Stamina

A couple years ago I had breakfast with Nick Mehta, my friend who runs the incredibly exciting Gainsight.  I think at the time I had been running Return Path for 15 years, and he was probably 5 years into his journey.  He said he wanted to run his company forever, and he asked me how I had developed the stamina to keep running Return Path as long as I had.  My off the cuff answer had three points, although writing them down afterwards yielded a couple more.  For entrepreneurs who love what they do, love running and building companies for the long haul, this is an important topic.  CEOs have to change their thinking as their businesses scale, or they will self implode!  What are five things you need to get comfortable with as your business scales in order to be in it for the long haul?

Get more comfortable with not every employee being a rock star.  When you have 5, 10, or even 100 employees, you need everyone to be firing on all cylinders at all times.  More than that, you want to hire “rock stars,” people you can see growing rapidly with their jobs.  As organizations get larger, though, not only is it impossible to staff them that way, it’s not desirable either.  One of the most influential books I’ve read on hiring over the years, Topgrading (review, buy), talks about only hiring A players, but hiring three kinds of A players:  people who are excellent at the job you’re hiring them for and may never grow into a new role; people who are excellent at the job you’re hiring them for and who are likely promotable over time; and people who are excellent at the job you’re hiring them for and are executive material.  Startup CEOs tend to focus on the third kind of hire for everyone.  Scaling CEOs recognize that you need a balance of all three once you stop growing 100% year over year, or even 50%.

Get more comfortable with people quitting.  This has been a tough one for me over the years, although I developed it out of necessity first (there’s only so much you can take personally!), with a philosophy to follow.  I used to take every single employee departure personally.  You are leaving MY company?  What’s wrong with you?  What’s wrong with me or the company?  Can I make a diving catch to save you from leaving?  The reality here about why people leave companies may be 10% about how competitive the war for talent has gotten in technology.  But it’s also 40% from each of two other factors.  First, it’s 40% that, as your organization grows and scales, it may not be the right environment for any given employee any more. Our first employee resigned because we had “gotten too big” when we had about 25 employees.  That happens a bit more these days!  But different people find a sweet spot in different sizes of company.  Second, it’s 40% that sometimes the right next step for someone to take in their career isn’t on offer at your company.  You may not have the right job for the person’s career trajectory if it’s already filled, with the incumbent unlikely to leave.  You may not have the right job for the person’s career trajectory at all if it’s highly specialized.  Or for employees earlier in their careers, it may just be valuable for them to work at another company so they can see the differences between two different types of workplace.

Get more comfortable with a whole bunch of entry level, younger employees who may be great people but won’t necessarily be your friends.  I started Return Path in my late 20s, and I was right at our average age.  It felt like everyone in the company was a peer in that sense, and that I could be friends with all of them.  Now I’m in my (still) mid-40s and am well beyond our average age, despite my high level of energy and of course my youthful appearance.  There was a time several years ago where I’d say things to myself or to someone on my team like “how come no one wants to hang out with me after work any more,” or “wow do I feel out of place at this happy hour – it’s really loud here.”  That’s all ok and normal.  Participate in office social events whenever you want to and as much as you can, but don’t expect to be the last man or woman standing at the end of the evening, and don’t expect that everyone in the room will want to have a drink with you.  No matter how approachable and informal you are, you’re still the CEO, and that office and title are bound to intimidate some people.

Get more comfortable with shifts in culture and differentiate them in your mind from shifts in values.  I wrote a lot about this a couple years ago in The Difference Between Culture and Values . To paraphrase from that post, an organization’s values shouldn’t change over time, but its culture – the expression of those values – necessarily changes with the passage of time and the growth of the company.  The most clear example I can come up with is about the value of transparency and the use case of firing someone.  When you have 10 employees, you can probably just explain to everyone why you fired Joe.  When you have 100 employees, it’s not a great idea to tell everyone why you fired Joe, although you might be ok if everyone finds out.  When you have 1,000 employees, telling everyone why you fired Joe invites a lawsuit from Joe and an expensive settlement on your part, although it’s probably ok and important if Joe’s team or key stakeholders comes to understand what happened.  Does that evolution mean you aren’t being true to your value of transparency?  No.  It just means that WHERE and HOW you are transparent needs to evolve as the company evolves.

• Get more comfortable with process.  This doesn’t mean you have to turn your nimble startup into a bureaucracy.  But a certain amount of process (more over time as the company scales) is a critical enabler of larger groups of people not only getting things done but getting the right things done, and it’s a critical enabler of the company’s financial health.  At some point, you and your CFO can’t go into a room for a day and do the annual budget by yourselves any more.  But you also can’t let each executive set a budget and just add them together.  At some point, you can’t approve every hire yourself.  But you also can’t let people hire whoever they want, and you can’t let some other single person approve all new hires either, since no one really has the cross-company view that you and maybe a couple of other senior executives has.  At some point, the expense policy of “use your best judgment and spend the company’s money as if it was your own” has to fit inside department T&E budgets, or it’s possible that everyone’s individual best judgments won’t be globally optimal and will cause you to miss your numbers.  Allow process to develop organically.  Be appropriately skeptical of things that smell like bureaucracy and challenge them, but don’t disallow them categorically.  Hire people who understand more sophisticated business process, but don’t let them run amok and make sure they are thoughtful about how and where they introduce process to the organization.

I bet there are 50 things that should be on this list, not 5.  Any others out there to share?

(The following post was written by one of Return Path’s long-time senior managers, Chris Borgia, who runs one of our data science teams and has run other support organizations in the past, both at Return Path and at AOL.  I don’t usually run guest posts, but I loved the topic with Chris suggested it, and it’s a topic that I’d only have a limited perspective on!)

Managing Up in a Growing, Global Workplace

For many years, I thought “managing up” was a cheap way of getting ahead. I thought someone who managed up was skilled at deceiving their boss into thinking they were more accomplished than they really were.

I have since learned that managing up, or managing your boss, is not devious, but is actually a valuable discipline. When you learn to manage up successfully, you empower your boss to better represent your interests to influencers in the organization.

If you are a manager, you should realize that in addition to managing your boss, you can help your employees effectively manage you. When our employees help us to be successful, we are further enabled to invest in their success. This symbiosis is seen in any relationship – the more you help the other person, the more they will be able to – and want to – help you. If you are a manager, it’s important to realize that your employees should be managing up, and you can encourage them to do so by being vulnerable, admitting ignorance, and asking for support.

There are many books and articles on managing up or managing one’s boss. The essentials are fairly consistent:

• Understand your boss’s goals, priorities, and needs
• Know your boss’s strengths and weaknesses
• Set mutual expectations to build trust
• Communicate and keep your boss informed

You’ll need to be intentional about the essentials no matter where you work, but there are additional challenges of managing up in a growing, global workplace like Return Path. In a growing company, you’re likely to work for a boss who is new to their role, the company or the industry. In a global company, you may report to a boss who works in another office, or even in another country. The fundamental aspects of managing up are the same, but these situations can require a tailored approach.

When your boss is new to their role, the company, or the industry

In a growing company, you’re likely to report to someone who is new to their role in the company, new to the company itself, or even new to the industry. You can be invaluable to your boss in closing the knowledge gap and enabling them to make the best decisions for you and your team.

• Process Help your boss understand how the department operates. How are goals and priorities determined? How do people communicate? What does the team expect from the boss?
• People If your boss doesn’t know the people, they may lack the appropriate empathy in a given situation. Help them understand your team’s needs and how their decisions impact the people.
• Decision Making Your boss will likely need additional data to help them make decisions. Providing your boss with this data up front, saving them from admitting ignorance, will go a long way to developing a strong relationship.
• Context Sometimes your boss won’t know what they don’t know, so providing your boss the context around issues, decisions, and goals will enable them to make the best decisions for your team.

When your boss works in another office or country

In a global workplace, it’s likely that at some point you will have a boss who works in another office or even in another country. Having a remote boss offers many opportunities for managing up.

• Visibility Your boss doesn’t see you – or possibly others on the team – every day, so you might want to communicate more about the day-to-day operations of the team. At times, it will feel like you are sharing minutia, but it’s likely your boss will find this valuable in developing a complete understanding of what is going on.
• Insight If you work in a core office, you have a tremendous opportunity to be your boss’s eyes and ears.  What are you seeing or hearing locally that might change your boss’s plans or perspective? What are people worried about? Are there any rumors your boss should be aware of?
• Culture If your boss is in a different country, you will need to develop a relationship that considers any cultural differences. Cultural differences are seen in office attire, working hours, email habits, vacation schedules, and more. Bosses in some cultures may expect more deference, while in others they may expect more direct honesty. Understanding your boss’s culture, and helping her understand yours, will develop mutual respect and expectations to make each other successful.

Your relationship with your boss is a symbiotic one. Your boss can’t be successful unless you are, so they are your champion.  Learning to effectively manage up, especially in a growing, global workplace, is not nefarious business. Your boss will represent and support you to the best of their abilities. The more you enable your boss, the better they can support you, and everybody wins.

Part of creating the best place to work  is learning how to self manage – very, very well.  This is an essential part of Creating an environment of trust , but only one part.  What does self-management mean?  First, and most important, it means realizing that you are in a fishbowl.  You are always on display.  You are a role model in everything you do, from how you dress, to how you talk on the phone, to the way you treat others, to when you show up to work. 

But what are some specifics to think about while you swim around in your tank?

1. Don’t send mixed signals to the team.  You can’t tell people to do one thing, then do something different yourself
2. Remember the French Fry Theory of being a CEO.  My friend Seth has the French Fry theory of life, which is simply that you can always eat one more French fry.  You’re never too full for one more fry.  You might not order another plate of them, but one more?  No problem.  Ever.  As a CEO, you can always do one more thing.  Send one more email.  Read one more document.  Sometimes you just need to draw the line and go home and stop working!  (See my earlier post  here  on how Marketing is like French Fries for another example.)
3. Regularly solicit feedback, then internalize it and act on it.  Do reviews for the company.  Do anonymous 360s (I’ve written about these regularly here). Get people a review that has ratings and comments from their boss, their peers, and their staff.  Do them once a year at a minimum.  And do one for yourself.  They’re phenomenal.  Everyone needs to improve, always.  Our head of sales Anita always says “Feedback is a gift, whether you want it or not.”  Make sure you do them for yourself as well.  Include your Board.  If you don’t agree with the feedback you are being given that is likely a data point that you have a BLIND SPOT.  Being defensive about feedback is dangerous.  If you don’t get it/don’t like then do some more work to better understand it.  Otherwise you will forever be defensive and never develop in this area
4. Maintain your sense of humor.  It’s not only the best medicine, it’s the best way to stay sane and have fun.  Who doesn’t want to have fun at work?
5. Keep yourself fresh:  Join a CEO peer group.  Work with an executive coach.  Read business literature (blogs, books, magazines) like mad and apply your learnings.  Exercise regularly.  Don’t neglect your family or your hobbies.  Keep the bulk of your weekends, and at least one two-week vacation each year, sacrosanct and unplugged.  As Covey would say, Sharpen the Saw

You set the tone at your company.  You can’t let people see you sweat too much – especially as you get bigger.  You can’t come out of your office after bad news and say “we’re dead!”  You can make a huge difference by being a great role model, swimming around in your fishbowl.

At What Price False Positives?

As has been covered in many places, including Direct and The Wall Street Journal, Verizon settled a lawsuit yesterday over “too aggressive” spam filtering, or what we in the business call false positives — filtering out legitimate, non-spam emails as spam.  This is a huge problem that part of our business at Return Path, our Delivery Assurance Solutions group, has been fighting for years.

The gist of the settlement is that Verizon is changing the way it filters spam to make sure more legitimate mail gets through, and that it is refunding various small amounts of money or free months of service to customers who complained about the problem.

I am NOT a believer in lawsuits like this at all.  Also, I think the act of filtering aggressively enough to catch the spam but not so aggressively as to cause false positives is a very difficult balancing act that most ISPs actively struggle with every day.

So the outcome here is that a bunch of consumers will receive money or refunds or free service ranging from a few dollars up to potentially $100.  The seven class plaintiffs are going to receive $1000 each for their troubles.  Oh and for good measure, the lawyers are asking for $1.4 million in expenses.  Don’t even get me started on that one.

All that said, though, it’s interesting that there’s now some kind of economic cost to false positives on the books.

The Best Laid Plans, Part I

One of my readers asked me if I have a formula that I use to develop strategic plans.  While every year and every situation is different, I do have a general outline that I’ve followed that has been pretty successful over the years at Return Path.  There are three phases — input, analysis, and output.  I’ll break this up into three postings over the next three weeks.

The Input Phase goes something like this:

Conduct stakeholder interviews with a few top clients, resellers, suppliers; Board of directors; and junior staff roundtables.  Formal interviews set up in advance, with questions given ahead.  Goal for customers: find out their view of the business today, how we’re serving them, what they’d like to see us do differently, what other products we could provide them.  Goal for Board/staff: get their general take on the business and the market, current and future.

Conduct non-stakeholder interviews with a few industry experts who know the company at least a little bit.  Goal: learn what they think about how we were doing today…and what they would do if they were CEO to grow the business in the future.

Re-skim a handful of classic business books and articles.  Perennial favorite include Good to Great, Contrarian Thinking, and Crossing the Chasm.

Hold a solo visioning exercise.  Take a day off, wander around Central Park.  No phone, no email.  Nothing but thinking about business, your career, where you want everything to head from a high level.

Hold senior staff brainstorming.  Two-day off-site strategy session with senior team and maybe Board.

Next up:  the Analysis Phase.

The Beginnings of a Roadmap to Fix America’s Badly Broken Political System?

UPDATE:  This week’s Economist (March 17) has a great special report on the future of the state that you can download here, entitled”Taming Leviathan:  The state almost everywhere is big, inefficient and broke. It needn’t be,” which has many rich examples, from California to China, and espouses a bunch of these ideas.

I usually try to keep politics away from this blog, but sometimes I can’t help myself.  I’m so disgusted with the dysfunction in Washington (and Albany…and Sacramento…and…) these days, that I’ve spent more spare cycles than usual thinking about the symptoms, their root causes, and potential solutions.  A typical entrepreneur’s approach, I guess.  So here’s my initial cut at a few solutions.

I’m sure it’s incomplete, and it’s possibly overly simplistic.  While I think it’s a pretty pragmatic and non-partisan approach, I’m guessing people will have visceral political opinions about it.  Here are five things I’d like to see that I think will start us on the road to repair:

• Nonpartisan redistricting: All districts at all levels of government should be drawn by nonpartisan commissions.  There is no reason to create “safe” seats and uncompetitive elections that drive candidates to extreme positions in order to win primaries.  All of that is undemocratic.  I hope California’s proposition that creates this kind of solution works and is copied.
• Public finance of campaigns: This will have to come with a constitutional amendment limiting free speech when it comes to political campaigns, but we should be prepared as a society to limit freedom in that one narrow way in order to remove money from politics.  This topic just keeps coming up, from both the left and the right (think about the examples of Wall Street donations impacting financial reform on one side and public sector union political contributions impacting negotiations with states and cities on the other).
• Presidential line-item veto: Its constitutionality may be in question, but this would give the President a more granular form of one check-and-balance he already has and could greatly help reduce wasteful spending as well as simplify legislation (more on that in a minute).
• Auto-expiration of tax/spend bills: I found the debate over the expiration or extension of the “Bush tax cuts” to be enlightening.  Maybe some class of tax/spend bills — those over a certain dollar figure, those that create entitlements, though that involve government subsidies to industry — should be forced to be renewed every 5 or 10 years instead of being “evergreen” so that the debate can reoccur in light of changes in circumstance.  How many other things are “on the books” in ways that don’t make sense in today’s world?
• Simplicity of legislation: The health care reform bill was 1,990 pages long according to the pdf I just downloaded, and few if any in Congress actually read the whole thing.  They even admitted it AT THE TIME.  Is this a smart way to govern?  Whether voluntarily or via constitutional amendment, Congress should consider only passing single-issue bills and maybe even limiting the size of any given piece of legislation to something that at least THEY THEMSELVES ARE ABLE TO READ.

These things should do a lot to ease legislative gridlock, relieve bitter partisan rancor, and remove some of the silly parliamentary manoeuvrings that plague our government today.  Whether or not they can systematically deal with elected officials’ unwillingness to tackle hard problems and penchant for personal deal-making and runaway deficit spending is another question.

My personal belief is that country could stand some form of a new Constitutional Convention to critically review our society and its governance after almost 250 years.  I love our Constitution and think it was wisely laid out as the foundation for what has become one of the world’s greatest and most enduring nations…but that doesn’t mean that the Founders, who lived in a very, very different time, had perfect vision for all eternity.

Blogiversary

Next week will mark the one year anniversary of my blog (and for that matter, Brad’s blog).  It’s been a lot of fun, so I think I’ll celebrate by taking two weeks off and going to Europe with Mariquita (well, ok, I was planning on doing that anyway).

Even if no one read OnlyOnce, I’d be happy I’m writing it for all of the reasons I expressed here back in June.  But lots of people do read it, more and more every day.  In fact, an executive at Yahoo! who I met earlier this week actually quoted it to me — as Bruno Kirby said in When Harry Met Sally, “the first time someone has ever quoted me back to me before.”

In my very first posting, which explains the blog’s title and mission, I said I’d try not to be too extraneous with the material I post.  So I took a look through some stats this morning about the last year of blogging:

– Including this, I’ve written 131 postings, about one every three days

– Typepad doesn’t keep stats on blog topics/categories, so this is an estimate (and postings can be associated with multiple categories), but it looks like I’ve posted 6 times about books, 10 times about current events, 4 times about travel, 7 times about blogs, 9 times about “business” (whatever that means), 52 times about email/web/tech, 40 times about entrepreneurship, and 38 times about leadership/management.  So at least I stayed more or less on point.

– I’ve received a total of 125 comments, or less than one per posting (this is NOT a truly interactive medium!)

– I have about 1,000 regular readers, roughly 70% via RSS feed, 20% via email subscription, and 10% via live alerts or just regular web visitors

– My Amazon Associates link has generated about 150 sales for a total of $2,700 and about $170 in affiliate fees to me, which basically covers the cost of my Typepad subscription

Thanks to everyone who reads and comments.  Feedback is always welcome for year two!

A Ball Bearing in the Wheels of E-Commerce

As an online marketing professional, I’ve long understood intellectually how e-commerce works, how affiliate networks function, and why the internet is such a powerful selling tool.  But I got an email the other day that drove this home more directly.

When I started my blog about a year and a half ago, I set myself up as an Amazon affiliate, meaning that any time someone clicks on a link to Amazon from one of my postings or on the blog sidebar, I get paid a roughly 4% commission on anything that person buys on Amazon on that session.

According to the email report I just got from Amazon on Q2 sales driven by my blog, I am responsible for driving traffic that buys about $2,500 worth of merchandise from Amazon every quarter, which yields about $100 to me in affiliate fees.  All I really link to are business books that I summarize in postings, although people who click from my blog to Amazon end up buying all sorts of random things (according to my report, last quarter’s purchases included a Kathy Smith workout DVD and a new socket wrench set in addition to lots of copies of Jim Collins’ Built to Last and Malcolm Gladwell’s Blink.

This is a true win-win-win — Amazon gets traffic for a mere 4% of sales, a relatively low marketing cost; I get a small amount of money to cover the various fees associated with my blog (Typepad, Newsgator, Feedburner), and people who read my blog pay what they’re going to pay to Amazon anyway – and maybe get something they otherwise wouldn’t have gone out to get in the process.

My blog is certainly not a top 1,000 blog, or probably not even a top 10,000 blog in terms of size of audience.  This is merely a microcosm that proves the macro trends.  If I’m driving $10,000 per year of business to Amazon, now I REALLY understand how there are now approximately 500,000 people who make their LIVING by selling goods on eBay, and how probably another 500,000 people are making good side money or possibly even making their living by running offers and affiliate marketing programs from their web sites.  I’m like a little ball bearing in the finely tuned but explosively growing wheel of e-commerce.

If my quarterly affiliate fees keep growing, I’ll find something more productive or charitable to do with them than keep them for myself.  But for now, I am covering my costs and marveling on a personal level at how all this stuff works as well as it does.

Reality Bites

So Oracle is buying the $1.5 billion revenue Siebel for $5.85 billion, and eBay is buying the at most $60 million revenue Skype for $2.4 billion, which could grow to $4.1 billion if Skype hits some performance targets.  Huh.  Must be all those pesky customers, receivables, and assets bogging down Siebel’s books.

UPDATE:  Fortune’s David Kirkpatrick, one of the most insightful journalists covering technology, makes some sense of this in this week’s Fast Forward column.

Beyond CAN-SPAM:  The Nightmare Continues, Part II

A couple of months ago, I blogged about two well-intentioned but very unfortunate new laws on the books, one in Michigan and one in Utah, designed to protect children from advertising that’s harmful to minors, but in fact full of unintended consequences.

Today, the Detroit Free Press had a great article about how the law in Michigan is so poorly conceived and executed, that not only is it angering legitimate businesses, it’s actually angering the parents who were supposed to be its principle beneficiaries.  One parent’s quote in the article pretty much sums it up:

“What was the whole point in signing up if it’s not doing any good? Is this just the legislature and the governor trying to look good and tough, but in the end, just kicking up dust?”

Agreed, and well said!

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