39 percent in 2016, from 22 percent in 2014, while the rate on the math test increased to 37 percent, from 29 percent. It’s hard to isolate the cause for the improvement, but it is likely to be a combination of both the academic and cultural changes, which makes Ascend a bold testing ground for the theory that children from low-income homes can be educated the same way as children from affluent families.

Finally, what about adult education, specifically the much ballyhooed MBA? Does it provide the education that provides the skills to climb the corporate ladder?

Not really, according to Henry Mintzberg, Cleghorn Professorship of Management Studies at McGill University, who looked at CEOs from what is considered the most elite university on the planet: Harvard.

Joseph Lampel and I studied the post-1990 records of all 19. How did they do? In a word, badly. A majority, 10, seemed clearly to have failed, meaning that their company went bankrupt, they were forced out of the CEO chair, a major merger backfired, and so on. The performance of another 4 we found to be questionable.

I sent the article to another Harvard-educated CEO I know. His reaction?

Excellent  article. Very true. It took me years to unlearn what I’d been taught at business school…

The article is well worth your time, especially if you, or someone you know, are considering spending the money/going into debt for your MBA.

One more irreverent note, compliments of CB Insights, that is oh, so, true.

Hack: How to hire MBAs
My co-founder Jon stumbled upon this hack to get lots of MBA resumes which I’m going to let you in on.
Whatever the job title, throw the word “strategic” in front of it.

Image credit: .waldec

Ducks in a Row: The Ultimate In Employee Trashing

March 14th, 2017 by Miki Saxon

https://www.flickr.com/photos/drb62/3689632021/

“We value/care about our employees” is one of the most hypocritical statements companies make these days.

(“Our customers are very important to us” is the other.)

Want proof?

The Republican-controlled Congress is pushing through a bill to give corporations the ability to intrude deeper and more personally into your life than ever before.

A little-noticed bill moving through Congress would allow companies to require employees to undergo genetic testing or risk paying a penalty of thousands of dollars, and would let employers see that genetic and other health information. (…) The new bill gets around that landmark law by stating explicitly that GINA and other protections do not apply when genetic tests are part of a ‘workplace wellness’ program.

This mean that, in the name of “wellness,” your boss will know if you were treated for an STD or that you are predisposed for alcoholism, Parkinson’s, cancer, or whatever.

Not only your boss, but the unregulated company that runs your company’s wellness program, but is not constrained by HIPPA rules.

Employers, especially large ones, generally hire outside companies to run them [wellness programs]. These companies are largely unregulated, and they are allowed to see genetic test results with employee names. (…) They sometimes sell the health information they collect from employees.

Can your company actually force you to comply?

No, but the penalty for refusing is costly in the form of higher insurance premiums and co-pays.

No health insurance at your company? You could still take a major financial hit.

If an employer has a wellness program but does sponsor health insurance, rather than increasing insurance premiums, the employer could dock the paychecks of workers who don’t participate.

In general, Corporate America’s attitude towards its employees reflects its attitude towards customers.

For the most part, that ranges from “general nuisance” to “necessary evil.”

And while the number of exceptions to that attitude, at least when it comes to customers, is growing, it doesn’t always apply to employees.

As the provisions of this long-desired bill prove.

That said, it will be a great recruiting tool for those companies that don’t do it.

Image credit: Daniel R. Blume

Golden Oldies: If the Shoe Fits: Finding the Cause of Turnover

March 13th, 2017 by Miki Saxon

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies are a collection of what I consider some of the best posts during that time.

Bosses are usually unrelenting when something goes wrong with a product/service. They, the team and often the entire company work to not only find the cause, so it won’t happen again, but also to placate their customers.

However, when the problem is an internal human one, they are more hesitant to root it out, since that often means first looking in the mirror and then actually changing (not just paying lip-service until the turmoil dies down).

Read other Golden Oldies here.

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

5726760809_bf0bf0f558_mIn the right frame of MAPping Company Success it says, “Have a quick question or just want to chat?” along with both email and phone number.

A few weeks ago a “John,” a founder, called me to see if I had any idea why his turnover was so high.  

In response to my questions he described his company’s culture, management style, product, etc.

I told him that assuming what he said was what was actually happening then something else was going on.

Since we are several thousand miles apart, we came up with the idea of using a stationary camcorder to tape the interactions; a “set it and forget it” approach to capture the norm and not performances.

A few days later he sent me a link to see the results.

I choked at the length, but it didn’t take that long to find what the likely problem was.

To see if my instinct was correct, I watched the entire nine hours on fast forward.

What I saw was that, almost without exception, during every interaction John had, whether with programmers or senior staff, he interrupted them to take calls or respond to texts.

We discussed the ramifications and effects of the constant interruptions and I asked him how he would feel if they had acted the same way.

He said it had happened to him and he usually felt annoyed, offended or both.

So I asked why they would feel any different.

John said that also explained why one senior developer said he preferred to work where he was shown some respect.

John had chalked it up to the developer’s age and that he couldn’t handle the casual atmosphere, but thinking back the guy had had a good relationship and no problems with the team.

I suggested that instead of saying anything he just change, i.e., pay attention and not interrupt, since actions speak louder than words.

I also sent him this image as a constant reminder.

respect

John went further than changing; he called the most recent three who had left, apologized and said he would like them to come back.

One had already accepted a job, but the other two decided to give it another shot.

They both said that his candidness, honesty in recognizing the problem and sincere apology made it likely he would follow through.

Image credits: HikingArtist and via Imgfave

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