Book Short: Plain Talk

An HR rock star I met with recently told me that “You can say anything you want to your people, as long as it’s true,” which of course is great advice.  Plain Talk: Lessons from a Business Maverick (book, kindle), by Ken Iverson, the long-time CEO of Nucor, pretty much embodies that.  If you’re not familiar with Nucor, it’s a steel company – right, steel – and the most successful one of the last 50-75 years, at that.  You may think an industrial company like this offers no lessons for you.  If so, you are wrong.

The reason Nucor has been so successful, if you believe their long time leader, is that they run the people side of their business differently than most companies like them.  Reading this book from the perspective of a knowledge worker business CEO was particularly interesting, since I had to transform my frame of reference a bit (and do a little mental time travel as well) in order to understand just how revolutionary Nucor’s practices were at the time.

But then I realized – they’re still revolutionary today.  How many companies – even the most progressive ones – don’t have performance reviews because they don’t need them in order to create a high performing environment?  Companies that spend a good percentage of their time and energies thinking about how to get their employees to do their best work, as opposed to focusing only on the goals of the business, do better than those who don’t.  It doesn’t matter what industry you’re in.  As Patrick Lencioni would say, you can outbehave the competition.

Plain Talk is a really short book, and a good, authentic read if you’re a leader who cares about your people and wants to learn a few nuggets here and there from one of the 20^th century masters of that discipline.  Anyone that can link a high degree of delegation to authority has a story worth telling.

Book (Not So) Short:  Raise Your Hand If You’re Sure

I couldn’t get the catchy jingle from the 80’s commercial for Sure deodorant (you remember, the one with the Statue of Liberty at the end of it – thanks, YouTube) out of my head while I was reading the relatively new book, Confidence: How Winning Streaks and Losing Streaks Begin and End.  Written by HBS professor Rosabeth Moss Kantor, Confidence is one of the few business books I’ve read that’s both long and worth reading in full.

The book has scores of examples of both winning and losing streaks, from sports, business, politics, and other walks of life, and it does a great job of breaking down the core elements that go into creating a winning streak or turnaround (Accountability, Collaboration, Innovation).  Kantor also puts a very fine point on the “doom loop” of losing streaks and just how hard it is to turn them around.  The book also has a good crisp definition of why winning streaks end — arrogange, anyone? — and has consistent, but not preachy recipes for avoiding pitfalls and driving success.  All in all, very inspirational, even if many of the roots of success lie in well-documented leadership qualities like those expressed in Jim Collins’ Built to Last and Good to Great.  The book is good enough that Kantor can even be forgiven for lauding Verizon, probably the most consistently awful customer service company I’ve ever dealt with.

But even more of the roots of success and disappointment around streaks are psychological, and these examples really rang true for me as I reflected back on our acquisition of the troubled NetCreations in 2004.  That company was in the midst of a serious slump, a losing streak dating back to 2000, at the peak of the original Internet boom.  Year over year, the company had lost revenues, profits, customers, and key personnel.  Its parent company saw poor results and set it into the doom loop of starving it for resources and alternating between ignoring it and micromanaging it, and when we acquired the business, we found great assets and some fantastic people (many of whom I’m proud to say are still with us today), but a dispirited, blame-oriented, passive culture that was poised to continue wallowing in decline.

I can hardly claim that we’ve turned the business around in full, or that I personally made happen whatever turnaround there has been, but I do think we did a few things right as far as Kantor and Confidence would see it.  Her formula for a turnaround (Espouse the new message, Exemplify it with leadership actions, Establish programs to systematically drive it home throughout the organization) is right in line with our philosophy here at Return Path.

First, we accelerated the separation and autonomy of a fledgeling NetCreations spin-off unit, now our Authentic Response market research group, and let a culture of collaboration and innovation flourish under an exceptionally talented leader, Jeff Mattes.

But that was the easy part (for me anyway), because that part of the business was actually working well, and we just let it do its thing, with more support from HQ.  The turnaround of the core list rental and lead generation business of NetCreations, the original Postmaster Direct, was much tougher and is still a work in progress.  In the last six months, we’ve finally turned the corner, but it hasn’t been easy.  Even though we knew lots of what had to be done early on, actually doing it is much harder than b-school platitudes or even the best-written books make it seem.

The one thing that Kantor probably gives short shrift to, although she does mention it in passing a couple times, is that frequently turnarounds require massive major amounts of purging of personnel (not just management) to take hold.  As one of my former colleagues from Mercer Management Consulting used to say, “sometimes the only way to effect Change Management is to change management.”  Sometimes even very talented people are just bogged down with baggage — the “ghost of quarters past” — and nothing you do or say can break that psychological barrier.

Boy, have we learned that lesson here at Return Path the hard way.  I’m extremely grateful to our team at Return Path, from the old RP people who’ve seen it all happen, to the old NetCreations people who are thriving in the new environment, to the new blood we’ve brought in to help effect the turnaround, for playing such important roles in our own Confidence-building exercises here.  And I’m super Confident that 2007 will be the year that we officially turn the old NetCreations/Postmaster losing streak into a big, multi-year winning streak.

Anyway, I realize this may redefine the “short” in book short, but Confidence is without question a good general management and leadership read.

Book Short:  Continuing to make “sustainability” a mainstream business topic

The Big Pivot: Radically Practical Strategies for a Hotter, Scarcer, and More Open World, by my friend Andrew Winston, is a great book.  It just got awarded one of the Top 10 business books of 2014 by Strategy+Business, which is a great honor.

Andrew builds nicely on his first book, Green to Gold:  How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage (post, book link) (and second book, which I didn’t review, Green Recovery), as I said in my review of Green to Gold, to bring:

the theoretical and scientific to the practical and treat sustainability as the corporate world must treat it in order to adopt it as a mainstream practice — as a driver of capitalistic profit and competitive advantage.

Andrew’s central thesis, with plenty of proof points in the book for our planet of 7 Billion people, rapidly heading to 9-10 Billion, is this:

Whether you take a purely fiscal view of these challenges or look through a human-focused lens, one thing is clear: we’ve passed the economic tipping point. A weakening of the pillars of our planetary infrastructure— a stable climate, clean air and water, healthy biodiversity, and abundant resources— is costing business real money. It’s not some futuristic scenario and model to debate, but reality now, and it threatens our ability to sustain an expanding global economy… If this hotter, scarcer, more transparent, and unpredictable world is the new normal, then how must companies act to ensure a prosperous future for all, including themselves?

Andrew’s writing is accessible and colorful.  The book is full of useful analogies and metaphors like this one:

Climate can also seem easy to write off because the warming numbers don’t sound scary. A couple degrees warmer may sound pleasant, but we’re not really talking about going from 75 to 77 degrees Fahrenheit on a nice spring day. As many others have pointed out, the right metaphor is a fever. Take your core body temperature up one degree, and you don’t feel so great. Five degrees, and you’re sick as a dog. Ten degrees, and you’re dead.

The book also does a really nice job of looking at the externalities of climate change in a different way.  Not the usual “I can pollute, because there’s no cost to me to doing so,” but more along the lines of “If I had to pay for all the natural resources my business consumes, I would treat them differently.”

Some of Andrew’s points are good but general and maybe better made elsewhere (like the problems of short-termism on Wall Street), but overall, this book is a great think piece for all business leaders, especially in businesses that consume a lot of natural resources, around how to make the challenge of climate change work for your business, not against it.

Two things occurred to me during my read of The Big Pivot that I think are worth sharing for the people in my life who still don’t believe climate change is real or threatening.  The first is Y2K.  Remember the potentially cataclysmic circumstance where mission critical systems all around the world were going to go haywire at midnight at the turn of the millennium?  The conventional wisdom on why nothing major went wrong is that society did enough work ahead of time to prevent it, even though the outcomes weren’t clear and no one system problem alone would have been an issue.  I was thinking about this during the book…and then Andrew mentioned it explicitly towards the end.

The second is something I read several years ago in my personal news bible, The Economist.  I couldn’t find the exact quote online just now, but it was something to the effect of “Even if you don’t believe man created climate change, or that climate change is real and imperiling to humanity and can be fixed by man, the risks of climate change are so great, the potential consequences so dire, and the path to solve the problem so lengthy and complex and global…it’s worth investing in that solution now.”

Let’s all pivot towards that, shall we?  If you want to download the introduction to the book for free, you can find it on Andrew’s web site.  Or for a three-minute version of the story, you can watch this whiteboard animation on YouTube.

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: Hire Great

It’s certainly not hiring season for most of America The World The Universe, but we are still making some limited hires here at Return Path, and I thought – what better time to retool our interviewing and hiring process than in a relatively slow period?

So I just read Who: The A Method for Hiring, by Geoff Smart and Randy Street.  It’s a bit of a sequel, or I guess more of a successor book, to the best book I’ve ever read about hiring and interviewing, Topgrading, by Geoff Smart and his father Brad (post, link to buy).  This one wasn’t bad, and it was much shorter and crisper.

I’m not sure I believe the oft-quoted stat that a bad hire costs a company $1.5mm.  Maybe sometimes (say, if the person embezzles $1.4mm), but certainly the point that bad hires are a nightmare for an organization in any number of ways is well taken.   The book does a good job of explaining the linkage from strategy and execution straight to recruiting, with good examples and tips for how to create the linkage.  That alone makes it a worthwhile read.

The method they describe may seem like common sense, but I bet 95 out of 100 companies don’t come close.  We are very good and quite deliberate about the hiring process and have a good success average, but even we have a lot of room to improve.  The book is divided into four main sections:

• Scorecard: creating job descriptions that are linked to company strategy and that are outcome and competency based, not task based
• Sourcing: going beyond internal and external recruiters to make your entire company a talent seeker and magnet
• Selection: the meat of the book – good detail on how to conduct lots of different kinds of interviews, from screening to topgrading (a must) to focused to reference
• Sell:  how to reel ’em in once they’re on the line (for us anyway, the least useful section as we rarely lose a candidate once we have an offer out)

One of the most poignant examples in the book centered around hiring someone who had been fired from his previous job.  The hiring method in the book uncovered it (that’s hard enough to do sometimes) but then dug deep enough to understand the context and reasons why, and, matching up what they then knew about the candidate to their required competencies and outcomes for the job, decided the firing wasn’t a show-stopper and went ahead and made the hire.

I’d think of these two books the way I think about the Covey books.  If you have never read The 7 Habits of Highly Effective People, you could just get away with reading Stephen Covey’s newer book, The 8th Habit:  From Effectiveness to Greatness, though the original is much richer.

Book Short:  Long on Platitudes, Short on Value

I approached Success Built to Last:  Creating a Life That Matters, by Jerry Porras, Stewart Emery, and Mark Thompson, with great enthusiasm, as Porras was co-author, along with Jim Collins, of two of my favorite business books of all time, Built to Last and Good to Great. I was very disappointed in the end.  This wasn’t really a business book, despite its marketing and hype.  At best, it was a poor attempt at doing what Malcolm Gladwell just did in Outliers in attempting to zero in on the innate, learned, and environmental qualities that drive success.

The book had some reasonably good points to make and definitely some great quotes, but it was very rambly and hard to follow.  Its attempt at creating an overall framework like the one used in Built to Last and Good to Great just plain didn’t work, as two of the three legs of the stool were almost incomprehensible, or to put it more charitably, didn’t hang together well.

This isn’t a terrible book to have on your shelf, and it might be good to skim, but remember that “skim” is only one letter away from “skip.”

Book Short:  Loving the Strengths Movement More Than the Book

I’m a big believer in the so-called Strengths Movement — that we would all be better served by playing to our strengths than agonizing over fixing our weaknesses. I think it’s true both in professional and personal settings.

The books written by Marcus Buckingham that come out of Gallup’s extensive research into corporate America, First, Break All the Rules (about management) and Now, Discover Your Strengths (self-management) are both quite good.  Another book written by someone else off the same research corpus, 12: The Elements of Great Managing is ok, but not as good, as I wrote about here.

Buckingham’s newest, Go Put Your Strengths to Work: 6 Powerful Steps to Achieve Outstanding Performance, is fine and has some good points but is way too long, a little hokey, and has a lot of online companion material that is far more interesting sounding than it is actually useful.

The book does build nicely on Now, Discover Your Strengths by giving you inspiration and a framework for taking those signature themes from the prior book and translating them into action — stuff you actually do every day that plays to your strengths and draws out your weaknesses.  And that’s helpful.  Some of his suggestions for what you do with that information are ok but a bit common sense only and way too drawn out (“here’s how to talk to your boss…”).

To be fair, I am going to do some of the work that Buckingham recommended doing — so I guess that says something about the power of the book, or at least the movement underlying it.  But not the best read in the world.

Book Short: There is No Blueprint to $1B

Blueprint to a Billion: 7 Essentials to Achieve Exponential Growth, by David Thomson (book, Kindle) sounds more formulaic than it is. It’s not a bad book, but you have to dig a little bit for the non-obvious nuggets (yes, I get that growing your company to $1B in sales requires having a great value proposition in a high growth market!). The author looked for commonalities among the 387 American companies that have gone public since 1980 with less than $1B in revenues when they went public and had more than $1B in revenue (and were still in existence) at the time of the book’s writing in 2005.

Thompson classifies the blueprint into “7 Essentials,” which blueprint companies do well on across the board. The 7 Essentials are:

– Create and sustain a breakthrough value proposition

– Exploit a high growth market segment

– Marquee/lighthouse customers shape the revenue powerhouse

– Leverage big brother alliances for breaking into new markets

– Become the masters of exponential returns

– The management team: inside-outside leadership

– The Board: comprised of essentials experts

As I said above, there were some nuggets within this framework that made the entire read worthwhile. For example, crafting a Board that isn’t just management and investors but also includes industry experts like customers or alliance partners is critical. That matches our experience at Return Path over the years (not that we’re exactly closing in on $1B in revenues – yet) with having outside industry CEOs sit on our Board. Our Board has always been an extension of our management and strategy team, but we have specifically gotten some of our most valuable contributions and thought-provoking dialog from the non-management and non-investor directors.

Another critical item that I thought was interesting was this concept of not just marquee customers (yes, everyone wants big brand names as clients), but that they also need to be lighthouse customers. They need to help you attract other large customers to your solution – either actively by helping you evangelize your business, or at least passively by lending their name and case study to your cause.

The book is more of a retrospective analysis than a playbook, and some of its examples are a bit dated (marveling at Yahoo’s success seems a bit awkward today), and the author notes as well that many of the “blueprint” companies faltered after hitting the $1B mark. But it was a good read all-in. What I’d like to see next is a more microscopic view of the Milestones to $100 Million!

In 2005, I wrote a post called Unfolding the Map in which I looked at these two seemingly opposing philosophies from successful entrepreneurs:

• If you don’t have a map, you can’t get lost
• If you don’t have a map, you can’t get where you’re going

and tried to combine them when thinking about product roadmapping. The same contradiction and combination could be applied to anything, including coaching and development.

That’s why I was excited to read my friend Matt Spielman’s new book, Inflection Points: How to Work and Live with Purpose. Matt worked at Return Path twice over the years — first as employee #3 (more on that in a minute) and then over a decade later as CMO. We live near each other and know each other’s families. I’ve been lucky enough to see his career unfold and develop into what it is today, a flourishing coaching business called Inflection Point Partners that helps clients tremendously…and that also feeds Matt’s soul.

When I first met Matt and he joined me and Jack to launch Return Path in 1999, he was fresh out of business school and focused on sales and marketing from his prior career in investment banking. Our idea was that he would do the same for us as we got our product in market. But as I started focusing more on what kind of company we wanted to build and how to get there, Matt became my leading thought partner on those topics. When we got to about 25 people, he and I created a new role for him — head of Human Capital and Organization Development. While a bit clunky, that title meant that Matt was the principal person helping me create at small scale what we later branded our People First philosophy. That philosophy and the practices we developed out of it led to 20 years of a strong track record of investing in people and helping over 1,300 colleagues grow their careers by being simple, actionable, and broad-based in the way we handled feedback and development planning. This started back in 2000.

Matt’s book puts the ethos that I saw percolating over 20 years ago into a tight framework around his coaching methodology of the GPS (Game Plan System). The book is short and sweet and walks through both the philosophy and the framework in accessible terms. And while it’s true that you have to be open to new ideas, open to serendipity, and go with flow sometimes…it’s also true that if you have specific goals in mind, you are unlikely to achieve them without a focused effort.

I’ve written a lot about coaching lately between The Impact of a Good Coach and another recent post about a strong coaching framework about intentionality in Russell Benaroya’s book. In that second post, I noted that “While I have become less and less of a life planner as I’ve gotten older under the headline of ‘man plans, God laughs,’ I am a huge believer in being intentional about everything. And that pretty much sums up Matt’s book: If you don’t have a map, you can’t get where you’re going.

Book Short:  Triumph over Adversity

In truth, Malcolm Gladwell’s most recent book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, was a bit of a disappointment.  I thought his first three books, Tipping Point, Blink, and Outliers, were fantastic, and I routinely refer to them in business.  David and Goliath isn’t bad, it’s just a little light and hangs together a lot less than Gladwell’s other books.

I just read a scathing review of it in The New Republic, which I won’t bother linking to, mostly because the reviewer was on a total rant about Gladwell in general and was particularly insulting to people who read Gladwell (an interesting approach to a book review), essentially calling us self-help seekers who aren’t interested in reality or wisdom.  Nice.

Two seminal quotes from the book that get at its essence are:

To play by David’s rules you have to be desperate. You have to be so bad that you have no choice.

and

He was an underdog and a misfit, and that gave him the freedom to try things no one else ever dreamt of.

Those things are probably generally true in life, but also applicable to business.  A business book I read years ago called The Underdog Advantage: Using the Power of Insurgent Strategy to Put Your Business on Top, by David Morey and Scott Miller, brings this principle to life for work.

I also liked the concept Gladwell talked about a few times in the book about being a big fish in a small pond, and how that can sometimes be a better place to be than a small fish in a big pond in terms of building self-confidence.  That’s certainly been true for me in my life.

If you go back the premise of Gladwell’s books in general, as I heard him say on The Daily Show the other night — “to get people to look at the world a little differently” — then David and Goliath does that on some level.  And for that alone, it’s probably worth a quick read.

Book Short:  I Wish This Existed 12 Years Ago

Brad Feld has been on my board for over a decade now, and when he and his partner Jason Mendelson told me about a new book they were writing a bunch of months ago called Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, I took note.  I thought, “Hmmm.  I’d like to be smarter than my lawyer or venture capitalist.”

Then I read an advanced copy.  I loved it.  At first, I thought, I would really have benefited from this when I started Return Path way back when.  Then as I finished reading it, I realized it’s just a great reference book even now, all these years and financings later.  But as much as I enjoyed the early read, I felt like something was missing from the book, since its intended audience is entrepreneurs.

Brad and Jason took me up on my offer to participate in the book’s content a little bit, and they are including in the book a series of 50-75 sidebars called “The Entrepreneur’s Perspective” which I wrote and which they and others edited.  For almost every topic and sub-topic in the book, I chime in, either building on, or disagreeing, with Brad and Jason’s view on the subject.

The book is now out.  As Brad noted in his launch post, the book’s table of contents says a lot:

1. The Players
2. How to Raise Money
3. Overview of the Term Sheet
4. Economic Terms of the Term Sheet
5. Control Terms of the Term Sheet
6. Other Terms of the Term Sheet
7. The Capitalization Table
8. How Venture Capital Funds Work
9. Negotiation Tactics
10. Raising Money the Right Way
11. Issues at Different Financing States
12. Letters of Intent – The Other Term Sheet
13. Legal Things Every Entrepreneur Should Know

Fred has posted his review of the book as well.

Bottom line:  if you are an aspiring or actual entrepreneur, buy this book.  Even if you’ve done a couple of financings, this is fantastic reference material, and Brad and Jason’s points of view on things are incredibly insightful beyond the facts.  And I hope my small contributions to the book are useful for entrepreneurs as well.