Tag: management

Why do executives see romance in the startup culture?

Many managers think startups are romantic – could it be because of the corporate lives they lead?

One of the fascinating phenomenons of the modern era is how corporate managers have appropriated the startup culture.

At the announcement of the Australian Centre for Broadband Innovation’s Apps For Broadband prizes, Foxtel’s CIO Robyn Elliot described her experience of working in a startup.

“Foxtel was once in the category of startup itself,” said Elliot at the start of her speech.

Apples and Oranges

Comparing Foxtel to a scrabbling startup in the modern sense is bizarre given the company was a well funded joint venture between News Limited and Telstra – the company being a good example of modern Australian crony corporatism rather than a risky undertaking by daring entrepreneurs.

This conceit about startups isn’t unusual among corporate executives, in the early days of Australia’s National Broadband Network it was quite common to hear NBNCo managers talk about their startup ethos – this from a company backed by around 30 billion dollars of government funding.

At one stage I interviewed for a job at NBNCo and I struggled not to start giggling when the “startup ethos of the organisation” was earnestly emphasised to me several times during the meeting.

Not surprisingly the job went to an ex-telco staffer, as did most of the team’s roles. No doubt their corporate experience was far more suited to the company’s ‘startup ethos’  than that of actually having worked in four startups. Giggling in the interview probably didn’t help either.

The romantic dreams of executives

Given most corporate staffers would curl into the fetal position and weep after two weeks of working in a real startup, why do executives indulge in the conceit that their business is ‘just like a startup’?

The answer could lie in “The Consequences to the Banks of the Collapse in Money Values” written by John Maynard Keynes in 1931.

A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him. It is necessarily part of the business of a banker to maintain appearances, and to confess a conventional respectability, which is more than human. Life-long practices of this kind make them the most romantic and the least realistic of men.

So it is for the modern corporate executive who has spent their working lives fighting for the corner office having met their KPIs and spending years cultivating their network of like minded managers.

After two decades spent writing stern memos on the use of paper clips and climbing the corporate ladder, it must be tempting for a middle aged executive to look at those funky youngsters getting billion dollar payouts after a couple of years grabbing three hours sleep a night among the pizza boxes under the desk and get pangs of what might have been…..

A harmless startup fantasy

In some many ways the executive startup fantasy is touching and largely harmless, even if it does attract sniggers and giggles from the unwashed and underpaid who’ve actually been there.

The real risk is when a senior executive tries to shoehorn a Silicon Valley startup culture into an organisation.

While most large companies could do with some of the hunger and flexibility found in smaller businesses, there’s many ways that could go terribly wrong – particularly when driven by a starry eyed romantic manager.

For most executives though, the dreams of being in a startup will remain a fantasy – and that’s probably best for everybody.

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Cutting the middle management fat

Cutting middle management is an imperative for business as markets change quickly.

No-one can say life is comfortable at Cisco when every two years the company engages on a round of job cutting that tends to keep employees on their toes.

While this year’s job cuts are relatively mild – only 4,000 as opposed to nearly 13,000 in 2011 – it’s notable the focus on culling middle management positions.

“We just have too much in the middle of the organization,”  the Wall Street Journal reports Cisco CEO John Chambers as saying.

One of the challenges for businesses is become more flexible when markets are rapidly changing. Having ranks of middle managers makes it harder for organisations to respond.

John Chambers and Cisco are reducing their middle management head count to respond to that need. Many other companies are going to have to do the same.

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Politics, business and leadership

Google’s hiring processes raise some important points about leadership.

I’ve covered the New York Times’ interview with Google’s senior vice president of people operations, Laszlo Bock previously in describing what the business has learned from its scientific method of hiring people.

One striking aspect of that story that deserves further discussion is Bock’s thoughts on leadership;

We found that, for leaders, it’s important that people know you are consistent and fair in how you think about making decisions and that there’s an element of predictability. If a leader is consistent, people on their teams experience tremendous freedom, because then they know that within certain parameters, they can do whatever they want. If your manager is all over the place, you’re never going to know what you can do, and you’re going to experience it as very restrictive.

This is something that applies in all walks of life — whether you’re coaching a kids’ football team, running a corporation or leading a nation.

Sadly in many of these fields we’re lacking the consistent leadership Laszlo Bock describes. That could turn out to be one of the greatest challenges for the 21st Century.

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Driving change from the top

The adoption of cloud, social media and bring your own device is being driven by executives, the opposite of what happened in the PC era.

One of the hallmarks of the PC era was how  innovations in workplace technology tended to be driven by the middle ranks of organisations.

The PC itself is an example, it’s adoption in the early 1990s was driven by company accountants, secretaries and salespeople who introduced the machines into their workplaces, usually in the face of management opposition.

Many of the arguments against introducing PCs at the time are eerily similar to that against the Internet or social media over the next twenty years.

Sometime in over the last few years that pattern changed and the adoption of new technologies started being driven by boards and executives.

The turning point was the release of the Apple iPad which was enthusiastically adopted by executives and directors, suddenly, Bring Your Own Device policies were in fashion and the pattern of the c-suite driving change had been established.

Now a similar problem is at work with social media, the story of David Thodey driving the use of Yammer in Telstra is one example where executives are leading the adoption of services in large companies.

The lesson for those selling into the business market is to grab the imagination of senior executives and the board, with competitive pressures increasing on companies they may well be a receptive audience.

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Re-inventing management with social media

Is social media changing how management works? It could be the case at Telstra.

Yesterday I went along to hear Telstra’s Paul Geason speak at the American Chamber of Commerce lunch in Sydney.

Geason, who is Group Managing Director for the company’s Enterprise and Government division, was speaking on some of the findings from Telstra’s Clever Australian program along with some of the technology trends he’s encountered in big business and public organisations.

The bulk of Geason’s presentation I reported in an article for Comms Day, and much of his observations about enterprise technology trends wouldn’t surprise keen observers of the industry or regular readers of this blog.

What did stand out though were his comments on how social media is changing management behaviour at Telstra where over 25,000 registered users of the company’s Yammer platform have direct access to the company’s CEO, David Thodey.

Social media is just going crazy. Within Telstra now we have over 25,000 of our staff registered on Yammer. It has been a phenomenon. It’s playing this really interesting role of breaking down the hierarchy in our organisation.

Which is not just because of the technology but it’s also got something to do with our CEO.

He is on Yammer just about every single day of the week. There is not an issue that hits that site that he won’t pick up and direct to the right place to get it to the right place and have it dealt with.

Our people love it, they would never have imagined they could get that level of access and input and intervention from the CEO.

There’s a certain transparency that has come to our organisation that didn’t exist previously which is really great for the levels of engagement of our people and very challenging for us as leaders in having to deal with that level of visibility that was not there before.

I think it’s really changing how organistations are operating.

Paul Geason’s comments are a good example of changing management structures. Not only does it bring accountability to executives, it also means organisations can respond quickly to changing marketplaces – something covered in the Future of Teamwork presentation back in 2010.

A few years ago, no-one would have thought of Telstra as being an open, collaborative organisation yet today it’s gone quite a way down the path to becoming one.

The key though to this is having senior management buying into the process. Without that leadership many companies might be facing a tough future.

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Google’s simple recipe for management accountability

Does keeping things simple help Google’s managers?

One of the big challenges for larger organisations is giving managers the feedback they need to do their jobs properly. The New York Times interview with senior vice president of people operations at Google, Laszlo Bock, covers some interesting aspects of how accountability in the workplace helps executives.

Google surveys its staff twice a year on how they think their managers are performing in a Upward Feedback Survey that pulls together between twelve and eighteen different factors which the company then uses to measure how their leaders are performing.

That bottom-up, data driven approach has proved to be successful as Bock told the New York Times.

We’ve actually made it harder to be a bad manager. If you go back to somebody and say, “Look, you’re an eighth-percentile people manager at Google. This is what people say.” They might say, “Well, you know, I’m actually better than that.” And then I’ll say, “That’s how you feel. But these are the facts that people are reporting about how they experience you.”

You don’t actually have to do that much more. Because for most people, just knowing that information causes them to change their conduct. One of the applications of Big Data is giving people the facts, and getting them to understand that their own decision-making is not perfect. And that in itself causes them to change their behavior.

Accountability matters – who’d have thought?

The other thing that Bock and Google’s HR team have learned from their measuring management performance is just how effective consistency can be.

We found that, for leaders, it’s important that people know you are consistent and fair in how you think about making decisions and that there’s an element of predictability. If a leader is consistent, people on their teams experience tremendous freedom, because then they know that within certain parameters, they can do whatever they want. If your manager is all over the place, you’re never going to know what you can do, and you’re going to experience it as very restrictive.

Sometimes we make things too complex – and Google’s experience with managers shows that simple accountability and consistency are far more effective than complicated KPIs.

Image by ulrik at sxc.hu

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When Venture Capital meets its own disruption

Falling barriers to entry are disrupting Venture Capital investors as much as incumbent managers.

Tech industry veteran Paul Graham always offers challenging thoughts about the Silicon Valley business environment on his Y Combinator blog.

Last month’s post looks at investment trends and how the venture capital industry itself is being disrupted as startups become cheaper to fund. He also touches on a profound change in the modern business environment.

Graham’s point is Venture Capital firms are finding their equity stakes eroding as it becomes easier and cheaper for founders to fund their business, as a result VC terms are steadily becoming less demanding.

An interesting observation from Graham is how the attitude of graduates towards starting up businesses has changed.

When I graduated from college in 1986, there were essentially two options: get a job or go to grad school. Now there’s a third: start your own company. That’s a big change. In principle it was possible to start your own company in 1986 too, but it didn’t seem like a real possibility. It seemed possible to start a consulting company, or a niche product company, but it didn’t seem possible to start a company that would become big.

That isn’t true – people like Michael Dell, Bill Gates and Steve Jobs were creating companies that were already successes by 1986 – the difference was that startup companies in the 1980s were founded by college dropouts, not graduates of Cornell or Harvard.

In the current dot com mania, it’s now acceptable for graduates of mainstream universities to look at starting up business. For this we can probably thank Sergey Brin and Larry Page for showing how graduates can create a massive success with Google.

One wonders though how long this will last, for many of the twenty and early thirty somethings taking a punt on some start ups the option of going back to work for a consulting firm is always there. Get in your late 30s or early 40s and suddenly options start running out if you haven’t hit that big home run and found a greater fool.

There’s also the risk that the current startup mania will run out of steam, right now it’s sexy but stories like 25 million dollar investments in businesses that are barely past their concept phase do indicate the current dot com boom is approaching its peak, if it isn’t there already.

Where Graham is spot on though is that the 19th and 20th Century methods of industrial organisation are evolving into something else as technology breaks down silos and conglomerates. This is something that current executives, and those at university hoping to be the next generation of managers, should keep in mind.

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