Category Archives: Leadership

Not in My Kitchen, You Don’t: Leaders as Norm Setters

There are two types of restaurants:  those where it’s acceptable for a cook to pickup dropped food and serve it, and those where it’s not.

food on floor 2

Sure, when asked, everyone would say it’s unacceptable to serve dropped food in their kitchen.  But is that how their kitchen actually runs?  One of my favorite definitions of culture is, to paraphrase Henry Ford’s thoughts on quality, “what happens when no one is watching.”

And if managers really run such clean kitchens, then why are there so many:

  • Websites with typos?
  • Webinars with logistics problems at the start?
  • Demonstrations where something breaks?
  • Presentations where the numbers don’t foot?
  • Customer meetings that start late?

The fact is most managers say they run kitchens where it’s unacceptable to serve food that was dropped on the floor, but all too often they don’t.  Dropped food gets served all the time by corporate America.  Why?  Because too few leaders remember that a key part of their job is to set norms — in our company, in our culture, what’s acceptable and what’s not.

Defining these norms is more important than defining quarterly OKRs or MBOs — both because they persist over time and because they help define culture — yet few managers treat them as such.  Sure, some managers like to emphasize values, and will frequently story-tell about a focus on Trust or Customer Success.  And that’s great.  But that’s all positive reinforcement.  Part of norm setting — particularly the part that says what’s not acceptable is our culture — needs to be negative reinforcement:  you can’t do that here.

gordon

That’s why I love Gordon Ramsey and his shows like Hell’s Kitchen.  “YOU CAN’T SERVE THAT, IT’S BLOODY RAW!”

He is a clear, if overzealous, communicator who sets very clear norms.  The power of norms is that, once set, the culture reinforces them.  Everyone quickly understands that in our kitchen you don’t serve dropped food and people will call each other out if someone attempts to do so.

I remember over a decade ago, mixed in a deluge of corrections I’d made on a press release, I wrote something like this:

“No, No, No, No, No, Goddammit, No — Never [break this rule and do that].”

The guy who wrote the press release was new.  He complained to HR that my feedback created a hostile work environment.  The complaint made me pause.  Then I thought:  you know what, for someone who writes like that guy does, I want it to be a hostile environment.  Cook like that in someone else’s kitchen.  But not in mine.  (Yes, he quit shortly thereafter.)

Over time I’ve learned that you don’t need to scream like Ramsey (or my younger self) to establish clear norms.  You just need one, simple, almost magical word:  unacceptable.  Just as it’s unacceptable in this kitchen to serve food that’s been dropped on the floor:

  • It’s unacceptable in this marketing team to publish work with typos.  (Work on your writing skills and have a better process.)
  • It’s unacceptable in this events team to have logistical problems at the start of an event.  (Test them all, three times if necessary, before running the webinar.)
  • It’s unacceptable in this SC team to have demos crash during sales calls.  (Test every click before you start, and don’t go off-road for the fun of it.)
  • It’s unacceptable in this finance team to create slides where the numbers don’t foot.  (Cross-check your own work and then have someone else cross-check it again.  Or, better yet, use a system to publish the numbers off one database.)
  • It’s unacceptable in this sales organization to start customer meetings late.  (Our standard practice is to book the meeting room 30 mins before the meeting start, arrive 30 mins early, and test all logistics.)

When it comes to norms, you get what you expect.  And when you don’t get it, you need to be clear:  what happened is unacceptable [1].

Since this is all pretty simple, then why do so few managers spend time defining and enforcing such operational norms?

First, it will make you unpopular.  It’s far easier to be “surprised” that the webinar didn’t work for anyone on Chrome or “understanding” that sometimes demos do crash or “realistic” that we’ll never eliminate every typo on the website.  But remember, even here you are norm-setting; you’re just setting the wrong norms.  You’re saying that all these thing are, in fact, acceptable.

Second, it’s hard because you need to be black-and-white.  A typo is black-and-white.  Numbers that don’t foot are black-and-white.  But amateurish PowerPoint clip art, poorly written paragraphs, or an under-prepared sales presentation are grey.  You’ll need to impose a black-and-white line in defining norms and let people know when they’re below it.  Think:  “this is not good enough and I don’t want to debate it.”

Third, your employees will complain that you’re a micro-manager.  No one ever calls Gordon Ramsey a micro-manager for intercepting the service of under-cooked scallops, but your employees will be quick to label you one for catching typos, numbers that don’t foot, and other mistakes.  They’ll complain to their peers.  They’ll cherry-pick your feedback, telling colleagues that all you had were a bunch of edits and you weren’t providing any real macro-value on the project [2].  You can get positioned as a hyper-critical, bad guy or gal, or someone might even assert that it’s personal — that you don’t like them [3].  A clever employee might even try to turn you into their personal proof-reader, knowing you’ll backstop their mistakes [4].

But, know this — your best employees will understand exactly what you’re doing and why you’re doing it.   And they will respond in kind:  first, they’ll change their processes to avoid breaking any of the established norms and second, they’ll reinforce those norms with their teams and peers.

# # #

Notes

[1] And people who do unacceptable things don’t last long in this organization.

[2] No one would ever say “the ambiance was great, the service prompt, and the customer should have been happy despite the raw scallops,” but somehow many business people will say “the vision was great, the idea creative, and that the CEO should have been happy despite all the typos and math errors.”

[3] Ergo be careful in your approach.  Feedback should always be about the work — criticize the performance, not the performer.  And you must be consistent about enforcing norms equally across all people.  (Norms aren’t just for the ones you don’t like.)  Proof-read only the first page or two of a document and then say, “continued review, but stopped proof-reading here.”  Or, borrowing from The Best Work Parable, you might just stop everything at page two, send the document back, and offer to read only a properly written version of it.

[4] This begs fundamental questions about approvals.  Say you approve a press release about last quarter’s results and it contains both several typos and several incorrect numbers.  Does your approval let people off the hook for those errors?  How will they see it?  What does your approval actually mean?  Are you approving every number and every comma?  Or are you, in effect, approving the release of the headline on a given date and assuming others are accountable for quality of the body?

A Simple Trick To Get Your CEO Closer to Your Team

Startup VPs sometimes lament that their CEOs don’t really know the people on their teams, don’t realize how smart and talented they are, or fully appreciate the value of their teams’ work.  How, they wonder, can they build a better bridge between their boss and their teams?

The answer is simple:  invite the CEO to something.  To what?

  • Your staff meeting
  • A departmental town hall Q&A session
  • Your team’s planning offsite
  • A quarterly business review (QBR) or equivalent

Social gatherings (e.g., team buildings, after-work drinks) are fine a complement, but they don’t actually solve the problem I’m addressing — how to build a bridge between your team and your boss. This is not about knowing their spouses’ names and how many children they have.  This is about seeing them at work, in the workplace.

That the answer is so simple and that so few VP actually do it reveals something [1]:

  • Some VPs like to complain about the problem.  These folks likely harbor insecurity about their teams because they are, in the end, afraid to put the CEO in a room alone with them.  They are afraid their teams may look stupid, or worse yet receive direct feedback that they worry their teams can’t handle.  These VPs would never invite the CEO unprompted, and even when prompted, reply with, “yes, we should do that one day” but somehow that day never seems to come.  These VPs are weak and will likely get stuck in their careers unless they have have more confidence in their teams (or hire better teams, as indicated) and more confidence in their boss.

 

  • Some VPs like to fix it.  These people typically don’t need to be told to build a strong relationship between their team (particularly their direct reports) and their boss.  It’s good for everyone, and the company overall, when such relationships are in place.  These people aren’t afraid their team will embarrass themselves because they know they’ve hired smart, quality people.   These people aren’t afraid that their team will wilt under a bit of direct, executive feedback either — probably because they’re not afraid to deliver such feedback themselves.  If they don’t think of the idea themselves, when prompted, they jump on the idea — and not just once for show — but by building such invites into their standard operating cadence.

My strong advice is that you want to be the second type of VP.  If you’re not trying to build a better relationship between your team overall, your directs, and your boss, then you are failing everyone — including yourself.

# # #

Notes

[1]  Now you could argue I’m projecting here because I’m not a highly invite-able CEO, but I can say across 12 years of CEO experience at two different companies, it was a relatively rare experience to be spontaneously invited by my direct reports to such events.  (And when it did happen, it was always the same VPs doing the inviting.)  What’s more, I can also say across more than a decade of CMO experience at two different companies, I didn’t see a lot of my peers do it, either.

Seven Books Not To Give the Boss for Christmas*

Well, when you run a company focused on corporate finance, you don’t get a lot of Holiday Party scandals.  At Host’s very nice 2018 Holiday Party the closest thing we had was an employee conversing with me about books (Bad Blood) and then wholeheartedly suggesting that I just had to read another book, Drive — which, as it turns out, is about motivating employees.  Hum.

The blowback potential hadn’t occurred to me in real time, but after got home I noticed an email from the person who’d suggested the book, contritely offering that the suggestion wasn’t intended to send a message or anything.  I laughed.

My reply was simple:  I once actually not just recommended but actually bought and gave Death by Meeting to my boss, so I’m not one to be throwing stones.

But, for those with a dark sense of humor, the exchange did get me thinking about the perfect Christmas anti-shopping list for the boss.  Here we go.

Seven Books You Probably Shouldn’t Buy the Boss for Christmas*

  1. (When East Coast people move to California.)  Stop People Pleasing: Be Assertive, Stop Caring What Others Think, Beat Your Guilt, & Stop Being a Pushover.  

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2.  (“Can somebody please make a decision around here?”)  The Perfection Trap: Cultivate Self-Acceptance, Fire Your Inner Critic, Overcome Procrastination, and Get Things Done.

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3. (“I love those all-hands emails.”) Writing to Be Understood: What Works and Why

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4. (“Don’t worry, you can lead without it.”)  The Charisma Myth: How Anyone Can Master the Art and Science of Personal Magnetism

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5. (“If you’ve not checked Glassdoor recently, uh.”) How to Make People Like You in 90 Seconds or Less

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6.  (“I love the team you’ve put together around here.”)  Needy People: Working Successfully with Control Freaks and Approval-holics

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7. (“Executing our new strategy looks like a piece of cake.”)  Endurance, Shackleton’s Incredible Voyage.

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# # #

Notes 

* or equivalent.

My Appearance on DisrupTV Episode 100

Last week I sat down with interviewers Doug Henschen, Vala Afshar, and a bit of Ray Wang (live from a 777 taxiing en route to Tokyo) to participate in Episode 100 of DisrupTV along with fellow guests DataStax CEO Billy Bosworth and big data / science recruiter Virginia Backaitis.

We covered a full gamut of topics, including:

  • The impact of artificial intelligence (AI) and machine learning (ML) on the enterprise performance management (EPM) market.
  • Why I joined Host Analytics some 5 years ago.
  • What it’s like competing with Oracle … for basically your entire career.
  • What it’s like selling enterprise software both upwind and downwind.
  • How I ended up on the board of Alation and what I like about data catalogs.
  • What I learned working at Salesforce (hint:  shoshin)
  • Other lessons from BusinessObjects, MarkLogic, and even Ingres.

DisrupTV Episode 100, Featuring Dave Kellogg, Billy Bosworth, Virginia Backaitis from Constellation Research on Vimeo.

 

My SaaStr Talk Abstract: 10 Non-Obvious Things About Scaling SaaS

In an effort to promote my upcoming presentation at SaaStr 2018, which is currently on the agenda for Wednesday, February 7th at 9:00 AM in Studio C, I thought I’d do a quick post sharing what I’ll be covering in the presentation, officially titled, “The Best of Kellblog:  10 Non-Obvious Things About Scaling SaaS.”

Before jumping in, let me say that I had a wonderful time at SaaStr 2017, including participating on a great panel with Greg Schott of MuleSoft and Kathryn Minshew of The Muse hosted by Stacey Epstein of Zinc that discussed the CEO’s role in marketing.  There is a video and transcript of that great panel here.

saastr

For SaaStr 2018, I’m getting my own session and I love the title that the folks at SaaStr came up with because I love the non-obvious.  So here they are …

The 10 Non-Obvious Things About Scaling a SaaS Business

1. You must run your company around ARR.  Which this may sound obvious, you’d be surprised by how many people either still don’t or, worse yet, think they do and don’t.  Learn my one-question test to tell the difference.

2.  SaaS metrics are way more subtle than meets the eye.  Too many people sling around words without knowing what they mean or thinking about the underlying definitions.  I’ll provide a few examples of how fast things can unravel when you do this and how to approach SaaS metrics in general.

3.  Former public company SaaS CFOs may not get private company SaaS metrics.  One day I met with the CFO of a public company whose firm had just been taken private and he had dozens of questions about SaaS metrics.  It had never occurred to me before, but when your job is to talk with public investors who only see a limited set of outside-in metrics, you may not develop fluency in the internal SaaS metrics that so obsess VC and PE investors.

4.  Multi-year deals make sense in certain situations.  While many purists would fight me to the death on this, there are pros and cons to multi-year deals and circumstances where they make good sense.  I’ll explain how I think about this and the one equation I use to make the call.

5.  Bookings is not a four-letter word.  While you need to be careful where and when you use the B-word in polite SaaS company, there is a time and place to measure and discuss bookings.  I’ll explain when that is and how to define bookings the right way.

6.  Renewals and satisfaction are more loosely correlated than you might think.  If you think your customers are all delighted because they’re renewing, then think again.  Unhappy customer sometimes renew and happy ones don’t.  We’ll discuss why that happens and while renewal rates are often a reasonable proxy for customer satisfaction, why you should also measure customer satisfaction using NPS, and present a smart way to do so.

7.  You can’t analyze churn by analyzing churn.  To understand why customers churn, too many companies grab a list of all the folks who churned in the past year and start doing research and interviews.  There’s a big fallacy in this approach.  We’ll discuss the right way to think about and analyze this problem.

8.  Finding your own hunter/farmer metaphor is hard.  Boards hate double compensation and love splitting renewals from new business.  But what about upsell?  Which model is right for you?  Should you have hunters and farmers?   Hunters in a zoo?  Farmers with shotguns?  An autonomous collective?  We’ll discuss which models and metaphors work, when.

9.  You don’t have to lose money on services.  Subsidizing ARR via free or low-cost services seems a good idea and many SaaS companies do it.  But it’s hell on blended gross margins, burns cash, and can destroy your budding partner ecosystem.  We’ll discuss where and when it makes sense to lose money on services — and when it doesn’t.

10.  No matter what your board says, you don’t have to sacrifice early team members on the altar of experienced talent.  While rapidly growing a business will push people out of their comfort zones and require you to build a team that’s a mix of veterans and up-and-comers, with a bit creativity and caring you don’t have to lose the latter to gain the former.

I hope this provides you with a nice and enticing sample of what we’ll be covering — and I look forward to seeing you there.

Eight Words that Can Limit Your Career: “Let Me Get Back To You On That”

As executives there are certain things we are expected to know — in our heads — about our jobs and our functions.  Sometimes I call this “the 3:00 AM test” because someone should be able to wake you up at 3:00 AM in the middle of a sound sleep and you should be able to answer questions like:

  • What’s the forecast for the current quarter? (Sales, Finance)
  • How many MQLs did we generate last week?  (Marketing)
  • How many customer bugs are outstanding?  (Engineering)
  • What’s the monthly PR retainer?  (Marketing)
  • What’s the ending cash forecast for the quarter?  (Finance)
  • How many unique visitors did we get on the website last week?  (Marketing)
  • What are the top three deals in the current quarter?  (Sales)

In another post, I playfully called these the other kind of in-memory analytics, but I was focused mostly on numbers that you should be able to recall from memory, without having to open your laptop, without having to delegate the question to your VP of Ops (e.g., salesops, marketingops), and without having to say the dreaded, cringe-worthy, and dangerous eight words:  “let me get back to you on that.”

The same logic that applies to numbers applies to other basic questions like:

  • What’s our elevator pitch against top-rival?  (Marketing)
  • What’s the structure of the sales compensation plan?  (Sales)
  • Which managers are the top 2-3 hot spots in the company?  (People)
  • What are the top three challenges in your department and what are you doing about them?  (Any)

You see, when you say the dreaded eight words here’s what everybody else in the meeting is hearing:

“I can’t answer that question because I’m not on top of the basics, and I am either not sufficiently detailed-oriented, swapped-in, or competent to know the answer.”

And, worse yet, if offered unapologetically:

“I’m not even aware that this is the kind of question that everyone would reasonably expect me to be able to answer.”

Here are three tips to help you avoid falling into the eight-words trap.

  1. Develop your sensitivity by making a note of every time you hear them, how you feel about the specific question, and how it reflected on the would-be respondent.
  2. Make a list of questions you should be able to answer on-the-spot and then be sure you can.  (If you find a gap, think about what that means about how you approach your job.)
  3. If you feel the need to say the dreaded eight words see if offering a high-confidence range of values will be enough to meet the audience’s need — e.g., “last week’s web visitors were in the 10,000 to 11,000 range, up a few percent from the week before.”

And worst case, if you need to say the dreaded eight words and you think the situation warrants one, offer an apology.  Just be mindful that you don’t find yourself apologizing too often.

Handling Conflict with the “Disagree and Commit” and “New Information” Principles

In every executive team there are going to be times when people don’t agree on certain important strategic or operational decisions.  Some examples:

  • Should we split SDRs inbound vs outbound?
  • Should we map SCs to reps or pool them?
  • How should we split upsell vs new business focus in mid-market reps?
  • Should CSMs get paid on upsell or only renewals?
  • Should we put the new buzzword (e.g., AI, ML, social) into the release plan?
  • Should we change the company logo ?

The purpose of this post is to provide a framework to get decisions made and executed, without certain decisions becoming a form of weekly nagging at the e-staff meeting, a topic of discussion at every board meeting, or worst of all, a standing joke among the team.

The Disagree-and-Commit Principle

The first time I heard disagree-and-commit I thought it was corporate, doublespeak garbage.  What the heck did it mean?  I’m supposed to go to a meeting, say that I believe we should go left, get overrun by the group who eventually decides to go right, and then I’m supposed to say “sure, everybody, just kidding, let’s go right.”  How disingenuous — everybody knows I wanted to go left.  How controlling of the establishment.  How manipulative.  This is thought control!

“You may disagree, but you must conform … (wait, was that our outside voice) …  you must commit.”

(Recall my first professional job was as at a company we referred to as The People’s Republic of Ingres.)

Let’s just say I missed the point.  My older, wiser self now thinks it’s a great, but often misunderstood, rule.  (And that’s not just because now I am the establishment.)

Here’s a nice definition of disagree-and-commit from The Amazon Way via this blog post.

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

I always missed two things:

  • I took commit to mean change your mind (or “get your mind right” in the Cool Hand Luke sense). It actually means committing to execute the decision wholly, i.e., as if it were the one you had voted for.  You can’t undermine or sabotage the decision just to prove yourself right.  This is a great rule.  People aren’t always going to agree, but if you want to work at the company, you must execute our decisions wholeheartedly once they are made.  There is no other option.

 

  • The obligation to disagree.  I love this part because some people lack the courage to speak up in the meeting, and then want to passive-aggressively work against the decision and/or attempt a pocket veto by going to the person who was in charge of the meeting and saying, “well, I didn’t feel comfortable saying this in the meeting, but, ….” Such behavior creates a potential paradox for the executive in charge — particularly if she agrees with the pocket veto argument.  Does she overrule the group decision based on the new argument (and reward dysfunctional behavior) or does she stick with a decision she no longer prefers in order to avoid incenting pocket vetoes.  In my opinion, in 95% of the cases you want say, “Sorry Joe, I wish you’d said something in the meeting because that’s an interesting point, but the decision stands.” Worst case call another meeting.  Never, ever just overrule the decision.

Explicitly embracing the disagree-and-commit principle is one great way to end endless, nagging disagreements:  we met to discuss the issue, we came to a conclusion, I know you didn’t agree with it, but you need to commit to execute it wholeheartedly.  (Else we’re going to have a conversation about insubordination.)  We want a rational culture.  We debate ideas.  But we need to make and execute decisions, and you’re not going to agree with every one.

The New Information Principle

But what if the issue keeps coming up anyway?  Perhaps via periodic serious requests to reconsider the decision.  Perhaps through a series of objections coming from someone not responsible for executing the decision (so “commit” is less relevant) — but who just can’t stand the idea.  Or maybe someone has a personal ax to grind (e.g., I know we’ve talked about this before, but can we please relocate the office) and who just won’t take no for an answer.

The problem is if you always shut down these requests, then you risk creating a big problem with corporate agility.  On one hand you want to shut down the constant nagging about adding data mining capabilities from the data mining zealot. On the other hand, you don’t want to make the subject taboo because maybe your top competitor launched a new data-mining addition last month and it’s hurting you in sales.

So, the principle is simple:  if you want to re-open discussion on something we’ve already decided, do you have any new information that wasn’t available at the time we made the decision?

If the answer is no, we’re not re-opening it here, and we can do at either next quarter’s ops review or next year’s strategy offsite (pending prioritization against other topics).

If the answer is yes, find out what the new information is, and then decide if it warrants an immediate or deferred re-examination of the decision.

With this principle you can keep a firm hand against those who won’t give up on an issue while still being open to new information that might cause the need for a  valid re-examination of it.