People Centered Leadership

3 Ways Your Software Business is Already Attractive to Potential Strategic Partners

2009-12-02T21:10:00.000-08:00

Entrepreneurs tend to be very driven individuals. Their twin mantras are "capital" and "growth", and they pursue both with a white-hot intensity I personally find invigorating. They focus obsessively on improving their product, getting it to market, and selling it like crazy, and of course, there have been fortunes made in just this manner. Then again, most entrepreneurs I know have spent years running around that particular hamster wheel, and have yet to reap the rewards.

Fortunately, then, it turns out that there are other paths to growth and capital beyond the build-release-sell cycle. Strategic partnerships can turn your existing product into a quick or recurring source of revenue (or both). Even better, there are probably a number of ways in which your venture is already attractive to potential strategic partners. Here are three of them:

Market segmentation or integration
Large companies might be capable of focusing their resources on any area they like, but even the largest can't focus on all of them at the same time. There are always going to be opportunities to fit your product into the cracks in somebody else's portfolio.

Let's say your product solves a big problem in the HR space. You may look to partner with, for example, a large business services company, one that offers a broad range of solutions across a number of industries. If your product can address a pain point for their customers, and the larger company doesn't already have a solution in that space, a partnership opportunity exists.

It works in the other direction, too. Say you have built a platform for something like identity management, an application that could work for any kind of business. Often I find that, with a little tweaking, you can take a broad solution like that and customize it for a particular market, such as financial services, or a particular function, such as HR. The trick is to find a partner selling into a particular vertical market, or into a particular corporate operational area — one that will pay you to configure a version of your product to meet the specific requirements of that space.
Distribution
Yes, sometimes the classics are still the best. You have customers, thus demonstrating you have a product that fills a need. There are always companies that want to get a piece of that action; the trick for you is to find partners who specialize in selling into hard-to-reach markets. My favorites are the government sector, which has its own rules and can be very difficult - and expensive - for a new entrant, and international markets. China, in particular, is a very tricky market, but even the European Union is awfully far away and downright foreign (just ask Oracle) if you're used to selling in the US. Generally, sector or geographic distribution arrangements can be negotiated to provide up-front capital, and cost you very little if you were not planning on entering these markets directly yourself any time soon.
Private labeling
Web developers have become incredibly sophisticated at building sites with eye-catching designs and interesting and engaging content. Luckily for you, though, they often still struggle with taking the next step: converting their visitor flow into cash flow. If your existing product offers a feature that can be leveraged by the site for that purpose, a partnership opportunity exists.

Let's say, for example, that your software calculates an optimal portfolio allocation based on an investor's goals and external factors such as prevailing interest rates and technical market conditions. You might partner with a site devoted to financial news and discussion forums, which would offer your service to its users (either for a fee, or as a way to drive advertising revenue) using its own branding. Your partnership could involve revenue sharing, or perhaps just a recurring monthly or annual license fee - and all you had to do was to configure your software to enable easy rebranding (something you should consider doing anyway, if you haven't already).

The great thing about partnerships it that there are as many flavors as there are companies. In my own work helping emerging growth firms find and land strategic partners, I've seen an amazing array of deals. Some of these arrangements provide up-front capital, some supply an ongoing source of recurring revenue, and most are non-dilutive or only mildly dilutive. But the one thing they have in common is that they provide a stepping stone for the venture on its road to growth and profitability. Even better, as the partners learn more about one another and become more comfortable working together, these deals can often lead to a liquidity event benefiting founders and investors alike.

Graphics reused with permission. No endorsement implied. Attribution:
Puzzle:

http://www.flickr.com/photos/wilhei/ / CC BY 2.0

Money:

http://www.flickr.com/photos/tracy_olson/ / CC BY-SA 2.0

Five Things Giraffes Teach Us About Leadership

2009-11-29T21:27:00.000-08:00

Dawn on the Serengeti. The plains are mostly silent, save for the cackling and snarling of a group of hyenas, still hidden in shadow, competing for scraps from last night's kill. The sun erupts over the horizon, gathering strength as it prepares to sear the parched grasslands. In the distance, a familiar silhouette makes its languid and graceful way to a stand of leafy acacia trees.

The giraffe. Earth's tallest land animal, it is slender and beautiful, herbivorous and social. And it has a few things to teach us about leadership:

You already stand out from the crowd; take advantage of it.
Leaders get noticed, sometimes even before they become leaders. The giraffe accomplishes this with his long legs and even longer neck, whereas you, unless you are 18 feet tall and weigh 3000 pounds, are going to have to rely on the 3 "C"s of the developing leader: competence, confidence, and communication. If you have these talents, you already stand out; you may as well acknowledge that and act on it.
Sometimes you just have to dive right into things.
The birth of a giraffe is one of the wonders of nature: the newborn falls about six feet from his mother to the ground! From that point he has only about half an hour to find his footing: while giraffes aren't normally sought by predators, a shaky calf makes a prime target. Like the newborn calf, leaders don't always have the benefit of preparation or training for every situation in which they find themselves. The giraffe reminds us that even after a tough beginning, we need to adjust rapidly to avoid a potentially much harsher fate.
Never forget that others are relying on you.
The giraffe obviously has a view of its surroundings that is unavailable to other animals. However, when the giraffe is at a watering hole, it has to splay its front legs rather awkwardly to reach down to take a drink, a position that leaves it quite vulnerable to alligators and other predators. That is why the giraffes do not all drink at once; as some are drinking, others are watching, ready to alert the herd if danger is nearby. Even other animals will take a cue from the giraffes and head for safer ground if the big herbivores are startled.

Likewise, our teams are watching us closely for hints of trouble ahead. Leaders have to keep in mind that their responses to developments within the enterprise are always being observed, and remember that they have a responsibility, not only to lead their teams away from danger, but also to avoid sending false signals that could cause distraction and anxiety.
Remain above the fray.
Not too many predators will take a shot at landing a giraffe for lunch. The animal is simply too big, and its kicks too powerful; there are simpler choices on the menu. Well, the Serengeti and the boardroom have something in common: a tendency towards eliminating the weaker members of the herd. As a leader, your position could make you a target: arm yourself with a history of successful efforts and a reputation for keeping yourself above petty political squabbles, and you will encourage would-be spoilers to find easier targets.
Acquire rewards that are out of reach to others.
The whole point of the giraffe's size and specialized anatomy is to enable it to reach and enjoy the leaves of the thorny acacia tree. Not only is much of this foliage to be found far above the ground; it is also protected by enormous, pointy thorns, which the giraffe easily avoids by using its impressive tongue.

Similarly, through their own unique natures, leaders are equipped to reach unusual rewards: mentoring a team member and seeing her advance, leading an important project to a successful conclusion, or making decisions that have an impact on the company, its customers, and its employees. And, yes, sometimes the money's good*, too. :)

Sure, taking leadership lessons from animals, even beautiful and exceptional animals, could be considered odd. Then again, in the martial arts we find a centuries-old principle of learning from the natural fighting styles of the tiger, crane, leopard, snake, and other animals. Studying these animals has provided inspiration for some pretty incredible martial arts feats over the years; perhaps the giraffe can do the same for our practice of leadership.

Got any other examples of animal-inspired leadership lessons? Share them by clicking on the "Comments" link below.

Postscript:

Like giraffes as much as I do? You can see them up close and personal - and even feed them! - at the San Diego Wild Animal Park, one of my favorite places.

Also, for a very funny take on the giraffe, see this Saturday Night Live video short (which is unfortunately preceded by a 30-second ad, but it's worth the wait).

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All photos above are licensed for reuse. No endorsement is implied. Attributions:
Drinking giraffe: http://www.flickr.com/photos/38349568@N07/ / CC BY-SA 2.0

Acacia thorns: http://www.flickr.com/photos/martineau/ / CC BY-ND 2.0

A Smatitude of Gratitude

2009-11-24T16:52:00.000-08:00

(OK, I admit it: "smatitude" isn't really a word.)

Here we are, approaching the holidays, and I am looking back on the professional and emotional carnage this complicated year hath wrought. In 2009, my employer was taken over by the FDIC and then sold off for a song. My employees were scattered to the wind; some of them have yet to find new positions. On the home front, my little dog, who had been with us for 16 years, passed away. And, of course, my own transition from big-company employee back to entrepreneur, writer, advisor, and work-at-home dad has not been without its difficulties.

To put it concisely: in many ways, this past year has sucked.

Like many others, though, I use this time of year as an opportunity to set aside the whining, and focus instead on the great good fortune that overwhelmingly and fundamentally defines my life. Much of this gratitude is directed towards the various people I've had the good fortune to lead over the past couple of decades or so. I've tried to show them my appreciation on a regular basis, but it's good to pause and dedicate a moment now for just that purpose.

Of course, offering your gratitude for the hard work and dedication of your team is simply appropriate and proper. Your employees, through their efforts, have enhanced your career, and in the best cases, made your workdays more enjoyable through their companionship and professionalism. But, as blogger Ron Ashkenas points out on the Harvard Business Publishing blog, there are reasons beyond simple humanity and courtesy to share your gratitude with your team:

[T]he notion of "giving thanks" also is critical for driving organizational and individual improvement. Most research into individual development has shown that managers are more likely to change if they are given positive feedback that they can build upon, [than they are] when confronted with a litany of weaknesses and failures.

Simply put: offering gratitude for strong performance works better than discouraging poor performance.

Well, thanks to some seriously bad management at a now-defunct bank, I no longer have to worry about motivating my employees. But I am still very grateful to my teams, recent and more remote, and to them I say:

Thank you for always making me look smarter and more skilled than I really am, by dint of your creativity and professionalism.

Thank you for putting up with me on the many, many occasions I showed up at work moody, grumpy, distracted, or all of the above.

Thank you for your considerable openness to my direction, feedback, and recommendations, and for your willingness to let me know when I was doing or suggesting something dumb, and for your direct but gently tactful way of saying so.

Thank you for the trust, both professional and personal, that you placed in me by allowing me to guide you in reaching your career goals and in managing the tricky balance between work and family.

I have a lot to learn, and I have made errors notable both in number and scope; I will no doubt continue to do so. But I'm happy with who I am, and what I'm doing, and the way I'm going about it, and much of that I owe to the people who reported to me through the years. And so, one more time, to all of you: thank you.

PS And, as a final note: thank you to you, my readers. Your feedback and nice comments have made working on this blog an incredibly rewarding effort.

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Five Ways to Lose Your Best Employees

2009-11-21T15:26:00.000-08:00

Oh dear! You went ahead and ignored my advice, and managed to hire some outstanding employees. Don't worry: all is not lost. Just follow this simple plan, and you can be sure that, sooner rather than later, your best employees will run screaming toward the exits, on their way to working for your competitors.

Keep poor performers around until they quit, retire, or die. Remember, the goal here is to get rid of your strong performers -- the ones carrying the load when your poor performers are yakking on the phone or leaving at 2pm for their fourteenth "doctor's appointment" this month. Leverage the time-tested power of low morale by keeping around a few folks who burden the rest of the team with their total lack of pride in their work. Soon enough, your most productive employees will look for a workplace at which they don't spend all day resenting their Wallyesque colleagues.
What is this "training budget" of which you speak? Here's where you'll be glad you've turned to me, your employee alienation mentor, because managers get this one wrong all the time. You may think that providing training for your employee simply sets her up to take a better, higher-paying job somewhere else, and thus, you want to train the heck out of those good employees. But nay! It turns out that strong performers want to learn and grow in their jobs, and want their employers to give them opportunities to follow a career path within their company. Who would've guessed? Deny them training, and they will soon make their way to a company that demonstrates its interest in keeping them by giving them the tools they need to meet their career goals.
Take credit for their work. When you're in a staff meeting with the CEO, she has no idea who on your team was really responsible for the recent success (why on Earth would you ever give her that information?). Why not take the credit? Besides, surely it was your inspired leadership that drove the hard work of your talented and dedicated employees, thus producing the desired results. Surprisingly effective, this technique will ensure that your staff will look for an employer who enables, rather than blocks, the progress of their careers.
Practice NIHYYSOB management. NIHYYSOB, a concept introduced in the classic book(let), The One-Minute Manager, means giving your employees no feedback at all, until they do something wrong. The moment you spot a mistake, you zap them for their error, and, like a Moray eel, slink back to your hole to await the next victim. Your employee will quickly learn that the only way to get your attention is to fail, and will therefore begin the search for a company at which he might occasionally be recognized for what he does right. (I am indebted to John Romine of UC Irvine for reminding me of this one.)
Ignore them altogether. On the other hand, NIHYYSOB does require a bit of effort on your part. Why not simply provide no feedback, no direction, and no leadership whatsoever? Don't believe this technique is common? Think about your team. How often do you meet with your direct reports, much less the other members of the team, on a one-on-one basis? And when you do, are you talking about the employee's progress towards her career goals, or just reviewing the status of whatever project she is working on? And how often do you bring the whole team together, and when you do, what sort of feedback do you offer them? The beauty of this technique is that it is so simple, you may be practicing it right now without even realizing it!

There's an old saying that suggests that an employee joins a company for the job, salary, location, and benefits, but leaves because of their boss. You can be that boss! Believe me, in addition to the handful of modest suggestions above, there are sooooo many other ways to get those pesky, demanding, expensive, and talented employees to go somewhere else.

And, once they leave, your loyalty and dedication will certainly be all the more apparent... won't it?

Five Ways to Avoid Hiring the Best Candidates

2009-11-15T18:40:00.000-08:00

Hiring: even good managers are sometimes bad at it. Many seem to hate the process, and by extension, the candidates. And who can blame them? You have to kiss a lot of frogs during the recruitment process, and there's no guarantee of even a single prince at the end. So why not make it easy on yourself? Just scare away the best candidates - anybody left will be happy to accept pretty much any offer you're prepared to make!

Here are some ways to make sure that the best candidates will take a position with your competitors, and not with you:

Create a vague job description. Like this one, which has been on Monster for months: and no wonder. (Sorry if it's been taken down by the time you read this.) This type of bland, non-descriptive advertisement says to potential candidates that only the most desperate need apply. Highly qualified candidates will be much too selective to give that ad a second look.
Don't prepare. During the interview, ask questions that make it painfully obvious you have not reviewed your candidate's resume or cover letter. Even better, have no questions prepared at all: just wing it. Then have him hang out in the conference room for 20 minutes while you hunt around to see if anybody else - anybody - is available to speak with him. Message: this role isn't important enough for us to spend any time thinking about who will be filling it.
Don't challenge them. Only throw softballs during the interview. After all, it's so darned uncomfortable for everyone when the candidate can't answer a question; who wouldn't want to avoid that? Your candidate will understand completely: you're a leader who can't make a difficult or unpopular choice.
Play "gotcha". Instead of asking boring questions designed to illuminate his skills, experience, and values, spend an hour trying to stump your candidate. If he seems to know a lot about something, keep digging until you turn up something he doesn't know (and that you probably don't know either). He'll recognize that you're the type of leader that needs to be the smartest person in the room.
Make them wait. Keep your candidate waiting in the lobby for half an hour past the scheduled interview time. Then make her wait after the interview to hear what her status is. Don't tell her when to expect a decision, or if you do, miss the deadline. Don't reply to her thank-you note. This technique will send your candidate a clear signal that your employees come last when you are prioritizing your tasks for the day.

In all seriousness, great employees are still hard to find, even in tough economic times. You'll work hard to recruit them, and you'll work hard to keep them. Accept that, and you will build a team whose success creates new rewards and new opportunities for them, and for you.

Finding Your Team's Hidden Abilities

2009-11-08T20:30:00.000-08:00

I'm a student of martial arts. I study a variety of karate known as kempo. For me, martial arts is unsurpassed in its ability to build and support the qualities of leadership, self-reliance, initiative, persistence, and strategic thinking, that I seek to reinforce in myself. And, oh yes, let's not forget humility, which is especially relevant in my case, as I tend to get my butt kicked at least once a week.

Today I was watching a mixed martial arts match on TV. I figured I knew how it was going to turn out: one of the fighters was gigantic, towering over his opponent and enjoying about an 8-inch reach advantage. Neither fighter was very experienced, and the match figured to end with the bigger dude, Marcus "Big Baby" Jones, beating the heck out of his opponent with his enormous fists.

But that's not what happened. Yes, Jones won, and won convincingly. But, to my utter surprise, he won with finesse, rather than power, trapping his opponent in a painful submission known as an arm bar. True, submission techniques aren't solely the province of small, wiry fighters; still, they do require some skill and experience, and I sure didn't expect to see that kind of grappling ability in former NFL player Jones.

Part of the lesson here, of course, is not to judge a book by its cover. But there's more to it. It wasn't just Jones' stature, broad shoulders, bulging biceps, and absurdly large hands that led to my incorrect prediction; after all, his opponent wasn't exactly built like a chimney sweep either. But I'd watched both opponents train; I knew a bit about their backgrounds. At one point prior to the fight, Jones said he was going to tear off his opponent's arm and hit him with it. All in all, I felt safe in concluding I was about to see a beat-down.

Instead, I was treated to an exercise in strategy and timing I'd never anticipated. I thought I had a reasonable picture of Jones the fighter, but in reality, I'd missed his hidden abilities. Of course, people can surprise you - even people you think you know pretty well, like the members of your team. I've had a few opportunities to build teams from scratch, but most of the time, I take over an existing group. That means that individuals on the team have spent time - perhaps a long time - in their respective roles.

These roles form the context in which I get to know them. In the early stages of our relationship, I learn their personalities, as well as their skills and work habits. But it's easy to forget that I'm looking at them through a narrow window bounded by their job descriptions, that there's much more to each person than is evident to me in my usual interactions with them.

The best way to find the buried nuggets of talent on your team is simply to dedicate a portion of your busy schedule to meet and speak with each of them individually. I've mentioned before that I'm surprised to see how infrequently senior leaders are willing to make this simple, though admittedly time-consuming, effort.

In hard times, it's more important than ever that leaders take the time to see sides of their employees that they might otherwise have missed. Automation, outsourcing, and the poor economic climate have formed the perfect storm, robbing workers of opportunities and, in many cases, their livelihoods. Knowing your team member's hidden talents may mean the difference between finding her a new role or having to let her go.

Keeping your employees employed is noble and appropriate, but it's not the only advantage of taking a closer look. The more you know of your team's hidden abilities, the broader your range of responses can be when faced with new business challenges. That makes you, and your team, more valuable to your enterprise. And that is a good place to be, whatever the state of the economy.

90-Day Plan

2009-10-24T17:51:00.000-07:00

A colleague of mine is a candidate for a job at a public utility. She's had a few great interviews, which doesn't surprise me at all because she's an outstanding manager and generally a great person to be around. For the last round, the company asked her to provide a plan for her first 90 days, should she be selected for the position.

I've always hated that question. In the past, when I've been asked that, I've insisted that in such a short amount of time, I'll be lucky to get to know the key players and the location of the restrooms, much less get anything serious accomplished. Even while giving it, I knew that was a terrible answer; therefore, I was glad the question came up again now, so I could think about a better one while not under the critical gaze of a CEO.

In reality, I had provided one of the best answers, but by just sort of throwing it out there I'd not given it the respect it deserves. In the first 90 days, only a few of your goals will be true business objectives -- you don't even know what they are yet! Rather, most of your mission during those first few months will be, dare I say it, People Centered.

In no particular order:

Meet every person on the team individually.

I've been amazed by the positive reception I've had to simply setting up individual meeting with each member of my staff, no matter how many levels down the org chart they may be. That response tells me that senior leaders aren't doing this nearly often enough. Meet with your employees, find out what they love about their job and what concerns them. Find out what makes them get up every morning and show up at work.

Meet each department head.

If you're in IT, then odds are your customers are internal as well as external. Start with the internal folks. Get a sense of their priorities and mission, and how well they think your group is meeting their needs. Find out what else your group could be doing to support them.

Meet semi-weekly at first, then weekly with your boss.

Creating an initial 90-day plan is a great opportunity to set the expectation in your future boss' mind that you're going to look for some one-on-one time over the first several weeks. In those meetings, find out what his priorities are, and how well your team has been meeting them up until now. As time goes on, make sure that you and your boss stay on the same page.

Review any pending job openings in your group.

If possible, put them on hold until you are given sufficient chance to evaluate your organization: you may want to make some changes, or look for an opportunity to promote from within.

Set up regular team “all-hands” meetings and begin holding them.

The content of the meetings matters much less than the fact of having them.

Of course, there are a few pure business matters that do require your early attention as well:

Review existing performance metrics.

You don't know what they are, but you have some idea what they ought to be. See what you've got, then decide on some new ones you'd like to see and get started producing them.

Are there any fires that need attention right away?

You'd hope your future boss would let you know about this prior to your coming on board, but she may have avoided the subject. Or, she may not even realize that there's an immediate problem. Make it a priority to determine if one exists, and if so, to get it fixed.

If your prospective boss did mention any near-term priorities in the course of the interview process, be sure those are given due attention in your plan.

Doing so demonstrates that you were listening, and that you are already on the same page with your new boss.

Determine where your greatest exposure is, and make sure it's covered.

In a recent leadership position I held, it took me a little too long to realize that there was one group in particular which was both not in good shape and had the ability to completely blow me out of the water. I was eventually given plenty of opportunities to wish I'd noticed that sooner.

Ultimately, the 90-day plan is a great opportunity for you to illustrate to a prospective employer that you have been around the block a couple of times – that you know where the land mines are and how to avoid them. In fact, if your potential future boss doesn't ask you for one, consider providing one anyway, thus letting her know that you are thoughtful, focused, and, most importantly, that you read this blog.

Starting and Finishing

2009-10-13T18:14:00.000-07:00

In his classic book, The Soul of a New Machine, author Tracy Kidder follows the design and construction of a new mainframe. IBM had introduced a new product, and its Route 128 rival, Data General, was eager to produce a competitive model. Kidder embedded himself with the engineering team tasked with bringing the big iron to the marketplace. Reissued in paperback a few years ago, the technology described is now laughably obsolete. However, the real theme of the book concerns not technology, but human creativity, and in that sense the book will always have relevance.

I read this book a long, long time ago, and as far as I know, I don't even have a copy lying around. But some things stick out in my mind. In particular, Kidder spends a little time describing two categories of engineers: starters and finishers. Although it was over 20 years ago, and I certainly don't remember that section verbatim, I do clearly recall how deeply Kidder's description resonated for me.

Starters are driven by the need to create. They are incredibly comfortable with an empty white board and a ticking clock. Starters have ideas -- more ideas than they can follow up on, usually -- and are compelled to see those ideas become reality. They're tinkerers, experimenters, and hackers. Starters are the engine of innovation.

And yet, a starter who builds the world's greatest computer may only stay engaged until the machine barely operates. If it crashes every other day, or if it requires four power cables and a windmill to operate, or if you have to enter data into it using toggle switches, that won't bother the starter. His drive to create was satisfied the moment the system came to life and did more or less what it was intended to do. Anything beyond that, for a starter, is hardly worth paying attention to.

Finishers are driven by the need to perfect. They have no less of a creative impulse than starters, but they satisfy it by finding efficient ways to cross every T and dot every I. They make sure that the lights on the front panel meet all the IEEE specs, that all the defects uncovered in QA have been addressed, and that the power supply is of sufficient quality to keep the thing running reliably... well, at least until the warranty expires.

If you left home this morning in a car, you can thank a starter. If the car actually got you all the way to work, and the door didn't come off in your hand as you exited, you can thank a finisher.

As a leader, it's very important to spot these tendencies in your staff, and to delegate work accordingly. As an entrepreneur, it's even more important to recognize these traits in yourself. Fully appreciating your own strengths and weaknesses, as touchy-feely as that may sound, forms a critical piece of the foundation of your business. As speaker and author Marcus Buckingham points out, success comes to those who take advantage of their strengths and find ways to work around (rather than attempt to overcome) their weaknesses.

As for me: by temperament, I'm definitely a starter. As an engineer I am a starter. As a writer, I'm a finisher: it is much more comfortable for me to take an existing piece and hone it to perfection through careful editing than it is for me to stare at a blinking cursor, wondering if I have anything else to say. As a consultant, therefore, I am fortunate, because so much of my work begins with engineering (say, evaluating a technology plan) and ends with writing. I guess it just goes to show: if you roll a marble around a board long enough, it eventually finds the dimple.

What Am I Up to Now?

2009-09-25T23:00:00.000-07:00

Readers of this blog (I know you're out there; I can hear the keyclicks) are aware that some time during the spring, I left my position with WaMu Investments. And yet, I've offered nary a word as to what I've been doing since.

Let's remedy that immediately, so we can get back to discussing leadership and innovation as soon as possible.

A good friend, Brian Callahan of Markwood Capital Alliance, has spent the last 22 years working with entrepreneurial ventures, helping them to build strategic alliances. Too frequently overlooked in all the hoopla about venture capital and private equity, strategic partnerships are often the best way for a small business to capitalize itself. If you have a product and customers, but want more capital to expand without diluting your equity position, strategic partnerships are the way to go.

Brian has had outstanding success over the past two decades helping small firms find partners they'd never imagine they could get on their own. And yet, he realized that he could do even more for his clients if he had a partner who could get his hands dirty within the companies, helping them with their products, platforms, and plans, working closely with the leadership team to make the company even more attractive to potential strategic partners.

That's where I come in. I've founded Shire Ventures to provide great small companies with the technology leadership and business insight they need to position themselves to reach their ultimate goals. My background as both CIO and entrepreneur enable me to share perspectives that emerging companies could not attain by themselves.

At the same time, I'm a partner in M-Squared Advisors, with my colleague Howard Mirowitz. Howard is a brilliant strategist, technologist, and finance wizard, with a sheepskin from Wharton Business School to prove it. The mission of M-Squared Advisors is much the same as that of Shire Ventures: enable entrepreneurs to realize their dreams.

Ultimately, I'm doing this because I just love working with entrepreneurs. They're optimistic, relentless, smart, and creative. They challenge me in ways that no big corporate job could. And I'm learning more every day than I would in any given month at a bank, retailer, or manufacturer.

Of course, I recommend you keep watching this space (and follow my tweets) as I share the remarkable stories and experiences I am privileged to be a part of, as I work with these incredible companies and their dynamic and innovative leaders.

Surviving the Recovery

2009-10-02T09:47:00.000-07:00

Each morning, more or less, I make myself the same breakfast. If I'm fortunate enough to be doing so in a house rendered silent by the departure of my kids for school, I'll put the TV on, turned up just loud enough for the drone of the talking heads on CNBC to be heard over the sizzle of tomatoes and onions in my pan.

This morning they were interviewing a guy who made an interesting point. He noted that, in a downturn, small businesses tend to let their employees go later than large businesses do. In my experience, that's true. In a small company, everybody is like family. It's hard (and you can take my word on this) to let go people you care about, people who have entrusted you with their livelihood. You have a shared history. There's the time you had dinner at their house, or they at yours. And then there was that day they brought their kids to work when their nanny called in sick, or that time that you were down with the flu and everybody pitched in to get you flowers. These are not people you want to see suffer, and even more so, you do not want to be the cause of their misfortune.

And so, when the economy hits the skids, small ventures are the last to trim their staff. Because owners are so reluctant to make this move, by the time they do so, the company's finances may already be in crisis. Ironically, as entrepreneurs tried to wait out the downturn, they may have actually made it almost all the way through to the other side: as a result, they find themselves short-handed and short of funds just as the economy is turning around. At a moment when they should be positioned for growth, they are instead running on empty, struggling to serve their existing customers, much less respond to an increase in demand. Having lived through the recession, they're in danger of being killed by the recovery.

At this critical point, it's vital for your small venture to be looking to establish strategic partnerships. These come in many forms: a partner may provide a channel to a vertical market (such as government) that is hard for your firm to reach on its own. It may license your company's product for rebranding as part of their own offering. It may take over a geographic region, such as Europe or the Far East, that you are not able to service on your own.

Whatever the specific arrangement, a strategic alliance generally provides some specific benefits your small business needs in order to take advantage of the economic upturn. Most crucially, it can supply a much-needed infusion of cash: licensing or distribution deals can (and should) be structured to include some amount of up-front payment, perhaps in return for a discounted license fee or guarantee of exclusivity in a certain vertical market or geographic region. Additionally, a partner can provide some credibility for your small firm as it tries to penetrate customers who might otherwise be spooked by your weak balance sheet.

But what about the additional demand created by the partnership? Even when a partner supplies up-front cash, it's tricky to turn those dollars into resources overnight. In fact, some of the money may go to servicing bloated debt balances accrued during the downturn, rather than directly into fueling growth. Demand rises, but spending is still constrained.

For software and service businesses, there has never been an easier time to grow in a controlled, demand-driven way. The advent of commodity cloud computing, in its many forms, enables smart companies to deploy exactly the resources they need, exactly when they are needed. For example, when you need to test a new release, you can engage the hardware, software and networking required to support the test, and then instantly decommission those resources when the test is complete. Or, for web-based businesses, you can deploy a dedicated production environment after the contract has been signed: no more buying expensive hardware based on forecasts that may, or may not, be correct.

Stay tuned for more on strategic partnerships, cloud computing, and other topics of important to small business leaders. For real-time updates, please follow me on Twitter.

If I haven't said so before: thanks for reading! I'd be doing this even if nobody else read it (which, actually, is sort of what I expected when I created People Centered Leadership last year), but I've found the nice comments I've received about this blog to be very meaningful for me, and they help push me to keep it going. Thank you!

How Integrity is Like a Great Dog

2009-08-17T21:41:00.000-07:00

I'm back from vacation, back from stewing over the events of the past year, and back in action.

Today an article caught my attention. Seems that they've finally indicted a guy suspected of stealing a wee bit of credit card information — about 130 million records, give or take. Congratulations to our government, who finally tracked the guy down in his very, very secret hiding place: prison.

But that's another matter. Here's the bit that really caught my eye:

Mr. Gonzalez once worked with federal investigators. In 2003, after being arrested in New Jersey in a computer crime, he helped the Secret Service and federal prosecutors in New Jersey identify his former conspirators in the online underworld where credit and debit card numbers are stolen, bought and sold.

Now, when the Secret Service is looking for informants, it's not like they can call on me or one of my friends. They need somebody who is currently employed as a scumbag, so he (let's face it: it's a “he”) can rat on his scumbag buddies.

But all too often, employers will take the same “it takes a thief” approach. This case is a great example of why that's a stupid idea: integrity totally eclipses skill and experience when it comes to hiring. That made me think of something I saw recently.

In this diagram, the "Big Dog" star, VY Canis Majoris — the biggest known star in the galaxy — is compared to another humungous object, our Sun. The Sun occupies a central position in our perception, giving depth and color to everything we see. And yet, way out there, in a place where we can't directly observe it, is this unimaginably huge, gigantic, enormous star. But it doesn't make itself known to us directly — we have to search it out.

In hiring decisions, the applicant's skills and experiences often color our entire vision of that person. And yet, floating out there is something much bigger, but less obvious. We have to make the extra effort to identify the underlying character of the person behind the skillset, and then determine if that individual has the qualities that we want to bring to the organization. If not, there's just no amount of technical ability that is going to make up that deficit.

On a related note: if you're wondering about this image, it is in the public domain. It just wouldn't do to write an entire column on integrity and then steal the central image, would it? :-)

Genius

2009-05-02T20:16:00.000-07:00

Wow - I knew it had been a while since I'd posted, but I was amazed to see just how long.

So back to work. If you've been in a leadership position for any amount of time, I hope you've noticed that good ideas come from all quarters. At a given moment, anybody in the room might come up with an insight that all the really important folks (like yourself) have missed.

Still, it can't be denied: some people are just smart. Really smart. You know who you are.

So I was interested in this David Brooks piece, entitled “Genius,” in the New York Times. As the author relates, and as we all know, the path to success is the same as the route to Carnegie Hall: practice.

When I was a kid, I was a huge Lakers fan, and my particular favorite was number 44, Jerry West. As a teen, West “practiced in the rain, mud, and snow. He would forget to go home to eat dinner, and would practice shooting until his fingers bled.” Result? Well, among his many other accomplishments, West still holds the NBA record for free throws made in a season – and that was in 1966!

Sure, West was born with talent. But lots of people are, and only West has held that free throw record for nearly as long as I've been alive. What made a kid from a West Virginia backwater into a superstar were those hours and hours of relentless, painful, mind-numbing practice.

But I wondered, when I read the Brooks piece, about intellectual, rather than athletic, accomplishment. Brooks mentions Mozart, but implies that Mozart's early and regular practice with the piano is what led to his reputation as a genius. That might be true if he were best known for his playing, but of course, Mozart is actually famous for composition. The most brilliant pianists aren't necessarily great composers (Chopin being a notable exception).

So how to account for superior intellectual achievement in areas like composition, or leadership, or innovation?

Whenever I think of the term “genius”, I take a moment to lament my own lost potential, and then I get past that and I think of the physicist Richard Feynman. In part, of course, because that's the title of James Gleick's terrific biography of Feynman. But fundamentally, it's for the same reason that Gleick had when he chose the name of his book. Feynman was – second only perhaps to Einstein – the iconic genius of the 20th century.

But if repetition, more than innate gift, made Jerry West what he was, and Kobe Bryant and Tiger Woods and Yo-Yo Ma what they are, what made Feynman, Feynman?

Thanks to Feynman's habit of writing about himself, and to Gleick's account, we know the answer: Practice. Nobody worked through problems in their head more than Feynman. No matter what else was going on, Feyman's inner dialog was never silent. Feynman himself writes, “I have a limited intelligence and I use it in a particular direction.” There are too many examples to relate here, but when he says “use”, he means: rehearse. Over and over again.

Don't believe in “intellectual practice”? Consider Jill Price. You may have heard of her: she's the woman who remembers virtually every minute of her life. Misleadingly labeled “the woman who can't forget,” Price can recount what she was doing at any given time, or tell you the exact time she was doing any given activity. Scientists are fascinated by her, and are seeking biochemical or anatomical clues to her incredible capabilities.

But, as Gary Marcus suggests in Wired, Price's amazing recall may be due less to biology than to (wait for it): Practice! Marcus believes that “Price remembers so much about herself because she thinks about herself—and her past—almost constantly.” He goes on to conclude:

[Michael] Jordan wasn't born the greatest basketball player of all time; he became the greatest, combining considerable but not unique innate talent with an incredible amount of hard work shooting free throws and practicing jumpers long after most of his peers were out carousing. Whether intentionally or not, Price has shown the same sort of daily dedication to chronicling her own life.

I'm going to go out on a limb here, and suggest that leadership takes practice. Innovation takes practice. The fact that the practice occurs in your head, or in a meeting, or in a memo, doesn't make it any less fundamental. And surely the fact that you aren't always successful shouldn't deter you: even in his record-setting '66 season, Jerry West missed 14% of his free throws.

The lesson for me? I need to post more often. I simply need the practice.

Before You Can Be A Real Leader, You Might Have to Fake It

2009-02-25T19:17:00.000-08:00

Two articles caught my attention. In the first, the author, Kevin Hassett, argues that smarty-pants know-it-all Ivy League MBAs are responsible for all the economic trouble we're in today. (I suppose he could be right, but in my experience, Ivy League MBAs are brilliant and creative. Then again, I only know one, and we've been friends since we were roommates in college.) Hassett uses the phrase “best and brightest,” presumably alluding to the term used by David Halberstam to describe the posse of geniuses he blamed for leading the country into the debacle of Vietnam.

I'm not sure I agree with the general thrust of the piece, but one line caught my eye. In describing how these high-powered businesspeople came to believe they were masters of the universe, the author refers to Ohio University research involving 153 MBA students. According to Hassett, the psychologists running the study “observed that the students who had the strongest narcissistic traits were most likely to emerge as leaders.”

An article in Time runs along a similar vein. The author, Jeffrey Kluger, examines a couple of other studies recently published in the Journal of Personality and Social Psychology. And guess what? The UC Berkeley researchers involved in that effort discovered that “dominant individuals behaved in ways that made them appear competent [...] above and beyond their actual competence.”

I posted the Time article on the door to my office. I hope my employees take two messages from the piece when they stop to read it. First, that I'm engaging in a bit of self-deprecating humor – which I am. Second, that Kluger's advice to “[s]peak up, speak well and offer lots of ideas, and before long, people will begin doing what you say” may be worth examining.

Taken together, the articles suggest that you need to fake it before you can make it. Harvard MBAs may or may not have ruined the world, but before they were in any position to do so, they had to believe in themselves (perhaps a tad too much, but that's a discussion for another time). Bosses may be smart, or they may not be, but they only got to be bosses by being willing to put their ideas out there, and by having the confidence to assume that others will follow.

Leadership is like anything else. You're not born doing it: it takes practice, and you'll make mistakes, and if you have the slightest amount of self-awareness, you're going to ask yourself frequently whether you really belong in the position you've reached. So relax. You might have to fake it for a while. But so did your boss when she was in your job (and then she did it again when she moved up into the corner suite she occupies today). And so did that other manager down the hall whose intellect and leadership skills you admire (and maybe he still is).

You can't do the right thing for the people you are leading if you're not leading. Take a deep breath, and then, as another brilliant MBA I know likes to say, act as if you really have the confidence that you think somebody in your job should have. Before you know it, you will.

Anger Management

2009-02-15T16:09:00.001-08:00

Not unreasonably, people sometimes leave their jobs because they are unhappy (usually with their boss). On the other hand, on many occasions, an employee changes jobs because it is simply in their best interest at that point to do so. Perhaps the company is not doing well, and they fear for their continued employment. Or there may have been a change in the employee's personal life – a marriage, say, or the arrival of a child – that necessitates a move. Or, perhaps the employee simply received a better offer from another company.

In that latter case, in my experience, an employee accepting an offer to work elsewhere doesn't simply acknowledge that their current employment no longer meets their needs. Instead, very often, he or she will work up a head of steam first. By the time they depart, they have crafted a laundry list of complaints, and are happy to share them with whoever asks. Indeed, listening to the litany of errors in judgment, unfair decisions, or lack of recognition experienced by the employee, one could hardly imagine how they could have stayed so long. Never mind that the employee was happy enough until the new offer came in.

I've seen this happen over and over again – in fact, I have been guilty of the same behavior myself – and I think I understand why. In your current position, you have friends, colleagues, perhaps even a boss you like, and you feel loyalty to these people. You've been compensated, of course, for your efforts, and the company has perhaps invested in your development through training, conferences, and promotions. In short, somewhere deep inside, you feel like you owe these people something, and that perhaps you are doing the wrong thing by walking out.

So, in order to rationalize your decision to leave, you develop a list of reasons why you shouldn't be staying in the first place. Like that raise last year that wasn't what it should have been, or that idea of yours that never got the attention it deserved. Somehow, it feels better to be leaving a situation that's wrong, than it does to move from a good situation to one that is even better. The former is something you need to do, while the latter feels more like something you just want to do.

Allow me, then, to set your minds at ease. It is acceptable and ethical to move into a new position when you feel it is a better fit for you for reasons personal, professional, or both. Unless you've entered into an agreement to the contrary, your burden of responsibility to your employer is limited to doing your job to the best of your ability, as long as you both choose to continue the arrangement. Most employment agreements are “at will,” meaning that you or your employer can choose to part ways at any time. Employers have good reason to structure the relationship in this way, but it works out for you as well: when you decide to go, you can simply go, with no further responsibility to your employer.

The reason I raise this issue is that I hope that if more people are aware of this tendency, they will attempt to avoid it (as employees) or defuse it (as managers). When I left my last position, I made a real effort (not always successful, admittedly) to make sure everybody understood the change was because I was reaching for something, not running from what I already had. My mantra was, “I love it here, but I need to move on, because this opportunity is unique and provides me with something I've been looking for.” My new job offered more money and more autonomy, and my boss and my colleagues understood that those were important to me, and my choice did not reflect in any way on how much I enjoyed my work with them.

As managers, we can help shape the tone of an employee's separation by understanding and respecting their decision. Generally, when employees have left my team, I have (usually) avoided trying to talk them out of it: I assume that adults are able to make decisions about their own lives. I want to show respect for their choice for many reasons, one of which is that I don't want them to feel the need to create that laundry list of complaints to counter my argument. I want us to part as colleagues who respect one another, and who shared a very positive work experience together. That not only makes me feel better, it also helps avoid situations in which the departing employee poisons the atmosphere during – and sometimes beyond – their notice period.

Free-Fall Leadership Redux

2009-02-07T17:11:00.000-08:00

The free-fall continues, as does my role – well, for the next 100 days or so anyway.

Things are unfolding pretty much as I described in my first post on this subject. However, there has been a significant, albeit planned, development: the first round of layoffs has been completed.

Saying goodbye to colleagues under these circumstances has proven difficult for everybody, even though we knew this day was coming. Although some people left even earlier, a large group departed on or about January 29th. The prior week, suddenly, crates appeared in cubes and offices, and the first wave of departing employees became identifiable by the jeans they wore and the cartons they carried.

We'd spent weeks avoiding the fact that many of our friends were on their way out. In the interim, we shared a common destiny: all of us, save a few, knew our termination dates. All of us were part of successful teams tragically linked to a very unsuccessful enterprise, and by and large, we'd come to accept our fate. We leaned on one another for support, and speculated on who might be offered permanent positions, or why the acquiring firm kept one team and not another. We were all in it together.

But this first wave of departures created an earthquake in what was, after all, a fragile and temporary status quo. Prior to this stage, the concept of us all going our separate ways had a surreal quality. Yes, we have been slow to fully internalize the situation, but that's only because we needed some time to process the change.

Now, however, the eschatological nature of our existence demands attention - and acceptance. And the response, as far as I can tell so far, has been anger. Anger at our former leadership, who well deserve it. Anger at our new owners, whose only real crime is being different than what we were used to. Anger at the universe for the way things turned out.

I anticipate, though, that anger will give way to acceptance, as it tends to do in these situations. To help my team get to that place as rapidly as possible, my focus is on counseling them on how to best prepare themselves for identifying and succeeding in new positions. I'll write about that some more in the future.

I'm also very energized by my own thinking about what to do next. I'm far from settled on the direction that I'll be taking, even though I've now got less than four months of employment left. With the economy in the tank, and unemployment approaching 8%, this is not a good time for an executive in his mid-40s to be looking for work. And yet, I'm excited. I like change, and I'm about to undergo a ton of it.

Inflation in the Online Crime Sector

2009-02-02T17:51:00.000-08:00

I'll get back to the employee evaluation stuff at some point.

Today, though, an article in the Wall Street Journal (Feb 2, 2009) caught my interest. The article is derived from a press release issued by PGP, the company that commercialized the free secure email software we all knew and wanted to use, but couldn't, due to the lack of any decent public key infrastructure.

(As an aside: a single desktop license for PGP encryption software runs over $300. Wow! I guess if free doesn't work as a business model, try exorbitant!)

But I digress.

PGP hired some folks to survey the IT community (“43 organizations across 17 different industry sectors”), and found that the cost of an average data compromise event in 2008 rose 2.5% year over year to $202 per record.

This number is important, because the best weapon the CIO can wield in the battle for budget dollars is a set of hard figures quantifying risk. How many customers do you have? Ten thousand? Congratulations – a single inadequate security process can cost you $2,020,000. Think that's a lot? Actually, it isn't: the survey revealed that “[a]verage total per-incident costs in 2008 were $6.65 million.”

When it comes to getting budget for access control, identity management, security, and related matters, it's possible to rely on the newspaper argument. That conversation goes like this: “We can spend a few extra bucks ensuring that our database is locked down, or we can wake up one morning to find your picture in the paper, next to the headline, ‘Executive's Parsimony Results in Massive Identity Theft.’” That position has definite emotional appeal, but in the end, the pure dollars and cents argument wins the day.

Fixing Performance EvaluationsPart IIa: Some Ideas

2009-01-02T16:27:00.000-08:00

I'll bet you figured the next post would be "Part II: The Solution". Sorry to disappoint you.

But I do have some thoughts on how to approach the problem. As you'll recall from my previous post, the basic problem with performance evaluations as they are now practiced is that managers are encouraged to ascribe ratings along the same curve year after year. Thus, managers find themselves torn between assigning correct ratings, required ratings, or easy ratings. The former are ideal, but managers will often avoid assigning appropriate ratings because there can be significant follow-up involved with employees who receive poor evaluations. Easy ratings create the least additional work for the manager, but tend to reward low achievers while disincenting stronger performers. The middle option - rating employees on the curve prescribed by senior management - is meant to force managers to assign appropriate ratings, but in practice does no such thing, for the reasons I discussed last time.

A significant drawback of the current system, really, is that we're relying on a single individual to assign these ratings. The employee's direct supervisor is responsible for the rating, and for the resulting coaching, documentation, or disciplinary action. Often, but not always, a reviewer will seek the opinions of others in the employee's sphere of activity - internal customers, teammates, and so forth - but even when a manager is diligent enough to do so, the weight and impact of that feedback can vary widely. Generally, while the manager may take such input into account, the math that combines those views with the manager's own observations to yield the final rating is mysterious at best.

But performance reviews are too important to be left to one person. And so, I give you that old chestnut, the 360-degree review. You know what this is, right? Everybody gets a vote. Of course, there's a problem here - if implemented broadly, review time will produce a transitive closure of everybody reviewing everybody else. All work will cease, the paperwork will exceed any building's capacity to house it, and that will be that.

Enter technology. It should be relatively easy to design a tool which:

Helps identify 3-5 candidates who can provide input for a review.
Limits the number of reviews any single individual can be assigned
Makes it easy for reviewers to supply a rating and a 3-4 sentence summary of why they would assign that rating.

If each employee were asked to review a maximum of 3-5 other employees, providing a few sentences about each one, the process would not have to be endless, nor would it have to result in enormous amounts of paperwork.

Once 360-degree feedback is obtained, the final employee rating would depend mathematically, in part, on those "outside" ratings. That makes it difficult for a manager to unilaterally enhance or diminish an employee's achievements. Managers could be allowed to disqualify one or more outside ratings, but would be required to justify each disqualification ("Ted seems to blame Alice for that project's failure, but in truth, it was unavoidable.") Furthermore, if the rating assigned by the manager were significantly different than those assigned by outside reviewers, the manager would also have to justify that.

If the manager is incented to provide accurate ratings, by presenting his or her viewpoint against the backdrop of the feedback of others, it will become a lot less attractive to merely assign everybody a "3" (or a "C" or whatever your mid-tier rating is) and move on. Another benefit is that employees will have the karmic experience of benefiting, or otherwise, from their ability to work with the others around them.

Stay tuned for an additional idea or two on improving performance evaluations.

Fixing Performance Evaluations Part I: The Problem

2008-12-05T13:20:00.000-08:00

One of the most important jobs you have as a manager is to evaluate your employees' performance. Ideally, you are providing regular feedback, and so the evaluation process is merely an affirmation of a status you both already recognize.

But, to be sure, it's not easy to deliver an evaluation to an employee whose performance is less than optimal. And, generally, as that employee's compensation – or even continued employment – rests in part on your assessment of his or her performance, you may be even more reluctant to provide negative feedback. And, of course, to give a negative review, there's all that paperwork that's likely to result: improvement plans, additional meetings to review progress, and so forth. Call this the problem of manager self-preservation: no manager really wants to make his or her own life more miserable by assigning negative ratings.

Companies recognize this dilemma, and most enterprises respond as they usually do: by overcompensating and making the problem worse. More than one company I know of publishes “guidelines” for their managers regarding the distribution of ratings to be assigned to employees. HR and senior leadership will deny it all day long, but their message is pretty plain: grade on the curve.

The curve itself is a familiar one. Companies seem to anticipate through their published guidelines that their own employees perform only slightly better than the normal distribution. Thus, one guideline suggests that on a scale of 1-5 (5 being best), 15% of employees should receive a 1 or a 2, 35% of employees a 4 or a 5, and the remainder (50%) a 3.

Think about that. On a team of 30 people, four or five would receive an unsatisfactory rating, each and every time reviews are performed!

Such guidelines are laughably flawed. They provide vastly insufficient support for the idea that we:

Hire for excellence
Coach poor performers (who actually improve as a result)
Rid ourselves of perennial poor performers (who didn't improve).

If I do award 15% of my employees an unsatisfactory rating this year, I certainly hope I've done enough work as a leader by the following year that that number will have been substantially reduced. But corporate policy has no room for such a concept.

Well, then: perhaps the answer is to keep raising the bar. Challenge my employees to do more and more each year, until some inevitably fall by the wayside.

While there may be reasons for a version of that approach on a sales team, in most other fields of endeavor, it just doesn't make sense. If I lead a team of programmers, and they are divining clever, efficient solutions to problems and producing solid code, then what exactly would be my plan for “raising the bar” the following year? Less bugs? More lines of code? I don't think so – diminishing returns will rapidly set in. At some point, they will be working at the highest level one can reasonably expect. Am I still to assign 15% of them a failing grade?

So, put simply, the problem is this: how do I ensure that ratings are assigned fairly, while avoiding the problem of manager self-preservation?

Tune in for Part II. :)

What I Learned About Unemployment From Somebody I Once Laid Off

2008-12-04T20:54:00.000-08:00

One cannot predict the future for certain, but I can, with little fear of contradiction, forecast that I will no longer be working at my current employer beyond May 31, 2008.

The way it has all come down is thus: many in the back office will lose their jobs as of January 31. Some are being “asked” to work right up until the end, while others are permitted to work from home, or simply stop working altogether. Those departing on 1/31 will leave with a token severance and a don't-let-the-door-hit-you sincere thank-you from their employer.

The branch and sales staff, by and large, will continue as employees.

The remaining group are being asked to stay through a transition period. Fortunately, this group includes me and the substantial majority of my team. In consideration for signing a one-sided, waive-everything-and-ask-no-questions release form, we will be eligible for a bit of an incentive package if we can stick it out until the end.

Termination dates vary for the members of this group; as I mentioned, mine is 5/31.

If an employee were to ask me what they should do with a planned Memorial Day job transition, I'd tell them, finances permitting, to take the summer off and spend it with their kids.

And that is what I hope to do. There are still six months between now and my pending independence, but if things all go as planned, I will take a month or two to spend with my kids. A real summer! Who can even remember what such a thing is like!? With my kids getting older, I know it's unlikely I'll get another opportunity like this.

A while back, when I was running my own small business, I was forced to lay off a good employee and good friend. Jim decided to take advantage of the unplanned career recess to follow a dream, and hike the Appalachian Trail from bottom to top. And that's what he did.

Jim died recently of an illness that robbed him of his ability to stand, much less hike, for years before his death. Damn, he was happy he took that opportunity when he had it. If I really manage to take a chunk of the summer off, it will be in part due to the example that Jim set for me.

More on Lifelong Innovation

2008-11-17T20:33:00.000-08:00

A quick followup to my earlier post: a short piece by Clive Thompson in the October issue of WIRED (16.10) also touches on the question of innovation among the, er, mature set.

Thompson raises an important point. I'm one of those people who feel that Google, for example, has measurably improved my quality of life. Perhaps one day LinkedIn will, too. And without the mysterious, magical Shazam, I would never have learned that "Feelin' Alright" was a Traffic tune before Joe Cocker recorded the version that unfailingly has me turning the volume to 11.

But what will really have an impact on my existence? What will change the world (and not just the printed map industry) in our lifetime? It will be the creation of cheap, renewable, pollution-free energy. Or a cure for diabetes, or autism. And in those categories, it's the older, more experienced entrepreneurs who will be more likely to be able to raise funds, lobby, and generally put together the expensive, resource-intensive, government-subsidized, multi-discipline efforts required to get the job done.

PS I was going to offer extra credit for spotting the bug in the snippet of BASIC code at the top of the article, but some other aging geek already commented on it. See if you can figure it out without sneaking a peek at the reader feedback on the bottom.

Free-Fall Leadership

2008-10-26T16:17:00.001-07:00

I'm hoping to post here once a week or so, but once in a while, a small thing gets in the way. This month the small thing was the ongoing meltdown of the American economy, the looming end of our entitled lifestyle, and the collapse and resurrection of the company that (for the time being, at least) employs me.

To lay it out plainly: most of my back-office colleagues will not keep their jobs. I will not keep my job. If we're lucky, our new employer will keep us on for a bit as they transition customers, systems, and processes, but we won't know if that will be the case for a few weeks. Thus, in the near to very-near future, hundreds of my colleagues and I will be thrust into the job market at its lowest point in five years.

All in all, it's a bit distracting. On the other hand, it's given me an opportunity to view first hand how senior and mid-tier leaders, as well as rank-and-file employees, deal with crisis, uncertainty, and fear (and to see how I deal with it as well, but I'll save that for some future introspective blog).

And so it goes, that each day I work with colleagues, employees, and bosses who are uncertain about their own futures. Common themes emerge, and not to put too fine a point on it, they tend to mirror the famous stages of grief. (Best example of "denial": in spite of almost certain imminent unemployment, I went out and bought myself an iPhone yesterday. Also known as "shop therapy".)

One thing about leadership — at every level — is this: most things at work, as in life, are not under your control. You take measures to prepare for predictable risk, and when things go wrong, you take steps to fix the problem. In this situation, however, the enabling power of response and correction is unavailable. The game is over, and what has been decided, has been decided. In such a case, is there still an opportunity for leadership to make a difference?

Absolutely, right up through the bitter end. Call it "free fall leadership":

Listen. An oldie but a goodie. I am discovering, though, that it's a lot harder to listen with all the noise going on between my ears: What will I do next? How long will it take to find work in this economy? What if I have to relocate? So listening, even for somebody with good listening habits, gets a lot tougher in times like this.
Demand excellence. In this situation, it can be very hard for an employee to see why his or her contribution matters. And let's be honest: in some case, it doesn't matter as much as it used to. If I'm working on a product that I am pretty sure is headed for the dustbin as soon as the new bosses get around to noticing it, I'm feeling pretty demoralized. Remind your people (and yourself) that work quality is a matter of integrity. The new guys are still coming through with paychecks, and you owe them your best work. What they decide to do tomorrow is outside your control, but your personal integrity is not. In my time, I've written a lot of code and overseen any number of projects that never saw the light of day: I'm no less proud of my accomplishments, regardless of what others chose to do with them.
Have fun. Uncertainty is uncomfortable for most people, and extended uncertainty, as my team is now experiencing, is downright painful. We have to work to get beyond that. We're having more group meetings featuring food, and we're proceeding with as much training and morale lifting activities as our your-guess-is-as-good-as-mine budgets will permit. And we don't discourage gallows humor: people need the release of laughter, and there's no use pretending things aren't as they are.
Be honest, but stick to the facts. My team ask me often what I think will happen. I don't know. I'm pretty sure my boss doesn't know, and I'm pretty sure his boss doesn't know. On the other hand, I've been around for a while, and it's awfully tempting to share what I think is likely to happen. But there's just no upside to speculating: if I'm too optimistic, the outcome will be that much more crushing for the team; if I'm too pessimistic, I will kill morale and demolish productivity, creating a self-fulfilling prophecy. "I don't know" is a perfectly good answer, as is, "well, in the worst case, X, and in the best case, Y, and of course it could be something in between."

Leadership in free fall is challenging because we all know how the story is going to end. The question is: can we have fun, maintain our dignity and integrity, and focus on what we can control in the mean time? If so, whatever the outcome, the trip won't have been so bad.

Empowerment at Every Level

2008-09-07T16:18:00.000-07:00

A very accomplished and smart friend of mine tells this story: at the age of 19, he was working at a leading national department store as a stock assistant. Although he was hired into the position with little training, he worked hard to figure out the best way to stock hundreds of items in such a way that they would be organized and easily retrievable. Unfortunately, regardless of how hard he worked, his boss was never satisfied. The boss criticized him frequently for taking too long to do his job – never mind that there were no established guidelines for how the job should be done or how long it should take. In his performance review, the boss noted that my friend had been recommended by another department, and that therefore the boss would henceforth view that department's recommendations with skepticism.

Without even hearing the rest of the story, I knew where it had to be going. My friend is extremely intelligent and self-aware, and even in his 30s has accomplished things that others spend their whole lives trying to achieve.

Eventually, my friend got a new boss. The new boss encouraged him and gave him room to figure out the best way to handle his responsibilities. And what happened? My friend developed a system that the chain ended up deploying in several Orange County stores, realizing a savings of about a million dollars.

Now, dear reader, this may seem like an obvious lesson, particularly if you currently manage, say, a team of programmers. But remember – he was just a stock assistant, and a teenager at that. As yourself how much latitude you'd offer such an employee.

Give your people an opportunity to innovate – give them time to learn and room to fail – and the most amazing things will happen.

Lifelong Innovation

2008-08-24T13:38:00.000-07:00

It can't be denied: I'm not as young as I used to be. But, in spite of the shoulder ache that keeps me up at night, and the various other reminders of the onward march of time, I do not believe that my best years are behind me – quite the opposite, in fact.

That's why it was refreshing to read this piece in the Wall Street Journal, written by George Anders. Leading companies are looking for ways to support creativity in employees well beyond the traditional age for epiphanetic experience. Indeed, according to the article, over the course of the last 75 years or so, the average age for breakthrough discoveries has risen about 10%, to 40.

Is it reasonable to expect our more experienced staff to contribute at the same level as energetic, recently matriculated newcomers? Much has been made of the simple fact that employees produce according to what is expected of them. (If you have a citation for me on this point, please send it along - I couldn't come up with one quickly enough to make it into this entry.) If we expect creativity and innovation from our employees – all of them – a few interesting things will happen:

We will set goals according to that expectation.
We will reinforce creative behavior among all our employees, young and not-so-young.
We will see breakthrough thinking coming from unexpected quarters.

Accepting less from more mature employees amounts to simple disrespect. I am pretty sure that my bosses expect me to supply, directly or through my team, a more-or-less ongoing series of innovations and creative solutions, in spite of my graying (remaining) hair. I wouldn't insult any of my own staff by expecting less from any of them. As the article suggests, finding ways to support that level of productivity among employees of all ages is an important characteristic of people centered leadership.

Empowerment and Innovation

2008-08-20T20:09:00.000-07:00

Today I happened to be speaking to one of my team about empowerment and innovation. Probably I was influenced by an article I had picked up in the doctor's office earlier in the day*. The piece, written by management power-duo Jack and Suzy Welch, addresses the culture at Google (and, I hope, many other places), which “freely permits employees to work off-site and encourages them to use one day a week to explore any kind of ‘what-if’ project that interests them.”

Jack Welch, of course, is famous for his tenure at the head of GE, the nice folks who bring you so many Sunday morning talk shows. I've always thought of GE as a stereotypical, big, conservative, stodgy American corporation. But, when I focus on their core business, I realize that they are essentially a giant technology innovation engine (literally – if you don't believe me, check out their cool tutorial on jet engines.) Even their motto – “Imagination at Work” – sounds like it belongs to Disney... or perhaps Google. So it probably shouldn't have surprised me that Jack and Suzy had some interesting insights into empowerment and innovation.

“Empowerment,” they note, “is less likely to happen in bigger companies, which is the opposite of how it should be... Big companies do tend to be risk-averse, keeping decisions near the top, while small ones, and in particular startups—short on resources, formality, and time—tend to unleash every brain.” (Emphasis mine.) They go on to point out that big companies can afford the risk that empowerment represents, while smaller companies can often go under due to a single erroneous decision.

It's fairly obvious that real empowerment – and, frankly, real innovation – is more common in smaller companies. What is new is the recognition by a Fortune 10 CEO that this isn't the way it should be. The challenge for Google is to keep alive the spirit of innovation that got it to where it is now, a challenge shared by any big company that wants to avoid getting pantsed by a couple of PhDs in a garage in Palo Alto, Pasadena, or Cambridge.

Have I seen any evidence that big companies are getting this message? Outside of a few technology firms, no. Instead, thanks in part to Sarbanes-Oxley, individual empowerment is at a nadir. There is little room for creativity when all business problems are supposed to be addressed in the same, regimented manner, using the same, tired techniques, and requiring the same, groupthink approach. Requirements. Development. Unit testing. Integration testing. User acceptance testing. Migration. Celebratory lunch. Repeat.

Small, private firms are exempt from SOX, and have not yet developed the culture of risk avoidance shared by so many large public companies. Employees are less likely to have HR-prescribed, set-in-stone job descriptions, and auditors are unlikely to drop by to ask for copies of approved change controls. As a result, individuals have much more room to innovate; indeed, they are generally strongly incented to do so by stock options whose value they can thereby impact directly.

Until big companies can find a way to create space within their latticework of regulations, policies, and procedures for employees to innovate, they will continue to earn their reputation as places where cool ideas go to die.

*) Quick question: if you have an 8am appointment, and the office opens at 8am, shouldn't you actually see the doctor well before 8:30? Because that's when I saw him. Sheesh.

More Staff, Fewer Managers?

2008-08-17T17:33:00.000-07:00

When I saw the title of the Wall Street Journal article, "Overseeing More Employees With Fewer Managers," I was sure I'd hate it. To me, more employees and fewer managers means less time spent with each employee — less time to:

Mentor
Provide and receive feedback
Identify strengths and find a way to leverage them
Work with a struggling employee to return him to productivity and success

To my mind, those are key reference points in any decision concerning team size. But is there an upside to this philosophy? Are managers able to increase their "span of control" (more on that phrase in a future posting) and still end up with perfectly acceptable, people-centered results?

The article describes a Pepsi subsidiary in which "workers have been briefed on company goals and processes so that they do more themselves to keep production running smoothly." The piece goes on to explain that "[n]ew pay systems reward productivity, quality, service and teamwork while penalizing underperformance."

So, do empowered employees require less personal attention? Empowerment is certainly compatible with — even a requirement of — people-centered leadership. But does empowerment dilute the role of the leader, as the snack-food company would have us believe?

Maybe, but I'm skeptical. Deprived of individual guidance, we will expect employees to use their knowledge of "company goals and processes" to grow, thrive, and make good decisions. Well, I'm in favor of keeping your employees up to speed on those things; I'm just not sure that, in and of itself, acquainting your employees with the corporate mission statement constitutes leadership.

Of course, if the staff aren't as productive as we'd like, there's still no need to resort to manager intervention: the "pay systems" will make things right. That will sure save a lot of time on mentoring, intervention, and personal support.

In technology, we look to our teams to offer creative, practical, and innovative solutions to business problems. Leadership is critical to making that dynamic work. The WSJ article notes that Sun Microsystems - certainly a major technology innovator, notwithstanding its current precarious financial position - prefers to keep teams on the small side.

As long as we, as leaders, have something to offer our employees — as long as we can help them overcome challenges, meet their goals, and realize success in their professional lives — we owe it to them, and to the companies that employ us, to ensure that we have sufficient capacity to do so. Ultimately, employee empowerment, however laudable a goal that may be, is no substitute for the individual support and attention of an effective and dedicated leader.