January 7, 2013
"We thought that one way to communicate respect would be to always be on time to meetings with entrepreneurs. Rather than make them wait in our lobby for 30 minutes while we attended to more important business like so many venture capitalists that we visited, we wanted our people to be on time, prepared and focused. Unfortunately, anyone who has ever worked anywhere knows that this is easier said than done. In order to shock the company into the right behavior, we instituted a ruthlessly enforced $10/minute fine for being late to a meeting with an entrepreneur. So, you are on a really important call and will be 10 minutes late? No problem, just bring $100 to the meeting and pay your fine."

— Another great piece by Andreesen Horowitz founder, Ben Horowitz: Programming Your Culture is a smart take on an important topic, filled with common sense. I also loved this line: “The world is full of bankrupt companies with world-class cultures. Culture does not make a company.”

December 11, 2012
"Do you really want to use all your concrete and steel to build parking lots? It seems pretty stupid."

Google’s Larry Page steps into the one-on-one CEO exclusive interview ring, in the wake of Tim Cook’s bout with Bloomberg Businessweek’s Josh Tyrangiel. Miguel Helft’s interview is far-reaching, and while it’s impossible to imagine that the chief of a public company will say anything controversial on the record, there are some interesting insights into the company’s culture and management, including Page’s comment above, related to their focus on developing driverless cars, which reflects a breadth of curiosity and interest one might not attach to an advertising company. The whole interview is well worth a read; here are some of the quotes that stuck out for me: 

On internal culture/talent: “We want to do things that will motivate the most amazing people in the world to want to work on them.” Google’s focus on internal talent is pretty legendary. The question that this comment sparked for me, however, is “not on those who actually want to use the products?” 

On interoperability and playing nicely with others (especially pertinent in the wake of the Twitter/Instagram bust-up): “I think it would be nice if everybody would get along better and the users didn’t suffer as a result of other people’s activities.” 

Echoing my colleagues’ theory of the Innovation Ambition Matrix, Page outlines Google’s commitment of 70% of efforts to incremental innovation, 20% to adjacent projects, and 10% to new-to-the-world ideas. It’s a simple enough theory that is nonetheless super hard to pull off. As he puts it, “it’s actually hard to get people to work on stuff that’s really ambitious. It’s easier to get people working on incremental things.”

On the importance and value of iteration: “If you look at a product, and you say the day it launched, “It’s not doing what I think it should do.” We say, “Well, yeah. It just launched today.”

On the fact that he and his team aren’t even close to done yet: “I have a deep feeling that we are not even close to where we should be.” Well then.

November 28, 2012
Howard Schultz on the “drift towards mediocrity” in the United States

Starbucks’ CEO was a star turn at last night’s event in celebration of Harvard Business Review's 90th anniversary. Schultz has been outspoken about the management of the United States over the past eighteen months, and he didn't hold back in conversation with HBS professor, Nancy Koehn. Acknowledging that it is “somewhat unorthodox and unprecedented” for the CEO of a public company to speak out about government, he was nonetheless unapologetic, training his sights on the current state of the United States and, in particular, the looming fiscal cliff. How is it possible to have got within 34 days of this impending catastrophe? he asked. In whose interest are the politicians working? And, he warned, while not dealing with the fiscal cliff would be catastrophic, the Bandaid-based solution that politicians will likely paper over the crisis is “equally as irresponsible.”

For us to face $16 trillion in debt, with 14 million unemployed, the budget deficit, municipalities declaring bankruptcy… We’re all dressed up here in New York City, we’re getting ready for the holiday season. But America is not the America our parents fought for and promised us. The issue as business leaders, as citizens, is to understand we cannot embrace the status quo. 

"I didn’t come here to depress anybody," Schultz added, to rueful laughs from an audience which, it should be said, comprised a classic HBR crowd of senior corporate leaders and management thinkers. "I came to speak the truth." And the truth as Schultz sees it is that national leaders have lost the trust of the people. "Leadership are not putting their feet in the shoes of the American people. They’re putting their feet in the shoes of their own party and extremists. That’s a disaster."

Given the goings-on that Americans (and those who live here) have recently endured in the endless run-up to the Presidential election, it’s hard to disagree. And it turns out it was the election itself that spurred Schultz into voicing his concerns, when he discovered the many billions of dollars set to be spent on campaigning by the candidates and their parties. 

I was stunned by that. And once you’re exposed to something so inconsistent with what you believe, the question is, ‘are you a bystander? Do you walk away?’

For Schultz, walking away was not an option, and in 2011 he issued a Starbucks-wide email, Leading Through Uncertain Times, and called on his C-suite friends to boycott campaign donations “till people play nice and move the country forward for benefit of people, not party.” Back at the HBR event, he added:

Everyone in this room, Republican, Democrat, Independent, will agree with this statement: we all know that something is wrong. We absolutely know it. Yet we’re sitting here as if everything is going around like a merry-go-round, like everything’s fine.

"Do you feel alone in this?" asked Koehn of Schultz’s stand against the establishment. Delightfully, Starbucks’s founder was blunt in reply. "Everyone I talked to had a sense of understanding and sensitivity about the issue but they were afraid," he said, as the audience shifted uncomfortably in their seats. "It’s not that I’m alone. I think people do not have the courage to step out right now."

Schultz wasn’t all doom and gloom. Asked to nominate a leader who motivates him, he recommended two speeches by RFK: the "Ripple of Hope" speech given in South Africa in 1966, and the impromptu announcement of the assassination of Martin Luther King in 1968 (embedded below.) Why these particularly?

Those two speeches define leadership, courage, conviction, what it means to believe in something, what we’re lacking as society around the world… We need to find heroes once again. I don’t think we fully realize how high the stakes are, how we are allowing the greatest nation in the history of the world to drift towards mediocrity. I don’t understand why we are here. We have such greatness, possibilities, and optimism and we’re allowing this to take place. 

It was a sobering conclusion, but inspiring to see a leader take a stand on what we all know. President Obama, you should call Mr Schultz into your meetings with business leaders.

October 1, 2012
"You lose money every month, eventually there’s no restaurant, right?… It is so important that we, as chefs, understand how to manage in a way that we are not losing money. Because otherwise there is no point."

In Check, Please, John Colapinto peeks into the kitchen of Eleven Madison Park, the upscale NYC restaurant that charges $195 for its tasting menu. The co-owners, Will Guidara and chef Daniel Humm, are striking in their practical approach to running their business, while the piece is full of fascinating insights into the management of food. Some of the other tidbits that stood out:

Grant Achatz of Alinea got rid of tablecloths from his Chicago restaurant, saving himself $42,000 a year.

Staff at the restaurant Daniel monitor diners via cameras to ensure that service is as fast as humanly possible. Not for the benefit of said diners, it should be added, but so that the restaurant can maximize the number of people who eat there each night.

Says Guidara: “If you ever make a decision first and foremost to make money, it will end as well… Every decision needs to start with it making you better. And then you have to ask yourself, ‘Is this also a good financial decision?’ “

August 29, 2012
"I’d study what the best people are doing, figure out how to standardize it, and then bring it to everyone to execute."

— So says one Dave Luz, the regional manager for the eight Cheesecake Factories in the Boston area, quoted in Big Med, Atul Gawande’s brilliant recent piece for The New Yorker. Gawande studied the stunningly efficient management systems within the restaurant and mused about how some of the techniques could usefully be transposed to healthcare, an industry which if one were to be unkind might surmise seems to operate on a global system of sheer inefficiency. Luz, above, tells the sorry story of the care of his mother, suffering from Alzheimer’s, and shares the common sense attitude of healthcare outsiders who can’t quite fathom how the system has warped into its current form. It’s all too easy for insiders to discount such opinions as coming from those “who don’t understand.” But sometimes it’s worth stopping to wonder if they might have a point. Certainly, the idea of borrowing methods and tactics from other industries that have already figured stuff out is a quick way to boost innovation. Gawande goes on to detail pioneering medical folks who are trying to do just this; it’s an uphill slog, but let’s hope they stick with it. Fascinating piece; must-read.

July 19, 2012
"There’s this pattern that you come to recognize about Netflix. Sometimes they just don’t stop to listen to their customers when their customers are telling them they aren’t happy."

Netflix’s Lost Year is a *great* story of management—and mis-management—in our modern world. The quote above comes courtesy of Mike Kaltschnee, the founder of Hackingnetflix.com, but the whole story is filled with anecdotes and insights that show how Netflix navigated the path from crazy-good innovator to arrogant mis-hitter. The moral of the story: put your customer anywhere else but first and get ready for trouble.

[Story via Ruth Schmidt]

July 13, 2012
"Company executives are paid to maximize profits, not to behave ethically."

This sentence turns up halfway through Eduardo Porter’s interesting NYT piece, The Spreading Scourge of Corporate Corruption, which breaks down the recent LIBOR scandal to make the case that none of us are very scandalized by any of this stuff any more. As he writes, "it’s not just banks that are frowned upon. Trust in big business overall is declining. Sixty-two percent of Americans believe corruption is widespread across corporate America.”

The fact that this sentence turns up, baldly, unadorned, matter-of-fact and entirely accurate blows my small mind. What system have we built in which this could possibly be a reasonable or useful focus? What hell have we wrought? We are reaping what we sowed, alright, and the fact that our careful system rewards profits, not fair, reasonable, longterm decisions leads to a twisted society in which everyone vies to not break the letter of the law only according to the letter of the law. Again, this happens in industries far from banking. This philosophy is rife throughout western culture and business. As Porter continues, Evidence suggests that [executives] behave as corruptly as they can, within whatever constraints are imposed by law and reputation.” And we all nod our heads and agree, "of course that’s what they must do!" and congratulate ourselves on our clear-headed lack of naivete.

As Porter concludes, it’s difficult to predict the impact of the growing lack of trust in “the institutions that underpin the nation’s liberal market democracy.” My guess: this is unsustainable and more and more will change for systemic change that will be very difficult for many. We may tsk and roll our eyes for now, but don’t you agree that revolution lies ahead?

July 6, 2012
"While traditional leaders want to be right, creative leaders *hope* to be right."

John Maeda's talk at TEDGlobal was a treat, as he showed some of the early digital artwork for which he first made his name. (I so remember seeing it back then and, truthfully, being perfectly mystified by it even as I knew it was somehow really quite important.) But the self-effacing president of RISD also had some really insightful comments to share about the impact of creative thinking in management and leadership. Read the full post here.

June 6, 2012
"Learnings (n): Word favored by consultant-types meaning “something learned.” Apparently, “lesson” wouldn’t do despite 500 years of continuous use in the English language."

— Ouch, this is painfully good. The intent of MBA Jargon Watch is, according to its producer, “to elucidate, amuse, and gently mock users and consumers of management, business, and consulting jargon.” Or, as journalist Adam L Penenberg puts it, it’s a dictionary of management speak that’s “absolutely awesome in every way.”

May 22, 2012
Nest’s Tony Faddell on Prototyping and Getting Projects Approved

I recently attended the 99% Conference in New York, a refreshing gathering whose focus is less on the generation of ideas and more on their execution. (The conference’s name is a riff on Edison’s famous quote about the need for only 1% inspiration and 99% perspiration.) The next few posts will feature some of the highlights, with the sought-after accolade of My Favorite Speaker* going to Tony Faddell.

The former Apple designer (Faddell was responsible for the iPod) has recently been lauded for his success with the Nest “learning thermostat,” a simple-to-install device that helps people to understand how their home uses energy (and therefore set it to save.) Faddell was energetic, inspiring and utterly committed to the concept that it’s the team that makes the difference between a launch’s failure or success, not simply the value of the idea itself. And it’s clear that the curiosity he described as being present from his early youth is still an integral part of the way he does business.

Prototyping, too, is a key skill that he believes needs to be mastered by more than designers. As Faddell described, in the 1990s people would all too often come to him with a great idea for a “kitchen computer.” They’d tell him all about how it would work, how beautiful it would be and how people could use it to get recipe information. And yet, he’d reply to them:

"You understand the hardware, the screen, the internet connection… but you didn’t attack the real problem. You didn’t prototype the user experience. You prototyped the hardware to get people to say that’s cool. But you didn’t look at the hard, hard pieces of the puzzle: how will people interact? How will they get two touches on the screen? How will it work? Too often people go for the easy thing but it’s the hard thing that sets the schedule, the budget and whether it’s doable."

His advice: "find the hardest thing… the thing you really want to change, and look deeply into that."

I also liked his three necessary qualities for getting projects approved:

1. Passion. This includes both the passion of youth and team members but, Faddell described, what is necessary is a “thoughtful passion, not an egotistical passion.” This is about being introspective about what you’re trying to do and then communicating that effectively to the people you’re trying to get join your team or who can approve something to move forward.

2. Presentation. This isn’t merely about making something look slick, but about looking at all the details and anticipating concerns, questions or risks, especially those of importance to those outside a core team. “Make them a part of the process,” advised Faddell, and acknowledge the challenges ahead and explain how they’ll be managed. By anticipating difficult questions and having, if not answers, at least the ability to show that they’re considered, the quantiest of analysts can be brought on board an innovation project.

3. Partnership. Getting the right senior leadership on board any innovation-related project is critical, Faddell advised. If conversations are starting with questions about shipping, product numbers or return on investment then as far as he’s concerned, you’re not working with the right person who will be able to give the necessary amount of air cover to your nascent idea. Instead, make sure you’re working with people who can be emotionally and rationally engaged in an idea’s worth. They’re the folks who will help you when others raise reasonable doubts.

Finally, a lovely, honest admission of the reality of innovation and entrepreneurship. “If it doesn’t feel like a rollercoaster day, you’re not doing something right,” said Faddell. “You need to feel that doubt every single day.”

* This is not a real thing.

[Photo: Julian Mackler]

May 4, 2012

I clearly remember someone showing me John Derian’s work about a decade ago, and I didn’t understand it at all. Then I remember wandering into his store in the east village a few years later, and becoming completely smitten with it. This video is wonderful, and Derian clearly utterly charming, though I do wish we got a clearer insight into how exactly he does run the business side of things… His acknowledgement that he’s baffled by financial matters is honest—and let’s face it, a common complaint from creative types. So what’s his solution to managing the need to remain focused on his passion and talent—and care for his staff and his flourishing business? 

[Video via Jon Barrett]

April 17, 2012
"Soccer is a metaphor for creative collaboration in a team, and coaching soccer can likewise be a metaphor for effective leadership."
Overlooking the fact that the sport is clearly called “football,” not “soccer,” Goal Play!: Leadership Lessons From The Soccer Field, a new book by Paul Levy, sounds like a good read. This Globe and Mail review, Leadership Lessons, On Field And Off, highlights some choice quotes and stories.
[Story via Tim O’Reilly. Photo by BZO/Flickr.]

"Soccer is a metaphor for creative collaboration in a team, and coaching soccer can likewise be a metaphor for effective leadership."

Overlooking the fact that the sport is clearly called “football,” not “soccer,” Goal Play!: Leadership Lessons From The Soccer Field, a new book by Paul Levy, sounds like a good read. This Globe and Mail review, Leadership Lessons, On Field And Off, highlights some choice quotes and stories.

[Story via Tim O’Reilly. Photo by BZO/Flickr.]

April 10, 2012
"Humanities majors may well learn a great deal about the world. But they don’t really learn career skills through their studies. Engineering majors, conversely, learn in great technical detail. But they might not learn why, how, or where they should apply their skills in the workforce. The best students, workers, and thinkers will integrate these questions into a cohesive narrative."

Overlooking the fact that the Peter Thiel teaching at Stanford is the same Peter Thiel who paid 20 kids $100,000 to drop out of college and start a business, this is a great recap of Thiel’s first course at Stanford. Student Blake Masters took detailed notes, and there are some real gems (not, it should be noted, necessarily captured verbatim). The above comment shows the recognition of a workforce that can integrate inputs from diverse source, while this quote should also be borne in mind by all would-be entrepreneurs:

Channeling Tolstoy’s intro to Anna Karenina, all successful companies are different; they figured out the 0 to 1 problem in different ways. But all failed companies are the same; they botched the 0 to 1 problem.

I was also fascinated by Thiel’s interpretation of “the problem with big business,” which comes down to a question of scale and design:

North of 100 people in a company, employees don’t all know each other. Politics become important. Incentives change. Signaling that work is being done may become more important than actually doing work. These costs are almost always underestimated. Yet they are so prevalent that professional investors should and do seriously reconsider before investing in companies that have more than one office. Severe coordination problems may stem from something as seemingly trivial or innocuous as a company having a multi-floor office.

Thiel also gets into why people should ever embark on a startup in the first place, and it’s not, he advises, in order to merely copy what already exists. You can learn a lot if you shot for the moon and miss. But:

If you try to do Groupon for Madagascar and it fails, it’s not clear where exactly you are. But it’s not good.

And then finally, he details some questions all entrepreneurs should pose to themselves. I say we’d all probably benefit from taking a conscious look at where we are:

First, what is valuable? Second, what can I do? And third, what is nobody else doing?

March 31, 2012
"For firms trying to improve working conditions the fault may well be in their own business model. Just-in-time manufacturing has made supply chains leaner. Slimmer inventory cuts costs and allows firms to move more quickly. As products’ life-cycles shorten, this is a crucial competitive edge. But a last-minute design change or the launch of a new product can mean suppliers having to pull out all the stops to keep up—or face a stiff financial penalty."

When The Jobs Inspector Calls is a nuanced Economist piece looking at supply chain issues for large multinational companies making the bulk of their products in developing markets such as China or south-east Asia. Focused mainly on, surprise surprise, Apple, the piece also looks at practices by the likes of Nike, and does a good job of illustrating the complexity of the issue. The piece also cites the fascinating findings of MIT’s Richard Locke, author of the upcoming Promoting Labour Rights in a Global Economy.

March 14, 2012
"The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus."

As Scott Crawford commented on Twitter, “It’s “Why I left the company that starts with G” day.” This piece, by now-former Google engineer James Whittaker, is hugely interesting reading and important for those interested in cultivating a company culture based around innovation. Every company changes as it grows and matures (duh), yet even those as lauded for their smarts and forward thinking as Google have to watch the little details that eventually add up to a whole that might not be quite what anyone had in mind. Whittaker’s conclusion, in particular, describes a present that is both horribly true and hugely far from Google’s initially incredible service:

Perhaps Google is right. Perhaps the future lies in learning as much about people’s personal lives as possible. Perhaps Google is a better judge of when I should call my mom and that my life would be better if I shopped that Nordstrom sale. Perhaps if they nag me enough about all that open time on my calendar I’ll work out more often. Perhaps if they offer an ad for a divorce lawyer because I am writing an email about my 14 year old son breaking up with his girlfriend I’ll appreciate that ad enough to end my own marriage. Or perhaps I’ll figure all this stuff out on my own.

Whittaker, it should be noted, now works at Microsoft.