Book Short: The Most Rapacious Guys in the Room

I just finished The Smartest Guys in the Room, by journalists Bethany McLean and Peter Elkind. This is the story of Enron, and what a tale it is! The book is a good quick business novel read. It reminded me a lot of Barbarians at the Gate, except that it made me far angrier. I’m not sure if that’s because I’m at a different place in my career now than I was 10 years ago and therefore have a different appreciation for what goes on in companies, or if the Enron guys were just far worse than anyone surrounding RJR Nabisco. But in any case, as my Grandpa Bill would have said, this one certainly raised my hackles.

Anyway, I can’t even get into the details without working myself into a frenzy about these crooks, but suffice to say there are lots of “what not to do” lessons in this book, starting with CEO Ken Lay’s wuss-like, disconnected approach to leading the company and ending with CFO Andy Fastow’s insane rationalizations for using the company as his own piggy bank. Anyway, I thought it would just be easier to just list out a few simple things to look for in your own company if you’re concerned you might be having some financial scandals within.  You know you have a problem if…

– Your company has 3,000 off-balance sheet special purpose entities, including 800 in the Caymans

– Your CEO has waived your company code of ethics twice so that the CFO could negotiate deals for his own profit against the company

– Your President combatively calls an analyst an asshole on an earnings call when asked why the company couldn’t produce a balance sheet and cash flow statement with its income statement and earnings release

– Your staffers meet someone from your auditor and say “oh, you’re the guy that won’t let us do something”

– Your accounting department becomes viewed as a major profit center because of its treatment of revenue

It’s truly astonishing what these bozos thought they could get away with. Thank God they’re going to jail. Thanks to my colleague Patty Mah (a friend of the author) for this book.

Book Shorts:  Fred the Cow?

I enjoyed two interesting, super-quick reads from last week that have a common theme running through them:  being remarkable.

The Fred Factor, by Mark Sanborn, is one of those learn-by-storytelling business novellas.  It’s all about the author’s mailman, Fred, and how Fred has figured out how to make a difference in people’s lives even with a fairly routine job.  The focal points of the book are things like “practice random acts of kindness” and “turn the ordinary into the extraordinary by putting passion into your work.”  It’s a good reminder that it is unbelievably easy, not to mention free, to be kind and thoughtful, and that those things are always always always worth doing.  Kinda makes me wonder what the Brad factor is.  <g>

The Big Moo, a collection of essays written by 33 different business thinkers/writers and edited by Seth Godin, isn’t out yet, but you can pre-order it via that link on Amazon.  It follows the main theme of another of Seth’s books, Purple Cow, about how to make your business remarkable and backs it up with various vignettes from the different writers.  It has some great reminders about how easy and inexpensive it can be to be remarkable in business.  Wisdom like “Criticism?  Internalize it,” and “Get great ideas about your business from new employees,” and “How would you run your business if you relied on donations from your customers in order to survive?” are all insightful and thought provoking.

Each is great and an easy read, and while one is more personal and the other business-oriented, in they are both somewhat remarkable.

Unfolding the Map

I heard two similar catchphrases last week, both from entrepreneurs I respect, that are diametrically opposed:

1. If you don’t have a map, you can’t get lost

2. If you don’t have a map, you can’t get where you’re going

How to reconcile the two?  I think the answer is stage of company.  In the early days of a business, being too rigid on what you’re building and how you interact with your customer set can doom you.  You have to be nimble!  Spry!  Not care exactly what your endgame is, as long as it’s good.

As your business grows and you have a customer base to support and numbers to hit, having too much product development wanderlust across the organization will kill you.  You have more people at more levels in the organization who need more direction and goal-setting in order to stay effective and productive.

The trick is having enough of a map in the early days to not get completely defocused, and having enough flexibility in the map later on to switch routes if there’s traffic ahead.

Yes, They Are THAT Important

Our enterprise spam filter has been down for about a day as we reconfigure some servers here.  It has been just this side of crippling, especially travelling and getting spammed to death on my Treo.

Spam filters have become good enough (though still not perfect on the false positive side, of course) and prevalent enough, that I had forgotten just how important a role they play in today’s corporate IT environment.  We’d be in really sorry shape without them!

Counter Cliche:  Sometimes You Need a Shortstop

Fred’s Chiche of the Week this week is about drafting the best available (corporate) athlete.  I think he’s right lots of the time, especially in startup companies where people need to wear multiple hats.  And it might also be a good rule of thumb in larger companies, when you want to have flexibility to move managers around from group to group and get them to easily take on new challenges or responsibilities.

But sometimes, you just need a shortstop, and if you were the GM of a baseball team, your manager or owner would be pretty ticked off if you went out and hired a decathlete for the job.  Companies who are in the "medium size" stage (and probably larger companies as well, under certain circumstances) are often creating new functions and departments that require people with specialized knowledge or experience, whether domain or functional, to get the business to the next level.  So you may want the most versatile shortstop you can find (maybe one who could play second or third base in a pinch), but at a minimum you need a great middle infielder.

One of my other board members, Greg Sands, described the phenomenon of companies growing out of the startup stage once to me as a comparison to cell development in small organisms.  As the organism grows, cells have to specialize for the organism to adapt to its new environment.  I guess this post could also have been called "sometimes you need a spleen," but that wouldn’t have been appropriately sporting given the original Cliche. 

These Things Do Take Lots of Care and Feeding

Pete Blackshaw wrote a really thoughtful piece in ClickZ today entitled “Ten Reasons Why I Should Stop Blogging.”  It’s a good read if you’re a middle of the road blogger…or particularly if you’re thinking about starting a new blog.

For Whom the Bell Tolls, Part II

Two years ago, when we got Vonage at home, I blogged raves about the service, which I continue to believe today (although I do hear mixed reviews of it from time to time, depending on the user-in-question’s internet connection).  And I blogged about Skype when I started using that last year.  The theme of both posts was a big “uh oh” to phone companies everywhere.

So let me add another note on this theme.  I spent some time yesterday at the offices of Skype, now a client of ours.  From the minute I walked in the door, something seemed odd about the office.  I couldn’t put my finger on it, there just seemed to be something missing.  Then it occurred to me — no phones.  Literally, I couldn’t see a single one.  The receptionist did have one for incoming calls and routing, and she said she thought there were one or two other ones in the entire office.  Everyone is happily on Skype.  Skype In, Skype Out, video Skype, plain old Skype.  It was a beautiful thing — not to mention extremely cost-effective.

Now I can’t wait for the team at Skype to figure out how make a true Skype mobile phone to marry VOIP with high-speed wireless.  Then I can be released from exorbitant cell phone charges.

To Ma Bell…and all of your offspring who specialize in overcharging customers and then providing them with horrendous customer service…you’re really on the path to being marginalized.  And good riddance, I say.

Marketing is Like Baskin Robbins

A couple years ago, I wrote that Marketing is Like French Fries, since you can always take on one more small incremental marketing task, just as you can always eat one more fry, even long after you should have stopped. Today, inspired in part by our ongoing search for a new head of marketing at Return Path and in part by Bill McCloskey’s follow up article about passion in email marketing in Mediapost, I declare that Marketing is also like Baskin Robbins – there are at least 31 flavors of it that you have to get right.

McCloskey writes:

I submit that the über marketer who is expert in all the various forms of interactive marketing is someone who just doesn’t exist, or is very bad at a lot of things. An interactive jack of all trades, master of none, is not the person you want heading up your email marketing efforts. What you want is someone who is corralling those passionate about search, RSS, email, banners, rich media, mobile marketing, WOMM, social networks, viral into a room and figuring out an integrated strategy that makes sense.

Boy, is he right.  But what Bill says is just the front row of ice cream cartons — the interactive flavors. Let’s not forget that running a full marketing department includes also being an expert in print, broadcast, direct mail, analytics, lead gen, sales collateral and presentations, creative design, copywriting, branding, PR, events, and sponsorships.  Wow.  I’m getting an ice cream headache just thinking about it.  No wonder CMOs have the highest turnover rate of any other C-level executive.

I think Bill’s prescription is the right one for larger companies — get yourself a generalist at the helm of marketing who is good at strategy and execution and can corral functional experts to coordinate an overall plan of attack.  It’s a little harder in small companies where the entire marketing department might only be 2-3 people.  Where do you put your focus?  Do you have all generalists?  Or do you place a couple bets on one or two specialties that you think best line up with your business?

I think my main point can be summed up neatly like this:  Running Marketing?  Be careful – it’s a rocky road out there.

Staying Power

I interview a lot of people.  We are hiring a ton at Return Path, and I am still able to interview all finalists for jobs, and frequently I interview multiple candidates if it’s a senior role.  I probably interviewed 60 people last year and will do at least that many this year.  I used to be surprised when a resume had an average job tenure of 2 years on it — now, the job market is so fluid that I am surprised when I see a resume that only has one or two employers listed.

But even the dynamic of long-term employment, as rare as it is, has changed.  My good friend Christine, who was a pal in college and then worked with me at MovieFone for several years before I left to start Return Path, just announced that she’s finally leaving AOL — after almost 11 years.  Now that’s staying power.  But most likely the reason she was able to stay at MovieFone/AOL for over a decade is that she didn’t have one single job, and she didn’t even work her way up a single management chain in a single department.  She had positions in marketing, business development, finance, operations, planning, strategy.  Most were in the entertainment field, so they did have that common thread, and some evolved from others, but the roles themselves had very different dynamics, skills required, spans of control, and bosses.

That’s the new reality of long-term employment with knowledge workers.  If you want to keep the best people engaged and happy, you have to constantly let them grow, learn, and try new things out or run the risk that some other company will step in with a shiny new job for them to sink their teeth into.  Congratulations, Christine, on such a great run at AOL — it’s certainly my goal here to keep our best people for a decade or more!

I Hope I Didn’t Make You Sick, Too

Fellow entrepreneur and MyWay blogger Chris Yeh takes me to task for my post last week entitled Humbled at TED.  Although his blog post was pretty harsh on me — saying essentially that I’d lost my brain and made him sick by fawning over celebrities (which I didn’t do) — his comment on my blog was a little more measured, just reminding me that people like Bill Clinton is human and puts his pants on one leg at a time just like the rest of us.

I think Chris missed my main point, and since he decided to go public blasting me, I’ll repeat here what I emailed him privately before he decided to blog this:

Oh I don’t put them on that much of a pedestal, although perhaps my post sounded like that. My comments are more driven by a combination of:

– the great things they’ve done for humanity as opposed to the more mundane commercial that most of us do

– the immense knowledge of specialists in fields I know little about

– the level of intellectual discourse among the regular attendees…more than I see on a daily basis by 10x

Plus, pedestal or not, it isn’t every day that one sees Clinton, Bezos, Khosla, Branson, and Brin/Page all in the same room at once. 🙂

Anyway, thanks for the comment. I may blog it and my response.

Still, Chris’s main comment to me is probably a good one, which is that “treating the successful as if they were on another plane simply perpetuates the belief that you’ll never achieve the same kind of success.”  And on that point, he’s 100% right.  There is greatness and success in all of us, whether we’ve tapped into it yet or not.

An Execution Problem

My biggest takeaway from the TED Conference this week is that we — that is to say, all of us in the world — have an execution problem.  This is a common phrase in business, right?  You’ve done the work of market research, positioning, and strategy and feel good about it.  Perhaps as a bigger company you splurge and hire McKinsey or the like to validate your assumptions or develop some new ones.  And now all you have to do is execute — make it happen.  And yet so many businesses can’t make the right things happen so that it all comes together.  I’d guess, completely unscientifically, that far, far more businesses have execution problems than strategic ones.  Turns out, it’s tough to get things to happen as planned BUT with enough flexibility to change course as needed.  Getting things done is hard.

So what do I mean when I say that humanity has an execution problem?  If nothing else, the intellectual potpourri that is TED showed me this week that we know a lot about the world’s problems, and we don’t lack for vision and data on how to solve them.  A few of the things we heard about this week are the knowledge — and in many cases, even real experiences — about how to:

– Steer the evolution of deadly disease-causing bacteria to make them more benign within a decade

– Build world class urban transportation systems and growth plans to improve urban living and control pollution

– Drive down the cost of critical pharmaceuticals to developing nations by 95%

– Dramatically curb CO2 emissions

We have the knowledge, and yet the problems remain unsolved.  Why is that?  Unlike the organized and controlled and confined boundaries of a company, these kinds of problems are thornier to solve, even if the majority of humans agree they need to be solved.  Whether the roadblock is political, financial, social — or (d) all of the above — we seem to be stuck in a series of execution problems.

The bright spot out of all of this (at least from this week’s discussions) is that, perhaps more than ever before in the history of mankind, many of our most talented leaders AND our wealthiest citizens are taking more of a personal stake in not just defining the problems and solutions, but making them happen.  They’re giving more money, buiding more organizations, and spending more time personally influencing society and telling and showing the stories.  It will take years to see if these efforts can solve our execution problems, but in the meantime, the extraordinary efforts are things we can all be proud of.