Hearts was one of my favorite card games in college.  I remember staying up deep into the night regularly with my roommates playing it.  I recently taught our kids how to play and have been playing with them more regularly of late…and I was reminded how much I enjoy the game.  No metaphor or simile is perfect, and this one isn’t either, but it occurred to me the other night that being a CEO is a little bit like playing a game of Hearts.

First and foremost, you have to play the hand that you’re dealt.  No matter how proactive you want to be about running your own agenda, things happen around you — with your people, your customers, your competitors, and you have to figure out how to react to situations.

Second, you usually get to pass 3 cards to another player, but sometimes you have a “hold” hand.  Even within a situation you have to react to, sometimes you can mute the edges of it before you actually react (but occasionally, you can’t change the situation at all).  Consider the difference between a customer telling you they are about to churn (maybe you can still save them on price, terms, feature sets) vs. sending you a termination notice after they have signed with a competitor.

Next, when playing the hand, there are times when you want to get the lead so you can control the flow of the game, and there are times when you want to avoid getting the lead so you just hand out point cards to others.

Also in the course of the play of a hand, you want to keep close track of what the other players have and don’t have in their hands, particularly so you can avoid the Queen of Spades and so you can try hard to capture the Jack of Diamonds.  Day in and day out at work, you need understand as deeply as possible what your competitors and partners are up to…and you always want to have an eye on the biggest opportunity in front of the company — a new prospect you’re trying to win over, for example — and the biggest risk point you’re trying to avoid.

Finally, you have to recognize that any given hand is one out of many in a game, just like every day, or week, or quarter, is just one piece of your overall stewardship of your company over the long haul.  And of course the simple act of being an entrepreneur is in and of itself analogous to Shooting the Moon.  It’s almost impossible to do, and you have to both have the right cards AND play the hand extremely well.  But when you do, the reward is spectacular!

(That wasn’t too much of a stretch, was it?)

Another CEO with whom I trade notes on the craft of running a company asked me this question the other day, and I thought the answer would make a for a good blog post.  Any product team (or other kind of team) who has Agile practices, does some kind of a Daily Standup (DSU) meeting in which each team member reviews progress against goals for a given period and highlights issues where he or she is blocked and needs help.  I wrote about Return Path‘s journey to implement Agile across the whole company last year here.

My meeting routines have been shaped over the years but the current versions are largely influenced by Lencioni’s Death by Meeting, which is worth a read. My blog post isn’t all that helpful about this specific subject, but it’s here.  Anyway…here’s what I wrote to my friend:

I love our DSU. We do it at 11 eastern because we have people in Colorado and California on it. We just make the time. We block 15 minutes, but most people block the full :30 and sometimes a small sub group will need to stay late to cover something in more depth (we call that the after-party or the 16th minute). If I had everyone in the same time zone, I would do it at 8:30 or 9:00. 

We usually just “run the calendar” at the DSU. What’s everyone doing today, anything notable from yesterday, anything people need broader quick hit updates on, especially things that are cross-team. It’s great daily connectivity. We have tried to run the exec team like a true agile team in the past with cards and demos, etc., but that didn’t really work other than the occasional time when all of us were working on something together (e.g. Annual budgeting and planning), since a lot of our work as leaders is down, not across. 

We do the meeting Tuesday through Friday. We probably cancel 1 a week on average if too many people have to miss it. People know it’s a priority and not to schedule over it unless unavoidable, but sometimes travel, client conflicts, etc. invade. 

Mondays we still do our Weekly Tactical for an hour. I have a whole standing agenda format for that (as well as our Monthly Strategies for 2-3 hours and Quarterly Offsites for a couple days). I find that the Weekly Tactical actually goes much better with the four DSUs because we don’t have to spend time checking in on the basics…so we are much more effective in using that time on bigger items like sales forecast and recruiting review, progress against major initiatives and OKRs, having other people come in and present things to us, etc. 

I’ve said this for years, but as I sit on the train commuting into work after a week off relaxing with my family for my Dad’s 75th birthday (or as he prefers to call it, the 46th anniversary of his 29th birthday), I feel particularly inclined to write it up!

I love my job, so I almost never mind going to work. But I also love being on vacation and traveling with my family and try to do as much of it as I can. Years ago before we had kids and became tethered to school and sports schedules, we used to take at least one full two week vacation, completely unplugged, at least once a year. I miss that!

The problem with any vacation longer than a couple days off (which is NOT a vacation) is that it can take several days to unwind, decompress from work and the small stresses of every day life, and unplug, meaning not checking email, reading blogs or the newspaper every morning, and not fidgeting every time you’re more than 10 feet away from your smartphone. Then on the other end of the trip, trying to triage email the day before you go back to work and generally gearing up for reentry into the fast lane also consume a bunch of cycles — and for me, I’ve never been able to sleep well the night before the first day of anything, so it means starting back with diminished relaxation even before walking through the office door.

So all in, that means the true part of a week-long, meaning 9-day vacation (including two weekends), is about 4-5 days.

That’s not bad. But I think you have all that same overhead associated with a two week vacation as well…so a two week vacation of 16 days leaves you with 11-12 days. Mathematically, if not psychically, more than twice as good as the standard one-weeker.

I’m inclined to start doing that once a year again, schedules be damned!

As a side note, two things I also used to do on vacation, even a one-weeker, that I am regretting not doing this time are (a) actually turning my work email account off my phone and leaving it off until the Monday morning after vacation so there’s no cheating on a couple minutes of email here or there, and (b) making sure my schedule is almost completely open that first Monday back to catch up. Next time, those two features will return prominently…along with that full second week off.

Oh, and if anyone says a Startup CEO can’t take a long unplugged vacation…I call bullshit. You may not be able to do it any two weeks of the year with no notice, but plan ahead, leave things in good order, leave someone in charge (or don’t, but be deliberate about that), and let them know where to call you in case the building burns down. It will be fine when you get back, and healthy for tour team to have a break from you as well.

A friend of mine just left his job as CEO of a growth stage company to become CFO of a Fortune 500 company.  That’s a big deal…and also a big change.  When I was talking to him about the move, he said the following to me:

Some executive teams are like baseball teams.  You play shortstop, and you bat 8th.  That’s just what you do.  The team needs one of those because the sport is structured that way.  The CEO of my new company likes to run his executive team as a basketball team.  Everyone has a position, but everyone also has to be capable of doing everything on the court well – shooting, blocking, rebounding, passing – and is expected to go after the ball any time it’s nearby.

It’s one thing to say that of a Fortune 200 company, because you have the luxury of doing anything you want in terms of staffing at those levels.  My friend, who is financially oriented for sure, can be CFO of a company of that size because they probably have a strong Chief Accounting Officer.  But how does that dialog apply to startups?  Should you run a baseball team?  A basketball team?  Does it matter?  Can you switch between the two?

My take is that early stage startups need to be more like basketball teams.  You just don’t have enough people to get everything done unless you all take things off each others’ plates.  And you certainly don’t want to be siloed early on in a company’s life as you’re trying to find product-market fit and get those first customers on board.  Your CTO needs to be in front of customers in sales pitches.  Your CFO needs to run customer service and other staff functions.  Everyone needs to pitch in on strategy.

As companies grow, I think they need to become more like baseball teams because larger organizations require levels of specialized knowledge that you don’t often find in startup leaders (though you certainly can, especially as the world becomes more startup-oriented) if they are to survive and scale.  You need a CFO capable of putting in place more complex systems and controls.  You need a head of Sales who knows how to manage a more disciplined pipeline and sales power-driven machine, not just someone who is a fantastic closer of big deals.

At the larger sizes (well below the Fortune 500 level), you can afford to have more of a basketball team again.  You want people with areas of specialization, but you also just want great athletes, and you can have some of the more technical expertise working at the next couple levels down.

There are two challenges this metaphor raises for scaling businesses.  The first one is making your baseball team AS MUCH LIKE A BASKETBALL TEAM AS POSSIBLE when you’re in that mode.  Why?  I love baseball more than most as a sport, but executive teams of companies at any size need strategic thinkers and interdisciplinary, cross-functional work as much as possible.

And that leads to my second challenge with the metaphor, which is that you don’t want to swap out your executive team multiple times in a rapidly scaling business if you don’t have to.  So this begs the question – can you turn a great specialist into a great generalist and vice versa?  We have gone through transitions this past few years at Return Path from a functional structure to a business unit structure and back (sort of).  My take in the end is that it’s easier to turn a specialist into a generalist than to turn a generalist into a specialist.  You can interview for this.  There are great specialists in every discipline who are capable of being generalist thinkers.  But it’s really tough to take someone without proper training and experience in some disciplines and make them a specialist.  Not impossible (although in some disciplines it actually is impossible – think about General Counsel), but difficult.

Everything is Data, Part II – Get Those Expenses In

My friend and former colleague Angela Baldonero (used to run our People Team at Return Path, now is COO of super cool startup Procurify), used to say about her job as head of HR, “Everything is Data.”  She guest blogged about that principle on OnlyOnce years ago here , and she particularly cited this theory when talking about the recruiting and hiring process.

I’ve thought about this principle a lot over the years, and I’ve occasionally come up with other examples where I think peripheral data can inform whether or not an employee will succeed, at least in my world.  I don’t know how many of these can be caught in an interview process, but that’s worth thinking about.  Here’s one for today’s post:  I’ve noticed a very high correlation over the years between poor performance and being late turning in expenses.

I know, it sounds silly.  But think about it.  Most of the work we do involves some level of being organized, being on time, prioritizing work and working efficiently, and caring about money (whether the company’s money or our own money).  Someone who can’t bother to fill out a quick expense report following a business trip is demonstrating an absence of all of those traits.  The most glaring example of it we ever had here involved a fairly senior sales executive years ago who was delinquent in his expenses to the tune of over $40,000.  That’s right, $40,000.  It was so bad that our auditors made us footnote it in our annual audit.  We begged him to turn in his expenses.  We even offered to have him send a pile of all the receipts to us and have someone in Accounting help him out.  But he was always too busy, made too many excuses for why he couldn’t get them done.  I think it ended up taking us firing him for him to actually clean them up and get paid back.  Why did we fire him?  He was ineffective in his role, unresponsive to colleagues, unable to prioritize his work, and sloppy in his deliverables.

By the way, the opposite is not true – someone who is incredibly punctual about getting expenses in is not guaranteed to be a high performer, although they are usually guaranteed to at least be organized (which for some roles may be a critical success factor).

I suppose ultimately this is just another example of Broken Windows, which I blogged about in two different places, here and here.

Book Short – Blink part III – Undo?

I just finished reading Michael Lewis’s The Undoing Project: A Friendship That Changed Our Minds, and honestly, I wish I could hit Life’s Undo button and reclaim those hours.  I love Michael Lewis, and he’s one of those authors where if he writes it, I will read it.  But this one wasn’t really worth it for me.

Having said that, I think if you haven’t already read both Malcolm Gladwell’s Blink (review, buy) and Daniel Kahneman’s Thinking, Fast and Slow (review, buy), then it might be worth it.  But having read those two books, The Undoing Project had too much overlap and not enough “underlap” (to quote my friend Tom Bartel) – that is, not enough new stuff of substance for me.  The book mostly went into the personal relationship between two academic thinkers, Daniel Kahneman and Amos Tversky.  It also touched on some of the highlights of their work, which, while coming out of the field of psychology, won them a Nobel prize in Economics for illuminating some of the underlying mechanics of how we make decisions.

The two most interesting pieces of their work to me, which are related in the book, are:

First, that human decision-making is incredibly nuanced and complex, and that at least 25% of the time, the transitive property doesn’t apply.  For example, I may prefer coffee to tea, and I may prefer tea to hot chocolate, but that doesn’t necessarily mean I prefer coffee to hot chocolate.

From the book, “When faced with complex multidimensional alternatives, such as job offers, gambles or [political] candidates, it is extremely difficult to utilize properly all the available information.” It wasn’t that people actually preferred A to B and B to C and then turned around and preferred C to A. It was that it was sometimes very hard to understand the differences. Amos didn’t think that the real world was as likely to fool people into contradicting themselves as were the experiments he had designed.  And the choice created its own context: Different features might assume greater prominence in the mind when the coffee was being compared to tea (caffeine) than when it was being compared to hot chocolate (sugar). And what was true of drinks might also be true of people, and ideas, and emotions. The idea was interesting: When people make decisions, they are also making judgments about similarity, between some object in the real world and what they ideally want. They make these judgments by, in effect, counting up the features they notice. And as the noticeability of features can be manipulated by the way they are highlighted, the sense of how similar two things are might also be manipulated.”

Second, what Kahneman and Tversky called Prospect Theory, which is basically that humans are more motivated by the fear of loss as opposed to the greed of gain.  I’ve written about the “Fear/Greed Continuum” of my former boss from many years ago before.  I’m not sure he knew about Kahneman and Tversky’s work when he came up with that construct, and I certainly didn’t know about it when I first blogged about it years ago.  Do this experiment – ask someone both of these questions:  Would you rather be handed $500 or have a 50% chance of winning $1,000 and a 50% of getting nothing?  Then, Would you rather hand me $500 or have a 50% chance of owing me $1,000 and a 50% chance of owing me nothing?  Most of the time, the answers are not the same.

For fun, I tried this out on my kids and re-proved Prospect Theory, just in case anyone was worried about it.

Anyway, bottom line on this book – read it if you haven’t ready those other two books, skip it if you have, maybe skim it if you’ve read one of them!

Stamina

A couple years ago I had breakfast with Nick Mehta, my friend who runs the incredibly exciting Gainsight.  I think at the time I had been running Return Path for 15 years, and he was probably 5 years into his journey.  He said he wanted to run his company forever, and he asked me how I had developed the stamina to keep running Return Path as long as I had.  My off the cuff answer had three points, although writing them down afterwards yielded a couple more.  For entrepreneurs who love what they do, love running and building companies for the long haul, this is an important topic.  CEOs have to change their thinking as their businesses scale, or they will self implode!  What are five things you need to get comfortable with as your business scales in order to be in it for the long haul?

Get more comfortable with not every employee being a rock star.  When you have 5, 10, or even 100 employees, you need everyone to be firing on all cylinders at all times.  More than that, you want to hire “rock stars,” people you can see growing rapidly with their jobs.  As organizations get larger, though, not only is it impossible to staff them that way, it’s not desirable either.  One of the most influential books I’ve read on hiring over the years, Topgrading (review, buy), talks about only hiring A players, but hiring three kinds of A players:  people who are excellent at the job you’re hiring them for and may never grow into a new role; people who are excellent at the job you’re hiring them for and who are likely promotable over time; and people who are excellent at the job you’re hiring them for and are executive material.  Startup CEOs tend to focus on the third kind of hire for everyone.  Scaling CEOs recognize that you need a balance of all three once you stop growing 100% year over year, or even 50%.

Get more comfortable with people quitting.  This has been a tough one for me over the years, although I developed it out of necessity first (there’s only so much you can take personally!), with a philosophy to follow.  I used to take every single employee departure personally.  You are leaving MY company?  What’s wrong with you?  What’s wrong with me or the company?  Can I make a diving catch to save you from leaving?  The reality here about why people leave companies may be 10% about how competitive the war for talent has gotten in technology.  But it’s also 40% from each of two other factors.  First, it’s 40% that, as your organization grows and scales, it may not be the right environment for any given employee any more. Our first employee resigned because we had “gotten too big” when we had about 25 employees.  That happens a bit more these days!  But different people find a sweet spot in different sizes of company.  Second, it’s 40% that sometimes the right next step for someone to take in their career isn’t on offer at your company.  You may not have the right job for the person’s career trajectory if it’s already filled, with the incumbent unlikely to leave.  You may not have the right job for the person’s career trajectory at all if it’s highly specialized.  Or for employees earlier in their careers, it may just be valuable for them to work at another company so they can see the differences between two different types of workplace.

Get more comfortable with a whole bunch of entry level, younger employees who may be great people but won’t necessarily be your friends.  I started Return Path in my late 20s, and I was right at our average age.  It felt like everyone in the company was a peer in that sense, and that I could be friends with all of them.  Now I’m in my (still) mid-40s and am well beyond our average age, despite my high level of energy and of course my youthful appearance.  There was a time several years ago where I’d say things to myself or to someone on my team like “how come no one wants to hang out with me after work any more,” or “wow do I feel out of place at this happy hour – it’s really loud here.”  That’s all ok and normal.  Participate in office social events whenever you want to and as much as you can, but don’t expect to be the last man or woman standing at the end of the evening, and don’t expect that everyone in the room will want to have a drink with you.  No matter how approachable and informal you are, you’re still the CEO, and that office and title are bound to intimidate some people.

Get more comfortable with shifts in culture and differentiate them in your mind from shifts in values.  I wrote a lot about this a couple years ago in The Difference Between Culture and Values . To paraphrase from that post, an organization’s values shouldn’t change over time, but its culture – the expression of those values – necessarily changes with the passage of time and the growth of the company.  The most clear example I can come up with is about the value of transparency and the use case of firing someone.  When you have 10 employees, you can probably just explain to everyone why you fired Joe.  When you have 100 employees, it’s not a great idea to tell everyone why you fired Joe, although you might be ok if everyone finds out.  When you have 1,000 employees, telling everyone why you fired Joe invites a lawsuit from Joe and an expensive settlement on your part, although it’s probably ok and important if Joe’s team or key stakeholders comes to understand what happened.  Does that evolution mean you aren’t being true to your value of transparency?  No.  It just means that WHERE and HOW you are transparent needs to evolve as the company evolves.

• Get more comfortable with process.  This doesn’t mean you have to turn your nimble startup into a bureaucracy.  But a certain amount of process (more over time as the company scales) is a critical enabler of larger groups of people not only getting things done but getting the right things done, and it’s a critical enabler of the company’s financial health.  At some point, you and your CFO can’t go into a room for a day and do the annual budget by yourselves any more.  But you also can’t let each executive set a budget and just add them together.  At some point, you can’t approve every hire yourself.  But you also can’t let people hire whoever they want, and you can’t let some other single person approve all new hires either, since no one really has the cross-company view that you and maybe a couple of other senior executives has.  At some point, the expense policy of “use your best judgment and spend the company’s money as if it was your own” has to fit inside department T&E budgets, or it’s possible that everyone’s individual best judgments won’t be globally optimal and will cause you to miss your numbers.  Allow process to develop organically.  Be appropriately skeptical of things that smell like bureaucracy and challenge them, but don’t disallow them categorically.  Hire people who understand more sophisticated business process, but don’t let them run amok and make sure they are thoughtful about how and where they introduce process to the organization.

I bet there are 50 things that should be on this list, not 5.  Any others out there to share?

I’ve written a lot over the years about Return Path’s Core Values (summary post with lots of links to other posts here).  And I’ve also written and believe strongly that there’s a big difference between values, which are pretty unchanging, and culture, which can evolve a lot over time.  But I had a couple conversations recently that led me to think more philosophically about a company’s values.

The first conversation was at a recent dinner for a group of us working on fundraising for my upcoming 25th reunion from Princeton.  Our guest speaker was a fellow alumnus who I’ve gotten to know and respect tremendously over the years as one of the school’s most senior and influential volunteer leaders.  He was speaking about the touchstones in his life and in all people’s lives — things like their families, their faith, the causes they’re passionate about, and the institutions they’ve been a part of.  I remember this speaker giving a similar set of remarks right after the financial crisis hit in early 2009.  And it got me thinking about the origins of Return Path’s values, which I didn’t create on my own, but which I obviously had a tremendous amount of influence over as founder.  Where did they come from?  Certainly, some came from my parents and grandparents.  Some came from my primary and secondary education and teachers.  Some came from other influences like coaches, mentors, and favorite books.  Although I’m not overly observant, some certainly came from Hebrew school and even more so from a deep reading of the Bible that I undertook about 15 years ago for fun (it was much more fun than I expected!).  Some came from other professional experiences before I started Return Path.  But many of them either came from, or were strongly reinforced by my experience at Princeton.  Of the 15 values we currently articulate, I can directly tie at least seven to Princeton:  helpful, thankful, data-driven, collaborative, results-oriented, people first, and equal in opportunity.  I can also tie some other principles that aren’t stated values at Return Path, but which are clearly part of our culture, such as intellectually curious, appreciative of other people’s points of view, and valuing an interdisciplinary approach to work.

As part of my professional Reboot project, this was a good reminder of some of the values I know I’ve gotten from my college experience as a student and as an alumni, which was helpful both to reinforce their importance in my mind but also to remember some of the specifics around their origins – when and why they became important to me.  I could make a similar list and trade and antecedents of all or at least most of our Company’s values back to one of those primary influences in my life.  Part of Reboot will be thinking through all of these and renewing and refreshing their importance to me.

The second conversation was with a former employee who has gone on to lead another organization.  It led me to the observation I’ve never really thought through before, that as a company, we ourselves have become one of those institutions that imprints its values into the minds of at least some of its employees…and that those values will continue to be perpetuated, incorporated, and improved upon over time in any organization that our employees go on to join, manage part of, or lead.

That’s a powerful construct to keep in mind if you’re a new CEO working on designing and articulating your company’s values for the first time.  You’re not just creating a framework to guide your own organization.  You’re creating the beginning of a legacy that could potentially influence hundreds or thousands of other organizations in the future.

A Sense of Urgency, by John Kotter, is a solid book – not his best, but worth a read and happily short, as most business books should be.  I originally was going to hold off on writing this post until I had more time, but the subject matter alone made me think that was a mistake and that I should write it while it’s fresh in my mind.  <g>

The three tools to fight complacency are the organizing framework for the book — bring the outside in, behave with urgency every day, and turn crises into opportunities — are all good thoughts, and good reminders of basic management principles.  But there were a couple other themes worth calling out even more.

First up, the notion that there is a vicious cycle at play in that urgency begets success which creates complacency which then requires but does not beget urgency.  The theme is really that success can drive arrogance, stability, and scale that requires inward focus — not that success itself is bad, just that it requires an extra level of vigilance to make sure it doesn’t lead to complacency.  I’ve seen this cycle at different times over the years in lots of organizations, and it’s one of the reasons that if you look at the original companies on the Dow Jones Industrials index when it was expanded from 12 to 30 around 100 years ago, only one of them (GE) still exists.

Second, that busy-ness can masquerade as urgency but actually undermines urgency.  A full calendar doesn’t mean you’re behaving with urgency.  Kotter’s example of an Indian manager is great:

If you watch the Indian manager’s behavior carefully and contrast it with the hospital executive’s, you find that the former relentlessly eliminates low-priority items from his appointment diary. He eliminates clutter on the agenda of the meetings that do make it into his diary. The space that is freed up allows him to move faster. It allows him to follow up quickly on the action items that come out of meetings. The time freed up allows him to hold impromptu interactions that push along important projects faster. The open space allows him to talk more about issues he thinks are crucial, about what is happening with customers and competitors, and about the technological change affecting his business.

Finally, Kotter’s theme of “Urgent patience” is a wonderful turn of phrase.  As he says,

It means acting each day with a sense of urgency but having a realistic view of time. It means recognizing that five years may be needed to attain important and ambitious goals, and yet coming to work each day committed to finding every opportunity to make progress toward those goals.

How true is that?  It’s not just that big ships take a long time to turn…it’s that big opportunities take a long time to pursue and get right.  If they didn’t…everyone would do them!  Urgent patience is what allows you to install a bias for action in your team without causing panic and frenzy, which is never productive.

Thanks to my friend Chad Dickerson for recommending this book, a great read as part of Operation Reboot Matt.

Book Short – A Smattering of Good Ideas that further my Reboot path

Ram Charan’s The Attacker’s Advantage was not his best work, but it was worth the read.  It had a cohesive thesis and a smattering of good ideas in it, but it felt much more like the work of a management consultant than some of his better books like Know How (review, buy), Confronting Reality (review, buy), Execution (review, buy), What the CEO Wants You to Know ( buy), and my favorite of his that I refer people to all the time, The Leadership Pipeline (review, buy).

Charan’s framework for success in a crazy world full of digital and other disruption is this:

Perceptual acuity (I am still not 100% sure what this means)

1. A mindset to see opportunity in uncertainty
2. The ability to see a new path forward and commit to it
3. Adeptness in managing the transition to the new path
4. Skill in making the organization steerable and agile

The framework is basically about institutionalizing the ability to spot pending changes in the future landscape based on blips and early trends going on today and then about how to seize opportunity once you’ve spotted the future.  I like that theme.  It matches what I wrote about when I read Mark Penn’s Microtrends (review, buy) years ago.

Charan’s four points are important, but some of the suggestions for structuring an organization around them are very company-specific, and others are too generic (yes, you have to set clear priorities).  His conception of something he calls a Joint Practice Session is a lot like the practices involved in Agile that contemporary startups are more likely to just do in their sleep but which are probably helpful for larger companies.

I read the book over a year ago, and am finally getting around to blogging about it.  That time and distance were helpful in distilling my thinking about Charan’s words.  Probably my biggest series of takeaways from the book – and they fit into my Reboot theme this quarter/year, is to spend a little more time “flying at higher altitude,” as Charan puts it:  talking to people outside the company and asking them what they see and observe from the world around them; reading more and synthesizing takeaways and applicability to work more; expanding my information networks beyond industry and country; creating more routine mechanisms for my team to pool observations about the external landscape and potential impacts on the company; and developing a methodology for reviewing and improving predictions over time.

Bottom line:  like many business books, great to skim and pause for a deep dive at interesting sections, but not the author’s best work.

Brad wrote a fun post a couple years ago about rituals, including one about The Annual Dinner that he and Amy, Fred and Joanne Wilson, and Mariquita and I have been having not quite annually for almost 15 years now.  His most poignant comment (other than that apparently he and I are both getting larger and greyer in sync with each other) is about the power of marking the passage of time together with the same group of people.  We have a similar tradition at Return Path that’s worth noting in the context of my reboot program since it happened a few weeks ago and was part of the reboot cycle.

On the first anniversary of Return Path’s founding, I took my co-founder Jack Sinclair and our first two colleagues, Matt Spielman and Alexis Katzowitz, our to lunch where we shared lessons learned from the past year at the company and predictions for the company in the coming year with each other.  Jack, George Bilbrey, and I continued doing an end-of-year meal tradition with those two conversation topics for over a decade.  The last three years, since Jack left to join Stack Overflow, George and I have continued the tradition on our own.  Although some of our conversation every year isn’t really for public consumption, I’ve always regretted not blogging some highlights of it.  The tradition is a very powerful one of reflection and retrospective, which is deeply ingrained in Return Path’s culture, as a means of continuous improvement through renewal and refreshing.

Last month, we came up with a few good lessons learned that are featuring in my reboot.  Here they are:

• Growth covers up a lot of weaknesses.  While we still have a healthy growth rate as a company, it’s lower than is used to be – as is the case for all companies as they grow and face the law of large numbers.  What’s interesting, though, is how many weaknesses growth can cover up that start getting exposed as growth slows.  Think of it as an analogy to Technical Debt, call it Organizational Debt.  It’s the accumulation of small decisions over time to take an expedient path on a particular item.  It’s the “oh, we’ll throw a body at the problem now and automate the solution later” type thing that never gets automated, then gets compounded when the hired body needs to be replicated, then managed, then turned into a department.  You get the idea.
• Executive playbooks must be applied flexibly.  As is true of many growing companies, we’ve hired a number of outside senior executives over the last few years.  Some have worked out and others haven’t.  One thing we’ve learned, though, is that there’s a bit of a myth sometimes around the “I have the playbook” claim, the same way there’s a myth around hiring sales people who claim “I have a Rolodex” (or whatever the current version of that is).  Every company is unique, even in the same space.  Every situation is unique.  What makes an executive great is the ability to take learnings and experiences from prior roles and companies, both good and bad, and apply them thoughtfully to new situations, not the ability to run the same play over and over again in exactly the same way.  Sure, there are core business processes or systems that can be applied consistently, but most of those don’t require senior executive expertise.
• Know the job your customer is hiring you to do and what the alternatives are.  This is contemporary product management language, but it really rings true.  No matter who you are, no matter what job you do, you have a customer.  That customer is paying you something for a reason.  That money could go somewhere else.  Keeping that reason top of mind (and understanding when and why and how it shifts) is critical to developing the right solutions.

George, thanks for a decade and a half of reflections together (among other things!).