business

Failure and success

When have you spoken publicly about a swift kick you got after you failed at something? Hooray for David Neeleman, Jim Donald, and Ed Zander for having the courage to talk to Fortune about their “Lessons of the Fall“. Each revealed a great deal about his fairly recent experience being canned by his board after years of success, and what led up to that event. The points I most appreciated:

  • Regarding boards. Mr. Neeleman said, “… looking at the company through this little hole once a quarter at a four-hour meeting — board members don’t know that much about the company.” I have to admit that reading this line, I expected him to then nicely bash his board for bad advice. Rather he said, “I would have been much more engaged with the board… You have to give them an accurate view of what’s going on… That’s the job of the CEO, and I failed.” We often think those above us know more than we do. Often times, they don’t. They most often have more experience and can give us perspectives, ideas and judgements based on that experience. It is our job to make sure they know what is important in this specific situation, so they can help us.
  • Regarding activists. Mr. Zander was asked directly about dealing with Carl Icahn, definitely a powerful activist as a shareholder. His advice: “…what decisions I had to make, what the long-term strategy was – don’t do anything for the short-term. And sometimes that’s painful for short-term shareholders.” From this, I believe Mr. Zander made the decisions he felt were right, despite the activists knowing the consequences. I respect that. In the end, it is your face you have to look at in the morning, not the activists. Listen, and then act in a way that allows you to look at yourself with pride. I think Mr. Zander did.
  • Regarding Moms. Most of us have a “mom” in our lives, be it our natural mom or one that has picked us up along the way. They play important roles in keeping the right balance between incredible belief in us, and also, keeping us in check. The most real part of this interview was when Mr. Donald said the hardest and first thing to do was to call his mom and tell her after he had lost his job with Starbucks. He was upfront with her, and also reassured her that everything was fine. He faced it quickly and with grace, but made it clear that it was the toughest day he’s faced.

I respect each of these leaders more now. Thanks for showing the rest of us success in failure, along with your many successful successes.

What is on my shirt today? My favorite failure saying:

What would you do
      if you knew
 you could not fail?

Now, stop reading and go to it!

P.S. Some of you have asked for more on the IronMan event. First, thanks for asking. Second, there is a post on the Spreadshirt blog about it that was taken from an internal newsletter interview. Hope you enjoy it!

Do you know what drives your business?

For the past few months, we’ve been working on driver-based analysis and planning for our different business units at Spreadshirt. The effort reminded me of why so many businesses do not attempt such an analysis. The main reason: lies, damn lies, and statistics. What happens is that you start at the highest level. Like most retail businesses, for us, we can start with traffic, conversion and basket size for each of our business units. Kind of feels cold, huh?

The next step for the drivers is to get to what makes each business unit special to its customers. For us:

Shop Partner. Number of selling shop partners and sales per shop is where you head next. And, once you have that, you start thinking about the different levels of shop partners used to judge sales per shop. For example, major accounts, power sellers and then the “long tail” are typical classifications. Then, what about recruiting of those different partners? Lead generation and direct advertising can be broken into impressions, click through, registration, activation, and shop set-up. What about shop traffic and customer WOW (I believe in Net Promoter for this measure)?

For each of these, you then argue more critical drivers. And, we haven’t even gotten into regions, and their maturity, which has a big impact on the drivers.

The question is where do you stop? When do the numbers matter and when do they become details that are distracting? My experience… stay at 5-7 drivers. No lie. Pick 5-7 and stick to them. Period.

Team members can focus on levers that impact these drivers, but don’t let those levers become drivers themselves. Keep the team focused on the drivers for their business, which will help you focus on the business as a whole versus get stuck on one number.

Another recommendation… be careful not to let drivers be self-referencing. For example, we could define major accounts as accounts over a certain level. The problem with this is that you don’t know if an account is major until it becomes major. You want to be able to target leads as having “major” potential. We did this at QuickBase by defining major accounts as Fortune 500, with a special emphasis on Fortune 100, as an example. While not all Fortune 100 accounts turned major, the hit rate was higher than going after accounts with “potential”, than waiting and seeing if those became major to define them as major.

What are your thoughts and experiences with driver-based analysis and planning? When have you seen business drivers used well and when not?

What am I wearing on my shirt? To bring some levity to a serious post, I’m going to turn to one of my favorite mood lighteners, Yogi Berra.

Don’t make the wrong mistake

Drucker rocks

Andreas, who runs our brand evangelism, gave me The Starfish and the Spider to read. I agree with him that the book isn’t a big WOW, but has some nice points. My favorite in brief…

Peter Drucker consulted with General Motors in his early days. He suggested to the GM management that they:

Ask customers what worked for them and what didn’t; and incorporate that feedback into corporate strategy.

Note, Drucker didn’t say, “incorporate that into the product design“, but rather, “incorporate that into corporate strategy.” So, while many companies aren’t even doing the former still today, Drucker understood the power of the latter… oh so many years ago.

And, after his thoughts were rejected at GM, he took these and more thoughts to Japan. He said they embraced this theory:

Top management is a function and a responsibility, rather than a rank and privilege.

Think about this to drive understanding and actions from management-to-employees and employees-to-management.

Why are these my favs? The simplicity in both statements. Do you have any other Drucker-isms you live by? I might add it to my shirt, which on the front would say…

Drucker rocks!

P.S. If you want to read a great book with new business ideas, get Mavericks at Work by Bill Taylor and Polly LaBarre.