The impact of timing: why this financial crisis is our biggest break

Yesterday the Guardian posted an excerpt from Malcolm Gladwell’s latest book, Outliers: The Story Of Success. I enjoy reading Gladwell’s work, even though I find it a bit rambling and missing some structure that woud improve impact. Maybe he means it that way?

The main part of the excerpt is about how “genius” can be tracked to practice/hard work, specifically narrowing to about 10,000 hours of practice being required. Good, interesting information with several fun studies and stories to back it up.

Another (more dispersed) piece of the excerpt is about timing. Here are the two points made about the “timing” of genius:

  • Take ice hockey in Canada: look at any team and you will find that a disproportionate number of players will have been born in the first three months of the year. This, it turns out, is because the cut-off date for children eligible for the nine-year-old, 10-year-old, 11-year-old league and so on is January 1. Boys who are oldest and biggest at the beginning of the hockey season are inevitably the best. And so they get the most coaching and practice, and they get chosen for the all-star team, and so their advantage increases – on into the professional game.
  • …an astonishing 14 on the [Forbes 75 richest people in history] list are Americans born within nine years of each other… [snip, snip]… almost 20% of the names come from a single generation – born between 1831 and 1840 in a single country. The list includes industrialists and financiers who are still household names today: John Rockefeller, born in 1839 (the richest of the lot); Andrew Carnegie, 1835; Jay Gould, 1836; and JP Morgan, 1837.

    [snip, snip] It was when all the rules by which the traditional economy functioned were broken and remade. What that list says is that it was absolutely critical, if you were going to take advantage of those opportunities, to be in your 20s when that transformation was happening.

    If you were born in the late 1840s, you missed it – you were too young to take advantage of that moment. If you were born in the 1820s, you were too old – your mindset was shaped by the old, pre-civil war ways.

Today, many of us are feeling limited by timining — specifically, why did this financial crisis have to hit now, just as we were hitting a stride. Re-read this sentence about why 20% of the 75 richest people in history come from one country and one period:

It was when all the rules by which the traditional economy functioned were broken and remade.

While it is scary, this financial crisis is the breaking of our traditional economy. What is amazing is that this is happening on a global scale. It isn’t just about one country, but about one large global economy that is being broken. Now, it is our time to remake it.

Since many of you reading my blog are near my age, you will also be thinking about the next sentence that said you had to be in your 20s to take advantage of that. But read the next paragraph: This is your choice. Don’t be stuck in your mindset that was shaped by the old, pre-global economy, pre-financial correction days. You can look at our situation as Sequoia did in their famous RIP Good Times session for their entrepreneurs, or you can look at this as a new economy. How will it be remade? What do you know now that will be wrong for the future? What will be right?

When I read Titan, I thought I could learn a great deal from Mr. Rockefeller, but I never imagined I would be living in similar times as him. This excerpt is making me think differently on this, and I am feeling excited and ready for the challenge — even though you have to divide by 2 to get me to 20.

What is on my shirt today? A quote from Madeline Albright at a recent Wellesley dinner (see #3):

 Be confident
but not certain

I would add a third important point to Mr. Gladwell’s points: practice, timing, and support. Mr. Gladwell mentions this too in passing. For the hockey players, it is the ones that go the most coaching. In speaking of Mr. Gates and Mr. Joy it was access to computers (and specifically the people who gave them that access). Remember to support each other!

POVERTY: POOR, DESTITUTION, SCARCITY, DEFICIENCY

I have left many posts site in my drafts folder, but I can’t let this day go by without supporting Blog Action Day. The purpose of Blog Action Day is to bring focus to an issue that matters to all of us by putting the power of blogging behind one topic. This year’s topic is Poverty.

I’m not an expert on poverty, and haven’t been an anti-poverty advocate other than occasional donations and volunteer work. As I was thinking about this post, I did what I normally do when I start thinking about a topic: I went to the Oxford English Dictionary to get a better sense of the topic based on definitions. That’s what drove the subject line and the structure of this post.

I have to admit that I felt a bit of unease and somewhat frustration… why haven’t I done more? As I thought through this more over the last month, I remembered something my grandmother, Zella Beattie, used to say to me: Use your talents.

It sounds simple, too simple or broad for impact. Aren’t we always using our talents… except when we get lazy? What she meant though is along the lines of what Marcus Buckingham is teaching regarding focusing on your strengths. This leads to the question of what are your strengths, and how can the regularly be used to help the state of poverty, in your city, country, continent, or world — as part of your daily life, along with special actions, like donations and volunteering — official or unofficial.

So, as a high-tech executive, where are my strengths best used to act against poverty? Here are my top 5:

  • Job creation. A great deal is reported in the news about layoffs, what isn’t reported is job creation. The most thorough statistics I found are from the Small Business Administration in the US, reporting employment across companies from 1990-2005. In only two years of that 15 year span has there been a decrease in net employment numbers. Remarkable record. I am a business builder — less poor.
  • Training. I believe in focusing a business on skilled work — anything else possible should be outsourced, as it isn’t how you will win. Skilled work also means you need to train employees, making an investment in them. Training ==> higher productivity ==> better margins ==> more money to invest back into the business. With a focus on training, along with increasing your business value, you are increasing the overall wealth of the population by adding more skill — less deficiency.
  • Vendor relationships. Understand your vendors in the same way you understand your customers. What are their goals and how do you fit in? Select those vendors that are important to your business and spend the time building the relationship. Together, you will find efficiencies pretty easily, and you will also find new business opportunities regularly. Being strategic about your vendors means a healthier, stronger business — less scarcity.
  • Community action. When it comes to community action that supports your business, my hero is Danny Meyer, who started Union Square Cafe and has turned it into a very successful restaurant and catering group in NYC — one of the toughest places in the world to succeed with a restaurant. He’s had a community-action approach with every restaurant with an eye to the community impact. I highly recommend his book, Setting the Table, to learn more about a community-focus for your business — less destitution in your area.
  • Mentoring. As an executive, realistically, you can impact 1-3 companies at most. But you have a multiplier in the people that you provide mentoring. Mentoring can be formal or informal. Intuit had an incredible internship program that was designed in a way that increased mentoring opportunities. I have wanted to start a similar program via a network of start-ups and growth businesses to provide strength in numbers. Thanks to Blog Action Day for bringing this back to the forefront of my mind. I believe that through mentoring the multiplier effect will keep that job creation number high. Go out and inspire others for less poverty!

Thanks for listening. Writing this post has helped me think about some new ways I can have an impact on poverty in my everyday life. I thank the folks at Blog Action Day for encouraging this type of thought exercise, as I know it will lead to actions. Please take some time to visit their site, as there is a wealth of resources and ideas on what you can do to help!

On my shirt today, in honor of my grandmother:

Use your talents.

The wisdom to know the difference

People that work with me know that I am constantly searching for benchmarks: “Who is the best in the world at this” and how do we learn from them and compare to them? So, when July started looking soft for us, I started calling other retailers and other execs.

To set the stage, our first half of 2008 was incredible. We delivered 97% of a very aggressive plan. Very impressive work from a great team! July started looking soft, but we made a good month in the end. And now August, while we are still posting solid year over year growth, it isn’t where we were, or planned to be. With other execs telling me that they are seeing the same, why am I still feeling frustrated? Am I lacking the wisdom to know the difference between what I can control and what I cannot?

I could say that, but I won’t.
Remember when Bob Nardelli “resigned” from Home Depot? Mr. Nardelli and the board disagreed over his compensation being tied more closely to stockholder gains. He complained that that share price is the one measure that he cannot control. (Read Business Week’s summary.) While I have strong views about the public markets leading to bad executive decisions regarding short-term versus long-term results, I do believe CEOs are in control of their share price. (This does not mean CEOs can always make share prices go up.) Examples are given in the article that while Mr. Nardelli was doing great in some areas, there were other areas, like employee and customer satisfaction, where there were some big questions.
So, yes, the economy impacts my business. But it is my and my team’s responsibility to respond to the economy. It is about risks and contingencies. We need to be prepared. Moving quickly means less reliance on how you did things in the past and more on how you will do them in the future. How do you prepare for that? How do you keep on top of things?

Focus. This is where I have fallen short in the last six months. As things were going well, I let too many visions expand, and didn’t prepare enough for the Summer, and possible impacts of a typically slow season combined with a slow economy. This led to things like missed hand-offs over vacations, not matching an promotional campaign from last year, not pushing some shop partner launches before vacations, etc. All small details, that have overall had a bigger impact.

We are doing too much, missing important details. We need to step back and do less, execute exceptionally well. What are our critical few? Over the next few weeks, I will be working with our team to narrow our list of priorities, so we can deliver an outstanding Fall and Holiday season.

As I think about making tough decisions on priorities, I remember another benchmark I like to keep in mind, a 2006 article from Fortune. It was a study of Fortune 500 companies, comparing founder-led companies to those led by hired executives, like me. Founder-led companies (26 of the 500) overall performed seven percentage points better than the rest of the Fortune 500 over a ten-year period from 1995 to 2005. The two theories presented for why:

  • Founders care more. “Their companies are their life’s work, so they’re more likely to embrace long-term strategies.”
  • Founders tend to be industry experts. “They’re less likely to make the kind of disastrous ‘diversifying’ acquisitions that give M&A a bad name. ” (Note, in smaller companies think diversifying activities versus acquisitions.)

Focus on the long-term and on fewer things. Hired executives can learn that from successful founders. I want to be the best by many measures, not just those that are convenient, or fit me or my team well. Sometimes we use our wisdom to say that there are things we cannot control, using those as an excuse to not master what we can control. I think I would add an amendment to the Serenity Prayer:

Grant me the serenity to accept the things I cannot change;
the courage to change the things I can;
the wisdom to know the difference;
and the perspective to challenge that wisdom, when needed.

What is on my shirt today? One of my favorite Susan B. Anthony quotes:

Failure is impossible

P.S. Failure is impossible is also the title of an exceptional book about Ms. Anthony by Lynn Sherr. I highly recommend it, especially during an election season in the US. Voting is a right and a privilege.

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!

Why email doesn't work: A letter from Mark Twain explains

By referral of my friend, Phil Terry of Creative Good, I am reading The Americanization of Edward Bok. I double Phil’s recommendation for anyone that wants to read about an inspirational life from very early years; to understand an entrepreneurial mind from the late 1800s; and to learn a bit about publishing during this time. This man was a friend and confidant to nearly every famous author of this time, not to mention all of the US Presidents and other statesmen. An engaging read.

But, what was that about Mark Twain? It is such a coincidence that I read a passage in the book about Mark Twain’s response to an interview by Mr. Bok. Mr. Bok had secured an interview with the notoriously interview-shy Mr. Twain. He sent the written interview to Mr. Twain for his approval. The response (only the first two paragraphs included, the rest is just as brilliant):

My Dear Mr. Bok:

No, no — it is like most interviews, pure twaddle, and valueless.

For several quite plain and simple reasons, an “interview” must, as a rule, be an absurdity. And chiefly for this reason: it is an attempt to use a boat on land, or a wagon on water, to speak figuratively. Spoken speech is one thing, written speech is quite another. Print is a proper vehicle for the latter, but it isn’t for the former. The moment “talk” is put into print you recognize that it is not what is was when you heard it; you perceive that an immense something has disappeared from it. That is its soul. You have nothing but a dead carcass left on your hands. Color, play of feature, the varying modulations of voice, the laugh, the smile, the informing inflections, everything that gave that body warmth, grace, friendliness, and charm, and commended it to your affection, or at least to your tolerance, is gone, and nothing is left, but a pallid, stiff, and repulsive cadaver.

That paragraph, written by a brilliant author, I hope gives you an idea of what it takes to write versus talk. The problem… email is talk in “printed” form. Most often you miss everything that Mr. Twain calls out, and therein lies the problem.

I read this passage on the plane on Saturday, as I had just had three conversations the past week with people that were emailing problems back and forth and not picking up the phone. This included senior managers who weren’t talking to their team members regularly, but thought it was OK because they were emailing them daily. There is immense value in talking to someone, and it is worth your time. If you think that email takes less time, you are not spending the time writing that the issues deserve.

Before you hit send on an important, even semi-important, email, ask yourself, are you using a wagon on water? If the answer is possibly, then pick up the phone or stand up from your chair and walk a few cubes down… start to talk.

I have a dizzying array of meetings each week. Not all of them are great. The best ones have agendas prepared in advance (something I request of every meeting I’m in) and send to me at least a day before the meeting. This allows me time to think through what is needed and prepare some thoughts and responses. I would not trade that dizzyness for more emails. Meeting with team members gives me more energy than an email could, because of the soul that Mr. Twain points out comes across in a talk.

If you are a manager, have regular one-on-ones with your team members. If you find yourself with nothing to say in those meetings, then you are missing the point, and you and your team member need to prepare for those meetings more. Spend time in advance reviewing emails sent since the last meeting and thinking about goals, then you will have plenty to discuss.

What’s on my shirt today?

email is cheap
talk is valuable

P.S. Creative Good is a wonderful organization. If you don’t know them, you should.

Staying calm in a tempest

Though those that grew up with me would laugh, I am often asked how I stay calm in various, stressful situations. The reason my friends and family from long ago would laugh is that I’m not known by them as having an even temper. I’m passionate about life and that comes out pretty clearly and quickly, but what I’ve learned from my experience that they haven’t seen… perspective.

HSBC has been running an ad campaign for about a year that hits perspective well. The ads juxtapose two images with labels, then show the images again with the labels switched. My favorites:

With each of these I can remember my own perspective turning point. I am not and never have been interested in having children, and earlier, I often wondered why anyone woud do it. As my friends have had kids and I’ve gotten up close and personal with kids, I’ve seen what a sense of fulfillment and happiness children can bring. It has not changed my beliefs for my life, but it does make me much more calm and centered when I’m sitting on a flight next to a screaming, breast feeding baby. (I am completely serious.)

In business, even when I don’t have specific experience perspective, I do ask myself, “Why would that be happening?” And then try to realize what different perspectives there might be. This helps come to not only a sense of calm about the status, but a set of possible solutions based on different perspectives.

As I am writing this, I’m reminded of a Dan and Chip Heath Fast Company Make Goals Not Resolutions article from this Winter. Their analysis of how you achieve your resolutions is to visualize how you are going to reach what you want. Perspective is exactly that… visualization from different angles. In this case, it is to understand and succeed.

What is on my shirt today? In another post, I’m going to cover my thoughts on Danny Meyer’s book Setting the Table, which is an extraordinary book on business and hospitality. He introduces the word

umbuntu

as a South African greeting, which was translated as “I see you.” As Danny says, “That simply and effectively addresses the core human need to be seen and to feel seen.” To me, understanding someone’s perspective is the best way to really see them.

Why I'm not ashamed of Wal-Mart

I’m getting a little defensive over the Wal-Mart “thing” due to living in the Northeast and Germany, where Wal-Mart has been chewed up and spit out. I have to admit that I hate having the Wal-Mart conversation with many people in both of these places. Most typically, they boastfully say, “Well, Wal-Mart couldn’t succeed here.” I’m not completely sure why that is something to be proud of in itself. I think that folks are saying it because the big company didn’t overrun their town or country and turn everyone into mindless (money-saving) zombies with small businesses left in the wake. But that’s not the point of my post… that’s another conversation that maybe I’ll find interesting enought to write about at some point. My point is that

    • Even though they are a very large corporation and I’m quite sure there are people involved with Wal-Mart that have both deliberately made unethical decisions and mistakenly made bad decisions
    • And yes, turning a ship that big is hard, and they can’t react in the way they used to be able to react
    • And yes, they have lost some of their charm with Mr. Walton gone

… I still respect what Wal-Mart has done and I’m proud they are from Arkansas… my home state.

I’ll give you my top 5 reasons why I respect Wal-Mart:

  1. Before Ben & Jerry’s, Google, and Southwest, Wal-Mart shared success throughout the ranks. Yes, across the South, there are people who were cashiers at Wal-Mart who are millionaires now. Sam Walton believed in his employees and rewarded them with stock in the company through ESOPs and stock grants.
    • Note… The company doesn’t have that leverage for employees now due to their size. This is a law of nature, not something evil they are doing to their employees. 
  2. Sam Walton was a communicator, and he built a company that values communication. Being from Arkansas, I saw examples of this from friends who worked there. I knew about the Saturday morning meetings that drove the business for years and years. I know about the incredible satellite network used for communicating across the country to all the remote places where Wal-Mart was.
  3. Wal-Mart defined relentless focus on execution. An example: Their distribution centers lay out let stores have the minimum amount of space dedicated to storing inventory without risking selling inventory… they used 40% of what most competitors did. Why? They knew that stores were about selling and they wanted maximum space to selling space. Wal-Mart knows what is important to them and then execute with keen focus against that.
  4. Wal-Mart is not a slave to their systems. Their systems are built and bought to support their business. (I was a vendor to them… this one I know keenly.) For example, their retail systems were designed to give local flexibility with centralized control. Stores were allowed to adjust prices as needed to respond to local competition, but only to a certain point, as defined by the business objectives set in Bentonville. In all my interactions with Wal-Mart, I have to say they are the best at being the master of their systems.
  5. Sam Walton set up the company to learn. This is one reason they’ve struggled more in recent years, there are very few people from whom they can learn. Mr. Walton set the company up to be driven by benchmarking themselves across industries and departments. Every single group was expected to benchmark with people that were the tops in their areas… across marketing, communications, HR, retail, distribution/logistics, etc.

I recently learned from the book What I Learned from Sam*Walton that there was an internal rally cry at Sam’s Club, HEATKTE, which stood for “high expectations are the key to everything”. This is how Mr. Walton ran the company. He expected more… all the time… from everyone. He was tough, but inspirational, and he built an outstanding company that has been the most successful company in my lifetime.

Please know I am not saying Wal-Mart is perfect. I don’t think this. I also don’t think they deserve the ire they have stirred up in people. Before you bash them, make sure you know the facts. The company has done a great deal of good and are a model company in many ways, particularly looking at the first 4/5ths of their existence.

OK, I’ve gotten that off my chest. Feel free to hurl insults my way for standing up for the big evil American corporation.