Advice from a Billionaire

 

Not too long ago John Doerr gave a talk at my alma mater. If you do not know who Doerr is, he is a self-made billionaire. John started working at Intel in 1974. And, since 1980, he has been with the venture capital firm Kleiner Perkins Caufield & Byers.

At KPCB Doerr has backed companies such as Google, Amazon, Intuit, and Sun Microsystems. Quite the pedigree, wouldn't you say? And yet, Doerr's demeanor is remarkably down-to-earth.

So, what was the advice? What did Mr. Doerr talk about that day at Cal? Many things, of course. But, a couple things, in particular, grabbed my attention.

Below the title of my blog you can see a quote from the great Tom Peters. I love that quote because it is so matter-of-fact. Yet it is profoundly important. That day, at Berkeley, Doerr echoed Peters's sentiment.

Throughout the talk Doerr gave a lot of good advice. At one point he says, “If you are going to be the CEO and a founder of a company (aka an entrepreneur) I think you should learn how to sell.” Sounds exactly like Peters.

Doerr continued, “You really ought to learn how to get orders. If you don't find customers, and customers are going to pay for what you are doing, you are going to fail.” He sure did not hedge on that one! If you do not know how to sell, you are going to fail. Hey! That rhymed!! I think I shall use it more often...

From an entrepreneurial perspective John spoke of the importance of learning leadership and management. The importance of building and leading a team. And, if you do not think leadership entails selling, you are fooling yourself.

He also said, “Whatever the stage of your development, I think it is really important to always network. To develop personal and lifelong networks.” We always hear a lot about the importance of networking. But, what does it mean, really?

Well, networking is relationship building, and it requires the exchange of value. Everybody wants to network but nobody wants to pick up the damn phone. Doerr did not specifically say that. But, he did say, “Have the confidence to cold call anybody that matters to you.”

Hey! Good news! If you are reading this blog, there is a fair chance that I cold-called YOU!! Related to networking, and cold-calling, John recommends that we locate and cultivate mentors. This is tough because a lot of people think a mentor is like a sensei in a dojo.

It does not really work that way. If someone is willing to “take you under their wing,” do not take that cliché too literally. Mentoring tends to occur, here-and-there, on-the-fly. You are not going to move into the person's house.

Doerr also recommends that we get good at public speaking. He said, “I think people are judged by their ability to think, and speak, on their feet, more than any other skill.” Strong words!

The way I figure, it generally does not hurt to listen. Here are a few snippets, of the audio, from the talk: Click here.

A Lesson from the Olympics

Michael Phelps says he has swam his last race. The five time Olympian is 31 years of age.

He first competed in the Olympics at age 15. Same goes for Katie Ledecky. She too made it to the Olympics by age 15.

This is what psychologists might call the multiplier effect. Early success drives a person to work hard and earn additional successes.

This is all well and good but, what if you do not experience early success? I mean, my blog is about effectiveness and entrepreneurship. Not sports. If we do not experience early success should we give up on our dreams of owning a successful business?

This is where we should talk about David Plummer. Plummer did not swim in the Olympics until he was age 30. I do not know if you can appreciate that fact. But, what it means is Plummer had lived two lifetimes before making it into the Olympics.

This is a really important lesson in entrepreneurship. In a word, Plummer is the personification of Angela Duckworth's Grit. What Duckworth has discovered is the critical importance of grit, or perseverance.

When your competition benefits from the multiplier effect, and explodes our of the gate, it can be rather disheartening. If that is your reality, remember David Plummer.

Actually, this is a big part of the reason I would rather be an entrepreneur than an Olympian. The window of opportunity is much larger for the entrepreneur.

Michael Phelps is the most decorated Olympian of all-time. And, he is retired by the age of 31. By age 31 most entrepreneurs have not even experienced real success yet. So, you need to just keep plugging away. Perseverance is adaptive.

A good mindset, for the entrepreneur, is urgent patience. I borrow that phrase (urgent patience) from the Harvard professor John Kotter and his book A Sense of Urgency.

As an entrepreneur, you want to be urgent about the activities but patient with the results. Be like David Plummer. Jump into the pool everyday. Do the work. And, someday you will make it to your Olympics.

Why We Trust Made-up Facts

Does the name, Sydney Finkelstein, ring a bell? No, he is not a character in a movie. Syd is a professor of management at Dartmouth University. He is also the director of the Tuck Center for Leadership.

As you probably know, I am a practicing entrepreneur (emphasis on the word practicing) I am also a strong advocate for learning from academia. Entrepreneurs need to focus on speed and execution. While academics can spend more time being thorough and accurate. The two make for a solid combination.

This is why I recently spent so much time transcribing my notes on The Leadership Challenge. Drucker said leaders are not born and they are not made. Leaders are self-made. The idea is that the best we can do is create an environment where people can develop themselves into leaders. I hope my blog can be an element of that environment.

Now, back to Professor Finkelstein. Not too long ago, I read a great article of his. The article was titled, "Why we trust made-up facts." Here it is, in its entirety:

Why do seemingly smart and capable people act as if make-believe facts were actually true?

Building a business or running an established company is hard enough without making stuff up, so why do leaders sometimes believe in all sorts of things that are not true — even when it could hurt?

Yet, make-believe facts are a feature of the business and political landscapes in far too many situations.

This past week at an extraordinary meeting of shareholders, for example, Bank of America chief executive officer Brian Moynihan’s quest to add the chairman title to his chief executive officer role culminated with a bruising battle with pension funds and other institutional investors who opposed the move.

But here’s the intriguing part: companies with CEOs who also hold the board chair position do not produce better or worse results than companies that separate the two positions.

Why bring on an army of protest to adopt a governance change that doesn’t even make a difference? This is just one of many examples in which a leader stirs up a hornets nest without the facts to back his or her actions.

Journey to the land of make-believe

Why do seemingly smart and capable people act as if make-believe facts were actually true? It’s for the same reason that US Republican presidential candidates almost uniformly advocate for lower marginal tax rates to boost economic growth, despite evidence from the past presidencies of Ronald Reagan, Bill Clinton, and George W Bush that this policy only increases income inequality, not growth.

It's also for the same reason that politicians such as Francois Hollande in France, Jeremy Corbyn in the UK and Bernie Sanders in the US advocate for a much more activist government role in society despite the evidence of huge breakdowns in government-run services in these countries, such as public schools in France, the National Health Service in the UK and the conduct of war in the US.

The answer is ideology. Ideology is a strong, unblinking and fundamentalist view of what is right and what is wrong, undisturbed by both empirical evidence and carefully constructed contrary logic. In government, as in business, ideology precludes adaptation and agility. And so we surround ourselves with make-believe facts,

These non-facts can strike at the heart of what a firm does. Most international law firms deliver legal services to clients by relying on highly-educated but inexperienced law school graduates, leveraging the difference between the fees they receive and the compensation they pay out to generate huge profits for partners. Now that the value of such “service” to clients is being challenged, all but the very top-tier of law firms around the world are struggling, yet they stubbornly stick to the same business model. Reality has changed, but the facts these losing law firms choose to believe in — an outmoded business model — remain firmly entrenched.

We all convince ourselves that fantasies are reality from time to time, of course. Unfortunately, in competitive market places, there are huge incentives for entrepreneurs to directly challenge the make-believe world you created.

This was true for many of those companies that lived in an analogue world a decade or two ago, when digital was transforming multiple technologies (eg, Kodak in cameras, Motorola in mobile phones). And it is true now for many companies that invested billions of dollars in infrastructure and overhead while internet-enabled start-ups create seamless delivery of services (eg, the global taxicab industry; traditional cable companies).

Back to reality

All is not lost. We can call out make-believe facts for what they are. Even corporate board members can speak out — last I looked, that was a big part of their job description. Leaders need to support, not destroy, those people who have the courage to stand up and speak out.

You should ask yourself why you do things the way you do. Perhaps there was a good reason to do so years ago, but why has it remained so despite all that has changed around you? While I have my qualms about Big Data when it comes to promoting innovation and creativity, there’s no denying the power of the revolution taking place in human resource management and sales force management, in fact throughout modern enterprise. Big Data holds the promise of taking on and undermining those make-believe facts that depend on purity of ideological thought.

And remember that storytelling and emotional appeals — the heart and soul of ideologues that can’t rely on logic to convince others — can also be used to take on make-believe facts. Communicating a different point of view is not just a matter of stating your position, and don’t disregard the power of story-telling to convey your message.

I'm under no illusion that the favourite fantasies of leaders will just melt away when confronted by logic, open-mindedness and data — even when communicated in a compelling manner. But that’s all we’ve got.

Part Seven – Leadership for Everyone

Today is the last in my series of notes on the book The Leadership Challenge. We made it! I am kidding, of course. As it turns out, this series has been very well received. The number of views have been off-the-charts. For that reason, I will likely do something similar, in the future.

This last part is largely an overview and recap. So, it will be shorter than the previous six. I hope you enjoy. Have a great week!

Part Seven – Leadership for Everyone

Chapter Thirteen – Leadership is Everyone's Business

The journey to the top of the mountain often takes a decade or more.

None of us knows our true strength until challenged to bring it forth.

We're all born. What we do with what we have before we die is up to us.

It's possible for everyone to learn to lead.

Those who are most successful at bringing out the best in others are those who set achievable “stretch” goals and believe that they have the ability to develop the talents of others.

We do know that effective leaders are constantly learning.

Jim Whittaker, REI's first employee and the first American to climb Mount Everest, once observed, “You never conquer the mountain. You conquer yourself–your doubts and your fears.”

Fear of failing or fear of what might happen doesn't help anyone.

If getting to the top is hard, staying there is even harder.

Leadership development is self-development. The instrument of leadership is the self, and mastery of the art of leadership comes from mastery of the self. Self-development is not about stuffing in a whole bunch of new information or trying out the latest technique. It's about leading out of what is already in your soul. It's about liberating the leader within you. It's about setting yourself free.

The quest for leadership is first an inner quest to discover who you are. Through self-development comes the confidence needed to lead. Self-confidence is really awareness of and faith in your own powers.

The more you know about the world, the easier it is to approach it with assurance.

Work to become all you can be.

As you give back some of what you have been given, you can reconstruct your community. As you serve the values of freedom, justice, equality, caring, and dignity, you can constantly renew the foundations of democracy.

All great leaders have wrestled with their souls.

You can't lead others until you've first led yourself through a struggle with opposing values.

Without a set of beliefs, your life has no rudder, and you're easily blown about by the winds of fashion. A credo that resolves competing beliefs also leads to personal integrity.

To step out into the unknown, begin with the exploration of the inner territory.

You'll never find an example of a leader who enlisted 100 percent of the constituents in even the most compelling of future possibilities. Not only is this realistic, it's fortunate. We should all be grateful for the forces we can't control and the voices we can't enlist. We need the cynics, skeptics, and alternative voices to keep our freedom. We need the challenges, surprises, and adversities to strengthen our courage.

Change for change's sake can be just as demoralizing as complacency.

Be careful to not have too much fun. Sometimes we can lose sight of the mission because we're having so much fun.

(Also, be careful because) it's easy to be seduced by power and importance.

Do not allow work to consume you.

Always remain open and full of wonder.

Constituents look for leaders who demonstrate an enthusiastic and genuine belief in the capacity of others, who strengthen people's will, who supply the means to achieve, and who express optimism for the future.

Without hope there can be no courage.

The secret is success is to stay in love (with your mission)

Leadership is an affair of the heart.

Part Six – Encourage the Heart

I hope you are enjoying this new, little series I have posted. Over the last several weeks, I have been posting my notes from the book The Leadership Challenge. I have heard it said that leaders are readers. My idea was to help keep you from having to read the entire book. I would even encourage you to download my notes for yourself. And, I ask that you subscribe to my/this blog (upper right side of the page.) Next week will be the last of my series on this book. Enjoy!

Part Six – Encourage the Heart

Chapter Eleven – Recognize Contributions

The human heart drives a company's success … Success must be kindled.

Your real job is to get results and to do it in a way that makes your organization a great place to work – a place where people enjoy coming to work, instead of just taking orders and hitting this month's numbers.

Most people rate “having a caring boss” even higher than they value money or fringe benefits.

We're using standards to mean both goals and values.

Values set the stage for action. Goals release the energy. The ideal state is often called Flow.

Vast amounts of research show that people feel best about themselves and what they do when they voluntarily do something.

People's motivation to increase their productivity on a task increases only when they have a challenging goal and receive feedback on their progress.

Giving encouragement requires us to get close to people and show that we care. No news has the same impact as bad news.

Expectations are powerful because they are the frames into which people fit reality. People are much more likely to see what they expect to see even when it differs from what may be actually occurring.

Research on the phenomenon of self-fulfilling prophecies provides ample evidence that other people act in ways that are consistent with our expectations of them.

One of the clearest and most often mentioned responses to the question “What is so special about leaders?” is that they bring out the best in us.

If we have someone in our life who believes in us, and who constantly reinforces that belief through their interactions with us, we are strongly influenced by that support.

There is no doubt, expectations–high or low–influence other people's performance. But only high expectations have a positive impact–on actions and on feelings about oneself. Only high expectations can encourage the heart.

People get excited about the challenges they face.

Optimism is important. When we fail, or come up short, we might remind ourselves, “You'll get it next time.”

At its root the word Lead comes from an Old English word that means “go, travel, guide.”

One way of showing you care is to pay attention to people, to what they are doing, and to how they are feeling.

Controlling managers have low credibility. Highly controlling behaviors–inspecting, correcting, checking up–signal lack of trust.

If people know there's a caring leader in their midst, in search of achievements to recognize, they'll want to show the best of themselves.

Learning to understand and see things from another's perspective–to walk in their shoes–is absolutely critical to building trusting relations and to career success.

Learning another's language, literally or figuratively, is essential to leadership, and absolutely critical in this era of global leadership.

If others know we genuinely care about them, they're more likely to care about us.

It is absolutely necessary for leaders to be clear about standards and to create a condition of shared goals and values.

When we're open we make ourselves vulnerable–and this vulnerability makes us more human and more trusted.

By demonstrating the willingness to take risks, leaders encourage others to take chances as well.

To make recognition personally meaningful, you first have to get to know your constituents.

Take the predictable and make it a surprise. Find variety in repetition.

To the extent possible, you want to create a climate of personalization.

It's well worth the effort to make a connection with each person.

Instead of relying only or even primarily on formal rewards, effective leaders make tremendous use of intrinsic rewards–rewards that are built into the work itself, including such factors as a sense of accomplishment, a chance to be creative, and the challenge of the work–immediate outcomes of an individual's effort.

There are few if any more basic needs than to be noticed, recognized, and appreciated for our efforts.

Leaders are constantly on the lookout for ways to spread the psychological benefits of making people feel like winners, because winners contribute in important ways to the success of their projects.

Intrinsic rewards are the fun you have while being down on the field playing the game. Extrinsic rewards are the results posted on the scoreboard. What we found among leaders was not so much an either-or mentality as a both-and type of thinking. Leaders are remarkably skillful in using these types of rewards in complementary ways.

Leaders get the best from others not by building fires under people but by building the fire within them.

What personalized recognition comes down to is thoughtfulness.

Telling your story in public will create more meaning.

Leaders expect the best of people and create self-fulfilling prophecies about how ordinary people can produce extraordinary actions and results.

Leaders make people winners, and winning people like to up the ante, raise the standards, and explore uncharted territory.

A major part of the reward comes with the presentation.

(What one gal remembers most) was the call from the CEO who took the time to personally congratulate her and thank her.

Having high expectations, and providing feedback, increase the likelihood that your people will achieve competence and mastery.

Being a Pygmalion entails developing a winner's attitude in those around you.

If criticism is necessary, comments should be restricted to behaviors rather than character. Similarly, feedback–preferably extensive–should stress continuous progress rather than comparisons with other people.

Positive expectations generally reflect a meritocracy in the minds of leaders, and a strong respect and appreciation for people from different backgrounds. You need to envision the possibilities for greatness within each of the people on your team.

Make sure that whoever makes the presentation knows exactly what is being recognized and can talk about specific contributions that have affected the company. Also, give the recipients an opportunity to make a few comments.

Setting a positive example gives people a sort of behavioral map to follow.

Weekly breakfast meetings are perfect opportunities to ask about people who are doing things right.

Part of a leader's job is to be a cheerleader.

What makes a “thank-you” work is the leader's genuine care and respect for those who are doing the work.

Chapter Twelve – Celebrate the Values and Victories

Celebrations serve as important a purpose in the long-term health of our organizations as does the daily performance of tasks.

Find ways to bring people together to have some fun.

Promoting a culture of celebration fuels the sense of unity and mission essential for retaining and motivating today's workforce.

Every gathering of a group is a chance to renew commitment.

Everything about a celebration should be matched to its purpose.

Celebrations are to the culture of an organization what the movie is to the script or the concert is to the score–they provide expressions of values that are difficult to express in any other way.

Working with others should be rejuvenating, inspirational, and fun.

Make gatherings pleasant, playful, and humorous so that people want to participate wholeheartedly.

Our files are full of personal-best leadership cases in which strong human connections produced spectacular results.

Leadership stories should have themes. There are stories that kick start urgency, stories to make people brave and wise, stories about core values, stories to inspire innovation.

One leader flies slightly out of formation because he firmly believes it breeds curiosity, builds new relationships, and encourages innovation.

You want to celebrate your company's victories, and make sure everyone has fun.

You need set the example. Working shoulder-to-shoulder, with your people, shows that you care. This visibility makes leaders vulnerable. It also makes the leader more real and more genuine.

You can't delegate any of these practices.

Public ceremonies provide opportunities to reiterate key values and to make heroes and heroines of individuals with whom everyone can identify.

Intimacy heals; loneliness depresses.

Whatever you wish to celebrate, formalize it, announce it, and tell people how they become eligible to participate.

There is nothing wrong with having fun and playing games at work. Liven up the place.

Being a human matters.

Always be on the lookout for people doing things right (not just people doing things in need of correction)

Emotions are contagious. Literally. Moods are social viruses, and you can catch a bad mood as easily as a bad cold.

You can cheerlead for your group better than anyone else.

Try a thank-goodness-it's-Monday party.

Most personal-best leadership experiences were a combination of hard work and fun.

People love it when they can laugh with the boss.

Encouraging the heart is not the end of the process. It's a continuous part of the leadership journey.