Book Short:  I Wish This Existed 12 Years Ago

Brad Feld has been on my board for over a decade now, and when he and his partner Jason Mendelson told me about a new book they were writing a bunch of months ago called Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist, I took note.  I thought, “Hmmm.  I’d like to be smarter than my lawyer or venture capitalist.”

Then I read an advanced copy.  I loved it.  At first, I thought, I would really have benefited from this when I started Return Path way back when.  Then as I finished reading it, I realized it’s just a great reference book even now, all these years and financings later.  But as much as I enjoyed the early read, I felt like something was missing from the book, since its intended audience is entrepreneurs.

Brad and Jason took me up on my offer to participate in the book’s content a little bit, and they are including in the book a series of 50-75 sidebars called “The Entrepreneur’s Perspective” which I wrote and which they and others edited.  For almost every topic and sub-topic in the book, I chime in, either building on, or disagreeing, with Brad and Jason’s view on the subject.

The book is now out.  As Brad noted in his launch post, the book’s table of contents says a lot:

1. The Players
2. How to Raise Money
3. Overview of the Term Sheet
4. Economic Terms of the Term Sheet
5. Control Terms of the Term Sheet
6. Other Terms of the Term Sheet
7. The Capitalization Table
8. How Venture Capital Funds Work
9. Negotiation Tactics
10. Raising Money the Right Way
11. Issues at Different Financing States
12. Letters of Intent – The Other Term Sheet
13. Legal Things Every Entrepreneur Should Know

Fred has posted his review of the book as well.

Bottom line:  if you are an aspiring or actual entrepreneur, buy this book.  Even if you’ve done a couple of financings, this is fantastic reference material, and Brad and Jason’s points of view on things are incredibly insightful beyond the facts.  And I hope my small contributions to the book are useful for entrepreneurs as well.

I love stealing/borrowing other people’s good ideas for management and leadership when they’re made public, and I always encourage others to do so from me. I call it “plagiarizing with pride.” So I was intrigued when I saw a new way of doing all-hands meetings published by my friend Daniel Odio (DROdio) on his founder community called FounderCulture. You can see the original post here.

We’ve experimented with different formats and cadences for all-hands meetings over the years. They tend to vary with the size of the company and complexity of the material to cover. Larger companies usually fall into the rhythm of doing quarterly all-hands meetings sometime after the end of the quarter, usually around a Board meeting, with a quarterly recap and forecast for next quarter.

But for early stage companies, there’s no tried-and-true method. We struggled with that for a while at Bolster. Weekly felt too much. Quarterly felt like too little. It seemed weird for me or my co-founders to just have a meeting where we talked at everyone…and it also seemed weird to just host an “open mic night” type meeting. Then I saw DROdio’s video, and we adapted it. It’s working pretty well for us. Here’s what we do in what we’re calling our Open All-Hands Meeting:

• We hold an all-hands meeting every Monday for :30
• A different team member is responsible for being the host/chair/emcee for each meeting
• We run the meeting off of a dedicated Trello board with specific columns of information. Everyone is invited to contribute to the Trello board in the days leading up to the meeting. The columns are:
  • Values-Kudos-Good News: Anyone can call out anyone for doing something that demonstrates one of the company’s values, that is just a big thank you, or that is some other piece of karmic goodness they want to share
  • Wins: All client wins are shown here with some detail, each in its own card with its owner highlighted
  • #MAD: This is where we trade items on which we Made A Decision during the prior week, big or small. We’ve always struggled with the best way to keep everyone informed on things like this…and this works really well for that purpose
  • Learnings/Product Ideas: Anyone can populate this with anything they want as they go about their work and either come across learnings or product ideas they want to share
  • Announcements: Pretty self-explanatory, any corporate announcement, new employee introductions, etc.
  • Swim Lane Updates: Each we, we ask one or two of our functional or project areas to do a deep dive update — Product, Finance, Sales, Marketing, Ops, etc. — and this is also where we’ll do product demos of newly released functionality
  • Permanent Items: this isn’t a column that’s read…it just warehouses things we want on the board like the schedule of hosts, schedule of swim lane updates, instructions for running the meeting, recordings of prior meetings
  • BOLSTER 2022: this isn’t a column that’s read…it contains our mission, values, strategy, and key strategic initiatives and metrics for the year
  • Archive: this isn’t a column that’s read…it just contains the prior week’s items
• There’s a series of light integrations between Slack, Hubspot, and Trello to automatically populate Trello based on certain channels, keywords, and emojis. Every week, the board is automatically wiped clean after the meeting
• The host moves the meeting from column to column and card to card, sometimes reading the cards, and sometimes asking the person who submitted the card to read it or give color commentary on it
• I do jump in from time to time, as do some of my co-founders or our other leaders, to give extra commentary or amplify something or help connect the dots. But that’s about as formal as my role gets other than…
• …when we do have a quarterly board book and board meeting, I host that one meeting and recap the meeting, ask other leaders to comment on specific topics, and facilitate Q&A on the materials we send out ahead of time. So I’m hosting 4 meetings per year
• The host can add a personal touch to any meeting. Custom wallpaper for the Trello board. Asking everyone in the company who has a pet to send in a photo of the pet ahead of time and introducing their furry friends during the meeting. Playing intro or outro music to fit the occasion. Doing spot surveys or game show questions to keep things lively. Interviewing new team members. Asking everyone to do a one-sentence “here’s what I’m working on this week” at the end of the meeting
• Finally, the host passes the baton from one person to the next each week. No one can escape this responsibility!

In addition to the Open All-Hands Meeting format, I send the company an email every Friday with some musings on the prior week. The content of these varies widely – from “what I did last week,” to “here’s something I saw that’s interesting,” to welcoming new team members with their bios, to customer testimonials. Sometimes other founders write these. They’re a good way to add a personal touch to the operating system of the company — and we also send these to our board and major shareholders every week so they, too, can keep a finger on the pulse.

These two things together are proving to be a good Operating System for keeping everyone informed, aligned, and connected on a weekly basis.

As I mentioned the other day, the second edition of Startup CEO is out.  This post is a teaser for the content in one of the new chapters in this edition on Authentic Leadership.

As I mentioned last week, the book went to press early in the COVID-19 pandemic and prior to all the protests around racial injustice surrounding the George Floyd killing, so nothing in it specifically addresses any of those issues.  In some ways, though, that may be better at the moment since the book is more about frameworks and principles than about specific responses to current events. Two of those principles, which are timeless and transcend turmoil, uncertainty, time and place, are creating space to think and reflect and being intentional in your actions. In a world in which CEOs are increasingly called upon to deal with more than traditional business (pricing, strategy, go-to market approaches, team building, etc.) it’s imperative to approach and solve challenging situations from a foundation that doesn’t waver. 

At Return Path our values were the foundation that provided a lens through which we made every decision. Well, not every decision, only the good ones. When we strayed from our core values, that got us into trouble. The other principle, outlined in Chapter 1 of the Second Edition, is leading an organization authentically.

Let me provide a couple concrete examples of what I mean by “Authentic Leadership” since the term can be interpreted many ways.

One example is to avoid what I call the “Say-Do” gap.  This is obviously a very different thread than talking about how the company relates to the outside world and current events.  But in some ways, it’s even more important.  A leader can’t truly be trusted and followed by their team without being very cognizant of, and hopefully avoiding close to 100%, any gap between the things they say or policies they create, and the things they do.  There is no faster way to generate muscle-pulling eyerolls on your team than to create a policy or a value and promptly not follow it. 

I’ll give you an example that just drove me nuts early in my career here, though there are others in the book.  I worked for a company that had an expense policy – one of those old school policies that included things like “you can spend up to $10 on a taxi home if you work past 8 pm unless it’s summer when it’s still light out at 8 pm” (or something like that).  Anyway, the policy stipulated a max an employee could spend on a hotel for a business trip, but the CEO  (who was an employee) didn’t follow that policy 100% of the time.  When called out on it, did the CEO apologize and say they would follow the policy just like everyone else? No, the CEO changed the policy in the employee handbook so that it read “blah blah blah, other than the CEO, President, or CFO, who may spend a higher dollar amount at his discretion.”

What does that say about the CEO? How engaged are employees likely to be, how much effort are they willing to devote to the company if there are special rules for the executives? You can make any rule you want — as you probably know if you have read a bunch of my posts or my book over the years, I’m a proponent of rule-light environments — but you can’t make rules for everyone else that you aren’t willing to follow yourself unless you own the whole company and don’t care what anyone thinks about you or says about you behind your back.

Beyond avoiding the Say-Do Gap, this new chapter of the book on Authentic Leadership also talks about how CEOs respond to current events in today’s increasingly politicized and polarized world.  This has always felt to me like a losing proposition for most CEOs, which I talk about quite a bit in the book.  When the world is polarized, whatever you do as CEO, whatever position you take on things, is bound to upset, alienate, or infuriate some nontrivial percentage of your workforce.  I even give some examples in the book of how I focused on using the company’s best interests and the company’s values as guideposts for reacting (or not reacting) to politically divisive or charged issues like guns or “religious liberty” laws.  I say this noting that there are some people who *believe* that their side of an issue like this is right, and the other side is wrong, but the issues have some element of nuance to them.

Today’s world feels a bit different, and I’m not sure what I would be doing if I was leading a known, scaled enterprise at this stage in the game.  The largely peaceful protests around all aspects of racial injustice in America in the wake of the murder of George Floyd — and the brutality and senselessness of that murder itself — have caused a tidal wave of dialog reaching all corners of the country and the world.  The root of this issue doesn’t feel to me like one that has a lot of nuance or a second side to the argument.  After all, what reasonable person is out there arguing that George Floyd’s death was called for, or even that black Americans don’t have a deep-seeded and widespread reasonable claim to inequality…even if their view of what to do about it differs?

I *think* what I would be doing in a broader leadership role today is figuring out what my organization could be doing to help reduce or eliminate structural racial inequality where we could based on our business, as opposed to driving my organization to take a specific political stand. I know for sure that I wouldn’t solicit feedback from a select group of people only, but I would create a space where voices from across the organization (and stakeholders outside of it as well) could be heard. That’s not a solution, but a start, and in challenging times making a little bit of headway can lead to a cascading effect. It can, if you keep the momentum.

And, in line with “authentic leadership,” it’s okay to admit that you don’t have the answers, that you might not even know the questions to ask. But doing nothing, or operating in a “business as usual” way won’t make your company stronger, won’t open up new opportunities, won’t generate new ideas, and won’t sit well with your employees, who are very much thinking about these issues. 

So, in today’s challenging times I would follow my own advice, be thoughtful and reflective, and intentional in searching for common solutions.  I’d try to avoid “mob mentality” pressure — but I would also be listening carefully to my stakeholders and to my own conscience.

In the coming weeks, I’ll write posts that get into some of the other topics I cover in the book, but none of them will be as good as reading the full thing!

Book Short:  Steve Jobs and Lessons for CEOs and Founders

First, if you work in the internet, grew up during the rise of the PC, or are an avid consumer of Apple products, read the Walter Isaacson biography of Steve Jobs (book, kindle).  It’s long but well worth it.

I know much has been written about the subject and the book, so I won’t be long or formal, but here are the things that struck me from my perspective as a founder and CEO, many taken from specific passages from the book:

• In the annals of innovation, new ideas are only part of the equation. Execution is just as important.  Man is that ever true.  I’ve come up with some ideas over the years at Return Path, but hardly a majority or even a plurality of them.  But I think of myself as innovative because I’ve led the organization to execute them.  I also think innovation has as much to do with how work gets done as it does what work gets done.

• There were some upsides to Jobs’s demanding and wounding behavior. People who were not crushed ended up being stronger. They did better work, out of both fear and an eagerness to please.  I guess that’s an upside.  But only in a dysfunctional sort of way.

• When one reporter asked him immediately afterward why the (NeXT) machine was going to be so late, Jobs replied, “It’s not late. It’s five years ahead of its time.”  Amen to that.  Sometimes product deadlines are artificial and silly.  There’s another great related quote (I forget where it’s from) that goes something like “The future is here…it’s just not evenly distributed yet.”  New releases can be about delivering the future for the first time…or about distributing it more broadly.

• People who know what they’re talking about don’t need PowerPoint.”  Amen.  See Powerpointless.

• The mark of an innovative company is not only that it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind.  This is critical.  You can’t always be first in everything.  But ultimately, if you’re a good company, you can figure out how to recover when you’re not first.  Exhibit A:  Microsoft.

• In order to institutionalize the lessons that he and his team were learning, Jobs started an in-house center called Apple University. He hired Joel Podolny, who was dean of the Yale School of Management, to compile a series of case studies analyzing important decisions the company had made, including the switch to the Intel microprocessor and the decision to open the Apple Stores. Top executives spent time teaching the cases to new employees, so that the Apple style of decision making would be embedded in the culture.  This is one of the most emotionally intelligent things Jobs did, if you just read his actions in the book and know nothing else.  Love the style or hate it – teaching it to the company reinforces a strong and consistent culture.

• Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!’” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.  There’s always a tension between listening TO customers and innovating FOR them.  Great companies have to do both, and know when to do which.

• What drove me? I think most creative people want to express appreciation for being able to take advantage of the work that’s been done by others before us. I didn’t invent the language or mathematics I use. I make little of my own food, none of my own clothes. Everything I do depends on other members of our species and the shoulders that we stand on. And a lot of us want to contribute something back to our species and to add something to the flow. It’s about trying to express something in the only way that most of us know how—because we can’t write Bob Dylan songs or Tom Stoppard plays. We try to use the talents we do have to express our deep feelings, to show our appreciation of all the contributions that came before us, and to add something to that flow. That’s what has driven me.  This is perhaps one of the best explanations I’ve ever heard of how creativity can be applied to non-creative (e.g., most business) jobs.  I love this.

My board member Scott Weiss wrote a great post about the book as well and drew his own CEO lessons from it – also worth a read here.

Appropos of that, both Scott and I found out about Steve Jobs’ death at a Return Path Board dinner.  Fred broke the news when he saw it on his phone, and we had a moment of silence.  It was about as good a group as you can expect to be with upon hearing the news that an industry pioneer and icon has left us.  Here’s to you, Steve.  You may or may not have been a management role model, but your pursuit of perfection worked out well for your customers, and most important, you certainly had as much of an impact on society as just about anyone in business (or maybe all walks of life) that I can think of.

Book short:  Blink

Blink, by Malcolm Gladwell, is a must read for marketers, entrepreneurs, and VCs alike, just as is the case with Gladwell’s first book, The Tipping Point.

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.

Blink for Entrepreneurs/CEOs:  What’s the most critical lesson in Malcolm Gladwell’s Blink, as it relates to entrepreneurs/CEOs?  It’s about bias in hiring.  Most of us make judgments about potential new hires quite quickly in the initial interview.  The symphony example in the book is the most painfully poignant — most major symphony orchestras hired extremely few women until they started conducting auditions behind a screen.  It’s not clear to me yet how to stop or even shrink hiring bias, but I suspect the answer lies in pre-interview work around defining specific criteria for the job and scoring all candidates on the same set of criteria.

Blink for VCs:  What’s the most critical lesson in Malcolm Gladwell’s Blink, as it relates to VCs?  It’s about picking companies to back.  Even VCs who are virtuosos, as Gladwell would call them, can make poor judgments on companies to back based on their own personal reaction to a company’s product or service, as opposed to the broader marketplace’s reaction.  Someone poured a whole lot of money into Webvan, Pets.com, eToys, and the like.

Blink for Marketers:  What’s the most critical lesson in Malcolm Gladwell’s Blink, as it relates to Marketers?  It’s the importance of multivariate regression testing.  No, really, I’m not kidding, although there’s no doubt a less math-y way of saying it — “test everything.”  The Coca-Cola Company thought they were doing the right thing in creating New Coke because they were losing the Pepsi Challenge.  But what they didn’t realize was that Pepsi (unintentionally or not) had suckered them into believing that the single-sip test was cause for reengineering a century of product, when in reality Coke was probably just being out-advertised.  Christian Brothers Brandy was going out of its mind losing market share to competitor E&J until someone realized that they just needed to change the shape of their bottle.

If you haven’t yet done so, go buy the book!  It’s a very quick read and incredibly thought provoking.  And if you haven’t yet read The Tipping Point, it’s a must as well.

Book Short – Another Must-Read by Lencioni

The Ideal Team Player: How to Recognize and Cultivate The Three Essential Virtues (hardcover,kindle is Patrick Lencioni’s latest and greatest.  It’s not my favorite of his, which is still The Advantage (post,buy ), but it’s pretty good and well worth a read.  It builds on his model for accountability in The Five Dysfunctions of a Team (post,buy)and brings it back to “how can you spot or develop and a good team player?”

The central thesis of the book is that great team players have three attributes – hungry, humble, and people-smart.  While I can’t disagree with those three things, as with all consultants’ frameworks, I sound two cautionary notes:  (1) they aren’t the absolute truth, just a truth, and (2) different organizations and different cultures sometimes thrive with different recipes.  That said, certainly for my company, this framework rings true, if not the only truth.

Some great nuggets from the book:

-The basketball coach who says he loves kids who want to come to practice and work as hard as they can at practice to avoid losing
-The concept of Addition by Addition and Addition by Subtraction in the same book – both are real and true.  The notion that three people can get more done than four if the fourth is a problem is VERY REAL
-When you’re desperate for people, you do stupid things – you bring people on who can get the job done but shouldn’t be in your environment.  I don’t know a single CEO who hasn’t made this mistake, even knowing sometimes that they’re in the process of making it

The framing of the “edge” people – people who have two of the three virtues, but not the third, is quite good:

-Hungry and Humble but not People-Smart – The Accidental Mess Maker
-Humble and People-Smart, but not Hungry – The Lovable Slacker
-Hungry and People-Smart, but not Humble – The Skillful Politician

In my experience, and Lencioni may say this in the book, too (I can’t remember and can’t find it), none of these is great…but the last one is by far the most problematic for a culture that values teamwork and collaboration.

Anyway, I realize this is a long summary for a short book, but it’s worth buying and reading and having on your (real or virtual) shelf.  In addition to the story, there are some REALLY GOOD interview guides/questions and team surveys in the back of the book.

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.

It feels like it may be a bit premature to write a post with this title here in the summer of 2021. Even as vaccines are rolling out fairly quickly, the combination of the Delta mutation of the COVID-19 virus and a bizarrely large anti-vaccine movement in the US, plus slower vaccine roll-outs in other parts of the world, are causing yet another spike in infections. 

However, I read Michael Lewis’s The Premonition last week, a bit of a “mid-mortem” on the Pandemic, and it got me thinking about what lessons we as a society have learned in these past 18 months, and how they can be applied to entrepreneurs and startups. I am particularly drawing on the few weeks I was deeply engaged with the State of Colorado’s COVID response effort, which I blogged about here (this is the 7th post in the series, but it has links to all the prior posts in order).

Here are a few top of mind thoughts. 

First, entrepreneurial skills can be applied to a wide range of society’s challenges.  The core skills of founders and entrepreneurs are vision, leadership/inspiration/mobilization of teams, and a fearlessness about trying things and then seizing on the ones that work and rapidly discarding the ones that don’t, quickly absorbing learnings along the way. If you look broadly at the world’s response to the Pandemic, and at Colorado’s response as a microcosm, you can see that the jurisdictions and organizations that employed those types of skills were the ones that did the best job with their response. The ones that flailed around — unclear vision, lurching from plan to plan and message to message, pandering to people instead of following the science, sticking with things that didn’t make sense — those folks got it wrong and saw more infections, hospitalizations, and deaths. 

Second, parachuting in and out of leadership roles really works but is a little bit unsatisfying. I think that, even in a short period of time, I got a lot of good work done helping organize and stand up the IRT in Colorado. It was very much an “interim CEO” job, not unlike a lot of the roles we place at Bolster. Without a ton of context around the organization I was joining, I still had an impact. The unsatisfying part is more about me as the exec than it is about the organization, though. I’m so used to being around for the long haul to see the impact of my work that I found myself pinging Sarah, who took over the leadership of the group after I left, Brad, and Kacey and Kyle on the teamfor a few weeks just to find out what was going on and what had become of Plan X or Idea Y. 

Third, I came to appreciate something that I used to rail against in the business world, or at least came to appreciate an alternative to it. I frequently will say something like “don’t solve the same problem four different ways,” almost always in response to people facing a big hole in the organization and trying to hire four different people to fill the hole, when likely one hire will do (or at least one for starters). But what Michael Lewis calls the “Swiss cheese defense” or Targeted Layered Containment (TLC) that worked pretty well as defense and mitigation against the virus while there was no vaccine totally worked. He calls it the Swiss cheese defense because, like a slice of Swiss cheese, each layer of defense has holes in it, but if you line up several slices of Swiss cheese just right, you can’t see any of the holes. Some masking here, some quarantining there, couple closures over there, a lot of rapid testing, some working from home where possible, some therapeutics – and voila – you can blunt the impact of a pandemic without a vaccine. The same must be true for complex problems in business. I am going to amend my approach to consider that alternative next time I have a relevant situation. 

Fourth, blunt instruments and one size fits all solutions to complex problems (especially in this situation, with multiple population types in multiple geographies) — even those with good intentions — can’t work, drive all sorts of unintended consequences, with a lack of feedback loops can make situations worse or at least frustrating. Nationwide or even statewide rules, quite frankly even county-wide rules, don’t necessarily make sense in a world of hot spots and cool spots. Statewide regulations for schools when districts are hyper local and funded and physically structured completely differently, don’t always make sense. There are definitely some comparables in the business world here – you’d never want, for example, to compensate people across all geographies globally on the identical scale, since different markets have different standards, norms, and costs of living. 

Finally, I am left with the difficult question of why all the preparation and forethought put into pandemic response seemed to fail so miserably in the US, when several nations who were far worse equipped to handle it in theory did so much better in reality. I am struggling to come up with an answer other than the combination of the general American theme of personal choice and liberty meeting the insanely toxic and polarizing swirl of politics and media that has made everything in our country go haywire lately. Big government incompetence in general, and failures of national leadership on this issue, also factor in heavily.  I also gather from Michael Lewis that the transition from one administration to another frequently involves a massive loss of institutional knowledge which can’t help. Of all these, failure of strong leadership stands out in my mind. 

The lesson for startups from this last point is important. Leadership matters. Eisenhower once said something to the effect that “plans are nothing but planning is everything.”  The thoughtfulness, thorough planning, communication and inspiration, and institutional knowledge that come from effective leadership matter a lot in executing and growing a startup, because you literally never know what COVID-analog crisis is lurking quietly around the corner waiting to pounce on your startup and threaten its very existence.

Pret a Manager

My friend James is the GM of the Pret a Manger (a chain of about 250 “everyday luxury” quick service restaurants in the UK and US) at 36th and 5th in Manhattan.  James recently won the President’s Award at Pret for doing an outstanding job opening up a new restaurant.  As part of my ongoing effort to learn and grow as a manager, I thought it would be interesting to spend a day shadowing James and seeing what his operation and management style looked like for a team of two dozen colleagues in a completely different environment than Return Path.  That day was today.  I’ll try to write up the day as combination of observations and learnings applied to our business.  This will be a much longer post than usual.  The title of this post is not a typo – James is “ready to manage.”

1. Team meeting.  The day started at 6:45 a.m. pre-opening with a “team brief” meeting.  The meeting only included half a dozen colleagues who were on hand for the opening, it was a mix of fun and serious, and it ended with three succinct points to remember for the day.  I haven’t done a daily huddle with my team in years, but we do daily stand-ups all across the company in different teams.  The interesting learning, though, is that James leaves the meeting and writes the three points on a whiteboard downstairs near the staff room.  All staff members who come in after the meeting are expected to read the board and internalize the three points (even though they missed the meeting) and are quizzed on them spontaneously during the day.  Key learning:  missing a meeting doesn’t have to mean missing the content of the meeting.

2. Individual 1:1 meeting.  I saw one of these, and it was a mix of a performance review and a development planning session.  It was a little more one-way in communication than ours are, but it did end up having a bunch of back-and-forth.  James’s approach to management is a lot of informal feedback “in the moment,” so this formal check-in contained no surprises for the employee.  The environment was a little challenging for the meeting, since it was in the restaurant (there’s no closed office, and all meetings are done on-site).  The centerpiece of the meeting was a “Start-Stop-Continue” form.  Key learning:  Start-Stop-Continue is a good succinct check-in format.

3. Importance of values.  There were two forms of this that I saw today.  One was a list of 13 key behaviors with an explanation next to each of specific good and bad examples of the behavior.  The behaviors were very clear and were “escalating,” meaning Team Members were expected to practice the first 5-6 of them, Team Leads the first 7-8, Managers the first 10, Head Office staff the first 12, Executives all 13 (roughly).  The second was this “Pret Recipe,” as posted on the public message board (see picture below).  Note – just like our values at Return Path, it all starts with the employee.  One interesting nugget I got from speaking to a relatively new employee who had just joined at the entry level after being recruited from a prominent fast food chain where he had been a store general manager was “Pret really believes this stuff — no lip service.”

I saw the values in action in two different ways.  The first was on the message board, where each element of the Pret Recipe was broken out with a list of supporting documents below it, per the below photo.  Very visual, very clear.

The second was that in James’s team meeting and in his 1:1 meeting, he consistently referenced the behaviors.  Key learning:  having values is great, making them come to life and be relevant for a team day-in, day-out is a lot harder but quite powerful when you get it right.

4. Managing by checklist.  I wrote about this topic a while ago here, but there is nothing like food service retail to demand this kind of attention to detail.  Wow.  They have checklists and standards for everything.  Adherence to standards is what keeps the place humming.  Key learning:  it feels like we have ~1% of the documentation of job processes that Pret does, and I’m thinking that as we get bigger and have people in more and more locations doing the same job, a little more documentation is probably in order to ensure consistency of delivery.

5. Extreme team-based and individual incentive compensation.  Team members start at $9/hour (22% above minimum wage that most competitors offer).  However, any week in which any individual store passes a Mystery Shopper test, the entire staff receives an incremental $2/hour for the whole week.  Any particular employee who is called out for outstanding service during a Mystery Shop receives a $100 bonus, or a $200 bonus if the store also passes the test.  The way the math works out, an entry level employee who gets the maximum bonus earns a 100% bonus for that week.  But the extra $2/hour per team member for a week seemed to be a powerful incentive across the board.  Key learning: team-based incentive comp is something we use here for executives, but maybe it’s worth considering for other teams as well.

6. Integrated systems.  Pret has basically one single software system that runs the whole business from inventory to labor scheduling to finances.  All data flows through it directly from point of sale or via manager single-entry.  All reports are available on demand.  The system is pretty slick.  There doesn’t seem to be much use of side systems and side spreadsheets, though I’m sure there are some.  Key learning: there’s a lot to be said for having a little more information standardized across the business, though the flip side is that this system is a single point of failure and also much less flexible than what we have.

7. Think time.  I’ve written a little about working “on the business, not in the business,” or what I call OTB time, once before, and I have another post queued up for later this summer about the same.  Brad Feld also very kindly wrote about it in reference to Return Path last week.  Working in retail means that time to work on IMPORTANT BUT NOT URGENT issues is extremely hard to come by and fragmented.  I suspect that it comes more at the end of the day for James, and it probably comes a lot more when he doesn’t have someone like me observing him and asking him questions.  But his “office” (below), exposed to the loud music and sounds and smells of the kitchen, certainly doesn’t lend itself to think time!  Key learning:  of course customers come first, but boy is it critical to make space to work OTB, not just ITB.  Oh, and James needs a new chair that’s more ergonomically compatible with his high countertop desk.

Years ago, I spent a few weekends working in my cousin Michael’s wine store in Hudson, NY, and I wrote up the experience in two different posts on this blog, the first one about the similarities between running a 2-person company and a 200-person company, and the second one about how in a small business, you have to wear one of every kind of hat there is.  My conclusion then was that there are more similarities than differences when it comes to running businesses of different types.  My conclusion from today is exactly the same, though the focus on management made for a very different experience.

Thanks to James, Gustavo, Orlanda, Shawona, and the rest of the team at the 36th & 5th Pret for putting up with the distraction of me for the bulk of the day today — I learned a lot (and particularly enjoyed the NYC Meatball Hot Wrap) and now have to figure out how to return the favor to you!

In Search of Automated Relevance

A bunch of us had a free form meeting last week that started out as an Email Summit focused on protocols and ended up, as Brad put it, with us rolling around in the mud of a much broader and amorphous Messaging Summit.  The participants (and some of their posts on the subject) in addition to me were Fred Wilson (pre, post), Brad Feld,  Phil Hollows, Tom Evslin (pre, post), and Jeff Pulver (pre, post).  And the discussion to some extent was inspired by and commented on Saul Hansell’s article in the New York Times about “Inbox 2.0” and how Yahoo, Google, and others are trying to make email a more relevant application in today’s world; and Chad Lorenz’s article in Slate called “The Death of Email” (this must be the 923rd article with that headline in the last 36 months) which talks about how email is transitioning to a key part of the online communications mix instead of the epicenter of online communications.

Ok, phew, that’s all the background. 

With everyone else’s commentary on this subject already logged, most of which I agree with, I’ll add a different $0.02.  The buzzword of the day in email marketing is “relevance.”  So why can’t anyone figure out how to make an email client, or any messaging platform for that matter, that starts with that as the premise, even for 1:1 communications?  I think about messaging relevance from two perspectives:  the content, and the channel.

Content.  In terms of the content of a message, I think of relevance as the combination of Relationship and Context.  The relationship is all about my connection to you.  Are you a friend, a friend of a friend, or someone I don’t know that’s trying to burrow your way onto my agenda for the day?  Are you a business that I know and trust, are you a carefully screened and targeted offer coming from an affiliate of a business I trust, or are you a spammer? 

But as important as the relationship is to the relevance of your message to me, the context is equally important.  Let’s take Brad as an example.  I know him in two distinct contexts:  as one of my venture investors, and as an occasional running partner.  A message from Brad (a trusted relationship) means very different things to me depending on its context.  One might be much more relevant than the other at any moment in my life.

Channel.  The channel through which I send or receive a message has an increasing amount to do with relevance as well.  As with content, I think of channel relevance as the combination of two things –  device, and technology.  For me, the device is limited to three things, two with heavy overlap.  The first is a fixed phone line – work or home (I still think cell service in this country leaves a lot to be desired).  The second is a mobile device, which could mean voice but could also mean data.  The third is a computer, whether desktop or laptop.  In terms of technology, the list is growing by the day.  Voice call, email, IM, Skype, text message, social network messaging, and on and on.

So what  do I mean about channel relevance?  Sometimes, I want to send a message by email from my smartphone.  Sometimes I want to send a text message.  Sometimes I want to make a phone call or just leave a voicemail.  Sometimes I even want to blog or Twitter.  I have yet to desire to send a message in Facebook, but I do sometimes via LinkedIn, so I’m sure I’ll get there.  Same goes for the receiving side.  Sometimes I want to read an email on my handheld.  Sometimes a text message does the job, etc.  Which channel and device I am interested in depends to some extent on the content of the message, per above, but sometimes it depends on what I’m doing and where I am.

So what?  Starting to feel complex?  It should be.  It is.  We all adjusted nicely when we added email to our lives 10 years ago.  It added some communication overhead, but it took the place of some long form paper letters and some phone calls as well.  Now that we seem to be adding new messaging channels every couple weeks, it’s becoming increasingly difficult to get the relevance right.  Overlaying Content (Relationship and Context) with Channel (Device and Technology) creates a matrix that’s very difficult to navigate.

How do we get to a better place?  Technology has to step in and save the day here.  One of the big conclusions from our meeting was that no users care about or even know about the protocol – they just care about the client they interact with.  Where’s the ultra flexible client that allows me to combine all these different channels, on different devices?  Not a one-size-fits-all unified messaging service, but something that I can direct as I see fit?  There are glimmers of hope out there – Gmail integrating IM and email…Simulscribe letting me read my voicemail as an email…Twitter allowing me to input via email, SMS, or web…even good old eFax emailing me a fax – but these just deal with two or three cells in an n-dimensional matrix.

As our CTO Andy Sautins says, software can do anything if it’s designed thoughtfully and if you have enough talent and time to write and test it.  So I believe this “messaging client panacea” could exist if someone put his or her mind to it.  One of the big questions I have about this software is whether or not relevance can be automated, to borrow a phrase from Stephanie Miller, our head of consulting.  Sure, there is a ton of data to mine – but is there ever enough?  Can a piece of software figure out on its own that I want to get a message from Brad about “running” (whatever channel it comes in on) as a text message on my smartphone if we’re talking about running together the next day, but otherwise as an RSS feed in the same folder as the posts from his running blog, but a voicemail from Brad about “running the company” (again, regardless of how he sends it) as an email automatically sorted to the top of my inbox?  Or do I have to undertake an unmanageable amount of preference setting to get the software to behave the way I want it to behave?  And oh by the way, should Brad have any say over how I receive the message, or do I have all the control?  And does the latter question depend on whether Brad is a person or a company?

What does this mean for marketers?  That’s the $64,000 question.  I’m not sure if truly Automated Relevance is even an option today, but marketers can do their best to optimize all four components of my relevance equation:  content via relationship and context, and channel via device and technology.  A cocktail of permission, deep behavioral analysis, segmentation, smart targeting, and a simple but robust preference center probably gets you close enough.  Better software that works across channels with built-in analytics – and a properly sized and whip smart marketing team – should get you the rest of the way there.  But technology and practices are both a ways off from truly automated relevance today.

I hope this hasn’t been too much rolling around in the mud for you.  All thoughts and comments (into my fancy new commenting system, Intense Debate) are welcome!

The Gift of Feedback, Part IV

I wrote a few weeks ago about my live 360 – the first time I’ve ever been in the room for my own review discussion.  I now have a development plan drafted coming out of the session, and having cycled it through the contributors to the review, I’m ready to go with it.  As I did in 2008, 2009, and 2011, I’m posting it here publicly.  This time around, there are three development items:

1. Continue to spend enough time in-market.  In particular, look for opportunities to spend more time with direct clients.  There was a lot of discussion about this at my review.  One director suggested I should spend at least 20% of my time in-market, thinking I was spending less than that.  We track my time to the minute each quarter, and I spend roughly 1/3 of my time in-market.  The problem is the definition of in-market.  We have a lot of large partners (ESPs, ISPs, etc.) with whom I spend a lot of time at senior levels.  Where I spend very little time is with direct clients, either as prospects or as existing clients.  Even though, given our ASP, there isn’t as much leverage in any individual client relationship, I will work harder to engage with both our sales team and a couple of larger accounts to more deeply understand our individual client experience.
2. Strengthen the Executive Committee as a team as well as using the EC as the primary platform for driving accountability throughout the organization.  On the surface, this sounds like “duh,” isn’t that the CEO’s job in the first place?  But there are some important tactical items underneath this, especially given that we’ve changed over half of our executive team in the last 12 months.  I need to keep my foot on the accelerator in a few specific ways:  using our new goals and metrics process and our system of record (7Geese) rigorously with each team member every week or two; being more authoritative about the goals that end up in the system in the first place to make sure my top priorities for the organization are being met; finishing our new team development plan, which will have an emphasis on organizational accountability; and finding the next opportiunity for our EC to go through a management training program as a team.
3. Help stakeholders connect with the inherent complexity of the business.  This is an interesting one.  It started out as “make the business less complex,” until I realized that much of the competitive advantage and inherent value from our business comes fom the fact that we’ve built a series of overlapping, complex, data machines that drive unique insights for clients.  So reducing complexity may not make sense.  But helping everyone in and around the business connect with, and understand the complexity, is key.  To execute this item, there are specifics for each major stakeholder.  For the Board, I am going to experiment with a radically simpler format of our Board Book.  For Investors, Customers, and Partners, we are hard at work revising our corporate positioning and messaging.  Internally, there are few things to work on — speaking at more team/department meetings, looking for other opportunities to streamline the organization, and contemplating a single theme or priority for 2015 instead of our usual 3-5 major priorities.

Again, I want to thank everyone who participated in my 360 this year – my board, my team, a few “lucky” skip-levels, and my coach Marc Maltz.  The feedback was rich, the experience of observing the conversation was very powerful, and I hope you like where the development plan came out!