Book Short:  Crazy Eights

In honor of Return Path being in the midst of its eighth year, I recently read a pair of books with 8 in the title (ok, I would have read them anyway, but that made for a convenient criterion when selecting out of my very large “to read” pile).

Ram Charan’s latest, Know-How:  The 8 Skills That Separate People People Who Perform From Those Who Don’t, was pretty good and classic Charan.  Quick, easy to skim and still get the main points.  The book lost a little credibility with me when Charan lionized Verizon (perhaps he uses a different carrier himself) and Bob Nardelli (the book was published before Nardelli’s high profile dismissal), but makes good points nonetheless.  Some of the 8 Skills he talks about are what you’d expect on the soft side of leadership — building the team, understanding the social system, judging people — but his best examples were particularly actionable around positioning, goal setting, and setting priorities.  The book reminded me much more of Execution and much less of Confronting Reality (which is a good thing).

For years I’ve felt like the last person around to still not have read The 7 Habits of Highly Effective People, so I thought I’d skip straight to the punchline and read Stephen Covey’s newer book, The 8th Habit:  From Effectiveness to Greatness.  Fortunately, as I’d hoped, the new book summarizes the prior book several times over, so if you haven’t read the first, you could certainly just start with this one.  The book also comes with a DVD of 16 short films, some of which are great — both inspirational and poignant.  Unlike most business books, the 8th Habit is NOT skimmable.  It almost has too much material in it and could probably be read multiple times or at least in smaller pieces.  The actual 8th habit Covey talks about is what he calls Find Your Voice and Help Others Find Their Voices and is a great encapsulation of what leading a knowledge worker business is all about.  But the book is much deeper and richer than that in its many models and frameworks and examples/tie-ins to business and goes beyond the “touchy feely” into hard-nosed topics around execution and strategy.

Now I’m looking for the DVD of the first season of Eight is Enough!

Pivot, Don’t Jump!

I spoke last night at the NYC Lean Startup Meetup, which was fun.  I will write a couple other posts based on the experience over the next week or so.  The Meetup is all about creating “lean startups,” not just meaning lean as in cheap and lightweight, but meaning smart at doing product development from the perspective of finding the quickest path to product-market fit.  No wasted cycles of innovation.  Something we are spending a lot of time on right now at Return Path, actually.

My topic was “The Pivot,” by which the group meant How do you change your product idea/formation quickly and nimbly when you discover that your prior conception of “product-market fit” is off?  I talked a bit about the pivots we’ve done over the years here, not just the corporate ones, but some of the essential product ones as well.  One of the comments a member of the Meetup made that really stuck with me was that you have to “Pivot, Don’t Jump” when making changes to your business or product.

This has been true of Return Path’s pivots over the years.  Our pivots have all had two very solid foundation points — the company’s deep expertise in email, and our customer base.  Every pivot we’ve done has been in some way at the request/urging of our clients, and the new directions have always been in line with our core capabilities.  While we have a talented team that probably could execute lots of different businesses well, it’s hard to see us being successful in other areas that are farther afield.

People over the years, for example, have suggested that we should get into SMS deliverability — isn’t that going to be a hot topic?  We don’t know.  We don’t spend our lives immersed in text messaging.  What about getting into measurement of social media messaging — isn’t that related?  Maybe, but it’s not in our wheelhouse.  Expanding from email deliverability software and analytics, into services, into data, into whitelisting on the other hand – those were pivots, not jumps.

One other note of course, is that the larger your business is, and the more investors have a stake in it, the harder it is to make BIG pivots or any kind of jumps.  Innovation is still critical, but innovating from a well-protected core is what it’s all about, not chasing new shiny objects.

Doing Well by Doing Good, Part IV

This series of posts has mostly been about things that people or companies do that help make the world a better place — sometimes when it’s their core mission, other times (here and here) when it becomes an important supporting role at the company.

Today’s post is different — it’s actually a Book Short as well of a new book that’s coming out later this fall called Green to Gold:  How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage, published by Yale Press and written by Daniel Esty (a Yale professor and consultant), and a good friend of mine, Andrew Winston, a corporate sustainability consultant.

Green to Gold is a must-read for anyone who (a) holds a leadership position in business or is a business influencer, and (b) cares about the environment we live in.  Its subtitle really best describes the book, which is probably the first (or if not, certainly the best) documentation of successful corporate environmentalstrategy on the market.

It’s a little reminiscent to me of Collins Built to Last and Good to Great in that it is meticulously researched with a mix of company interviews/cooperation and empirical and investigative work.  It doesn’t have Collins “pairing” framework, but it doesn’t need to in order to make its point.

If you liked Al Gore’s movie, An Inconvenient Truth, this book will satisfy your thirst for information about what the heck the corporate world is doing or more important, can do, to do its part in not destroying our ecosystem.  If you didn’t like Gore’s movie or didn’t see it because you don’t like Al Gore or don’t think that many elements of the environmental movement are worthwhile, this book is an even more important read, as it brings the theoretical and scientific to the practical and treats 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.

This is a really important work in terms of advancing the cause of corporate social responsibility as it applies to the environment.  Most important, it proves the axiom here that you can, in fact, Do Well by Doing Good.  If you’re interested, you can pre-order the book here.  Also, the authors are writing a companion blog which you can get to here.

Book Short:  Choose Voice!

I took a couple days off last week and decided to re-read two old favorites.  One –Ayn Rand’s The Fountainhead — my fourth reading — will take me a little longer to process and figure out if there’s a good intersection with the blog.  One would think so with entrepreneurship as the topic, but my head still hurts from all the objectivism.  The second — Exit, Voice, and Loyalty, by Albert O. Hirschman — is today’s topic.

I can’t remember when I first read Exit, Voice, and Loyalty.  It was either in senior year of high school Economics or Government; or in freshman year of college Political Philosophy.  Either way, it was a long time ago, and for some reason, some of the core messages of this quirkly little 125 page political/economic philosophy book have stayed with me over the years.  I remembered the book incorrectly as a book about political systems, and I think it was born consciously in the wake of Eugene McCarthy’s somewhat revolutionary challenge to a sitting President Johnson for the Democratic Party nomination in 1968.  But the book is actually about business; it’s just about businesses and their customers, not corporations as social structures (the latter being more of an interest to me).  Written by an academic economist (I think), the book has its share of gratuitous demonstrative graphs, 2×2 matrices, and SAT words.  But its central premise is a gem for anyone who runs an organization of any size.

The central premise is that there are really two paths by which one can express dissatisfaction with a temporary, curable lapse in an organization:  exit (bailing), or voice (trying to fix what’s wrong from within).  The third key element, Loyalty, is less a path in and of itself but more an agent that “holds exit at bay and activates voice.”

You need to read the book and apply it to your own circumstances to really get into it, but for me, it’s all about breeding loyalty as a means of making voice the path of least resistance, even when exit is a freely available option (few of us run totalitarian states or monopolies, after all).  That to me is the definition of a successful enterprise, both internally and externally.

With your customers:  make your product so irresistible, and make your customer service so deep, that your customers feel an obligation to help you fix what they perceive to be wrong with your product first, rather than simply complain about price or flee to a competitor.

With your employees:  make your company the best possible place you can think of to work so that even in as ridiculously fluid a job market as we live in, your employees will come to their manager, their department head, the head of HR, or you as leader to tell you when they’re unhappy instead of just leaving, or worse, sulking.

With your company (you as employee):  make yourself indispensible to the organization and do such a great job that if things go wrong with your performance or with your role, your manager’s loyalty to you leads him or her to give you open feedback and coach you to success rather than unceremoniously show you the door.

Ok, this wasn’t such a short book short — probably the longest I’ve ever written in this blog, and certainly the highest ratio of short:actual book.  But if you’re up for a serious academic framework (quasi-business but not exclusively) to apply to your management techniques, this short 1970 book is as valid today as when it was written.  Thanks to David Ramert (I am pretty sure I read it in high school) for introducing it to me way back when!

• The dangers of relying on collective intelligence revealed!
  Wikipedia Celebrates 750 Years Of American Independence Founding Fathers, Patriots, Mr. T. Honored (From The Onion — hilarious)
  (tags: Humor Social_Networking wikipedia Technology history onion)

Counter Cliche:  How Much Paranoia is Too Much Paranoia?, Part II

After the original posting, one of my readers wrote in with the following question:

I was one of the first employees at a pre-funding enterprise social networking company, after having consulted on doing their business plan for them (not coming up with it; mainly turning the CEO and CTO’s engineer-speak into English). 

So with all that background, when you say “open book” to your employees, can you break that out some more?  I have an idea of what I think that means, and what it doesn’t, but I’d love to hear your thoughts on it too.

My thoughts on this are quite simple.  We are willing to share everything internally other than compensation.  We publish detailed monthly financials and reporting to the team, and we ask that they treat the information as extremely confidential.  We have had only good things come from this level of openness with our team.  Good ideas, good esprit de corps, and a radical reduction in fear of the unknown (the old "Looks like we had a bad quarter, does that mean I need to look for a job now?  Are we running out of money?"). 

In fact, I know one other CEO who goes so far as to publish an only-slightly modified version of his Board books to the entire company.

Transparency is a good thing.

Doing Well by Doing Good, Part II

At Return Path, we feel strongly that companies can and should make the world a better place in several different ways.  Certainly, many companies’ core businesses do that — just look at all the breakthroughs in medicine and social services over the years brought to market by private enterprises, including my friend Raj Vinnakota, who I wrote about in part I of this series last year.  But many companies, including Return Path, aren’t inherently “save the world” in nature (although some people in online marketing would have you believe that we are!), and those companies can still make a difference in the world in a few ways:

1. Organize projects in the local community for their employees to help out/work at

2. Allow employees to take a limited amount of paid time off for community service work

3. Provide matching gift programs so employees’ donations are enhanced by the company

4. Donate money or services to charitable organizations they believe in

As a relatively small company, we have to pick our battles here.  We currently have a policy for #2 above that allows employees 3 days per year of paid time off for community service work.  And today, we are announcing a comprehensive program for #4 above in association with the Accelerated Cure Project for Multiple Sclerosis.  This choice was inspired by our long-time employee and friend Sophie Miller, who was diagnosed almost two years ago now with MS (and is doing great)!

Read the details of what we’re doing with Accelerated Cure in the full press release here.

CEO Diary:  What Makes a Great Day?

5:30 a.m. – run (have to keep up with Brad)

8:45 a.m. – networking coffee with former main contact at large strategic partner; now CFO of another company in the industry

9:30 a.m. – work time/email/read newsletters, Wall St. Journal online, various RSS feeds

10:30 a.m. – internal meeting to discuss mothballing a product feature that’s hard to maintain and doesn’t generate much revenue

11:00 a.m. – internal meeting to clarify roles and responsibilities between account management and  client technical operations

11:30 a.m. – brainstorm 2006 strategy with head of one of our lines of business

1:00 p.m. – great sales call on a Tier I prospect with new sales person; business almost certainly forthcoming!

3:00 p.m. – meet with head of sales and hea of HR to discuss candidate for sales position and potential changes to sales compensation structure

3:30 p.m. – review draft of new (revolutionary!?!?) corporate web site; do deep dive on critical headlines and copy points with team members

4:30 p.m. – status meeting with new head of marketing,including quick stand-up meeting on PR strategy for upcoming trade show with one line of business head and product manager

5:30 p.m. – work/email/planning next Board meeting agenda/blog posting

7:00 p.m. – dinner with CTO

Energizing (frenetic?).  Diverse in terms of functions/departments covered.  Good balance of internal vs. external.  Some items high level, some more detailed.  Mix of brainstorming vs. decisions vs. status checks.  Some social mixed in with hardcore work.  This is why I love my job!

Counter Cliche:  It’s Fun at the Top!

Fred’s VC cliche this week is a good one — that CEOs have the weight of the company on their shoulders, otherwise known as "it’s lonely at the top."  He’s right in a lot of ways, and his two suggestions for dealing with it are good.  To those, I’d add a third suggestion, which is to create a peer group of other CEOs that gets together periodically to talk, share ideas, and blow off steam.  It doesn’t need to be something formal like YPO or YEO — just have a quarterly dinner roundtable with a handful of other local CEOs you know and respect, whether from your industry or not. 

But the counter to Fred’s cliche is that while yes, it can be lonely at the top, it can also be a ton of fun.  Having the weight of the company on one’s shoulders also means having the ability to do some exciting things:

– Being social and interacting with people all across the organization, at all levels, to really understand what’s going on

– Being multi-disciplinary and working on projects with all departments to make sure things are in sync

– Periodically getting out of the organization and understanding what’s happening in the outside world, with customers, suppliers, partners, and investors

I’m sure there are others, and I’m certainly lucky to have an investor who has sympathy for the "weight of the company" problem — but there are many days where the weight is completely overshadowed by the fun!

Why I Love My Board, Part II

I’ve written a few things about my Board of Directors over the years, some of which I note below.  Part I of this series isn’t particularly useful, though there’s an entertaining link in it to a video of Fred that’s worth looking at if you know or follow him.

Today, we are happy to announce that we are adding a new independent director, Scott Petry, the founder of Postini and now a senior email product leader at Google (read the official press release [here]).  Scott’s a fantastic addition to our already strong Board, and the process of recruiting and adding him has made me reflect a bit on my Board and its strengths and weaknesses, so I thought I’d share a couple of those thoughts here.

I think Return Path has cultivated a very high functioning Board over the years, and I feel very fortunate to have the group that we have.  Here are the top five things I think make our Board special, in no particular order.

1. We have great individuals on the Board.  Each of our individual Board members — Fred Wilson, Greg Sands, Scott Weiss, Scott Petry, and Brad Feld (now officially an observer), (in addition to me) — could anchor a super strong Board in his own right and have all served on multiple Boards of related companies.  And not only do these guys know their stuff…they do their homework.  They all come to every meeting very well prepared.
2. The individual Board members are different but have different experiences and personalities that complement each other nicely.  Among the three VCs on the Board, two have operating experience, one as a founder and one in product management.  Among the two industry CEOs, one has more of a business development focus, and the other has deep technical expertise.  Some directors are excitable and a bit knee-jerk, others are more reflective; some are aggressive and others are more conservative; some have extremely colorful metaphors, others are a bit more steeped in traditional pattern recognition.
3. We have built a great team dynamic that encourages productive conflict.  I assume a lot of rooms full of great directors of different types are so ego-laden that people just talk over each other.  Our group, for whatever reason, doesn’t function that way.  We are engaged and in each others’ faces during meetings, no one is afraid to voice an opinion, and we listen to each other.  Some of this may be the way we spend time together outside of Board rooms, which I wrote about in The Social Aspects of Running a Board. Some is about just making sure to have fun, which I wrote about in The Good, The Board, and The Ugly (Part I, Part II, Part III), I talk about other aspects of running a good Board, including making sure to have fun – that post includes an entertaining picture of now-Twitter CEO Dick Costolo and a few of his friends from his FeedBurner days.
4. We are deliberate about connecting the Board and the Executive team, and the rest of the company.  We encourage every director to have a direct relationship with every one of my direct reports.  They connect both during and outside of meetings, and they have gotten to know each other well over the years.  This is much more helpful to us than a more traditional “hourglass” structure where all connections go through the CEO.
5. We run great meetings.  We send out a single, well-organized document several days before the meeting.  Board members do their homework.  We focus on current and future issues more than reporting on historical numbers, and we no longer do any presentations — it’s all discussion (I also wrote about a lot of this here in PowerPointLess).

Welcome to the Return Path family, Scott P – we are delighted to have you on board our Board!

5 Ways to Spot Trends That Will Make You (and Your Business) More Successful

I’ve recently started writing a column for The Magill Report, the new venture by Ken Magill, previously of Direct magazine and even more previously DMNews. Ken has been covering email for a long time and is one of the smartest journalists I know in this space. My column, which I share with my colleagues Jack Sinclair and George Bilbrey, covers how to approach the business of email marketing, thoughts on the future of email and other digital technologies, and more general articles on company-building in the online industry – all from the perspective of an entrepreneur. Below is a re-post of this week’s version, which I think my OnlyOnce readers will enjoy.

Last week I published my annual “Unpredictions” for 2011. This tradition grew out of the fact that I hate doing predictions and my marketing team loves them. So we compromise by predicting what won’t happen.

But the truth is that the annual prediction ritual – while trite – is really just trend-spotting. And trend-spotting is an important skill for entrepreneurs. Fortunately it’s a skill that can be acquired, at least it can with enough deliberate practice (another skill I talk about here).

Here are five habits you should consider cultivating if being a better trend spotter is in your career roadmap.

Read voraciously. I read about 50 books every year.  About half of them are business books, and I also mix in a bit of fiction, humor, American history, architecture and urban planning, and evolutionary biology.  I keep up with more than 50 blogs and I read all the trade publications that cover email.  I also read the Wall Street Journal and The Economist regularly.  What you read is a little less important than just reading a lot, and diversely.

Use social media (wisely). Julia Child once said that the key to success in life was having great parents. My advice to you is quite a bit simpler:  make friends with smart people. Facebook, Twitter, LinkedIn and others have given us a window into the world unlike any other. Status updates, tweets, and – maybe most important of all – links shared by your network of friends and colleagues gives you a sense of what people are talking about, thinking about and working on. And you can’t just lurk.  You actually have to be “in” to get something “out.”

Follow the money. Pay attention to where money gets invested and spent. This includes keeping an eye on venture capital, private equity, and the public markets, as well as where clients (mostly IT and marketing departments) are spending their dollars and what kinds of people they are hiring. Money flows toward ideas that people think will succeed. A pattern of investments in particular areas will give you clues to what might be the big ideas over the next five to 10 years.

Get out of the office: I think it’s hugely important for anyone in business, and especially entrepreneurs, to spend time in the world to get fresh perspectives. I’m not sure who coined the phrase, but our head of product management, Mike Mills, frequently refers to the NIHITO principle – Nothing Interesting Happens in the Office.  Now that’s not entirely true – running a company means needing to spend a huge amount of time with people and on people issues, but last year I traveled nearly 160,000 miles around the world meeting with prospect, clients, partners and industry luminaries. You don’t have to be a road warrior to get this one right – you can attend events in your local area, develop a local network of people you can meet with regularly – but you do have to get out there.

Take a break. While you need information to understand trends, you can quickly get overloaded with too much data.  Trend spotting is, in many ways, about pattern recognition. And that is often easier to do when your mind is relaxed.  Ever notice that you have moments of true epiphany in the shower or while running? Give yourself time every week to unplug and let your mind recharge. As Steven Covey says, “sharpen that saw”!