what happens and how it happens depend on the network

“The crux of the matter is that in the past, networks have been viewed as objects of pure structure whose properties are fixed in time. Neither of these assumptions could be further from the truth. First, real networks represent populations of individual components that are actually doing something ““ generating power, sending data, or even making decisions. Although the structure of the relationships between a network’s components is interesting, it is important principally because it affects either their individual behavior or the behavior of the system as a whole. Second, networks are dynamic objects not just because things happen in networked systems, but because the networks themselves are evolving and changing in time, driven by the activities or decisions of those very components.

In the connected age, therefore, what happens and how it happens depend on the network.”

–               Duncan J. Watts, Six Degrees ““ the Science of a Connected Age

Ramsay Gillman Obituary

RAMSAY GILLMAN (from Chron.com)

Ramsay Gillman, born in Houston, Texas on the 1st of February 1944, the son of Frank and Lula Gillman, died on Friday, the 3rd of June in his home in Houston. He was preceded in death by his father, mother, and brother, Barton Gillman. He is survived by his beloved wife and companion of 35 years, Stevie Gillman, daughter, Stacey Gillman Wimbish and her husband, Frank; son, Jason Gillman and his wife, Brittany; and son, Christopher Gillman. Grandchildren include Grace Wimbish, Frankie Wimbish, Jace Gillman and Cavan Gillman.

At the time of his death, Ramsay was serving as Chairman of the Board of the Gillman Companies, one of the largest privately held automobile dealership groups in the country.

The son of a pioneer automobile dealer, Ramsay began his automotive career working in the parts department of his father’s Pontiac dealership in downtown Houston. After attending the  General Motors Dealer Management Institute and other specialized schools, he became an authorized dealer in 1967.
Ramsay served as a Director for the National Automobile Dealers Association (NADA) from 1989 through 1999. He was elected as President of NADA in 1997. During his years as a Director, Ramsay was a member of the NADA Industry Relations Committee, the NADA Regulatory Affairs Committee and was Chairman of the NADA Government Relations Committee in 1993 and in 1999. At the time of his death, Ramsay was serving as a Trustee for the NADA Charitable Foundation and for the NADA Dealers Election Action Committee.

Ramsay served as President of the Houston Automobile Dealers Association and Vice President of the Texas Automobile Dealers Association. In 1984, Ramsay was appointed Vice Chairman of the Texas Motor Vehicle Commission by Mark White, then Governor of Texas and served for 3 years. At the time of his death he was serving as a board member of the Texas Department of Motor Vehicles appointed by Rick Perry, Governor of Texas.

Ramsay received the 1996 Sports Illustrated All-Star Dealer Award, presented by the American International Automobile Dealers Association, for his lifelong contribution to the automotive business and commitment to numerous charitable organizations.

In 1997, the State of Texas House of Representatives passed House Resolution No. 350, officially commending Ramsay for his “outstanding achievements” and years of dedication to the State of Texas, the automobile industry, his community, and charitable organizations. In 2009, The Texas Automobile Dealers Association honored Ramsay with the lifetime achievement Automotive Legends Award.

Charitable organizations that receive support from the Gillman family include the Houston Livestock Show & Rodeo Youth Scholarship Program, the Fort Bend County Women’s Center, which provides shelter for abused women and their children, the Earning by Learning Program, which rewards young children for reading books, the Ronald McDonald House, the Muscular Dystrophy Association and Sickle Cell Association.

Ramsay was an exceptional storyteller, always with a moving or humorous tale for every occasion. He lived life over the top, was a true friend, a great mentor, and enjoyed every phase of living. An expert golfer, ardent outdoorsman, an extraordinary fisherman and proficient hunter, he packed over 100 years of living in the 67 years we were privileged to enjoy his companionship and company.

A Celebration of Ramsay’s remarkable life is to be conducted at eleven o’clock in the morning on Wednesday, the 8th of June, at St. Luke’s United Methodist Church, 3471 Westheimer Road in Houston, where the Rev. Peter Miller, Pastor of Caring Ministries, is to serve as the officiant.

For those desiring, in lieu of customary remembrances, memorial contributions in Ramsay’s name may be directed to the Fort Bend Women’s Center, P.O. Box 183, Richmond, TX, 77406; the Houston Automobile Dealers Association Scholarship Fund, P.O. Box 16550, Sugar Land, TX., 77496-6550; the National Automobile Dealers Charitable Foundation, P.O. Box 9133, Tacoma, WA., 98490-0133.

Jason Calacanis on Scurvy

“Hey wait. You’re the captain of the ship. We can talk about what direction we’re going. But we’re going in a direction. And if there’s a debate about what direction we’re going, it’s my ship, I’m gonna pick at the end of the day. I’m gonna take everyone’s input. But there’s gonna come a point when the ship has to go. Because there’s only a certain number of lemons. And you’re gonna get scurvy and we’re all gonna lose our teeth. And it’s gonna get f*cking crazy. And people are gonna lose their minds. We need to keep the ship moving. You can get your own ship.” –  Jason Calacanis

and

“What gets you out of bed in the morning to win? You have to have some love for the game.” –  Jason Calacanis

 

So ya, I respect the dude. Passionate? Yes. Overly honest? Yes. Respect? Yes.

Managing The Fire-Hose of Ideas

As the company has grown over the years, I have hit a number of tipping points that were unexpected and hurt the company. Bears AttackUnfortunately I have been unable to find a book that predicts these moments accurately and I know few people who have organically grown a 30+ employee 13 year old technology and marketing firm. We’re a bit odd. So while there are many sage leaders in the city of Houston, few have ever been “in my shoes” so to speak and most aren’t really sure what we do. In other words, sometimes I am flying blind and changes are clear only in hind sight. I am having one of those moments now and it involves ideas and a very motivated, skilled, enthusiastic and hard working group of employees.

The problem is ideas. Too many of them.

My management philosophy has always been the same. “Hire good people. Train the hell out of them. Let them run.” There can be problems with this. If you train them and they run off to a field to pick  daisies, you fire them. But my experience has been that people are a LOT more motivated when they are given the tools and the freedom to do their jobs.

I once worked at a large corporation where I needed a Vice President’s sign off to get a $30 book I needed to do my job. And I had to write up a justification about why I needed the book. I called it a “pre-book-report” at the time. Anyway, I come from a family that consumes books like other people consume Doritos so this blew my mind. My manager, her boss, the VP and I spent way more than $30 in salaries debating the merits of said book. Most of which was made up because none of us had read it. So while the CEO said we were there to “maximize shareholder values” the rest of us didn’t get the memo. So I kept reading books and just paid for everything I needed out of my own pocket.

And I vowed I wouldn’t cripple my employees that way when years later I started a company.

Back to ideas. Thanks to our clients we get to eat. And we help them make a profit using our technology and processes. Everything is thanks to our clients. They expect and deserve the best possible service at the best possible value that we can deliver. That takes training. And I am committed to training. So far this year we sent 11 people to SXSWi, 2 people to SMX, 2 people to DrupalCon, 2 people to NTEN’s NTC, 2 people to the TSG Summit, 2 people to PyCon, we have 4 scheduled to attend Tufte, etc….  And it’s only March 19! Perhaps I shouldn’t share this because my competitors can see that the secret sauce over here is training. But I’m not that worried as investor led companies tend to maximize profits for the quarter and therefore lack the discipline and will to invest so heavily in training. Particularly if all of those expenses hit you in the same quarter.

Now, all of those employees are back from cities all across the United States and they are walking in to my office with idea after idea. After idea. After idea. And ideas are good. But it’s too much.

This is compounded because ideas are pretty cliche. You can’t patent an idea, you can only patent an implementation of an idea. Ideas only have value when you take action on them. It is results that create value, not ideas. Yet all of us in life want to provide the ideas and have them get done, usually by someone else.  And we take it personal when someone shoots our idea down, and people know that, so the more ideas you throw out there the more people nod their heads in agreement. “Why yes, that is a good idea.” And it might be. But we’ll never know unless someone prioritizes it and commits the resources to implement the idea and then evaluates the results.

And some ideas are just bad. For example Ethan Watters expressed these emotions about one idea:

The idea of going to a Shriners meeting and listening to some high school student read her award-winning essay on the value of democracy seemed like an activity that I might encounter in the first ring of hell.

Nothing against the Shriners, but that is an idea that if you told me you were doing that I would say “hmmm, sounds interesting.” Yet I would be thinking: “No, that does NOT sound like a good idea for me and NO I do not want to test that idea.” But I wouldn’t say that.

A few years ago I judged a Tech-Transfer event for MBA students who presented a case on if an academic patent should be commercialized for the university where the research was done. I kid you not – this one patent was for a nanotech etching machine that was less than half the size and more expensive than one that was commercialized and in use in industry. It is hard not to look at that idea, shake your head, and think “was that just some dude who wanted to frame a patent for his wall?” I guess it’s academia so they have more wiggle room, but sheesh. This is an example of a bad idea that wasted time and money.

Testing ideas is expensive.

As a CEO your dream is someone walks up and says

“I had this idea so I prototyped it and the initial results look promising. Can we schedule a time to go over the results?”

And sometimes that happens. It really does. And those people get promoted at our company much faster than others. But more often than not you are presented with an idea like it is a sacred object and expected to immediately commit resources to test it. And there are simply too many ideas. And never enough resources.

(Sidebar: You actually get a LOT of innovation from the sales team (yes really) because they talk to prospects and see actual needs before people who only work with products we already support. Because no one within the company already knows X new product, a sales person with initiative will self install (read: prototype). That is how we started offering WordPress and Drupal as new product lines and THEY ARE GREAT!)

I was pondering the expense of organizing and testing all of these ideas while on a long walk with the dog this morning. A few possible solutions came to mind:

  1. Set up a DIGG type ranking system for idea submission and have employees vote the ideas up or down.
    1. They talk about this a little in Groundswell. But Idunno, I rarely see committees find the best possible idea. They usually blend everything until you get a compromised version of mush. Or whoever can write the best python script wins the vote. I love Amazon reviews, but I rarely write one. Does that mean my ideas don’t have value because I won’t use that particular tool?
  2. Require employees to write-up the idea and present it in an organized fashion at a scheduled time.
    1. This would stop the revolving door in my office of people presenting great ideas. Yet as I recently blogged about visionaries, it is the Eureka moments that lead to big discoveries. I am not sure a global “you must write it up” filter is in the best interest of the company.
  3. Schedule office hours.
    1. This is probably something I should do as a CEO as I am a little too accessible at times which prevents me from getting my work done. But again, will I miss a Eureka moment? What is it that I do that could possibly be more important than working with our employees?
  4. Say “no” to everything.
    1. Saying “no” to everything has actually worked well for me in the past. If the employee  isn’t motivated enough to overcome the first “no” then they aren’t that committed to the idea. Or so goes the thinking. But people are very different culturally. Extroverts ask me the same question 10 times while introverts won’t ask at all! Won’t this method bubble the “squeaky wheel” ideas up to the top? I doubt those are the best ones.
  5. Make them run it by their manager first.
    1. Otherwise known as the “hide behind hierarchy” method. Would this not break the spirit of an employee if they felt the CEO was inaccessible? What if they had an issue with their manager at a personal level, but had a good working relationship, but didn’t want to share? And do I really want to be the type of founder who is unwilling to talk to any employee? The answer to that is a resounding “no!” I spend more time with employees than I do with clients because I know developing our employees is what it takes to get to great customer satisfaction!

I’m at a loss here. I see we have hit this point. I feel like I am drinking from a firehose and I can’t keep up. While ideas alone are worthless, the implementation of a good idea has definite value!

My question to anyone who has made it this far in the post is “do you know of a system that has been tested and works for a CEO of a high growth company to handle employee ideas?” And I specifically do not want ideas. What I need is knowledge of a system that has been tested and works. Even if that system is a behavior modification on my part.

 

 

Rick Perry’s Business Income Tax is Bad for Employment

This is a cross post. To comment go to the official version on the Chron here.

schipulmug.jpg

Ed Schipul

In 2006 Rick Perry passed an uneven business income tax in the state of Texas. This is in conflict with the Texas state constitution which states you can not have an income tax without a referendum. And for five years he has been able to get away with it. To the detriment of small business and preventing the creation of jobs in our state.

It is not tax that breaks a business man’s soul. It is inequities.

First things first:

“Render unto Caesar the things that are Caesar’s” – Matthew 22:21

One of the first rules of business is “Never ever EVER mess with the government.” Gangster  Al Capone learned this the hard way going to jail for tax evasion instead of murder.  I say this first to emphasize that  I pay my taxes. All of them. Promptly. I collect sales tax and employee deductions and submit those promptly. And I pay them not out of fear of enforcement, but out of obligation as a proud American. Same reason I vote. It’s the right thing to do.

So why this blog post then? Why poke the ant-hill? Because I read about this tragedy in Austin a few weeks ago. For some reason it really hit me hard. From the article.

Restaurant owners dead in apparent murder-suicide: Yoli and Michael Amr ran Mama Roux and founded Gumbo’s
He offered his Louisiana cooking skills to the kitchens of places such as Gumbo’s and  Mama Roux. She brought her personality to the hostess stand.

On Monday, they told workers they were going out of business.

By Wednesday morning, they were dead.

Police said they do not yet know a motive for the deaths.

A Texas corporation listing Yoli Amr as the owner “” Dixie Roux Inc. “” had its charter revoked Jan. 28 for violations of the franchise tax portion of the state tax code, according to documents on file on the Texas secretary of state’s website.

I do not know the motive for the tragedy in Austin. But I think all of us would speculate it was the failure of the business. I can’t imagine having to lay off my entire staff of 32 people. That would be horrible. The fact that they shut down on a Monday and were gone by Wednesday suggests that was the event that triggered it. And the reporter mentions the Franchise Tax based revocation of their license which suggests, but doesn’t convict, the new tax as part of the problem.  (Note “Franchise” does not mean franchises like Subways. It applies to all businesses doing business in Texas)

At a high level it sounds like their business, like many in our fourth year of recession here in the states, was having money problems.

It is hard to run a small business. I say this from experience, or maybe I’m just a bit slower than the average bear. But it takes all of my energy. I don’t want sympathy, I chose this path. But y’all need us crazy business owners. From SBA small firms create jobs:

  • Represent 99.7 percent of all employer firms.
  • Employ just over half of all private sector employees.
  • Pay 44 percent of total U.S. private payroll.
  • Have generated 64 percent of net new jobs over the past 15 years.
  • and the list goes on…

So what is the new revised “Franchise Tax” law and why do I call it a Texas Business Income Tax? Why didn’t Texas just pass an income tax? That isn’t politically prudent. And oh ya, Income Tax is against the Texas Constitution without a referendum. Specifically:

Sec.  24.    PERSONAL INCOME TAX; DEDICATION OF PROCEEDS. (a)  A general law enacted by the legislature that imposes a tax on the net incomes of natural persons, including a person’s share of partnership and unincorporated association income, must provide that the portion of the law imposing the tax not take effect until approved by a majority of the registered voters voting in a statewide referendum held on the question of imposing the tax. The referendum must specify the rate of the tax that will apply to taxable income as defined by law.

Governor Rick PerryIn 2006 the Texas State Legislature wanted to reduce property taxes. I own a home and pay taxes on that as well and being somewhat fiscally conservative I liked the idea at the time. It is described on the Office of the Governor – Rick Perry site as:

The commission’s work culminated with a proposal to reform the franchise tax and for the state to buy down school property taxes. Working from the Texas Tax Reform Commission’s recommendations, Governor Perry called a Special Session in 2006 to address school property taxes. The commission’s plan was passed by the Legislature, and in May 2006, Governor Perry signed into law a package of bills that has provided tax relief of over $16.4 billion in school property taxes.

In other words, to  reduce property taxes you must increase business taxes. Take $100 from Small-Business-Employer-Peter and give $10 each to Homeowner-Voter-Paul. OK, I get that. I’ll pay my share. But calling it a tax cut really galls me.

So what did they come up with? The euphemistically named “Margin Tax.” This Texas business tax increase of 2006 is described by Politifact as:

…in a 2006 special session, engineering a tax overhaul that reduced local school property taxes. To help districts offset the loss of revenue, the Legislature revamped the franchise tax, increased the cigarette tax and modified how the state taxes used-car purchases. Perry signed the overhaul legislation into law in May 2006.

A key goal of the new franchise tax, often called the margins tax, was to apply it to companies that had largely avoided the old corporate franchise tax. As expected at the time, businesses paid more in total after the overhaul of the franchise tax than before, although less than was forecast. Franchise tax revenue had totaled $5.8 billion in 2006 and 2007. In 2008 and 2009, the first two years of the revised tax, total revenue was $8.7 billion.

However, the 2006 changes didn’t affect all businesses the same way, said Dale Craymer, president of the Texas Taxpayers and Research Association… (more)

Yes, you read that right. Business Taxes in Texas went from 5.8 Billion to 8.7 Billion looking at a two year period. Which by the way is less than was projected.

So how do you explain the Franchise Tax law and why it is unfair? Well first because you can’t pass an income tax, they passed a “Margin Tax” where Government is going to classify each business and define how to calculate their margins. Um…. call me a skeptic but my experience has been government isn’t exactly an expert at defining the costs of running a business.

For a grocery store the following are NOT considered valid costs of running a business. I repeat, these grocery store expenses are the ones that are NOT allowed.

The following costs are not allowed as  COGS:

  • rent paid for the distribution center;
  • rent paid for the grocery store space;
  • refrigerated display cases;
  • shelving for grocery display;
  • compensation paid to cashiers and baggers;
  • the cost of cash registers;
  • credit card company fees; and
  • grocery bags.

Cash Registers? What are we to do? Wander into an unheated warehouse with no employees with food stacked on the floor and leave money on the floor as we leave the building carrying half rotten food in our hands?  So lets get one thing straight. The Texas Franchise Tax, called the Margin Tax, is in fact the Texas Business Income Tax with big government in charge of itemizing your Profit and Loss statement.

But wait, it gets worse. The tax rate is either 0.5% for a retail establishment or 1% for a service business. It can be double for the exact same type of service and generally favors larger corporations over small business. A recent editorial in the Chronicle explained the double taxation of small service stations:

Mom-and-pop auto repair shops across Texas are being forced into an unfair competition with big companies,  dealerships and franchises that receive preferential tax treatment under state law.

Texas requires incorporated businesses with more than $1 million in sales (in 2012 this figure rolls back to $600,000) to pay a business tax called the franchise or margin tax. Even though $1 million sounds like a lot of money, many small businesses fall into this category. The state provides different methods to calculate the tax based on the classification of businesses. Service industries use one method, retail businesses use another and trades such as plumbers and roofers use a third method. Which method do you suppose the auto repair business is required to use? The worst possible one.

The independently owned auto repair shops in Texas are taxed at twice the rate applied to dealership-owned shops or franchise stores because of an outmoded classification system.

So if I have my Chevy fixed at the local family owned repair shop, that locally owned business pays twice as much tax as if I had paid to have it repaired at the Dealership (do we still own GM?) I don’t know about you, but that just seems wrong to me. It’s cheating plain and simple and should not be tolerated.

In business you have net profit, which is all of your sales minus all of your costs. This is what Corporations get taxed on by the Federal Government. It works pretty much like your personal taxes. Not everything is deductible so you always show more net profit on your corporate tax returns than you actually have at the end of the year (travel is only 50% deductible on the justification that you went to Odessa on business to party it up, but whatev…). So while someone may not like the Federal Income Tax, it is at least consistent. If it is bad, it is bad for everyone.

Want more jobs? Give us a level playing field and leave us alone. I realize Atlas Shrugged is  puerile, but there are some truths in there. Get rid of the euphemisms. Speak clearly. Level the playing field. Then leave us alone. Regulate and tax us, but regulate and tax us fairly. You run the government and we’ll run the businesses and create jobs. OK?

The Texas Franchise Tax, what I shall pin to the Governor who passed it as Rick Perry’s Texas Business Income Tax, is a huge business tax increase and it just isn’t fair to small business. It needs to be scrapped and fixed from the ground up. Send me a tax bill. Raise my taxes. Pass a fair income tax. Fine. I’ll pay them like I always do. But Texas, please send me the same tax bill you send the other businesses. That is only fair.

Closing thoughts: In the course of writing this blog post I learned of the amazing work Yoli and Michael Amr did with animals. And read the heart felt comments on these posts. I am sorry I did not get a chance to meet them. In their honor I made a donation to Williamson County Animal Shelter. I also learned about some amazing resources to help entrepreneurs and anyone considering suicide. Don’t do it. We need you here. We really really need you here.

PS: And  Governor, if you are reading this, you can block your fellow Aggie on twitter here. ;-)

stultifying effects of social proprieties

James Turrell's The Light InsideLess fairy tale than fable about the consequences of collective hypocrisy, Andersen‘s story bears a message that has become a proverbial truth”¦ Choosing to ignore what is in plain sight and blindly acting as if there were nothing wrong are the targets of Andersen’s satirical barbs. That it takes an “innocent“ child to divine the truth that “His Majesty“ is unable to discern is a reminder of the stultifying effects of social proprieties and the way in which culture and civilization produce duplicity and hypocrisy.

The Annotated Classic Fairy Tales, Maria Tartar on The Emperor’s New Clothes

HBR: Authentic Leadership as Bad?

As someone who regularly recommends the book Absolute Honesty to people, I found this HBR post on Authentic Leadership to be very interesting:

Most people can agree that authenticity is of great value. We’d rather be “” or follow “” a leader who is for real than one who is faking it. Acting in a way that feels truthful, candid, and connected to who you really are is important, and is a leadership quality worth aspiring to.

On the other hand, being who you are and saying what you think can be highly problematic if the real you is a jerk. In practice, we’ve observed that placing value on being authentic has become an excuse for bad behavior among executives. (more)

via prsa.org

When to Apply Business Advice

I emailed out to the company today’s quote of the day, something we do internally, with the three quotes below. But given how popular advice from 37 Signals is among some of my employees, I wanted to add some commentary (after the jump). And BTW, I definitely agree with these three quotes from Rework.

“You need less than you think”¦Do you really need six months or can you make something in two?“   (pg. 53)

and

“No time is no excuse.   The most common excuse people give: “There’s not enough time.“   They claim they’d love to start a company, learn an instrument, market an invention, write a book, or whatever, but there just aren’t enough hours in the day.   Come on.   There’s always enough time if you spend it right.“ (pg. 40)

and

“When you put off decisions, they pile up.   And piles end up ignored, dealt with in haste, or thrown out.   As a result, the individual problems in those piles stay unresolved.   Whenever you can, swap “˜Let’s think about it’ with “˜Let’s decide on it.’   Commit to making decisions.   Don’t wait for the perfect solution.   Decide and move forward.   You want to get into the rhythm of making choices.   When you get into that flow of making decision after decision, you build momentum and boost morale”¦You can’t build on top of “˜We’ll decide later,’ but you can build on top of “˜Done.’   The problem comes when you postpone decisions in the hope that a perfect answer will come to you later.   It won’t.“ (pg. 77)

All from  Jason Fried and David Hansson in the book  Rework

COMMENTS: 37 Signals has been successful creating jobs for people and making a profit. They build tools for themselves and then share their applications with others. There is no question Basecamp is a success. The 37 Signals formula is to build products to the exact specifications of THEIR customers, it just so happens the customer is first and foremost THEM.

Our business model is different. We make products for OTHER people. This is a subtle but important distinction. Picture a male fashion designer who makes women’s clothes. He can appreciate them. He has a creative vision. But the clothes he designs will be worn by his female clientele. The male fashion designer’s success is when women purchase his designs built for the them. The male fashion designer is challenged to make a simple and beautiful product that works with the physical reality of his customers.

While I usually agree with the content of Rework, I find I do not always agree with the 37 Signals viewpoint. Yes, it works for them. Yes I agree with 90% of it. But just as critical is to know what advice is bad advice for a firm like ours. I think it is important that I plan for the company’s future. Thus I do not agree with statements such as this:

“Writing a plan makes you feel in control of things you can’t actually control”¦Why don’t we call plans what they really are: guesses.   Start referring to your business plans as business guesses, your financial plans as financial guesses and your strategic plans as strategic guesses.   Now you can stop worrying about them as much.“   (pg. 19)

It is catchy. It makes for a good anti-establishment Purple Cow type of quote. But I suspect the employees at Schipul appreciate me applying that advice carefully. Does that advice relate to our particular situation? No. And I think the team at 37 is plenty of smart enough to tell people to apply their advice…well, if it applies!

Sometimes advice is populist, but there is a logical flaw. A company who follows the infamous “work smarter not harder“ quickly falls to a company that believes “work smarter AND harder.“ Working smarter-not-harder would only work if hard workers were dumb. But we get smarter through experience! So unfortunately, hard workers are typically also smarter than you. Oooops. But we don’t like to admit that. What we want to hear is that the 4 hour work week is a winner.  I certainly wish the global economy worked that way!

I guess I am saying, use common sense and trust experience built upon DOING stuff.

Getting to Zero in Management

“And if you ask her for a new assignment, a promotion into a new role, you’re likely to hear the speech she first heard long ago from Mr. Hicks about “getting to zero“ with a job. 11:59

To explain, she picks up a piece of paper and draws a line across it. She shades an area below the left end of the line.

“When you start the job, whatever it is, you have to find out who the secretary is, where the bathrooms are, who your teammates are,“ she says. “Trust me, for a lot of time you are operating below zero.“

She then points to the middle stretch of the line.

“This is when most people want to leave a job,“ she adds. “They say: “˜I’m done. I know everything. I’m done.’ But think about that. If you left there, basically all this area under the curve, which is negative, which is take-away, you owe the company all of that. Then you do this for six more months, and you can operate the place smoothly, but you haven’t really transformed it in the ways that you can help to transform it.“

She starts shading an area above the line to the right. That represents what a manager is expected to contribute “” what to give back “” after absorbing all of the training and experience that exists below the left side of the line. The balance amounts to “getting to zero.“

“You can only leave after you put in as much above the curve as under the curve. Unfortunately, that usually takes more than a day, and it takes a couple years,“ Ms. Burns says. “People would come in to me and say: “˜You put me in this developmental assignment. I know how to run the place now. Thank you. Can I go to the next one?’ I say: “˜Well, how about all the stuff that you owe us? How about getting settled in for a little while longer and then start to transform it?’ “

Xerox’s New Chief Tries to Redefine Its Culture

you can’t get that shot, but that shot was not the problem

Thoughts on excuses and accusations in leadership.

moss [[oak]menil]Back in College I played a lot of racquetball tournaments and played on the Texas A&M racquetball team. I also coached a few hours a week, sometimes kids, sometimes other students, at the local gyms in College Station Texas. Every once in a while when coaching a newbie who threw me a floater in the middle of the court I’d crush it down the line or do a nice splat. The student would invariably look at me as if I had done something wrong exclaiming:

How am I supposed to GET THAT!?!?! You killed it! I can’t get that!

My answer was always the same.

You can’t get that shot. Nobody can. But THAT shot was not the problem. It was the shot before where you set me up that was the problem. The kill shot was just the part that hurt. Identify the real cause before you howl in indignation. Now lets work on not setting your opponent up, OK?

Running a business over the years I have found that two commonly used fallacies by employees (and by me!) are post hoc and non sequitur. Both of which are Latin phrases and sound all funny to me. How do they relate to business?

Example: an employee is late day after day after day. You work with them. Go through the usual discipline rigmarole. Think thoughts like “wow, they need a parent not a manager.” And eventually the day comes when you hold them accountable. The response:

I was on a church retreat this weekend and overslept today. And if you put work over God that is YOUR problem not mine. You are way out of line to put work over God and family!

It’s important to remember that the employee in this scenario ACTUALLY BELIEVES what they are saying. At a human level it is a mind-blowingly insensitive accusation against a fellow human being, but that is besides the point. The catch here is that “it does not follow.” This particular day it is the presenting problem; the floating ball in the middle of the court. The real issue is that they are late day after day. The accusation that the manager is a heretic bound for hell is simply the presenting problem. You, the manager, did nothing wrong.

Yet the employee believes what they said!

In my experience there is only one solution. Educate them on fallacies and communication BEFORE they use them on you. It doesn’t always work, but at least it might. Education is the first step.  Because  common fallacies are, well, common. Read on my fellow leaders, and cut yourself some slack. It really isn’t you. It was the shot where they set you up that caused the problem.

Set him before me; let me see his face.

Soothsayer. Caesar! red dragon

Caesar. Ha! who calls?

Casca. Bid every noise be still: peace yet again!

Caesar. Who is it in the press that calls on me? 100
I hear a tongue, shriller than all the music,
Cry ‘Caesar!’ Speak; Caesar is turn’d to hear.

Soothsayer. Beware the ides of March.

Caesar. What man is that?

Brutus. A soothsayer bids you beware the ides of March. 105

Caesar. Set him before me; let me see his face.

Cassius. Fellow, come from the throng; look upon Caesar.

Caesar. What say’st thou to me now? speak once again.

Soothsayer. Beware the ides of March.

Caesar. He is a dreamer; let us leave him: pass.

(source)

Their concern is not with themselves but with the group and how the group is faring

“I once watched a highly intelligent Pueblo Indian engaged in intercultural education programs struggle and sweat to put into words a problem he and his people were having to cope with. vulturesWhenever a white man is put down in the middle of a pueblo, the Indians must cope with his narcissism as expressed by his almost total preoccupation with how HE is doing (providing he is well motivated) or how HE is being treated (if he is less idealistic).

Regardless of motives, behavior of this sort is threatening and disruptive to Pueblo life, because the Indians are just the opposite. Their concern is not with themselves but with the group and how the group is faring.

The Indians see what we call narcissism in all whites ““ a trait that goes far beyond and is much more inclusive than self-love and individual differences. Since the Pueblo Indians themselves are not this way, how can they describe what they themselves do not include in their experience?

And what does the well-motivated concerned white man do when he has devoted much of his life to “helping“ the Indians only to discover that cultural insight reveals him as a disruptive force in Pueblo life, even though he considers himself an ally?

Why hadn’t any of his Pueblo friends told him this?”

Beyond Culture, Edward T. Hall, pg 153, Copyright 1976

Don’t Sandwich Constructive Feedback Because People Aren’t Stupid

The “Sandwich Method” of feedback was the first method of constructive criticism I learned as a young manager right out of university. You know it – 1) say something positive then 2) give the constructive criticism and then 3) close with a positive statement. Example:

Mary, you are doing a great job on the ACME Products account. But I hear your project team missed the deadline for the latest ACME blog release and the client is upset. And by the way, your hair looks nice today!

bunnyIt is true that a spoonful of sugar helps the medicine go down. The difference between the analogy of “sugar and medicine” and “sandwich feedback” is that medicine is “a” – not a person, “b” – good for your current illness only and “c” – not a long term human relationship. So with all of my focus on candor and directness for competitive business advantage, why then do I fall back to sandwich feedback methods?

Because the sandwich method is mostly about the person giving the feedback. It’s easier to give feedback in a sandwich because although you know you have to give the feedback, it is hard to give negative feedback. So the path of least resistance is to say nothing about an employee who is late. You say nothing until all of the other employees come to the conclusion the late employee is your favorite who gets paid to do less and can get away with anything. Silence indicts the leader.

One step up from ignoring the issue is the ineffective sandwich method. The domain of the partially courageous.

Why is the sandwich method of giving feedback so bad? Because people aren’t stupid. That’s right – if you work with stupid people you can probably use it forever. But it does NOT work with smart people. The authors of Absolute Honesty explain it this way:

people aren’t stupid and if you always deliver feedback in a sandwich, they start to realize that the purpose of the message is the zinger in the middle. They then start doubting your truthfulness about any of the good things when you tell them because they’re always wondering when the zinger will come.

and

Not that there is anything wrong with acknowledging someone’s strengths when giving feedback – we just think it’s better to avoid making a sandwich and get to the point. – pg 91

and

Experience has shown us that, when giving criticism, the direct approach is the best as long as it’s given in an environment where positive feedback is abundant. – pg 92

To repeat, if you use the sandwich method of giving feedback then people will ignore the good things you say waiting for the negative. And they think of you as a minor league liar for saying positive things you probably don’t believe (even if you do!). So get to the point. Give lots of positive feedback on a daily basis. But when giving negative feedback say it and move on. And keep it discrete from positive feedback.

“You need fast dialog and fast conversation to get at the mission. Candor.” – Jack Welch 2005, Houston Forum

and

“From the day I joined GE to the day I was named CEO, twenty years later, my bosses cautioned me about my candor. I was labeled abrasive and consistently warned my candor would soon get in the way of my career. “¦ and I’m telling you that it was candor that helped make it work.“ ““ Jack Welch, Winning, Pg 34

And in closing – candor is the way to move up in a competitive organization. Especially one fighting off the great recession. Not rudeness mind you, but honest candor where you respectfully call things the way you see them. You don’t waste time with sandwich feedback loops so folks know you are honest. By speaking directly you are treating people respectfully. People believe your compliments and they respect your feedback. Honest.

Joni Mitchell ““ Free Man in Paris

Caveau De La Huchette
Caveau De La Huchette

The way I see it he said
You just can’t win it
Everybody’s in it for their own gain
You can’t please ’em all
There’s always somebody calling you down
I do my best
And I do good business
There’s a lot of people asking for my time
They’re trying to get ahead
They’re trying to be a good friend of mine

I was a free man in Paris
I felt unfettered and alive
There was nobody calling me up for favors
And no one’s future to decide
You know I’d go back there tomorrow
But for the work I’ve taken on
Stoking the star maker machinery
Behind the popular song

I deal in dreamers
And telephone screamers
Lately I wonder what I do it for
If l had my way
I’d just walk through those doors
And wander
Down the Champs Elysees
Going cafe to cabaret
Thinking how I’ll feel when I find
That very good friend of mine

I was a free man in Paris
I felt unfettered and alive
Nobody was calling me up for favors
No one’s future to decide
You know I’d go back there tomorrow
But for the work I’ve taken on
Stoking the star maker machinery
Behind the popular song

#peace

Collins: The Five Key Things to Consider When Looking for the Right People

The following are my notes from listening to Jim Collin‘s audio coaching on “getting the right people on the bus.”

From Jim Collins: The Five Key Things to Consider When Looking for the Right People

“What are the characteristics of the right people? Are there any generic characteristics we are looking for in the right people.” … “As I see it, there are five basic characteristics, five basic criteria, for being a “right person on the bus“

  1. They must share the core values.
    1. “The person must share the core values of the institution or the organization you are building.“
    2. “You can’t get people to share your core values.“
    3. “The whole task is to find people who already have a predisposition to your core values…They must share the core values… those who do not have a predisposition to sharing the core values get ejected like a virus. Get escorted out the door by the organizational antibodies.“
  2. A right person on the bus is not someone that you need to manage.
    1. The moment you feel the need to manage somebody, or tightly manage somebody, you’ve probably made a hiring mistake. … that is one of your key clues that you might have the wrong person on the bus.
    2. The moment you feel the need to manage somebody, you’ve probably made a hiring mistake.
  3. Could they be the best in the industry in that seat?
    1. In the seat that they hold, could they potentially be one of the best in the industry … in that particular seat? It doesn’t mean they actually “are” the best, but at least possible that they could eventually become one of the best
  4. The Individual understands the difference between having a job and holding a responsibility.“
    1. “My assistant Vicky gets this so well… “If you were an air traffic controller and you did your job and you did all the right things but the planes still crashed, would it matter? No, it wouldn’t matter… You have a responsibility that goes far beyond having a job. …   the responsibility to worry three steps ahead to ensure that the planes don’t crash.
    2. That sense of “I have a broader sense of responsibility” rather than “I have a job” the ability to get that distinction is one of the crucial dimensions of the right people on the bus.Tthey are what I would describe as productively neurotic. If they see a hole they feel the need to fill it and to make it better.
  5. If it were a hiring decision all over again, given everything you know having worked with this person, would you still hire?
    1. This is the litmus test question.
  6. Lastly – You must be fair.
    1. And fair in the following sense. Always ask yourself the following question. Do you have a “bus problem” or do you have a “seat problem”. It could be you have a wonderful great person on the bus but you made a managerial mistake and put that right person in the wrong seat?“ “When in doubt, be fair.“

Of course he makes it sound so simple. Having been hiring and (unfortunately) firing people since my very first job out of college, I know all too well how hard it is to interview. The advice given on hiring people is always “do lots of interviews” and “slow down the process until you are sure.” Which sounds great, except not every good job applicant will go through 10 interviews and wait six months for an offer. In other words the market varies. And quite frankly you can’t always tell.

I have learned to be wary of certain groups of job applicants in the hiring process.

  1. The prideful.
    1. Prideful people do dumb things to save face. The humble will just go “damn, I screwed that up. But I learned.” The prideful will make a bad decision and then defend it to the bitter end in front of the entire company before they admit a mistake. Humble people rule.
  2. Those that tell you they are smart.
    1. Um… you are an adult. If you have to tell me you’re smart in the first five minutes of the interview something is wrong. Those silly tests only test about a third of your actual knowledge, and if that is a prop for your ego we have a problem. Tell me you are a hard worker, tell me about results, but don’t tell me you’re smart. Sheesh. What you really want is a humble hard worker who lets their work product shout about how awesome they are while their own words are quiet.
    2. Interesting conversation about telling if someone is smart here.
  3. The insecure.
    1. The most dangerous group of all. The insecure turn on you unexpectedly and like a mine field they can lay in wait for 50 years before going off. The insecure follow a leader instead of their own hard coded core values. As such they jump ship when a leader trips, and every leader must take risks and therefore WILL trip. The leader will get back up, but the mine goes off.
    2. Sometimes a leader can expedite discovery by intentionally appearing to make a mistake. But be careful.
    3. The insecure are also the most likely to rationalize unethical behavior.

There is no easy answer to hiring and firing, or to determining “which seat on the bus” a person is most qualified for. And timing also matters, a person may outgrow a position and a position can outgrow a person. Sometimes the person is so good you just need to put them on the bench, let them sit in the wrong seat for a little while before the right seat comes available. These are heavy decisions.

Having to make these decisions, one thing I am personally committed to is the development of my people. While I can’t control the economy or stop acts of God, I can ensure that no matter what my people are as prepared as possible for whatever lies ahead. Training and growing our team is within my circle of influence.

Tribal Citizenship Behavior

When a crisis occurs, like a hurricane hits your city or the country freaks out about the swine flu, part of a leaders job is to protect the tribe. To do that, the people have to be prepared. The first priority must then be to make sure every member of the tribe is prepared to take care of their family. Katrina made this concept clear:

The New Orleans police chief says some of his officers may still be trapped in their homes and he’s not sure how many walked off the job.

Walk off the job? Police!? Obviously family comes first. Or people won’t show up to work no matter how critical their job is because no job is more important than your family. Step one is to have everyone develop an “in case of emergency preparedness family plan“.

Assuming someone is prepared as best they can be, then what makes them a “team player” as they say. Well, as usual, “they” is wrong in that the phrase “team player” is like comparing the word “violin” to “Stradivarius”. What you REALLY want from your tribe members, peers, friends, etc, whether you know it or not, is far more nuanced that the phrase “team player” suggests. You want someone who is “cool with the tribe” and supports you ALL!

caroline-tribeA bit of research led me to the Distributive, Procedural and Interactive Justice scales by Niehoff & Moorman. If they weren’t academics they would call it a way to quantify employee satisfaction. But that isn’t really what I am after. More digging made me realize that the academics call what I am after, perhaps theirs is more narrow in scope, but they call it “Organizational Citizenship Behavior.” This criticism of Organizational Citizenship Behavior questions if good OCB is in fact in the best interest of the organization! But I’ll leave that to another day. For now OCB is comprised of four elements (from the above link):

OCB has four separate, but related behavior elements that differ in their target and direct objective.   It is believed that the indirect objective of all OCB is the benefit of organizational goals (Organ, 1988).   In a theoretical typology developed by Graham (1989; Moorman & Blakely, 1995; Moorman, Blakely, Niehoff, 1998) OCB categorizes into four types:

  1. personal industry,
    1. (the extent to which an individual performs tasks beyond the call of duty.   Employees who spontaneously work overtime, put in extra hours on a project, or volunteer to take on new projects are engaging in personal industry.)
  2. loyal boosterism,
    1. (the promotion of firm image to outsiders.   An employee that spontaneously compliments his employer to a member of another firm, a friend, or any stakeholder displays loyal boosterism behavior.)
  3. individual initiative,
    1. (communicating with others in the organization to improve individual and group performance) and
  4. inter-personal helping.
    1. (An employee, recognizing that a co-worker might benefit from possession of a piece of information, such as a sales contact, technical information, or market tip, and passing on such information without the other asking for it)

and

To summarize, OCB consist of non-obligatory, informally influenced behaviors.

I translate that last part to say what OCB is referring to, is stuff you do to help the organization that isn’t in your job description. It’s the stuff that makes life pleasant, like buying a Nerf Gun refill pack for your unarmed co-worker to make cubicles-war “fair” again. That stuff.

I think what I’m looking for is really a Tribal Citizenship Behavior index. With the definition of tribe being more loosely defined than just the employees of a company. A tribe that has even low clustering coefficients – meaning loosely bound.

Anthropologist Michel Maffesoli appears to have coined the term Neo-Tribalism which Wikipedia defines as:

Neotribalism is the ideology that human beings have evolved to live in a tribal, as opposed to a modern, society, and thus cannot achieve genuine happiness until some semblance of tribal lifestyles has been re-created or re-embraced.

Tribes are not organizations, at least in the context of OCB as I understand it. An easy example; in tribes people have distinct roles including that of the cynic who provides constant creative tension. Yet the cynic DOES add value in times of crisis because they foresee the need for batteries, chain saws, and medical masks before a crisis. While not wildly popular perhaps, they fix the weakest link in a tribe at specific times. Maybe a score of 5/10 on a day-to-day basis on the OCB scale, but a 10/10 for Tribal Citizenship Behavior when the *&@#! hits the fan! This need to remain loosely joined (a clustering coefficient closer to zero) quickly snaps back into place during a crisis (a clustering coefficient closer to 1 – we ALL know the guy with the generator after a Hurricane!).

I’ll keep thinking about this (of course) but I wanted to highlight two other concepts from OCB that we can borrow for TCB are dominant coalitions and technological change as a tribe restructuring catalyst:

Dominant Coalitions

A dominant coalition consists of the network of individuals within and around an organization that most influence the mission and goals of the organization (Cyert & March, 1963).   In theory, the goals of an organization flow from the chief executive officer, board of directors, or top management team.   However, the dominant coalition maintains an influence on goals through informal, rather than formal, channels.

When it comes to social media, public relations and tribal behavior, you have a unique problem. It is considered “uncool” to call yourself a “Social Media Expert“. And indeed like any other trend that goes mainstream, every new kid on the block joins in when their last trendy business dries up and becomes an “expert”. I overheard a conversation the other day that was “I didn’t follow her back (on twitter) because her description said ‘social media expert’ and she only had 22 followers!”. I wouldn’t have followed back either so I am part of the problem in a way.

The point is the “cool kids find it cool to deny being cool.” Or, the dominant coalitions in tribal citizenship behavior deny being influencers in the first place.

which ties into technology as follows

A technological change within an organization may provide the impetus for power changes within the organization.   Burkhardt and Brass (1990) studied the introduction of a new computer technology into a governmental agency.   They found that early adopters of the technology gained a significant amount of informal power in the organization, which could be used to join or enhance one’s membership in the dominant coalition.   Thus, such changes in technology could result in altered membership in the dominant coalition.

Or “The Geeks Shall Inherit the Earth.” If this premise is true it not only changes the complexion of the dominant coalitions and the tribe itself, but it is a biased change. By that I mean tech people are more introverted than extroverted, more logical than mathematical, tend towards aspergers, etc… In other words a different personality type has joined the dominant coalition. Perhaps a good thing! But a change to be noted regardless.

In conclusion, Tribal Citizenship Behavior (TCB, heh) can borrow heavily from Organizational Citizenship Behavior. Like OCB we can borrow personal industry, loyalty, initiative, people helping people.   We can try to measure dominant coalitions in a tribe. Measure intention which is always critical. But these aren’t enough because a tribe may not have a stated goal like an organization, beyond preservation of the tribe. Which, again, is why we start by personal emergency planning.

More posts on the topic of Tribal Citizenship Behavior as my thoughts evolve. I’d love to hear your thoughts on the topic?

Chron Post: Millennials head under a rock

The Chron.com started a new blog called The List and asked me to guest blog post. My first (and only) post so far is titled:

old-glory-by-eschipul1Chron Post: Millennials head under a rock

The GI generation, by all accounts, appears to have raised one of the biggest groups of spoiled kids our country has ever seen. The Baby Boomers. And the Boomers are burying the Millennial generation and their grandkids in debt and chaos. Pretending deficit spending isn’t just a deferred tax increase (it is). And that seems wrong to this Gen X’er..

In the book GENERATIONS, The History of America’s Future, the authors describe the Boomers as:

The Boomers, who came to college after Eisenhower and before the Carter malaise of 1979. These were the babies of optimism and hubris, Beaver Cleaver and Musketeers, the post-Sputnik high school kids whose SAT scores declined for seventeen straight years, student strikers, flower-child hippies and draft resisters. – pg 30

(read the full post on Millennials and the Baby Boomers on Chron.com here.)

The Simple Truth About Your Business

I just finished reading The Simple Truth About Your Business, Why Focused and Steady Beats Business at the Speed of Light. By Alex Brennan-Martin, a man I have had the privilege of meeting. And a man who has earned a good amount of my money from celebrating dinners at his Houston restaurant with my wife over the years.

brennans-after-the-fireLike many things I like, I need it broken down. Numbered lists and exactness of speech. So I figured I would like a book titled The Simple Truth! Specifically The Simple Truth from the book   on page 25 states:

The Simple Truth answers the three most important questions in your quest for excellence and success:

  1. What is the real product my customer is buying?
  2. What special ingredient differentiates my product?
  3. Why is my customer buying what I am selling?

So the “for examples” are:

  1. Wal-Mart’s Simple Truth: “To lower the world’s cost of living.” – pg 27
  2. Disney World is not in the theme-park business, or even the entertainment business; it is in show business. – pg 28

Brennan goes on to clarify

You cannot deliver the Simple Truth unless the employees understand the Simple Truth. The customer is numero uno, but until the employees’ needs are aligned with those of the customer, there is an inherent conflict.”

For Brennan the simple truth of his restaurant is:

Creating Great Customer Memories – pg 50

Which brings me to a challenge with our business. We used to say simply “we build web sites that help you sell”. Probably because our turn around was in the recession of 2001 and 2002. If you could help someone survive that was awesome stuff! It prevented CEOs from having to lay people off, and that is a BIG motivator.

To this day our primary headline is “Does your website increase your sales” and our tag line is “The Web Marketing Company“. Pretty clear stuff.

Yet our vision is:

To Connect and Organize the World’s People. Do Good.

So unlike Wal-Mart, our vision statement can not double as our simple truth. Having deep thoughts on that subject now…

Formation of New American Group Influencers

New groups are being formed throughout the country, and nobody has noticed. These emergent groups are zero to three years old. And the organizers are not the usual suspects. If there is a connection to urban tribes it is the connecting of existing urban tribes.happyface

We meet our new friends, talking to others we know through the same medium, and in introverted humility ask “oh, how do y’all know each other?” Assuming it predates our joining the group. But it doesn’t. We assume these eclectic people of diverse backgrounds knew each other selectively before the overall group formed. But they didn’t. It’s like everyone has the same social birthday. It all happened as part of the Great American Social Software Revolution. The grandparents were born in 2004.

And I am not convinced they, we, follow the RENGEN model.

It is simply like minded people. Who met through sites like Flickr and twitter, form groups. Old news, like 15 year old prodigy news, right? What is news is that about three years ago the local aspect got magnified somehow. Asynchronous communication on bulletin boards drifted not to synchronous, but on an exponential curve much closer to synchronous. And the closer the line moves to zero, the more local factors come into play.

Local is the new black. And these new local influencers, many previously also influential but with a new magnifying glass, are more powerful than ever. Or newly powerful.

And these new groups haven’t self-identified yet. And the leaders don’t even realize they are leaders. People who nominate themselves as leaders are frequently rejected. Like an atom that meets to form when it wants and then goes on to reject the laws of physics, a self-nominated enforcer is refuted.

This is startling in that there is no visible ideology to bind.

“A common sharing of ideas integrates individuals into the community, a group, a party, or a movement. Ideas, commonly held, define the things that are acceptable and the tasks to be accomplished, excluding all others.   Ideologies play the same role that totems and taboos play in primitive tribes, defining what is common to the members and what is alien.”

– Contemporary Political Ideologies, pg. 9, 1986

Yet there is no dominant ideology that can be seen by this writer. Liberals and conservatives and the rational majority that are not on either end of the spectrum all participate. The “unfollow” and “block” functions of twitter are natural enforcers.

The main take-away is not a new ideology so much as the awareness of the rapid fire formation of new influencers. Influencers who in a majority appear, ironically, “off the grid” to the current power structure.

As I close this post I find I am very convinced of

  1. the formation of new groups is very real
  2. there is no readily apparent ideology that binds
  3. the leaders are below the radar, the influence unmapped

The next 10 years will be interesting indeed!

Note: The image? No relation to the post. Just an image of happiness on my flickr stream. That is all.