Entrepreneurial Leadership and Management . . . and Other Stuff


CEOs Get More Credit Than They Deserve . . . and More Blame

They say it’s lonely at the top.  CEOs are uniquely responsible for the results of the company and how those results are achieved.  No one shares this total responsibility.  There are no peers in the organization and there is, generally, little understanding of the pressures that such responsibility carries.  As such, CEOs are often held up as superheros when things go well and as almost satanic when they don’t.  Fair?  Not exactly.  Reasonable?  Well . . .

In my career, I’ve had the opportunity to run several private companies and a few public ones.  There have been some successes and there have been more than a fair share of failures.  Some of the successes were big ones that were highly visible and some were small and less visible, although at times, even more important.  The same can be said for the failures – while they came in both big and small forms, the big, hairy, nasty ones were not always the most important ones.  Although, they were always the ones that everybody got to see and, likely, remember. 

Sometimes I basked in the glory of the company’s success, getting treated like I carried 750 people on my back across the finish line.  Other times, I got the crap kicked out of me by employees, investors and/or shareholders who thought I was solely responsible for a hiccup in performance.  Both of these points of view are right and both are wrong.

I’m a strong believer in the buck stops here view of the CEO’s role and responsibilities.  The CEO’s role is unique for the fact that he/she is responsible for everything that goes on inside the company – whether or not they are actually in control of it.  In good companies, the CEO is held accountable for what the company does and how it does it.  In this way, getting the lion’s share of credit for a success and being taken to task for a failure are both right.

On the other hand, the job of running a company is complex and multi-faceted.  There are loads of factors related to whether or not the company has short or medium-term successes or failures.  In recognizing the performance of the CEO, some of these factors are often ignored, biasing the external view of the CEO’s performance.  Because of this, both reward and blame may be out of context.  Take, for example, when the overall economy is good, raising all boats with the tide.  Or, when changes in regulatory laws make it difficult to continue to address a market, regardless of the company’s efforts.  Yeah, as I write this I know it sounds like I’m equivocating about the responsibilities of the job.  I’m not, really.  I’m just stating that no judgement about CEO performance is simple, although they are often made that way.

Most CEOs do a good job and are appropriately managed by company boards in a fair and reasonable way, of course.  Glaring and notable cases where CEOs receive insane awards for mediocre performance or no punishment for failure (sometimes even rewards for failure) are the ones we hear about, though.  This is primarily the result of that fact that in the past, many (most?) companies, meaning the directors and shareholders of those companies, have not held their CEOs accountable to a reasonable degree.  They have mostly sat by and watched as the CEO has taken the company to new levels, augered it into the planet or really didn’t do much either way.

So what’s a poor CEO to do?  Well, until there is some universally applied standard for accountability and a commonly understood measure of performance, it is unlikely that there will be a rational and balanced view of how a CEO is actually doing over the long haul.  Perhaps, because it’s the sometimes irrational money of shareholders involved, there can never be a common standard and CEOs will continue to bask in glory one day only to be hung from the gallows the next.

From the CEO’s point of view, the odds of being evaluated correctly increase tremendously when decisions are made in thoughtful, considered ways.  That usually means that truly major decisions, with respect to the company’s size, are made with some level of involvement of the rest of the management team, company advisors and the company’s Board of Directors.  From the Board’s point of view, corporate directors need to always hold the CEO accountable for major decisions and company performance.  That doesn’t mean simply recognizing what happened, but teaching, rewarding, or punishing based on both the results and the process of what the CEO does. 

Yeah, even in a perfect world, it’ll still be an emotional roller coaster ride for the CEO, but that’s part of what makes the job interesting.  Being judged in virtually unpredictable ways in a sometimes irrational manner keeps things exciting <g>.

 June 30th, 2007  

Who’s In Charge?

Sure, almost any management structure can work, depending on the people, the environment and how lucky you are.  Those structures in which there are multiple people responsible for the same team or deliverables, though, almost always fail.  When there isn’t a single person who is the final arbiter and decision-maker, decisions and, therefore, execution, can drag out for extended periods, at best, and can potentially even lead to organizational paralysis.  Furthermore, employees of fast-moving organizations need to have a go-to person to address problems and answer questions.  If they have to address a committee, even a two person one, inefficiency and confusion will likely reign, creating a situation where decisions come slowly and making the employee question whether he/she should seek similar guidance the next time.  No organization can afford this.

I see this happening in startups all the time.  Two founders can’t decide or, more likely, choose not to decide who will be in charge.  “We’ll be equals.”  While it’s fine for two or more to share equal ownership in a budding enterprise (although there can even be problems with that when big decisions need to be made that require a vote of some sort), sharing corporate management responsibility is a mistake.  Ultimately, there will be difficult decisions that need to be made when a consensus cannot be formed.  What does a founding team of equals do then?

Aside from the decision-making issues, it’s easy to see how in some organizations employees may also use the fact that they have two bosses to get the answer they want.  Like a child manipulating parents, the employee can play one manager off another or simply seek out the the right one for every decision.  Yeah, adults do that too.

Obviously, this situation is not solely found in startups.  Even if it’s not a co-CEO situation, sometimes co-VPs, directors or group managers can be found inside struggling companies.  The same things happen at any level where management responsibility is shared – things slow down and get confused.  The genesis of these situations is the same as the one for co-founders, above – people don’t see the need or, more likely, choose not to make the tough call in choosing the single person for a managerial role.  Co-managers may also be assigned in situations where a particular single manager doesn’t have all the capabilities necessary for the role with the excuse that their knowledge and/or capabilities augment each other’s. 

In any case, the situation should be avoided.  Almost always, a management role with two people filling it shouldn’t even be created and if a single person doesn’t have what it takes to fill the role, they shouldn’t be hired for or promoted into it.  This management snafu is pretty black-n-white and is, therefore, easy to avoid.  Don’t let yourself slip into the easy solution in order to keep everyone happy or even to fill a temporary need.  Management moves like this are like a crutch.  Make the tough (smart) decision at the start and fill all managerial roles with individuals.  A little pain now will result in better company performance later.

 June 23rd, 2007  

The 10 Worst Jobs in Science

The July edition of Popular Science (it doesn’t look like there’s an on-line version available) has a great article titled, The Worst Jobs in Science.  The article outlines the 10 worst jobs available for scientists around the world – most with fairly vivid descriptions of what makes each of the jobs stink (some literally).  He’s my summary . . .

10. Whale-feces researcher – search the seas for floating whale crap to be able to determine the state of whales in an area.  Apparently, whale poop contains loads of info about the whale that left the package behind and it’s loads easier than getting similar data from a whale in motion.

9. Forensic entomologist – determining the time of death of a murder victim by studying how maggot infested he/she is.  Yum.

8. Olympic drug tester – standing by while thousands of athletes pee into cups, then testing each urine sample for a variety of performance enhancing drugs. 

7. Gravity research subject – spend 21 straight days in a bed, at a 6-degree, head-down angle to help determine the problems caused by lack of gravity including, atrophied muscles, bone degeneration and heart problems.  Where do I sign up?

6. Microsoft security grunt – work 24/7 to address the security holes in Microsoft’s products.  As the article states:

. . . to most hackers, crippling Microsoft is the geek equivalent to taking down the Death Star, so the assault is relentless.”

5. Coursework carcass preparer – be one of the people that prepare the myriad of frogs, bugs, pigeons, sharks and pigs for dissection by ninth graders.  Apparently, the job includes the happy euthanization task required before putting the specimens in a bottle full of formaldehyde. 

4. Garbologist – like an archeologist except you work through trash.  Recent trash like the stuff you just took to the curb last night.

3. Elephant vasectomist – as if snipping the reproductive parts of a many-ton mammal weren’t difficult enough – a single testicle is one-foot across, it turns out that in an elephant the parts that require snipping are on the inside, meaning that you have to cut through some seriously tough skin to get to them.

2. Oceanographer – this one seems pretty normal, right?  I guess in the science world this is a bad news/bad news kinda job.  Basically, everything an oceanographer studies these days exposes more troubling information about how global warming is real, the planet is dying and that we won’t be eating sushi in the next 30 years.

1. Hazmat diver – These guys dive into sewers, toxic waste dumps, used medical material and inside nuclear reactors.  Then they clean ’em up.  One story told in the article is about a diver that had to dive into a waste lagoon of factory pig farm that not only contained pig urine and liquid pig feces, but also included all the needles that had been used to inject the pigs with hormones and antibiotics.  OK, I’ve got the picture.  You guys definitely win.

 June 20th, 2007  
 Misc Thoughts  
 Comments Off on The 10 Worst Jobs in Science

In Memory of Digital Equipment Corporation

DEC-BadgeI mentioned that I worked for DEC to someone recently and they had no idea what I was talking about.  Granted, the person was young, but he was an adult.  Funny how the second largest computer company in the world in its time, and the inventor of the mini-computer could be so quickly forgotten. When I joined DEC in 1981, revenues were well below the peak of the roughly $14B they would hit in 1989.  In fact, I think they may have been about $3B.  Digital was still basking in the glory of the VAX, which was released in the late 70s, and was totally disrupting the old mainframe business dominated by IBM.

DEC’s headquarters was in an old woolen mill in Maynard, Massachusetts, not some shiny steel and glass structure in Silicon Valley.  That is part of what made it cool to work there.  In its own way, the place was sort of the Googleplex of the time and the company was innovative, fast-moving and a blast to work for.

Like any company, DEC did a lot of stupid things.  Let’s face it, the company doesn’t exist any more which probably means it made at least a few key mistakes.  One thing it did profoundly well, though, was recruit new talent.  The company was full of smart people that attracted other smart people.  The company also made a committed effort at making its computers available on college campuses around the world.  In a time where university computing meant punch cards and big black boxes, DEC hooked young engineers and scientists with interactive computing.  For those of you who can’t imagine life without a GUI, you probably have trouble understanding the magnitude of this change.  It was huge and made loads of young people (like me) want to work for the company driving this sea change.

This marketing fed the company’s almost insatiable need to hire and grow in the 80s.  In fact, the company grew almost uncontrollably (there’s one of those key mistakes).  As such, there never seemed to be many good managers around (I was fortunate to work for a good one – thanks, Alain).  For renegade employees willing to work hard, the environment was unreal – all the resources you could want at your disposal.  For those who wanted to slack off, though, there was always a place to hide.  We called it, “retirement for the young.”

The group that I worked in was an especially good one.  It was in DEC’s semiconductor engineering facility in Hudson, MA.  In those days, DEC was pouring money into semiconductor physics, manufacturing and software tools for the development of processors.  I was fortunate enough to be in a small team of really smart people that always kept the bar high.  The group created some incredible stuff back then, in fact, some of the underlying technology we created is still in use today in one form or another.

When I was hired, I was a software guy who had just been through two failed startups – one because of someone else’s mistakes, one because of my own – I’m a slow learner.  Within a year or so at DEC, though, I was running the internal chip design course and designing my own microprocessor (the rectangle on the badge above is one of the chips).  That was the kind of huge opportunity that was available in the company if you wanted it.  It was easier back then to make such a domain leap, of course – wire widths weren’t measured in wavelengths of light, but with a tape measure.  You could practically draw the physical layout with a crayon.  The important thing was that someone like me had the chance to make that kind of move.  It just doesn’t happen often today.

I left DEC in 1984 to start Viewlogic Systems with four other guys that I worked with.  Viewlogic was a big success and a great experience, but it was really difficult leaving DEC.  Many of the things I learned there influenced what I did when building new companies – mostly positive things, I think.  I’m sure it’s just my fond memories of the place, but I think that DEC had a huge impact on how we look at and run technical businesses today.  It’s too bad that it isn’t remembered more (or at all) for the hugely positive affect it has had on many of today’s leading technology companies.  It was even one of the first venture-backed companies in the US having taken $70,000 to start up in 1957.

I can only hope that some day people who worked at one of the companies that I have been responsible for will have similar positive memories of their experiences while employed there.  If so, much of it will have been influenced by my own great experience at the once great company, DEC.

 June 9th, 2007  
 Computers, Misc Thoughts  

A Crash-Course in VPS

I mentioned last week that I was moving this blog off of an internal server to an externally-sourced one at 1&1.  Further, that I chose to use a VPS, or Virtual Private Server, for the installation.  For servers that don’t require loads of disk space, CPU power or memory, a virtual server makes loads of sense.  They are a lot cheaper than a dedicated server while giving the owner the same level of control (complete root access).  The options with such a server obvious exceed those of a simple web host that just allows its owner to control the pages of a web site and, perhaps, a database behind it.

My goal is to use the server to host multiple web sites, including this blog, serve a variety of files – both public and private, run an IMAP/POP/SMTP mail server (Merak), and a couple of background processing programs of my own creation (therefore, fat and inefficient).  None of these processes is very CPU critical so I wasn’t too concerned with the overall CPU load on the VPS.  Also, after calculating the amount of disk space I needed, I found that I could easily last for a while on 10GB.  This seems small, but the mail server compresses its files and I don’t need this server to serve audio/video (I have another server for that) reducing the disk space need substantially.  I was a bit concerned about memory, but it seemed to me that all these applications could run in the 300MB space offered by 1&1’s lowest-end VPS offering.  It’s in this last decision that I found I was very wrong.

Especially since 1&1 VPS’ are running a 64-bit version of Windows Server 2003, memory space got consumed pretty fast.  If I was sticking with just the web and file server functions, I could have squeaked by, but my own applications plus the various processes that are part of the mail server kept me right at the upper bound of the virtual memory space that I had.  This might even be acceptable other than the fact that the virtual machine didn’t like it when it ran out of memory and often crashed. 

So, I upgraded the server to a higher-end VPS offering from 1&1, which I’m afraid required a complete rebuild.  The new server offers more disk space, more CPU and more memory, although not a ton more at 500MB.  This gives my applications plenty of breathing room though.  I finally completed the transfer of everything this morning and it all appears to be running OK.  We’ll see.

If you’re looking at a virtual server solution, look hard at your memory requirements.  Hunting around at all the service providers out there (there are many), I found that not all of them are up front about the memory space available.  1&1 buried this factor more than most – they were clear about the disk space and CPU levels available, but I had to really hunt to get memory info.  This is especially bad since it ends up being the most important factor.

FWIW, you can also get a VPS from 1&1 and others that comes with Linux (mostly Fedora Core).  My guess is that you can build a leaner server with a Linux base so that may be a better option for you.

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 June 9th, 2007  
 Computers, Misc Thoughts  

Good Customer Service is Sooooo Easy

Let me get right to the punch line . . . good customer service is so easy because customers’ expectations are so low.  It’s a relative thing.  Yeah, yeah, yeah, it shouldn’t be that way, but it is and aggressive companies should be taking advantage of the fact that their customer’s have been beaten down by suppliers for so long that a simple recognition of the fact that they paid money is enough to make them happy.  In a world with few initial differentiators and almost no sustainable differentiators, customer service can make all the difference in making sure you beat your competition, get repeat sales and have a customer base that is your best and biggest marketing department.

So here’s a story from a recent experience that might make this more clear . . .

I’ve mentioned before that I’ve flown something like a gajillion miles on United Airlines.  There’s a nice trophy stating this fact in a box in my basement somewhere.  As you’d expect, though, other than a mass-produced plaque with my name on it, United never recognizes this fact and it, along with $9.58 might get me a mint, double-hot, no-foam, low-fat, grande mochachino latte at Starbucks.  All of the crappy seats, snitty flight attendants, flight delays and United’s patented smelly lavatories (what’s up with that anyway?) are mine for the taking, just like they are for everyone else.  Further, I don’t look forward to a pleasant or enjoyable flight.  I actually pray for a safe flight that gets me to my destination within some reasonable deviation from the scheduled arrival time.  It’s a school bus with wings and that’s all I’ve come to expect out of it.

So, wasn’t I pleasantly surprised (shocked, actually) when a flight a few weeks ago on United offered a positively memorable experience?  The toilets still stunk and the plane looked like it was previously used to transport cattle, but the crew was phenomenal and it it made the rest of the experience a total non-issue.  From what I could see, this all stemmed from the attitude and direction of the captain who seemed not only responsible for operating the 757, but for the happiness of his passengers, too.  What a concept!

What he did to make this happen – at least the stuff I witnessed – was simple, cost virtually nothing and took little time.  While the passengers were waiting in the boarding area to get on the plane, the captain took the microphone (uh, oh, I thought, this is gonna be bad) and gave us the complete low-down of the flight plan, the plane’s status, the crew and what was happening at both the departure and arrival airports.  No bad news.  No delays.  It’s not like he had to be out there for bad news, he was essentially out there for no news – just for the customers.  He told us that it might get a little bumpy over the Midwest and that they’d try to skirt the storms that were creating the turbulence.  What made this different from the usual pre-flight blather was that he 1. covered a pretty complete list of the stuff a passenger would want to know, 2. showed empathy to those who might be concerned about turbulence and, 3. DID IT FACE-TO-FACE.  Instead of being the anonymous voice in the the speaker, he took the time to explain this stuff standing among us.  Simple, good, unique.

Then, as we boarded the plane, the captain stood at the door and handed out his business card (which had a phone number and email address) to every passenger that boarded.  I asked him if he should be spending his time doing his pre-flight checks and he told me they were already done.  He said: “I just show up a few minutes earlier so that it doesn’t hold up the passengers.”  I have to hire this guy.

To top it all off, about midway through the flight, a flight attendant brought me back another business card from the captain.  This one was signed and had a small note hand-written on the back.  “Thank you Mr. Herman for your support of United and for flying a gajillion miles with us.”  It was in the database, he just chose to use the information to recognize a customer.

His attitude was contagious.   The flight attendants were smiling and attentive, people actually listened when announcements were made and the passengers talked about how great United is during the flight.  My water glass never reached half-empty because there was someone always attentively refilling it, and I don’t only mean that metaphorically. 

Oh yeah, there’s one more thing.  At the arrival gate, the captain waited, shaking people’s hands as they disembarked, thanking them for flying United and asking if they had any questions.  I almost had a stroke.

I’d estimate that virtually everyone on that flight considered United to be a good choice for their next journey – even the jaded ones like me.  Service is so bad that even a small offering of reasonable service changes our entire mind set.  Just think of all the low-cost, easy-to-implement things you could do for your customers to get that same kind of response.

 June 6th, 2007  
 Customer Focus  

Honda Dumps Gasoline/Electric Hybrids for Diesels

No one can say I didn’t warn ’em.  I’ve been talking about this for a while on this blog, to anyone who’ll listen and to many that are smart enough not to.  Diesels are a better solution to minimizing the drain on dead and rotting dinosaurs than gasoline engines, even when coupled with batteries and electric motors.  According to AutoBlog, it looks like Honda gets it (I’d love to take credit for it, but I doubt any Honda employees read this blog) and is dumping the current hybrid technology in their popular midsize cars, including the Accord Hybrid, and replacing both the gerbil and it’s running wheel with a real motor – one solely motivated with black gold, Texas tea . . diesel fuel.

According to the post:

. . . Honda seems set to make it official. There will be no new Accord Hybrid in their lineup. Instead the North American market will get a diesel Accord to fight the mileage wars.”

It looks like the diesel engine of choice will be a 2L+ size, 4-cylinder motor using the new ultra-clean diesel fuels that meet California’s strict Tier II / Bin 5 standards.  As you’d expect from California, these are the toughest diesel emission standards in the world.  This engine should offer more torque than the current V6 hybrid (lower HP, though – it does have two fewer cylinders), with better fuel economy.  While the first engine will be a 4-cylinder, it looks like Honda will back it up with a V6 offering more torque and power while remaining on a petrol diet.

The new Honda engine will be available in 2009 cars.  Start looking for diesels from other manufacturers passing you while you’re refilling your Prius starting next year.

 June 5th, 2007  
 Stuff with a Motor  

Windows Live Writer Beta 2

I’ve been playing with the new beta of WLW for the last couple of days and I really like the way the product is coming along.  I thought the first beta, which I have used for quite some time now, was already the best blogging editor available.  The update solidifies that position even further, IMO.

Beta 2 fixes a raft of bugs in beta 1 and introduces some new ones, of course.  After all, it is beta software . . . There are a load of functional enhancements that really make the product a lot better.  These include:

  • New GUI – much nicer look and feel.  Not complicated, but more complete and aero-ish.  Still very easy to find your way around.
  • In-line spell checking (squiggles).  God forbid you have to wait until you’re done writing to do a batch spell check, but we’ve all become addicted to knowing right away.
  • Much improved detection of blog theme.  WLW retrieves the blog theme for local and offline WYSIWYG editing by creating a dummy post, retrieving it and then deleting it.  In beta 1, if you pinged servers that consumed your feed as you posted, those servers could grab the temporary post before WLW could delete it.  Thus, the large number of “Temporary post for style detection” posts all over the place.  Apparently, while this can still happen, it’ll be rare.
  • Easy in-line table editing – surprisingly complete.  Think Word and Excel.
  • Page authoring (in addition to posts) for WordPress and Typepad.
  • Easy linking to previous posts in your blog and the ability to catalog favorite links for quick reference and insertion.
  • An API that lets the weblog providers (WordPress, Typepad, etc.) open weblog features up to the editor.  Some of these have been exposed already by WordPress and Typepad.

The upgrade from beta 1 was easy.  I just ran the installer over the existing software and had no problems.  You run beta software at your own risk, of course, but the beta 2 release looks pretty stable (see the bugs outlined in the link above) and offers some cool new functionality.  Worth checking out.

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 June 5th, 2007  

How to Build a Company for $12,107.09

I’ve consumed a lot of venture capital starting companies over the years.  Not those insane amounts that you read about, but enough to make me wonder what the hell we did with all that money along the way.  For the last few years, though, I’ve been fascinated with the idea that highly leveraged companies can be started on a shoestring because of the huge array of resources available through the web.  Of course, it’s not only the availability of such resources, it’s the price.  The competition that the same availability creates makes providers very competitive.  You gotta love competition.

The web also breaks many of the old rules about distribution.  While there remain many products and services and a large number of markets that still require real bag-carrying sales and service reps, many products that used to be sold face-to-face can now be sold and delivered virtually.  Yeah, I know.  It seems like this is old news.  I’m surprised, however, with the large number of people who still don’t see it.

In his post titled, By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09, Guy Kawasaki discusses his efforts to start his new company, Truemors, with about as close to $0 in capital as possible.  It’s a great post with dozens of lessons and pointers about how to leverage the massive resources available to everyone on the web, let alone it’s implicit access to a zillion customers.  Definitely worth checking out. 

 June 5th, 2007  
 General Business  

Red Sox, Yankees, Fenway

Ah.  Spring baseball in New England.  Classic stadium, epic divisional rivalry, the best team in baseball (the Red Sox) and 50 degrees and raining.  Thanks to my good friend Rick, I sat in the second row behind the plate at last night’s game (did you see me on TV? <g>).  It was cool at game time, which would have been OK, but the skies opened up after the 5th inning and made things a bit uncomfortable.  Further, the game lasted 4:15 – that’s even a long game for nice warm, sunny days.

Most Yankees v. Red Sox games are good.  If not for the quality of the play, at least for the fact that the two teams are the contestants in the biggest rivalry in American sports (sorry Chicago/St. Louis and San Francisco/Los Angeles, this is the one).  It’s the Hatfields and the McCoys dueling it out in an epic battle.   Melodramatic? If you think so, you obviously don’t live in Boston or New York and clearly never watch ESPN.

I’m afraid that the Sox lost this round and in a bad way. Alex Rodriguez hit a home run off the Sox closer, Jonathan Paplebon in the top of the 9th to take a 6-5 lead that they wouldn’t surrender.  But I’m more worried about the fact that this was my 4th Sox game this season and they are 0-4 with me in attendance.  Keep in mind that the team has only lost 10 home games.  Like any self-respecting member of Red Sox Nation, I can only blame myself for the loss last night.  Sorry team.

Even with the loss, it’s still great any time you get to spend the evening at Fenway.

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 June 4th, 2007  
 Red Sox  
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