David Cummings on Startups

Category: Leadership

  • Two Requirements for Success from The Advantage

    Patrick Lencioni’s most recent book, The Advantage, is one of the best business books published in the past year. Early on he argues that there’s two requirements for success in business:

    1. Smart – strategy, marketing, finance, and technology
    2. Healthy – minimal politics, minimal confusion, high morale, high productivity, and low turnover

    Most executives focus on the “smart” side of the equation because it is easier to deal with, taught in school, and believed to be the differentiating part of running a successful business. The reality is that the “smart” requirement is now much more of a given due to the availability of information, educational background of executives, and competitive nature of most markets in the Internet age.

    The “healthy” side of the equation is the one that isn’t given enough attention and over the next 10-20 years will become just as top-of-mind and worked on as the “smart” side. Entrepreneurs and executives that don’t embrace the “healthy” side will have more limited lifespans and outcomes compared to those that do. Some people will deride it as being fuzzy and a corporate culture ploy but in the end a strong corporate culture is the only sustainable competitive advantage completely within the control of the company’s leaders.

    What else? What are your thoughts on the two requirements for success from Patrick Lencioni’s book The Advantage?

  • Notes from Mike McQuary at EO Nerve Atlanta 2012

    EO Nerve Atlanta 2012 kicked off today and was a big success. The theme is Dream | Challenge | Lead and the events to support it have been excellent. First thing this morning we were inspired by Dr. Martin Luther King’s “I Have a Dream” speech in video and live re-enactment form. After that we heard from the CEO of a NYSE company followed by Mike McQuary, the co-founder of Mindspring/Earthlink as well as Wheego, one of only three companies in the United States to have a completely electric car on the market today.

    Here are some notes from Mike McQuary’s talk at EO Nerve Atlanta 2012:

    • Mike was sleeping on the floor of the studio apartment of Charles Brewer when Charles quit his job and said he wanted to start a company based on a strong culture of people that he liked, and the business idea didn’t matter
    • Mike was the operations guy and Charles was the visionary for Earthlink, which grew to thousands of employees in only a few years
    • Org charts should be flipped upside down whereby the leaders are serving the employees
    • Don’t have offices or reserved parking spots as that creates unnecessary hierarchy
    • Mike personally interviewed the first 1,000 Mindspring employees for corporate culture fit
    • Earthlink hired people who were passionate about helping other people, and then trained them on the skills
    • Integrating Earthlink and Mindspring into one company was the hardest thing because the cultures were very different
    • Mike walked away from Earthlink when he realized he’d regret not spending time with his four little kids
    • As leader be careful what you say because it’s taken differently
    • Make sure you have hard metrics to measure success
    • Wheego was started after Mike saw the documentary Who Killed the Electric Car and heard the sound of the voice of customers who were passionate about the product, just like his customers at Earthlink

    Mike did a great job sharing anecdotes and advice from his entrepreneurial experiences. Mingspring was a massive success and I hope Wheego turns out the same way.

  • Team Members Scaling From Front Line to Executive

    When a company is just getting started it’s critical to get ‘A’ players on board that are excited to roll up their sleeves and do whatever it takes to be successful. As the startup grows and matures, one of the most difficult things is developing the early team members to scale as the business scales. It’s super tough to go from front-line team member to an executive managing a fast-growing department.

    Here are some items to look for in team members that aspire to scale as the business scales:

    • Executive presence – a level of confidence and professionalism that reflects strongly on the company
    • Penchant for bigger-picture thinking – getting the job done is great but successful executives need to be thinking about long-term strategies, metrics, and ways to improve
    • Strong communication skills – in-person discussions, team meetings, and conference calls should be productive and facilitated in an effective manner (great public speaking skills are a nice bonus)

    As team members express a desire to scale with the organization, set proper expectations and ask hard questions regarding their ability to deliver as an executive at the next level.

    What else? What other thoughts do you have on team members scaling from front line to executive?

  • Organizational Health as the Next Corporate Frontier

    Yesterday I started reading The Advantage: Why Organizational Health Trumps Everything Else in Business by Patrick Lencioni, one of my favorite authors. So far, it’s another must-have book in an entrepreneur’s collection.

    Lencioni uses the term “organizational health” and explicitly says he doesn’t like the term “corporate culture” because it’s over used. I disagree. He uses the subtitle “Why Organizational Health Trumps Everything Else in Business” and corresponding book content is nearly identical to my favorite saying that corporate culture is the only sustainable competitive advantage completely within the control of the company.

    Another interesting point he makes is that management teams are so strong, on average, with strategy, operations, marketing, etc that those are much less of a differentiator than they used to be. Talent is still extremely important but for companies of size the managers are good enough in the main functional areas. Now, the real differentiation comes from organizational health and the softer, internal people side of the business.

    I’m looking forward to reading more of the book and can already recommend it to entrepreneurs that believe a strong corporate culture is critical to success.

    Note: The Six Critical Questions for Every Entrepreneur.

  • Steve Jobs and the Weekly Project Review

    Recently I started reading the book Inside Apple by Adam Lashinsky in attempt to find new ideas about how to run a great company. The book is pretty good so far covering some well-known details of Apple as well as a number of things I hadn’t seen before. My favorite idea is the weekly project review instituted by Steve Jobs.

    Here’s how the Apple executive team weekly project review works:

    • Every Monday the senior management team meets for two hours
    • The top 4-6 highest priority projects are reviewed in minute detail with most projects being product launches (new products and updates to existing products)
    • All projects and tasks have a specific Directly Responsible Individual (DRI)
    • There’s always one DRI for a line item and never multiple people

    How many leadership teams of billion dollar plus companies get into the details on a weekly basis for a small number of most important company projects? My guess is not too many. The weekly detailed project review fits nicely with the one page strategic plan and quarterly rocks whereby the rocks represent the most important projects that need to get done.

    What else? What are your thoughts on the idea that Steve Jobs personally reviewed details of the most important projects on a weekly basis?

  • Leadership Development Programs in Startups

    Lately I’ve been working on a simple leadership development program internally. A startup can only grow as fast as the leaders within the company grow, and no faster, so developing leaders is key. The current approach is fairly simple and works as follows:

    • Meet once per month for one hour
    • Separate managers into several groups such that no direct report of a manager is in the same group
    • Discuss one book or article per month (our book for this month is Drive by Daniel Pink)
    • Talk about any leadership challenges or opportunities over the past 30 days as well as the up-coming 30 days

    One of the most important parts of this program is actually taking the time to reflect for a few hours each month and to be intentional about getting better as a leader. Our program is just getting started but I’m excited to see how it progresses and how our leaders develop.

    What else? What are some other ideas for a leadership development program in a startup?

  • Startups as a Way to Build Community Leaders

    A few weeks ago I was having lunch with a successful entrepreneur that had sold his business for a large sum of money over a year ago. During the conversation I asked him why he started the company and what were some of the reasons for being. He cited some of the more common ones like being his own boss and financial independence by age 45, but then he mentioned one of his top five purposes as a business was to build community leaders.

    As I hadn’t heard this community leaders example before I drilled in to collect more information. Here are some reasons building community leaders was important to him:

    • Every person has leadership abilities at some level and their internal programs to train their people to be leaders helped their business
    • The startup can only grow as fast as the leaders in the company grow
    • Leadership training helps people be better leaders at home, their children’s schools, church, non-profits, and more, making for a better community
    • Career development happens faster with more leadership training, making for an even greater positive impact on people’s lives

    Like self-actualization of a person, I now view self-actualization of a startup as one of the important goals and growing team members is tightly related.

    What else? What are your thoughts on startups as a way to build community leaders?

  • Four Lessons of Self-Knowledge for Leaders

    One of the approaches I like about Warren Bennis and his theories in the book On Becoming a Leader is that he puts the impetus on the leader to go out and better himself. There’s nothing handed to you — whether it’s proactively finding a mentor, reading books, or learning from peers, the onus is on you.

    In the book the author offers up four lessons of self-knowledge for leaders (pg 52):

    • One: You are your own best teacher.
    • Two: Accept responsibility. Blame no one.
    • Three: You can learn anything you want to learn.
    • Four: True understanding comes from reflecting on your experience.

    The best leaders I know are the ones who are constantly engaged in learning. And the learning doesn’t have to be specific to their industry, rather they are passionate learners about a multitude of things, of which they draw parallels and patterns in their efforts to be a better leader.

    What else? What do you think of these four lessons of self-knowledge for leaders?

  • What’s the right amount of in-person communication in a startup?

    Internal communication has been a hot topic lately. As a startup grows the amount of in-person communication needs to grow even faster. But, what’s the right amount of in-person communication in a startup? How do you know when there’s enough? As a general rule it’s better to have too much communication rather than too little.

    Here are some of the in-person communication processes we use:

    • Daily check-in – Quick stand-up meeting for 10 minutes each day answering the questions what did you accomplish yesterday, what are you going to do today, and do you have any roadblocks
    • Weekly all hands meeting – 20 minute meeting with everyone talking about good news and answering town hall questions
    • Bi-weekly or monthly catch-up – Status update on top three projects, what’s working, what needs to change
    • Quarterly check-in – Lightweight performance review answering questions what did you accomplish last quarter, what are you going to do this quarter, how can you improve, and how are you following the values
    • Quarterly simplified one-page strategic plan – A one page document with S.W.O.T. analysis, vision, goals, elevator pitch, and more talked about at the first all hands meeting of the quarter

    In-person communication and alignment is tough. As a startup grows it becomes even tougher. The fine balance between extensive communication and death-by-meeting needs to constantly be evaluated.

    What else? What are some other in-person communication processes that you’d recommend?

  • The Four Essential Competencies of a Leader

    Recently I started reading On Becoming a Leader by Warren Bennis as several people have mentioned it as a classic. After getting through his Hollywood-style political leanings in the intro he does a good job of describing characteristics and examples of good and bad leaders.

    Here are the four essential competencies of a leader according to Warren Bennis (pg. xxv)

    • Leaders are able to engage others by creating shared meaning
    • All authentic leaders have a distinctive voice
    • All true leaders have integrity
    • The most important competency is adaptive capacity — this is what allows leaders to respond quickly and intelligently to relentless change

    Most of the leaders interviewed are somewhat dated now as the book is over 20 years old but the concepts and ideas still ring true. For leaders looking to learn and grow in their skills, this book is a quality read.

    What else? Do you agree with these four essential competencies of a leader?