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!

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.

Book Short:  Blink Part II

Years ago I wrote a post about Malcolm Gladwell’s excellent book, Blink (post, buy).  While my post has lots of specifics in it for entrepreneurs, for VCs, and for marketers, my quick summary was this:

Where The Tipping Point theorizes about how humans relate to each other and how fads start and flourish in our society, Blink theorizes about how humans make decisions and about the interplay between the subconscious, learned expertise, and real-time inputs.  But Gladwell does more than theorize — he has plenty of real world examples which seem quite plausible, and he peppers the book with evidence from some (though hardly a complete coverage of relevant) scientific and quasi-scientific studies.

I recently finished another book, Thinking Fast, and Slow, by Daniel Kahneman, which was very similar.  I’d call it the academic version of Blink, or that Blink is the journalistic version of it.  Kahneman breaks down our ability to think and process information into what he calls System 1 (quick and intuitive) and System 2 (slower, rational and logical).  As he puts it:

In summary, most of what you (your System 2) think and do originates in your System 1, but System 2 takes over when things get difficult, and it normally has the last word.

The book is rich in examples, and while it’s a bit long and sometimes slow going, it is an excellent read if you want to learn more about how the brain works.  The work applications are many – we do a lot of work at Return Path on understanding and avoiding Unconscious Bias at work – and this book gave me a bunch of good ideas around that.  It’s clear that it’s impossible to become a true master of your intuition vs. logic, but you can design some systems, or at least insert some checks and balances into other systems, to blunt the impact of faulty intuition or lazy logic.  The book also has an overwhelming number of labels it applies to common situations – great, but hard to keep them all straight (the priming effect, anchors, endowment effect, etc.).

Perhaps the most interesting thing for me to ponder as an entrepreneur, though, was the section on Loss Aversion (another great label).  It turns out we humans are motivated more by fear of loss than by the prospect of gain.  A poignant example in the book is that professional golfers make a higher percentage of putts (I forget the actual number, but a real one, like 3-5%) for par than for birdie, when the putts are like-for-like in terms of distance and difficulty.  Saving par is more of a motivator than being under par.  The application for work is interesting.  As companies get larger, it can be difficult for founders and management teams to maintain the same level of bold risk-taking they did as smaller organizations.  Having something to lose is harder than having nothing to lose.  And yet, as they say, fortune favors the bold.  Growth stage companies need to figure out how to institutionalize risk taking and experimentation, including putting enough resources into those activities that will generate future growth, rather than simply protecting what’s already running.  (Of course, what’s already running needs investment, too.)

Thanks to my colleagues Dragana and Richard for recommending this book, and to Jamie for facilitating our office book club around it this month!

The Gift of Feedback, Part III

I’ve written about our 360 Review process at Return Path a few times in the past:

• overall process
• process for my review in particular
• update on a process change and unintended consequences of that process change)
• learnings from this year’s process about my staff

And the last two times around, I’ve also posted the output of my own review publicly here in the form of my development plan:

• Here in 2008
• Here in 2009

So here we are again.  I have my new development plan all spruced up and ready to go.  Many thanks to my team and Board for this valuable input, and to Angela Baldonero (my fantastic SVP People and in-house coach), and Marc Maltz of Triad Consulting for helping me interpret the data and draft this plan.  Here at a high level is what I’m going to be working on for the next 1-2 years:

• Institutionalize impatience and lessen the dependency dynamic on me.  What does this mean?  Basically it means that I want to make others in the organization and on my team in particular as impatient as I am for progress, success, reinvention, streamlining and overcoming/minimizing operational realities.  I’ll talk more about something I’ve taken to calling “productive disruption” in a future blog post
• Focus on making every staff interaction at all levels a coaching session.  Despite some efforts over the years, I still feel like I talk too much when I interact with people in the organization on a 1:1 or small group basis.  I should be asking many more questions and teaching people to fish, not fishing for them
• Continue to foster deep and sustained engagement at all levels.  We’ve done a lot of this, really well, over the years.  But at nearly 250 people now and growing rapidly, it’s getting harder and harder.  I want to focus some real time and energy in the months to come on making sure we keep this critical element of our culture vibrant at our new size and stage
• I have some other more tactical goals as well like improving at public speaking and getting more involved with leadership recruiting and management training, but the above items are more or less the nub of it

One thing I know I’ll have to do with some of these items and some of the tactical ones in particular is engage in some form of deliberate practice, as defined by Geoffrey Colvin in his book Talent is Overrated (blog post on the book here).  That will be interesting to figure out.

But that’s the story.  Everyone at Return Path and on my Board – please help me meet these important goals for my development over the next couple of years!

Book Short:  Getting to MVP

Usually, when we hear the term MVP, we think Most Valuable Player.  But in my line of work, that acronym has come to mean something entirely different:  Minimum Viable Product.  Running Lean: Iterate from Plan A to a Plan That Works, by Ash Maurya, is an incredibly useful, practical how-to guide for any entrepreneur with an idea from concept through to MVP, or the smallest bit of functionality that you can get customers to pay for. This is one of the best books I’ve read that encapsulates most of the contemporary thinking and writing about product development in the early stages of a startup’s life from thought leaders like Steven Gary Blank and Eric Ries.

I read the book recently, as I was writing Startup CEO (original outline here), and I quoted liberally from it, including using his Lean Canvas graphic:

The basic principle behind the Lean Canvas is that the old way of doing a business plan was a ton of up front planning work, assuming you’re right, then building to spec.  The new way of doing a business plan is a really short series of hypotheses on a single page, then the time is spent de-risking the plan by systematically testing each element of it out.  The book includes several lists of checklists that walk you through how to test each box on the Lean Canvas.  As I’ve written about before, checklists are a really powerful management tool.

This is an essential read for entrepreneurs just starting a business.  But it’s also an excellent read for anyone running a growth company.  We have adopted more and more agile/lean methodologies over time at Return Path, and all of our product teams use the Lean Canvas with any major new features and projects.

(Side note – I’m writing this post on Friday, May 10, which is the 9th anniversary of my publishing this blog – 760 posts and one draft book later, it’s still an integral part of my business life!)

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:  Internet True Crime

Fatal System Error: The Hunt for the New Crime Lords Who Are Bringing Down the Internet, by Joseph Menn (book, kindle) was a bit of a disappointment.  I was really hoping for more of an explanation of how the “business” of Internet crime works — what the economics are like, what the landscape/scope/sectors are like, who the players are.

What I got was a bit of a true crime novel, the story of Barrett Lyon and Andy Crocker, who are respectively a geek and a cop, and their very specific stories of tracking down a handful of internet criminals around a handful of technical tactics (DDOS attacks and botnets).  It wasn’t bad, the stories were ok and occasionally entertaining, but it was very narrow.

It felt to me like there is a much more interesting story to tell around criminals who USE the Internet to commit crimes as opposed to people attacking the infrastructure.  Has anyone ever run across a book like that?

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:  Fixing America

I usually only blog about business books, but since I occasionally comment on politics, I thought I would also post on That Used to be Us:  How America Fell Behind in the World It Invented and How We Can Come Back, by Tom Friedman and Michael Mandelbaum (book, Kindle), which I just finished.

There is much that is good about America.  And yet, there is much that is broken and in need of serious repair.  I wrote about some thought on fixing our political system last year in The Beginnings of a Roadmap to Fix America’s Badly Broken Political System?, but fixing our political system can only do so much.  Tom Friedman, with whom I usually agree a lot, but only in part, nailed it in his latest book.  Instead of blaming one party or the other (he points the finger at both!), he blames our overall system, and our will as a people, for the country’s current problems.

The authors talk about the four challenges facing America today – globalization, the IT revolution, deficits and debt, and rising energy demand and climate change, and about how the interplay of those four challenges are more long term and less obvious than challenges we’ve faced as a country in the past, like World Wars or The Great Depression, or even The Great Recession.  The reason, according to the authors, that we have lost our way a bit in the last 20-40 years, is that we have strayed from the five-point formula that has made us successful for the bulk of our history:

• Providing excellent public education for more and more Americans
• Building and continually modernizing our infrastructure
• Keeping America’s doors to immigration open
• Government support for basic research and development
• Implementation of necessary regulations on private economic activity

It’s hard not to be in violent agreement with the book as a normal person with common sense.  Even the last point of the five-point formula, which can rankle those on the right, makes sense when you read the specifics.  And the authors rail against excessive regulation enough in the book to give them credibility on this point.

The authors’ description of the labor market of the future and how we as a country can be competitive in it is quite well thought through.  And they have some other great arguments to make – for example, about how the prior decade of wars was, for the first time in American history, not accompanied by tax increases and non-essential program cuts; or about how we can’t let ourselves be held hostage to AARP and have “funding old age” trump “funding youth” at every turn.

The one thing I disagree with a bit is the authors’ assertion that “we cannot simply cut our way to fiscal sanity.”  I saw a table in the Wall Street Journal the same day I was reading this book that noted the federal budget has grown from $2.6T in 2007 to $3.6T today – 40% in four years!  Sure sounds to me like mostly a spending program, though I do support closing loopholes, eliminating subsidies, and potentially some kind of energy tax for other reasons.

I’ll save their solution for those who read the book.  It’s not as good as the meat of the book itself, but it’s solid, and it actually mirrors something my dad has been talking about for a while now.  If you care about where we are as a country and how we can do better, read this book!

Book Short:  Is CX the new UX?

Outside In: The Power of Putting Customers at the Center of Your Business, by Harley Manning and Kerry Bodine from Forrester Research, was a good read that kept crossing back and forth between good on the subject at hand, and good business advice in general.  The Customer Experience (CX) movement is gaining more and more steam these days, especially in B2B companies like Return Path.  The authors define Customer Experience as “how your customers perceive their interactions with your company,” and who doesn’t care about that?

A few years ago, people started talking a lot more about User Experience (UX) as a new crossover discipline between design and engineering, and our experience at Return Path has been that UX is an incredibly powerful tool in our arsenal to build great technical products via lean/agile methods.  The recurring thought I had reading this book, especially for companies like ours, was “Is CX the new UX?”

In other words, should we just be taking the same kind of lean/agile approach to CX that we do with technical product development and UX — but basically do it more holistically across every customer touchpoint, from marketing to invoice?  It’s hard to see the answer being “no” to that question, although as with all things, the devil is in the implementation details.  And that’s true at the high level (the authors talk about making sure you align CX strategy with corporate strategy and brand attributes and values) as well as a more granular level (what metrics get tracked for CX, and how do those align with the rest of the companies KPIs).

The book’s framework for CX is six high-level disciplines: strategy, customer understanding, design, measurement, governance, and culture — but you really have to read the book to get at the specifics.

Some other thoughts and quotes from the book:

• the book contains some good advice on how to handle management of cross-functional project teams in general (which is always difficult), including a good discussion of various governance models
• “to achieve the full potential of customer experience as a business strategy, you have to change the way you run your business. You must manage from the perspective of your customers, and you must do it in a systematic, repeatable, and disciplined way.”
• one suggestion the book had for weaving the customer experience into your culture (if it’s not there already) is to invite customers to speak all-hands meetings
• another suggestion the book had for weaving the customer experience into everyone’s objectives was one company’s tactic of linking compensation (in this case, 401k match) to customer experience metrics
• “Customer Experience is a journey, not a project. It has a beginning but it doesn’t have an end.”

Thanks to my colleague Jeremy Goldsmith for recommending this book.

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.