Category Archives: Leadership

5 Secrets of Creating a Great Business Team

team working together

My favorite five secrets of a great business team? This list came to me first as an answer to the question how do you build a great business team on Quora.  These five points aren’t something from the business school curriculum. They come from the experience of actually doing it, recruiting a team and growing a business from zero to millions. (For more on that story, click here).

My list

  1. No skill or experience justifies lack of integrity. You need to trust the people you work with, and particularly, the people who become key team members to build on.
  2. Diversity makes better businesses. Not for fake political reasons, but for real business reasons. Teams of different kinds of people – gender, background, ethnicity, and so forth – have broader vision than teams of people who are all the same. Diversity has been given a bad name by bigots. It’s not just morally correct, it’s also better business.

What diversity does and doesn’t mean.

  1. Different skills and experience. You don’t want all developers or all marketers, you want developers, marketers, administrators, producers, leaders, and so forth. I see student groups that are three and four people who share the same major; that rarely works.
  2. Shared values create strong bonds. Palo Alto Software was built by a team that shared my founder values about good business planning, startups, and small business. Jurlique was built by a team that shared founder values about cosmetics with only natural organic ingredients not tested on animals. And don’t confuse shared values with diverse types of people, skills and backgrounds. They are compatible, not contradictory, ideas.

Avoid the all-C-level-officers team

  1. Beware of title inflation. Having the first four people all have C-level titles is usually a sign of youth and lack of experience. In the real world, founders are rarely all fit to be C-level officers for the long term. I recommend vague non-committal titles in the beginning, like “head of tech,” “marketing lead,” and so forth. Leave room to recruit stars later on, as needed, with the big titles.

 

Take Real Steps to Fight Sexism in Tech

Harassment in the workplace. Sexism. Genderism. Bigotry and prejudice. Brogramming. Not just everywhere, but also in high tech, which – you’d think – should have been advanced past that backwardness.

Silicon Valley too. Blue city, blue industry, in a blue state. If you’ve been off the grid for a while, read this from the New York Times, Or google “Dave McClure Apology”, “Chris Sacca apology”, or “Justin Calder harassment” and you’ll see. Or just go straight to google brogramming. And these are just the most recent tip of the iceberg.

I don’t want to just wring my hands and write how bad it is (although I can’t resist some of that, but I’m putting it at the end, below) … I have compiled some lists of what, concretely, you can do about it.

Steps to fight sexism in tech. Seriously. Now.

Minda Zetlin published a three-point list in this article in Inc:

  1. VCs must publish the percentage of their funds they invest in women- and non-white-led startups.
  2. Hire more female VCs.
  3. Create an organization where women can make anonymous complaints.

Stephanie Manning of Leher Hippeau Ventures published a five-point plan (excerpts):

  1. Talk about it. Blog about it, Tweet about it, or reach out to your team about it. Acknowledge that this is unacceptable behavior and communicate to your team that this isn’t how you do business. Don’t think this isn’t my fund, this isn’t my co-investor, this isn’t my problem. It’s a problem for all of us.
  2. Don’t be creepy. Just don’t. Don’t put yourself in a position where actions or words could be misinterpreted. If you think “could this be crossing the line?” go out of your way to make sure you’re on the right side of the line and then take 5 steps back.
  3. STSD. Shut that sh*t down. If you are a male leader or any male within your organization and hear or see inappropriate things coming from your colleagues, shut it down. Right then and there. You can choose to do it in front of everyone or pull that person aside, but do it in real time. Make sure to follow up with the female who received the inappropriate comment to let her know that behavior will not be tolerated, you’ve confronted the individual, and you’d like to know if anything else comes up.
  4. Diversify. Look at your team, maybe you have all male leaders/partners/executives but where are the women? If they are already on your team, include them in important meetings and decision making. Studies show diverse teams outperform homogeneous ones so it’s mutually beneficial to bring more women to the table.
  5. Educate yourself. Don’t use the few women on your team as the go-to “token females” to answer all your questions about gender diversity. Seek out feedback from friends, family, and colleagues. Reach out to friends at companies that tackle diversity and inclusion exceptionally well.

Human rights of women entrepreneurs

Reid Hoffman, founder of LinkedIn, published a manifesto titled The Human Rights of Women Entrepreneurs that concluded with a pledge that all of us should take. He has his own list of three points (excerpts):

  1. VCs should understand that they have the same moral position to the entrepreneurs they interact with that a manager has to an employee, or a college professor to a student. If you are interested in pursuing a business relationship of some kind, you forfeit the prospect of pursuing a romantic or sexual relationship.
  2. If anyone sees a venture capitalist behaving differently from this standard, they should disclose this information to their colleagues as appropriate – just as one would if one saw a manager interacting inappropriately with an employee, or a college professor with a student.
  3. Any VC who agrees that this is a serious issue that deserves zero tolerance – and I certainly hope most do think this way – should stop doing business with VCs who engage in this behavior. LPs should stop investing. Entrepreneurs of all genders should stop considering those VCs.

And finally, an earlier list, 5 Ways For Men in Tech to Support Workforce Equality While Barely Trying, published in 2015 by Megan Berry, head of Product at OctaneAI and previously RebelMouse (also one of my four daughters). Megan wasn’t in the specific context of venture capital and investors, but was very much immersed in the day-to-day of high tech. She had her own 5-point list (again, excerpts)

  1. I’ll get it”. It’s all too common for the woman in the room to be asked to get coffee or water or pick up lunch. It’s usually done casually, even unintentionally, but all too often. Here’s a thank you to the guys who interrupt the ask to the only woman in the woman and say “I’ll get it.”
  2. Actually, you’re the pretty face.” True story. I was once leaving the office to give a talk, accompanied by a male co-worker. As we were getting ready to go, he made a joke about how I was the “pretty face.” A coworker told him, “Actually, you’re the one we’re sending to be the pretty face. She’s giving the talk.” Whenever you can turn a sexist joke back on the joketeller, women everywhere will thank you.
  3. Come grab a drink with us!” It’s easy for the only woman in a group to feel unsure if she’s welcome at the happy hour, the casual beers in the office or similar situations. These casual environments are important for anyone’s career. You gain mentorship, bond with your coworkers and get the insider knowledge to advance in the company. Don’t assume she feels welcome, welcome her.
  4. What do you think we should do?” Women are more hesitant to speak up in meetings than men. This is a generalization and not a rule (just ask my coworkers, I’m sure they’ll assure you I have no issue speaking up), but if you find yourself in a meeting with only one woman in the room, it can’t hurt to make sure she feels comfortable speaking up. It’s so easy to do and, hey, maybe she’ll have the best idea in the room.
  5. It’s so easy a dad could use it” The examples we use in everyday language and business are surprisingly powerful. If you talk about it being so easy a “mom could use it” I encourage you to push your creativity a step forward to think beyond the simplest of stereotypes.

OMG it’s 2017!

Jeez! This sh*t was obsolete years ago. I grew up in the 50s and 60s and even then, already, my mom taught me better than this. And, God knows, there was a whole lot of bias back then. (Mad Men was realistic for my generation. But it’s been 50 some years since Betty Friedan first published The Feminine Mystique. And 35 years since my sister encountered sexism in her career in Silicon Valley high tech. And 20 since one of my daughters first encountered it.

For those of us old white guys, it’s way too easy to forget, or ignore, that this is going on. I was shocked when my sister encountered it in a 1980s tech company that eventually went public. Shocked and saddened, when I discovered, via my daughters (I have four daughters, all in tech) first encountered it was they merged into the work world beginning in the late 1990s. Dismayed when my youngest got it in a San Francisco SOMA startup in 2012.

For the record, I haven’t been ignoring it. I’ve been fighting it. It’s been a thing in this blog for 10 years. I may be older white male, but I do know right from wrong.

Sexism in tech is a cancer. Stop it.

Did You Get Screwed in Business

This is a true story. I was there. The details are possibly not exact, and the quotes are paraphrased, but the essentials are true.  A startup founder was pitching to 22 local investors. The group had asked him to pitch because we liked his summary materials. He was local to us and had an interesting product. But he got screwed. I got screwed

This is what happened

  • Two minutes into the pitch, he said he had been screwed by a partner in a previous venture.
  • Ten minutes into the pitch, he said that he had been screwed by attorneys in a previous business deal.
  • Fifteen minutes into the pitch, he said he’d been screwed by an employee he had to fire.

Normally, after every pitch, after the founder has left and we’re alone, the group takes time to discuss what we saw and heard. In this case, the room was quiet for a few seconds. Then one of us said:

“One thing we know for sure … if we invest in that guy, he’ll be blaming us for it later.”

Everybody laughed.

He didn’t get the investment from us. Do you know why not?

This is what reminded me

This morning I saw this question in Quora, the world’s best question and answer site.

Every time I’ve gone into business, I’ve gotten screwed badly, either by partners or by customers. How do I avoid this the next time around?”

I’m answering here first.

Startup Vision: Paradox of Consistency vs. Opportunity

Startup VisionThe world is full of paradox, like this one. Here’s research on startup vision that shows “The tech landscape is lush with entrepreneurs whose success blossomed only after the founders had modified or even abandoned their original vision.” That makes sense when you see examples and details. But wait – what about the idea that the best startups are driven by clear vision? Doesn”t the one contract the other?

That’s business. Hard and fast rules don’t work often enough. You can’t just follow lists of best practices.

The thought comes from reading The Risk of an Unwavering Vision | Stanford Graduate School of Business. That piece summarizes research by William P. Barnett, a professor of business leadership, strategy, and organizations at Stanford’s Graduate School of Business; co-authored with colleague Elizabeth G. Pontikes of the University of Chicago. They decided to gauge entrepreneurial success rates by researching the early choices made by software entrepreneurs operating in 4,566 organizations in 456 different market categories over 12 years.

Successful founders change the startup vision

For example (quoting from the article above, describing the research) …

“Facebook became something quite different from the Harvard-specific social connection site created by Mark Zuckerberg. Airbnb? That short-term housing rental juggernaut started as a way for people to find roommates. What eventually became the ride-sharing app Lyft originally offered carpooling software for large companies.”

Barnett adds

“It’s almost always the case that the greatest firms are discovered and not planned.”

Following the crowd doesn’t often work

The post highlights Barnett saying:

“If you want to find a unicorn, listen for the buzz and run the other way.”

And adds the details:

“Barnett and Pontikes found that entrepreneurs who were willing to adapt their vision and products to find the right market often did the best. They also found that those who followed the herd into perceived hot markets, or “consensus” entrants, were less viable in the long run than those who made “non-consensus” choices by defying common wisdom and entering markets that were tainted by failures and thus regarded as riskier.”

Why is this paradoxical?

But wait. Doesn’t vision drive most successful companies? I’ve written in this space about what I call values, which are related to vision, with the idea that clear and consistent values can drive success. For example, from an older post here titled Build a Mission:

… you and I know companies … driven by missions. People can believe in a mission. It gives the team power and momentum. People are happier when they work on something they believe does some good to somebody.

So my conclusion is – and I’ve written this previously – there is no such thing as universal best practices. It’s all case by case.

10 Clues That You Aren’t a Leader

LeadershipI really know what makes you a leader. I’ve seen dozens of quotes and hundreds of articles, and I took a course on leadership in business school. But leadership depends so much on context and style that it’s hard to make any universal statements that aren’t just empty clichés.

What I do know, though, is that just wielding authority doesn’t make you a leader. Just having responsibility, or a title on your business card, doesn’t automatically make you a leader, either.

And also, I have a pretty good idea of what isn’t leadership. I learned that the hard way. And yes, since you insist on asking, I learned some of them by realizing that they applied to me.

I’m going to list 10 clues that show that you aren’t really a good leader. This is for people in authority. I’m talking to you. You are not really a leader if …

  1. Everybody always agrees with you. If you think that, get a clue. They don’t always agree with you. They are lying to you. And if so, it’s your fault, because you made them decide to pay you lip service with fake agreement.
  2. You talk more than you listen.
  3. Nobody who works for you owns anything by themselves. Ownership means owning a task, having responsibility, being empowered to operate, make decisions, and — yes — make mistakes.
  4. You do all the work. Because you don’t, really. If you think you do, then you’re not giving others enough credit. Or, if your people are really that bad, then change your team. You hired them.
  5. You correct people more than you applaud people. In the real world, performance seeks balance, like water seeks its level. If you correct way more than you praise, something’s wrong. And it’s probably you, not them.
  6. You take more credit than you give. There again, balance.
  7. Achievement in your group is something you bestow on people, rather than something they achieve themselves. Don’t make people work for praise. That’s ugly. Make them work for objective numbers that they can see, their peers can see, and you can see, at the same time.
  8. People pause to think, or guess, what you believe in. When you stand for something, and have values, people know it. It’s not just what you say, it’s what you do .
  9. You criticize more than collaborate. Don’t call yourself collaborative if people don’t want your help. Do they come to you? If not, you may not be as open to new ideas, or other people’s ideas, as you think.
  10. You don’t get bad news quickly. That means people are worrying about how to tell you. If people hide bad news or — worse still — spin it to look like good news, then get a clue. You’re not a leader.

And I want to conclude by emphasizing that last point, which is a clear case of last but not least, and perhaps even the first coming last.

Think about your leadership style in context of the flow of information, particularly bad news. If people wait to tell you, then you’re in trouble.

A leader wants the bad news instantly. Good news can wait. Bad news can’t.

(Note: this post first appeared as my monthly column for the Eugene Register Guard.)

Why All Business Has to be More Social

Are trends favoring social businesses over classic “greed is good” businesses? Is all business social business? Or, every day, more business is social? I think so. I hope so.Define_Social_Entrepreneurship

I first heard the term “social venture” in the late 1990s. Back then, social ventures were the odd exception to the norm, making money while making things better for their employees, their community and rest of the world. They sold devices to sanitize drinking water in the developing world for small profits. They sold technology to develop clean energy. They sold goods that protected the health of the less privileged in the developing world.

It’s been about two years since Harvard Business Review published “Every Business Is (or Should be) Social,” an article by Deborah Mills-Scofield. She wrote:

All businesses are social. All companies have people as customers, employees and suppliers. At some point in deciding which supplier to use, in engaging your workforce, and in getting your product into users’ hands, relationships with people matter. Improving their experiences always improves the outcome for your company.

It’s not just random change. It’s progress.

It’s not that people running businesses are more ethical or moral than they used to be. It’s because of changes in rewards and penalties for good or bad behavior. Social and technological changes are real factors.
The big change started with the Internet in the 1990s. Websites gave businesses a new and different way to reach the world. Before the World Wide Web, businesses had essentially only two ways to reach out to get people to know, like and trust them. They could pay for advertising. Or they could go through the media with public relations, events, articles, speaking opportunities and the like.

The second option depended on getting through gatekeepers: editors, event managers, producers and so forth. By the middle-to-late 1990s, businesses could generate their own website and online options to attract people and help them get to know, like and trust them.

Then came blogging. Millions of people started their own blogs. Experts established their expertise by writing and publishing blog posts and articles. The gatekeepers ceded power to the general public, the readers, search engines and the quality of content. Authors, consultants and assorted business experts established themselves independently of gatekeepers.

The finishing touch was social media. Facebook, Twitter, LinkedIn and other social sites offered publishing for the masses, billions of opinions expressed as likes, follows and comments.

The result of these trends is what we call transparency.

In his book “The Age of the Customer,” small business advocate Jim Blasingame suggests that we’ve passed a tipping point. “You don’t control your brand,” he says, “your customers do.” And that is a shift in centuries of business reality, he adds.

And it’s because of the accumulated power of the customer as publisher in millions of tweets and updates.

Transparency means bad business behavior is more likely to result in damage to the brand. Big corporations still want to spin information toward their favor, but it’s more difficult to do.

United Airlines took a huge hit in brand image when a customer posted a video on YouTube complaining about treatment of a guitar. Clothing brand Kenneth Cole took a huge hit when its founder tweeted that riots in Cairo were caused by his firm’s new spring fashion line. When Volkswagen cheated on emissions tests, the world knew. When General Motors misplayed product recalls, the world knew.

Transparency also means that good business behavior matters more, too.

Markets care about business stories. A new local business is more effectively able to compete against big national brands because buyers know the local firm’s story and care about it. Clean energy businesses are finding buyers willing to pay more for renewable energy than fossil fuel energy. People pay more for healthy food than mass-produced food. People care about genetically modified foods, and local foods. Some customers prefer local coffee shops to Starbucks. Chain restaurants are less attractive to some than local restaurants.

As we look at business today and trends, shouldn’t all businesses be conscious of their impact on employees, customers, the environment, the economy and the world?

Isn’t it a sign of progress that when so many businesses have a social conscience that we drop the distinction between social business and just plain business? Shouldn’t good behavior be a business advantage?

I’m happy to report that I think it’s happening. Slowly and in stops and starts, progress is being made. All business should be social business.

(Note: republished with permission from my monthly column in the Eugene Register Guard Blue Chip magazine.) 

10 Ways to Tell You Are Not a Leader

  1. Everybody always agrees with you. Because they don’t. They’re lying to you. And it’s your fault they are, because you make them.
  2. You talk more than you listen.
  3. Nobody who works for you owns anything by themselves. And I mean ownership as owning a task, having responsibility, being empowered to operate, make decisions, and – yes – make mistakes.
  4. You do all the work. Because you don’t, really. If you think you do, then you’re not giving others enough credit.
  5. You correct people more than you applaud people.
  6. You take more credit than you give.
  7. Achievement in your group is something you bestow on people, rather than something they achieve themselves in the objective numbers they’re responsible for.
  8. It takes your people time to think when asked what ideas you stand for, or what you believe in.
  9. You don’t get bad news quickly. That means people are worrying about how to tell you. People hide bad news or, worse still, spin it to look like good news.
  10. You criticize more than you collaborate.

(Image: bigstockphoto.com)

Birds of a Feather Fail Together: the Business Case for Diversity

Diversity is good for business. Equal opportunity is not only morally and ethically right, it’s also a better way to run a business. Here are some reasons why, and points to consider.

What’s intuitively obvious

DiversityIt’s pretty much accepted wisdom that when people come together in a common business, it’s better for them to have different skills and experience that the same thing. You want somebody good at sales, somebody good at marketing, somebody who likes managing the money, somebody who can produce whatever it is you sell, right? That’s aside from gender, ethnic, religious, age diversity. The idea is commonly accepted.

Go from there to the obvious parallel with diversity of vision, background, outlook, and experience within a single business culture. Think for just a moment about the larger vision involved in branding and marketing, expansion, and growth. Which is more likely to produce new ideas, early alerts of changes, awareness of new markets and new products: the birds of a feather who flocked together, or a group that includes different people with different backgrounds and ideas?

A collection of studies

I caught The Business Case for Diversity on the business2community blog. Fascinating. Here are some highlights:

  • Diverse companies outperform non-diverse companies by 35%, according to a McKinsey study cited in that post.
  • Sociologist Cedric Herring found that companies with the highest levels of racial diversity had, on average, 15 times more sales revenue than those with the lowest levels of racial diversity. Herring found that for every percentage increase in the rate of racial or gender diversity, there was an increase in sales revenues of approximately 9 and 3 percent, respectively.
  • A study at the Kellogg School of Management6 found that diverse teams outperform homogeneous ones because the presence of group members unlike yourself causes you to think differently.
  • In a Catalyst report called The Bottom Line: Corporate Performance and Women’s Representation on Boards7, researchers found that Fortune 500 companies with the highest representation of women board directors performed better financially than those with the lowest representation of women on their board of directors.

Diversity is good for business

The bottom line, for me, is the bottom line: diversity is not just the future, not just the way the western world is going, not just a natural result of trends and technology, and not just morally and ethically right. It’s also good business.

(Image: Flicker Creative Commons, by croptrust)

We’re Raising Girls to be Perfect, Boys to be Brave

Friday video, a TED talk, Girls Who Code founder Reshma Saujani is out to change the way the world looks at girls, tech, and girls in tech. Her non-profit Girls Who Code inspires high school girls to study computer science.  She aims to enroll one million women in the program by 2020 — and tech has stepped in to help: Google and Twitter are backers, and engineers at Facebook, AT&T and others have signed on as mentors.  Here’s a quote:

Most girls are taught to avoid risk and failure. We’re taught to smile pretty, play it safe, get all A’s. Boys, on the other hand, are taught to play rough, swing high, crawl to the top of the monkey bars and then just jump off headfirst. And by the time they’re adults, whether they’re negotiating a raise or even asking someone out on a date, they’re habituated to take risk after risk. They’re rewarded for it. It’s often said in Silicon Valley, no one even takes you seriously unless you’ve had two failed start-ups. In other words, we’re raising our girls to be perfect, and we’re raising our boys to be brave.

For the original on the TED site: http://www.ted.com/talks/reshma_saujani_teach_girls_bravery_not_perfection

 

Entrepreneurship and Leadership with Mark Maples

My Friday video for this week is on entrepreneurship and leadership from the Stanford Ecorner. If you haven’t been there for a while, check it out. There is a new interface, and it’s a great collection of speakers on entrepreneurship, startups, business, and investment.

Here’s the intro from the site:

Silicon Valley veteran Mike Maples Jr. shares heartfelt advice urging aspiring entrepreneurs to “only do things that you think have a chance to be legendary.” By committing to always doing exceptional work and being around inspiring people, Maples says you will reap the cumulative benefits of a lifetime of excellence, and be able to enjoy it again whenever you look back.

This is a two-minute excerpt from a longer talk.