Book Short:  Alignment Well Defined, Part II

Getting the Right Things Done:  A Leader’s Guide to Planning and Execution, by Pascal Dennis, is an excellent and extraordinarily practical book to read if you’re trying to create or reengineer your company’s planning, goal setting, and accountability processes. It’s very similar to the framework that we have generally adapted our planning and goals process off of at Return Path for the last few years, Patrick Lencioni’s The Advantage (book, post/Part I of this series).  My guess is that we will borrow from this and adapt our process even further for 2014.

The book’s history is in Toyota’s Lean Manufacturing system, and given the Lean meme floating around the land of tech startups these days, my guess is that its concepts will resonate with most of the readers of this blog.  The book’s language — True North and Mother Strategies and A3s and Baby A3s — is a little funky, but the principles of simplicity, having a clear target, building a few major initiatives to drive to the target, linking all the plans, and measuring progress are universal.  The “Plan-Do-Check-Adjust” cycle is smart and one of those things that is, to quote an old friend of mine, “common sense that turns out is not so common.”

One interesting thing that the book touches on a bit is the connection between planning/goals and performance management/reviews.  This is something we’ve done fairly well but somewhat piecemeal over the years that we’re increasingly trying to link together more formally.

All in, this is a good read.  It’s not a great fable like Lencioni’s books or Goldratt’s classic The Goal (reminiscent since its example is a manufacturing company).  But it’s approachable, and it comes with a slew of sample processes and reports that make the theory come to life.  If you’re in plan-to-plan mode, I’d recommend Getting the Right Things Done as well as The Advantage.

I love innovation, and process is no different than product or business model in that regard. I’ve run and attended several hundred board meetings over the years, both those of companies where I’ve been CEO or Chairman, and those where I’m a director. I’ve written a lot about how I like running board meetings in Startup CEO, and as I mentioned the other day, I’m a co-author of a Second Edition of Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, which is coming out in June and is available to pre-order now, along with Brad Feld and Mahendra Ramsinghani.

There are two adaptations I’ve made to my standard board routines in the last year or so, one driven by the pandemic and one not.

In olden times (that makes me sound like I’m 400 years old, but “pre-covid” sounds so clinical), I used to have a board dinner the night before or after every board meeting, and of course, everything was in person. That was a really important ritual in my mind towards the end of building the board as an effective team, where people on the team know each other as people, share things going on in their lives, share vulnerabilities, and develop bonds of trust. Without regular in-person meetings and dinners or social events, that gets a lot harder. Even when we get back to “normal,” I imagine the most we’ll do in-person board meetings is 1-2x/year.

What’s the zoom version of this?

We now do two 30-minute Executive Sessions (directors only) one before the board meeting officially starts and observers and team join, as well as the traditional one after the meeting ends. The purposes of the two sessions are different. The standard post-meeting Executive Session follows up on the meeting and has me talk about business or team issues that I don’t want to talk about with the full group present or get feedback from the board. But the one before the meeting is almost entirely social. I try to come up with a different question or topic to get all of us talking that is not about Bolster. Last week’s meeting was a simple “what’s the best thing that’s happened to you so far in 2022, and what’s the worse?” One time I asked everyone to show a picture from their phone photo roll and talk about it. You get the idea. It’s not the same as a dinner, but it seems like an effective substitute given the medium.

The second adaptation, and full credit to Fred for suggesting this one a while back, is the post-meeting survey. Now immediately after every Board meeting, I send a simple Google form to each director with the following questions:

• What are 1-3 areas/specifics where we are doing well?
• What are 1-3 areas/specifics you’re concerned about or where we could do better?
• Did the board book have the right level of detail and commentary?  Is there anything you’d like to see change about the format or the content?
• Did the meeting meet your objectives for learning and discussion? 
• If not, why not?
• Do you have any other feedback for Matt at this time?

I get great feedback, almost immediately and always from all board members, while things are still fresh in everyone’s mind. I’m planning to do this whether or not the meeting is remote…although it’s definitely good when the meeting is remote, and things like Executive Session, Closed Session, and debrief with me after Closed Session are quick or sometimes rushed.

There’s always room for innovation, even in standard and time-tested processes like board meetings.

Book Short: The Anti-Level-5 Leader

The Five Temptations of a CEO, another short leadership fable in a series by Patrick Lencioni, wasn’t as meaningful to me as the last one I read, The Four Obsessions of an Extraordinary Executive (post, link), but it wasn’t bad and was also a quick read.

The book to me was the 30 minute version of all the Level-5 Leadership stuff that Collins wrote about in Good to Great and Built to Last. All that said, it was a good quick read and a reminder of what not to do. The temptations are things that most CEOs I’ve ever known (present company very much included) have at least succumbed to at one point or another in their career. That said, you as a CEO should quit or be fired if you have them in earnest, so hopefully if you do have them, you recognize it and have them in diminishing quantities with experience, and hopefully not all at once:

– The temptation to be concerned about his or her image above company results

– The temptation to want to be popular with his or her direct reports above holding them accountable for results

– The temptation to ensure that decisions are correct, even if that means not making a decision on limited information when one is needed

– The temptation to find harmony on one’s staff rather than have productive conflict, discussion, and debate

– The temptation to avoid vulnerability and trust in one’s staff

I’m still going to read the others in Lencioni’s series as well. They may not be the best business books ever written, but they’re solid B/B+s, and they’re short and simple, which few business books are and all should be!

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:  Tales of Two Cities

Return Path is basically dual-headquartered in New York City and Broomfield, Colorado, so two recently published books which provide history and insights into the tech industry in those two cities were both of interest to me.

Startup Communities: Building an Entrepreneurial Ecosystem in Your City, by Brad Feld (book, kindle) came out a few months ago and is part of Brad’s Startup Revolution series which will also include my upcoming book Startup CEO, to be published this fall.  In the book, Brad uses the example of the Boulder/Denver area and a few different sectors to demonstrate a blueprint to creating an entrepreneurial ecosystem – the kind that are popping up all over the world of late.

Tech and the City: The Making of New York’s Startup Community, by Alessandro Piol (kindle only) hits on many of the same themes and topics as they relate to New York City, although the book is more of a history of the New York tech scene than a framework with examples.  The book draws heavily on quotes from Fred Wilson, like Brad, a long time friend and Board member.  One of the things the book left me thinking about was what the New York tech scene will look like in 30 years after the new Cornell-Technion campus is up and running.  That plus the current momentum of the tech industry in New York, plus the sheer commercial scale of the city, could really produce an interesting environment down the road that actually starts to rival Silicon Valley, though rival probably isn’t the right word.

All in, these two books do a good job of chronicling the industry I work in, in the two cities where I work, but they also abstract nicely to broader principles about public-private collaboration as well as sector development.

Book Short:  Like a Prequel to My Book

How to Start a Business, by Jason Nazar, CEO of our client Docstoc, is a great and quick (and free) eBook that feels a lot like a prequel to my book Startup CEO:  A Field Guide to Scaling Up Your Business (original outline here). My book is about scaling a business once you’ve started it.  Jason’s book is a really practical guide to starting it in the first place.

The thing that’s particularly good about this book is that it’s as much a resource guide as it is a book.  At the end of each of its 24 chapters (and within them as well), Jason adds a series of external links to other resources, from videos to checklists to templates.  The book answers a lot of really practical questions that are easy for product-focused entrepreneurs to gloss over or ignore, from corporate structures to insurance, from trademark registration to pitching VCs, from payroll to tax planning.

It’s great to see so much more being written for entrepreneurs these days.  Ash Maurya’s Running Lean: Iterate from Plan A to a Plan That Works (which I blogged about last week) is another related book that focuses on how to bring a new product to market.  But Jason’s eBook is a must read for anyone in TechStars or any accelerator program, or anyone contemplating starting a business.

Book short:  Myers-Briggs Redux

Instinct:  Tapping Your Entrepreneurial DNA to Achieve Your Business Goals, by Tom Harrison of Omnicom, is an ok book, although I wouldn’t rush out to buy it tomorrow.  The author talks about five broad aspects of our personalities that influence how we operate in a business setting:  Openness to Experience, Conscientiousness, Extroversion, Agreeableness, and Neuroticism.  These traits are remarkably similar to those in the popular Myers-Briggs Type Indicator that so many executives have taken over the years.

It’s not just that you want to be high, high, high, high, and low in the Big 5.  Harrison asserts that successful entrepreneurs need a balance of openness and conscientiousness in order to be receptive to new ideas, but be able finish what you start; a balance of extroversion and agreeableness so that you have enough energy but also have the ability to work with others; and not too much neuroticism, as you have to be able to take risks.

The book not only talks about how to spot these factors, but how to work around them if you don’t have them (that part is particularly useful, but he doesn’t do it for all five factors).  He also talks about the entrepreneurial addiction to success, and creating the all-important Servant CEO culture, which I certainly agree with and wrote about early on in this blog in my “Who’s The Boss?” posting.

Harrison does have a great section on how “Nice Guys” can and should be winners; how being nice and having guts aren’t mutually exclusive, and he gives a well-written Twelve Rules for expressing the Nice Guy gene:

– Don’t walk on other people, but don’t let them walk on you

– Respect the big idea in everyone

– Own everything

– Never let ’em see you sweat Keep it simple

– Never think in terms of “So what have you done for me today?”

– More is less

– Live your word consistently

– Don’t lie:  fix what’s causing you to think you need to lie

– Never forget to thank, congratulate, or acknowledge people for their efforts

– Keep your door and your heart open

– Never stand in the way of balance

The most annoying part of the book is that Harrison keeps making references to a handful of genetic studies about twins to prove on and off that traits are inherited and that inherited traits can be expressed in different ways.  These references are mildly interesting, but they detract from the substance of the book.

Overall, the book has some interesting points in it, but it’s too much like Jim Collins’ Good to Great and Built to Last, only without the depth of business research and case studies.  Plus, Harrison does the one thing I find most irritating in business books — he is clearly an expert in one thing (business), but he unnecessarily pretends to be an expert in another thing (genetics) in order to make his point.

Triple Book Short: For Parents

People who know me know that I am a voracious reader.  Among other things, I probably read about 25-30 books per year — and I wish I had time for more.  I probably read about 50% business books, which I blog about.  Most of my other reading is in a couple specific topical areas that interest me like American History and Evolutionary Biology.  Over the last few years, Mariquita and I have discovered and read a handful of books about parenting that have been foundational for us as we work deliberately at raising our three kids, and two of them have roots in some of the same philosophies, psychologies, and research as a lot of contemporary business literature.  So for parents everywhere, I thought I’d devote a book short to these three books.

The first one is Healthy Sleep Habits, Happy Child, by Marc Weissbluth.  Having kids who sleep long and well has been the foundation for us to have a well functioning household.  Well rested kids are much easier than tired ones.  Well rested parents are more effective.  We have found that the principles in this book have consistently served us well on this front.  All three of our kids more or less slept through the night starting at 6-8 weeks and have been great sleepers since then.

Unconditional Parenting, by Alfie Kohn is basically, for those in the HR/OD field, “Action/Design” for parenting.  The principles in this book have applied to kids as young as 1 year old, and the examples in the book go through the teenage years.  Our main learnings from this book have been around moving away from more traditional forms of reward, punishment, and control and towards helping our kids make decisions as opposed to follow directions by understanding our kids perspective on things, working to help them articulate their own understanding of a situation, and helping them see the perspective of others.

Raising an Emotionally Intelligent Child, by John Gottman, builds on a lot of the same underlying work that Daniel Goleman writes about in articles and business books around Emotional Intelligence (in fact, Goleman wrote the forward to this book as well).  The book lays out a process the author calls Emotional Coaching to help kids learn empathy and problem solving by showing kids empathy, teaching them to understand and label their own emotions, and working with them to craft solutions on their own, but doing the whole process in a very calm and 1:1 manner.  One of my favorite parts of the book, which is so unusual in business books and any kind of self-help book, is that the author has a whole section devoted to when NOT to use this process.

Parenting is a very personal thing, and there isn’t a right or wrong way to go about it.  I have a friend who is fond of saying that parenting is a little bit like the way comedian George Carlin used to describe “other drivers” on the highway.  People who are going slower than you are “a**holes” and people who are going faster than you are “crazy.”  Only you drive the “right way.”  So true, but if you’re a parent, there’s no more important thing to be deliberate about practicing than parenting, and these books have been a good practice guide for us.  We have found a full read of these three books to be very helpful to us in our work with our kids, and we have been very lucky that our main babysitter has been aligned with us on philosophy (and has been willing to read these books with us).

Boards That Lead, by Ram Charan, Dennis Carey, and Michael Useem, was recommended to me by a CEO Coach in the Bolster network, Tim Porthouse, who said he’s been referring it to his clients alongside Startup Boards. I don’t exactly belong in the company of Ram Charan (Brad and Mahendra probably do!), so I was excited to read it. While it’s definitely the “big company” version to Startup Boards, there are some good lessons for startup CEOs and founder to take away from it.

The best part about the book as it relates to ALL boards is the framework of Partner, Take Charge, Stay out of the Way, and Monitor. You can probably lump all potential board activities into these four buckets. If you look at it that way…these are pretty logical:

• Monitor – what you’d expect any board to do
• Stay out of the Way – basic execution/operations
• Partner – strategy, goals, risk, budget, leadership talent development
• Take Charge – CEO hiring/firing, Exec compensation, Ethics, and Board Governance itself.

There was an interesting nugget in the book as well called the Central Idea that I hadn’t seen articulated quite this way before. It’s basically a statement of what the business is and how it’s going to win. It’s about a page long, 8-10 bullet points, and it includes things like mission, strategy, key goals, and key operating pillars that underlie the goals. It basically wraps up all of Lencioni’s key questions in one page with a little more meat on the bones. I like it and may adopt it. The authors put the creation of the Central Idea into the Take Charge bucket, but I’d put it squarely in the Partner bucket.

Other than that, the book is what you’d expect and does have a lot of overlap with the world of startups. Its criteria for director selection are very similar to what we use at Bolster, as is its director evaluation framework. The book has a ton of handy checklists as well, some of which are more applicable than others to startups, for example Dealing with Nonperforming Directors and Spotting a Failing CEO.

All in, a good read if you’re a student of Boards.

Book Short: Wellness Redefined

Well Being: The 5 Essential Elements, by Tom Rath and Jim Harter from the Gallup organization, is a solid read and incredibly short. It’s one of those books that’s really a long article stretched and bound. But it goes beyond the basics of what I expected, which was something like “having healthy employees cuts down on absenteeism” and has a couple great elements of food for thought for leaders looking to build cutting edge and uber-productive organizations. It comes out of the same general body of research as four other very strong books I’ve written about over time — First, Break all the Rules, Now, Discover Your Strengths, 12: The Great Elements of Managing (book, review), and Go Put Your Strengths to Work (book, review).

The authors define well being as having five separate components:  career well being, social well being, physical well being, financial well being, and community well being. Ok, that makes sense, but the three most interesting points the book made from my perspective were:

1. Well being isn’t just about one of these five elements – it’s about all five, and how they interact together, and how the workplace can support all of them
2. Achieving long-term objectives around well being requires finding short-term incentives that drive the same behavior in more obvious and immediate ways, as most long-term well being drivers require short term sacrifice. So figure out how to make eating a salad better for you not just years from now but TODAY (you’ll have more energy after lunch than if you eat that cheeseburger), for example
3. Financial well being isn’t something a lot of companies focus on, and maybe it should be. Particularly in our industry we hire knowledge workers and assume therefore that they’re smart and educated about everything…but maybe there are ways that the company can support financial well being that aren’t necessarily obvious

The book is full of stats from the underlying research, most of which show that most people are shockingly unhappy, and that most workplaces dont do enough to support employee wellness. The book also notes, as is the case with most things, that promoting well being among employees requires more than just setting up programs. Doing it right requires constant vigilance, measurement, and follow up. At Return Path, we do a bunch of programs along the lines suggested by the book (but can and should do more!), but we’ve never been rigorous with follow up. Good food for thought.

Note there is also a free whitepaper on the economics of well being that you can download here.  The white paper is ok…but not nearly as interesting as the book, and note that it does not substitute for the book.  Thanks to my colleague Cathy Hawley for this book!

5 Ways to Get Your Staff on the Same Page

[This post first appeared as an article in Entrepreneur Magazine as part of a new series I’m publishing there in conjunction with my book, Startup CEO:  A Field Guide to Scaling Up Your Business]

When a major issue arises, is everybody at your company serving the same interests? Or is one person serving the engineering team, another person serving the sales team, one board member serving the VC fund, another serving the early-stage “angels” and another serving the CEO? If that’s the case, then your team is misaligned. No individual department’s interests are as important as the company’s.

To align everyone behind your company’s interests, you must first define and communicate those goals and needs. This requires five steps:

1. Define the mission. Be clear to everyone about where you’re going and how you’re going to get there (in keeping with your values).
2. Set annual priorities, goals, and targets. Turn the broader mission into something more concrete with prioritized goals and unambiguous success metrics.
3. Encourage bottom-up planning. You and your executive team need to set the major strategic goals for the company, but team members should design their own path to contribution. Just be sure that you or their managers check in with them to assure that they remain in synch with the company’s goals.
4. Facilitate the transparent flow of information and rigorous debate. To help people calibrate the success, or insufficiency, of their efforts, be transparent about how the organization is doing along the way. Your organization will make better decisions when everyone has what they need to have frank conversations and then make well-informed decisions.
5. Ensure that compensation supports alignment (or at least doesn’t fight it). As selfless as you want your employees to be, they’ll always prioritize their interests over the company’s. If those interests are aligned – especially when it comes to compensation – this reality of human nature simply won’t be a problem.

Taken in sequence, these steps are the formula for alignment. But if I had to single out one as the most important, it would be number 5: aligning individual incentives with companywide goals.

It’s always great to hear people say that they’d do their jobs even if they weren’t paid to, but the reality of post-lottery-jackpot job retention rates suggests otherwise. You, and every member of your team, “work” for pay. Whatever the details of your compensation plan, it’s crucial that it aligns your entire team behind the company’s best interests.

Don’t reward marketers for hitting marketing milestones while rewarding engineers to hit product milestones and back office personnel to keep the infrastructure humming. Reward everybody when the company hits its milestones.

The results of this system can be extraordinary:

• Department goals are in alignment with overall company goals. “Hitting product goals” shouldn’t matter unless those goals serve the overall health of your company. When every member of your executive team – including your CTO – is rewarded for the latter, it’s much easier to set goals as a company. There are no competing priorities: the only priority is serving the annual goals.
• Individual success metrics are in alignment with overall company success metrics. The one place where all companies probably have alignment between corporate and departmental goals is in sales. The success metrics that your sales team uses can’t be that far off from your overall goals for the company. With a unified incentive plan, you can bring every department into the same degree of alignment. Imagine your general counsel asking for less extraneous legal review in order to cut costs
• Resource allocation serves the company, rather than individual silos. If a department with its own compensation plan hits its (unique) metrics early, members of that team have no incentive to pitch in elsewhere; their bonuses are secure. But if everyone’s incentive depends on the entire company’s performance, get ready to watch product leads offering to share developers, unprompted.

This approach can only be taken so far: I can’t imagine an incentive system that doesn’t reward salespeople for individual performance. And while everyone benefits when things go well, if your company misses its goals, nobody should have occasion to celebrate. Everybody gets dinged if the company doesn’t meet its goals, no matter how well they or their departments performed. It’s a tough pill to swallow, but it also important preventive medicine.