Does size matter?

It is the age-old question — are you a more important person at your company if you have more people reporting into you?  Most people, unfortunately, say yes.

I’m going to assume the origins of this are political and military. The kingdom with more subjects takes over the smaller kingdom. The general has more stars on his lapel than the colonel. And it may be true for some of those same reasons in more traditional companies. If you have a large team or department, you have control over more of the business and potentially more of the opportunities. The CEO will want to hear from you, maybe even the Board.

In smaller organizations, and in more contemporary organization structures that are flatter (either structurally or culturally) or more dynamic/fluid, I’m not sure this rule holds any more. Yes, sure, a 50-person team is going to get some attention, and the ability to lead that team effectively is incredibly important and not easy to come by. But that doesn’t mean that in order to be important, or get recognized, or be well-compensated, you must lead that large team.

Consider the superstar enterprise sales rep or BD person. This person is likely an individual contributor. But this person might well be the most highly paid person in the company. And becoming a sales manager might be a mistake — the qualities that make for a great rep are quite different from those that make a great sales manager. We have lost a few great sales reps over the years for this very reason. They begged for the promotion to manager, we couldn’t say no (or we would lose them), then they bombed as sales managers and refused as a matter of pride to go back to being a sales rep.

Or consider a superstar engineer, also often an individual contributor. This person may be able to write code at 10x the rate and quality of the rest of the engineering organization and can create a massive amount of value that way. But everything I wrote above about sales reps moving into management holds for engineers as well.  The main difference we’ve seen over the years is that on average, successful engineers don’t want to move into management roles at the same rate as successful sales reps.

It’s certainly true that you can’t build a company consisting of only individual contributors. But that isn’t my point. My point is that you can add as much value to your organization, and have as much financial or psychic reward, by being a rock star individual contributor as you can by being the leader of a large team.

Post Traumatic Job Disorder.

As we have been scaling up Return Path, we have been increasingly hiring senior people in from the outside. We believe in promoting from within and do it all the time, but sometimes you need an experienced leader who has operated at or ahead of the scale you’re at.  Someone with deep functional expertise and a “been there, done that” playbook. When you get a hire like this right, it’s amazing how much that kind of person gets done, how quickly.

One of the pitfalls of those hires, though, is cultural fit. Many of the larger organizations in the world don’t have the kind of supportive, employee-centric cultures that we have here, or that startups tend to have in general. They tend to be much more hierarchical, political, command-and-control. There is a real risk that hiring a senior person who has been trained in environments like that will blow up on you — that, as I’ve written before, the body will reject the organ transplant.

I’ve taken to calling the problem PTJD, or Post-Traumatic Job Disorder. Some of the stories I’ve heard from senior people about their experiences with their bosses or even CEOs at prior companies include such things as:  being screamed at regularly, having had a gun pulled on you, having had a knife pulled on you, having been ignored and only spoken to once or twice a year, being the victim of sexual harassment. Nice.

Just like PTSD, many people can recover from PTJD by being placed in a different environment with some up-front reprogramming and ongoing coaching. But also like PTSD, there are times where people can’t recover from PTJD. The bad habits are too engrained. They are (virtually) shell shocked.

Assuming you do the same reprogramming and coaching work on any PTJD employee, the difference between an employee who recovers and one who does not recover is really hard to smoke out in an interview process. Almost all candidates like this (a) are very polished and now how to interview well, and (b) genuinely think they want to work in a more relaxed, contemporary environment.

Here are five things I’ve learned over the years that can help identify a PTJD candidate who is unlikely to recover, before you make the hire:

1. Look for candidates who have bigger company experience, but who also have startup and growth/scaling experience.  As I’ve written before, stage experience is important because the person is more likely to really understand what he or she is getting into — and what their playbook of action is.
2. Try to understand, if a candidate has been in a workplace that breeds PTJD, whether that person was just in the machine, or if the person actually ran the machine. In other words, a senior manager might be a better fit to recover from PTJD than a senior executive.
3. Note that not all big companies are dysfunctional or lead to PTJD, so try to understand the reputation of the person’s employer. For example, in New York, it’s a pretty safe bet that someone coming from American Express has not only been well trained, but well cared for.
4. Do reference checks differently. Do them yourself. Do them as if you were doing a 360 on the person (manager, peer, subordinate, even a junior person from another department). Do reference checks on the references (seriously – ask the references about each other) so you understand the biases each of them brings to the conversation with you.
5. Focus on the first 90 days. Be relentless about how you onboard a potential PTJD victim. Give them more care, structure, praise, guidance, and criticism than you might otherwise give. Use an outside coach to augment your work, and assign a good executive buddy internally. And listen carefully to the feedback from the organization about the person, doing a deep 360 after a few months to see if the person is recovering, can recover, or can’t recover. If the latter, time to cut your losses early.

Thanks to some of my new executive colleagues here for inspiring this post, and I hope none of my friends who have served in the military take offense at this post. I am drawing an analogy, but I’m not truly suggesting that PTJD compares in any way, shape, or form to the horrors of war.

And here I am. In the middle of that “once.” Fred Wilson wrote a great posting by that title on his blog, and it has stuck with me. When I decided to start a blog, it was the first thing that came to mind as a main theme for the blog, so there you go. Only Once it is.

I’m not entirely sure why I’m doing a blog. Part of it is fascination with the newest corner of the Internet and its related areas like RSS (clicking on that link will get you the RSS feed of this blog). Part of it is to try out the medium and see how it might work for the hundreds of marketers and publishers who are my company’s clients. I suppose part of it is to generate some interest in my company, Return Path, which in my extremely biased opinion is one of the most interesting companies in the email services business.

My one hesitation about starting a blog is that the other part of me feels like blogs are a bit narcissistic, and I can’t imagine who on earth would want to read whatever it is that pops into my head. But I’ll give it a try and promise not to go overboard on the extraneous postings.

So, I will probably post periodically about experiences of an entrepreneur, of the one time I’ll ever be a first-time CEO. But I may also post on other things periodically that match my interests: book reviews, travelogs, Princeton, great wines, maybe even the occasional political commentary to prove to my predominantly New York friends that (a) not all Republicans are bad, and (b) not all Jewish New Yorkers are Democrats.

So, here we go…enjoy!

Symbolism in Action

A couple months ago, I wrote about how the idiots who run the Big 3 US automakers in Detroit don’t have a clue about symbolism — the art or the science of it.  Yesterday, I wrote about how I think the non-headcount cuts to G&A that we’re making at Return Path during these challenging economic times will be positive for the company in the long run.  The two topics are closely related.

Obama announces on Day 1 that White House staffers who make more than $100k won’t be getting a pay raise this year.  Presumably all of those people just started their jobs on January 20 and wouldn’t be eligible for a raise until 2010.  Return Path cuts pilates classes in its Colorado office — an expense that must cost around $3,000/year.  Practically speaking, it won’t make a difference to our budget one way or another.  Microsoft lays off 1,400 people — a real number, certainly for those families — but that’s the equivalent of Return Path laying off 2 people. 

Sometimes the symbolic is just that.  It is something designed to send a signal to others, and not much more.  You could argue that all three examples above mean nothing in reality, so they were just symbolic.  A waste of time.

You can also make the argument that sometimes, when done right, symbolism turns into action as it motivates or serves as a catalyst for other changes.  Obama’s cuts may be fictitious, but they set the tone for broader action across a 2mm person bureaucracy.  Pilates in the office?  Feels too excessive these days, even for a company obsessed with its employees and their well being, in an era where we’re cutting back other things that are more serious.  Microsoft has gobs of cash and doesn’t need to worry about its future, but it wants to tell the other 99% of its employee population that it’s time to buckle down and fly straight.  And they will.

Anyone who thinks the synbolic doesn’t influence the practical should think again.  Or just talk to Caroline Kennedy about the impact of her admission that she hadn’t voted in years on her political ambitions.