Category Archives: Leadership

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Leading Teams Toward Success Using People, Products and Profits

I’ve written the words People, Products, Profits (In That Order!) so many times over the years it would be easy to think of them as simply a slogan I use, a catchphrase meant to pique your interest. I assure you this is no more the case than Apple using the words Think Different as a clever tagline. Like the words Think Different, People-Products-Profits is part management philosophy, part rallying cry, and in an aspirational context, part religion. When I invoke these words to set the table for embarking on the outrageous, it is with the full knowledge that I could sound silly, fail miserably, fall on my face, or possibly convince you that relentless pursuit of the extraordinary is within your grasp. That’s a lot to bite off in a very few words. It’s meant to be.

In my new book, Endless Encores, a veteran CEO named Daphne spends an evening talking with an up-and-coming executive named Paul, helping him come to terms with the potential first failure he could be facing following a huge initial success. They are stuck in an airport, passing the hours. She is a leader and he is leader, only at the moment he is too obsessed with his own personal exposure to realize that he is failing to be a leader by trying to duck out of the way of his own mishap. By worrying more about what he has done than what he has learned, he has shifted the weight of his problem from marginal to endemic. In truth, the failure he might be facing is not so much a setback as it is an opportunity. By the end of the story, he has embraced that and reset his sights on the long game.

Save for the guidance from Daphne, Paul might have missed the boat. And the plane. And all that might have been ahead of him in the form of material reward, passionate accomplishment, intellectual richness, and emotional fulfillment. It’s a close call, but he makes it over the coals. You can, too, if either you have a Daphne in your corner and you’re willing to listen, or if you otherwise come to acknowledge your role as a leader is more about the long-term example you set than the specific offering you at the moment champion. One is permanent and tangible, the other fleeting and beyond your control. Where would you prefer to focus?

Leading through People, Products, and Profits means committing to the idea that talent is a priori to all success. This has much less to do with your own talent than the talent you assemble, empower, and inspire. World class products and services don’t create themselves. They are created by human beings, most often high performance teams, and the time you devote to building and bolstering those teams is a direct reflection of your values.

When your team identifies a product concept that is worth pursuing, leadership becomes the championing of execution over the touting of an idea. We can all dream up big ideas, but few of us can bring them to market. Those who can almost invariably need some form of stewardship to hold the team together through unending punch lists of details. If that’s not challenge enough, you can have the best team in the world and the best product in the world, but if your business model is not sensible and doesn’t sustain the enterprise, it really doesn’t matter what you set out to accomplish. A business has to create value, usually measured in the form of profit, and if you can’t lead a team to do that more often than not, you’re not likely to get many chances to stand in the center ring.

The point of the rallying cry is to set a tone of priority, balance, and perspective. Everyone likely wants a business that is profitable, but leaping straight to the outcome ignores the most valuable element in the mix: your customers. An exceptional team that has been well-directed puts the customer in first position, in essence their supreme boss, with the primary hope that if a customer’s expectations are exceeded, that customer can become a customer for life. When we talk about the notion of lifetime value, we are talking about just that: Have we surprised and delighted a customer in such a way that they ascribe emotion to the brand we represent? Will they come back for more with cost-effective prompting, and will they tell their influence circles about the breadth and depth of their fine experience? That’s why a business leader is accountable first to customers, because they hold all the cards, and that’s why when they pursue a business opportunity, they place investment in talent first, product innovation second, and business model third. You need all three, but put them in the wrong order and you are left extracting value from a customer rather than bonding a customer who becomes a partner in creating value.

Yes, you have to juggle three balls at once in sequence if you want to repeat success, and you have to do it over and over. It’s not easy and it’s not supposed to be easy, because if it were, you wouldn’t be worthy of praise or wealth because anyone could do it. Likewise, leadership is a choice. It’s not for everyone. The rewards are far often more intrinsic than measurable, and falling on your face in a public forum is never going to be fun. You will fail. We all fail. If you learn when you fail you will also win. You have to decide if leadership is really something you’re ready to shoulder. If you are, choose your words and the order of those words carefully. The talent around you will only become cynical if you’re insincere and don’t stand for something more than winning right now.

Repeating success is about the journey. Leading is about tone and substance. Projects are always short. Careers can be short or long. The choice is always yours. Your values always matter. If you’re deliberate in determining how you build a culture of shared values, the best around you will always be listening. Stay authentic and their results will surprise you. Those are likely to be extremely pleasant surprises.

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This article originally appeared on Leadership Now.

Photo courtesy of Free Range Stock

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Who’s Really Sitting at the Top of Every Organizational Chart

New Org Chart 1cFacebook moved into a new office complex earlier this year, which Mark Zuckerberg has described as “the largest open floor plan in the world.” With over 400,000 square feet, it is reported not to offer a single private office. There are conference rooms, shared spaces, and all kinds of creative gathering areas meant to protect the startup environment that is core to the company’s zeitgeist as it evolves into a corporate behemoth. It’s a wild, energetic, real-time experiment in organizational development that is already being praised and criticized from inside and outside the company. Whatever your assessment might be, it’s a test of human behavior worth watching.

For a moment, I’d like to think of the Facebook campus not as a model of space planning, but as a model of team planning. Long before the debate raged on whether private offices had run their course of usefulness—and just how truly dreadful the industrial cubicle could be—company leaders were debating the “optimal” way to arrange organizational charts in the Information Age. If you’ve spent any time with me in product development, you know I like to quote the sometimes overused phrase, “People in companies get stuff done in spite of org charts, not because of them.” It’s a bias I maintain for all kinds of reasons, not the least of which is seeing it in action almost every day. Another bias I hold applies to the “optimal” way to build these org charts. I’ll confess to that in a moment, but the title of this article has likely already given away my leaning.

Let’s start with the basics. The rise of the Industrial Revolution in the 18th Century, emerging from prior Agrarian Societies, led to thousands of individuals working for single companies, for the most part creating efficiencies in the manufacturing model. Most of us are familiar with the innovation of Henry Ford as something of the father of mass production with his 20th Century Assembly Line. The premise of the organizational charts for these early corporate conglomerates surmised that a few knowledge workers and a Big Boss would send instructions down the pyramid to a wide base of workers who hopefully wouldn’t ask too many questions. Executives were at the top, middle managers squeezed in the sandwich, and individuals contributors down below busy doing their hands-on functions repeatedly. If the model sounds blunt and easy to follow, there is a reason for that—it dates back to the earliest days of broad warfare, mostly perfected by the Romans. You have an Emperor, you have Generals, you have Captains, and you have Soldiers. It worked for thousands of years in capturing terrain, albeit at the cost of mostly Soldiers, and it worked for hundreds of years in mass producing products, too often without much consideration of job satisfaction.

As education and information became more available in later decades, and asking questions became the norm, the inflexible org chart became a lot more difficult to maintain. As workers collaborated more and followed instructions less, human resources departments (formerly known as personnel offices) looked to break out of the traditional top-down structures and unleash creativity. Standard org charts evolved along the lines of two basic models: Functional Departments and Cross-Functional Teams.

Functional Departments place similarly skilled workers into groups led by senior individuals with advanced experienced in a discipline. This creates a Legal department, an Art department, an Engineering department, a Finance department, a Sales and Marketing department, and the like. Over the course of your career you might aspire to become the VP of Finance or the VP of Marketing, and these VPs, now sometimes called C-Level executives (Chief Financial Officer, Chief Marketing Officer) point the functional expertise of their teams into a Chief Executive Officer. Your company may organize itself this way. It is a very common and familiar way to organize. It’s also still very close to the old military hierarchy.

Cross-Functional Teams break the model of Artist reporting to Art Director and Engineer reporting to Engineering Director. They place multi-disciplinary groups under a generalist manager who is often more “cat herder” than boss. In this model, a smaller group of people with engineering, finance, marketing, design, and manufacturing expertise might all report to someone called a Project Lead, Product Manager, or General Manager, who is in essence a mini-CEO. Unlike Functional Departments, Cross-Functional Teams are likely to be less “permanent” in structure. The team might be ad hoc, assigned to an initiative, ready to be broken up and redeployed following a product release. Functional experts on the team might have a dual reporting relationship to the team leader and a senior expert in their area of expertise offering professional mentorship, so that a team leader who doesn’t know the law doesn’t have to render legal oversight (always a good idea). Over time Cross-Functional teams can evolve into more permanent Business Units with profit and loss responsibility for a specific line of products and extensions. If you have ever been in a company comprised of Battling Business Units , you know it can be even less fun than being buried on a Functional Team.

It is at the intersection of these two models that we all learn the necessity of Matrix Management, which unfortunately in the Information Age is the only real way we have to collaborate in an ongoing manner. Sometimes we need a Functional Department to help us advance in our area of expertise, and sometimes we need a Cross-Functional team to get stuff done with people who are good at different things. Most companies go back and forth between Functional Departments and Cross-Functional Teams, and just when you think your company has settled into a comfortable structure, along comes the inevitable memo announcing the company re-org. Companies re-org over and over in search of optimizing their growth models, but the truth is, neither approach is perfect, and whichever one your company is currently utilizing, be prepared to have it change. Re-orgs are certain because change is certain. The opposite would be sameness, and as much as you might think you want that, running in place is the surest way possible to go out of business.

Oh, about that bias of mine—I believe anything in a company that leads to entrenched fiefdoms stalls creativity. Functional Departments are usually fiefdoms. Business Units are usually fiefdoms. Again, this is why Matrix Management is a reality, particularly in managing empowered, innovative individuals who join together in a mission that is unlikely to last a lifetime, but has a real chance to change the world now. If we take that back to the visual metaphor of the open floor plan, I tend to see greater strength in the output and engagement of Cross-Functional Teams than I do Functional Departments. That doesn’t mean I am against having an exemplary CFO, CTO, or CIO setting the bar for excellence in a discipline. It just means that whatever the org chart says at the moment, I don’t want any walls between artists talking to engineers, lawyers talked to sales people, accountants talking to marketers, or anyone so distant from customers that they forget who pays everyone’s salary.

You see, at the root of all this, there only is one Emperor, one General, one CEO, one Boss who matters most. That is the voice of the Customer, whom we almost never place on the org chart. Start by putting the Customer at the top of the hierarchy, and you’ll soon understand why who reports to whom doesn’t really matter when it’s time to tally the scorecard. That’s why the walls gotta go, figuratively or literally. Go out on the floor and try to bump into a few people. You may be surprised how much you learn and how good it feels.

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This article originally appeared on Inc.

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Dreaming and Doing

Some people focus on dreaming. Some focus on doing. The ones who find a way to bridge the gap make change happen. Every once in a while, as Steve Jobs would say, they put a dent in the universe.

Many people elicit feedback. A few of them take something away from that feedback and apply it to what they are dreaming and doing. Yet too many solicit the feedback and then bat it away, a check mark on their roadmap to convince themselves they are not building in isolation. They have no interest in taking their vision to another level if it means wandering a bit from a too rigidly determined path.

The combination of dreaming and doing creates the flint and steel of innovation. Without both the status quo rules.

The combination of listening and interpreting is what hones an idea and an action plan, shaping and molding it into a viable product.

Walt-Disney-2Walt Disney said, “If you can dream it, you can do it.” For decades I’ve been trying to decipher what he really meant by this. What I do know is that this calling is aspirational. It is incredibly difficult to meet this challenge. Walt defines a promise, then delivers the promise. This has taught me that when I make a promise to customers, I must be fully committed to delivering on that promise. If I allow a gap to remain between dreaming and doing, the dream becomes cynical. Failure is okay if it’s part of the path of learning, but a cynical promise is never okay. That’s when words become hollow, and customers abandon a brand.

Recently on a cross-country flight I saw the movie Jobs.  I don’t know if it’s a great movie, but it did remind me clearly of Steve’s near maniacal obsession with perfection, with making excellence a reality, with getting everything right. That’s a standard that will surely break the mediocre and inspire those who want to be inspired. He was a dreamer, he was a doer. In his own weird way, he was also a listener. You had to listen closely to hear where he was hearing, but Steve was always listening.

Walt Disney was always listening as well. He would sit in the center courtyard at Disneyland and listen to the people around him. He never stopped dreaming. He never stopped doing. He never stopped listening,

Over the past few years I have worked with several emerging companies, to help them craft and realize their articulated strategies. I have seen magnificent dreams get stuck either because they were too unformed to realize or because the dialogue around the table became stunted by poor interchange. When you travel a great deal and interact with a wide range of customers, you begin to see the difference between actual listening and pretending to listen. You also see the results—who is gaining ground and who is stuck at the table. In my observation, the people stuck at the table might still be dreaming instead of doing because they are not listening.

As a team grows, the voices on that team expand, none more important than the voice of the customer. Does that mean a powerful vision should be diluted into compromise so everyone’s voice is incorporated? Of course not! I have written about that many times before, secure in my belief that product development is not democratic. A big idea is almost always pure, and consensus is not the same as compromise. Yet I have also sat in the room when the small spark needed for bringing dreaming into doing was snuffed out time and again. No matter how many times it was said, it was not heard. Thick heads prevailed. The status quo ruled. An ordinary idea was dressed up as something extraordinary only to be exposed as counterfeit when stared down by paying customers.

The bigger the dream, the harder it is to get it right.  Listening, editing, sifting through, and interpreting feedback is your path. That’s how you build engagement. That’s how you build momentum. That’s how you build loyalty.

Big dreams are rallying cries; small dreams are not. Incremental dreams do not put a dent in the universe. Dreams that overcome entrenched hierarchies fire up those around you and fire up your customers. The fire starts with a spark. The spark? Listening.

Business is pragmatic. Say what you are going to do and then do it, otherwise your brand promise will be empty and your customers will abandon you.

Dream big, but understand that once you share a dream, you must be committed to bringing it to life.  That is a dream worth dreaming, worth fighting for, worth sacrificing for, worth celebrating.  Hold people accountable for their role in the dream and cause them to own a share in its success.  That is a much more worthy endeavor than just doing a job.

And listen.

The end of each year is a great time for personal reflection. What can you do next year that you weren’t able to do this year? Are you dreaming it or doing it? And as you embark on doing it, make a point of listening to those you need to hear. Then make the hard calls, just like Steve Jobs, just like Walt Disney.

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Mentoring is the Secret Sauce

YodaLast month I gave a talk at Innovate Pasadena on mentoring. I shared some reflections on what it has meant to me to have mentors in my personal and work life, and what it means to me to be a mentor when I have the opportunity. I talked about my former staff members who still call me up, the new people whose journey I have joined, and how all that creates an ecosystem of mutual support, vibrant feedback loops, and trusted opinion testing.

It is worth noting given the inescapable subjectivity in this meditation that this is simply how I think about the world, one mentor’s opinion as it were, and not meant to be an encyclopedic statement for all worthy mentors at large. That said, here are some of the key ideas I covered:

What is mentoring? My definition: One person who has ideas and experience to offer engaging in a relationship with another person who has ideas and experience to offer. It’s a two-way street. If it’s not a relationship—which means give and take—it does not work.

What isn’t it? It isn’t me making the hard decisions for you that you don’t want to make for yourself. I think of this as a Socratic dialogue where I get to ask you a lot of questions. You’re going to do all the work, because it’s your work, and I won’t let you dump your work on me.

Am I going to step on your fingers or tell you you’re awesome? Yes. It depends on what you need. This is jazz. I go with the flow. BTW, if you’re not awesome, I’m not going to be interested at all. If I’m hard on you, it’s because I need to be, not because I want to be. If I don’t say anything at all, it’s because I have given up—that’s the worst thing that can happen.

What’s the difference between consulting, coaching, and mentoring? I have given a three-day seminar on this, but think of it this way: When I’m consulting, you’re paying for my experience to fix a problem; you want a recommendation and you want it backed up. When I’m coaching, you’re paying me for my time to bring out the best in you. I think of both consulting and coaching as relatively shorter-term assignments that surely can be extended, and while mentoring encompasses elements of both, I think of it as a longer-term engagement, even if sporadic. When I’m mentoring, we’re both investing in a relationship that helps you do your job, that brings both of us benefits, tangible and intangible. I don’t expect anything when I consult except to get paid on time, which is why I don’t do much of it. I don’t expect you to give back when I’m coaching, I expect you to perform. When I’m mentoring, I expect to get something back from you, even if it’s just satisfaction, but I also expect to learn things from you that I can redirect elsewhere.

Can your boss be your mentor? Yes, if you are very lucky. I’ve had a few bosses who were fantastic mentors. They were 100% in my corner. They were not competing with me. I have also had awful bosses who said all the buzzwords but couldn’t have cared less if I lived or died as long as I made them rich. If you don’t have a good boss, and odds are you don’t, especially if you’re an entrepreneur, then find yourself a mentor. I promise you, the mountain climb ahead is going to hurt a lot less if you have someone who really cares about you—other than your spouse, who is truly tired of hearing all your business problems and probably can’t help you more than she or he already has.

How do I find a mentor? They will probably find you, and the question is, will you be paying attention? Almost no one fills out a mentoring application or posts a listing on Craigslist to be a mentor. Coaches and consultants do that. Mentors opt into a relationship as it naturally expands. Keep your eyes open! If someone is taking an interest in your work, go with it. Incubators and accelerators offer formal and informal ways to meet industry experts, but so do community centers and shared-interest groups. If someone invests in your company and he or she is showing an interest in more than your financial performance, spend more time with them. Do things for people all the time and they will do things for you, often when you least expect it and most need it. You don’t have to ask, “Will you be my mentor?” In fact, most of the time I find out years afterward that someone thought of me as a mentor. It happens naturally.

Will I open my Rolodex to you? OK, first, what’s a Rolodex? The answer is yes, selectively, as trust builds. If I’m financially invested in your success and I think you’ll do well with an open door, I may open it. If I’m not personally invested in you but I think there is a win-win introducing you to someone I know, I may do it, but understand, my network and my reputation are among my most important assets, so if you take advantage of my network, it’s one and done.

Do I get compensated? This can be tricky. Sometimes there is money involved in mentoring, sometimes not. First and foremost, if I admire your commitment or like what you’re brave enough to be attempting, I just do it because thank goodness someone did it for me. I have about 200 or so people from past gigs whom I still call back for free. If you worked for me in the past and reach out to me and you weren’t a turd, I’ll always call you back promptly. Sometimes in a board situation I might get paid something meaningful at liquidity. Sometimes if liquidity is a long way off and it makes sense for everyone involved given the time commitment, I might take a retainer fee. Often I get involved in a project on pure spec with the vague potential of phantom equity. A lot here depends on how much sequential time is involved, as well as how curious I am about your vision. Free or paid, cash or stock, what matters is that we both feel good about it, that the material and spiritual rewards all feel fair, and we are always transparent in our expectations.

Do you have to listen to your mentor for it to work? Yes, you have to listen. You don’t have to do what I say, but I have to know you’re listening. If you’re not listening, then why am I talking? If you just want my contacts or my money, I’m not a mentor, I’m something else. If I say something and you decide you don’t want to do it, that’s cool; just explain your thought process so I know that we are in this together. If you blow me off or don’t afford me that level of respect, I am going to bail.

Must you pay it forward and backward? You must. If you’re not planning to help someone down the road, don’t expect to keep my interest. Good people attract good people. If you join this club, expect to stay in it for life.