Book Short:  A Must Read

Every once in a while, I read a book and think, “This is an important book.”  Microtrends, by Mark Penn, was just that kind of read.  Penn is the CEO of one of our largest clients in the market research business as well as CEO of Burson Marstellar and, more notably, the Clintons’ pollster and strategy director for much of the last 16 years.  He’s a smart guy, and more important than that, he’s awash in primary research data.

The premise of Microtrends is that America is no longer a melting pot, where lots of different people come together to try to be the same, but rather that it’s a big tent, where lots of small groups are now large enough to express their individuality powerfully.  The book is also perfect for the ADD-afflicted among us, with 75 chapters each of about 4 pages in length describing one new “microtrend” or small faction of American identity.  Penn not only describes the trend in a data-rich way but then goes on to postulate about the impact that trend will have on society at large and/or on the business opportunities that could come from serving those in the trend.

Just to give you a sample of the trends he covers:  Sex-ratio singles (explaining why there really are more single women than men), Extreme commuters (we certainly have a couple of those at Return Path),
Pro-Semites vs. Christian Zionists (they sound the same but are completely different), Newly-released Ex-cons (hint – there are a ton of them), and the rise of Chinese artists.

Whether you’re interested in marketing, entrepreneurship (you’ll get loads of ideas here), investing (more loads of ideas), or just trends in American and global society, Microtrends is a must must must read.  All 75 chapters were interesting to me, but even if you don’t love some…they’re only 4 pages each!

Book Shorts:  One Up, One Down

I read new books by two of my favorite authors today:  Geoffrey Moore and Seth Godin.  Moore’s was his best book in years; Godin’s was his worst.

Geoffrey Moore’s latest book, Dealing with Darwin:  How Great Companies Innovate at Every Phase of their Evolution, is Moore’s best book in a while. While I loved Crossing the Chasm and thought Inside the Tornado was a close second, both The Gorilla Game and Living on the Fault Line didn’t do it for me — they both felt like a pile of Silicon Valley buzzwords as opposed to the insightful and groundbreaking market definition in his first two books.

But Darwin is a gem. It goes back to Moore’s strengths in analyzing leading companies and creating a powerful framework for innovation that transcends industry and stage of company. And even better, the book has a few very useful “how to” lists to help readers interpret the content and adapt it to their own environments.

So whether you’re a Geoffrey Moore fan or not — assuming you are a fan of innovation and kicking your competitors’ collective butts — this book’s for you.

By contrast, Seth Godin’s Small Is the New Big is old news if you are a Seth Godin fan. It is literally a repackaging of essays, articles, and blog postings he’s written over the years. He’s trended down lately in his writing, like Moore (and most authors who have a single theme or two, it should be said), but unlike Moore, this book isn’t his recovery. The book is a must-have if you (a) love Seth’s writing and want a hard copy archive of his soft-copy stuff, (b) you don’t read Seth’s blog and want to see what you’ve been missing, or (c) you have his other books and are compulsive enough that you can’t stand incomplete collections.

Otherwise, wait for his next book, which hopefully will have some more of the original thinking and writing and ideas that made books like Permission Marketing, Unleashing the Ideavirus, and Purple Cow such new business classics.  I have to say, the thing that disappointed me most here is that I felt like Seth totally sold out with this book — as a regular reader of his, I just felt duped by the Godin Marketing Machine, which is precisely the kind of thing he rants against.  There was definitely NO Free Prize Inside this one.

Book Short:  Like Reading a Good Speech

Leaders Eat Last, by Simon Sinek, is a self-described “polemic” that reads like some of the author’s famous TED talks and other speeches in that it’s punchy, full of interesting stories, has some attempted basis in scientific fact like Gladwell, and wanders around a bit.  That said, I enjoyed the book, and it hit on a number of themes in which I am a big believer – and it extended and shaped my view on a couple of them.

Sinek’s central concept in the book is the Circle of Safety, which is his way of saying that when people feel safe, they are at their best and healthiest.  Applied to workplaces, this isn’t far off from Lencioni’s concept of the trust foundational layer in his outstanding book, Five Dysfunctions of a Team.  His stories and examples about the kinds of things that create a Circle of Safety at work (and the kinds of things that destroy them) were very poignant.  Some of his points about how leaders set the tone and “eat last,” both literally and figuratively, are solid.  But his most interesting vignettes are the ones about how spending time face-to-face in person with people as opposed to virtually are incredibly important aspects of creating trust and bringing humanity to leadership.

My favorite one-liner from the book, which builds on the above point and extends it to a corporate philosophy of people first, customer second, shareholders third (which I have espoused at Return Path for almost 15 years now) is

Customers will never love a company unless employees love it first.

A couple of Sinek’s speeches that are worth watching are the one based on this book, also called Leaders Eat Last, and a much shorter one called How Great Leaders Inspire Action.

Bottom line:  this is a rambly book, but the nuggets of wisdom in it are probably worth the exercise of having to find them and figure out how to connect them (or not connect them).

Thanks to my fellow NYC CEO Seth Besmertnik for giving me this book as well as the links to Sinek’s speeches.

Reboot – The Fountainhead

Happy New Year!  Every few years or so, especially after a challenging stretch at work, I’ve needed to reboot myself.  This is one of those times, and I will try to write a handful of blog posts on different aspects of that.

The first one is about a great book.  I just read Ayn Rand’s The Fountainhead for (I think) the 5^th time.  It’s far and away my favorite book and has been extremely influential on my life.  I think of it (and any of my favorite books) as an old friend that I can turn to in order to help center myself when needed as an entrepreneur and as a human.  The last time I read it was over 10 years ago, which is too long to go without seeing one of your oldest friends, isn’t it?  While the characters in the book by definition are somewhat extreme, the book’s guiding principles are great.  I’ve always enjoyed this book far more than Atlas Shrugged, Rand’s more popular novel, which I think is too heavy-handed, and her much shorter works, Anthem and We The Living, which are both good but clearly not as evolved in her thinking.

As an entrepreneur, how does The Fountainhead influence me?  Here are a few examples.

• When I think about The Fountainhead, the first phrase that pops into my head is “the courage of your convictions.”  Well, there’s no such thing as being a successful entrepreneur without having the courage of your convictions.  If entrepreneurs took “no” for an answer the first 25 times they heard it, there would be no Apple, no Facebook, no Google, but there’d also be no Ford, no GE, and no AT&T
• One great line from the book is that “the essence of man is his creative capacity.”  Our whole culture at Return Path, and one that I’m intensely proud of, is founded on trust and transparency.  We believe that if we trust employees with their time and resources, and they know everything going on in the company, that they will unleash their immense creative capacity on the problems to be solved for the business and for customers
• Another central point of influence for me from the book is that while learning from others is important, conventional wisdom only gets you far in entrepreneurship.  A poignant moment in the book is when the main character, Howard Roark, responds to a question from another character along the lines of “What do you think of me?”  The response is “I don’t think of you.”  Leading a values-driven life, and running a values-driven existence, where the objective isn’t to pander to the opinion of others but to fill my life (and hopefully the company’s life) with things that make me/us happy and successful is more important to me than simply following conventional wisdom at every turn.  Simply put, we like to do our work, our way, noting that there are many basics where reinventing the wheel is just dumb
• Related, the book talks about the struggle between first-handers and second-handers.  “First-handers use their own minds.  They do not copy or obey, although they do learn from others.”  All innovators, inventors, and discoverers of new knowledge are first-handers.  Roark’s speech at the Cortland Homes trial is a pivotal moment in the book, when he says, “Throughout the centuries, there were men who took first steps down new roads armed with nothing but their own vision.  The great creators — the thinkers, the artists, the scientists, the inventors — stood alone against the men of their time.  Every great new thought was opposed.”  In other words, first-handers, critical thinkers, are responsible for human progress.  Second-handers abdicate the responsibility of independent judgment, allowing the thinking of others to dominate their lives.  They are not thinkers, they are not focused on reality, they cannot and do not build
• The “virtue of selfishness” is probably the essence of Rand’s philosophy.  And it sounds horrible.  Who likes to be around selfish people?  The definition of selfish is key, though.  It doesn’t inherently mean that one is self-centered or lacks empathy for others.  It just means one stays true to one’s values and purpose and potentially that one’s actions start with oneself.  I’d argue that selfishness on its own has nothing to do with whether someone is a good person or a good friend.  For example, most of us like to receive gifts.  But people give gifts for many different reasons – some people like to give gifts because they like to curry favor with others, other people like to give gifts because it makes them feel good.  That’s inherently selfish.  But it’s not a bad thing at all
• Finally, I’d say another area where The Fountainhead inspires me as a CEO is in making me want to be closer to the action.  Howard Roark isn’t an ivory tower designer of an architect.  He’s an architect who wants to create structures that suit their purpose, their location, and their materials.  He only achieves that purpose by having as much primary data on all three of those things as possible.  He has skills in many of the basic construction trades that are involved in the realization of his designs – that makes him a better designer.  Similarly, the more time I spend on the front lines of our business and closer to customers, the better job I can do steering the ship

One area where I struggle a little bit to reconcile the brilliance of The Fountainhead with the practice of running a company is around collaboration.  It’s one thing to talk about artistic design being the product of one man’s creativity, and that such creativity can’t come from collaboration or compromise.  It’s another thing to talk about that in the context of work that inherently requires many people working on the same thing at the same time in a generalized way.  Someday, I hope to really understand how to apply this point not to entrepreneurship, but to the collaborative work of a larger organization.  I know firsthand and have also read that many, many entrepreneurs have cited Ayn Rand as a major influence on them over the years, so I’m happy to have other entrepreneurs comment here and let me know how they think about this particular point.

It feels a little shallow to try to apply a brilliant 700 page book to my life’s work in 1,000 words.  But if I have to pick one small point to illustrate the connection at the end, it’s this.  I realize I haven’t blogged much of late, and part of my current reboot is that I want to start back on a steady diet of blogging weekly.  Why?  I get a lot out of writing blog posts, and I do them much more for myself than for those who reads them.  That’s a small example of the virtue of selfishness at work.

Book Short:  Next, Write a Sequel

Written by Rodd Wagner and James K. Harter and billed as “the long awaited sequel to First, Break All the Rules” (one of the best management books I’ve ever read), I thought 12: The Elements of Great Managing, was good, but not great.  12…, along with the original book First… and Now, Discover Your Strengths, the latter two both by Marcus Buckingham, are all based on an extensive database of research done on corporate America by the Gallup organization over many years.  All three are valuable reads in one way or another, although I found this to be the weakest of the three.  (Note that Now… is different from the other two in that it’s not about management, it’s about self-management — very different, though based on the same research.)

Anyway, the elements of great managing, so say the authors, is all about creating employee engagement.  I totally buy into that.  And since no book short on 12… would be complete if it didn’t list out the 12…

1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?
3. At work, do I have the opportunity to do what I do best every day?
4. In the last seven days, have I received recognition or praise for doing good work?
5. Does my supervisor, or someone at work, seem to care about me as a person?
6. Is there someone at work who encourages my development?
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel my job is important?
9. Are my co-workers committed to doing quality work?
10. Do I have a best friend at work?
11. In the last six months, has someone at work talked to me about my progress?
12. This last year, have I had the opportunities at work to learn and grow?

The book fleshes out each of the 12, gives examples (some of which are better/clearer than others), and then addresses compensation in a very interesting chapter at the end.  Key takeaways on comp:

– Higher pay doesn’t guarantee greater engagement
– Good and bad employees are equally likely to think they deserve a raise
– Money without meaning isn’t enough
– Most employees, most of the time, feel undercompensated
– Individual pay can/should be private, but comp criteria should be very public
– People who feel well-compensated generally work harder

The book also cites a very provocative article suggesting that organizations would handle comp better if they made everyone’s comp public (in contrast to the final bullet above, yes).  I’m going to write more about compensation in future postings, so I’ll leave this section on those notes.

Finally, the book’s two closing thoughts are perhaps its most prescient:  one critical element of BEING a great manager is HAVING a great manager; and the managers who put the most into their people, get the most out of their people.

Book Short:  The Religion of Heresy

At the end of Tribes: We Need You to Lead Us, Seth Godin’s new book, Seth says this:

I’m going to get a lot of flak from people about what you just read. People might say that it’s too disorganized or not practical enough or that I require you to do too much work to actually accomplsh anything. That’s ok.

He’s kind of right. The book is a little breezy and meanders around, just like riffing with Seth. It’s not practical in the sense that if the entire world operated this way in the extreme, we’d have serious problems. But the fact that he requires you to do “too much work to actually accomplish anything” is part of the brilliance of his message.

This was Seth’s best book in years, mostly because it is fresh. It is not a rant about marketing; it is a wonderfully succinct look at how we as a society are rallying and organizing around causes, campaigns, companies, and collective beliefs. It’s not about the Internet, though its principles are easily implemented and amplified using online tools. It’s not a how-to guide to being a fancy corporate leader, but it’s one of the most pointed descriptions of the ethos of a certain type of leader (the upstart, or as Seth says, the heretic). It’s not about a particular revolution; it’s about how mini-revolutions are becoming the norm these days.

Tribes is short, inspirational, and pure Seth. Though quite different in its nature and mission, it really evoked for me Mark Penn’s Microtrends (post, link) — a study of larger tribes and heretics in contemporary America.

A listing of Seth’s books over the years follows:

• Permission Marketing — the original

• Unleashing the Ideavirus — good follow up on viral marketing

• Really Bad Powerpoint (ebook) — the standard for not being boring when you present

• The Big Red Fez — the standard on designing great web sites

• Survival Is Not Enough — motivating about being a nimble company

• Free Prize Inside — on being buzzworthy

• Purple Cow — on being remarkable, a great book

• The Big Moo — good follow-up with remarkable examples

• Small Is the New Big — not worth it if you read his blog

• All Marketers Are Liars — fine, a little “more of the same”

• The Dip — haven’t read it

• Meatball Sundae — haven’t read it

• Tribes — see above

Book Short:  Sloppy Sequel

SuperFreakonomics, by Steven Levitt and Stephen Dubner, wasn’t a bad book, but it wasn’t nearly as good as the original Freakonomics, either.  I always find the results of “naturally controlled experiments” and taking a data-driven view of the world to be very refreshing.  And as much as I like the social scientist versions of these kinds of books like Malcolm Gladwell’s The Tipping Point and Blink (book; blog post), there’s usually something about reading something data driven written by a professional quant jock that’s more reassuring.

That’s where SuperFreakonomics fell down a bit for me.  Paul Krugman has described the book in a couple different places as “snarky and contrarian.”  I typically enjoy books that carry those descriptors, but this one seemed a bit over the top for economists — like a series of theories looking for data more than raw data adding up to theories.Nowhere is this more true than the chapter on climate change.  It’s a shame that that chapter seems to be swallowing up all the public discussion about the book, because there are some good points in that chapter, and the rest of the book is better than that particular chapter, but such is life.

As with all things related to the environment, I turned to my friend Andrew Winston’s blog, where he has a good post about how the authors kind of miss the point about climate change…and he also has a series of links to other blog posts debunking this one chapter.  If you’re into the topic, or if you read the book, follow the chain here for good reading.  My conclusion about this chapter, being at least somewhat informed about the climate change debate, is that the book seems to have sloppy writing and editing at best, possibly deliberately misleading at worst.  (Incidentally, the reaction in the blogosphere seems highly emotional, other than Andrew’s, which probably doesn’t serve the reactors well.)

But I’ll assume the best of intentions.  Some of the points made aren’t bad – there is no debate about the problem or the need to solve it, the authors express legitimate concern that current solutions, especially those requiring behavioral change, will be too little too late, and most interestingly, they show an interest in alternative approaches like geo-engineering.  I hadn’t been familiar with that topic at all, but I’m now much more interested in it, not because it’s a “silver bullet” approach to dealing with climate change, but because it’s a different approach, and complex problems like climate change deserve to have a wide range of people working on multiple types of solutions.  I met Nathan Myhrvold once (I almost threw up on him during a job interview, which is another story for another day), and it makes me very happy that his brilliance is being applied to this problem as a general principle.

As I said, though, beyond this one chapter, the book is good-not-great.  But it certainly is chock full of cocktail party nuggets!

Exciting News for Return Path

If you’ll indulge me in a quick moment of company self-promotion, we are so excited at Return Path to announce that we have been included in Fortune Magazine’s annual list of the Best Places to Work — we are ranked #11 in the Medium Size Company category!  Our official blog post/press release are here.

This is really exciting and a testament to all 360+ of our talented team members at the company.  When we talk about one of our core values as being Job 1 — a shared responsibility for championing and extending our unique culture as a competitive advantage — this is one of those examples of where the theory becomes reality!

Of the many things I may have had in mind for the Return Path of the future on December 6, 1999, winning what is probably the most prestigious “employer of choice” award in the world certainly wasn’t one of them, but it was wonderful to receive the acknowledgment.  Congratulations to the whole team here on this great achievement!

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?

I’ve gotten to know a number of Bolster members over the last few years, and one who I have come to appreciate quite a bit is Tim Porthouse. I’m on Tim’s email list, and with his permission, I’m reprinting something he wrote in his newsletter this month on the topic of CEO engagement in politics and current events. As you may know, I’ve written a bunch on this topic lately, with two posts with the same title as this one, Should CEOs wade into Politics (part I here, part II here). Thanks to Tim for having such an articulate framework on this important subject.

Your Leadership Game: “No Comment.”

Should you speak up about news events/ politics?

Most of the time, I say, no!

Startup CEOs feel pressure to speak up on news events: Black Lives Matter, Abortion, LBGTQ+ rights, the conflict in Israel/Palestine, Trump vs. Biden. Many tell me they feel pressured to say something, but are deeply conflicted.

Like you, I am deeply distressed by wars, murder, restrictions on human rights, bias, and hate. But if we feel something, should we say something?

Before you speak up, ask the following questions:

1.      Mission relevance. Is your startup’s success or mission on the line? Are customers or employees directly impacted? Example: It makes sense for Airbnb to advocate when a city tries to ban short-term rentals. It makes sense to advocate for your LBGTQ+ employees when a state tries to restrict their rights.

2.      Moving the needle. Will speaking out change anything? If you “denounce” something or “take a stand,” what really happens? Example: If you have employees in a state banning abortion and you tell them your startup will support them as much as the law allows, this could create great peace of mind for employees. But if your startup does not operate in Ukraine or Russia, then denouncing Russia does little (and Russia does not care!)

3.      Expertise. Do you have a deep understanding of the situation? It’s usually more complicated than it appears, especially at first. Once you speak out, you have painted yourself into a corner you will be forced to defend.

4.      Precedence and equivalence. If you issue a statement about today’s news event, will you react to tomorrow’s event? Why not? Where do you draw the line?Someone will be offended that you spoke up about X but not Y.

5.      Backlash. Are you ready to spend significant time engaging with those who disagree with you?It can get ugly quickly, and mistakes can be costly. Plus, the American public is tiring of business leaders commenting on the news.

6.      Vicarious liability. Who are you speaking for? When you say, “Our startup denounces X”?Does the whole company denounce it? You don’t know, and probably not. Does the Leadership Team? They may feel pressured to support you. What you are really saying is, “I denounce X!” OK, great, then say it to your friends and family. Leave your startup to talk about business.

If your answers are “yes,” – then speak out.

If not, I recommend keeping quiet.

In my opinion, our job is to build great companies, not debate current events.

By not speaking out, you can say, “We don’t talk politics here.” You can shut down any two-sided arguments at work and say, “Let’s get back to work,”removing a big distraction. Remember when employees protested because Google was bidding for Pentagon contracts?

I realize that you will be challenged to make a statement, that, “Saying nothing is unacceptable/ complicit.” But whoever challenges you will only be satisfied if you support their view.

If you still want to speak out, I respect your choice. Some of you will be angry with me for writing this, and I accept that. I’m asking you to think carefully before you make a statement.

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.