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It’s Called Integrity

Wednesday, January 7th, 2015

Plum Creek Portraits

Mixed in with all the bad stuff over the last few weeks of 2014 were some feel-good stories to provide a bit of balance.

One of them that you probably missed was truly surprising.

After all, how many CEOs give back their bonus because they don’t think they deserve and say so publicly?
But that’s exactly what Rick Holley, CEO of Plum Creek Timber Co., did.

He returned 44,445 restricted stock units worth nearly two million dollars.

Holley said, “he does not believe that he should receive such an award unless Plum Creek’s stockholders see an increase in their investment return.”

The board members were surprised, to say the least, CEOs do not refuse, let alone give back, bonuses.

“I told them I wasn’t asking for their approval. They had given these to me and I appreciated their confidence in me, but I didn’t feel comfortable taking them… This has been a year where total shareholder returns are down 10% or more. It just wasn’t the right thing to do.”

And while it’s obvious to any investor or employee that not taking a bonus in a bad year is “the right thing to do” it apparently came as a revelation to those with fiduciary responsibility for all stakeholders.

Apparently the board didn’t realize Holley possesses a trait that’s rarely seen these days, especially where money is concerned.

It’s called integrity.

Image credit: Plum Creek Timber Co.

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Lean Startup Conference 2014: Mikkel Svane and Zendesk’s Story

Thursday, December 11th, 2014

Startup Land book

KG Charles-Harris is once again attending the Lean Startup Conference and sharing his impressions and what he’s learning with you.

It was especially interesting to listen to Mikkel Svane’s talk about Zendesk’s story, because I had read a pre-publication copy of his book Startup Land.

The book was the basis of the talk, I found Mr. Svane to be enlightening, honest and real and all that carried over in his book.

Startup Land was an enjoyable read from a strong entrepreneur, with real stories about the struggle of starting, moving and growing a technology company. 

The fact that they started as entrepreneurs in Denmark and moved an embryonic company to the US only increased the complexity and challenges that the three founders had to traverse in making the company a success. 

Not only were the founders outside the normal Silicon Valley entrepreneurial eco-system, but they were also in a different country with little access to the information or thinking patterns common in the US.  It is a testament to the tenacity and determination, and even more so to the “hustling mentality” of the founders – they were willing to take significant risks and stay completely focused on two things — building a great product and getting immediate revenue on this product.

The author rightly credits the Scandinavian social system for their ability to take some of the risks that they were able to assume — they knew they would never end up on the street homeless, but could suffer a temporary reduction in living standards if they failed.  This is radically different than the case in the US and many other countries where startup failure can lead to destitution.

Regardless, the ingenuity and determination displayed during the process of bringing Zendesk from birth to maturity was an inspiration.  I’m a serial entrepreneur with international background myself, and I know how much effort is required to make that kind of move. 

The major challenge, however, comes with adjusting to the new mindset and culture in your host country.  Startup Land discusses this to some extent, but it would have been interesting to get some more insight about it.

Mr. Svane does a good job of synthesizing his experience into practical advice, summarized in special sections at the end of each chapter.  As such, the book can be a practical guide to such things as what to consider when hiring team members or how to think about particular aspects of the business. 

Also, some of the most interesting, and sometimes funny, parts of the book are found in how the three founders interacted based on their particular personalities and proclivities. 

Considering that founder dynamics is one of the most prevalent reasons for startup failure, this information  should be studied closely.  The difficulties and required tolerance for navigating these issues is core, especially the sensitivity required by the Founder/CEO.

In short, the book is well worth reading — it’s a quick and easy read with practical insights and a good dose of humor.

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Entrepreneurs: Talking about the Down Stuff

Thursday, November 13th, 2014

https://www.flickr.com/photos/mikecogh/15128166879

As any founder knows, the course of business isn’t smooth and even the most successful startups hit bumps along the way.

Your people know it, too.

In fact, they often foresee trouble more clearly than you’d like and are quick to act — walking next door to another startup. And they do this whether their information is accurate or not.

That means you need to learn how much, when and how to communicate to your team, but keep in mind that there are no absolute answers, because it depends on the specific subject and situation.

That said, there are general guidelines that will help you with the question.

  • How much to share? You should discuss with one or more trusted advisors who have substantial experience rather than with peers.
  • When to share? Most crucial is to talk to your people before the rumors start. Rumors are like genies, once out of the bottle they are impossible to put back. Worse, in addition to growing with every telling and spreading through the company, they tend to spread throughout the entire venture ecosystem.
  • How to share? Clearly, honestly, no games, no half truths. You hired smart people and they’ll see right through anything else.

Unfortunately, many founders tend to clamp down, say nothing, run scared, freeze, bluster, or some combination thereof.

There are very few things that are guaranteed in a startup, but watching your people walk out the door because you hunkered down, shut up, and hoped no on would notice is one of them.

Flickr image credit: Michael Coghlan

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The Soul of a Company

Monday, September 22nd, 2014

https://www.flickr.com/photos/criminalintent/3661629219

Does your company have soul?

Or is it so focused on profit that there is no room for anything else?

What does it mean for a company to have soul?

That question is addressed by a Belgium, Frederic Laloux, who quit McKinsey when he found himself miserable and out of touch with his clients.

 “The work I had loved so much was work I simply couldn’t do any longer. I came to the realization that I was in a very different place than the executive teams of the large corporations with whom I had been working. I just couldn’t work with these big organizations anymore. They felt too soulless and unhealthy to me, too trapped in a rat race of just trying to eke out more profits.”

Wondering what gave a company soul fueled two years of research that resulted in Reinventing Organizations: A Guide to Creating Organizations Inspired by the Next Stage of Human Consciousness.

Not surprisingly, Laloux found that trust ranked at the top of managerial attitudes that create soul.

Trust, Mr. Laloux found, is perhaps the most powerful common denominator in the companies he studied. “If you view people with mistrust and subject them to all sorts of controls, rules and punishments,” he writes, “they will try to game the system, and you will feel your thinking is validated. Meet people with practices based on trust, and they will return your trust with responsible behavior. Again, you will feel your assumptions were validated.”

In other words, bosses (like most others) get what they expect.

While trust can’t be faked, it is trust a function of individual bosses, from the most junior all the way up to the CEO.

That means that even if you are working in a soulless situation you can run your own organization with trust, integrity and soul.

Flickr image credit: Lars Plougmann

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Stain or Paint? What’s Your Preference?

Wednesday, September 17th, 2014

https://www.flickr.com/photos/27656042@N03/3320116815/in/set-72157607737046395/Bosses are enamored with culture and rightly so.

However, for culture to work its wonders it must sink deeply into the organization in the same way that stain is absorbed by wood.

Cultural stain is the direct result of walking the talk and making sure that everybody else walks it, too.

It’s intentional action and it requires paying attention.

It must be applied carefully or every imperfection and flaw in the organization will be on display.  

Stain is never the output of an underling; when ideas do bubble up from other parts of the organization they won’t take root without the support of the boss, whether publicly or not.

The problem is that many bosses find it faster to treat culture like paint.

Cultural paint is easier to apply and, like real paint, it can hide everything from minor blemishes to dry rot.

It’s paid lip-service, with effects that are grounded in convenience and often included only to make the employees feel good.

What paint-loving bosses forget is that the more coats of paint are applied the more likely is it to peel.

People aren’t stupid and will vote their displeasure with their feet.

Flickr image credit: maurice.heuts

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Ducks in a Row: Cognizant of Cultures

Tuesday, September 16th, 2014

https://www.flickr.com/photos/foxypar4/2168375264

Erin Meyer is the author of The Culture Map: Breaking Through the Invisible Boundaries of Global Business and teach cross-cultural management at the international business school Insead, in Paris.

His article explaining how he learned to identify seminar participants with questions by looking for “bright eyes” is something every manager should read—whether or not they are managing an international team.

Why? Because different cultures are more than a function of Japanese vs. Russian vs. British.

Just as culture differs from country to country it differs by areas within each country.

In the US it’s beyond the difference between Massachusetts and Texas or Nevada and Colorado.

The cultural differences between Northern and Southern California are considerable, as are the differences between New York City and Rochester.

Cultural differences can be even finer; think of the differences between the various Burroughs in NYC starting with attitude all the way to language and almost everything in-between.

Beyond that different cultures can exist next door to each other, passed on through families, friends and social media.

Some cultural differences are obvious, while others are extremely subtle.

But they all have one thing in common.

To succeed, a boss needs to recognize the obvious, tease out the subtle and address them all.

Flickr image credit: John Haslam

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The Hypocrites of Tech

Monday, September 15th, 2014

4744202563_f23be1cbb0_mSince it was first announced, iPad commercials have shown kids using them and millions of parents took to them to keep their kids entertained.

One major exception was Steve Jobs, the guru of consumer technology (his kids read hardcopy books).

“They haven’t used it,” he told me. “We limit how much technology our kids use at home.”

Jobs wasn’t alone.

Since then, I’ve met a number of technology chief executives and venture capitalists who say similar things: they strictly limit their children’s screen time, often banning all gadgets on school nights, and allocating ascetic time limits on weekends.

Chris Anderson, the former editor of Wired and now chief executive of 3D Robotics, Alex Constantinople, the chief executive of the OutCast Agency, Evan Williams, a founder of Blogger, Twitter and Medium and Lesley Gold, founder and chief executive of the SutherlandGold Group all limit or say no to technology for their kids.

“That’s because we have seen the dangers of technology firsthand. I’ve seen it in myself, I don’t want to see that happen to my kids.” –Chris Anderson

Limited or outright banned, technology is handled differently by those in tech when it comes to their kids.

Although some non-tech parents I know give smartphones to children as young as 8, many who work in tech wait until their child is 14. While these teenagers can make calls and text, they are not given a data plan until 16. But there is one rule that is universal among the tech parents I polled.

“This is rule No. 1: There are no screens in the bedroom. Period. Ever,” Mr. Anderson said.

In the light of new research, barring electronic screens from the bedroom has taken on new urgency and not just for kids.

The blue light from personal electronic devices has also been linked to serious physical and mental health problems.

(My sister’s doctor warned her months ago, but it took the article to make her stop.)

What the tech world sees is no different from what other people see on the news, but they pay more attention.

Not that any of this will change the ads or overall marketing of tech—it will keep targeting kids—hook them early they’re yours for life—and encouraging people of all ages to use their screens when it’s dark.

So much for the vaunted tech values of authenticity and transparency.

Actually, taking a step back, tech’s attitude seems more in tune with politicians’ attitude—more of a do as I say, not as I do approach.

Flickr image credit: Ernest McGray, Jr.

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If the Shoe Fits: What Would You Do?

Friday, August 29th, 2014

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

5726760809_bf0bf0f558_mCisco CEO John Chambers constantly amazes me.

It’s not his 19 years of reinventing Cisco and keeping it on top, but for other stuff, such as Cisco’s disaster-focused Tactical Operations team.

They just did another very neat thing.

Read the article for the full story, but here’s the short version.

Connectify is a successful startup.

It makes a networking product called Connectify Hotspot that lets you turn any Windows computer into a Wi-Fi hotspot to share your internet connection. It’s been downloaded 65 million times and used for over 500 million hotspots.

Cisco is the world’s largest maker of hotspot equipment.

Connectify had been trying to buy the connectify.com domain since its founding (long story; read article).

Turned out that Cisco had acquired the domain as part of a long ago deal.

When the story came to light Cisco’s reaction was swift.

It immediately turned the domain over to Connectify at no cost.

Connectify publicly expressed its thanks.

Connectify’s CEO Alex Gizis was so thrilled that he wrote a public thank you post to Cisco and called Cisco the “hero” of the story. He then offered a free year of its hotspot service to all of Cisco’s 75,000 employees.

Here’s the question.

Under similar circumstances—hot startup/competing technology—how many of the CEOs at Google, Oracle, Facebook, Apple, Twitter, GE, 3M, HP, VMware, etc. would do the same thing?

What would you do?

Image credit: HikingArtist

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Ducks in a Row: Private vs. Public

Tuesday, August 26th, 2014

https://www.flickr.com/photos/dkeats/6520047059/

Ask people what they do in private and you’ll probably hear far more detail than you want, but ask what they earn and they’ll either freak out at the question or be very insulted.

What they probably won’t do is tell you.

Sex used to be personal, but these days it is often broadcast to anyone who will listen, but not finances—although older workers are less likely to discuss either of them.

Companies are even more paranoid about keeping salaries confidential—sharing compensation information is a firing offense in many of them.

Usually, the more a company insists that the numbers are private the more likely people are to assume that something is rotten—or unfair.

After all, gossip tends to exaggerate things. Professor Lawler says studies show that when pay is confidential, workers often believe the salary distributions are more unfair than they really are.

That’s why Dane Atkinson, chief executive of SumAll, a data analytics company, does things differently.

When he helped found the company about three years ago, a decision was made to disclose all salaries and equity shares. (…) “In this way, more money goes not to those who negotiate better, but those who work the hardest,” he said. The people who resist making salaries more transparent, he said, “are usually those who think they’re making too much.”

The other people who resist are the bosses who are playing games with compensation.

You know, the ones who make the lowest offers possible and/or play favorites.

Compensation, whether salary or stock, should make sense to everyone; it should be plausible and accurately reflect the person’s contribution to the company’s success—not their charm, personality, looks or threats to leave.

Flickr image credit: Derek Keats

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Ducks in a Row: Open-book Management

Tuesday, July 8th, 2014

https://www.flickr.com/photos/carlcollins/69912897

Among today’s most popular buzzwords is ‘transparency’.

Transparency is one of the most important underpinnings of ‘authenticity’ and ‘trust’.

Corporations large and small trumpet the transparency of their dealings—except financial ones.

(Individuals, too; they will describe in detail their thoughts, attitudes and actions, even their sex lives, but freak when the subject is their money.)

But some bosses believe that financial transparency is not only possible, but can lay the groundwork for an extraordinary culture.

Financial transparency means not just sharing all the company financials with all its employees, but ensuring they have the skills to understand them by explaining and discussion them.

It’s called open-book management and was documented in “The Great Game of Business” by Jack Stack and Bo Burlingham.

Mr. Stack and the managers bought the plant [International Harvester engine plant], renamed it Springfield ReManufacturing and turned it into a thriving collection of more than 30 businesses now known as SRC — thanks largely to an innovative strategy that came to be known as open-book management.

The basic rules are

  • Know and teach the rules: every employee should be given the measures of business success and taught to understand them
  • Follow the Action & Keep Score: Every employee should be expected and enabled to use their knowledge to improve performance
  • Provide a Stake in the Outcome: Every employee should have a direct stake in the company’s success-and in the risk of failure

Ari Weinzweig and co-founder Paul Saginaw wanted that kind of inclusive, engaged culture when they started their company and used open-book to anchor their growth.

Zingerman’s Delicatessen, a tiny sandwich shop near the university, into a group of nine businesses that, three decades later, has 650 employees, 18 managing partners and combined annual sales of $50 million.

That’s called success and has been recognized as such and emulated a la Tony Hsieh.

Wayne Baker, a professor in the Ross School of Business at the University of Michigan, turned it into four case studies. Bo Burlingham featured Zingerman’s in a book called “Small Giants,” which is about companies that “choose to be great rather than big.” And the owners and employees of more than 1,000 companies have attended ZingTrain seminars to learn more about the Zingerman’s model.

While their approach is definitely a success, not everyone likes or wants the involvement.

Former staff members talk about the frustrations of having to placate difficult customers, as well as the stress of being “Zingy” throughout a long shift. “It is exhausting to work somewhere where you feel like you have to improve what you do constantly,” said one former worker at Zingerman’s Roadhouse.

Others love it.

Krystal Walls, who works in the mail-order business and has two children and a third on the way, said at the training session, “I have never worked anywhere where I was trusted or respected like this.”

When their little deli first succeeded they were offered substantial buyouts, as well as the opportunity to franchise, but none of those options allowed them to pursue their vision and make a difference. The company pays its people well and provides full health benefits.

“Employees who are stressed out financially, wondering how to pay for their kid’s allergy meds, or their rent or auto insurance, are not going to be able to do their job well,” said Mr. Saginaw, who has been lobbying in Washington for the last year for an increase in the minimum wage. “We’re comfortable with the notion that there’s such a thing as enough. Others may be wealthier than we’ll ever be, but I wonder if they’ve lost a certain amount of joy in their work.”

Flickr image credit: Carl Collins

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