I love me a good framework. And Geoffrey Moore is the kind of good product/marketing frameworks for technology companies. Moore’s Zone to Win: Organizing to Compete in an Age of Disruption is a must-read for anyone managing a larger technology organization (start reading it when you get to 200-250 people – it’s never too early to worry about disruption). More important, it’s really a companion book or coda to Escape Velocity: Free Your Company’s Future from the Pull of the Past, so if you haven’t read that one, start there and read both sequentially. Zone to Win is quite short and punchy, and it doesn’t disappoint.
I can’t believe is that I never blogged about Escape Velocity before since it was a very influential book in how we managed a bunch of things at Return Path in the later years when we got larger and were more in “disrupt or be disrupted” mode. I’ll start with the essence of that book before I move onto Zone to Win.EscapeVelocity‘sprincipal framework is to divide the different product lines/lines of business you have into three planning horizons:
Horizon 1 (H1): Current businesses that should be profitable and sustainable
Horizon 3 (H3): Nascent R&D efforts with the potential to be disruptors or game changers
Horizon 2 (H2): The bridge between H1 and H3 where an R&D effort that is taking off is scaled and hopefully achieves the eponymous Escape Velocity
The essence of the book is to talk about how larger companies become completely slavish to H1 businesses, their cash cows, and struggle to escape from their pull, whether that’s internal resource allocation or customer-driven demands. Failure to innovate properly beyond H1 businesses is why companies die. But the rest of the book is a lot less memorable, and it doesn’t quite prompt you into action.
That’s where Zone to Win comes in, and it helps me understand where we really got a couple things really wrong at Return Path (as an aside, Moore once met my Return Path cofounder George at a conference, and when George described our business to him, he said “Ah, a blue collar business. Those can work, too.” I think I understand what he meant by that, although it doesn’t sound like a compliment!)
In Zone to Win, Moore shows you how to put the three Horizons into action by creating an overlay framework to managing your company to help optimize all three zones simultaneously. The four zones are:
The key takeaways for me from this framework as well as the notes of where we got things wrong at Return Path, even while acknowledging that we had to play across H1, H2, and H3 simultaneously, were:
Performance Zone: Managing your main H1 business in a way that drives growth and customer success for the long haul
Productivity Zone: Managing your main H1 business for optimal profitability and scalability
Incubation Zone: Starting new H3 businesses and hoping they work
Transformation Zone: Getting your H3 business through H2 and into H1 to the point where it’s at least 10% of your overall revenue
What we got right at Return Path was first recognizing that we needed to incubate new businesses as the growth in our core business started to slow down, as well as recognizing that we needed to step up our game in managing the core business for performance. So, Moore would say something like “congratulations, you drew up the correct strategy.” But we fell down on implementation for reasons in three of the four zones. Our problem with the Performance Zone is that we discovered the three horizon model too late — there were several years where we were running R&D experiments in the middle of the core business, which created chaos. By the time we got religion around it, we were constantly playing catch up redesigning our management processes — like the teenager still wearing his kid clothes looking awkward and misfit. In the Productivity Zone, we did invest in productivity, but we weren’t aggressive enough about insisting on End of Life for some programs or products, and and we were bogged down by a convoluted legacy implementation of our CRM system that we never wholesale fixed. But the biggest problem we ran into was in the Transformation Zone, where we tried to jam two new businesses through that zone at the same time instead of focusing all our energies on one. I bet we could have pulled off even more of a transformational success with our security business (the one further along) if we hadn’t also been trying to get our consumer insights business through H2 at the same time. At least Moore notes that’s the hardest zone to get right, so I don’t feel quite so dumb.
There were probably other exogenous factors that caused us to fall down on implementation, too, but I think this had a lot to do with it. And don’t get me wrong, Return Path was a success in the end. It just could have been more successful if we had caught this book and adhered rigorously sooner. It was even published in time — somehow we just missed it. We were lured by customer traction and market pull into thinking we could do both. And it’s certainly possible that we were advised against this by one or more of our board members and plowed ahead anyway.
Moore is a masterful writer. If you haven’t read Crossing the Chasm or Inside the Tornado,for example, if you’re a GenZ founder and you think “wow those books came out before I was born, they can’t be relevant,” you should start by reading them. They’re still 100% applicable today, and Moore’s subsequent editions have updated some of the case studies, even if not totally contemporary — and these are worth reading even as a raw startup (in fact, especially as a raw startup). But once you finish those and your business gets larger, go straight into Escape Velocity and be sure to add on Zone to Win.
I usually only blog about business books, but since I read Bowling Alone: The Collapse and Revival of American Community, by Robert Putnam, because of its connection to the topic of Internet community and social media, I’ll record some thoughts about and from it here.
It’s an interesting read, although a little long. Putnam’s basic thesis is that America’s social capital — the things that have brought us physically and emotionally together as a country throughout much of the 20th century such as church, voting, and participation in civic organizations like the PTA or the Elks Club — are all severely on the decline. The reasons in Putnam’s view are television (you knew all those re-runs of The Brady Bunch would eventually catch up to you), suburban sprawl, two-career families, and “generational values,” which is Putnam’s way of saying things like people in their 60s all read newspapers more than people in their 50s, who all read newspapers more than people in their 40s, etc. He believes the decline is leading to things like worse schools, less safe neighborhoods, and poorer health.
The book does a good job laying out the decline in social capital with some really interesting and somewhat stunning numbers, but the book’s biggest shortcoming is that Putnam doesn’t do the work to determine causation. I buy that there’s a correlation between less voting and less safe neighborhoods, for example, but the book doesn’t convince me that A caused B as opposed to B causing A, or C causing both A and B. What I really wanted at the end of the book was for Putnam to go mano-a-mano with the Freakonomics guy for a couple hours. Preferably in those big fake sumo suits.
The book was published in 2000, so probably written from 1997-1999, and therefore its treatment of the Internet was a little dated — so I found myself wanting more on that topic since so much of the social media revolution on the Internet is post-2004. His basic view of the Internet is that it is in fact a bright spot in the decline of community, but that it’s changing the nature of communities. Now instead of chatting with whoever is bowling in the next lane over at the Tuesday night bowling league on Main Street, we are in an online discussion group with other people who own 1973 BMW 2002 series cars, preferably the turbo-charged ones. So the micro-communities of the Internet circa 2000 are more egalitarian (“on the Internet, no one knows you’re a dog”), but more narrow as well around interests and values.
What has social media done to Putnam’s theories in the last seven or eight years? How have things like blogging, MySpace, LinkedIn, YouTube, and Photobucket changed our concept of community in America or in the world at large? I welcome your comments on this and will write more about it in the future.
Getting the Right Things Done: A Leader’s Guide to Planning and Execution, by Pascal Dennis, is an excellent and extraordinarily practical book to read if you’re trying to create or reengineer your company’s planning, goal setting, and accountability processes. It’s very similar to the framework that we have generally adapted our planning and goals process off of at Return Path for the last few years, Patrick Lencioni’s The Advantage (book, post/Part I of this series). My guess is that we will borrow from this and adapt our process even further for 2014.
The book’s history is in Toyota’s Lean Manufacturing system, and given the Lean meme floating around the land of tech startups these days, my guess is that its concepts will resonate with most of the readers of this blog. The book’s language — True North and Mother Strategies and A3s and Baby A3s — is a little funky, but the principles of simplicity, having a clear target, building a few major initiatives to drive to the target, linking all the plans, and measuring progress are universal. The “Plan-Do-Check-Adjust” cycle is smart and one of those things that is, to quote an old friend of mine, “common sense that turns out is not so common.”
One interesting thing that the book touches on a bit is the connection between planning/goals and performance management/reviews. This is something we’ve done fairly well but somewhat piecemeal over the years that we’re increasingly trying to link together more formally.
All in, this is a good read. It’s not a great fable like Lencioni’s books or Goldratt’s classic The Goal (reminiscent since its example is a manufacturing company). But it’s approachable, and it comes with a slew of sample processes and reports that make the theory come to life. If you’re in plan-to-plan mode, I’d recommend Getting the Right Things Done as well as The Advantage.
The Paradox of Choice: Why More is Less, by Barry Schwartz, presents an enlightening, if somewhat distressing perspective on the proliferation of options and choices facing the average American today. The central thesis of the book is that some choice is better than no choice (I’d rather be able to pick blue jeans or black jeans), but that limited choice may be better in the end than too much choice (how do I know that the jeans I really want are relaxed cut, tapered leg, button fly, etc.?). We have this somewhat astonishing, recurring conversation at home every night, with the two of us sitting around paralyzed about where to eat dinner.
The author’s arguments and examples are very interesting throughout, and his “Laffer curve” type argument about choice vs. too much choice rings true. While there’s obviously no conclusive proof about this, the fact that our society is more rife with depression than ever before at least feels like it has a correlation with the fact that most of us now face a proliferation of choices and decisions to make exponentially more than we used to. The results of this involve ever-mounting levels of regret, or fear of regret, as well as internal struggles with control and expectations. Perhaps the best part of the book is the final chapter, which ties a lot of the material of the book together with 11 simple suggestions to cope better with all the choices and options in life — summed up in the last few words of the book suggestions that “choice within constraints, freedom within limits” is the way to go. Amen to that. We all need some basic structure and frameworks governing our lives, even if we create those constructs ourselves. The absence of them is chaos.
Overall, this is a good social science kind of read, not overwhelming, but definitely interesting for those who are students of human psychology, marketing, and decision making. It’s squarely in the genre of Gladwell’s The Tipping Point and Blink, and Robert Cialdini’s Influence, most of which I’ve written about recently, and though not as engaging as Gladwell, worth a read on balance if you like the genre.
Thanks to my friend Jonathan Shapiro for this book.
The Three Signs of a Miserable Job (post, link), The Five Temptations of a CEO (post, link), and The Four Obsessions of an Extraordinary Executive (post, link) are all related around the topic of management.
Death by Meeting (post, link), The Five Dysfunctions of a Team (post, link), and Silos, Politics and Turf Wars, on the other hand, are all related around the topic of leading a team and healthy team dynamics. This latest book, which is the last of his six books for me, rounds out this topic nicely, in a fun “novel” format as is the case with his other books.
The book hammers home the theme of an executive team needing to first be a team and then second be a collection of group heads as a means of breaking down barriers that exist inside organizations. It also lays out a framework for creating high-level alignment inside a team. The framework may or may not be perfect — we are using a different one at Return Path (the Balanced Scorecard) that accomplishes most of the same things — but for those companies who don’t have one, it’s as good as any.
The most compelling point in the book, though is the point that teams often make the most progress, change the most, and do their best work when their backs are up against a wall. And the point Lencioni makes here is — “why wait for a crisis?”
At any rate, another good, quick book, and absolutely worth reading along with the others, particularly along with the other two closely related ones. I’m definitely sorry to be done with the series. We may try the “field guide” companion to The Five Dysfunctions and see how the practical exercises work out.
In truth, Malcolm Gladwell’s most recent book, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, was a bit of a disappointment. I thought his first three books, Tipping Point, Blink, and Outliers, were fantastic, and I routinely refer to them in business. David and Goliath isn’t bad, it’s just a little light and hangs together a lot less than Gladwell’s other books.
I just read a scathing review of it in The New Republic, which I won’t bother linking to, mostly because the reviewer was on a total rant about Gladwell in general and was particularly insulting to people who read Gladwell (an interesting approach to a book review), essentially calling us self-help seekers who aren’t interested in reality or wisdom. Nice.
Two seminal quotes from the book that get at its essence are:
To play by David’s rules you have to be desperate. You have to be so bad that you have no choice.
and
He was an underdog and a misfit, and that gave him the freedom to try things no one else ever dreamt of.
I also liked the concept Gladwell talked about a few times in the book about being a big fish in a small pond, and how that can sometimes be a better place to be than a small fish in a big pond in terms of building self-confidence. That’s certainly been true for me in my life.
If you go back the premise of Gladwell’s books in general, as I heard him say on The Daily Show the other night — “to get people to look at the world a little differently” — then David and Goliath does that on some level. And for that alone, it’s probably worth a quick read.
My friend Andrew Winston, who is one of the nation’s gurus in corporate sustainability, just published his second book, this one from Harvard Business Press — Green Recovery: Get Lean, Get Smart, and Emerge from the Downturn on Top. It builds on the cases and successes he had with his first book, Green to Gold (post, link to book), which came out a couple years ago and has become the standard for how businesses embrace sustainability and use it to their financial and strategic competitive advantage rather than thinking of it as a burden or a cost center.
Green Recovery is a shorter read (my kind of business book), and it hits a few key themes:
Going green not only shouldn’t wait for better economic times, it’s a key way out of this mess
Businesses have relied on layoffs to cut costs for far too long — it’s time to get lean on stuff, not people
This is about survival for many businesses:Â Detroit died because it missed the green wave of environmental interest and rising energy prices
And the overarching theme…Green doesn’t raise costs, it lowers them – it’s a source of profit and innovation
The book reminds me a lot of my post Living With Less, For Good, which I wrote at the beginning of the financial market freefall last fall, talking about how we as a company were figuring out how to cut back without cutting people (something we’ve managed to do). Although I wasn’t talking about green initiatives specifically, the point of getting leaner on “stuff” really resonates with me.
At the end of the day, Andrew proves that steering your company to go green — no matter what industry you’re in — is a twofer: you can increase the strength of the business and simultaneously do your part to clean up the environment. That’s definitely the “change we can believe in” mentality applied quite pragmatically!
Please go put Decide and Conquer: 44 Decisions that will Make or Break All Leadersby David Siegel on your reading list, or buy it. David’s book is up there on my list with Ben Horowitz’s The Hard Thing About Hard Things. It’s a totally different kind of book than Startup CEO, and in some ways a much better one in that there’s a great through-line or storyline, as David shares his leadership framework in the context of his journey of getting hired to replace founder Scott Heiferman as Meetup’s CEO after its acquisition by WeWork, including some juicy interactions with Adam Neumann, through the trials and tribulations of WeWork as a parent company, through COVID and its impact on an in-person meeting facilitator like Meetup, through to the sale of Meetup OUT of WeWork.
It’s hard to do the book justice with a quick write up. It’s incredibly concise. It’s clear. It’s witty. Most of all, it’s very human, and David shares a very human, common sense approach to leadership. I particularly like a device he uses to reinforce his main points and principles by bolding the key phrases every time they show up in the book: be kind, be confident, be bold, expand your options, focus on the long-term picture, be pragmatic, be honest, be speedy, do what’s right for the business, work for your people and they’ll work for you, be surprised only about being surprised. These all resonate with me so much.
One of the interesting things about the book is that David is a CEO, but not a founder (although he was sort of a re-founder in this case). A lot of CEO books talk about how to run a company, or give stories from the trials and tribulations thereof, but few focus on the elements of interviewing for the CEO job, or taking over the reins of a company in the midst of a turbulent flight. So the book is about getting the job, starting the job, doing a turnaround, leading a company through growth, a buy-out, and managing a company inside of another company. And because Meetup is such an iconic brand and business, it’s easy to understand a lot of the backdrop to David’s story.
I just met David for the first time a few weeks ago. We knew a bunch of people in common from his DoubleClick days. We instantly hit it off and traded copies of our books, and then were reading them at the same time trading emails about the parts that clicked. I just can’t recommend the book enough to any CEO or founder. In my view, it joins a pretty elite canon.
I kept thinking as I was reading it that it was the other side of the proverbial coin…that Startup CXO was about the details of each executive job in a company…but Sarah’s book is about the things common to ALL executive jobs – how to get them, how to succeed at them, essentially how to BE an executive. I read it front to back in a single day one weekend and loved it.
Some of the most insightful moments in her book are:
Why big company executives who join startups often struggle
How to get promoted by proactively doing the next job – act “as if” – while still excelling at your current job
The importance of managing to the CEO’s preferred work style (personally…I’d debate this – I think CEO’s should manage to their CXOs’ work styles or at least make it a two-way street, but her point is very valid!)
Why executives shouldn’t just up and quit with “two weeks’ notice” but that executives also need to be mentally prepared to be shown the door when they resign
The importance of getting your hands dirty and not being “above” doing the work of your team
Mastering the art of data-driven storytelling
Sarah quotes a number of CEOs throughout the book who I know and respect, from Nick Mehta at Gainsight to Mindy Lauck at Broadly. It was fun to read the book and see a number of very familiar names in it along the way.
Sarah and I did an interesting format – sort of a “dueling fireside chat” about our respective books on a webinar last fall. We had a fantastic conversation that could have gone on for hours. If you’re an executive – or an aspiring executive – you should go read her book.
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.
Thanks to my friend and long-time former Board member Jeff Epstein, I recently downed a new book, You’re in Charge – Now What?, by Thomas Neff and James Citrin. I’m glad I read it. But it was one of those business books that probably should have just been a Harvard Business Review article. It’s best skimmed, with helpful short summaries at the end of every chapter that you could blow through quickly instead of hanging on every word.
The authors’ 8-step plan is laid out as:
Prepare yourself during the countdown
Align expectations
Shape your management team
Craft your strategic agenda
Start transforming culture
Manage your board/boss
Communicate
Avoid common pitfalls
Ok fine, those make sense on the surface. Here are three things that really stood out for me from the book:
First, “working” before you’re officially working – the countdown period. I tried hard NOT to do this when I was between things, but I’m glad I did the things I did, and now, I wish I had done more. The most poignant phrase in the book is “scarce time available during your first hundred days.” That is an understatement. As my “to read” pile grows and grows and grows with no end in sight…I wish I had done more pre-work.
Second, remember that in every interaction, you are being evaluated as much as you are evaluating. And note that for many people, they will be thinking very critically, things like “do I want to work with this person…is he/she showing signs that he/she wants to work with me?” Yes, we all know as leaders, we live in a fishbowl. But I think that may be even more true during the first couple months on the job.
Finally, this phrase stood out for me: “Acknowledging and in some cases embracing your predecessor can sustain a sense of continuity within the organization and instill a sense of connectivity with employees’ shared past.” There is frequently a temptation to focus on things that need change, which invariably there are…and which invariably you will hear from people who are happy to find a willing new ear to listen to them. But this posture of acknowledge/embrace is especially true in my case, where my predecessor is the founder and 25-year CEO who continues on as our active chairman.
I know there are a ton of books like this on the market, and while I’ve only read this one, I’d say that if you’re starting a new CEO or executive-level job, this is a good one to at least skim to get some ideas.
