That time I was fired

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I love Ben Horowitz‘s book The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. It’s a quick read, full of memorable business ideas that stick, gleaned from Horowitz’s experience with Loudcloud and other ventures (plus a handful of choice rap lyrics). Horowitz sets the tone right from the start:

imgresEvery time I read a management or a self-help book, I find myself saying, “That’s fine, but that wasn’t really the hard thing about the situation.” The hard thing isn’t setting a big hairy audacious goal. The hard thing is laying people off when you miss the big goal. The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things. The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed. 

One of my favorite chapters is “When Smart People Are Bad Employees.” Here’s an excerpt:

Sometimes a really smart employee develops an agenda other than improving the company. Rather than identifying weaknesses so he can fix them, he looks for faults to build his case. Specifically, he builds his case that the company is hopeless and run by a bunch of morons.

In my first ten years of employment, I’d been laid off or outsourced three times. Each time this happened, I was offered a new job or an extended severance package. I was reassured that my work was solid, and that the decision was based on math – nothing else. When I lost my job at the startup, it was something entirely different.

I’d joined the company as Chief Experience Officer, employee number six. We were a small but mighty team in Minneapolis, building something great that didn’t exist in the market. Within three months of our launch, Silicon Valley investors came knocking. They convinced our Founder CEO that they’d crush us if he didn’t take their money, and that their investment, experience, and relationships were exactly what we needed to make the company grow. We took the money.

With the money came a new CEO, based in California, an Entrepreneur In Residence (EIR) with the kind of pedigree investors dream about. Our Founder CEO was demoted to President of his company, and none of us were thrilled. We felt that the new owners were dismissive of our ideas, and that the direction they were taking the company was wrong-headed and stupid. I took it upon myself to stand up for the Minneapolis office.

I let the new CEO know he was wrong, again and again. I questioned most of his decisions, undermined him in company meetings, and made sure my coworkers knew we were headed down the wrong path. When my customer experience research was questioned, I got angry. When my coworkers felt undermined, I challenged the CEO to do better.

When I was fired, ten months after the new CEO started, I was enraged. Didn’t he know I was the one holding this thing together? Didn’t he understand that I was very, very right, and that he was very, very wrong?

If you don’t like something, change it. If you can’t change it, change your attitude.
– Maya Angelou

I’ll go to my grave knowing that our CEO was wrong about a lot of things, but he wasn’t wrong to fire me. I’d stopped looking for ways to fix the company, for ways to rally around the new product and leadership. I’d started focusing on making sure everyone knew the company was run by morons. I couldn’t change the things I didn’t like, and I refused to change my attitude. How did I last ten months?

I had to go.

Getting fired – for reasons that were entirely within my control – was terrible. I’ll never forget it, and I don’t recommend it. But the lessons I learned from the experience were valuable. Falling in line isn’t anyone’s favorite thing to do – many of us are paid to think critically, and we want to know that our opinions are heard and valued. But after we’ve said our piece, when the dust has settled and we didn’t get our way, our choices are clear: we can change our attitude, or we can change our scenery.

Building good things is boring

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goodthingsWhen I arrived at a new job several years ago, things were looking good. Work/life balance favored life, the dress code was non-existent, and employees were on track to get bonuses yet again. Our website was usually up, returns were usually down, and customers were generally pleased.

So it surprised my new boss when I stormed into his office telling him that things needed to change – the org structure was wrong, we lacked focus and purpose, and our product was just okay.

“Take a deep breath,” he said, “things are pretty good.”

“I don’t want things to be good,” I countered. “Building good things is boring. I want to build something great.”

My boss was intrigued, and he knew I was right. If we continued on our current path, we’d collect our bonuses, make lots of money, and still be home early for dinner. But there was a downside.

Why be great?

When “good enough” is good enough, all sorts of bad things happen. For example:

  • Innovation and risk-taking are discouraged
  • Top performers tend to underperform (or find new jobs)
  • We settle for mediocrity
  • People are promoted based on tenure instead of the value they bring

Incremental improvement can be terrific, but it can also get in the way. When we try to turn something good into something great, we get just the opposite:

  • Innovation and risk-taking are encouraged
  • Top performers are fully engaged, and pushed to do their best work
  • We never settle
  • People are promoted for adding business value

When an organization strives for greatness, inspired employees are rallied around a common goal, and everyone brings their best ideas and energy to the table. Sometimes we work long hours or forget to eat a meal, but it never feels that way. Trying to build something great feels fantastic.

A cautionary tale

A few years ago, I took a job at a small, well-funded internet startup. The founder had recruited experienced talent, and the team rallied around our “big hairy audacious goal“: to change the way people consumed information online. We worked hard to produce something great.

Along the way we started to run out of capital, and our BHAG took a backseat to our need to say afloat. We built a series of mediocre products that we tried to monetize, and we struggled to find an audience. Some would argue we were being pragmatic, that we couldn’t afford to build something great – we needed to build something good instead.

But when we stopped trying to build something great, we lost our focus. We started coming to work late, leaving early, and spending too much time worrying about lunch. Our focus turned from work to work/life balance, and we were no longer inspired to bring our very best to the office every day. A few of my co-workers loved it.

“This is the best job ever,” I remember one of them telling me.

“Not for long,” I warned.

In a few weeks, we were looking for new jobs. Would we have stayed in business longer if we stayed committed to building something great? We’ll never know. But I do know this: I would have felt a whole lot better about it.

Secrets of the Superbosses: let them go

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imgres-1There are all sorts of great ideas contained in Sydney Finkelsteins’ Harvard Business Review article Secrets of the Superbosses, things like hiring unconventionally; seeking out people who are smart, creative, and flexible; focusing on “unlikely winners”; and adapting the work to fit the talent. I especially love the part about helping employees move on the bigger and better opportunities:

Smart, creative, flexible people tend to have fast-paced careers. Some may soon want to move on. That’s OK with superbosses. They understand that the quality of talent on their teams matters more than stability, and they regard turnover as an opportunity to find fresh stars.

I hope to keep my best people on my team forever, I really do. But there are great reasons to embrace the fact that I can’t. Here are a few:

  • I’d rather keep a high performer in the company than lose them entirely: I’ve got people on my team who will deserve to be promoted in the next 1-3 years, maybe more people than I have opportunities. If I can grow my employees’ careers by helping them find a role on a different team, I might be able to keep them within the company.
  • New talent can be a great thing: Smart, motivated, new employees will bring new energy and ideas to the party. Adding people to the team is a huge risk, and I don’t take it lightly – it can be a disaster. But adding the right people can elevate everyone’s game, including my own.
  • It’s a small world after-all: My current employer is not my first, and more than likely it won’t be my last. There’s a very pragmatic reason to support my best people moving on to bigger and better roles, even at other companies: when I’m out looking for a new job, I’ll be glad to have good friends in high places.

Towards the end of the article, Finkelstein writes:

Superbosses employ practices that set them head and shoulders above even the best traditional bosses. They seek out talent differently and hire them in unusual ways. They create high expectations and take it upon themselves to serve as “masters” to up-and-coming “apprentices.” And they accept it when their protégés go on to bigger and better things, making sure to stay connected.

Superbosses think differently about their roles and responsibilities: they push their people, expect great things, and are confident in their own ability to grow and maintain talented teams. Part of this is acknowledging that, sometimes, to let a person grow, you have to let them go.

Shiny new objects rust over time

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Many of us have worked in companies that prioritize work on an annual basis. In these organizations, it’s common to invest in a few things each year at the expense of everything else. “This is the year of search,” you might say, because “last year was the year of mobile.” On the surface, this makes total sense – you can’t make big investments in the same capabilities each year. Eventually, everything will have its day in the sun.

In reality, this is a terrible way of prioritizing work, completely ineffective, because it means that – until each program has its day in the sun – it’s essentially left to wither and die. Or to almost die, which is even worse. Don’t you see it? Look there in the corner – there’s site search, begging to be put out of its misery. It had its last big investment two years ago. It knows it’ll be the golden child again next year, but in the meantime, customers are mocking its uselessness, laughing at its broken experience. Poor thing. 

A few years ago, my company addressed this by implementing an Agile, product-focused approach. Within our organization, each product area receives some amount of ongoing funding, which allows the team to make consistent progress throughout the year. The amount of funding may change according to business needs, but the idea of making consistent progress across the business doesn’t.

Take the Search product for example. Several years ago, Search had its day in the sun. Replacing our old system was one of the company’s top priorities, and the project got all the people and money it needed to be successful. Once our new Search was implemented, the big project was over, but the need to make continual progress – to optimize the experience – was still there. (It will always be there.) So although the Search team got smaller and some resources were moved to new strategic priorities, the capability continued to exist – we continued to make it better.

Search is, of course, just one example of a large company initiative – a shiny object – that needs ongoing care and feeding. (I can’t think of a product that doesn’t.) Organizations built on a product management model get this. Before they build new functionality, they’re thinking about how to support it and what the long-term roadmap looks like. Organizations that are entirely project focused, on the other hand, are likely to face poor support and unexpected costs. That’s because they haven’t planned for the inevitable, and because rust never sleeps.

Related: How much of a problem can you buy away?

How much of a problem can you buy away?

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My eCommerce team is world class – the best group I’ve worked with, capable of leaping tall buildings in a single bound. From top-to-bottom, we’re defining compelling visions, creating aggressive roadmaps, delivering innovation and quality, testing into winners, and measuring results. Even still, we can’t be experts at everything, and resources are limited.

This means there are times when we need to explore the vast vendor landscape to find tools that can help us solve our problems. We tend to focus in three areas:

  • Things that have been commoditized, because we don’t think they’ll help us differentiate.
  • Things that are really, really hard, because we don’t have the desire (or time) to build or maintain world-class-systems that we can easily buy.
  • Things that are outside of our core competencies, because sometimes the best way to get started with a new technology is to have someone else build it and then take it over.

In each of these areas, there’s a sense we’re buying a problem away, that by leveraging a vendor for ratings and reviews, or personalization, or search, or recommendations, or whatever, we can free our resources to focus on other things. And this is mostly true. But it’s never completely true.

It’s never completely true because there’s no problem that can be bought away completely. Even if we’ve “completely” outsourced a program (like ratings and reviews, for example), we need to define our strategy, manage our vendor, provide customer support and issue escalation, measure the program’s effectiveness, tweak the experience, and defend our budget. Despite our vendor’s promises, these things cannot be outsourced. Not effectively, anyway.

And who would want to hand all of these things over anyway? Vision? Analytics? Roadmap? I may want to leverage a vendor at times, but I never want to hand them my company’s strategy and ask them to drive it.

What does this mean? It means that when we consider buying a problem away, we need to understand that we can very rarely buy away the whole thing. We need to allocate both resources and dollars for the activities listed above, for ongoing support, and for the cost of potentially moving a capability in-house over time. We need to understand that there’s no such things as “hands-off” management or programs that run themselves.

Related: Shiny new objects rust over time

Gilt Group sale shows it’s hard to turn disruption into profit

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gilt

Having raised $286 million in funding, Gilt‘s sale to Hudson’s Bay last week for $250 million is hard to see as anything but a failure of Gilt to turn its flash sale model into a major stand alone business. According to CNN Money:

Gilt Groupe is one of the originators of the flash sale model. […] Its user base has soared over the years. […] Hudson’s Bay said the deal is a play to continue growing its discount business and that Gilt will integrate with its Saks OFF 5TH locations.

Several years ago, we saw something similar happen to Groupon, which thought is was going to revolutionize retail, and ended up doing much, much less. Here’s another quote from the CNN article:

“We plan to continue to foster Gilt’s culture of innovation, which has helped create a strong brand with a loyal and devoted millennial following,” said Jerry Storch, CEO of Hudson’s Bay, in a statement.

I think we’re seeing a couple of things:

We’re seeing the need for retail-oriented businesses to make money, and lots of it. It’s getting harder and harder for even the coolest startups to claim they’ve changed the world until they prove they can sell a lot of stuff. This is a good thing. The vendor landscape is littered with “disrupting technologies” that added little value. Turns out it’s much easier to be disruptive than to be meaningful.

We’re also seeing how hard it is for big retailers (like Saks Fifth Avenue) to innovate internally, how their cultures don’t really support change, and how – in many cases – they still haven’t wrapped their heads around what it means to be a relevant company in the Amazon.com era.

Rare is the company that creates something truly game-changing, lasting, meaningful to customers, and hugely profitable. So maybe Gilt did exactly what it was meant to do – create an experience that could terrifically augment an established brand and make it relevant to a whole new group of customers. Maybe Gilt’s greatest value is in extending its culture of innovation to Hudson’s Bay, ushering in a new era for the combined company.

Maybe that’s enough.

Think like a boss

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James GandolfiniMy team does Product development for 16 websites on 2 different platforms. We create roadmaps and prioritize work across more than 6 teams. We generate lots of new projects, and we have a process for vetting new ideas that come from all across the company. We work cross-functionally, with multiple technology and business teams. And we own our products from soup to nuts, development to support, build to run.

Each month, we prioritize new requests with the guidance of our senior executives, which means we tell them what our priorities are and they tell us if they disagree. Since we know the customers, the work required, the risk involved, the business value, and the product roadmaps better than anyone, we know what work needs to happen. Do our Execs weigh in? Absolutely. Do they have different opinions than ours? Occasionally. Do they change our priorities? Rarely.

Having strong, well-reasoned opinions about what work should be prioritized, delivering on our commitments, and showing real business value has helped our team gain the trust and confidence of our Executive leadership. They expect us to be the experts, and we respond by acting like it.

You probably know a lot more than your boss

In 95% of the work situations you will ever find yourself in, your boss doesn’t know any more than you do. In 75% of those situations, you know more than your boss does. In 50% of those situations, you know much, much more. I’m making up the numbers, but you get the idea.

And yet, many employees feel completely unable to make a decision without their boss’s input. Why?

We don’t want to make mistakes

For lots of people, it’s natural to avoid making decisions, just as it’s natural to avoid taking responsibility. Making decisions is scary, because it means being wrong a lot. I worked at a small company where the CEO ruled by fear, where being wrong was something to avoid at all costs. I didn’t last there very long.

At a company where employees are punished for being wrong, the best employees will leave or be fired (as I was). Those who stay are those who are good at playing the game – avoiding responsibility, asking their boss to make decisions for them. Are those the people you want to work with?

We’ve forgotten how to make decisions

Have you ever heard the comment “those decisions are made above my pay grade”? Those are the words of someone who lacks ideas, conviction, or confidence.

There can be good reasons for this kind of thinking. Command-and-control-based companies train employees that different decisions are made at different levels, and that there’s no upside to disagreeing with your boss. If your company’s beating you down, it might be time to find another one.

My old boss used to say “an opinion’s worth 50 IQ points.” At least.

We want help

Maybe the issue is simply a desire to get help, or to have a sounding board. This is totally valid – and very healthy. Help is important, and we could all use a little bit once in a while. I know I can.

We need more information

Sometimes we need more information to make a solid decision – there are times when my boss has a critical piece of information, and I’d be foolish not to ask for it. It comes down to this:

  • If you’re not making a decision because you need more information or want some help, that’s a good thing.
  • If you’re not making a decision because you lack the confidence or conviction to get it done, that’s less good.

The trick is to know the difference.

Creating the culture we want

As leaders, we need to figure out what we value in our employees and co-workers, and then create a culture that supports our values. If we value confidence, creativity, leadership, and risk-taking, we need to:

  • Empower our people to make decisions
  • Encourage risk taking
  • Seek out contrasting points of view
  • Promote healthy debate
  • Outlaw terms like “this decision is made above my pay grade”
  • Ask questions

Most importantly, we need to expect people to make mistakes, and we need to let them know it’s okay – in our actions and in our words. Then we need to remind them, over and over again. We need to believe that making mistakes is a critical part of becoming a better team and company. And we need to be willing to make some of our own.

Deliver business value, not projects

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About 2 years ago, my eCommerce team was working on a project that would allow Web Merchandising to more easily add content to our sites’ Product Detail Pages (PDPs). After working on the project for three months, we decided it was complete. We delivered the good news to our Executive team in our monthly update and waited for the accolades to come. “Fantastic,” our CEO said, “let’s take a look.” But when the Execs took a look at the PDP, they saw empty spaces where content should have been.

“No, no, no,” we said, “the functionality is complete. It’s just that you won’t see the project’s benefits until the Web Merchandising team adds the content. Probably in about two months.”

Guess how “done” the Execs thought we were. Not very.

It ain’t done ’til it’s making money

The idea that our work is incomplete until its business value is realized doesn’t thrill my team, and it doesn’t particularly thrill me either. It means when we work on a projects with dependencies (pretty much all of them), we can’t really move on without another team’s help. It means instead of thinking of new ways to drive value for the business, we’re finding creative ways to influence schedules we don’t own.

But what’s the alternative? Meetings like the ones described above? Lots of completed projects and no business value realized? A false sense of accomplishment shared by developers and product owners who hit their goals while the company suffered?

Service providers and agencies – the good, successful ones – get this. That’s why, before it gets close to contract renewal time, they’re showing me usage reports and asking if I need help getting more value out of their products. They’re offering consulting services (sometimes even free!), holding quarterly business reviews, and showing me all kinds of cool charts and graphs. They know that creating a terrific platform for generating user reviews or product recommendations is only half the battle. In order to justify renewing the contract, I need to see more reviews or a higher conversion rate – I need to see business value.

In a corporate setting, with so many levels, layers, and inter-dependencies, this message can be harder to land.

Setting the right goals

One way I’ve found to land the message is to give employees goals related to the amount of business value they drive. Within my team, everyone is accountable for at least one – and usually several – business-focused goals related to their work. For example:

  • The PDP conversion rate must improve by 10 bps, or
  • We’ll generate 10% more product reviews for our owned brands

This helps ensure that employees take ownership of the results they drive, and that work continues long after a project goes live. (In fairness, I also include a goal related to each employee’s individual and/or team output, so they’re not completely out of luck if another team falls down on the job. I call these quality and quantity goals – the quality of work is expressed in terms of business value, while the quantity is expressed in terms of sheer volume.)

This is simple, but effective. In cases where employees are focused only on project delivery, I’ve found that – more often than not – their goals are not tied to business outcomes.

I’d love to hear from you

I’ve described what I’ve found to be true time and time again: that employees need to be held accountable for business outcomes, and that business-focused goals are a great way to make it happen.

Now I’d love to know what you think. Do you agree that sharing accountability for business outcomes is critical? How have you solved the problem? Please let me know.