Thursday, March 29, 2012

The pressure's on for the CEO to Tweet

It's a generational thing. Seems to me, the older the business person the more they don't understand, or don't get Twitter and Social Media. The younger the more they do.

It's a generalization I know, but I see it play out with customers (and peers on public boards) all the time, and whether it's Twitter, or LinkedIn, or Facebook the more senior (in age) an executive is, the less likely they are to be engaged in social media. Every decade makes a significant difference, unless the exec is unusually communicative (who, like me, likes to connect in many different ways) or they are in the business of branding or social media. Enterprise execs... not so much.

But the market has already moved to embrace Twitter, the consumer market that is and increasingly the enterprise market. And CEOs ignore that at their peril. A new study by BRANDfog makes this very apparent. Top executives tend to be slow to embrace social media themselves, especially if they are in B2B businesses, and yet, according to eMarketer, BRANDfog finds that "consumers believe C-suite engagement in social media can benefit how they view a brand and its executive leadership. The majority of survey respondents, 78%, said CEO participation in social media leads to better communication, while 71% said it leads to improved brand image and 64% said it provides more transparency".

If executives don't swim in social media to some extent (albeit in a time efficient way) and educate themselves, they will lose out in their customer relationships. And having someone ghost write for you doesn't work in the long run. Your readers can tell the difference. (btw same thing is true for sales execs on Chatter: don't ghost it, do it yourself).

You can't hide on mahogany row any more. Your constituents - your customers and employees  - want to know who you are. Transparency is in fashion and it's not going out of style any time soon.

Wednesday, March 28, 2012

The new Evita on Broadway is a worthy successor

Evita is bring revived on Broadway next month - now in previews and opening April 5 - and it's marvelous.

The new production, first shown in London in 2006, wholeheartedly embraces the atmosphere of the time. The tempo of the music and instrumentation has been updated to a quicker, more authentic Latin sound than the original, with slow, and fast tango dancing woven throughout the performance. It sounds and feels higher energy than the original.
Everything in the staging and costumes is brown and grey and pale orange, dingy and post-war, making the two times Eva is dressed in white that much more impactful - and representing the power she was wielding. Dominant government buildings, jackbooted military, simple floor plan. The design successfully threw me into the period completely.

I was expecting Elena Roger to be good in the role of Eva Peron and she was. It's a very hard role to sing (huge range, often in the same musical phrase) and she packed a punch most of the time. I was not, however, expecting Ricky Martin to be good, and he was terrific. I was wrong before; he's not just a pretty face who can sing pop. He sang the part of Che with power and perfect pitch, humor and emotion. His English accent was a little off-putting at times but overall he was really very good. What a pleasant surprise.

Being an Andrew Lloyd-Webber/Tim Rice fan since I was 12 years old, I bought the original concept album for Evita in 1976 and had all the music and words memorized before the first show opened. The third performance ever, there I was seated in the front row in the middle transported by Elaine Page, David Essex and an experience which is still one of the most profound of my musical theatre history - and one I repeated several times over the following months.

But my history with the opera colors my experience. Without a big star like Ricky Martin I wonder if Evita will appeal to today's Broadway tourists? It doesn't have the flash of Superman, it doesn't have the humor and familiarity of Jersey Boys. When it was originally staged in 1978 Juan Peron had only been dead 4 years and Argentina's tumultuous politics were fresh in Londoner's minds. Today, 34 years later, do many people know the dramatic impact Eva Peron had on Latin America? Can they appreciate the complexity of Lloyd-Webber music which is much less accessible that Phantom of the Opera?

I hope so! And if you're in New York, and open to a thinking person's musical, go! This show is rock opera at it's finest.

Tuesday, March 20, 2012

Getting and Managing the Resources you need as a CEO

As a CEO, you are ultimately responsible to make sure your company is resourced the way you need it to be to execute your strategy.

I taught a class on this yesterday: Getting Resources from the Entrepreneurs Perspective to a room full of budding CEOs at the Haas School of Business at UC Berkeley. I knew they were future entrepreneurs when I asked for a show of hands on who wants to start a company one day and more than half hands in the room shot up! Great to see.

I break the problem of Resources down into four simple categories - makes the model easy to remember.

1. Cash

2. People

3. Advice

4. You

Cash is obvious. You as the CEO have no more important task, at any point in time, than making sure your company has enough money. You cannot lead a group of people to wild success if you cannot make payroll, and you can only survive on stock options for so long. You own the cash position, you own raising and managing the cash, you need to have a deep understanding of cash flow - and alongside of some of the notes from a class I taught a year earlier on cash management - here - I encouraged the group to get very good at using excel and building their own P&L.

People are your most precious resource. And talent follows the 80/20 rule. 80% of the value is created by 20% of the people. This does not mean you do not need the other 80%, but it does mean that as the CEO you had better know who that 20% is and make sure they are happy, challenged and well compensated in equity so they stick with you and your vision.

And the culture your create lies at the heart of your ability to recruit and retain the best. That's about you establishing values and walking the talk. And about creating a culture of Trust - because I believe trust is just more efficient.

Advice is about surrounding yourself with people who are smart and experienced, tell you what you need to hear (sometimes easy, sometimes hard to hear) and who ultimately share your vision and have your back. ie. a great board. Building a great board means finding a good VC - my Cliff notes to what makes a good VC here - and managing your board meetings so you can get their advice. Make sure you provide your board with enough information, and with the truth, so they can truly advise you.

And finally You. You are the most precious resource at the company because you are leading (we hope) and you are driving all aspects of the business to come together at once.  This does not mean you are more important - but it does mean you need to be fully cognizant of the responsibility you carry.

The CEO needs to be great at four things: Cash, Strategy, Customers and Culture. These drive your business forward - and build and protect your resources. At the end of the day you are IT. It's a cliche but the Buck really does stop with You. So taking care of you - make sure you are healthy and have the energy to lead, make sure you have advisors who hold a mirror up to your performance so you can get better and better, and care for the other side of you - your friends and family. All combine into who you are when you show up at the office every morning.

As I said to one of the students who asked me: "Apart from the 80/20 rule, what is the second rule you live by as a CEO?" - my answer was about the You. As CEO you are on 100% of the time, no downtime, no moments of doubt and that takes enormous reserves of energy. You are the source of the Resources. So make sure you can be present 100% of the time because all eyes are on you.

Monday, March 19, 2012

Women do it Better than Men -- Zenger Folkman

The evidence would say so, but perception would differ.

I read the new survey by Zenger Folkman "Women do it Better than Men", as featured in the Harvard Business Review last week, covering the differences in leadership between men and women this morning with a heavy heart...

The good news is that in 12 of the 16 categories women were ranked higher than men by their peers, their bosses and by their direct reports. And not only on the traditional softer areas like nurturing.

"Specifically, at all levels, women are rated higher in fully 12 of the 16 competencies that go into outstanding leadership. And two of the traits where women outscored men to the highest degree — taking initiative and driving for results — have long been thought of as particularly male strengths. As it happened, men outscored women significantly on only one management competence in this survey — the ability to develop a strategic perspective."
"Why are women viewed as less strategic? This is an easier question to answer. Top leaders always score significantly higher in this competency; since more top leaders are men, men still score higher here in the aggregate. But when we measure only men and women in top management on strategic perspective, their relative scores are the same."

 We know women are at least as good leaders as men, and yet 78% of top management is male and 67% of the next level down are men. For many CEO searches there are never even any women candidates on the list so having a woman at the top is not an option. It's just still very hard for women competing to get to the top of companies. Women quoted in the article speak to the need to work harder to prove themselves and the constant pressure to never make a mistake.

 I gave a talk at the engineering school at San Jose State University last week and less than 10% of the students in the room were women. Of course I took the opportunity to talk about FirstRain and our fantastic technology - and asked them to apply for a job with us when they graduate if they are great software engineers. But I also spoke about the need to build teams with women in them, and how that takes deliberate action to build a culture that is flexible and supports diversity. And as I looked out across the room I wondered if my words have any impact?

I am teaching at Berkeley Haas School of Business late this afternoon - talking about How to plan Resources for your new company. There will be 200-300 students and since it's a business school maybe 30% will be women, and this time I don't plan to talk about gender diversity, and yet diversity itself is a way to get maximum value out of your resources so maybe I should.

I read the study with a heavy heart this morning because, despite all evidence to the contrary, the perception is women are not as good leaders and when they get to the top they are bitches. It's portrayed in the media, it's rife in the comments in the article, in movies women are not portrayed as leaders and in corporate America I sit in conversation after conversation where "he" is the default pronoun. I get tired of saying "he or she" against the headwind.

But maybe it's just Monday morning and I don't have my girl-riveted metal armor on yet for the week. Time to suit up!

Wednesday, March 14, 2012

Fighting from women's rights in Pakistan

History and family reached out their long fingers to grip and squeeze my heart in the early hours this morning.

The tribal areas of Pakistan is one of the hardest areas in the world to be a woman. In two of the poorest and most conservative areas of the world - Pakistan's Khyber-Pakhtunhwa province (formerly know as the North West Frontier province) and the Federally Administered Tribal Areas - women are traditionally powerless, often abused, only 3% can read and they have one of the highest chances in the world of dying in childbirth.

But out in this war-torn part of the world women are helping women, trying to climb out of the abyss and improve the quality of life for the women and children in the area.

Khwendo Kor is a small grass-roots organization founded in 1993 by Maryam Bibi, who grew up in the Tribal areas, and four of her friends. This group of brave women and their volunteers raise money from donors for projects focused on improving education, health, training and micro-credit as well as being advocates for democracy. And it is a tough task they have taken on.

I've known about Khwendo Kor before... but this morning, reading their newsletter, I felt the threads of time pulling me.

Opening this month's FROK newsletter (the UK friends of KK) I saw a picture of my grandmother!

After the rush of emotion at seeing her unexpectedly, I was inspired that her work in the Tribal regions is, even now 60 years later, still recognized. As the wife of the region's Governor before Partition, my grandmother could chose to live the life of bridge and gin and tonics, or get involved and try to improve the lot of the women around her. She did both.

My grandmother founded the All Pakistan Women Association - for the "Educational, Social, Cultural and Economic Advancement" of the regions women. She was a smart, Cambridge educated woman (although she could not be granted her degree because she was not a man), caught up in the Raj which was a man's world and she was clearly determined to make a difference.

And she did... not only in the moment but also down through time. When Maryam Bibi finally decided to defy her family her first job was with the All Pakistan Women Association. The FROK newsletter article asks "Can it be just coincidence that these aims [of AWPA] correspond so closely to KK's? Or did the ideals of the APWA continue to echo for Maryam Bibi, as she continued into the 21st century the work with women which Lady Dundas (my grandmother) started in the mid-20th?"

I wonder how my grandmother felt, having worked hard to change the lives of the local women around her, to be leaving to return to England and back to the stifling English society of the early 1950s. When I was a little girl she talked endlessly of India (the region had been part of India back then). I think she missed it terribly. And as a child I assumed she missed being the High Commissioner's wife and the status that came with that. But talking to my mother and reading the papers about their time in what is now Pakistan I wonder. Was that the place she was actually the most free?

The words of the final farewell address by the APWA to my grandmother are inscribed on a silver scroll case, cherished by my mother, and could have been written also about Maryam Bibi, KK's founder:

“We have always found you anxious to do something for the betterment of the lot of the women of this Province.....It was the result of these efforts that today we find social relations amongst the women of Peshawar which did not exist earlier...

“You always made it a point to go round the refugees inhabited area to see for yourself the condition of the refugees and always insisted on their being provided with the necessities of life. But for this personal interest and supervision the lot of the refugees would not have been what it is."

Tuesday, March 6, 2012

How to understand your board's baffling behavior

Boards don't behave like management teams and their sometimes seemingly baffling behavior can be an irritant to management. But if you can get inside the head and motivation of a board member you can, with a little distortion of the nth dimension, understand their behavior.

Whether it's a public company board, a start up board or a non-profit board there are perspectives a board member has that give them a very different view than the senior management team:

1. They don't live it every day. Some board members do a better job than others of learning and remembering the critical aspects of your business, but if they only attend meetings once a quarter (or even once a month in the start up case) your business will have moved by leaps and bounds between each meeting and you have to take the time to back up and fill in the gaps for them.

2. Reasonable people given the same information will often make the same decision. But given that your board does not have all the same information as you, they will not instantly come to the same conclusion as you. They are not being difficult, they just don't have the same info. And, short of a Vulcan mind meld, you are always going to know more details than them, so be patient.

3. Good governance on a public board requires a board to have diverse opinions and deliberate - it's all part of good process. That then means they are not going to agree with you, in fact at least one of them should be disagreeing with you and challenging you at times or they are not seriously deliberating. Some board members disagree "just because" as a way to shake up the conversation and see what falls out. It's all part of the process, not about you.

4. Really good board members have a laser like ability to figure out what you are most defensive about and then pick at the wound. It's a way of testing and needling the CEO to understand what the real dynamics of a difficult situation are. It's meant to be helpful.

5. Being defensive is like a red rag to a bull. When a CEO has a defensive "don't question me" reaction to a challenge it's infuriating to the board member because a) it's the board member's job to question and b) it signals that the CEO is not on firm ground with his/her position, knows it and attacks back to try to stop the line of inquiry. As a CEO it's bad, bad behavior. I cringe inside every time I do it!

6. The board's most solemn duty is the selection of the CEO. Boards are always, always thinking "Is the person in the job the best person for the job right now?" Their duty is to the shareholders, even in a private company, and the selection of the leader is the greatest impact they have on the return to the shareholders. As CEO you just have to get comfortable with it, and help the board question you, and engage you in a continuous succession planning analysis. The day will come when you may not be the best person - for any one of a thousand reasons including your own - so get comfortable with the discussion.

7. Different board members have different roles to play. Some are financial - they may well ask remedial questions as they seek to understand your products, but if they are a former CFO and running your audit committee - God bless them! Some are technical and may question your go-to-market strategy but be a great resource for you when it comes to evaluating a technology. But just because they have a deeper set of skills in one area and less in others it does not mean they always remember that.

8. Your board are not your friends. Remember pt #6. They are your advisers, your ultimate employer and the representatives of your shareholders. While they may be fun to have dinner and play golf with outside the meeting they are not your friend inside the meeting and you can get smacked in the meeting if you forget that. Want to complain to someone safe? The only safe person in the room is your outside counsel (your lawyer) once you tell him the conversation is confidential.

9. Your board may have their own fears and issues about being on your board which can show up as baffling behaviors in your meeting. One board member (of a currently high profile and controversial public board) told me about the reputational risk of being on a board that should have been interesting and fun but has now turned into a public pillorying. The problem is by the time the going is rough it's hard for the board member to resign if the company actually needs his/her help. You can't know what challenges they are facing so don't assume their behavior is always about you.

10. Your board's job is not to motivate your team. In fact they can do quite the opposite when they get on a tear on an issue. Your job is to be the buffer between your board and your execs and if one of your execs can't handle the challenging, difficult decisions, don't have them in the room. Or tell them to grow up and grow a thick skin.

So if they are baffling you, or annoying you, or confusing your team take a deep breath and remember they are probably good people trying to help the company. And never forget the old proverb "With the rich and mighty, always a little patience".

For help on your meeting - refer to my How to Run a Board Meeting post.

I sit on the boards of FirstRain, JDSU, Rambus, the Anita Borg Institute and Planned Parenthood Mar Monte. No one board is special - these behaviors show up across the spectrum.

Friday, March 2, 2012

More customer love

I received an email yesterday under the subject line "I love FirstRain".

Clearly I was intrigued and opened it up straight away, and the message warmed the cockles of my heart. This user is a PR Director in a global B2B semiconductor company with 20+ years of experience and said:

"I wanted to let you know I love FirstRain. [...] I have tried others – Meltwater, Cision, Echo, Biz360 – and FirstRain is the best monitor out there – so easy to use, and it pulls the right companies and content without a lot of fuss up front. Being in a complex industry like semiconductors, I need a monitoring tool that pulls only the content I want and not a lot of extra stuff that is irrelevant... Thanks for a great product and very helpful reps"

Thank YOU!

Thursday, March 1, 2012

Who said you can kiss me?

Yesterday it happened again, and it is as annoying as ever.

There is a certain type of male business acquaintance who thinks it's OK to lean in and give me a kiss even though he hardly knows me. I put out my hand for a firm, manly handshake, he takes my hand and pulls me in to kiss me on the cheek.

Passive aggressive? Patronizing? Is it because he can't pee on my leg to establish hierarchy?

Yesterday's case was a man I had only met twice, and each time in an office setting. His office. I don't know him, I have not been drinking with him, I don't talk about my family with him. Any of these would allow me to forgive him for the risk of giving me an uninvited kiss.

If our behaviors were reversed - if I pulled him in for a kiss - I'd be in all kinds of trouble, so why is it acceptable for an older man to do it to me? And don't get me wrong, it's not that I am standoffish. I am a hugger. Once you are my friend you'll get hugs every time I see you. Big, deep hugs. But seriously, you have to have some semblance of personal relationship with me first.

This type of aggressive behavior happens more often than you'd think - even when your title is CEO. But it is generational and unlikely to happen with a man under 50. But over 50, in the services industries like investment banking or legal, it happens because the individual is either trying to establish seniority or he's trying to create a relationship by acting as if the relationship already exists. When I was younger there were other less professional motivations of course.... but I suspect not so much any more!

But when it happens, being the professional English person I am, I smile politely and launch into the business discussion at hand, when inside I am distinctly annoyed.

The notable rise in senior preference in VC financings

There's a lot of good news coming out of Silicon Valley these days - and for a community that lives on growth the statistics about venture financings are a great leading indicator of how people feel about that very growth.

Wilson Sonsini keeps statistics about the financings they see (where they represent the company or the investors) and produces a quarterly report of the trends. For Q42011, for example, you can see the up financings are up, and down financings are down - always good to see and a clear sign of the ongoing recovery.

But while the raw statistics might look promising, these is a darker lining that shows that the entrepreneurs are not 100% back in the power seat -- there is a big jump in the percentage of senior preferences. This means the later investors, paying up for higher valuations, are able to insist that they get paid back first on a sale. So while companies are doing well in increasing their valuations, they do not have enough bargaining power to fully protect prior investors and their employees are now third on the list to get paid.

You can see the trade off between valuation, dilution, control and seniority playing out in these statistics.

"The most notable trend in Q4 2011 was the increase in the use of senior liquidation preferences as compared with pari passu liquidation preferences. Senior liquidation preferences were used in 58% of deals in Q4 2011, significantly higher than the 42% figure in Q3 and the 47% figures in both Q1 and Q2. Senior liquidation preferences were used in a full 100% of down rounds, up from 75% in Q3, and were even used in 42% of up rounds, an increase of 14 percentage points over the 28% figure for Q3. This trend most likely reflects increasing valuations, as later-stage investors request seniority in exchange for higher valuations"

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