Lost in Noise is Learning

We are so bombarded by noise at times it’s hard to think. The raging debates around coronavirus public policy, racial injustice, and the presidential election form a perfect storm of noise. A cacophony of this magnitude only naturally sends us to seek shelter from the storm.

Don’t give in to the temptation of numbness. Where there is noise there is a signal. Sometimes you have to listen hard for it, but it’s worth the effort.

Where there is crisis there is learning.

During the entirety of the Covid-19 crisis, my own company has been digging deeper into data, questioning every one of our prior assumptions, revisiting foundational convictions that have proven to be upended by circumstances. It’s been meticulous work, exhausting in many ways, but every bit of analysis has been worth the long hours of difficult discussion. Through a highly Socratic process, we have reinvented our business model for the better.

All of that has me thinking: What else might these crises be telling us? What else can we learn from the turmoil all around us if we don’t allow ourselves to hide from the rhetorical barrage?

Here are a few ideas penetrating my consciousness in the realms of global warming, trusted communications, and government core competency.

Everyone Doesn’t Have to Drive Every Day

I live in Los Angeles. I look outside and the air is clear. The freeways are empty. Coincidence? An accidental moment without significance? Perhaps that’s the case, as some have argued the temporal reduction in emissions and anecdotal benefits of fewer cars on the road, but what if it were sustainable? Could one of the answers to climate change be so obviously right before our eyes? I’m not a scientist with the credentials to make such an assessment, but I certainly would like the problem studied objectively.

Until a few months ago, we woke up daily with the habit of getting in our cars and driving to work no more questioned than brushing our teeth. It was just something we did. In no previous discussion of environmental distress did I hear anyone credibly propose getting more than half our cars off the road, because the proposition would have been a non-starter. Then one day a bunch of us stopped getting in our cars. Poof, just like that, we were working from home. We also got the commute time back for more productive work, and while I’m at it, how about all of those car accidents that stopped because people behind the steering wheel weren’t texting. We will go back to the office regularly at some point, but does it have to be every day, for every person? Not in my world. The benefits are yet to be understood. Let’s understand them.

Media Desperately Needs Reinvention

We don’t understand fake news. We don’t even have a common definition of fake news. Some of us define fake news as the biased reporting of a media brand. Others identify it as the blatantly false information peddled to the public for effect without fact-checking. I remain a fan of journalism and consume branded media daily with my own filter for accuracy, but my litmus test for truth will never be yours. Until we can agree on some form of objectivity, we will continue to debate the source of our information rather than the implications of the information’s validity.

This is not healthy. If we can’t agree on what constitutes an empirical fact, the clear and present danger to our decision making is likely to have a catastrophic impact. No source, however reputable, is without fault. The New York Times isn’t sure what belongs on its op-ed page. Facebook as a public platform of democratic exchange has become an unmitigated disaster in its inability to parse purposely placed disinformation in unending disguises, free or paid. Elections are won cynically on ad volume, fueled by cash, fueled by special-interest investment in yet more noise. We know we need journalism, but given how few people want to pay for it and how compromising its ad base has become, its business model has failed. Whoever reinvents this business model is going to change the world. I believe this will happen, because accurate information is not a luxury but a necessity.

Readiness Is Pragmatic

Perhaps my most troubling observation is how flat-footed the United States has been caught with the ramifications of the pandemic. Of course no one knew any sooner than late 2019 that Covid-19 could interrupt every aspect of our lives, but we’ve been around long enough to know pandemics exist. How could we have so few of the necessary medical supplies or personal protective equipment in stockpiles for such a calamity? How could we not have a clear chain of command between federal, state, and local authority? How could we shut down the nation for three months and not make strides on healthy measures to address the next semester of student education?

We are a pragmatic nation known to focus our vast resources on innumerable global crises throughout our history, but have we become so focused on the here and now that we aren’t paying enough attention to scenario planning and game theory? If we don’t think carefully about reallocating resources to planning for the unknown, the chances we will be struck down even harder by the next surprise attack would seem to be 100%.

Do yourself a favor: Tune out the noise, but tune in the learning. Opportunity is always around us if we muster the discipline to trade demoralization for inspiration. That’s how we get better.

The alternative is to stick with what we’ve got. I hope we’ve learned that’s not much of an option.

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Image: Pixabay

Built to Launch?

I aspire in this post to be among the elite—one of the few business bloggers on the planet currently not commenting on Marissa Mayer becoming CEO of Yahoo. I have never met Marissa, but her reputation speaks strongly for her. I wish her well because I always want good people to succeed, and in this case I also want to see Yahoo succeed. I hope she reads my article about Yahoo from last year that predated her last two predecessors and figures out a way to restore much-needed competition to the landscape of search. Hmm, seems I’m writing about her. Okay, enough said. Got get ’em, Yahoo! Stop.

Now my real topic for the week—not surprisingly, also about succession.

Venture investors Marc Andreessen and Ben Horowitz have been steadfast in their support for keeping Founder/CEOs at the helm of the companies they back, from early blog posts on their site that state their philosophy to more recent comments in the Wall Street Journal that reinforce their sometimes contrarian assertions. Not only do they believe most deeply in the Founder/CEO success model, they have championed multiple class shares that keep CEOs in authority with majority control even without majority ownership. Their point of view is clear, consistent, and well-argued—and thus far their financial returns in aggregate have been extraordinary. They want vision, they want independence and long-term creative thinking, and they want continuity.

I am not sure I have an absolute opinion yet on absolute power for a start-up CEO; we’ll have to see how those play out over the next ten or twenty years. I do worry that without senior team loyalty and continuity, it may not matter whether a CEO stays or goes. Teamwork is what matters in today’s intellectual property centric companies, and if your team is not stable, I wonder if your company can remain so. Surely new blood is a great infusion when parsed appropriately, but it needs to be in balance, at equilibrium with a set of players we can count on.

What about the top-tier executives, perhaps a level down, who seem to jump freely from ship to ship, following their own personal muses, particularly after liquidity gives them the ability to set themselves free? Is this good for companies and long-term shareholder value, for companies with massive capitalization that are taking on investment—public or private—ostensibly with some hope of being Built to Last?

Clearly within our pressured and fragile economy, the bonding relationships between employers and employees have become increasingly tenuous. “At-will employment” is not just boilerplate in an offer letter, it means what it says, that jobs are temporal. Employees not under contract may depart a gig when they wish without much obligation, and employers may equally freely dismiss them (to the extent those decisions are not discriminatory) without much warning or explanation. Companies are predisposed to protect earnings and cost-cutting can be a tactic to achieve those goals, the favor of which gives employees good reason to always be in the market. Although there are any number of topics I can extract from that thread and will do so in the future, that is not my key focus here. This is not about everyday turnover and the anxiety it creates, it is about senior level turnover as a litmus test for investors.

Reality is, a lot of high-profile employees in high-profile start-ups seem to jump ship early these days. I am not so sure that they are cashing in as much as their attention spans or personal desires lead them from one thing to the next. Some examples:

• Two of Twitter’s co-founders who served as CEO left the job and their day-to-day roles, although one returned, not as CEO, but as head of product. The third co-Founder also left day-to-day responsibilities.

• Facebook’s most recent CTO, who joined the company in 2008, departed voluntarily almost immediately following the IPO. Facebook also lost an extremely high-profile CFO in 2009, and a number of other prominent C-level executives have churned through in the years leading up to the IPO.

• Groupon’s former COO, a Silicon Valley veteran brought in to steady the ship, spent about a year on the job day-to-day before moving to an advisory role.

• Yahoo continues to make headlines with five CEOs in five years, although the situation here is different. The last one to leave on his own timeline was media veteran Terry Semel, who preceded the five. Perhaps more curious at Yahoo is the level below CEO, where the turnover has been even more active, voluntary or otherwise.

• Google is now being celebrated as iCEO University, for which it has reason to be proud with strong executives like Sheryl Sandberg, Tim Armstrong, Dick Costolo, and now Marissa Mayer all willingly accepting significant challenges. My sense is this is sustainable as long as founders Larry Page and Sergey Brin stay on the job (guided by the advice of Eric Schmidt), but at some point the spinning off of entrepreneurs may take a toll as it did at once great legendary giants like Sun and Silicon Graphics (also keep an eye on HP).

It is hard to fault someone with talent and wealth for leaving a position with an “old company” to tackle a brand new start-up concept. They have the creativity, they have the yearning, and they can absorb the personal risk. Yet these aren’t exactly old, mature companies they are leaving, even in internet time. If talent retention is critical to continuity and leadership is demonstrated by example, what does it say about loyalty to the “rank and file” millionaires of Silicon Valley hungry to pursue their dreams when so many of the top dogs or near top dogs are endemically antsy?

Can you build a company that is Built to Last when many of your brightest employees—especially those made wealthy with capital they can reinvest—are thinking Built to Jump? Should shareholders in emerging high-valuation private and public companies be concerned with the New World of high turnover that is largely viewed as the way things are? There is already risk enough in holding stakes at the high valuations these companies will need to grow into, but if these are essentially knowledge-based companies where the key assets go home to their families each night, how much should owners worry whether they come back tomorrow or start a new company that’s more fun? Are these companies Built to Last or Built to Launch—launch themselves to early prominence, and launch the careers of the stars who emerge from their ranks?

Retention and the war for talent are surely talked about a lot, but I wonder if these are just buzzwords now, if key stakeholders really are losing sleep over the next spun-off employee or just prepared to roll with the punches. For anyone who has ever led a company, the notion of culture is no small issue, and companies where the culture is strong have a heritage of continuity that gives them a shot at longevity. Do we now assume Creative Destruction is such a powerful force that short-lived companies are a norm, regardless of culture and continuity? I wonder, and look forward to checking the Fortune 500 again for a few more decades to see how this plays out—not to mention the long-term trend on aggregate net job creation we so desperately need for our economy to go the distance.

I am not suggesting that employees should stay past their welcome or interest level, and in no way would I ever want (or tolerate as a manager) any form of stagnation in the form of tenure-based retention or retention for continuity’s sake. The case I am trying to make is for a tiny bit of balance in an Old World concept known as loyalty—which has been very good to me on both sides of the desk for most of my years on the job. It has been said that in today’s world loyalty is between individuals, not within companies, and there is every reason to understand how that has come to be. Yet if companies are not loyal to employees and employees are not loyal to companies, can these kind of companies really be long-term investments for shareholders? Said another way, if the system and talent are not demonstrating loyalty and commitment, should investors?