I keep expecting one of his books to be repetitive or boring, but Patrick Lencioni’s The Five Dysfunctions of a Team held my interest all the way through, as did his others. It builds nicely on the last one I read, Death by Meeting (post, link).
I’d say that over the 9 1/2 years we’ve been in business at Return Path, we’ve systematically improved the quality of our management team. Sometimes that’s because we’ve added or changed people, but mostly it’s because we’ve been deliberate about improving the way in which we work together. This particular book has a nice framework for spotting troubles on a team, and it both reassured me that we have done a nice job stamping out at least three of the dysfunctions in the model and fired me up that we still have some work to do to completely stamp out the final two (we’ve identified them and made progress, but we’re not quite there yet.
The dysfunctions make much more sense in context, but they are (in descending order of importance):
Absence of trust
Fear of conflict (everyone plays politically nice)
Lack of commitment (decisions don’t stick)
Avoidance of accountability
Inattention to results (individual ego vs. team success)
For those who are wondering, the two we’re still working on at the exec team level here are conflict and commitment. And the two are related. If you don’t produce engaged discussion about an issue and allow everyone to air their opinions, they will invariably be less bought into a decision (especially one they don’t agree with). But we’re getting there and will continue to work aggressively on it until we’ve rooted it out.
There’s one other interesting takeaway from the book that’s not part of the framework directly, which is that an executive has to be first and foremost a member of his/her team of peers, not the head of his/her department. That’s how successful teams get built. AND (this is key) this must trickle down in the organization as well. Everyone who manages a team of group heads or managers needs to make those people function well as a team first, then as managers of their own groups second.
At any rate, another quick gem of a book. I’m kind of sorry there’s only one left in the series.
I hate to write a lame post, but here’s what I wrote earlier in the year about Eliot Peper’s first Internet thriller, Uncommon Stock:
Eliot Pepper’s brand new startup thriller, Uncommon Stock, was a breezy and quick read that I enjoyed tremendously. It’s got just the right mix of reality and fantasy in it. For anyone in the tech startup world, it’s a must read. But it would be equally fun and enjoyable for anyone who likes a good juicy thriller.
Like my memory of Hackoff, the book has all kinds of startup details in it, like co-founder struggles and a great presentation of the angel investor vs. VC dilemma. But it also has a great crime/murder intrigue that is interrupted with the book’s untimely ending. I eagerly await the second installment, promised for early 2015.
Having just finished that second installment, called Uncommon Stock: Power Play, basically I want to say “ditto.” Â Power Play was just as good as the first book, and now I can’t wait for the third. Where the first installment’s startup focus was around funding and founder dynamics, this one’s startup focus was around shipping product and customers. The thriller part was just as juicy.
It’s also kind of fun reading about the Boulder startup scene, especially from a writer who doesn’t and who has never spent a ton of time there. He gets some things remarkably accurate with crisp descriptions. I was kind of hoping for a cameo by Brad, at least in the form of a throw-away comment about the “long haired homeless-looking investor in the corner of Frasca.”
Let me be clear up front: I do not think of my colleagues at Return Path as children, and I do not think of Casey, Wilson, and Elyse as employees. That said, after a couple weeks of good quality family time in January, I was struck by the realization that being a CEO for a long time before having kids has made me a better parent…and I think being a new parent the last three years has made me a better CEO.
Here's why. The two roles have a heavy overlap in required core interpersonal competencies. And doing both of them well means you're practicing those competencies twice as many hours in a week than just doing one – and in different settings. It's like cross training. In no order, the cross-over competencies I can think of are…
Decisiveness. Be wishy washy at work, and the team can get stuck in a holding pattern. Be wishy washy with kids, they run their agenda, not yours.
Listening. As my friend Anita says, you have two ears and one mouth for a reason. Listening to your team at work, and also listening for what's not being said, is the best way to understand what's going on in your organization. Kids need to be heard as well. The best way to teach good verbal communication skills is to ask questions and then listen actively and attentively to the responses.
Focus. Basically, no one benefits from multitasking, even if it feels like a more efficient way of working. Anyone you're spending time with, whether professionally or at home, deserves your full attention. The reality is that the human brain is full of entropy anyway, so even a focused conversation, meeting, or play time, is somehow compromised. Actually doing other activities at the same time destroys the human connection.
Patience. For the most part, steering people to draw their own conclusions about things at work is key. Even if it takes longer than just telling them what to do, it produces better results. With kids, patience takes on a whole new meaning, but giving them space to work through issues and scenarios on their own, while hard, clearly fosters independence.
Alignment. If you and your senior staff disagree about something, cross-communication confuses the team. If you and your spouse aren't on the same page about something, watch those kids play the two of you off each other. A united front at the top is key!
I'm sure there are others…but these are the main things that jump to mind. And of course one can be great in one area without being in the other area at all, or without being great in it. Are you a parent and a business leader? What do you think?
Courtesy of my colleague Stephanie Miller, I had a quick holiday read of Aesop & The CEO: Powerful Business Lessons from Aesop and America’s Best Leaders, by David Noonan, which I enjoyed. The book was similar in some ways to Squirrel, Inc., which I recently posted about, in that it makes its points by allegory and example (and not that it’s relevant, but that it relies on animals to make its points).
Noonan takes a couple dozen of Aesop’s ancient Greek fables and groups them in to categories like Rewards & Incentives, Management & Leadership, Strategy, HR, Marketing, and Negotiations & Alliances – and for each one, he gives modern-day management examples of the lessons.
For example, in the Wolf in Sheep’s Clothing, the lesson clearly is to strike while the iron is hot, or that a good plan executed today is better than a perfect one that’s too late. Noonan gives the example of Patton’s capture of Messina, Sicily during World War II.
And in The Hare & The Tortoise, where of course the moral is that slow & steady wins the race, Noonan gives the example of how New York Knicks coach Rick Pitino inspired Mark Jackson, who was chosen 18th in the NBA draft, to win the rookie of the year award in 1987 by helping him gain confidence by building on his strengths.
All in, a good read, even with that painful reminder that the Knicks used to have a decent basketball team.
I haven’t taken a poll to figure out the overlap between people who read this blog and people that bought the first edition of Startup CEO, but I’m guessing there’s a high degree of it. If you are familiar with the book, I don’t want to bore you with a recap of what I wrote, but I thought I would devote the next several blogs to new ideas in the second edition. First, the new cover art from the publisher is kind of cool:
The first question you might have is, “Why a second edition? Didn’t you say everything you needed to say the first time?” The answer to that is, yes, I did say everything I had to say at the time, and the first edition is pretty comprehensive as a field guide. But that was about a dozen years into what turned out to be a 20-year journey, and after we sold Return Path in 2019, I had time to reflect on all that happened. I learned a lot of new lessons between the first and second editions, we had a lot of first-time experiences, we scaled the company significantly, and we sold it. None of those things are, in and of themselves, worthy of a second edition, but collectively they help tell the story of startup to exit and tell it from a perspective of creating a sustainable business over nearly two decades.
But there are other reasons, too, besides new lessons learned. Eight years is a lifetime in terms of changes to micro-trends, language, business in general, and the world around us. I wanted to update the book to make it contemporary so that it can speak to a new generation of CEOs. The second edition is more than a new cover and obvious updates on the number of employees or revenues. I added topics that reflect heightened responsibilities of CEOs around moral and ethical leadership in an increasingly transparent and socially conscious world. How do you navigate a politically charged and divisive society? For example, the State of Indiana passed a law intended to not force people to do things that contravened their religious beliefs but it had the side effect of legal descrimination against LGBT citizens. It was contentious, with rallying cries in business and society for one side or the other, and those same sentiments were found within our employee population.
How should CEOs handle a situation that conflicts with their core values? There are no easy answers, but avoiding them doesn’t make the problem go away.
Whether it’s the #metoo movement, high-profile failures of leadership like airline employees dragging customers off of planes, or something as simple as unconscious bias in the workplace, the best CEOs now need to approach their jobs differently. I didn’t write about that in the first edition, but the second edition has an entire chapter devoted to “Authentic Leadership” and provides guidelines and advice to help CEOs. 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.
I also added a new section with several chapters on the ins and outs of selling a business. Startup exits are the important culmination of the startup experience and something that the first edition only briefly touched on. Obviously, I was still CEO of a growing company and although we had an opportunity or two to sell within those first years, we never pulled the trigger. The first edition talks about that process at a surface level, but the second edition has far more content and detail since we had completed a sale transaction.
The first edition of the book has sold close to 40,000 copies as of the writing of the second edition, which blew me away when I tallied it all up. I’ve received many notes of thanks from readers all over the world for the book, and I’m glad that the content has proved useful to so many people, noting from some of the more critical reviews on Amazon that it certainly doesn’t scratch everyone’s itch. I hope the changes in the new edition add even more value to the lives of entrepreneurs and startup management teams. That’s really who the book is written for.
I have a limited number of free copies of the book that I can send out, and oddly, they are only print copies since the book publishing ecosystem hasn’t figured out an efficient way for authors to distribute free Kindle copies of books yet. As a bonus incentive for reading all the way to the end of this post, I will be happy to send a free copy to the first 5 people who comment on this post on the blog and ask for one.
There’s been a growing cry for tech companies to add diversity to their leadership teams and boards, and for good reason. Those two groups are the most influential decision making bodies inside companies, and it’s been well documented that diverse teams, however you define diversity — diversity of demographics, thoughts, professional experience, lived experience — make better decisions.
Gender, racial, and ethnic representation in executive teams and in board rooms are not new topics. There’s been a steady drumbeat of them over the last decade, punctuated by some big newsworthy moments like the revelations about Harvey Weinstein and the tragic murder of George Floyd.
It’s also true that in people-focused organizations, and most tech companies claim to be just that, it’s beneficial to have different types of leaders in terms of role modeling and visibility across the company. As one younger woman on my team years ago said, “if you can see it…you can be it!”
My company Bolster is a platform for CEOs to efficiently build out their executive teams and boards. But while nearly every search starts with a diversity requirement, many don’t end that way.Â
Here’s why, and here’s what can be done about it.
For boards, the “why” is straightforward. Board searches are almost never a priority for CEOs. They’re viewed as optional. Bolster’s Board Benchmark study in 2021 indicated that only a third of private companies have independent directors at all;even later stage private companies only have independent directors two-thirds of the time. That same study indicated that 80% of companies had open Board seats. The comparable longitudinal study in 2022 indicated that the overwhelming majority of those open board seats were still open.
Independent directors are usually the key to diversity, as the overwhelming majority of founders and VCs are still white and male. It takes a lot of time and effort to recruit and hire and onboard new directors, and in the world of important versus urgent, it will always be merely important. Without prioritizing hiring independents, board diversity may be a lofty goal, but it’s also an empty promise. I wrote about my Rule of 1s here and in Startup Boards – I wish more CEOs and VCs took the practice of independent boards and board diversity seriously. The silver lining here is that when CEOs do end up prioritizing a search for an independent director, they are increasingly open to diverse directors, even if those people have less experience than they might want. That openness to directors who may never have been on a corporate board (but who are board-ready), who may be a CXO instead of a CEO, is key. Of the several dozen independent directors Bolster has helped match to companies in the past year, almost 70% of them are from demographic populations that are historically underrepresented in the boardroom.
Diversity is stalling for Senior Executive hiring for the opposite reason. Exec hires are usually urgent enough that CEOs prioritize them. And they frequently start their searches by talking about the importance of diversity. But Senior Executives are much more often hired for their resume than for competency or potential. Almost all executive searches start with some variation of this line, which I’m lifting directly from a prior post: “I want to hire the person who took XYZ Famous Company from where I am today to 10x where I am today.” The problem with that is simple. That person is no longer available to be hired. They have made a ton of money, and they have moved beyond that job in their career progression. So inevitably, the search moves on to look for the person who worked for that person, or even one more layer down…or the person who that person WAS before they took the job at XYZ Famous Company. Those people may or may not be easy to find or available, but they feel less risky. In the somewhat insular world of tech, those candidates are also far less likely to be diverse in background, experience, thought, or, yes, demographics.
Running a comprehensive executive search based on competencies, cultural fit, scale experience, and general industry or analogous industry experience is much harder. It takes time, patience, digging deeper to surface overlooked candidates or to check references, and probably a little more risk taking on the part of CEOs. And while CEOs may be willing to take some risk on a first-time independent director, fewer are willing to take a comparable level of risk on an unproven or less known executive hire.
For some CEOs, the answer is just to take more risk — or more to the point, recognize that any senior hire carries risk along a number of dimensions, so there’s no reason to prioritize your narrow view of resume pedigree over any critical vector. For others, the answer may be to bring the focus of diversity in senior hires to “second level” leaders like Managers, Directors, or VPs, where the perceived risk is lower, and the willingness to invest in training and mentorship is higher. Those people in turn can be promoted over time into more senior positions.
Not every executive or board hire has to be demographically diverse. Not every executive team or board has to have individual quotas for different identity groups, and diversity has many flavors to it. But without doing the work, tech CEOs will continue to bemoan the lack of diversity in their leadership ranks, and miss out on the benefits of diverse leadership, while not taking ownership for those efforts stalling.
I wrote part I of this post in 2011, and I feel even more strongly about it today. I generally keep this blog away from politics (don’t we have enough of that running around?), but periodically, I find some common sense, centrist piece of information worth sharing. In this case, I just read a great and very short book, Six Amendments: How and Why We Should Change the Constitution, by former Supreme Court Justice John Paul Stevens, that, if you care about the polarization and fractiousness going on in our country now, you’d appreciate.
If nothing else, the shattered norms and customs of the last several years should point people to the fact that our Constitution needs some revision. Not a massive structural overhaul, but some changes on the margin to keep it fresh, as we approach its 250th anniversary in the next couple decades.
Happy New Year! Every few years or so, especially after a challenging stretch at work, I’ve needed to reboot myself. This is one of those times, and I will try to write a handful of blog posts on different aspects of that.
The first one is about a great book. I just read Ayn Rand’s The Fountainhead for (I think) the 5th time. It’s far and away my favorite book and has been extremely influential on my life. I think of it (and any of my favorite books) as an old friend that I can turn to in order to help center myself when needed as an entrepreneur and as a human. The last time I read it was over 10 years ago, which is too long to go without seeing one of your oldest friends, isn’t it? While the characters in the book by definition are somewhat extreme, the book’s guiding principles are great. I’ve always enjoyed this book far more than Atlas Shrugged, Rand’s more popular novel, which I think is too heavy-handed, and her much shorter works, Anthem and We The Living, which are both good but clearly not as evolved in her thinking.
As an entrepreneur, how does The Fountainhead influence me? Here are a few examples.
When I think about The Fountainhead, the first phrase that pops into my head is “the courage of your convictions.” Well, there’s no such thing as being a successful entrepreneur without having the courage of your convictions. If entrepreneurs took “no” for an answer the first 25 times they heard it, there would be no Apple, no Facebook, no Google, but there’d also be no Ford, no GE, and no AT&T
One great line from the book is that “the essence of man is his creative capacity.” Our whole culture at Return Path, and one that I’m intensely proud of, is founded on trust and transparency. We believe that if we trust employees with their time and resources, and they know everything going on in the company, that they will unleash their immense creative capacity on the problems to be solved for the business and for customers
Another central point of influence for me from the book is that while learning from others is important, conventional wisdom only gets you far in entrepreneurship.  A poignant moment in the book is when the main character, Howard Roark, responds to a question from another character along the lines of “What do you think of me?” The response is “I don’t think of you.” Leading a values-driven life, and running a values-driven existence, where the objective isn’t to pander to the opinion of others but to fill my life (and hopefully the company’s life) with things that make me/us happy and successful is more important to me than simply following conventional wisdom at every turn. Simply put, we like to do our work, our way, noting that there are many basics where reinventing the wheel is just dumb
Related, the book talks about the struggle between first-handers and second-handers. “First-handers use their own minds. They do not copy or obey, although they do learn from others.” All innovators, inventors, and discoverers of new knowledge are first-handers. Roark’s speech at the Cortland Homes trial is a pivotal moment in the book, when he says, “Throughout the centuries, there were men who took first steps down new roads armed with nothing but their own vision. The great creators — the thinkers, the artists, the scientists, the inventors — stood alone against the men of their time. Every great new thought was opposed.” In other words, first-handers, critical thinkers, are responsible for human progress. Second-handers abdicate the responsibility of independent judgment, allowing the thinking of others to dominate their lives. They are not thinkers, they are not focused on reality, they cannot and do not build
The “virtue of selfishness” is probably the essence of Rand’s philosophy. And it sounds horrible. Who likes to be around selfish people? The definition of selfish is key, though. It doesn’t inherently mean that one is self-centered or lacks empathy for others. It just means one stays true to one’s values and purpose and potentially that one’s actions start with oneself. I’d argue that selfishness on its own has nothing to do with whether someone is a good person or a good friend. For example, most of us like to receive gifts. But people give gifts for many different reasons – some people like to give gifts because they like to curry favor with others, other people like to give gifts because it makes them feel good. That’s inherently selfish. But it’s not a bad thing at all
Finally, I’d say another area where The Fountainhead inspires me as a CEO is in making me want to be closer to the action. Howard Roark isn’t an ivory tower designer of an architect. He’s an architect who wants to create structures that suit their purpose, their location, and their materials. He only achieves that purpose by having as much primary data on all three of those things as possible. He has skills in many of the basic construction trades that are involved in the realization of his designs – that makes him a better designer. Similarly, the more time I spend on the front lines of our business and closer to customers, the better job I can do steering the ship
One area where I struggle a little bit to reconcile the brilliance of The Fountainhead with the practice of running a company is around collaboration. It’s one thing to talk about artistic design being the product of one man’s creativity, and that such creativity can’t come from collaboration or compromise. It’s another thing to talk about that in the context of work that inherently requires many people working on the same thing at the same time in a generalized way. Someday, I hope to really understand how to apply this point not to entrepreneurship, but to the collaborative work of a larger organization. I know firsthand and have also read that many, many entrepreneurs have cited Ayn Rand as a major influence on them over the years, so I’m happy to have other entrepreneurs comment here and let me know how they think about this particular point.
It feels a little shallow to try to apply a brilliant 700 page book to my life’s work in 1,000 words. But if I have to pick one small point to illustrate the connection at the end, it’s this. I realize I haven’t blogged much of late, and part of my current reboot is that I want to start back on a steady diet of blogging weekly. Why? I get a lot out of writing blog posts, and I do them much more for myself than for those who reads them. That’s a small example of the virtue of selfishness at work.
Mastering the 7 Essentials of High Growth Companies, by David Thomson, was a poor sequel to the solid Blueprint to a Billion [review] [buy]– and not worth reading if you’ve read the original. It was very short for its price and contained mildly interesting examples of “blueprint companies” that augmented the original book but didn’t uncover any new material or add any thinking to the mix. Basically, it was like another couple chapters that should have been part of Blueprint.
It is not a bad buy in lieu of the original if you haven’t read either one yet, as Blueprint is a bit longer than necessary, but otherwise, you can skip this one.
On a side note – the author’s interactive scorecard is a decent diagnostic tool (though also, I am sure, a lead gen tool for his consulting business).
A Sense of Urgency, by John Kotter, is a solid book – not his best, but worth a read and happily short, as most business books should be.  I originally was going to hold off on writing this post until I had more time, but the subject matter alone made me think that was a mistake and that I should write it while it’s fresh in my mind.  <g>
The three tools to fight complacency are the organizing framework for the book — bring the outside in, behave with urgency every day, and turn crises into opportunities — are all good thoughts, and good reminders of basic management principles.  But there were a couple other themes worth calling out even more.
First up, the notion that there is a vicious cycle at play in that urgency begets success which creates complacency which then requires but does not beget urgency. Â The theme is really that success can drive arrogance, stability, and scale that requires inward focus — not that success itself is bad, just that it requires an extra level of vigilance to make sure it doesn’t lead to complacency. Â I’ve seen this cycle at different times over the years in lots of organizations, and it’s one of the reasons that if you look at the original companies on the Dow Jones Industrials index when it was expanded from 12 to 30 around 100 years ago, only one of them (GE) still exists.
Second, that busy-ness can masquerade as urgency but actually undermines urgency. Â A full calendar doesn’t mean you’re behaving with urgency. Â Kotter’s example of an Indian manager is great:
If you watch the Indian manager’s behavior carefully and contrast it with the hospital executive’s, you find that the former relentlessly eliminates low-priority items from his appointment diary. He eliminates clutter on the agenda of the meetings that do make it into his diary. The space that is freed up allows him to move faster. It allows him to follow up quickly on the action items that come out of meetings. The time freed up allows him to hold impromptu interactions that push along important projects faster. The open space allows him to talk more about issues he thinks are crucial, about what is happening with customers and competitors, and about the technological change affecting his business.
Finally, Kotter’s theme of “Urgent patience” is a wonderful turn of phrase. Â As he says,
It means acting each day with a sense of urgency but having a realistic view of time. It means recognizing that five years may be needed to attain important and ambitious goals, and yet coming to work each day committed to finding every opportunity to make progress toward those goals.
How true is that?  It’s not just that big ships take a long time to turn…it’s that big opportunities take a long time to pursue and get right.  If they didn’t…everyone would do them!  Urgent patience is what allows you to install a bias for action in your team without causing panic and frenzy, which is never productive.
Thanks to my friend Chad Dickerson for recommending this book, a great read as part of Operation Reboot Matt.
The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, was a great read. Amazon is a fascinating, and phenomenally successful company, and Jeff is a legendary technology leader. The Everything Store is a company and personal biography and totally delivers.
Forget about the fact that Amazon is now almost $100B in revenues and still growing like mad. I find it even more amazing that a single company could be the largest ecommerce site on the planet while successfully pioneering both cloud computing services and e-readers. The stories of all these things are in the book.
As a CEO, I enjoyed reading more of the vignettes behind the things that Amazon is reputationally known for in the tech world – doors as desks, their unique meeting formats, the toughness of the culture, the extensive risk taking of growth over profits, and what works and does not work about Bezos’ authoritative and domineering style. And it’s always great to be reminded that even the biggest and best companies had to cheat death 10 times over before “arriving.”
This is good fun and learning for anyone in the business world. It reminded me most of Walter Isaacson’s biography of Steve Jobs ,which I wrote about here, although it’s more of a company history and less of a biography than the Jobs book.
)