It’s Not Having What You Want, It’s Wanting What You’ve Got

I’ve always thought that line (the title of this post) was one of Sheryl Crowe’s better lyrics. And there’s nothing like moving houses to bring it to life. We are pretty minimalist to begin with, or at least the size of our apartment had constrained our ability to be anything more. And we cleaned out and threw away a bunch of things before we moved. Now that we’re almost done unpacking, and we have several empty or nearly empty rooms in our much larger house, the lyric resonates.

I’m sure we’ll ultimately fill up those empty rooms, at least a little bit. That’s what everyone says happens when you expand into more space. But for the most part, we don’t NEED to. The furniture, toys, beds, and chairs that worked for us in one place SHOULD work for us in another. Happiness can’t come from forging forward on the volume of earthly possessions. It should really come from contentment when where you are in life. Anything else is icing on the cake.

That’s probably a good metaphor to think about the road ahead in business and the economy. It’s still not clear to me how much this current mess is going affect the general economy and spending across all sectors. Hopefully confidence returns to the financial markets, the credit crisis passes, and there’s not a general deep recession. But as my colleague Anita is so fond of saying, Hope is not a Strategy, so everyone needs to be bracing themselves for the worst right now.

And that means we all need to prepare for Not Having What We Want, but rather Wanting What We’ve Got. Businesses will continue to function and even grow if there’s a recession. But if there’s belt tightening to be done, it means that growth companies will have to shift paradigms a bit. They’ll be investing less in growth and in new things. They’ll be focusing more on profits. There will be less hiring. Promotions and raises and bonuses will be harder to come by (especially on Wall Street!).

None of this means we should stop forging ahead or reduce our ambitions. On the contrary – companies that can figure out how to achieve both growth AND profitability in tough times are the ones that win in the end. But it does mean that we’re in for a long road if we don’t all change our mindset and behaviors to match the times, as growth and profitability together looks quite different from growth at the expense of profitability.

Just Ask a 5-Year Old

I heard this short but potent story recently. I can’t for the life of me remember who told it to me, so please forgive me if I’m not attributing this properly to you!

A man walks into a kindergarten classroom and stands in front of the class. “How many of you know how to dance?” he asks the kids. They all raise their hands up high into the air.

“How many of you know how to sing?” he queries. Hands shoot up again with a lot of background chatter.

“And how many of you know how to paint?” 100% hands up for a third time.

The same man now walks into a room full of adults at a conference. “How many of you know how to dance?” he asks. A few hands go up reluctantly, all of them female.

“How many of you know how to sing?” Again, a few stray hands go up from different corners of the crowd. Five percent at best.

“And how many of you know how to paint?” This time, literally not one hand goes up in the air.

So there you go. What makes us get de-skilled or dumber as we get older? Nothing at all! It’s just our expectations of ourselves that grow. The bar goes up for what it takes to count yourself as knowing how to do something with every passing year. Why is that? When we were 5 years old, all of us were about the same in terms of our capabilities. Singing, painting, dancing, tying shoes. But as we age, we find ourselves with peers who are world class specialists in different areas, and all of a sudden, our perception of self changes. Sing? Me? Are you kidding? Who do I look like, Sting?

I see this same phenomenon in business all of the time. The better people get at one thing, the worse they think they are at other things. It’s the rare person who wants to excel at multiple disciplines, and more important, isn’t afraid to try them. But we’ve seen lots of success over the years at this at Return Path. The account manager who becomes a product manager. The tech support guy who becomes a software developer. The sales rep who becomes an account manager.

I love these stories! My anecdotal evidence suggests that people who do take this kind of plunge end up just as successful in their new discipline, if not more so, because they have a wider range of skills, knowledge, and perspectives on their job. Or it could just be that the kind of people who WANT to do multiple types of jobs are inherently stronger employees. Not sure which is the cause and which is the effect.

It’s even more rare that managers allow their people the freedom to try to be great at new things. It’s all too easy for managers to pigeonhole people into the thing they know how to do, the thing they’re doing now, the thing they first did when they started at the company. “Person X doesn’t have the skills to do that job,” we hear from time to time.

I don’t buy that. Sure, people need to be developed. They need to interview well to transition into a completely new role. But having the belief that the talent you have in one area of the company can be transferable to other areas, as long as it comes with the right desire and attitude, is a key success factor in running a business in today’s world. The opposite is an environment where you’re unable to change or challenge the organization, where you lose great people who want to do new things or feel like they are being held back, and where you feel compelled to hire in from the outside to “shore up weaknesses.” That works sometimes, but it’s basically saying you’d rather take an unknown person and try him or her out at a role than a known strong performer from another part of the organization.

And who really wants to send that message?

Like an Organ Transplant

I’ve often said that hiring a new senior person into an organization is a bit like doing an organ transplant. You can do all the scientific work up front to see if there’s a match, but you never know until the organ is in the new body, and often some months have gone by, whether the body will take or reject the organ.

New senior people in particular have a vital role in organizations. Often they are brought in to fix something that’s broken, or to start up a new position that growth has created. Sometimes they are replacing a problematic person (or a beloved one). Usually the hope is that they will also bring a fresh perspective and good outside view to bear on people whose heads are too much “in the business.” In all cases, their role as leaders makes them higher visibility and higher profile than most, and therefore more impactful if they succeed. It also makes them more problematic if they don’t.

What happens that causes the body to reject the organ? It could be a few things, but in my experience it’s usually one of three. Sometimes the execution isn’t there — in other words, the person knows what needs to be done but isn’t effective in getting it done, for any number of reasons. Usually you feel like you were sold a bill of goods. Other times, specifically in cases where the person is coming into a new job that didn’t exist before, it turns out the job was poorly specified and doesn’t need to exist, or that the person coming in is the wrong person for it. Usually the person feels like he or she was sold a bill of goods.

But I think in most cases, the cultural fit just isn’t there. And that’s not really anyone’s fault, although it *should be* something you can interview for to a large extent. These are the most painful ones to deal with. Decent to stellar execution (good enough to not end employment over it), but poor cultural fits.

How quickly does this take? I’ve seen it take a quarter. I’ve also seen it take a year. But in both cases, the warning signs were there much sooner.

A footnote on this is that as Return Path has grown, I’ve come to a new thought about this — it doesn’t just apply to senior people. It applies to almost any new hire. It may be an outcome of having a really strong and consistent culture, or it may just be the natural extension of this axiom.

Closure

This past weekend was a weekend of closure for me. As I prepare to leave the city after almost 17 years and the apartment I’ve lived in for almost 15, we had my two original roommates from this apartment in town for the weekend with their families for a bit of a farewell party. Times certainly have changed – from three single guys to three families and 7, almost 8 kids between us. Sitting around and noting that all three couples had either gotten engaged or first started dating within the confines of Apartment 35B, then saying goodbye as everyone left the apartment for the last time, was a little surreal. But overall, having everyone around was great fun and was a fitting way to mark the occasion.

If that wasn’t enough to drive the point home, we were lucky enough to get tickets to the Yankees game last night, which was the last home game the Yanks will play in their 85-year old stadium before moving across the street next season to their fancy new home. The ceremony before the game, which featured a bunch of prominent Yankee greats and their progeny (Babe Ruth’s daughter threw out the opening pitch!), was similarly surreal, but a fitting ending to a long-standing tradition.

Why is closure important? I’m not a psychologist, but for me and my brain anyway, celebrating or formally noting the END of something helps move on to the BEGINNING of the next thing. It helps compartmentalize and define an experience. It provides time to reflect on a change and WHY it’s (inevitably) both good and bad. And I suppose it appeals to the sentimentalist in me.

I think it’s important to create these moments in business as well as in one’s personal life. We and I have done them sporadically at Return Path over the years. Moving offices as we expand. Post-mortems on projects gone well or badly. Retrospectives with employees who didn’t work out, sometimes months after the fact. Whether the moment is an event, a speech at an all-hands meeting, or even just an email to ALL, one of the main jobs of a leader in building and driving a corporate culture is to identify them and mark them.

Why The Rules Have to Be Flexible

We have clients ask us all the time – how much email should I be sending out to my subscribers? One a week? One a month? And usually, we give the same advice – it depends on what you are sending, and on what expectation you set with your subscribers when they sign up.

This week is a great example that proves the rule “it depends.” I get the Wall Street Journal’s email alerts of major headlines. I think I’ve subscribed in two different categories, maybe three – I can’t remember, since I signed up about 10 years ago. In a typical week, across all the categories, I might get 5 or 10 emails from the Journal. So far this week, I’ve received 42 — and my guess is that we’ll close out the week around 50.

With all the global financial markets in turmoil, of course the Journal should be sending out news more frequently. It doesn’t even occur to me that it’s “too much email” or spam. In fact, I would have thought something was weird if I didn’t get a lot of them this week. Context makes it right.

Entrepreneur’s Perspective on Non-Competes

(Note: I just found this post in the “drafts” folder and realize I never put it up! It was written months ago, although I just updated it a bit.)

Bijan Sabet kicked off the discussion about non-competes by asserting that they are a barrier to innovation and that they are unenforceable in California anyway, so why bother?

Fred continued the discussion and made some good assertions about the value of non-competes, summarizing his points as:

Non-competes are very much in the interests of our portfolio companies. But the non-competes need to be tightly defined and the term of the non-compete needs to be paid for by the portfolio company if the employee was forced out of the company. The non-competes should certainly apply to all senior management team members and all key employees (like star engineers and such). It takes a lot of work to build a company. You should not risk all that knowledge and talent being able to walk out the door and set up shop across the street.

Brad and Jason/Ask the VC are generally on board with Fred’s view.

We’ve had non-competes since the beginning at Return Path.  I am generally in agreement with Fred’s parameters, but to spell out ours:

1. Our non-competes are very narrowly defined.  I had a very bad taste in my mouth when AOL acquired my former company, MovieFone, back in 1999 and stuck a 3-year non-compete in front of me that would have prohibited me from working anywhere else in the Internet.  I think the language was something like “can’t work in any business that competes with AOL or AOL’s partners in the businesses they are in today or may enter in the future.”  It was just silly.  Our non-competes apply very narrowly to existing direct competitors of the part of Return Path in which the given employee works.

2. We do not pay for non-competes.  Because our non-competes are very narrowly defined, we don’t expect to pay for someone to sit on the sidelines.  If people leave, or even if people are fired, they have 99.99% of the companies in the world as potential employers. 

3. We are willing to excuse people from non-competes if they are laid off.  Fair is fair.  However, we still expect our confidentiality and non-solicit agreements to remain in full force.

4. Everyone signs the same non-compete.  100% of the people, 100% of the time.  Same language.  No exceptions.  Again, this comes back to how narrowly defined the non-compete is.  It shouldn’t just be limited to senior executives.  Obviously you have to respect local laws of places like California or   Europ which have different views of non-competes.  If these cause in equalities in your employee base by geography, we make an effort to “re-equalize” in other ways.

5. We enforce non-competes in all situations.  I don’t believe in selective enforcement.  That sends the wrong message to employees.  We have had a couple instances where junior people have left and brazenly gone to a competitor.  While we have never blocked someone from starting a new job, we would if there wasn’t another resolution.  Fortunately, in those cases for us, we have contacted the employee and the hiring company and been able to work out a deal — the employee went to work in a non-competitive part of the new company, we struck a commercial relationship between us and the hiring company, etc.

6. We try to play by the rules when hiring people who have non-competes.  I think consistency is important here show to employees.  If we expect people to respect our non-compete, we should respect other companies’ non-competes.  This doesn’t mean we don’t try hard to lure competitors’ people to us when the situation warrants — it just means that if a non-compete is relevant and in effect, we will either make a deal with the other company, or in special circumstances, we will pay the employee to sit on the sidelines and ride out the non-compete.  This is a tricky process, but we’ve had it work before, and we’d do it again for the right person.

Our people and intellectual capital are a huge source of competitive advantage.  They are also the product of massive investment that we make in developing our people.  A good, narrow, non-compete is important for the company and can be done in ways that are fair to employees who are the beneficiaries of the training and development as well as their employment.  I think that’s part of the social contract of a great workplace.  Non-competes don’t stifle innovation — they protect investments that lead to innovation.  I suppose the same argument could be made of patents, some of which make more sense than others, but that’s the subject of another rant sometime.

But at the end of the day, it’s up to us to retain our people by providing a great place to work and advance careers so this whole thing is a non-issue!

Spooky

Note: Jonathan is a colleague of mine in our Authentic Response research business.

[Me] Hey, I heard you moved back to New York (from Boston)

[Jonathan] Yeah, the travel was getting to be too much. Plus, a buddy of mine was looking for a roommate

[Me] Where’s the place?

[Jonathan] Murray Hill

[Me] Oh – I lived there years ago. Where?

[Jonathan] Near 2nd and 34th

[Me] What building?

[Jonathan] It’s a small walk-up – you wouldn’t know it – 633 Second Avenue

[Me] NO WAY. I used to live there. Which floor?

[Jonathan] Third

[Me] Yup – that was my old apartment – from 15 years ago!

What a weird, weird, weird, thing.

7 Years On

My last September 11 as a New York City resident. I walked down to the World Trade Center site this morning as I have each of the last six 9/11s and rang The Bell of the Unforgotten, which is the New York City Fire Department’s port-a-memorial that they bring out for the day. As a long-time member of the lower Manhattan community, the day always bring out a lot of reflection for me. Seeing the memorial flood lights on tonight will do the same and bookend the day.

The main thing I was thinking about this morning was why there’s been nothing really built yet on the site. World Trade Center 7 (which is actually adjacent to the main site) went up in a hurry a few years ago (pictured here under construction four years ago), but nothing else.

My general understanding of the situation is that the holdup has not been around clean-up or pre-construction the last several years, but all about legal, political, and insurance issues. And that smacks to me of a leadership problem. I realize there are a lot of parties involved, and a lot at stake, but it’s just embarrassing to America that we haven’t rebuilt the site — and fast. Set an example to the rest of the world that we react swiftly and don’t let the bad guys knock us down…and keep us down.

It feels to me like a President who actually understood leadership would have gotten all the parties in a room together and not let them out until there was agreement on a plan. Don’t just let “the system” play things out laissez faire, but actually play them out in a hurry so the country and city can move forward. It feels like the kind of thing Reagan or Clinton would have done.

As I reflect on this today, the one thing I’m happy about is that no matter who wins the White House, America will be getting a leadership upgrade.

I Can’t Tell If I Like This Or Not

I am blogging at 35,000 feet, using American Airlines’ new GoGo in-flight Wi-Fi service. I am definitely having mixed feelings about it. On one hand, it’s nice to download the 47 emails I just wrote before two-hours after landing (sorry, team!). It’s also nice to be able to clean out my Inbox so it’s not overflowing when I get to our California office.

On the other hand, it has the potential to destroy one of the last few places in my life that’s completely free of connectivity. That kind of makes me sad.

I think I’m going to turn it off once I do a single pass at the Inbox. I guess I can turn it back on for the same $12.95 fee if I need it again. This service is a great convenience but a bit of a luxury. At least the guy next to me isn’t using Skype!

Hands in the Cookie Jar

It feels like I’m closing a lot of transactions lately. Today is another one – we are closing on a house. Somehow, no matter how much of an owner you are of your business, wiring money out of your own personal bank account is a bit harder than wiring from the corporate account.

I’ve observed something over the years with transaction closings – both personal and business. I call it the Hands in the Cookie Jar phenomenon. When a lot of money is on the table and trading hands, and when there are a lot of parties involved (not just the principles, but various agents and lawyers as well), the closer you get to the transaction closing, the more hands appear outstretched ready to grab a small piece of the money.

Today, it was about agents, lawyers, banks, mortgage brokers. And as we found out on yesterday’s walk-through of the house, it is also about the “guys,” as our real estate agent referred to them. You know, the tree guy, the termite guy, the plumbing and heating guy, on and on. Everyone is swarming to collect checks for all the work they’re doing or think they’re doing, some of which is valuable, and some of which just feels like highway robbery.

With corporate transactions, it’s usually more about the principles or people closer in. Sure, you have to pay bankers and lawyers, but corporate transactions are the time when others in the company — board members, execs, employees — all want to try to cut their own new deal at the last minute. We’ve had some bad experiences with this in the past, including a senior employee who threatened to quit if he didn’t get what he thought he should get out of a deal. And those situations are probably the most difficult to deal with.

Some of this is inevitable. Things come up that you didn’t anticipate in advance. Circumstances change. But in general, my approach to these things is that the best way to avoid the Hands in the Cookie Jar phenomenon is to document everything earlier on in the process and be unyielding as you get closer in. Just because money is changing hands doesn’t mean more hands get to be in the mix!

Sometimes You Just Need a 2×4 Between the Eyes

Freshman year in college, fall semester, my friend Peggy and I were in a small seminar class together on Dante. We thought we were pretty smart before the class started. And that we were great writers. Lots of As in high school. Then we wrote our first paper. Professor Bob Hollander gave me a C-. I think Peggy got a D. We were devastated. And pissed. Sure, the ensuing cocktail took the edge off (this was college, after all), but we both scheduled time with the professor during his office hours to figure out where our carefully honed academic trains had gone off the tracks.

Essentially what he said to each of us was this (you have to picture the 60-something professor in a turtleneck smoking a pipe with gravely voice for full effect): “Matthew, your writing wasn’t the worst I’ve ever seen. But I feel like you can do better, and sometimes you just need a 2×4 between the eyes.” End of meeting. Thank you, sir, may I please have another?

I couldn’t have been more irritated. But I will tell you one thing. I worked four times as hard on my next paper, got an A-, and elevated my game permanently. Not just for this one class, but for all of them. Bob was right. His 2×4 between my eyes worked.

Sometimes when we deliver performance feedback in business, this approach makes sense. There are times when someone is really doing poorly and needs harsh (fair, but honest) feedback. There are also times when someone is doing so-so but generally just not living up to his or her promise and should be doing better. And in those cases, you have to just make a judgment call about whether to give feedback on the margin or go for the full 2×4 to drive the point home and get someone to really elevate his or her game for good.