Monday, April 4th, 2016
It’s amazing to me, but looking back over the last decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.
I wrote this back in 2007. When I first started working I learned that a quarter was three months and that the companies I worked for, and later with, did everything based on that quarter. I thought it was stupid, because very little of real significance can be accomplished in just three months. Over the years I saw how much damage Wall Street’s short-term attitude did to companies, people and the economy. I certainly don’t claim any expertise, but recognition of that damage has really come to the fore, first BlackRock CEO Larry Fink and now Hillary Clinton. Read other Golden Oldies here.
Although I haven’t read The Taboos of Leadership, it supposedly “reveals the rarely discussed realities of leadership–the secrets that leaders just cannot admit to publicly for fear of losing power, self-respect, or even their jobs.” However, the author, Dr. Anthony F. Smith, makes a cogent observation when he says in an essay,
Well, unfortunately, there are no magic pills to becoming a Leader, just like there are no magic pills to losing weight, getting fit, making a million dollars, or shaving 10 strokes off your handicap in golf. Simply stated, becoming a Leader occurs when one exercises the arduous process of effective Leadership, day after day, week after week, and year after year….
What I have observed in my years of studying leaders, is that very few have all the gifts and talents themselves; what many of the great ones do have, is a self awareness of what talents they do have, and the self confidence and security to surround themselves with others who can compliment them, and compensate for their own lack of skills.
I have no idea whether Dr. Smith has all the answers, but he sure defines the biggest problem (red) and (unfortunately) the least likely solution (blue) in the second paragraph.
I don’t believe that any person has all the talents, skills, gifts, abilities, etc., to successfully lead across the board in today’s ultra complex world and even if they do have the awareness and self confidence fewer and fewer have the external security to hire the right people to compensate—by external, I mean enough secure time to create a team that can DO it.
We live in a ridiculous world where Boards, in fear of investors, give CEOs six months to turn around multi-billion dollar companies that have been drifting, if not actually plunging, downwards for years; expect them to do it no matter what the situation or economy; where the slightest miss is considered grounds for firing; and long-term is a quarter.
Even when Wall Street recognizes the need to change a deeply entrenched culture they still demand that it be done in a quarter and analysts not only want perfect visions of future direction, but also exact execution plans, preferably grounded in heavy cost-cutting (read layoffs).
So, like the politicians who once elected spend much of their time fund-raising, CEOs and the senior managers below them spend much of their time focused on immediate numbers, which they must produce quarterly by hook or, more and more frequently, by crook.
Under these circumstances, the real practice of leadership becomes a very iffy proposition.
Thursday, March 10th, 2016
I’ve been around startups since the late 1970s; long before dot com and software took over the spotlight.
And what I learned about VCs back then was different from VCs now.
Back them, most VCs were guys who had started or helped start companies, with strong operational, not just technical, and strategic background.
Sad to say, most VCs with under 25 years experience often don’t know what they’re doing, because they have never created/built a company, while the rest are just bankers masquerading as VCs following “sure bets.”
Granted, VCs have always had much in common with lemmings, preferring to fund “me, too,” companies, as opposed to earth-shattering, high risk products/services that actually moved society in new directions.
From my perch back then on the edge of the VC ecosystem I watched as the “names on the door” retired and were replaced by Wall Street wunderkinds, whose only skill was manipulating money.
What didn’t change was their lemming-like, follow-the-leader investment strategy.
Things haven’t improved much.
While more partners and “names on the door” have operational experience, the investment ecosystem is more closed-door incestuous than ever before.
So unless you are one of the mostly white, mostly male, right school, strongly connected, entitled few, start your company with a bootstrap mentality from the beginning — not as a fallback contingency.
Waiting for funding is like asking for permission.
Flickr image credit: billsoPHOTO
Friday, December 4th, 2015
Ajo sent me an email about another conference he attended yesterday and I thought I would share it with you.
I attended the Future of Money and Technology Conference hosted by Brian Zisk .
I was invited to the conference thanks to an introduction by Dave Park who runs recombinantinc.com. Recombinant is interesting by itself because they can synthesize new music from a sample of old melodies from an artist using an AI algorithms.
The conference has a great attendance with many high powered people such as Jon Jeswald from the Federal Reserve, Sheel Mohnot from 500 startups and Arvind Purushotham from Citi Ventures.
One interesting line of development has been the use of Bitcoin technologies for DRM.
One of the issues that the music industry faces is that it’s hard to track the owner of the rights to a piece of music – through divorces, inheritance, etc. This is a big mess because even though people want to pay for the music they play, the owners of the rights often don’t get the money.
So, many startups are working on different aspects of the bitcoin type blockchain technology to keep track of who owns these rights.
There are several companies that have similar but slightly different applications of the same general idea of keeping track of rights to digital assets using the blockchain algorithms for other types of assets. Blockstack.io headed by Peter Shiau was recently acquired by Digital Asset based on its success in using this technology in enterprise software.
Interesting world we live in.
Fascinating stuff, Fintech; one of the few areas that no matter how much I read I don’t understand — starting with bitcoin.
Thursday, September 3rd, 2015
It’s funny how things we read decades after a minor happening will bring that memory to the fore.
In the 1990s, when I was a tech recruiter and the original net was booming with startups, a young man asked me if I worked with startups, because he wanted to join one. I told him that startups had been my main market since the late Seventies (when I went to work for MRI).
He scornfully informed me that was impossible, since there weren’t any startups before the Internet and he wanted a recruiter who understood what he was looking for.
I was grateful, since I didn’t have any clients interested in his combination of arrogance and ignorance.
That memory was triggered when I read The VCs of BC and learned just how wrong he was — entrepreneurs were alive and well 4000 years ago; I think anyone who toils anywhere in the startup ecosystem will also enjoy reading it.
These letters survive as part of a stunning, nearly miraculous window into ancient economics. (…) during one 30-year period — between 1890 and 1860 B.C. — for one community in the town of Kanesh, we know a great deal.
And the parallels of today, including a vibrant entrepreneurial approach complete with venture capital, Wall Street-style players, esoteric financial instruments and risky deals.
The traders of Kanesh used financial tools that were remarkably similar to checks, bonds and joint-stock companies. They had something like venture-capital firms that created diversified portfolios of risky trades. And they even had structured financial products: People would buy outstanding debt, sell it to others and use it as collateral to finance new businesses.
There are a lot more fun details and interesting stories — the kind that are great to share over a few beers or a bottle of wine.
Hopefully it will encourage you to enjoy a bit of downtime — you’ll be more creative and productive for doing it.
Flickr image credit: Carole Raddato
Tuesday, December 16th, 2014
I’ve written many times describing the value of benefits and their effects on worker productivity.
Last year we looked at Amazon as a poster child for treating lower-level employees as expendable, replaceable ciphers.
However, some companies are eschewing Wall Street’s demand for short-term profit in favor of treating their employees and the environment better in the name of long-term profits and sustainability.
… a new type of business called a benefit corporation, which means its mission is to consider the needs of society and the environment, in addition to profit. There are 27 states that have passed legislation allowing companies to incorporate as benefit corporations…
Companies not located in one of those 27 states can apply as Certified B-Corporations.
The companies pledge to think about people and the planet in addition to profit, and an outside nonprofit inspects them and makes sure they’re doing so.
The premise is more back to the future than original — it’s called “stakeholder capitalism” and dates back more than 60 years.
Economists like Robert Reich, the one-time Labor Secretary, wondered if the Market Basket saga was a sign that the country was “witnessing the beginning of a return to a form of capitalism that was taken for granted in America sixty years ago.” He wrote that he hoped it was a return to “stakeholder capitalism,” in which employees and customers are also part of a company’s decision-making, as opposed to the “shareholder capitalism” of the last few decades that has focused on maximizing shareholder value.
While it’s Wall Street’s short-term, investor-as-god thinking that’s behind the minimization of workers and customers, it’s those same people, i.e., workers and customers, who are driving the change in attitude — along with multiple studies that prove treating all stakeholders well pays off.
More proof that, as I and others have said multiple times, business is like a three-legged stool — customers, investors and employees. When one or two legs are wildly out-of-whack with the third the stool falls over.
Maybe not immediately, but sooner than you think.
Wall Street and investors don’t care; they just go their merry, destructive way.
Flickr image credit: Gábor Kovács
Wednesday, August 20th, 2014
Tech currently has a high profile for arrogance, not to mention chauvinism and bigotry, with Google, Apple and Facebook are its most public whipping boys.
However, their comeuppance came with the intense media focus that will likely force them to at least put some effort into cleaning up their respective acts.
Not like their psychological brethren on Wall Street.
And while tech has a modicum of excuse that stems from age—its frat house culture has gotten worse as entrepreneurs have gotten younger—proven by the numbers, i.e., more women entered tech in the 1980s than do today—Wall Street has none.
The investment banking world has always been a bastion of white, male elitists; and hardcore harassment—an old boys group that didn’t give a damn what anybody thought.
Arrogance has been synonymous with investment bankers for decades, so seeing it kicked in the teeth by upstart tech arrogance was exhilarating.
Google’s Larry Page created his own acquisition yard stick,
The toothbrush test: Is it something you will use once or twice a day, and does it make your life better? …The esoteric criterion shuns traditional measures of valuing a company like earnings, discounted cash flow or even sales.
Page, for example, is looking for “usefulness above profitability, and long-term potential over near-term financial gain.”
Potential and usefulness are esoteric concepts to most bankers and “long-term” isn’t even in their vocabulary.
Bankers are fine with the hard stuff revolving around money, but are often useless on human side.
But often, when big tech companies are looking to grow through acquisitions, it is the culture and vision, not the earnings and revenue, that are of paramount importance.
Of course, investment banks need to lose a lot for it to really start mattering, but it looks like they are.
The acquiring company did not use an investment bank in 69 percent of American technology acquisitions worth more than $100 million this year, according to Dealogic.
All I can say is that it couldn’t happen to a more deserving group of guys—their comeuppance was a long time coming and it’s hitting the only place they might notice—their bank balance.
Flickr image credit: Chris Hartman
Friday, January 24th, 2014
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, because I want you to read the longer one at the link.
In an opinion piece, Sam Polk, a former hedge-fund trader and current founder of the nonprofit Groceryships, talks about wealth addiction.
Wealth addiction was described in 1980 by the late sociologist and playwright Philip Slater, but Polk speaks about it from a been there/done that perspective.
I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.
Read the post, then look in the mirror and ask yourself if you are or are getting addicted.
Wealth addiction isn’t a case of wanting to get rich; it is a case of nothing is enough.
And it applies to more than money—from followers to titles to trophy relationships and everything in-between.
Image credit: HikingArtist
Tuesday, December 10th, 2013
What’s wrong with our so-called leaders?
I finally figured it out.
They live in an alternate reality.
Not all of them, but too many.
And I don’t have to go to Washington (DC) to see them in action.
I can stay home in (southwest) Washington (State)—Clark County, to be exact (nowhere near Seattle.)
We have a county commissioner named David Madore who says he doesn’t know how someone can have a “meaningful” life on $50,000 a year.
First you have to understand Clark County reality.
According to the American FactFinder, a report from the U.S. Census Bureau, data from 2007-2011 indicates the median earning for a single worker in Clark County is $32,337.
Scott Bailey, regional labor economist for the Washington state Employment Security Department, says if you take out all of the seasonal workers from that number, it jumps to about $46,000 or $47,000. The median for men being $51,502 per year, and $40,023 per year for women.
Bailey says more than half the individuals in the county make less than $51,556.
Therefore, substantially more than half of us don’t live meaningful lives.
(New York City, at a median $50,895, is slightly lower, but with a far higher number of peole whose lives aren’t meaningful and those poor folks don’t even have someone to tell them.)
Obviously, Madore lives in an alternate reality.
As do most politicians, corporate chieftains, a good deal of Silicon Valley, Wall Street and others.
Flickr image credit: Jim Champion
Wednesday, September 25th, 2013
There is change afoot.
Workers today crave more from work than just a paycheck.
They want to work for, or start, companies that contribute to the greater social good, from encouragement and time to volunteer and sanctioned participation and support in various forms of fundraising to companies who (gasp) give up some profit in the name of “doing good by doing well.”
Candidates and customers flock to companies like Toms Shoes and Warby Parker that guarantee to donate an item for every item sold.
There was a time that companies seemed to give more of a damn about their communities and employees.
Yes it was more paternalistic and I’m not suggesting a return to that, but the enshrinement of greed in the name of profit goes deeper.
Milton Friedman, his cronies and a media frenzy happened.
In 1970, Nobel Prize-winning economist Milton Friedman wrote an article in the New York Times Magazine in which he famously argued that the only “social responsibility of business is to increase its profits.”
And as that mantra took hold so did the attitude that the only stakeholders that mattered were shareholders.
The belief that shareholders come first is not codified by statute. Rather, it was introduced by a handful of free-market academics in the 1970s and then picked up by business leaders and the media until it became an oft-repeated mantra in the corporate world.
Which, in turn, entrenched Wall Street’s quarter-long, short-term thinking and gave rise to the Carl Icahns of the investing world.
Friedman’s statement gave tacit approval and wide latitude to corporate raiders, leveraged buy-out firms and others to do literally anything in the name of profit and investor returns.
Lynn Stout, a professor of corporate and business law at Cornell University Law School, said these legal theories appealed to the media — the idea that shareholders were king simplified the confusing debate over the purpose of a corporation.
And we, i.e., society, accepted that attitude for half a century.
The results can be seen every day and they aren’t pretty—unless you’re part of the so-called 1% (or even the top 25%).
While there is change afoot, it begs the question—is it too little too late?
Flickr image credit: 401(K) 2013
Tuesday, July 16th, 2013
I’ve written many times about the importance of breaking down both horizontal and vertical silos (for more click the silo tag), but I don’t believe it can be done with an edict—even if that edict comes from Steve Ballmer.
This is especially true at a company like Microsoft, where the silos were intentionally built decades ago as part of the corporate structure.
Vertical silos, by nature, create, at the least, rivalry, but, more often, an “us against them” mentality within each silo.
For thousands of Microsofties, that’s the only cultural world they have known; many of them grew up in it, both in terms of years and promotions.
Changing culture is recognized as the most difficult organizational change any company, no matter the size, can undertake.
And one of the greatest error’s a CEO makes is thinking that all he needs on board is his senior staff the rest of people will fall in line.
For most companies, let alone one the size of Microsoft, terminating managers and workers that don’t fall in line isn’t even an option, since there is no way to replace them.
Yet having large numbers of your workforce on different cultural pages is a recipe for disaster.
The results of Ballmer’s changes will unfold over the next couple of years—in spite of Wall Street’s quarterly focus.
Changing culture is tremendously difficult; Charlie Brown didn’t pull it off at AT&T; Lou Gerstner said it was the most difficult part of turning around IBM.
Do you think Ballmer will succeed?
Flickr image credit: Tobyotter
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