Monday, December 31, 2012

How to Unite your Team: Advice from Napoleon

Silicon Valley is littered with small (and large) companies that want to create a revolution. It might be a revolution in commerce - like Square trying to "Architect a revolution, thoughtfully", or being the enablers of a revolution like social media was for the Arab Spring, or creating a revolution in music delivery the way Apple did with the iPod.

But what is it that unites a team of people to try to create a revolution in the world of technology?


Napoleon believed that "There are only two forces that unite men — fear and interest" (from Napoleon: In His Own Words 1916) because "all great revolutions originate in fear, for the play of interests does not lead to accomplishment."

I think he was right, but in reverse order.

In the world of the technology startups the dominant, unifying force is interest. Most people I have ever worked with were a part of the company because of shared interest. They have a common end in mind (to use one of Covey's 7 habits).

At Simplex (bought by Cadence in 2002) our interest was in the electrical modeling that semiconductor companies needed to make faster, more reliable chip designs - and so sell more chips at lower cost. Everyone in the team was interested in how to get the technology to work (a non-trivial series of math and computer science challenges), and work in the hands of customers at ever decreasing, truly less-than-the-width-of-a-hair, geometry sizes. Chip modeling was a "big data" problem before we talked about big data. Geeky, but very interesting.

The best technology leaders - usually the CEO or founders - unite their employees with a vision for what's possible. They have a uniting concept that everyone gets interested in - like salesforce.com with their "no software" platform to move CRM to the cloud, or Amazon with a vision that we'd all be buying books, and then everything else too, on line. Both visions were compelling, interesting to work on, and right.

So "the play of interest" does lead to accomplishment when you are building a technology company. I think it's the only thing. You can't unite people around money (well not for long anyway) and you can't unite them with fear in a market when they can walk down the street and find another interesting job.  You have to do it with interest.

The great general was right that fear plays a role too but it's only at the tactical level, in the moment, or in the sleepless times of the night. Fear of losing a deal, fear of failure, fear of missing a deadline you've committed to another team or a customer, fear of being wrong in the path you took to solve a problem. Everyone in a startup feels it. If they say they don't they're lying. Everyone experiences The Struggle. But you can't unite people with fear because, in the end, this is a game. It's not life and death, it's not the control of empires or the defense of your homeland. It's a business, with a dream, but a business.

Napoleon had to unite his men to fight through the mud and risk their own lives to (almost) bring continental Europe under his command -  he used both fear and interest. You need to unite them to work grueling hours and take huge personal risk to try out new ideas - and in technology that means uniting your team with interesting work and a meaningful goal.

Wednesday, December 26, 2012

Christmas

The smell of oak smoke from the fireplace.
Flaming Christmas pudding. Crackers. Port.
Church bells. Carols. The church clock chiming all night every half hour outside my window at Church View.
Jetlag.
Being told I don't know how to clean a kitchen floor.
Happily fetching Mummy's forgotten Kindle from upstairs. Every morning.
Making endless pots of tea. Making soup for the freezer.
Trying not to talk about cancer.
Rain. More rain.
Feminist Ryan Gosling.
The Queen's speech. Dr Who special.
The incredible kindness of my father. Practicing patience with my father.
Stilton and smoked mackerel pate and pickled onions. Comfort food.
Cousins. Missing my boys. Enjoying my sister, my daughter and her BFF.
Dog barking at a toy train around the tree. Happy, tired, full dog.



Rocky

Monday, December 17, 2012

Why hiring smart is not enough

Warren Buffet once said “In looking for people to hire, look for three qualities: integrity, intelligence, and energy. And if they don’t have the first one, the other two will kill you.”Clearly integrity is the first requirement when hiring. But right behind it, and just as critical, is intelligence, but intelligence comes with it's own baggage.


Obviously intelligence is essential when hiring into a fast growing company. Intelligence enables quick problem solving and brilliant, innovative ideas. Intelligence allows people to work autonomously when they need to cut through to the solution and many smart people can work faster and still get to a great result. Smarter employees take less time to train, less time to positively impact your business.

But smart people can also have a hard time learning. Chris Argyris' article in the HBR, written in 1991, "Teaching Smart People How to Learn" outlines the basic dilemma and ways to think about solving it. (It's a must-read in my opinion) The dilemma is that the smartest people in the organization, who are assumed to be the best at learning, may actually not be very good at it.

"Put simply, because many professionals are almost always successful at what they do, they rarely experience failure. And because they have rarely failed, they have never learned how to learn from failure. So whenever their single-loop learning strategies go wrong, they become defensive, screen out criticism, and put the “blame” on anyone and everyone but themselves. In short, their ability to learn shuts down precisely at the moment they need it the most"

Brittle behavior, defensiveness and blaming kill a team's ability to solve complex problems together. When you are changing quickly and learning a market (which is a continuous process when growing fast) it's important that everyone on the team can learn from the facts that are emerging, and when things don't turn out exactly as planned (which they never do) don't blame, just get on with finding the next solution.

And the key to not blaming is to be able to be introspective and look inside first - What are my assumptions and beliefs that are holding me back from learning from this situation (and so contribute to learning as a team)? Very smart people who do this naturally learn fast in complex business situations. Very smart people who are arrogant about their intellect typically don't. Struggling early (in school, in your first job); and/or experiencing failure is humbling. It makes you go inside, and with practice people develop the ability to check their internal assumptions first, before blaming someone else.

It's tricky, but you can figure this out in a candidate interview. Chris Argyris's article points out that: "One of the paradoxes of human behavior, however, is that the master program people actually use is rarely the one they think they use. Ask people in an interview or questionnaire to articulate the rules they use to govern their actions, and they will give you what I call their “espoused” theory of action. But observe these same people’s behavior, and you will quickly see that this espoused theory has very little to do with how they actually behave."

The way you can determine a smart person's real behavior, not their theory of who they are, and whether their default reaction is defensiveness or blame is to spend time with them on their failures. Can they describe to you a time they failed? What did it feel like, what lead up to it, what would they do differently, what areas of growth are they still working on improving that hurt them then as well as now? When I look back on the bad hires I've made (and I've made plenty), for many of them I can think back to the interview and I missed the introspection step.

I'm still always surprised when I ask the question "so tell me about a time you failed and what you did that contributed to the failure", shortly followed by "and what is the area you still need to improve, where you keep screwing up and you're working to fix it" that very smart people cannot, or will not, answer in a meaningful way. Or give all the reasons why it wasn't their fault. Conversely, it's powerful when a candidate can tell me what they are working on (in personal development) and how they are looking for a team of complementary skills, or an environment where they can grow and learn.

Note, this is not about EQ. Being charming in an interview and being the person I'd like to hang out with in a bar is not the same thing as being good at learning with a team.

So the first step is to test if the candidate is smart, and smart enough for the job you have. Technical tests, or emulations of real life situations (eg. for sales) are necessary to find the high IQ candidates. But it is also important to make sure you are hiring someone who can learn as your business changes and learn from circumstance without becoming defensive.

To quote my father (not always a good idea on a blog, but sometimes worth the risk) "If you're so smart, why aren't you rich?"

Tuesday, December 11, 2012

Public companies should report on Diversity to their shareholders

There is enough evidence of the value of diversity on corporate boards now to do something truly visible about it. We deal with Say-on-Pay every year now at the public board level, so why not Report-on-Diversity?

Say-on-Pay is a result of the Dodd-Frank Act. It says that the shareholders get to vote on whether they approve executive pay or not. It's non-binding - ie. "advisory" but boards take it very seriously. They have to. Executive pay is a contentious issue, highly paid consulting firms like ISS and Glass-Lewis opine on whether the shareholders should vote for or against the executive pay packages, and the compensation committee members (like me) work hard to try to both be competitive with the CEO's pay and take the input of the shareholders into account in the design of the pay packages.

It's an imperfect process, and the consultants are very mixed in the quality of their analysis, but it throws attention and light onto the right issue: over time is executive compensation lining up with company performance?

So why Diversity? Because we now know that having a diverse board improves company performance. Consider:

- ION's research that companies gain a competitive edge with more women on the board
- Catalyst's extensive research that having women on boards improves financial performance
- University of Wisconsin-Milwaukee research that boards with a woman on them are 40% less likely to have a financial restatement

but the numbers of women on boards are not changing. As Ilene H. Lang, president and CEO of Catalyst and a member of the WCD Global Nominating Commission, said: "Despite heightened conversation globally around women's representation on corporate boards, the 2012 Catalyst Census once again showed no change for the seventh consecutive year – and the challenge is not lack of qualified women."

The reality is white men still dominate the board room

Fran Maier of TRUSTe calls the low number of women on boards "despicable" and attributes the issue to low turnover of boards, lack of term limits, and most of all due to male board members recruiting people like them. She and Catalyst are right, it's just not a lack of qualified candidates.

And yet today only 16% of US public company board seats are held by women, 29% of companies have no women on the board, and while 91% of the Fortune 500 have one women director, only 60% of the Technology 200 have one director -- technology is significantly lagging!


I think the answer lies in transparency. I don't think it lies in quotas as the EU is pursuing. Their notion that 40% of directors should be women by 2020 or the company faces sanctions will create a negative backlash and will not lead to the best candidates being hired. Quotas are in place in several European countries, and they certainly make change happen fast, but I believe it diminishes the impact a woman can have on a company if she's known to be there because they need a human without a Y chromosome to fulfill a quota.

But we can tackle this issue, and make change happen, if companies have to report on their diversity and the process to improve their diversity to the shareholders. The British, who like the Germans are at the bottom in the rankings of women on boards and in management, have introduced voluntary measures where companies report on their diversity and their targets.


The statistics will change if companies are required to report on the diversity statistics of their upper management and board, and present them in the MD&A. It would improve if they were required to report on the change over time and describe their diversity programs to bring more women on the board and into senior management. Even more revealing would be to require them to disclose how many diverse candidates they interviewed in the CEO and Director recruiting process. I've been in the room - it's shockingly low (and I have to be very careful about when and whether I point that out since I am still always the only woman in the room - as I was years ago when this photo was taken).

Most boards want to do a good job. Most want their companies to do well and to provide good governance and oversight. Faced with the growing body of research that diversity improves financial performance, most would engage and try to improve things. Some are tone-deaf to the issue (which never fails to surprise me, even now) but educating boards and causing them to publicly report on the their diversity, their programs and their improvement over time would make change happen, and improve financial performance at the same time.

And my board at FirstRain? 50% women of course.


Read more here: http://www.sacbee.com/2012/12/11/5046274/global-nominating-commission-launches.html#storylink=c

Wednesday, December 5, 2012

And the Pope Tweets

There is a certain humor, and wisdom, in the Vatican announcing yesterday that His Holiness the Pope will be tweeting under the handle @Pontifex.

More than 2000 years ago the Roman Empire perfected the art of absorbing local deities and cults as they conquered new countries. Let the people keep their Gods and rituals and they are easier to control.

As the Christian Church emerged from the shadows into power in the 4th century it did the same thing. Keep the local festivals and rename them -- just think on the pagan customs we celebrate on my favorite holiday Christmas Day/midWinter Festival. And reuse the titles of authority.

In ancient Rome the priests of the (pagan) Roman religion were called Pontifex. The high priest was called Pontifex Maximus and then, with Augustus, the Caesars took on the title. They were heads of state and the religion. So by the time the Emperor became Christian, and the Bishop of Rome was the top priest of the new religion, he absorbed the ancient title: Pontifex Maximus. High priest.

Today we have new cults to be absorbed, Twitter being the cult de jour, a subset of the cult called Social Media. How best to absorb a people who live in the land of Social Media. Absorb our practices - Tweeting - absorb our culture - 140 characters in the moment - and use an ancient name that will resonate in the hidden recesses of our cultural memory. And gather more than half a million followers in 48 hours.



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