Book Short:  Required Reading

The Leadership Pipeline, by Ram Charan, Stephen Drotter, and James Noel, should be required reading for any manager at any level in any organization, although it’s most critical for CEOs, heads of HR, and first-time managers.  Just ask my Leaderhip Team at Return Path, all of whom just had to read the book and join in a discussion of it!

The book is easy to read, and it’s a great hands-on playbook for dealing with what the authors call the six leadersihp passages:

From Individual Contributor to Manager (shift from doing work to getting work done through others)

From Manager to Manager of Managers (shift to pure management, think beyond the function)

From Manager of Managers to Functional Manager (manage outside your own experience)

From Functional Manager to Business Manager (integrate functions, shift to profit and longer term views)

From Business Manager to Group Manager (holistic leadership, portfolio strategies, value success of others)

From Group Manager to Enterprise Manager (outward looking, handle external and multiple constituencies, balance strategic and visionary long-term thinking with the need to deliver short-term operating results)

All too often, especially in rapidly growing companies, we promote people and move them around without giving enough attention to the critical success factors involved in each new level of management.  I’ve certainly been guilty of that at Return Path over the years as well.  It’s just too easy to get trapped in the velocity of a startup someitmes to forget these steps and how different each one is.  This book lays out the steps very neatly.

It’s also one of the few business books that at least makes an attempt — and a good one at that — at adapting its model to small companies.  In this case, the authors note that the top three rungs of the pipeline are often combined in the role of CEO, and that Manager of Managers is often combined with Functional Managers.

Anyway, run, don’t walk, to buy this one!

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: How, Now

Every once in a while, I read a book that has me jump up and down saying “Yes! That’s so right!” How: Why How We Do Anything Means Everything in Business (and in Life), by Dov Seidman, was one of those books.  But beyond just agreeing with the things Seidman says, the book had some really valuable examples and two killer frameworks, one around culture, and one around leadership.

It’s a book about the way the world we now live in — a world of transparency and hyper-connectedness — is no longer about WHAT you do, but HOW you do it. It’s about how you can have a great brand and great advertising, but if your customers find out via a blog and YouTube clip that you run a low quality sweatshop in Malaysia, you are toast. It’s about you can…not outwork the competition, not outsmart the competition, but how you can out-behave the competition.

The book, which talks about principles like mutual gain, and thriving on the collaborative, reminds me a lot of a basic tenet of negotiation I learned years ago at the Harvard Program on Negotiation about finding a “third way” beyond a “me vs. you” negotiation by expanding the pie so both parties get more out of a deal.

Here are a few snippets from the book to inspire a purchase:

– How encouraging doctors to say “I’m sorry” radically reduces lawsuits

– How “micro-inequities” can subtly leech productivity from an organization

– How the majority of workers expect from their workplaces: equity, achievement, camaraderie

– How companies whose employees understand and embrace their mission, goals, and values see a 29% greater return than companies whose employees don’t

– How reputation is the new competitive advantage

– How people will do the right thing because in self-governing cultures, not doing the right thing no longer betrays just the company; it betrays individuals’ own values

– How increasing self-governance means moving values to the center of your efforts and making it clear — in how you reward, celebrate, communicate, and pursue — that those values form the guiding spirit of the enterprise

What type of organization do you run? One based on Anarchy & Lawlessness, one based on Blind Obedience, one based on Informed Acquiescence, or one of Values-Based Self-Governance? (Hint, it’s most likely the third category.) Read the book to find out more.

Book Short:  A Good Dose of Introspection

I rarely blog about non-business books since this is a business blog — and I read a lot of them!  But occasionally, one manages to slip in, and this time, it’s The Five People You Meet in Heaven, by Mitch Albom.  From the author of Tuesdays With Morrie, which I also liked quite a bit, this one is excellent.  And a very, very quick read.

The book, in short (i.e., a book short <g>), is about a guy who dies, and who, in heaven, meets five people who have shaped his life and died before him.  Some he knows well, some he knows barely, some he’s never met.  Each one tells him a story that explains some part of his life to him and in doing so, helps him understand more about himself and why/how he lived on earth.

The book, as I said, is a short read.  But more than that, it’s a wonderful story and provides an opportunity for a structured moment of introspection, one that I found very valuable.  Quite frankly, this book should be a “once every year or two” read.

It’s election season, the GOP convention is literally in my backyard, and while this is not a political blog, I can’t help myself. As we as Americans grapple with the question of who we want to be our next leader (or at least those people who live in the 11 annointed swing states do), I have had a lot of thoughts lately about the question of what makes a good leader, and what the differences are between successful leadership in politics and successful leadership in business.

James O’Toole’s article on President Bush on page 31 of the September issue of Fast Company (no link available yet) brings up a really interesting point in comparing Bush to former president Ronald Reagan. He asserts that “what made Reagan effective and respected was that his actions followed consistently from a positive worldview.” (I’d also argue that the positive worldview as a starting point had something to do with it, but that’s beside the point.) He goes on to say that Bush has an “implementation problem” in that he “has vacillated between contradictory approaches to leadership: realism and idealism.” His central thesis is stated very clearly that

“Realists and idealists can both be effective leaders. But one cannot be both at once…The leadership lesson for GW – and for any leader – is simple: Followers don’t much care if leaders are realists or idealists, but they distrust inconsistency.”

This may or may not be true in the political arena, but I know it’s not true in business. Jim Collins’ watershed books Built to Last and Good to Great — both must reads! — describe the ideal CEO as someone who can simultaneously be optimistic and idealistic about the future of the company while simultaneously recognizing and dealing with the realities of the short-term situation. Ironically for this posting, Collins calls this the Stockdale paradox, after retired Admiral James Stockdale, a military leader and erstwhile vice presidential candidate of Ross Perot in the 1992 election.

As CEO, I have to constantly be selling the vision of the company — what we’re trying to become and how we’re going to get there — in broad strokes to my investors, board, management team, employees, and even customers. It’s that vision that keeps the whole machine running and keeps everyone focused and excited and working hard towards our long-term goals. But I have to be equally vigilant about the mundane realities of the current quarter, making our numbers, containing costs, and running the machine. If I did either one without the other, I think the whole system would break down.

Is Bush’s problem, as O’Toole asserts, that he articulated two different types of reasons for the war in Iraq — one rooted in Realism (WMD) and one rooted in Idealism (freedom and democracy)? Same goes for his states reasons for the tax cut — Realism on the one hand (to stimulate the economy) and Idealism on the other hand (shrink government). I agree that the Bush Administration has occasional implementation problems and doesn’t have nearly the “following” that Reagan and other more successful leaders in the past have, but I don’t think they’re caused by combining Realism and Idealism in the President’s leadership style. I think the leader of the free world has to do both well, each at its appropriate time, in order to be effective at his job.

Next up in this series: Admitting Mistakes.

Book Short:  A SPIN Selling Companion

At Return Path, we’re big believers in the SPIN Selling methodology popularized by Neil Rackham. It just makes sense. Spend more time listening than talking on a sales call, uncover your prospect’s true needs and get him or her to articulate the need for YOUR product. Though it doesn’t reference SPIN Selling, Why People Don’t Buy Things, by Kim Wallace and Harry Washburn is a nice companion read.

Rooted in psychology and cognitive science, Why People Don’t Buy Things presents a very practical sales methodology called Buying Path Selling. Understand how your prospect is making his or her buying decision and what kind of buyer he or she is, be more successful at uncovering needs and winning the business.

The book has two equally interesting themes, rich with examples, but the one I found to be easiest to remember was to vary your language (both body and verbal) with the buyer type. And the book illustrates three archetypes: The Commander, The Thinker, and The Visualizer. There are some incredibly insightful and powerful ways to recognize the buyer type you’re dealing with in the book.

But most of the cues the authors rely on are physical, and lots of sales are done via telephone. So I emailed the author to ask for his perspective on this wrinkle.  Kim wrote back the following (abridged):

Over the phone it is fairly easy to determine a prospect’s modality. I’ve developed a fun, conversational question which can be asked up front, “As you recall some of your most meaningful experiences at XYZ, what words, thoughts, feelings or visuals come to mind? Anything else?”

If you’re interested in letting your blog readers test their modalities, the link below will activate a quick 10 question quiz from our website that generates ones modality scores along how they compare with others. (It’s like Myers-Briggs applied to decision making.) http://www.wallacewashburn.com/quiz.shtml

In any case, if you are a sales, marketing, or client services professional (or even if you just play one on TV), Why People Don’t Buy Things is a quick, insightful read.  Thanks for the quick response, Kim!

I haven’t done short book summaries in a LONG time, but I’ll try to start adding that back into the mix as I read interesting and relevant books. Here’s one to add to your list: One Life to Lead, by Russell Benaroya. I was recently connected to Russell by a mutual friend, TA McCann at Pioneer Square Labs. TA had a sense Russell and I would hit it off, and we did. Russell is a multi-time founder/CEO, a Coach, and an author, so we have a lot in common.

One Life to Lead is an excellent book. First, it is short and easy to get through. Unlike a lot of business books, it doesn’t go on too long or contain anything extraneous. It’s to the point!

Second, the book is a business book that’s not really about business. It’s about life and what Russell calls Life Design, which is a great framing of how to be intentional about leading your life. While I have become less and less of a life planner as I’ve gotten older under the headline of “man plans, God laughs,” I am a huge believer in being intentional about everything, which I talk about in Startup CEO quite a bit in the nuts and bolts context of building your business.

Finally, Russell’s framework is easy to understand and full of concrete exercises you can to. Here are his five steps, but you’ll have to read the book to get the details:

• Ground stories with facts. This reminds me a lot of the principles we have taught team members over the years in our Action/Design (and related) trainings. First, start with absolute concrete facts that everyone will agree are facts.
• Establish your principles. This is brilliant. Your company has documented values or operating principles. Why don’t you?
• Harness energy from the environment. Figuring out what makes you tick, and what drains your energy, is so important.
• Get in and stay in your genius zone. Shouldn’t we all focus our time on the things we do best and love the most?
• Take action. How to put it together and make it all happen.

If you don’t get out in front of life, it will happen to you, and Russell’s framework is about how to make sure you are in the driver’s seat of your own life. Here’s to that.

Book Short: The Challenger Sale

I’ve written a couple times in the past about how we sell at Return Path.  I’ve written about our principle sales methodology for the past decade, SPIN Selling, by Neil Rackham (and Major Account Strategy, also by Rackham, which is basically SPIN Selling for Account Managers), which focuses on a specific technique for solution selling by using questioning to get the prospective client to identify his or her own needs, as well as Jeffrey Gitomer’s two short books, the Little Red Book of Selling and Little Red Book of Sales Answers, which are long on sales questioning techniques.  And I also wrote this post about another book called Why People Don’t Buy Things, by Kim Wallace and Harry Washburn.  The great thing about this book is that it dives into the need for variation in sales communication strategies based on BUYER personae, such as The Commander, The Thinker, and The Visualizer.

While both these principles are good – asking questions and tailoring communication styles based on the buyer – anyone who has ever tried to run a whole sales call by asking questions knows that it’s REALLY HARD and can sometimes just outright flop.  There’s a new movement that I’ve been reading articles about for a few months now called The Challenger Sale, and I finally finished the book about it this past week.

If you run a company or a sales team that has any kind of complex sale or a hybrid software/service model, then you should read The Challenger Sale: Taking Control of the Customer Conversation, by Matthew Dixon and Brent Adamson.  Whether you adopt the methodology or not, there are a few really great insights in the book that will help you recruit and manage a sales team.  Some of the insights include:

• Understanding the five types of sales reps and why/when they’re successful/not successful.  The labels are telling in and of themselves:  the Lone Wolf, the Hard Worker, the Relationship Building, the Reactive Problem Solver, and the Challenger
• Why sales reps can be trained as Challengers, and how important it is to rally an entire organization around this sales model, not just train sales reps on it (that’s probably a good reminder for any sales methodology)
• The ingredients of the Challenger sale – Commercial Teaching for Differentiation, Tailoring for Resonance, Taking Control of the Conversation.  I found the section on Commercial Teaching the most enlightening, particularly in our business, where we’re not selling an established category with established budget line items

The Challenger Sale feels like the beginning of a wave that will take over a lot of selling organizations in the next decade, either directly as written or as it inspires ancillary works and related techniques.  For that reason alone, it’s worth a read.

I hope this post doesn’t gross anyone out or offend anyone. I admit it’s a little weird, and that it’s more accessible to men. Hopefully everyone can get my point, even if men get it a bit more. I’m channeling Brad as I write this. So bear with me.

Here is a picture of a men’s room with floor mats under the urinals.

The difference between using a men’s room that has floor mats and using a men’s room that does not have floor mats is profound in multiple ways. I’ll leave out the specifics, but you can imagine the comparative experiences if you haven’t had one or both.

A really good floor mat, from a quick scan of Amazon and Uline just now, costs $11 if you buy in bulk and is built to last 4-6 weeks. That gives us an annual per urinal expense of about $100 – trivial in the scheme of maintaining an office, restaurant, or place of business.

But here’s the thing. These floor mats are few and far between. I don’t have scientific research on the matter, but I’d guess that between 1 in 5 and 1 in 10 places of business have them. Maybe even fewer.

So, urinal floor mats are (a) cheap, (b) easy to acquire, and (c) make a profound difference in the environment. And yet, they are only have 10-20% market penetration at most.

That market penetration is not far off from the prevalence of very good leadership and management in business. I hear stories all the time from executives about absolutely terrible leadership practices. I also hear plenty of stories that aren’t awful, but are evidence of non-leadership or non-management. The experience of working for a good manager, or in an organization with strong leadership, is profoundly different than working with the absence of those things.

To complete the analogy, good management and leadership are also (a) cheap, (b) easy to acquire, and (c) make a profound difference in the work environment. Sure, you can’t buy good leadership online, but it’s not all that difficult to be a caring, supportive, transparent manager. Heck, there’s even a book called The One Minute Manager.

So why the low market penetration of both? It makes no logical sense. It’s not as if most people haven’t had the experience of using a urinal with a floor mat…or of having a really good leader or manager. It’s not as if leaders and decision makers don’t appreciate those things themselves.

The answer boils down to three simple points that anyone who is a manager or leader can do, any day:

• You have to pay attention
• You have to care
• You have to act

Great leaders and managers exhibit all three of these traits. They pay attention to things around them, noting that Everything is Data. They care about people, about experiences, about impressions, about reputations. And when they notice that something is off – however small it is – they care enough to remember and then take the time to act. To make a small change. Send an email. Have a quick conversation. Make a suggestion. Give someone quick praise or constructive feedback.

And to come back to where this post started – it’s also not that hard to have a nice men’s room at your office or business or restaurant. You just have to pay attention to the fact that it’s a much better experience to buy floor mats. You have to care about the experience in the men’s room (for yourself, for employees, for customers, for vendors, for visitors). And then you have to act and either buy the stupid mats or ask an office manager to do the same!

Book Short:  Are You Topgraded?

I read a decent volume of business books (some of my favorites and more recent ones are listed in the left hand column of the blog).  I have two main pet peeves with business books as a rule:  the first is is that most business books have one central idea and a few good case examples and take way too many pages to get where they’re going; the other is that far too many of them are geared towards middle and upper management of 5,000+ person companies and are either not applicable or need to be adapted for startups.

Anyway, I thought I’d occasionally post quick synopses of some good ones I’ve read recently.  Topgrading, by Brad Smart was so good that this post will be longer than most.  It’s a must read for anyone who’s doing a lot of hiring (fellow entrepreneur blogger Terry Gold is a fan, as well).

The book is all about how to build an organization of A players and only A players, and it presents a great interviewing methodology.  It’s very long for a business book, but also very valuable.  Buy a copy for anyone in your company who’s doing a lot of hiring, not just for yourself or for your HR person.  I think the book falls down a little bit on startup adaptation, but it’s still worth a read.

There’s been much talk lately about “the importance of B players” in Harvard Business Review and other places.  I share the Topgrading perspective, which is a little different (although more semantically different than philosophically different).

The Topgrading perspective is that you should always hire A players — the definition of which is “one of the top 10% of the available people in the talent pool, for the job you have defined today, at the comp range you have specified.”  I absolutely buy into this.  Don’t like what you’re seeing while screening candidates?  Change one of the three variables (job definition, comp, or geography) and you’ll get there.

The corrolary to the A-player-only theory is that there are three types of A players — the author calls them A1, A2, and A3.  A1’s are capable of and interested in rapidly rising to be leaders of the organization.  A2s are promotable over time.  A3s are not capable of or interested in promotion.

I think what the HBR article on B players is talking about is really what Topgrading calls A3 players.  A3 players are absolutely essential to an organization, especially as it grows over time and develops more operational jobs that leverage the powerhouse A1s and A2s that make up such a big percentage of successful startups.  You just have to recognize (perhaps with them) that A3 players may not be interested in career growth and promotion and not try to push them into more advanced roles that they may not be interested in or capable of doing well.

I’m a huge believer in having a healthy balance of A1s, A2s, and A3s, but I will always want to hire A players per the above definition.  Why would you ever settle for less?

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!