Monday, July 23, 2012
With all the coverage of the get-rich-quick startups of Silicon Valley at the moment it's important to remember that most of the time building a company is a marathon, not a sprint.
Yes you need a good idea. Yes you need a strong, growing market. Yes you need smart people. But even with all of that, s**t happens, you get surprised, some things take longer than you expect, markets change and it can be a long, hard slog up the hill to build long term value. Especially in a time of global recession.
Eric Jackson wrote a terrific article in Forbes last week -- titled The Most Under-rated Key to Long-Term Career Success: Staying Power -- in which he admires people who just keep churning out great work. They have the will power to just keep going, keep reinventing themselves and live his first key "Never Give Up". U2, Henry Blodget, Magic Johnson. Vastly different but similarly committed - they determinedly persist.
When you are building a company you want to find a team of people who, like you, have willpower and simply won't give up. You know you are going to ask a lot of them. You know you are sometimes going to push them past their limits, and then ask for more, and forget to ask for forgiveness later. At times you are going to appear insane, a bitch and heartless. But you won't give up. Winning may be quick, it may be lucky, but most of the time it comes with determination, persistence and hard work. When Yahoo recovers under Marissa Mayer (as I certainly hope it does) it will be because a team of people in Yahoo decide not to give up, they decide to fight to climb back out with great products.
When I was running Simplex we discovered that our product wasn't a must-have until the customers were designing for 0.18u semiconductor technology - which came 18 months later than we had planned. We had to cut back, hold expenses down, keep developing leading edge customers and persist until 0.18u ramped up for the big customers. Then a couple of years later as we grew and needed cash we filed our S-1 to go public in Sept 2000 but it took another 7 months of a rotten, volatile equity market to finally get public in May 2001. It would have been easier to bail out and sell instead at either of these points, and I'd have been a nicer person, but we were stubborn and determined, and tough.
It's not easy to never give up, especially in the face of The Struggle (as eloquently described by Ben Horowitz), which most leaders experience at some time or another. In the end it just takes sheer willpower. I love Muhammad Ali's quote, which is as much about building companies as it is about boxing: "Champions aren't made in gyms. Champions are made from something they have deep inside them. A desire, a dream, a vision. They have to have stamina, they have to be a little faster, they have to have the skill and the will. But the will must be stronger than the skill." Something we don't talk about enough in the flashy, celebrity-CEO style of today's tech industry.
Wednesday, July 18, 2012
I must be a horrible target for a sales person. I don't listen to cold call voicemails, I delete 99% of the spam emails I receive and, if a sales person is lucky enough to get me live, they have about 10 seconds to catch my attention before I tune out.
But I am not unusual. My short attention span and company-selfish interests are typical of the busy exec. And this is something too many sales people don't take into account. They talk about their products and their needs, not my company's needs.
In one study:
- 82% of senior executives said they ”almost always” or ”frequently” experience sellers who are uninformed about the executive’s needs and the executive’s company
and there is simply no excuse for this any more!
In the recent report on Sales Intelligence the Aberdeen Group not surprisingly found that the types of intelligence that are most useful are the higher level ones -- company and competitor, not the basic contact data most sales teams get equipped with.
We see this need again and again. If you want to get through to an executive (like me) you need to understand my business. What drives my business, what I am trying to achieve, and what's impacting my customers decisions.
Having my social profile, while cute, can actually make a salesperson annoying. Just because you contact me on Twitter or send me an Inmail is not going to make me respond - in fact if it is a cheesy message without substance I am not going to pay any more attention just because your message is on social media. On the very rare occasions an email gets through my filter it's because it speaks to my business needs.
The solutions exist today to equip your sales team with smart customer and competitor intelligence right in their workflow. Within the CRM, tailored to the market the rep is in, configured to make it easy for the rep to review the customer intelligence and so be knowledgeable about how he/she can impact the customer's business - -and so talk about the customers need first!
So if you want to sell directly to executives, do your homework about their business first or you are wasting your time as well as theirs.
Tuesday, July 10, 2012
You've been in that meeting. HR's leading the annual performance review process and you're being asked to rank your team members with their peers. In larger companies you're probably being asked to force your team into a bell curve of the top 20%, middle 60% and bottom 20%, or your HR person is talking about "the lifeboat test" (what order would you throw your employees out of the boat), or if you work for Intel maybe you're being asked to do a literal forced ranking.
It's a tried and tested HR process. Rank your employees, make sure they fit a bell curve, assign bonuses and merit increases accordingly, fit the merit increase budget that's been approved at the top. And you'll be told you're a bad manager if you think half your team is truly excellent.
Makes sense right? People fit on a bell curve of performance don't they?
The answer is no, especially not in technology. And as the recent Vanity Fair article about Microsoft points out, this approach to employees is an innovation killer. Kurt Eichenwald's excellent article about the Microsoft "lost decade" points the finger at many of the reasons Microsoft lost it's innovation mojo, and one is the adherence to stack ranking. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”
So this case is extreme, clearly. But I've seen it. I've been in the room, cringing.
Ranking has a role to play and can be useful, but as a CEO, or team leader, you have to be thoughtful about why you are doing it.
Where the process can be very helpful is to make sure you identify your top performers. Who are the people that really make a difference again and again? If you get your managers in a room and debate that question it's great to see leaders advocating for their people: why they are great, why they are one of our best, what their impact is on the company and it's growth. This discussion should lead to a list of people you, as the leader, want to pay close attention to. Are they well taken care of? do they have plenty of stock options? are they paid well relative to the market? do you spend enough time with them? is their manager working with them on their career path and training? would they benefit from a mentor? All good questions that you should know the answers to for your top performers. They are your innovation engine.
It's also good to force the discussion of the bottom performers. Not to hold a witch hunt, but to make sure your managers are not being lazy and keeping someone in the organization who should not be there. If an employee is not performing everyone around them knows it, it's probably because they are in the wrong job, and it's weighing down everyone around them. Forcing the conversation of who the bottom 10% are can illuminate who should be moved on, or who maybe needs some extra help, or moved into a different job within your company.
Forcing a stack rank through the whole population leads to politics without having any business benefit. HR loves it because it's a clean process that helps them manage the budget, but as deeply technical companies (like Rambus where I chair the compensation committee of the board) know: if you have a world class technical team a great deal more than 20% of them are excellent.
When your goal is to innovate you want to build a team where more than half of them are truly spectacular in their field, and where you demand excellence from everyone. In innovative R&D teams you need a zero tolerance policy for low quality work - and yet at the same time you need to tolerate some failure. Innovation takes risk, risk means some failure. When you are developing new products the concept of stack ranking your team into a mediocre group in the middle is the kiss of death! You simply cannot afford mediocre.
The one team where a stack rank can be useful is sales. Sales is the ultimate measurable job - everyone sees the score card every month. I know a CEO who ran a large CAD company in the 90s and he would fire the bottom 10% of his sales team each quarter on principle. The company was wildly successful, but it had a brutal sales culture. But when you live by the numbers you die by the numbers and so firing the bottom 10% each quarter created the focus on results that CEO wanted.
So what do I do? I run a process, once a year, with my FirstRain leadership team to discuss who the top performers are. Which team members are doing really great work - innovating, delivering excellent technology, winning major accounts - who's making the difference? It's always a lively debate. Some of the same names are (of course) on the list every year. It's exciting to see some new employees join the list quickly, or existing employees move up because they're growing and their excellence is emerging. It's a fun discussion and we use it to make sure we are taking care of the people who are making all the difference building the company. And I challenge managers on the non-performers. Beyond that, I think stack ranking is a bureaucracy we don't need.
Sunday, July 1, 2012
It is simply hard to believe the European Commission could be this socially tone deaf.
In creating a video for it's new campaign to recruit girls into science the EU produced 53 seconds of blatant stereotypes about teenage girls. Short skirts, high heels, ogling man, giggles, dropping molecules - and science only for the pursuit of creating makeup - products flagrantly promoted to teenagers and intimately involved in their early sexualization.
While it is amazingly, depressingly bad the video does have a silver lining. At least it sparked a debate -- see the Washington Post, and Wired UK's reactions -- and getting people talking about the stereotyping of girls against science is a start. But, my oh my, progress on the stereotyping of girls is slow!