Powerpointless

We tried an experiment last week at a Return Path Board meeting — and not just a regular Board meeting, but our once-a-year, full-day (~9 hour) annual planning session attended in person by all Board members, observers, and executives.  First, a little background.

We have been driving two important trends over the years at our Board meetings:

1. Focusing on the future, not the past.  In the early years of the business, our Board meetings were probably 75% “looking backwards” and 25% “looking forwards.”  They were reporting meetings — reports which were largely in the hands of Board members before the meetings anyway.  They were dull as all get out.  This past meeting was probably 10% “looking backwards” and 90% “looking forwards” and much more interesting as a result.

2. Focusing on creating a more engaging dialog during the meeting by separating out “background reading” vs. “presentation materials.”  We used to do a huge Powerpoint deck as both a handout the week before the meeting and as the in-meeting deck.  Then we separated the two things so people weren’t bored by the Powerpoint.  Then we started making the decks more fun and engaging and “zen.”  This meeting took the trend to its logical conclusion, which was that we sent out a great set of comprehensive reading materials and reports ahead of the meeting, and then…

…we didn’t have a single Powerpoint slide to run the meeting.  We thought that the best way to foster two-way dialog in the meeting was to change the paradigm away from a presentation — the whole concept of “management presenting to the Board” was what we were trying to change, not just what was on the wall.  The result was fantastic.  We had a very long meeting, but one where everyone — management and Board alike — was highly engaged.  No blackberries or iPhones.  Not too many yawns or walkabouts.  It was literally the best Board meeting we’ve had in almost 10 years of existence, out of probably 75 or 80 total.

I’m not sure this would work for all companies at all stages at all times, and we had a handful of graphics “ready to go” in case we wanted to shoot something up on the wall, as we likely will always have.  But I can’t say enough about how this evolution in meeting setup and execution changed the dynamic.

Book Short:  Sloppy Sequel

SuperFreakonomics, by Steven Levitt and Stephen Dubner, wasn’t a bad book, but it wasn’t nearly as good as the original Freakonomics, either.  I always find the results of “naturally controlled experiments” and taking a data-driven view of the world to be very refreshing.  And as much as I like the social scientist versions of these kinds of books like Malcolm Gladwell’s The Tipping Point and Blink (book; blog post), there’s usually something about reading something data driven written by a professional quant jock that’s more reassuring.

That’s where SuperFreakonomics fell down a bit for me.  Paul Krugman has described the book in a couple different places as “snarky and contrarian.”  I typically enjoy books that carry those descriptors, but this one seemed a bit over the top for economists — like a series of theories looking for data more than raw data adding up to theories.Nowhere is this more true than the chapter on climate change.  It’s a shame that that chapter seems to be swallowing up all the public discussion about the book, because there are some good points in that chapter, and the rest of the book is better than that particular chapter, but such is life.

As with all things related to the environment, I turned to my friend Andrew Winston’s blog, where he has a good post about how the authors kind of miss the point about climate change…and he also has a series of links to other blog posts debunking this one chapter.  If you’re into the topic, or if you read the book, follow the chain here for good reading.  My conclusion about this chapter, being at least somewhat informed about the climate change debate, is that the book seems to have sloppy writing and editing at best, possibly deliberately misleading at worst.  (Incidentally, the reaction in the blogosphere seems highly emotional, other than Andrew’s, which probably doesn’t serve the reactors well.)

But I’ll assume the best of intentions.  Some of the points made aren’t bad – there is no debate about the problem or the need to solve it, the authors express legitimate concern that current solutions, especially those requiring behavioral change, will be too little too late, and most interestingly, they show an interest in alternative approaches like geo-engineering.  I hadn’t been familiar with that topic at all, but I’m now much more interested in it, not because it’s a “silver bullet” approach to dealing with climate change, but because it’s a different approach, and complex problems like climate change deserve to have a wide range of people working on multiple types of solutions.  I met Nathan Myhrvold once (I almost threw up on him during a job interview, which is another story for another day), and it makes me very happy that his brilliance is being applied to this problem as a general principle.

As I said, though, beyond this one chapter, the book is good-not-great.  But it certainly is chock full of cocktail party nuggets!

Book Short: Chip Off the Old Block

I have to admit, I was more than a little skeptical when Craig Spiezle handed me a copy of The Speed of Trust, by Stephen M. R. Covey, at the OTA summit last week. The author is the son of THE Stephen Covey, author of the world famous Seven Habits of Highly Effective People as well as The Eighth Habit (book, post). Would the book have substance and merit or be drafting off the dad’s good name?

I dog-ear pages of books as I read them, noting the pages that are most interesting if I ever want to go back and take a quick pass through the book to remind me about it (and yes, Ezra, I can do this on the Kindle as well via the bookmark feature). If dog-ear quantity is a mark of how impactful a book is, The Speed of Trust is towards the top of the list for me.

The book builds nicely on Seven Habits and The Eighth Habit and almost reads like the work of Stephen the father. The meat of the book is divided into two sections: one on developing what Covey calls “self trust,” a concept not unlike what I blogged about a few months ago, that if you make and keep commitments to yourself, you build a level of self-confidence and discipline that translates directly into better work and a better mental state. The other core section is one on building trust in relationships, where Covey lists out 13 behaviors that all lead to the development of trust.

In fact, we just had a medium-size trust breach a couple weeks ago with one of our key clients. Reading the book just as we are struggling to “right the wrong” was particularly impactful to me and gave me a number of good ideas for how to move past the issue without simply relying on self-flagellation and blunt apologies. This is a book full of practical applications.

It’s not a perfect book (no book is), and in particular its notion of societal trust through contribution is a bit weak relative to the rest of the book, but The Speed of Trust is an excellent read for anyone who wants to understand the fastest way to build — and destroy — a winning culture. It reads like a sequel of Covey senior’s books, but that’s a good thing.

If this madness all ended tomorrow, I would do…almost nothing

(This post originally appeared on FindYourNerve on October 21)

I don’t know what you call the last 12 months of global macroeconomic meltdown.  I’ve taken to calling it the Great Repression.  In part because it’s somewhere in between a Recession and a Depression, in part because it’s certainly repressed the wants and needs of startups and growth companies the world over.  And it makes for good cocktail party chatter.

Someone asked me a question the other day, which started off with “Now that the recession is over…”  I can’t even remember the end of the question.  I got lost in the framing of it, mostly because I’m not convinced it’s over yet.  Fine, fine, Bernanke says it’s over.  But he couldn’t possibly have used more caveats or more cautious language to couch his statement.  I haven’t seem great signs of a recovery, in any case.  But the question got me thinking.  What would I do if the recession really was over, or if I knew that, say, tomorrow, the heavens would open up and swallow our inflation fears, deflation fears, and collective global deficits whole?

You know what?  I wouldn’t do a thing.  That’s not entirely true.  I’d probably sleep better that night.  But I wouldn’t do a lot of other things out of the gate.  This last year has tested nerves.  My nerve as a CEO, my Board’s nerve, and the collective nerve of our organization.  And we’ve pulled off a great year.  We will still grow close to 50%, we greatly expanded our operating margins and are generating nice cash flow, and we preserved all jobs, salaries, and core benefits (all five of our objectives that I laid out 12 months ago when the &*%$ started to hit the fan). 

So, why wouldn’t I do anything different if I knew the world would be a different place tomorrow?  Because holding our nerve this past year has changed a lot of things about our organization for the better, and I don’t want to see us reverse course on those things just because we can.  Here’s one example, one of many we have – when we cut our travel budget by 50% this year, everyone on the team looked at us like we were crazy and said there was no way we’d be able to make budget.  Guess what – we BEAT the slashed budget by almost a third, without complaint!  Why should we triple it going forward to get back to where we were? 

Anyway, other companies can lose their nerve when they aren’t forced to have it.  As for me and Return Path, while we will certainly move some things back to normal over time as the world improves, it won’t be a wholesale reversion to yesteryear.

Why I joined the DMA Board, and what you can expect of me in that role

I don’t normally think of myself as a rebel. But one outcome of the DMA’s recent proxy fight with Board member Gerry Pike is that I’ve been appointed to the DMA’s Board and its Executive Committee and have been labeled “part of the reform movement” in the trade press. While I wasn’t actively leading the charge on DMA reform with Gerry, I am very enthusiastic about taking up my new role.

I gave Gerry my proxy and support for a number of reasons, and those reasons will form the basis of my agenda as a DMA Board member. As a DMA member, and one who used to be fairly active, I have grown increasingly frustrated with the DMA over the past few years.

1. The DMA could be stronger in fighting for consumers’ interests. Why? Because what’s good for consumers is great for direct marketers. Marketing is not what it used to be, the lines between good and bad actors have been blurred, and the consumer is now in charge. The DMA needs to more emphatically embrace that and lead change among its membership to do the same. The DMA’s ethics operation seems to work well, but the DMA can’t and shouldn’t become a police state and catch every violation of every member company. Its best practices and guidelines take too long to produce and usually end up too watered down to be meaningful in a world where the organization is promoting industry self-regulation. By aggressively fighting for consumers, the DMA can show the world that a real direct marketer is an honest marketer that consumers want to hear from and buy from.

2. Despite a number of very good ideas, the DMA’s execution around interactive marketing has been lacking. The DMA needs to accept that interactive marketing IS direct marketing – not a subset, not a weird little niche. It’s the heart and soul of the direct marketing industry. It’s our future. The acquisition of the EEC has been one bright spot, but the DMA could do much more to make the EEC more impactful, grow its membership, and replicate it to extend the DMA’s reach into other areas of interactive marketing, from search to display advertising to lead generation. The DMA’s staff still has extremely limited experience in interactive marketing, they haven’t had a thought leader around interactive on staff for several years, and their own interactive marketing efforts are far from best practice. Finally, the DMA’s government affairs group, perhaps its greatest strength, still seems disproportionately focused on direct mail issues. The DMA should maintain its staunch support of traditional direct marketers while investing in the future, making interactive marketing an equal or larger priority than traditional direct marketing. We have to invest in the future.

3. Finally, I think the DMA suffers from a lack of transparency that doesn’t serve it well in the hyper-connected world we live in here in 2009 – that’s a nice way of saying the organization has a big PR problem. The organization does a lot of great work that never gets adequately publicized. This whole proxy fight episode is another example, both in the weak response from the DMA and also in a lot of the complaints Gerry lodged against the organization, many of which the organization says are untrue or misleading. Senior DMA execs or Board members should be blogging. They should be active thought leaders in the community. They should be much more engaged with their members to both understand member needs and requirements and more aggressively promote their agenda.

In short, I will be an independent voice who advocates for progress and change in the areas that I consider to be most important, and I will be transparent and open about expressing my views. I’ve already been clear with the existing DMA Board and management that I do have this agenda, and that I hope the organization will embrace it. If they do, even if only in part, I think it will be to the DMA’s benefit as well as the benefit of its members. If they reject it wholesale, my interest in long-term involvement will be fairly low.

That’s the story. As I said up front, I am taking up this new role with enthusiasm and with the belief that the DMA is open to change and progress. We’ll see how it goes, and I will blog about it as often as I can.

Do you have thoughts on the future of the DMA? I’d love to hear from you. You can leave a comment below or email me directly at matt at returnpath dot net.

Wanted: Rock Star Marketer

Return Path is hiring a VP Marketing. This is a new position – we haven’t had the job filled in a couple years like this, reporting directly to me. The job spec is here.

What it’s like to work here is pretty well captured here.

Why should you pass this on to a friend who is a good fit? Because you will help a friend find the best job he or she ever had! Oh and because we will pay you a nice referral fee if we hire your friend.

Why should you apply? That’s a longer answer:

1. We are inventive market leaders with a really unique business model, at a good scale, in a rapidly growing niche

2. We are reinventing our business in a way that is going to dramatically impact the entire email ecosystem in an extremely positive way for ISPs, filters, mailers, and end users alike

3. This position will be a hugely strategic role, managing a very strong marketing team as well as being an executive partner to the rest of the senior team around positioning and telling our story, both to all sides of the industry as well as potentially to Wall Street (someday, anyway)

4. As a growth stage company, we offer the best aspects of small company/startup life and larger company benefits

5. We have the best VC investors in the country, and we are also materially cash flow positive

6. We are a really fun place to work (just ask us!) If you are interested or know someone who is, you can comment here, or you can email me directly at matt at returnpath dot net. The details are in the spec, but we have a strong preference for someone in the Bay Area who has worked in email/messaging security.

Closer to the Front Lines, II

Last year, I wrote about our sabbatical policy and how I had spent six weeks filling in for George when he was out.  I just finished up filling in for Jack (our COO/CFO) while he was out on his.  Although for a variety of reasons I wasn’t as deeply engaged with Jack’s team as I was last year with George’s, I did find some great benefits to working more directly with them.

In addition to the ones I wrote about last year, another discovery, or rather, reminder, that I got this time around was that the bigger the company gets and the more specialized skill sets become, there are an increasing number of jobs that I couldn’t step in and do in a pinch.  I used to feel this way about all non-technical jobs in the early years of the company, but not so much any more. 

Anyway, it’s always a busy time doing two jobs, and probably both jobs suffer a bit in the short term.  But it’s a great experience overall for me as a leader.  Anita’s sabbatical will also hit in 2010 — is everyone ready for me to run sales for half a quarter?

The Gift of Feedback, Part III

Last week, I posted about my new development plan.  I thought I’d also share a “team development plan” that we crafted this year for the entire Executive Committee at Return Path (basically me and my direct reports), coming out of all of our 360 live reviews taken as a whole.

1.  Push each other harder and be continuous in our effort to provide the team and each of us feedback and further develop:  Improve ability to handle conflict as a group; Drive this work deeper into the organization; “Eyes/ears/mouth open;”  Explore how to better serve as role models to the rest of the organization, especially our direct reports/the next level of management; How do we get the Level II to function in the way that we do?
2. Getting messaging out/improve our communications as a team to the rest of the organization
3. Be more hawkish with underperformers:  Exert a discipline in dealing with problems; Making tough calls that don’t feel very good; Do we accept mediocrity?
4. Take responsibility for everyone as a group
5. Do we have a team of A+ players?  How do we recruit them as we get bigger?  Can we attract the best?  Or pay differently?  Revisit incentive comp plan if we don’t feel like it’s working as intended?
6. At least 2x/year comprehensively evaluate next level management to assess bench strength
7. Goal: to have this executive team be the outlier and be able to grow and each and as a team be able to manage a $100MM company

Thanks to our friend Marc Maltz at Triad Consulting as always for facilitating these great sessions and distilling the learnings down into bite-sized pieces for us!

How Deliverability is Like SEO and SEM for Email

I admit this is an imperfect analogy, and I’m sure many of my colleagues in the email industry are going to blanch at a comparison to search, but the reality is that email deliverability is still not well understood — and search engines are.  I hope that I can make a comparison here that will help you better understand what it really means to work on deliverability – they same way you understand what it means to work on search.

But before we get to that, let’s start with the language around deliverability which is still muddled.  I’d like to encourage everyone in the email industry to rally around more precise meanings.  Specifically I’d like propose that we start to use the term “inbox placement rate” or IPR, for short.  I think this better explains what marketers mean when they say “delivered” – because anywhere other than the inbox is not going to generate the kind of response that marketers need.  The problem with the term “delivered” is that it is usually used to mean “didn’t bounce.”  While that is a good metric to track, it does not tell you where the email lands.  Inbox placement rate, by contrast, is pretty straightforward: how much of the email you sent landed in the inbox of our customers and prospects?

Now let’s come back to how achieving a high inbox placement rate is like search.  If you run a web site, you certainly understand what SEO and SEM are, you care deeply about both, and you spend money on both to get them right.  Whether “organic” or “paid,” you want your site to show up as high as possible on the page at Google, Yahoo, Bing, whatever.  Both SEO and SEM drive success in your business, though in different ways.

The inbox is different and a far more fragmented place than search engines, but if you run an email program, you need to worry both about your “organic” inbox placement and your “paid” inbox placement.  If you are prone to loving acronyms you could call them OIP and PIP.

What’s the difference between the two?

With organic inbox placement, you are using technology and analytics to manage your email reputation, the underpinning of deliverability.  You are testing, tracking, and monitoring your outbound email.  Seeing where it lands – in the inbox, in the junk mail folder, or nowhere?  You are doing all this to optimize your inbox placement rate (IPR) — just as you work to optimize your page rank on search engines.  One of the ways you do this is by monitoring your email reputation (Sender Score) as a proxy for how likely you are to have your email filtered or blocked.  The more you manage all of these factors, the greater likelihood you will be placed in inboxes everywhere.

With paid inbox placement, you first have to qualify by having a strong email reputation.  Then you use payment to ensure inbox placement, and frequently other benefits like functioning images and links or access to rich media.  With this paid model, there’s no guarantee to inbox placement (don’t let anyone tell you otherwise), just like there’s no guarantee that you’ll be in the #1 position via paid search if someone outbids you.  But by paying, you are radically increasing the odds of inbox placement as well as adding other benefits.  There is one critical difference from search here, which is that you need good organic inbox placement in order to gain access to PIP.  You can’t just pay to play.

Like SEO, some organic deliverability work can and must be done in-house, but frequently it’s better to outsource to companies like Return Path to save costs and time, and to gain specific expertise.  Like SEM, paid deliverability inherently means you are working with third parties like our Return Path Certification program. 

As I said, it’s an imperfect analogy, but hopefully can help you better understand the strategies and services that are available to help you make the most of every email you send.

Another Only Once Moment, Sort Of

I’ve never handed over the reins of a company before (no, I’m not leaving, and we aren’t selling Return Path).  But I did the other day, for the first time.  As many people know, last year we reorganized the company to focus entirely on deliverability and whitelisting and spun out Authentic Response, a company in the online market research business, into a completely separate entity. 

Since then, I have been CEO of both companies.  Although Return Path has had more of my focus — Authentic Response had excellent day-to-day leadership under Co-Presidents Jeff Mattes and Rob Mattes — I’ve still been working in both businesses.

Today, we officially announced the hiring of my replacement, Jim Follett.  Jim was formerly CEO of Survey Sampling, a larger company in the online market research business, and has over 20 years of prior experience as a senior executive in market research and information services companies.  While we still share the office in New York and I will stay on as Chairman, the percentage of time I can now devote to Return Path is now 100% — the first time it’s ever been that way (for the deliverability business).

I didn’t start Authentic Response, and I’ve never been deep in the bones of the business the way I am Return Path.  Even so, I definitely experienced a range of emotions at our all-hands meeting where we introduced Jim to the company that I don’t regularly experience at the same time:  mainly a mix of pride in the work the team has done on my watch, excitement for the business, and sadness at not working quite as closely with the nearly 100 people in Authentic Response going forward.

I’m sure someday, I will hand over the reins to Return Path.  No time soon, but that day eventually comes for every entrepreneur.  If this was a preview, it will be an emotional day.

But for now, I’m mainly happy to welcome Jim to the family, and I’m excited for the entire Authentic Response business as it embarks on the next chapter in the company’s journey.

  

The Gift of Feedback, Part II

I’ve written a few times over the years about our 360 feedback process at Return Path.  In Part I of this series in early 2008, I spelled out my development plan coming out of that year’s 360 live review process. I have my new plan now after this year’s process, and I thought I’d share it once again.  This year I have four items to work on:

1. Continue to develop the executive team.  Manage the team more aggressively and intentionally.  Upgrade existing people, push hard on next-level team development, and critically evaluate the organization every 3-6 months to see if the execs are scaling well enough or if they need to replaced or augmented
2. Formalize junior staff interaction.  Create more intentional feedback loops before/after meetings, including with the staff member if needed, and cultivate acceptance of transparency; get managers to do the same.  Be extra skeptical about the feedback I’m getting, realizing that I may not get an accurate or complete picture
3. Foster deeper engagement across the entire organization.  Simplify/streamline company mission and balanced scorecard through a combination of deeper level maps/scorecards, maybe a higher level scorecard, and constant reinforcing communication.  Drive multi-year planning process to be fun, touching the entire company, and culminating in a renewed enthusiasm
4. Disrupt early and often, the right way.  Introduce an element of productive disruption/creative destruction into the way I lead, noting item 2 around feedback loops

Thanks to everyone internally who contributed to this review.  I appreciate your time and input.  Onward!