Book Short:  a Corporate Team of Rivals

One of the many things I have come to love about the Christmas holiday every year is that I get to go running in Washington DC.  Running the Monuments is one of the best runs in America.  Today, at my mother-in-law’s suggestion, I stopped i8n at the Lincoln Memorial mid-run and read his second inaugural address again (along with the Gettysburg Address).  I had just last week finished Doris Kearns Goodwin’s Team of Rivals:  The Political Genius of Abraham Lincoln, and while I wasn’t going to blog about it as it’s not a business book, it’s certainly a book about leadership from which any senior executive or CEO can derive lessons.

Derided by his political opponents as a “second-rate Illinois lawyer,” Lincoln, who arrived somewhat rapidly and unexpectedly on the national scene at a time of supreme crisis, obviously more than rose to the occasion and not only saved the nation and freed the slaves but also became one of the greatest political leaders of all time.  He clearly had his faults — probably at the top of the list not firing people soon enough like many of his incompetent Union Army generals — but the theme of the book is that he had as one of his greatest strengths the ability to co-opt most of his political rivals and get them to join his cabinet, effectively neutering them politically as well as showing a unity government to the people.

This stands in subtle but important contrast to George Washington, who filled his cabinet with men who were rivals to each other (Hamilton, Jefferson) but who never overtly challenged Washington himself.

Does that Team of Rivals concept — in either the Lincoln form or the Washington form — have a place in your business?  I’d say rarely in the Lincoln sense and more often in the Washington sense.

Lincoln, in order to be effective, didn’t have much of a choice.  Needing regional and philosophical representation on his cabinet at a time of national crisis, bringing Seward, Chase, and Bates on board was a smart move, however much a pain in the ass Chase ended up being.  There certainly could be times when corporate leadership calls for a representative executive team or even Board, for example in a massive merger with uncertain integration or in a scary turnaround.  But other than extreme circumstances like that, the Lincoln model is probably a recipe for weak, undermined leadership and heartache for the boss.

The Washington model is different and can be quite effective if managed closely.  One could argue that Washington didn’t manage the seething Hamilton and frothy Jefferson closely enough, but the reality is that the debates between the two of them in the founding days of our government, when well moderated by Washington, forged better national unity and just plain better results than had Washington had a cabinet made up of like-minded individuals.  As a CEO, I love hearing divergent opinion on my executive team.  That kind of discussion is challenging to manage — at least in our case we don’t have people at each other’s throats — but as long as you view your job as NOT to create compromises to appease all factions but instead to have the luxury of hearing multiple well articulated points of view as inputs to a decision you have to make, then you and your company end up with a far, far better result.

Comment on Political versus Corporate Leadership, Part II: Admitting Mistakes

My colleague Mike Mayor writes:

So you’e only asking for politicians to be honest Matt? Is that all? 🙂

Couldn’t agree more on the CEO side. A CEO who cannot admit to failure is doomed to be surrounded by “yes men” and, therefore, must go it alone, whereas the CEO who admits to having the odd bad idea every now and then is more likely to get truthful and accuruate information from those around him/her. Which scenario would you prefer to base your next decision on?

However, I look more to Hollywood for fostering the faux CEO/Board Room stereotypes, not politics. Look no further than the highest ranked show among 18 to 46 year olds: The Apprentice. Trump is just one contemporary example of successfully perpetuating the “kill or be killed” mentality of the ideal CEO. In his book, “How to Get Rich” one of his lessons is to “never take the blame for anything” (meanwhile Trump gets rich by being a caricature of a CEO).

The ideal CEO needs to set the example for the behavior of his employees, and creates opportunities by building relationships not “squashing the competition.” And like it or not, the ideal Board Room is actually a Think Tank of great minds working toward a common goal rather than a place to play mind games and mental poker.

Unfortunately, both of these things make for a horrible TV show but do contribute to building truly great companies! On the other hand, watch too many TV shows (or follow the politician’s lead) and you’ll likely become a CEO whose success is comparable to the CEOs of Enron and Tyco.

Book Short: Smaller is the New Small

Last month, it was Microtrends. This month, it’s MIT Professor Ted Sargent’s The Dance of Molecules: How Nanotechnology is Changing Our Lives. It seems like all the interesting things in life are just getting smaller and smaller. (Note to self: lose some weight.)

Sargent’s book is geeky but well-written. He dives into a couple dozen examples across many fields and disciplines of how nanotechnology holds extraordinary promise for solving some of mankind’s toughest scientific challenges — while creating a few new ethical and economic ones.

The science is for the most part beyond me, but the practical applications are fascinating:

– making solar power the sole source of global energy needs a possibility

– detecting cancer at the level of a single cancer cell rather than waiting to discover a grape-sized tumor; curing that cancer through embedded “pharmacy on a chip” drugs that release the right drugs over long periods of time locally at the spot of the disease

– figuring out how to keep proving the ever-more-challenging Moore’s law when only 4 years from now, parts of a transistor will need to be only 5 atoms across

– curing blindness with wireless retinal implants

Once every year or so, I read a book that makes me sad I didn’t go into engineering or science. The Dance of Molecules is that kind of book.

Political versus Corporate Leadership, Part III: The First Debate

Well, there you have it. Both of my first two postings on this subject — Realism vs. Idealism and Admitting Mistakes — came up in last night’s debate.

At one point, in response to Kerry’s attempted criticism of him for expressing two different views on the situation in Iraq, Bush responded that he thought he could — and had to — be simultaneously a realist and an optimist. And a few minutes later, Kerry admitted a mistake and brilliantly turned the tables on Bush by saying something to the effect of “I made a mistake in how I talked about Iraq, and he made a mistake by taking us to war with Iraq — you decide which is worse.”

So each candidate exhibited at least one of the traits of good corporate leadership, but on this front anyway, I think Kerry did a better job last night in turning one of his mistakes into a zinger against his opponent.

The Gift of Feedback, Part IV

I wrote a few weeks ago about my live 360 – the first time I’ve ever been in the room for my own review discussion.  I now have a development plan drafted coming out of the session, and having cycled it through the contributors to the review, I’m ready to go with it.  As I did in 2008, 2009, and 2011, I’m posting it here publicly.  This time around, there are three development items:

1. Continue to spend enough time in-market.  In particular, look for opportunities to spend more time with direct clients.  There was a lot of discussion about this at my review.  One director suggested I should spend at least 20% of my time in-market, thinking I was spending less than that.  We track my time to the minute each quarter, and I spend roughly 1/3 of my time in-market.  The problem is the definition of in-market.  We have a lot of large partners (ESPs, ISPs, etc.) with whom I spend a lot of time at senior levels.  Where I spend very little time is with direct clients, either as prospects or as existing clients.  Even though, given our ASP, there isn’t as much leverage in any individual client relationship, I will work harder to engage with both our sales team and a couple of larger accounts to more deeply understand our individual client experience.
2. Strengthen the Executive Committee as a team as well as using the EC as the primary platform for driving accountability throughout the organization.  On the surface, this sounds like “duh,” isn’t that the CEO’s job in the first place?  But there are some important tactical items underneath this, especially given that we’ve changed over half of our executive team in the last 12 months.  I need to keep my foot on the accelerator in a few specific ways:  using our new goals and metrics process and our system of record (7Geese) rigorously with each team member every week or two; being more authoritative about the goals that end up in the system in the first place to make sure my top priorities for the organization are being met; finishing our new team development plan, which will have an emphasis on organizational accountability; and finding the next opportiunity for our EC to go through a management training program as a team.
3. Help stakeholders connect with the inherent complexity of the business.  This is an interesting one.  It started out as “make the business less complex,” until I realized that much of the competitive advantage and inherent value from our business comes fom the fact that we’ve built a series of overlapping, complex, data machines that drive unique insights for clients.  So reducing complexity may not make sense.  But helping everyone in and around the business connect with, and understand the complexity, is key.  To execute this item, there are specifics for each major stakeholder.  For the Board, I am going to experiment with a radically simpler format of our Board Book.  For Investors, Customers, and Partners, we are hard at work revising our corporate positioning and messaging.  Internally, there are few things to work on — speaking at more team/department meetings, looking for other opportunities to streamline the organization, and contemplating a single theme or priority for 2015 instead of our usual 3-5 major priorities.

Again, I want to thank everyone who participated in my 360 this year – my board, my team, a few “lucky” skip-levels, and my coach Marc Maltz.  The feedback was rich, the experience of observing the conversation was very powerful, and I hope you like where the development plan came out!

Book short:  Proto Gladwell

I’m sure author Robert Cialdini would blanch if he read this comparison, but then again, I can’t be the first person to make it, either.  His book, Influence:  The Psychology of Persuasion, is an outstanding read for any marketing or sales professional, but boy does it remind me of Malcolm Gladwell’s The Tipping Point and Blink (book; blog post).  Of course, Cialdini’s book came out a decade before Gladwell’s!  Anyway, Influence is a great social science look at the psychology that makes sales and marketing work.

Cialdini talks about sales and marketing professionals as “compliance practitioners,” which is a great way to think about them, quite frankly.  He boils down the things that make sales and marketing work to six core factors: consistency, reciprocation, social proof, authority, liking, and scarcity.

Reciprocation – we hate being in a state of being beholden so much that we might even be willing to do a larger favor than the one done for us in order to remove the state.  Think about “free gifts” in merchandising as an example of this, or being in a negotiation where someone trying to make a cold sale on you offers a fallback, smaller sale.  For example, you don’t want to buy anything from the boy scout, but after you say no to the $5 raffle ticket and he asks about the $1 candy bar, you feel more obligated to buy the $1 candy bar because the boy scout has “given” on his initial request.

Consistency – once we have made a choice, personal and interpersonal pressures force us to back it up and justify our earlier decision – even more so when in writing or when declared to others.  This is why marketers love getting testimonials from customers; the testimonial locks the customer in emotionally, as well as encouraging others to buy the product.

Social proof – if others think it’s correct, it must be correct, especially if those other people are like us.  There are some scary examples in the book here, such as Reverand Jim Jones and The People’s Temple mass suicides.  Gripping, but creepy.

Liking – we listen to people we like, and we like people to whom we’re similar or who are physically attractive.  This section was especially reminiscent of Blink, but with different and more marketer-focused examples.

Authority – we have an extreme willingness to listen to authority, even when the authority isn’t quite relevant.  This is why celebrity endorsements work so well.

Scarcity – we have a extreme motivation of fear of loss, either or something, or of the opportunity to have something.  Who doesn’t like to keep doors open as long as possible?

The one place the book falls down a little bit is in the sections at the end of each chapter talking about how to resist that particular technique through jujitsu – the art of “turning the enemy’s strength to your advantage.”  While nice in theory, Cialdini’s examples aren’t super helpful beyond saying “when you think you’re getting suckered, stop — and then say no.”

Overally, though, the book is well written and choc full of examples.  Thanks to marketer Mallory Kates for sending me this great book!

Book Short:  The Little Engine that Could

Authors Steven Woods and Alex Shootman would make Watty Piper proud.  Instead of bringing toys to the children on the other side of the mountain, though, this engine brings revenue into your company.  If you run a SaaS business, or really if you run any B2B business, Revenue Engine:  Why Revenue Performance Management is the Next Frontier of Competitive Advantage, will change the way you think about Sales and Marketing. The authors, who were CTO and CRO of Eloqua (the largest SaaS player in the demand management software space that recently got acquired by Oracle), are thought leaders in the field, and the wisdom of the book reflects that.

The book chronicles the contemporary corporate buying process and shows that it has become increasingly like the consumer buying process in recent years.  The Consumer Decision Journey, first published by McKinsey in 2009, chronicles this process and talks about how the traditional funnel has been transformed by the availability of information and social media on the Internet.  Revenue Engine moves this concept to a B2B setting and examines how Marketing and Sales are no longer two separate departments, but stewards of a combined process that requires holistic analysis, investment decisions, and management attention.

In particular, the book does a good job of highlighting new stages in the buying process and the imperatives and metrics associated with getting this “new funnel” right.  One that resonated particularly strongly with me was the importance of consistent and clean data, which is hard but critical!  As my colleague Matt Spielman pointed out when we were discussing the book, the one area of the consumer journey that Revenue Engine leaves is out is Advocacy, which is essential for influencing the purchase process in a B2B environment as well.

One thing I didn’t love about the book is that it’s a little more theoretical than practical. There aren’t nearly enough detailed examples.  In fact, the book itself says it’s “a framework, not an answer.”  So you’ll be left wanting a bit more and needing to do a bit more work on your own to translate the wisdom to your reality, but you’ll have a great jumping off point.

Book Short: What’s For Dinner Tonight, Honey?

The Paradox of Choice: Why More is Less, by Barry Schwartz, presents an enlightening, if somewhat distressing perspective on the proliferation of options and choices facing the average American today. The central thesis of the book is that some choice is better than no choice (I’d rather be able to pick blue jeans or black jeans), but that limited choice may be better in the end than too much choice (how do I know that the jeans I really want are relaxed cut, tapered leg, button fly, etc.?). We have this somewhat astonishing, recurring conversation at home every night, with the two of us sitting around paralyzed about where to eat dinner.

The author’s arguments and examples are very interesting throughout, and his “Laffer curve” type argument about choice vs. too much choice rings true. While there’s obviously no conclusive proof about this, the fact that our society is more rife with depression than ever before at least feels like it has a correlation with the fact that most of us now face a proliferation of choices and decisions to make exponentially more than we used to. The results of this involve ever-mounting levels of regret, or fear of regret, as well as internal struggles with control and expectations. Perhaps the best part of the book is the final chapter, which ties a lot of the material of the book together with 11 simple suggestions to cope better with all the choices and options in life — summed up in the last few words of the book suggestions that “choice within constraints, freedom within limits” is the way to go. Amen to that. We all need some basic structure and frameworks governing our lives, even if we create those constructs ourselves. The absence of them is chaos.

Overall, this is a good social science kind of read, not overwhelming, but definitely interesting for those who are students of human psychology, marketing, and decision making. It’s squarely in the genre of Gladwell’s The Tipping Point and Blink, and Robert Cialdini’s Influence, most of which I’ve written about recently, and though not as engaging as Gladwell, worth a read on balance if you like the genre.

Thanks to my friend Jonathan Shapiro for this book.

Book short:  Life Isn’t Just a Wiki

One of the best things I can say about Remote: Office Not Required,  by Jason Fried and David Heinemeier Hansson, is that it was short.  That sounds a little harsh – part of what I mean is that business books are usually WAY TOO LONG to make their point, and this one was blessedly short.  But the book was also a little bit of an angry rant against bad management wrapped inside some otherwise good points about remote management.

The book was a particularly interesting read juxtaposed against Simon Sinek’s Leaders Eat Last which I just finished recently and blogged about here, which stressed the importance of face-to-face and in-person contact in order for leaders to most effectively do their jobs and stay in touch with the needs of their organizations.

The authors of Remote, who run a relatively small (and really good) engineering-oriented company, have a bit of an extreme point of view that has worked really well for their company but which, at best, needs to be adapted for companies of other sizes, other employee types, and other cultures.  That said, the flip side of their views, which is the “everyone must be at their cubicle from 9 to 5 each day,” is even dumber for most businesses these days.  As usual with these things, the right answer is probably somewhere in between the extremes, and I was reminded of the African proverb, “If you want to go fast, go alone. If you want to go farm go together” when I read it.  Different target outcomes, different paths.

I totally agree with the authors around their comments about trusting employees and “the work is what matters.”  And we have a ton of flexibility in our work at Return Path.  With 400 people in the company, I personally spend six weeks over the summer working largely remote, and I value that time quite a bit.  But I couldn’t do it all the time.  We humans learn from each other better and treat each other better when we look at each other face to face.  That’s why, with the amount of remote work we do, we strongly encourage the use of any form of video conferencing at all times.  The importance of what the authors dismiss as “the last 1 or 2% of high fidelity” quality to the conversation is critical.  Being in person is not just about firing and hiring and occasional sync up, it’s about managing performance and building relationships.

Remote might have been better if the authors had stressed the value that they get out of their approach more than ranting against the approaches of others.  While there are serious benefits of remote work in terms of cost and individual productivity (particularly in maker roles), there are serious penalties to too much of it as well in terms of travel, communication burden, misunderstandings, and isolation.  It’s not for everyone.

Thanks to my colleague Hoon Park for recommending this to me.  When I asked Hoon what his main takeaway from the book was, he replied:

The importance of open communication that is archived (thus searchable), accessible (transparent and open to others) and asynchronous (doesn’t require people to be in the same place or even the same “timespace”).  I love the asynchronous communication that the teams in Austin have tried: chatrooms, email lists (that anyone can subscribe to or read the archives of), SaaS project management tools. Others I would love to try or take more advantage of include internal blogs (specifically the P2 and upcoming O2 WordPress themes; http://ma.tt/2009/05/how-p2-changed-automattic/), GitHub pull requests (even for non-code) and a simple wiki.

These are great points, and good examples of the kinds of systems and processes you need to have in place to facilitate high quality, high volume remote work.

Book Short:  Internet Fiction

It’s been a long time since I read Tom Evslin’s Hackoff.com, which Tom called a “blook” since he released it serially as a blog, then when it was all done, as a bound book.  Mariquita and I read it together and loved every minute of it.  One post I wrote about it at the time was entitled Like Fingernails on a Chalkboard.

The essence of that post was “I liked it, but the truth of the parts of the Internet bubble that I lived through were painful to read,” applies to two “new” works of Internet fiction that I just plowed through this week, as well.

Uncommon Stock

Eliot Pepper’s brand new startup thriller, Uncommon Stock, was a breezy and quick read that I enjoyed tremendously. It’s got just the right mix of reality and fantasy in it. For anyone in the tech startup world, it’s a must read. But it would be equally fun and enjoyable for anyone who likes a good juicy thriller.

Like my memory of Hackoff, the book has all kinds of startup details in it, like co-founder struggles and a great presentation of the angel investor vs. VC dilemma. But it also has a great crime/murder intrigue that is interrupted with the book’s untimely ending.  I eagerly await the second installment, promised for early 2015.

The Circle

While not quite as new, The Circle  has been on my list since it came out a few months back and since Brad’s enticing review of it noted that:

The Circle  was brilliant. I went back and read a little of the tech criticism and all I could think was things like “wow – hubris” or “that person could benefit from a little reflection on the word irony”… We’ve taken Peter Drucker’s famous quote “‘If you can’t measure it, you can’t manage it” to an absurd extreme in the tech business. We believe we’ve mastered operant conditioning through the use of visible metrics associated with actions individual users take. We’ve somehow elevated social media metrics to the same level as money in the context of self-worth.

So here’s the scoop on this book.  Picture Google, Twitter, Facebook, and a few other companies all rolled up into a single company.  Then picture everything that could go wrong with that company in terms of how it measures things, dominates information flow, and promotes social transparency in the name of a new world order.  This is Internet dystopia at its best – and it’s not more than a couple steps removed from where we are.  So fiction…but hardly science fiction.

The Circle  is a lot longer than Uncommon Stock and quite different, but both are enticing reads if you’re up for some internet fiction.

The Advantage: Why Organizational Health Trumps Everything Else In Business is Patrick Lencioni’s newest book.  Unlike most or all of his other books (see the end of this post for the listing), this one is not a fable, although his writing style remains very quick and accessible.

I liked this book a lot.  First, the beginning section is a bit of a recap of his Five Dysfunctions of a Team which I think was his best book.  And the ending section is a recap of his Death by Meeting, another really good one.  The middle sections of the book are just a great reminder of the basic building blocks of creating and communicating strategy and values – about driving alignment.

But the premise, as the subtitle indicates, is that maintaining organizational health is the most important thing you can do as a leader.  I tell our team at Return Path  all the time that our culture is a competitive advantage in many ways, some quantifiable, and others a little less tangible.

A telling point in the book is when Lencioni is relaying a conversation he had with the CEO of a client company who does run a healthy organization – he asked, “Why in the world don’t your competitors do any of this?” And the client responded, “You know, I honestly believe they think it’s beneath them.” Lencioni goes on to say, “In spite of its undeniable power, so many leaders struggle to embrace organizational health because they quietly believe they are too sophisticated, too busy, or too analytical to bother with it.”  And there you have it.  More examples of why “the soft stuff” is mission critical.

Lencioni’s “Recipe for Organizational Health” (the outline of the book):

–          Build a Cohesive Leadership Team

–          Create Clarity

–          Overcommunicate Clarity

–          Reinforce Clarity

And his recipe for creating a tight set of “mission/vision/values” (the middle of the book):

1. Why do we exist?

2. How do we behave?

3. What do we do?

4. How will we succeed?

5. What is most important, right now?

6. Who must do what?

While there are lots of other good frameworks for doing all of this, Lencioni’s models and books are great, simple reminders of one of the CEO’s most important leadership functions.  We’re recrafting our own mission and values statements at the moment at Return Path, and we’re doing it using this 6-Question framework instead of the classic “Mission/Vision/Values” framework popularized a few years back by Harvard Business Review.

The full book series roundup as far as OnlyOnce has gotten so far is:

• The Three Signs of a Miserable Job (post, book)
• The Five Temptations of a CEO (post, book)
• The Four Obsessions of an Extraordinary Executive (post, book)
• Death by Meeting (post, book)
• The Five Dysfunctions of a Team (post, book, Field Guide)
• Silos, Politics and Turf Wars (post, book)
• Getting Naked (post, book)
• The Advantage (book)