Book Short:  Vulnerability Applied to Leadership

Getting Naked:  A Business Fable About Shedding The Three Fears That Sabotage Client Loyalty (book, Kindle), is Patrick Lencion’s latest fable-on-the-go book, and it’s as good a read as all of his books (see list of the ones I’ve read and reviewed at the end of the post).

The book talks about the power of vulnerability as a character trait for those who provide service to clients in that they are rewarded with levels of client loyalty and intimacy.  Besides cringing as I remembered my own personal experience as an overpaid and underqualified 21 year old analyst at how ridiculous some aspects of the management consulting industry are…the book really made me think.  The challenge to the conventional wisdom of “never letting ‘em see you sweat” (we *think* vulnerability will hurt success, we *confuse* competence with ego, etc.) is powerful.  And although vulnerability is often uncomfortable, I believe Lencioni is 100% right – and more than he thinks.

First, the basic premise of the book is that consultants have three fears they need to overcome to achieve nirvana – those fears and the mitigation tactics are:

1. Fear of losing the business:  mitigate by always consulting instead of selling, giving away the business, telling the kind truth, and directly addressing elephants in the room
2. Fear of being embarrassed:  mitigate by asking dumb questions, making dumb suggestions, and celebrating your mistakes
3. Fear of feeling inferior:  mitigate by taking a bullet for the client, making everything about the client, honoring the client’s work, and doing your share of the dirty work

But to my point about Lencioni being more right than he thinks…I’d like to extend the premise around vulnerability as a key to success beyond the world of consulting and client service into the world of leadership.  Think about some of the language above applied to leading an organization or a team:

• Telling the kind truth and directly addressing elephants in the room:  If you’re not going to do this, who is?  There is no place at the top of an organization or team for conflict avoidance
• Asking dumb questions:  How else do you learn what’s going on in your organization?  How else can you get people talking instead of listening?
• Making dumb suggestions:  I’d refer to this more as “bringing an outside/higher level perspective to the dialog.”  You never know when one of your seemingly dumb suggestions will connect the dots for your team in a way that they haven’t done yet on their own (e.g., the suggestions might not be so dumb after all)
• Celebrating your mistakes:  We’re all human.  And as a leader, some of your people may build you up in their mind beyond what’s real and reasonable.  Set a good example by noting when you’re wrong, noting your learnings, and not making the same mistake twice
• Taking a bullet for your team, making everything about your team and honoring your team’s work:  Management 101.  Give credit out liberally.  Take the blame for team failings.
• Doing your share of the dirty work:  An underreported quality of good leaders.  Change the big heavy bottle on the water cooler.  Wipe down the coffee machine.  Order the pizza or push the beer cart around yourself.  Again, we’re all human, leaders aren’t above doing their share to keep the community of the organization safe, fun, clean, well fed, etc.

There’s a really powerful message here.  I hope this review at least scratches the surface of it.

The full book series roundup as far as OnlyOnce has gotten so far is:

• The Three Signs of a Miserable Job (post, book)
• The Five Temptations of a CEO (post, book)
• The Four Obsessions of an Extraordinary Executive (post, book)
• Death by Meeting (post, book)
• The Five Dysfunctions of a Team (post, book, Field Guide)
• Silos, Politics and Turf Wars (post, book)
• Getting Naked (post, book)

A New Path Forward

Welcome to the world, Path Forward, Inc.!

I’m thrilled to announce the launch today of Path Forward, a new non-profit with a goal of empowering millions of women to rejoin the workforce after taking time out for childcare. We are launching today with a Crowdrise campaign.   See more about that below.  And we launched with a bang, too – the organization is featured in this really amazing story on Fortune.

The concept started at Return Path two years ago, as I wrote about here and again here, when our CTO Andy Sautins came to me with a simple but powerful idea of creating a structured program of paid fellowships with training for women who want to reenter the workforce but find it difficult to do so because of rusty skills, lapsed networks, or societal bias. We expanded the program later that year with partner companies ReadyTalk, SendGrid, MWH Global, SpotX, and Moz, as I wrote about here.  The response from both participants and companies has been nothing short of amazing.

The day after I put up that last post about v2 of the program, a human resources leader at PayPal gave me a call and asked if we could help them structure a program for their engineering organization, too.  That’s when it struck me that the idea of midcareer internships as one means of providing an on-ramp to the paid workforce for people who’d been focused on caregiving could work for many companies, and also that for this program to work and scale up, it couldn’t be an “off the side of the desk” project for the People Team at Return Path.  So we decided to create a new company separate from Return Path to carry out this important work.  And we decided that with a practical, but social mission, it should be a non-profit, dedicated to creating and managing networks of companies offering opportunities to many more people.

To date, the program has served nearly 50 participants (mostly women, but a couple of stay-at-home dads, too!) and 7 companies in 6 cities around the world, producing an impressive 80% hire rate.  The participants who have been hired by us and our partner organizations have made impressive contributions to their companies’ businesses and cultures.  The companies have benefitted from their experience and passion.  That’s what I call product-market fit.  Now it’s time to officially launch the new organization, and scale it up!  Our BHAG (Big Hairy Audacious Goal, in the language of Jim Collins) is that within 10 years, we want to serve 10,000 companies and 1 million women and men.  We want to reduce the penalty that caregivers face when they take time away from paid work.  We want to transform lives by getting people who want to work, back to work in jobs that leverage all their many skills and talents.  We want to help companies tap into an incredibly important but overlooked part of the talent pool to grow their workforces.  We want to change the world.

We’ve been able to assemble a strong Board of Directors to lead this effort.  Joanne Wilson, often better known as Gotham Gal and the founder of the Women’s Entrepreneur Festival, is joining me as Board Co-chair. Joanne is a force to be reckoned with in championing women founders in tech.  Brad Feld joins our Board with great credentials as an early-stage investor, but more importantly he’s served for more than 10 years as Board Chair of the National Center for Women and Technology.  Media luminary and investor Cathie Black was most recently the President of Hearst Magazines having previously served as President and Publisher of USA Today.  Cathie has been the “first” woman many times and has broken her share of glass ceilings.  Rajiv Vinnakota is the Executive Vice President of the Youth & Engagement division at the Aspen Institute and prior to that was the co-founder and CEO of The SEED Foundation, a non-profit managing the nation’s first network of public, college-preparatory boarding schools for underserved children which he started and successfully scaled up for more than 17 years.  Cathy Hawley, our long-time VP of People at Return Path, gets (though often deflects) the lion’s share of the credit for conceiving and championing the original return to work program at Return Path.  It is, truly, an embarrassment of riches. We are so thrilled to have them all on board Path Forward’s Board.

On the staff side I’m also pleased to announce that one of my long-time executive lieutenants at Return Path, Tami Forman, has accepted the role of Executive Director of Path Forward. I can’t think of anyone better for this role. Tami is the consummate storyteller, which every good founder and Startup CEO needs to be! More importantly she has been living and breathing work/life integration for eight years since the birth of her daughter (followed by a son). She is absolutely passionate about the idea that women can have jobs and families and live big lives. And, more importantly, she’s dedicated to the idea that taking a “break” (she and I agree it’s not a break!) to care for a loved one shouldn’t sideline anyone’s career dreams.

I can’t wait to see how far this idea can go. I truly believe this program can have a measurable, positive impact on thousands of companies across the country and the world.

Please join me and Tami and our talented Board on this journey.  Help us change the world.  There are three ways to participate:

• Click here if your company would like to learn more about having the Path Forward program in the future
• Click here if you would like to return to the workforce after a break and think a Path Forward fellowship might be a good, well, path forward for you
• And as a non-profit, we need financial help! Click here to contribute to our Crowdrise campaign, the goal of which is essentially a $500k “Series A” round (although it’s a non-profit, so this is a purchase of emotional equity, not actual equity) to move from product-market fit to a proven business model!

(Please note – we haven’t yet received word of our non-profit status yet from the IRS, though we expect it in the next couple of months.  As such, any donation now is not tax deductible until after the certification comes through.  While there’s some risk that we don’t gain non-profit status…we don’t think the risk is large.)

Self-Discipline:  Broken Windows Applied to You

Just as my last post about New Shoes was touching a bit of a nerve around, as one friend put it, "mental housecleaning," my colleague Angela pointed me to a great post on a blog I've never seen before ("advice at the intersection of work and life" — I just subscribed), called How to Have More Self-Discipline.  Man, is that article targeted at me, especially about working out. 

I think the author is right — more discipline around the edges does impact happiness.  But it also impacts productivity.  Not just because working out gives you more energy.  Because having your act together in small ways makes you feel like you have your act together in all ways.  As the author notes (without this specific analogy), it's a little like the "broken windows" theory of policing.  You crack down on graffiti and broken windows, you stop more violent crime, in part because the same people commit small and large crimes, in part because you create a more orderly society in visible, if sometimes a bit small and symbolic, ways.

I agree that the best example in the "non work" world is fitness.  But what about the "work world"?  What's relevant around self-discipline for professionals?  Consider these examples:

– A clean inbox at the end of the day.  Yes, it's the David Allen theory of workplace productivity which I espouse, but it does actually work.  A clean mind is free to think, dream, solve problems.  The quickest path to keeping it clean is not having a pile of little things to deal with in front of it, taking up space

– Showing up on time.  It may sound dumb, but people who are chronically late to meetings are constantly behind.  The day is spent rushing around, cutting conversations short — in other words, unhappy and not as productive.  The discipline of ending meetings on time with enough buffer to travel or even just prepare for the next meeting so you can start it on time (and not waste the time of the other people in the meeting) is important.  Have too many meetings that you can't be at all of them on time?  Say no to some — or make them shorter to force efficiency.  There's nothing wrong with a 10-minute meeting

– Dressing for success.  We live in a casual world, especially in our industry.  I admit, once in a while I wear jeans or a Hawaiian shirt to work — even shorts if it's a particularly hot and humid day.  (And even in New York, not just in Boulder.)  But no matter what you wear, you can make sure you look neat and professional, not sloppy.  Skip the ripped jeans or faded/frayed/rock concert t-shirt.  Tuck in the shirt if it's that kind of shirt, and wear a belt.  The discipline of "dressing up" carries productivity a long way.  Want to really test this out at the edges?  Try wearing a suit or tie one day to work.  You feel different, and you sound different

– Doing your expenses.  Honestly, I've never seen an area where more smart and conscientious people fall apart than producing a simple expense report.  Come up with a system for it — do one every week, every trip on the plane home, every time you have an expense — and just take the 5 minutes and finish it off.  Sure, expenses are a pain, but they only really become a pain and a millstone around your brain when you let them sit for months because you "don't have time" to fill them out, then you get accounting all pissed off at you, and the project's size, complexity, and distance from the actual event all mount

– Follow rules of grammar and punctuation.  Writing, whether for external or internal consumption, is still writing.  I'm not sure when everyone became ee cummings and decided that it's ok to forget the basic rules of English grammar and punctuation.  Make sure your emails and even your IMs, at least when they're for business, follow the rules.  You look smarter when you do.  Maybe — maybe — with Twitter or SMS you can excuse some of this and go with abbreviations.  But I wouldn't normally consider a lot of those formal business communications

I could go on and on, but I think you get the idea.  A little self-discipline goes a long way at work (and in life)!

Peter Principle, Applied to Management

My Management by Chameleon Post from a couple weeks ago generated more comments than usual, and an entertaining email thread among my friends and former staff from MovieFone.  One comment that came off-blog is worth summarizing and addressing:

There are those of us who should not manage, whose personalities don’t work in a management context, and there is nothing wrong with not managing.  Also, there promotion to management by merit has always been a curiosity to me. If I am good at my job, why does it mean that I would be good at managing people who do my job? In other words, a good ‘line worker’ doth not a good manager make. I’d prefer to see people adept at being team leads be hired in, to manage, then promotion of someone ill-fitted for such a position be appointed from within. This latter happens far to often, to the detriment of many teams and companies.

For those of you not familiar with the Peter Principle, the Wikipedia definition is useful, but the short of it is that “people are promoted to their level of incompetence, when they stop getting promoted…so in time, every post tends to be occupied by an employee who is incompetent to carry out their duties.”

Back when I worked in management consulting, I always used to wonder how it was that all the senior people spent all their time selling business.  They hadn’t been trained to sell business.  And a lot of the people great at executing complex analysis and client cases hated selling. Or look at the challenge the other way around:  should a company take its best sales people and turn them into sales managers?

We’ve had numerous examples over the years at Return Path of people who are great at their jobs but make terrible, or at least less great, managers.  The problem with promoting someone into a management role mistakenly isn’t only that you’re taking one of your best producers off “the line.”  The problem is that those roles are coveted because they almost always come with higher comp and more status; and if a promotion backfires, it generally (though not always) dooms the employment relationship.  People don’t like admitting failure, people don’t like “moving backward,” and comp is almost always an issue.

What can be done about this?  We have tried over the years to create a culture where being a senior individual contributor can be just as challenging, fun, rewarding, impactful, and well compensated as being a manager, including getting promotions of a different sort.  But there are limits to this.  One obvious one is at the highest levels of an organization, there can only be one or two people like this (at most) by definition.  A CEO can only have so many direct reports.  But another limit is societal. Most OTHER companies define success as span of control.  You get a funny look if you apply for a job with 15 years of experience and a $100k+ salary yet have never managed anyone before.  After all, the conventional wisdom mistakenly goes, how can you have a big impact on the business if all you do is your own work?

The fact is that management is a different skill.  It needs to be learned, studied, practiced, and reviewed as much as any other line of work.  In most ways, it’s even more critical to have competent and superstar managers, since they impact others all day long.  Obviously, people can be grown or trained into being managers, but the principle of my commenter – and “Peter” – is spot on:  just because you are good at one job doesn’t mean you should be promoted to the next one.

I’m not sure there’s a good answer to this challenge, but I welcome any thoughts on it here.

A Path Forward in California!

Back in March I was proud to announce the launch of Path Forward, a nonprofit on a mission to get people back to work after they’ve taken time off to care for a loved one.  I’m even more thrilled today to announce the launch of a Path Forward program in California with six top tech companies — Go Daddy, Demandbase, CloudFlare, Coursera, Instacart and Zendesk. They are all accepting applications now for October start dates. Click on the links above to see all their opportunities.

As a CEO I know how hard it is to find great talent. The Center for Talent Innovation estimates that nearly 30% of college-educated women have taken away from their careers to serve as caregivers to children or aging family members. They have also found that while 90% of them try to return to work, only 40% are able to land full-time jobs. As an industry, we simply can’t afford to lose thousands of talented women who become frustrated by attempts to restart their professional careers.

Please join me in supporting this organization in fulfilling its mission. If you know people in California who might be looking for opportunities to restart their careers, send them to Your Path Forward in California where they can access all the job postings for the fall program.

And if you think Path Forward would be a great program for your company, email the fine folks at [email protected] to learn more.

Book Short:  On The Same Page

Being on the same page with your team, or your whole company for that matter, is a key to success in business.  The Four Obsessions of an Extraordinary Executive, by Patrick Lencioni, espouses this notion and boils down the role of the CEO to four points:

1. Build and maintain a cohesive leadership team
2. Create organizational clarity
3. Overcommunicate organizational clarity
4. Reinforce organizational clarity through human systems

Those four points sound as boring as bread, but the book is anything but.  The book’s style is easy and breezy — business fiction.  One of the most poignant moments for me was when the book’s “other CEO” (the one that doesn’t “get it”) reflects that he “didn’t go into business to referee executive team meetings and delivery employee orientation…he loved strategy and competition.”  Being a CEO is a dynamic job that changes tremendously as the organization grows.  This book is a great handbook for anyone transitioning out of the startup phase, or for anyone managing a larger organization.

I haven’t read the author’s other books (this is one in a series), but I will soon!

Book Not-So-Short:  Not Just for Women

At the request of the women in our Professional Services team, I recently read Sheryl Sandberg’s Lean In:  Women, Work, and the Will to Lead, and while it may seem like dancing the meringue in a minefield for a male CEO to blog about it, I think it’s an important enough topic to give it a shot.  So here goes.

First, given the minefield potential, let me issue a few caveats up front.  These are deep, ages old, complex, societal issues and behaviors we’re talking about here.  There is no quick answer to anything.  There is no universal answer to anything.  Men don’t have the same perspective as women and can come across as observers (which in some respects, they are).  Working moms don’t have the same perspective as stay-at-home moms, or as single women.  We try to be good about all these issues at Return Path, but I’m sure we’ve only scratched the surface.  </caveats>

Perhaps most important, my overall take on the book is that it’s a very good business book that everyone should read – not just women.  I have a strong reaction to the reactions I’ve read and heard about the book – mostly from women dismissing the book because Sandberg has immense financial resources, so how could she possibly know the plight of the ordinary mom, and how could she understand what it is like to be a stay-at-home mom?  That reaction is to dismiss the dismissals!  I found the book to be very broadly applicable.  Of course things about life with a two-working parent family are easier if you have more money.  But that’s completely not the point of the book.  And Sandberg doesn’t once criticize stay-at-home moms for that choice – in fact, she acknowledges feelings of guilt and inferiority around them and admiration for the work they do that benefits all families and kids, not just their own.

Here are a few of the biggest areas of thinking, AHA, or questioning, that the book gave me:

• One of Sandberg’s underlying points is that the world would be a better place with more women in leadership positions, so that’s an important goal.  It’s interesting that few enough of our leaders are women, that it’s hard for me to draw that same conclusion, but it makes sense to me on the surface, and there’s some research about management teams and boards to back it up.  As far as I can tell, the world has yet to see a brutal female dictator.  Or a fair share of political or corporate scandals caused by women.  There are definitely some horror stories of “tough boss” women, but probably no more than “tough boss” men.  It’s interesting to note that in our society, leadership roles seem to be prized for their power and monetary reward, so even if the world wouldn’t be a better place with more female leaders, it would certainly be a more fair place along those two dimensions
• I felt that a bunch of Sandberg’s points about women were more generalizations about certain personality types which can be inherent in men and women.  Maybe they’re more prevalent in women, even much more, but some are issues for some men as well.  For example, her general point about women not speaking up even if they have something to say.  I have seen this trait in women as well as more introverted men.  As a leader, I work hard to draw comments out of people who look like they have something to say in a meeting but aren’t speaking up.  This is something that leaders need to pay close attention to across the board so that they hear all the voices around their tables.  Same goes for some of the fears she enumerates.  Many male leaders I know, myself included at times, have the “fear of being found out as a fraud” thought.  Same goes for the “desire to be liked by everyone” holding people back – that’s not gender specific, either.  All that said, if these traits are much more prevalent in women, and they are traits that drive attainment of leadership roles, well, you get the point
• The fact that women earn 77 cents on the dollar in equivalent jobs for men is appalling.  I’ve asked our People Team to do a study of this by level, factoring in experience and tenure, to make sure we don’t have that bias at Return Path.  I know for sure we don’t at the leadership level.  And I sure as heck hope we don’t anywhere in the organization.  We are also about to launch an Unconscious Bias training program, which should be interesting
• Sandberg made a really interesting point that most of the women who don’t work are either on the low end or high end of the income spectrum.  Her point about the low end really resonated with me – that women who don’t earn a lot stop working if their salaries only barely cover childcare costs.  However, she argues that that’s a very short term view, and that staying in the workforce means your salary will escalate over time, while childcare costs stay relatively flat.  This is compounded by the fact that women who lean back early in their careers simply because they are anticipating someday having children are earning less than they should be earning when they do finally have children.
• The other end of the income spectrum also made sense once I parsed through it – why do women whose husbands make a lot of money (most of whom make a lot of money as well) decide to off-ramp?  Sandberg’s point about the “Leadership ambition gap” is interesting, and her example of running a marathon with the spectators screaming “you know you don’t have to do this” as opposed to “you’ve got this” is really vivid.  See two bullets down for more on this one.  But it might not be straight-up Leadership Ambition Gap so much as a recognition that some of the high-earning jobs out there are so demanding that having two of them in the household would be a nightmare (noting that Dave and Sheryl seem to have figured some of that out), or that moms don’t want to miss out on that much of their children’s lives.  They want to be there…and they can afford to.  Another related topic that I wish Sandberg had covered in more depth is the path of moms who off-ramp, then re-on-ramp once their youngest children are in school, whether into the career they left or a different one.  That would be an interesting topic on many fronts
• Societal influences must matter.  The facts that, in 2011 – Gymboree manufactured onesies that say “smart like Daddy” and “pretty like Mommy,” and that JC Penney teenage girl t-shirts say “I’m too pretty to do homework so my brother has to do it for me” are more than a little troublesome on the surface (unless Gymboree also produces “handsome like Daddy” and “wicked smart like Mommy,” which somehow I doubt).  The fact that women do worse on math and science tests when they have to identify their gender at the top of the test is surprising and shocking
• I am really fortunate that Mariquita only works part time, and it’s unclear to me how our lives would work if we both worked full time, especially given my extremely heavy travel schedule, though I am sure we’d figure it out.  And there’s no way that I carry 50% of the burden of household responsibilities.  Maybe 20-25% at best.  But I was struck by Sandberg’s comments (I am sure true) that in two-working-parent families, women still carry the preponderance of household responsibilities on their shoulders.  I totally don’t get this.  If you both work, how can you not be equal partners at home?  A quick mental survey of a couple of the two-working-parent families we know would indicate that the parents split household responsibilities somewhat evenly, though you can never know this from the outside.  This should be a no brainer.  Sandberg’s point that men need to “lean into their families” is spot on in these cases for sure
• On a related note, Sandberg’s comment that “as women must be more empowered at work, men must be more empowered at home…moms can be controlling and critical…if he’s forced to do things her way, pretty soon she’ll be doing them herself” made me smile.  I have definitely seen this “learned helplessness” on the home front with dads quite a bit over the years
• One really good point Sandberg makes is that younger employees who don’t have kids should be allowed to have a life outside of work just as much as women who do have kids.  And that she pays people for the quality and quantity of their output, not their hours.  These are principles that match our values and philosophy at Return Path 100%
• Probably the most startling moment in the book for me – and I suspect many other men – was Sandberg’s vignette about the young woman at Facebook who was starting to “lean back” because she might someday have a family – before she was even dating anyone!  This really gave me a lot of pause.  If widespread (and I assume it is), there are clearly societal forces at work that we need to do more to help women early in their careers overcome, if they want to overcome them
• Sandberg’s point that a rich and fulfilling career “is a Jungle Gym, not a Ladder” is spot on, but this is true for men as well as women.  It matches our philosophy of Scaling Horizontally perfectly
• Another very poignant moment in the book was when Sandberg talked about how she herself had shown bias against women in terms of who she called on in meetings or lectures during Q&A.  Again, lots of pause for me.  If female leaders have the same societal bias against women, that’s a sign that we all have real work in front of us to help level the playing field around giving women air time.  Similarly, her example of the Heidi/Howard study was fascinating around how women with the same characteristics are perceived differently by both male and female co-workers gives me pause (for the record, I know the Heidi in question, and I like her!).  Likewise, the fact that female leaders are often given unflattering nicknames like “The Iron Lady” – you’d never see something like that for a man in the same position.  At least Thatcher wore the name as a badge of honor

I hope this post doesn’t end up as a no-win piece of writing where all I do is touch a few nerves and inspire no ongoing dialog.  “Let’s start talking about it,” the ending theme of the book, is a great way to end this post as well.  As with all tough issues, articulating the problem is the first step toward solving it.  Women need to allow men (as long as the men are open-minded, of course!) to think what they think, say what they think in a safe space, and blunder through their own learnings without feeling threatened.  And men need to be comfortable having conversations about topics like these if the paradigmatic relationship between women and leadership is going to continue to shift instead of avoiding the topic or just calling in HR.

Hopefully this blog post is one step towards that at my company.  Return Path colleagues – feel free to comment on the blog or via email and share stories of how we’ve either helped you or held you back!  But overall, I’m glad I read this book, and I’d encourage anyone and everyone to read it.

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.

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.

I love the concept of Servant Leadership.  From the source, the definition is:

While servant leadership is a timeless concept, the phrase “servant leadership” was coined by Robert K. Greenleaf in The Servant as Leader, an essay that he first published in 1970. In that essay, Greenleaf said:

“The servant-leader is servant first… It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions…The leader-first and the servant-first are two extreme types. Between them there are shadings and blends that are part of the infinite variety of human nature.

“The difference manifests itself in the care taken by the servant-first to make sure that other people’s highest priority needs are being served. The best test, and difficult to administer, is: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And, what is the effect on the least privileged in society? Will they benefit or at least not be further deprived?“

A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.

This is a very broad societal definition, but it’s fairly easy to apply to a more narrow corporate, or even startup environment.  Are you as a CEO oriented primarily towards your people, or towards other stakeholders like customers or shareholders?  By the way, trying to do right by all three stakeholders is NOT a problem in a world of being oriented towards one.  It’s just a philosophy around which comes first, and why.  Our People First philosophy at Return Path is fair clear that at the end of the day, all three stakeholders win IF you do right by employees, so they do the best possible work for customers, so you build a healthy and profitable and growing business.

CEOs who practice Servant Leadership aren’t necessarily focused on power dynamics, or on helping those least privileged in society (at least not as part of their job)…but they are focused on making sure that their employees most important needs are met — both in the moment, as in making sure employees are empowered and not blocked or bottlenecked, and over the long haul, as in making sure employees have opportunities to learn, grow, advance their careers, make an impact, and have the ability to live a well balanced life.

I was in a meeting a couple weeks back with another leader and a few people on his team.  He *seemed* to practice Servant Leadership the way he was speaking to his team members.  But he wasn’t, really.  He was doing something I refer to as Sucking Down.  He was telling them things they clearly wanted to hear.  He was lavishing praise on them for minor accomplishments.  He was smiling and saying yes, when what he really meant was no.  He was practicing the art of Sucking Up, only to people on his team, not to a boss.  I got a sense that something wasn’t right during the meeting, and then post meeting, he actually fessed up to me — even bragged about it — that he was being disingenuous to get what he wanted out of his people.

There’s a clear difference between Servant Leadership and Sucking Down in the long run.  The danger comes in the moment.  Just as managers need to build good detection skills to sniff out evidence of someone on their team Sucking Up, employees need to be able to understand that clear difference in their managers’ behavior as they think about how to manage their careers, and even where to work.

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

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

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

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

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

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

Next up in this series: Admitting Mistakes.