Friday, June 23rd, 2017
A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.
The last thing you need today is yet another autopsy of Travis Kalanick. If you indulge in any form of media you know TK isn’t the first to founder to go down in flames (and he won’t be the last)for creating a rotten culture.
A larger question is where was the adult oversight that kept other young founders from similar shenanigans?
Steve Jobs didn’t want to create a Windows-compatible version of the iPod or an app store for the iPhone; it was his lieutenants who pushed him to do it. Facebook’s Mark Zuckerberg and the Google founders, Larry Page and Sergey Brin, were guided by strong, experienced and extremely sober operators — Sheryl Sandberg and Eric Schmidt, respectively. Mr. Kalanick, meanwhile, was allowed to operate more or less solo, to micromanage a company that grew to enormous scale, and was left alone even when the firm’s problems became plain to see.
In its fifth year, Facebook had net income of $200 million in 2009 on revenue of $777 million; in its seventh year Uber lost $3 billion.
So instead, I thought I’d point you to a Glassdoor’s 2017 list of best CEOs as rated by their employees, so you could find positive role models.
In the large company category the top slot went to Benno Dorer, CEO of The Clorox Company.
“Excellent communication on vision, strategy, and where we are going. Constant access to leadership through round tables and other company events that allow all employees to feel like they are part of our decision making and strategy.”
In the small/medium category it’s Justyn Howard, CEO of Sprout Social.
There are many reasons why Sprout Social is an amazing place to work. Some of the pros include sensible managers that really care about you and your goals, and help you grow and advance your career. The company culture is inclusive, open and friendly. I have honestly not seen this many talented and hardworking people together prior to working here. Both individual and team initiatives are highlighted and praised often, communication is very transparent and you feel like your voice is heard.
Notice that the employee comments all focus on similar things.
They are what people of all ages want from their bosses.
Founders/bosses set the tone and values.
They shouldn’t be surprised when the people they hire have similar views.
Image credit: HikingArtist
Thursday, June 8th, 2017
Partnership is an aspect of culture that I think could be explored further.
We all have partners we deal with in life that range from personal to professional. And isn’t it nice to have a partner throughout your day? Someone to help shoulder the burden?
But there is a fine line between a partnership and a parasite and it’s important to remember the distinction.
I work in a partnership daily. My company, Flycast Partners, is a partner of several large scale software vendors. We work hand in hand daily to increase sales, provide services and support. We are essentially an extension of the vendor and work hard on maintaining those partnerships.
This past week my company had the honor of being named partner of the year for North America by BMC software. It was a surprise and unexpected. We are only about 70 strong right now and there are partners that are much larger than we are.
We asked why we were chosen. Was it revenue? Was it the number of accounts we grew? Was it some other tangible thing?
The simple answer was none of that. We didn’t bring in the most revenue or the most new accounts. What we brought was a trusted partnership.
BMC Software is the 7th largest software company in the world and their CEO personally said it was because they knew we acted in the best interest of the customer and BMC.
What drove us to this place?
For one, integrity. The president of my company, Nathan George, believes that you should be honest in all dealings, meet your commitments and do what you say you will do.
He hires based on those criteria. To me these are fairly simple concepts, but not always followed. It would be easy to take the low road sometimes, but not sustainable.
We have competition out there, but we don’t dwell on them. We work on building relationships and providing value.
This is an instance where the partnership benefits both parties.
Next week I will highlight where a partnership can turn parasitic.
Flickr image credit: K-State Research
Tuesday, January 31st, 2017
There’s a lot of talk these days from consultants, academics and executives about the importance of transparency, AKA being totally open and honest.
And many of those in the business world, from team leaders through CEOs, are actually walking the talk.
Or believe they are.
The problem lies in the fact that even those executives who have opened operations, especially financials, to the internal scrutiny of their people don’t recognize that true transparency needs to be a two-way street.
One-way transparency is open to spin — whether intentional or not.
Which, if you stop to think about it, should come as no surprise. It is a normal, human characteristic to put the best face on even the most negative thing.
So how is true, two-way transparency achieved?
By opening yourself to a no-holds-barred Q&A with everybody and forcing yourself to provide the A no matter how uncomfortable.
Harley Finkelstein, COO at Shopify and a new “Dragon” on CBC’s Next Gen Den, among other things, is the perfect role model of what should be called AMA transparency.
The AMA idea has been around for a while.
President Obama broke with convention back in 2012 when he agreed to do an Ask Me Anything — AMA — on the Internet forum Reddit.
But if you think it takes guts to expose yourself to a half hour of inquiries from strangers on the web, try fielding regular sessions of no-holds-barred questions from your own employees — live and on camera. Welcome to our normal routine: the internal AMA.
… While facing questions from my team is tough when I’m in the hot seat, it’s become a crucial tool for building trust as we’ve scaled from hundreds to more than a thousand employees.
I doubt you’ll find a lot of executives willing to do it, because a true AMA isn’t exactly fun for those in the hot seat, as Finkelstein freely admits, but it’s a great way to build trust, ownership/engagement, eliminate fear, etc.
There are plenty of times when I’ve been caught entirely off-guard. But that’s precisely the point. The element of surprise is the secret ingredient that makes the internal AMA such a valuable tool. (…)
Creating a culture where it’s safe to ask literally anything can lead to some awkward moments, but just taking that step helps instill a sense of ownership at every level. Sitting in that hot seat might make you sweat, but that just means you’re doing it right.
Do you have what it takes to “do it right?”
Image credit: Shopify
PS: Shopify is the first site I’ve seen that offers a “download” link next to all their leadership team.
Friday, January 13th, 2017
A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.
As I’ve said before, Steve Jobs may be a good role model for building a company, but not for building a culture.
Just think what would you could build if you combined the best of Apple’s culture with the best of cultural benchmarks — the way Pearl Automation is doing.
Founded in 2014 by three former senior managers from Apple’s iPod and iPhone groups, Pearl has tried to replicate what its leaders view as the best parts of Apple’s culture, like its fanatical dedication to quality and beautiful design. But the founders also consciously rejected some of the less appealing aspects of life at Apple, like its legendary secrecy and top-down management style.
Pearl’s cultural focus is totally inclusive, based on the idea that, since, every employee is contributing to its success, every employee has a “need to know.”
The start-up, which makes high-tech accessories for cars, holds weekly meetings with its entire staff. Managers brief them on coming products, company finances, technical problems, even the presentations made to the board.
Of course, the first thing you need to do is accept that you are not Steve Jobs.
The next thing is to understand that both creativity and failure are necessary to succeed.
Eswar Priyadarshan, who sold his mobile advertising company, Quattro Wireless, to Apple in 2010 and stayed for four years, said that he learned about design and aesthetics during his time there. But he noted that Apple’s high compensation, focused product mission and top-down decision-making tended to damp the risk-taking necessary to start a company.
Mr. Priyadarshan, who is now chief executive of BotCentral, a six-person start-up, compared Apple to a community of warrior monks. “Warrior monks don’t talk and do whatever is asked,” he said.
The actual question you need to answer is: do you want to lead a team of warrior monks or are you more excited about herding a team of innovative, quirky, creative cats.
Image credit: HikingArtist
Tuesday, August 9th, 2016
A post in Forbes / Entrepreneurs by Jane Chen talks about the importance of knowing your ‘why’.
In my personal experience, this “why” is so important because it helps you rally people behind your mission. It gives you purpose and meaning. It helps you make the right decisions. And when things get hard, as they inevitably will as an entrepreneur, the “why” keeps you going – especially in those moments when you want to give up.
‘Why’ isn’t only for entrepreneurs; it’s always been a high priority item to me personally and should be embedded in every company’s culture.
But finding the ‘why’ isn’t exactly a popular pastime; in fact, for many it’s positively uncomfortable.
Of course, many of the things that are good for us are uncomfortable.
‘Why’ not only provides purpose and meaning, it also spurs innovation, solutions and closure.
So, the next time you are faced with a need for motivation/inspiration or a problem/challenge/angst/confusion find your way past by first identifying the ‘why’.
You may need to go no farther.
Flickr image credit: steve p2008
Monday, September 15th, 2014
Since 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.
Tuesday, July 8th, 2014
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
Tuesday, June 24th, 2014
There are two types of managers, those who believe that productivity improves through constant oversight and those who don’t.
And for those who do there is an abundance of new technology that fosters increased worker surveillance.
Until now it’s been more of a philosophical argument, but new research is working to quantify it and so far it seems that less is more.
Trusting workers to help each other, be creative, solve problems and find better ways of doing things has typically been the province of knowledge workers.
But Ethan S. Bernstein, an assistant professor at the Harvard Business School, did his initial research with workers at a giant factory in China and the results were surprising.
The small amount of privacy the experiment created yielded a 10-15% percent productivity hike against other workers in the same factory.
“Creating zones of privacy may, under certain conditions, increase performance.” The right degree of privacy, he added, can foster “productive deviance, localized experimentation, distraction avoidance and continuous improvement.”
Bernstein’s research will only get more interesting and relevant to higher-level employees.
Since the factory project, Mr. Bernstein has conducted research studying the privacy-transparency trade-off in other settings, including biotechnology labs and service businesses. That research is not yet published, but Mr. Bernstein said the results so far point to “larger effects” than in manufacturing.
This isn’t rocket science to good managers, but it’s always nice to have your methods validated by Harvard research.
What it boils down to is that you should give your people all the information, authority and support necessary to do their job well and then get the hell out of the way and let them do it—often more efficiently and with better results than expected.
Flickr image credit: laurawashere95
Thursday, March 6th, 2014
Many founders talk about the desire to build truly open cultures.
Then they start adding exceptions and caveats, especially when it comes to compensation—whether dollars or stock.
Sharing compensation information is usually discouraged and discussing stock options or salary may even be considered a firing offense.
While there are startups opting for openness, what happens over time?
Based on Whole Foods nearly 30-year trial salary openness can work.
Whole Foods co-CEO John Mackey introduced the policy in 1986, just six years after he co-founded the company. In the book, he explains that his initial goal was to help employees understand why some people were paid more than others. If workers understood what types of performance and achievement earned certain people more money, he figured, perhaps they would be more motivated and successful, too.
It takes solid planning and a culture with a real commitment to transparency and developing people over time to make it work.
By making it’s financials, including profitability, available to all it employees, so they could see not just what everyone was paid, but where else the money went, Whole Foods created a true feeling of ownership along with the knowledge that promotion was available and the support to make it happen.
The company’s openness even drew recognition from the Federal Government.
In fact, in the late 1990s the widespread availability of so much detailed financial data led the SEC to classify all of the company’s 6,500 employees as “insiders,”
Building openness into your culture requires support and full buy-in from your senior staff.
And that means being willing to pass on people who have the right skills, but not the right attitude.
Flickr image credit: Paul Downey
Friday, June 21st, 2013
A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here
A few days ago I was asked if it was OK to warn a startup team by email that it was doubtful funding would happen before the money ran out.
My response was ‘absolutely not!’
The final word from a variety of experts is that it is not OK to fire, lay-off, break up, ask for a divorce, ground kids or any similar action by email, text or even by phone.
These are all subjects that must be done face-to-face for a variety of reasons, but all falling under one of the falling categories,
The list goes on, but I’m sure you get it.
That said, I thought I’d repost a slightly edited how-to for dealing with bad news that is as applicable today as it was when hard-copy memos, wires, carrier pigeons and smoke signals were the normal modes of communication.
Bosses know when they’re in trouble (duh), but they still seem to think that their people don’t know the facts (double duh).
Too many bosses, from startups through Fortune 100 and everything in-between, clamp down, say nothing, run scared, freeze, bluster, or some combination thereof and do it by email and/or text.
The result is management by rumor, which once started never ends.
The way to deal with bad news is directly, openly and honestly.
Even when the subject is no funding or lay-offs this axiom applies; in fact, it’s the only approach that gives your company or your reputation a chance of emerging intact.
Here are six basics to keep uppermost in your mind—whether they are comfortable or not.
- Bad news must be communicated in person—just like good news.
- Employees aren’t dumb—they know something bad is happening—and if they’re not explicitly told what it is, rumors will make any difficulty a catastrophe and a catastrophe a death knell.
- Management must be explicit about the ultimate potential consequences. In a situation that’s unfolding, such as a funding or economic crisis, when no one knows the ultimate outcome or can predict when it will change, frequent updates are effective.
- Everyone hates uncertainty, which is all you may have to offer, so analyzing and then explaining the worst case outcome as well as what you’re doing to counter it and how your people can contribute goes a long way to stabilizing the team and gaining their buy-in to your plans.
- Successful plans are dependent on how well they are communicated, which is what determines employee buy-in; if you choose the delusional approach of minimizing the situation then you should expect minimal results and maximum disruption.
- Share the outcome of your thinking, whatever it is—layoffs, plant closures, project cancellations, etc. If you don’t trust your people with the information your problems are far more serious than you realize.
Any solution to a crisis must be seen as fair, reasonable, and businesslike. If management’s reaction is illogical, petty, slipshod, unrealistic, draconian or any combination of these, then it’s likely employees will conclude the ship is about to sink and leap off.
People understand that difficult situations demand difficult remedies, and they appreciate that management must at times step up to harsh challenges. But if solutions are irrationally or whimsically applied, they become a demoralizing factor, increasing the difficulties that people encounter in trying to do their jobs.
Finally, you should always attempt to find a positive note to leave with employees. Everyone already knows that things are bad; it’s your job to find a potentially favorable course of action.
Just remember, you hired your people for their brains, so don’t expect them to suddenly go dumb. Employees easily spot propaganda masquerading as a solution.
Predicting an impossibly favorable outcome not only demeans your reputation, but also could affect your future entrepreneurial efforts.
Image credit: HikingArtist
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