Category Archives: management

I view myself both as a practitioner and student of business.  Therefore, I always try to find learnings in my experiences and to crystallize those learnings into nuggets that I can remember.

Here are some of my key, nugget-ized learnings from 2010.

• Analyze from near and far.  While we live in a information-obsessed world (and I view myself as a data junkie), for some decisions less information is better than more.

• Only work with people you like, trust, and respect.  Life’s too short to do otherwise.  (I stole this one from a board member who says that people buy from people they like, trust, and respect.  I think both are true.)

• If you don’t look forward to speaking with one of your coworkers, it’s a problem.  In theory, you should be eager to speak to all your colleagues, so you can work together to solve problems.  If you’re not eager, then you need to understand why.  It could be the tip of an iceberg.

• Power matters.  Read Jeff Pfeffer’s excellent book Power:  Why Some People Have It and Others Don’t to understand more.

• Don’t be a “bosshole” no matter how much you might want to be in certain situations.  Read Bob Sutton’s The No Asshole Rule or Good Boss, Bad Boss for more.

• Assume you are missing information.  This is an oldie but goodie.  It’s very hard for Meyers-Briggs J’s like me to defer reacting to a situation (because we just love making decisions) and instead say “I must be missing information” and even “the crazier the situation appears, the more probable I am missing information.”

• Listen to words, but watch behaviors.  As a word-oriented person, I often fall into the trap of using only my ears and not my eyes in gathering data.  If you’re the same way, then I encourage you to keep listening, but to start watching as well.  Word/action inconsistency can be a big tip-off.

• Listen for what is said as well as what is not.  Omission is a very powerful communications tool.

• Your need to talk with someone is an inverse function of your desire to do so.  In business, stressful situations develop and that stress can cause conflict avoidance.  Conflict avoidance causes conflict.  Break the cycle by talking when you least want to.

Those are my takeaways from the year.  What are yours?

I thought I’d take a few minutes to compile what I think were the best posts on Kellblog in 2010.  The selection is based on a combination of hits/views and my own personal opinion.  Here they are:

• The Database Tea Party: The NoSQL Movement
• Beware the Spectacular B-Round Valuation
• The Mythical World-Class Manager
• Six Things Publishers Should Be Able To Do With Content
• Veterans vs. Up-and-Comers in Startups
• The Fit or Fat Startup
• Five Rules for Competing with Giants
• Defending Weak People
• A Short Missive on Culture

I interviewed an executive this afternoon and he had a few great soundbites that I thought I’d share on the blog:

“Once when I was at HP, I met with Dave Packard. I asked him if he wanted me to tell him what the members of my team did.  He said no, tell me how you measure them, and then I’ll tell you what they do.”

While I love the quote and point it makes, I don’t agree with it 100%.   My general belief is that managers, with all the best intentions, over-engineer compensation plans to the point where no one actually understands what’s going on and the quarterly bonus becomes more of lottery / random-number-generator than anything else.

My favorite quote in this department comes from Business Objects where an EA once famously quipped about our customer loyalty indicator (CLI) bonus program (which put 3% of every employee’s compensation on a quarterly customer satisfaction survey):

“With my CLI bonus this quarter, I can buy one shoe.”

$60K x 3% = $1,800/ 4 = $450 x perf-factor = $400 which after tax = $225.  OK, she liked nice shoes, but you get the point.

Even more famously the whole program was later determined to be statistically invalid.  The movements on which we were paying people were random fluctuations within the 90% confidence interval.  The program truly was:  let’s take 3% of everyone’s pay and say, “c’mon seven!”

The great exception to all this is sales compensation, but we won’t jump into that here.  But, speaking of compensation, the candidate had another great quote:

I’m never sure which folks are going to listen to my direction and which won’t, but I only have paychecks available for those who do.

Business is, after all, a hierarchy.  I’m a huge fan of The Wisdom of Crowds and leveraging groups to improve decisions.  But, in the end, it’s not about consensus, it’s about making decisions and being accountable for them.  Ownership of the consequences legitimizes decision-making authority.

The last quote was about teaching a new pre-sales engineer that he really was in sales.  Sometimes pre-sales engineers have a stigma about  sales and treat their sales counterparts like zero-value-added, used-car hustlers.

I took the young man, put my arm around him, and we walked out of the building.  I told him to read what it said on the door.  He said, “HP.”  I said, “no, below that.”  He said, “Western Regional Sales Office.”

I told him that he had great talent and that I would happily help him find a job anywhere else in the company.  But I didn’t want him to walk back through that door unless he understood that it said “sales” on it.

I had lunch last week with a senior executive at a major software vendor.  I asked him how one of my former (non-MarkLogic) colleagues was doing.  His reply:

“Not so well.  Expectations were set very high because of his past experience and in the end he didn’t hire strong direct reports and build a strong organization.  Worse yet, when he was challenged on the quality of those people, instead of accepting that there may have been problems, he defended them.  And defending weak people is the beginning of the death cycle.”

The last sentence caught my attention because it’s a key decision that every manager must make.  When your management comes to you and says “your people are weak,” I think you are faced with two choices.

1. Say “no they are not” and defend them.
2. Say “perhaps they are” and upgrade them.

You must be aware that by simply having this conversation that you are, de facto, in deep pucky because a key part of your job is to build a strong organization.  Thus this is one of those conversations that you’re never supposed to have, much like one with your spouse on “what we’re going to do about your dalliance.”

As a contrarian and as someone who thinks he sets high people standards, my natural response is to pick the first option.  But that is de facto perilous because if your management is telling you that your people are weak, then they have presumably already put some thought to it and made up their mind.

It’s basically paradoxical because defending your people opens you to the “worse yet” argument (as in, “and worse yet, poor Joe can’t even see the problem.”)  But not defending people is to admit that they are weak and thus that you have failed to do your job in building a strong organization.  See prior comment about this being a conversation you don’t want to have.

But, as a manager, you’re probably going to have it one day and the higher you are in your organization, the more likely this conversation is to arise.  Why?  Because the higher up you the more everything below you becomes an abstraction.  Much of the abstraction rolls nicely into numbers such as sales, gross margin, and sales/head or profit/head.  But the one thing that doesn’t is your direct reports.

So, given that this is a “have you stopped beating your wife” conversation, I’d argue the best thing you can do is to avoid it.  How?  Through a number of means:

• Figure out what strong people or, dare I say, world-class people look like to your management.

• Attempt to refashion that a bit given your specific situation.  Be very sensitive to see if it’s working — are they nodding their heads when they’re supposed to, or do they really believe your modified image.

• Avoid swimming up-stream on every hire.  That is, try to get a mix of people on the team that blends two attributes:  those you want to hire and those who fit the mold from above.  (To the extent they’re identical, you have no problem.  To the extent they’re very different, you need to be careful.)

• Be open to the possibility that while you are accountable for delivering results that the boss’s image of what’s needed might actually be right.  And ask them to be similarly open in reverse.

• Proactively sell your people (and have they sell themselves) in terms of both their strengths and results, but also in terms of where they do map to the boss’s ideal.

• Finally, consider making a tally sheet.  Most bosses will hate this, but consider saying:  I start with 3 credits.  Every time I do something directly against what you want, I burn one.  However, every time that works out in the end, I get two back.  Deal?

Sunday’s New York Times had a fascinating article about (American) football entitled Coaches Take More Risks, But Perhaps Not Enough.

I’ve always believed that business managers are too conservative for two reasons:

• They are rewarded for plan performance, not absolute performance.  (See Beyond Budgeting for more on this whole meme.)
• They seek to avoid looking stupid as a primary motivation

To make this concrete, at BusinessObjects I’d often ask myself who (hypothetically) was the better manager:

• The guy who ran Italy, who signed up for 75% growth and delivered 69%
• The guy who ran France, who signed up for 25% growth and delivered 30%

In the vast majority of corporate reward systems, Mr. France is the winner.  In fact, if Mr. Italy’s not careful, he risks not only looking stupid but quite possibly getting fired — all for delivering double the growth of Mr. France.

I was, however, stunned to realize that the same kind of thing happens in professional athletics.  If there ever were an endeavor where getting-the-win should matter more than looking-dumb, you’d think it would be professional sports.  But it’s not so:

“Coaches are primarily conservative by nature,” Fouts said. “They don’t want to lose their jobs because they made a stupid decision. They are making a lot of money.”

Perhaps coaches are paid on a bad compensation plan, I wondered, one that doesn’t properly incent winning.  But it seems deeper than that.  A related story, Mr. Fourth And Go For It, details the work done by a UC Berkeley economist, David H. Romer, prompted by listening to a Raiders game many years ago:

[Romer] came up with the idea to rigorously examine fourth-down plays after listening to a radio broadcast of an Oakland Raiders game in his car about a decade ago. Although the Raiders had the ball in striking distance of the end zone, one of the commentators remarked that they would be smarter to kick a near-certain field goal rather risk going for a touchdown.

“I am pretty analytic,” Romer recalled telling himself. “That is a pretty shallow way of thinking about it.”

His work suggests that on fourth-down plays coaches are actually more motivated by perceived-stupidity-avoidance than by winning.  All this in a highly competitive sport with absolutely clear winners and losers and stakes that run in the tens of millions of dollars.  But here’s a typical — and funny — response to Romer’s work from a member of the football establishment:

“If we all listened to the professor, we may be all looking for professor jobs,” Bill Cowher, a former Pittsburgh Steelers coach, once remarked in ESPN The Magazine.

If you can’t get football coaches to take intelligent risks, does a business executive even have a chance to get his/her managers to take them?

This should make us all stop and think about how and when our organizations can make people look stupid, how to change that, and how to properly reward risk-taking, tolerate mistakes, and provide a culture in which people feel it’s a safe place to innovate.