Tuesday, November 28, 2006

Want to create value?

You need a sense of personal ownership. People tend to treat their own possessions better than public goods.

My good friend, Andy Monfried has a great post on how to go about value creation in a startup.

I'd like to synthesize his post down a bit and add my own two cents.

1. People respond to incentives. Give people clear incentives that help a company achieve it's goals and you get everyone swimming together in the same direction. There may still be some debate over what stroke to use, but that's ok. The metrics to determine success have to be clear and measurable. To do this you need timely data.

2. Transparency of timely data is critical for point one. If you don't have clear and easily accessible data it's difficult to set goals which drive incentives. The longer the lag time in access to the data the less accountability, less relevance of goals, and loss of empowerment.

3. Great managers at all levels are critical. Great managers encourage the right amount of creativity and help channel it in the right direction. Creativity without direction can kill startups as well as large companies. Startups don't focus enough to get traction, large companies sometimes brand these people as difficult, they spin their wheels, get frustrated and leave (there goes your next big idea). Good managers help leverage the creativity while making sure the work gets done.

4. Believing your own hype - successful startups take off like a rocket. Leaders and managers who are in-charge get caught up in this success. Their responsibilities grow, their titles grow, their challenges grow. The question is do all of these things grow faster then their abilities? If they do there are three options, 1) understand and accept that you may need help and ask for it 2) believe your own hype and think you are infallible 3) realize you maybe in over your head, but behave in ways you think will cover this up etc. ~ engage in politics, empire building, etc.

5. While the idea of a "politics free" company is a nice thought, as many of Andy's commenters wrote it's impossible when there is more than one person. I agree, the question is really what degree of politics you will allow and the intentions of the politics. Politics aren't necessarily bad, you need to rally the team behind a goal.

Good leaders are good politicians. (this becomes more important as companies get bigger)

Sure if we think we are right, we can pound our fist on the table and say, "my way or the highway." Will everyone around you come along? Probably not.

Bad politics are when special interests come into play. Different types of bad politics would be personal special interests, division special interests which go against the overall company goal.

In the end it's easy to say someone is being political because their objectives don't align with your own. What's critical is that there is strong leadership from the top down that set the vision, the ground rules. The less ambiguity of goal, the easier it is for people to rally around the vision. If the vision isn't clear then the process of determining the vision becomes political and the company suffers.

In summary, you set the vision and it could be the wrong vision. The more focused and aligned your company, the faster it can realize the mistake and take corrective actions. Lack focus and alignment and you'll plunge into political battles and miss your chance to adjust your course.


Howard Lindzon said...

great stuff. Linked through here from andy m

Andy said...

this is better than my post.

good job rob.