Political versus Corporate Leadership, Part II: Admitting Mistakes

The press conference this past spring where President Bush embarrassingly refused to admit that he had ever made any big mistakes, other than to reiterate his gaffe at trading Sammy Sosa when he owned the Texas Rangers, brings up another issue in this series: is it good for leaders, both political and corporate, to admit mistakes?

On the corporate side, I think the ability to admit a mistake is a must. Again, I’ll refer back to Jim Collins’ books Good to Great and Built to Last, both of which talk about humility and the ability to admit mistakes as a critical component of emotional intelligence, the cornerstone of solid leadership. And in another great work on corporate leadership, The Fifth Discipline, writer Peter Senge talks about “learning systems” and the “learning organization” as far superior companies. My experience echoes this. Publicly admitting a mistake, along with a careful distillation of lessons learned, can go a long way inside a company to strengthening the bond between leader and team, regardless of the size of the company.

But in politics, the stakes are higher and weirder — and the organization is a nation, not a company. Publicly admitting a single mistake can be a leader’s downfall. It’s too easy these days for political opponents to seize on a mistake as a “flip flop” and turn a candidate’s own admission into a highly-charge negative ad.

There was a fantastic op-ed in The Wall Street Journal back on April 15 on this topic, which unfortunately doesn’t have an available link at the moment, entitled “Bush Enters a Political Quandary As He Faces Calls for an Apology.” I’ll try to both quote from and summarize the article here since it’s central to this topic:

“For a politician, is an apology a sign of weakness or strength? That is the debate now swirling around President Bush after a prime-time news conference in which he refused reporters’ invitations to acknowledge any specific mistakes in handling the issue of terrorism or offer an apology to Sept. 11 victims’ families. Mr. Bush deflected the invitation, saying, ‘Here’s what I feel about that: The person responsible for the attacks was Osama bin Laden.’ Mr. Bush’s quandary is a time-honored struggle for politicians. While some have found a public apology helps them out of a tough spot, others discovered it can fuel more criticism. So far, there isn’t a definitive answer.”

The article goes on to say that while Harry Truman’s “the buck stops here” mentality was de rigeur in the Beltway for a while (through Kennedy’s Bay of Pigs fiasco and Reagan’s poor handling of Beirut), nowadays, apologies are a dreaded last resort. The reason? The rise of partisanship and the use of ethics and congressional or special counsel investigations used to humiliate or defeat political opponents by raising the spectre of corruption. The examples? Gingrich’s struggles in 1996 over his book; Clinton’s ridiculous linguistics machinations (“it depends what the definition of ‘is’ is”) around the Lewinsky scandal; and Lott’s downfall over segregationist comments.

The piece wraps up by saying that “Mr. Bush was backed into the apology quandary by one of his administration’s toughest critics, former White House terrorism expert Richard Clarke…Since then, White House officials have been pressured to do likewise [apologize to victims’ families about the government’s failings on 9/11] — or explain why they won’t…[but] aides are convinced that admitting error would only embolden Mr. Bush’s critics in the Democratic Party and the news media.”

So the question is: would Bush be better off by saying “Sorry, folks, we thought there were WMD in Iraq, but it turns out we were wrong. And we miscalculated how difficult it would be to win the war, how many troops it would take, and how many lives would be lost. I still feel like it was right for us to go to war there for the following four reasons…”?

I’m not sure about that. He’d certainly be more intellectually honest, and a number of people in intellectual circles would feel better about him as a leader, but my guess is that he thinks it would cost him the election in today’s environment. My conclusion is that today’s system is discouraging politicians from admitting mistakes, and that it will take an exceptionally courageous leader (neither Bush nor Kerry as far as I can tell) to do so.

In the end, while humility appeals to many people in a leader, it’s not for everyone. Fortunately for us, CEOs don’t have to run for office and most CEOs don’t have to face some the same level of public, personally competitive, and media scrutiny that politicians do. Now that’s an interesting conclusion that I didn’t intend at the beginning of the post — being a good political leader and being a good politician are sometimes deeply at odds with each other.

Next up in the series: Not sure! Any ideas? Please comment on the blog site or by emailing me.

I wrote a colorfully-named post years ago called Onboarding vs. Waterboarding, which detailed out some of the general principles around onboarding new employees that our companies have used over the years. A few weeks back, one of our clients and fellow CEOs of a Series C Ed:Tech company asked me for tips on onboarding senior executives, and some of what I said varied from or built on that earlier post.

Here are a few of the themes we riffed on:

1. Treat the new hire onboarding like you would a merger integration. Why? Well, because adding a new exec to your company is kind of like…a merger integration. Make a long checklist. Assign each item an owner and participating parties. Have a weekly meeting with all key stakeholders specifically to review the onboarding plan. In other words, don’t just leave it up to you, the new exec, and a Day 1 overview meeting with “business as usual” check-ins. Make it its own thing.
   
2. Take great care to communicate expectations and changes internally when the new exec starts. Any new exec, but especially one in a newly-created or upgraded role, will carry a new role description which by definition changes expectations and responsibilities both of the new exec’s role and of other execs’ roles (and possibly your own role or Level-2 team members’ roles). Make it super clear to the organization both in a meeting and in writing what those changes are. If people used to go to you for X, and now they have to go to New Exec for X, don’t leave that to the guesswork and imagination of your team.
   
3. Get out in front of the fact that your exec team has changed. As I always say, any time you change one person on a team (add or subtract), you have…a new team. Treat a new exec onboarding as such, though this will take time. Team dynamics will change, and you need to drive that process. You also need to make sure any shared language and tools on the team take a beat and include the new person. Did you run a DISC or use Myers-Briggs two years ago with your exec team? Great, do it again with the new team. Did you do a major trust/vulnerability exercise at an exec offsite last year? Better do a new one from scratch. This may sound like extra overhead, but it’s worth it. You don’t want the new person to always feel like the new person who is missing an inside joke. Plus, those kinds of things are always good hygiene for exec teams.
   
4. Begin with the end in mind. On Day 1, your new exec won’t know where the bathroom is, unless you are an all-remote company of course. Your objective is for the new exec to be just as autonomous as all other execs ASAP. So, work backwards from 90 or 180 or some other number of days on the question of autonomy. Build this into your integration checklist and weekly integration check-ins (see above), but note this is also a mental evolution both you and the new exec (and the rest of your exec team and the new person’s direct reports) need to go through. Some areas will be more logical for the new exec to be autonomous on Day 1 or at least Month 1. Some will take longer. Be explicit about defining those things.

Special thanks to my friend Amir for inspiring this post!

How to Wow Your Employees

Here at Return Path we like to promote a culture of WOW and a culture of hospitality.  Some of you may be asking, Why Wow your employees?   The answer is, there is nothing more inspirational than showing an employee that you care about him or her as an individual.  The impact a WOW has is tremendous.  Being a manger is like being in a fishbowl.  Everything you do is scrutinized by your team.  You lead by example whether you want to or not and showing your own vulnerability/humanity has an amazing bonding effect.

Why do you want to foster Wow moments with your team?  High performing teams have a lot of Wow going on.  If all members of a team see Wow regularly, they are all inspired to do more sooner and better.

Here are 15 ways to Wow your employees

1. Take them or her to lunch/breakfast/drinks/dinner quarterly individually, one nice one per year
2. Learn their hobbies and special interests; when you have a spiff to give, give one that is in line with these
3. Remember the names of their spouse/significant other/kids/pets
4. Share your development plan with them and ask for input against it at least quarterly
5. Respond to every email from your staff by the end of the day; sooner if you are on the TO line
6. Ask them what they think of a piece of work you’re doing
7. Ask them what they think of the direction the company is going, or a specific project
8. Periodically take something off each one’s plate, even if it’s clearly theirs to do
9. Periodically tell them to take a day off to recharge, ideally around something important in their lives
10. End every meaningful interaction by asking how they are doing and feeling about work
11. End every interaction by asking what you can be doing to help them do a better job and advance their career
12. Read all job openings and highlight ones that match their interests for future positions
13. Read the weekly award list and call out those FROM and TO your team in staff meetings
14. Send a handwritten note to their home when you have a moment of appreciation for them
15. (If your employee has a team he/she manages) Ask for input before every skip-level interaction and summarize each one after the fact in an email or in person

I try to have Wow moments regularly with people at all levels in the organization.  Here’s one that sticks with me.  At the Colorado summer party several years ago, I went up to someone who was a few layers down in the organization and said hi to her husband and dog by name.  I had met them before, and I work at remembering these things.  The husband was blown away – I hadn’t talked to him in probably two years.  In front of the employee, he gushed – “this is exactly why my wife loves working here – we are totally committed to being part of the RP family.”

There are as many ways to be a great manager and WOW your employees as there are stars in the sky…hopefully these ideas give you a framework to make these your own!

Scaling the Team

(This post was requested by my long-time Board member Fred Wilson and is also running concurrently on his blog today.  I’ll be back with the third and fourth installments of “The Best Laid Plans” next Thursday and the following Thursday)

When Return Path reached 100 employees a few years back, I had a dinner with my Board one night at which they basically told me, “Management teams never scale intact as you grow the business.  Someone always breaks.”  I’m sure they were right based on their own experience; I, of course, took this as a challenge.  And ever since then, my senior management team and I have become obsessed with scaling ourselves as managers.  So far, so good.  We are over 300 employees now and rapidly headed to 400 in the coming year, and the core senior management team is still in place and doing well.  Below are five reasons why that’s the case.

1. We appreciate the criticality of excellent management and recognize that it is a completely different skill set from everything else we have learned in our careers.  This is like Step 1 in a typical “12-step program.”  First, admit you have a problem.  If you put together (a) management is important, (b) management is a different skill set, and (c) you might not be great at it, with the standard (d) you are an overachiever who likes to excel in everything, then you are setting the stage for yourself to learn and work hard at improving at management as a practice, which is the next item on the list.
2. We consistently work at improving our management skills.  We have a strong culture of 360 feedback, development plans, coaching, and post mortems on major incidents, both as individuals and as a senior team.  Most of us have engaged on and off over the years with an executive coach, for the most part Marc Maltz from Triad Consulting.  In fact, the team holds each other accountable for individual performance against our development plans at our quarterly offsites.  But learning on the inside is only part of the process.
3. We learn from the successes and failures of others whenever possible.  My team regularly engages as individuals in rigorous external benchmarking to understand how peers at other companies – preferably ones either like us or larger – operate.  We methodically pick benchmarking candidates.  We ask for their time and get on their calendars.  We share knowledge and best practices back with them.  We pay this forward to smaller companies when they ask us for help.  And we incorporate the relevant learnings back into our own day to day work.
4. We build the strongest possible second-level management bench we can to make sure we have a broad base of leadership and management in the company that complements our own skills.  A while back I wrote about the Peter Principle, Applied to Management that it’s quite easy to accumulate mediocre managers over the years because you feel like you have to promote your top performers into roles that are viewed as higher profile, are probably higher comp – and for which they may be completely unprepared and unsuited.  Angela Baldonero, my SVP People, and I have done a lot here to ensure that we are preparing people for management and leadership roles, and pushing them as much as we push ourselves.  We have developed and executed comprehensive Management Training and Leadership Development programs in conjunction with Mark Frein at Refinery Leadership Partners.  Make no mistake about it – this is a huge investment of time and money.  But it’s well worth it.  Training someone who knows your business well and knows his job well how to be a great manager is worth 100x the expense of the training relative to having an employee blow up and needing to replace them from the outside.
5. We are hawkish about hiring in from the outside.  Sometimes you have to bolster your team, or your second-level team.  Expanding companies require more executives and managers, even if everyone on the team is scaling well.  But there are significant perils with hiring in from the outside, which I’ve written about twice with the same metaphor (sometimes I forget what I have posted in the past) – Like an Organ Transplant and Rejected by the Body.  You get the idea.  Your culture is important.  Your people are important.  New managers at any level instantly become stewards of both.  If they are failing as managers, then they need to leave.  Now.

I’m sure there are other things we do to scale ourselves as a management team – and more than that, I’m sure there are many things we could and should be doing but aren’t.  But so far, these things have been the mainstays of happily (they would agree) proving our Board wrong and remaining intact as a team as the business grows.

Book Short:  Chock Full O Management & Leadership

I just finished The Better People Leader, by Charles Coonradt, which was a very short, good, rich read.  It was a pretty expansive book on management & leadership topics — 100 short pages of material that are probably covered by 1,000 pages in other books.

What separates this book from the pack is the rich examples from non-business life that Coonradt sprinkles throughout the book.  They include the tale of a special ed kid who became a mainstream student within a year because his teacher had the courage to ask his fellow students to treat him normally, and the story of how Korean War POWs died in massive numbers not from physical torture but from negative feedback loops.

The closing quote of the book says it all, from Ronald Reagan:  “A great leader is not necessarily one who does the greatest things. He is the one who gets the people to do the greatest things.”  This book gives you quick tips on how to do just that.

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.

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”!

I wrote part I of this post in 2011, and I feel even more strongly about it today. I generally keep this blog away from politics (don’t we have enough of that running around?), but periodically, I find some common sense, centrist piece of information worth sharing. In this case, I just read a great and very short book, Six Amendments: How and Why We Should Change the Constitution, by former Supreme Court Justice John Paul Stevens, that, if you care about the polarization and fractiousness going on in our country now, you’d appreciate.

If nothing else, the shattered norms and customs of the last several years should point people to the fact that our Constitution needs some revision. Not a massive structural overhaul, but some changes on the margin to keep it fresh, as we approach its 250th anniversary in the next couple decades.

Understanding the Drivers of Success

Although generally business is great at Return Path  and by almost any standard in the world has been consistently strong over the years, as everyone internally knows, the second part of 2012 and most of 2013 were not our finest years/quarters.  We had a number of challenges scaling our business, many of which have since been addressed and improved significantly.

When I step back and reflect on “what went wrong” in the quarters where we came up short of our own expectations, I can come up with lots of specific answers around finer points of execution, and even a few abstracted ones around our industry, solutions, team, and processes.  But one interesting answer I came up with recently was that the reason we faltered a bit was that we didn’t clearly understand the drivers of success in our business in the 1-2 years prior to things getting tough.  And when I reflect back on our entire 14+ year history, I think that pattern has repeated itself a few times, so I’m going to conclude there’s something to it.

What does that mean?  Well, a rising tide — success in your company — papers over a lot of challenges in the business, things that probably aren’t working well that you ignore because the general trend, numbers, and success are there.  Similarly, a falling tide — when the going gets a little tough for you — quickly reveals the cracks in the foundation.

In our case, I think that while some of our success in 2010 and 2011 was due to our product, service, team, etc. — there were two other key drivers.  One was the massive growth in social media and daily deal sites (huge users of email), which led to more rapid customer acquisition and more rapid customer expansion coupled with less customer churn.  The second was the fact that the email filtering environment was undergoing a change, especially at Gmail and Yahoo, which caused more problems and disruption for our clients’ email programs than usual — the sweet spot of our solution.

While of course you always want to make hay while the sun shines, in both of these cases, a more careful analysis, even WHILE WE WERE MAKING HAY, would have led us to the conclusion that both of those trends were not only potentially short-term, but that the end of the trend could be a double negative — both the end of a specific positive (lots of new customers, lots more market need), and the beginning of a BROADER negative (more customer churn, reduced market need).

What are we going to do about this?  I am going to more consistently apply one of our learning principles, the Post-Mortem  –THE ART OF THE POST-MORTEM, to more general business performance issues instead of specific activities or incidents.  But more important, I am going to make sure we do that when things are going well…not just when the going gets tough.

What are the drivers of success in your business?  What would happen if they shifted tomorrow?

Book Short:  Vive La Difference

Brain Sex, by Anne Moir and David Jessell, was a fascinating read that I finished recently.  I will caveat this post up front that the book was published in 1989, so one thing I’m not sure of is whether there’s been more recent research that contradicts any of the book’s conclusions.  I will also caveat that this is a complex topic with many different schools of thought based on varying research, and this book short should serve as a starting point for a dialog, not an end point.

That said, the book was a very interesting read about how our brains develop (a lot happens in utero), and about how men’s and women’s brains are hard wired differently as a result.  Here are a few excerpts from the book that pretty much sum it up (more on the applied side than the theoretical):

• Men tend to be preoccupied with things, theories, and power…women tend to be more concerned with people, morality, and relationships
• Women continue to perceive the world in interpersonal terms and personalize the objective world in a way men do not.  Notwithstanding occupational achievements, they tend to esteem themselves only insofar as they are esteemed by those they love and respect.  By contrast, the bias of the adult male brain expresses itself in high motivation, competition, single-mindedness, risk-taking, aggression, preoccupation with dominance, hierarchy, and the politics of power, the constant measurement and competition of success itself, the paramountcy of winning
• Women will be more sensitive than men to sound, smell, taste, and touch.  Women pick up nuances of voice and music more readily, and girls acquire the skills of language, fluency, and memory earlier than boys.  Females are more sensitive to the social and personal context, are more adept at tuning to peripheral information contained in expression and gesture, and process sensory and verbal information faster.  They are less rule-bound than men
• Men are better at the kills that require spatial ability.  They are more aggressive, competitive, and self-assertive.  They need the hierarchy and the rules, for without them they would be unable to tell if they were top or not – and that is of vital importance to most men

As I said up front, this book, and by extension this post, runs the risk of overgeneralizing a complex question.  There are clearly many women who are more competitive than men and outpace them at jobs requiring spatial skills, and men who are language rock stars and quite perceptive.

But what I found most interesting as a conclusion from the book is the notion that there are elements of our brains are hard wired differently, usually along gender lines as a result of hormones developed and present when we are in utero.  The authors’ conclusion — and one that I share as it’s applied to life in general and the workplace in particular — is that people should “celebrate the difference” and learn how to harness its power rather than ignore or fight it.

Thanks to David Sieh, our VP Engineering, for giving me this book.

Brad wrote a fun post a couple years ago about rituals, including one about The Annual Dinner that he and Amy, Fred and Joanne Wilson, and Mariquita and I have been having not quite annually for almost 15 years now.  His most poignant comment (other than that apparently he and I are both getting larger and greyer in sync with each other) is about the power of marking the passage of time together with the same group of people.  We have a similar tradition at Return Path that’s worth noting in the context of my reboot program since it happened a few weeks ago and was part of the reboot cycle.

On the first anniversary of Return Path’s founding, I took my co-founder Jack Sinclair and our first two colleagues, Matt Spielman and Alexis Katzowitz, our to lunch where we shared lessons learned from the past year at the company and predictions for the company in the coming year with each other.  Jack, George Bilbrey, and I continued doing an end-of-year meal tradition with those two conversation topics for over a decade.  The last three years, since Jack left to join Stack Overflow, George and I have continued the tradition on our own.  Although some of our conversation every year isn’t really for public consumption, I’ve always regretted not blogging some highlights of it.  The tradition is a very powerful one of reflection and retrospective, which is deeply ingrained in Return Path’s culture, as a means of continuous improvement through renewal and refreshing.

Last month, we came up with a few good lessons learned that are featuring in my reboot.  Here they are:

• Growth covers up a lot of weaknesses.  While we still have a healthy growth rate as a company, it’s lower than is used to be – as is the case for all companies as they grow and face the law of large numbers.  What’s interesting, though, is how many weaknesses growth can cover up that start getting exposed as growth slows.  Think of it as an analogy to Technical Debt, call it Organizational Debt.  It’s the accumulation of small decisions over time to take an expedient path on a particular item.  It’s the “oh, we’ll throw a body at the problem now and automate the solution later” type thing that never gets automated, then gets compounded when the hired body needs to be replicated, then managed, then turned into a department.  You get the idea.
• Executive playbooks must be applied flexibly.  As is true of many growing companies, we’ve hired a number of outside senior executives over the last few years.  Some have worked out and others haven’t.  One thing we’ve learned, though, is that there’s a bit of a myth sometimes around the “I have the playbook” claim, the same way there’s a myth around hiring sales people who claim “I have a Rolodex” (or whatever the current version of that is).  Every company is unique, even in the same space.  Every situation is unique.  What makes an executive great is the ability to take learnings and experiences from prior roles and companies, both good and bad, and apply them thoughtfully to new situations, not the ability to run the same play over and over again in exactly the same way.  Sure, there are core business processes or systems that can be applied consistently, but most of those don’t require senior executive expertise.
• Know the job your customer is hiring you to do and what the alternatives are.  This is contemporary product management language, but it really rings true.  No matter who you are, no matter what job you do, you have a customer.  That customer is paying you something for a reason.  That money could go somewhere else.  Keeping that reason top of mind (and understanding when and why and how it shifts) is critical to developing the right solutions.

George, thanks for a decade and a half of reflections together (among other things!).