Jerk Manager Or Lessons From The Spanish Prisoner? (Long Post)

I thought I would relate a case I had in a startup situation where I had felt that I had reached the lowest point in my personal and professional life. I was really choked up, and it was probably the first time I have ever had something mental shut me down physically. But I think this case also reflects some aspects creativeness and caution that are bred into people working for startups.

I was contacted by an individual in Caracas, Venezuela. We’ll call him Mr. P. Mr. P. purportedly has a background in the enterprise software market and connections into the financial services space, a sector very ripe for my company’s product. Through pure chance, I happen to talk with one of our sales directors who actually has worked with Mr. P in the past. The past experience with Mr. P was positive. The prior company (in the same market space) got a number of high-level meetings with customer prospects and a mini-roadshow in Venezuela. One deal actually came though and was signed. Trick, however, was that Mr. P wanted his sales commission up-front (i.e., before receipt of first payment from customer). To make a long story short, the key person that signed the deal at prospective customer changed jobs, and the vendor lost the deal. Mr. P., part of a population where the economy is under terrible duress, no longer had the money to pay back the vendor. Our current sales director still speaks very highly of Mr. P.

So I decide to move forward. What does that mean? Well in a startup situation, and especially in cases where you do not have the Board’s blessing to pursue international speculation, you either need to get cash up-front or do a commission-only based deal. Went with later approach here. Additionally, I did not agree to pay for any expenses. Let’s get things rolling first.

I start to have a number of phone conferences with prospective partners (e.g., IBM distributors) and customer prospects. Mr. P. prepares some good presentations for us, and I verify some of the phone calls, discussions, and exchanges with people I know, people who have done business in Latin America. I even use informal networking to get connected to folks at IBM who manage the Latin America operations, tell me things about doing business there, and can verify that the people I am talking with as IBM distributors are actually IBM distributors. Early on, I also get introduced to a Mr. V. who is supposed to be able to broker additional connections, but on my first call, I wasn’t so sure about the fit.

A few weeks into the various calls (I never traveled to Venezuela btw), Mr. P. starts to indicate to me that he needs an advance of money. The highballing starts to come on strong. He has set up conference calls, cannot pay for food to eat, traveled to different parts of Latin America, etc., and I have not sent a single cent to him. I consult with our director of sales. Compressing things a bit, I am still cautious, so I roll out phase 2 of my "jerk manager" approach. I tell him that I cannot advance any money, but that I will send up to $750 in three pieces (perhaps not the exact amounts), and that each piece is tied to a milestone: e.g., phone conference with customer (both business and technical contacts), verification of pilot install of software, and signed order form (of a qualified, credit-checked customer) for training. He say "great". OK.

We almost complete through the second milestone, but have some issues with the Java virtual machine implementation in the IBM AS/400 environment.

Then something happens out of the blue. Mr. P’s son has been in a motorcycle accident. He will lose his arm if he does not get surgery. Mr. P. does not want to take his son to a public hospital, but wants to take him to a private one. Please advance the rest of the $750. Offline, I call the special crimes division of the FBI to see if they’ve ever heard of this one before. No guidance there. But they do have four full-time people manning the customer services lines to handle the Nigerian email scam. FBI says to me that they can’t make any recommendations here, but that it sounds like I’m doing all of the forward and backward chacking I can.

In the end I try to console Mr. P., but I also indicate that it is not my money to advance. It is shareholders’ money. I ask to let me speak to the doctor and the hospital. I say that I am not comfortable advancing money to him directly, but will pay the hospital directly, using some of my own money. He says OK. To make a long story short again, I get one of my friends that can help with the language to connect me to the hospital. I go through a number of different departments, and finally get so caught up with transfers, that I spare my friend the rest of his time with helping me out pro-bono. I ask Mr. P. why I cannot reach the person at the hospital, he says to call Dr. V.

In the midst of all this is where the low point happens. Mr. P. calls me out of the blue. He is sobbing. He tells me that he had to take his son to the public hospital for immediate surgery or the arm would be lost, but it turns out that his son has died.

It is even hard for me to recall how I felt at that moment, but I felt directly responsible for the death of his son. I had not advanced money to take him to the private hospital. While I had moved quickly to verify circumstances, it seemed as if I was not rapid enough. My mind and body shut down for 24 hours.

A few days later, Mr. P. tells me not to worry, that he will be gone for about a week to bury his son.

My mind starts to work again eventually. Hmm. V is a name I’ve heard before. Where have I heard that name? Let me scan my address book. There’s a Mr. V. that is a business development person. But what’s this? Dr. V (the scheduled surgeon for Mr. P’s son) has the same telephone number as Mr. V. Now V is a common name, but this seems odd. I eventually try to mention this to Mr. P. He has no explanation other than in his distraught mental state he must have confused things.

Mr. P. and I never seemed to trust one another after that series of incidents. Our business ended, and the company shareholders were out $250 and about 2 weeks of my time in paid salary. To this day, I do not know whether Mr. P’s son had died. Mr. P. let me know that it was not my fault though. One of my close friends told me that I need to see the movie, "The Spanish Prisoner". Probably both Mr. P. and my friend are right.

Cancer Research – Limits and Hopes

The title of the blog post is Art Hutchinson’s. He has a very touching post about the recent loss of his brother to cancer at the young age of 39. Posts like his really put life into perspective. It also sheds light on the importance of early diagnosis and the rapid attention to changing health conditions of loved ones. Finally, for those who have not had to go through such an ordeal, it sheds light on the hopes at stake (in fact, on the line every day) for better, faster research. My condolences to Art and his family. I’m sure that many others, like myself, would only hope to have a supportive extended family like his in times of need.

Intranet Blogging: More On Impacting Organizational Culture

This post has been reproduced from my 21Publish blog.

Intranet blogging (see earlier 21Publish whitepaper here [PDF file]) seems to be gaining momentum by companies that are looking to imbue and discuss culture in private settings. In a prior post, I mentioned how a major US bank is using blogs by 21Publish to discuss leadership and company culture.

Today, I learned from Shel Holtz’s blog that McDonald’s now has an intranet blog. According to Shel, Steve Wilson, the burger company’s senior director of web communications, addressed a crowd at Blog On:

"If your task is to move the culture of a company, you’re
not going to move it by the flip of a switch,” Wilson said. “You have
to show that an open dialogue can occur, and create an ongoing dialogue
to move from point A to point B."

Culture change is something that I’ve not heard explicitly discussed in mainstream corporate settings since the mid 90s, but it seems to be coming back into vogue. Blogs could be the internal desktop memo of days past.

Other very recent news in the blog intranet space … the NewPR Wiki just started a CEO Intranet Blogs list.

CorporateBlogging.Info also has a very recent post on using intranet blogs for knowledge management in a corporation. Just last week I had a discussion with a major telecom company about using blogs in the context of KM. Perfect use-case just coming of age. I suspect it has to do in part with the fact that blogging has been legitimized if only for the medium’s impact in organizing discussions more effectively than email. Additionally, some companies just aren’t ready organizationally (culturally) to handle the external messaging aspects of blogging, but they are more than ready to try things in a private/secure environment.

To change gears a bit, some things we have found at 21Publish is that customers like the ability to have hosted blogging intranets that support the following:

  • dedicated server integrated with company’s specific firewall considerations
  • workflows restricted by blog community manager to prevent confidential posts from going public
  • shared server, secure blog intranet (not custom integrated with organization’s firewall)
  • restricted admin of reader groups
  • traceable conversations and comment tracking within the community
  • automated sign-up and administration of bloggers with varying levels of control and which permit registrations only from certain domain names (e.g., companyxyz.com).

So I am seeing more momentum on intranet blogging than I have seen in the past. What are you seeing?

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Benefits Of Little Experiments And Figuring Out How People Perceive You

One of the most important lessons I learned from an angel investor in a prior venture I worked with was that of conducting test experiments. This might be as sophisticated as a split-cable marketing study where one delivers one segment or audience one type of message and another segment (randomly split) another type of message. See what results come from each segment. Analyze and come up with hypotheses why things are so. Go back and test and refine things.

What the angel investor taught me, however, was that I could get by with conducting some of this testing in more of an ad-hoc way without having to follow the rigor and statistical nature required in full-blown business experiments learned in business schools, etc. So long as I was disciplined, somewhat systematic, and could rely on my business instincts, this would get me in the ballpark and moving in the right direction.

To change gears a little, one way I have applied the ad-hoc testing technique is to get continuous feedback on myself as a business professional.

What is interesting about the blog world, it that one can get some feedback on how one is perceived by others. Through my blog postings, I have seen people refer to me in online contexts as:

  • management consultant
  • entrepreneur
  • operating manager/executive

In my case, the balance has been weighed more toward the first two in the list as opposed to the third one. It is also interesting because I do not consider myself an entrepreneur. I have supported entrepreneurs and been in entrepreneurial contexts, but I have not yet been that first person in the company to conceive of a business idea. I have had to earn my status in entrepreneurial contexts (e.g., through the earliest sales in an org. or through market guidance).

How one is perceived is very useful information to have when selling oneself into a job or consulting gig, say. It is also good to be aware of this in persuation-type situations (e.g., some people may perceive you to be more skilled as an entrepreneur when you really need to position yourself as a management consultant).

To complement the online feedback I’ve processed, in offline settings, I have gotten some feedback over the years on how people perceive me:

  • From a venture partner, ex-partner at well-known VC fund in South – classic bio and make-up of an entrepreneur, perhaps not naturally inclined but capable to be a position-player in business development
  • From a CFO – great people facilitator with excellent communication skills, maybe a little weaker on accounting detail than what needed for this engagement
  • From an entrepreneur – type of person needed for strategic finance issues and operating model considerations
  • From a CFO – would be good at a controller position in a finance organization because of an ability to tie finance with communication skills, may need to shore up skills in detailed accounting.
  • From a technical person – personality more of a Kellogg-type than a Chicago-type MBA (ouch?)
  • From angel investors – a trusted, right-hand man
  • From a client entrepreneur – significantly stronger on product development/management & business development as compared to online marketing
  • From an entrepreneur – much more of a corporate-type as opposed to an entrepreneur (little negative?), good at driving structure in an org. though
  • From a generalist-type executive in a multi-billion dollar firm – you are a generalist and a glue person that holds things together as opposed to being a front-person
  • From a client/middle-market company – well-suited for change management/management consulting engagements that require working with all levels in an org. (i.e., not just executives but line workers)
  • From a client/middle-market company – excellent at bringing management consulting-grade analytics and front-end, project management discipline to the table
  • From a friend – not the makeup of a financial analyst
  • From an angel investor – a terrible writer, but very good at picking an angle and delivering messages from that context
  • From strangers – a good go-to resource on management consulting and business schools

What is very funny to me about this list is that I never ever pictured myself in business development (prior to business school), but somehow people perceive me that way and see me in that role.

The bottom-line is that by getting this type of feedback, it becomes easier to know how one stacks up against others in a professional context.

By using this technique, I have made some choices to de-emphasize my efforts in pursuing financial-type endeavors. Continue to focus on opportunities that will require me to interface with all types of people. Defer functional specialization as a general rule but keep watching the trends. Focus more on management consulting, people facilitation, product management, start-up and business development opportunities.

As an aside, in addition to asking others how they perceive me, I have also asked my son how he perceives me. It is a good feeling when he responds, "You’re my buddy." I have to take that feedback and keep life in balance too.

Learnings On Facilitating A Blog Community

Blogging about group and blog communities is directly related to my job. If you are interested in facilitating a blog community, here are some of my musings and learnings at my 21Publish blog having looked at a number.

Update (10/19/05): I was prompted to write about this based on a post by Beth Kanter – she covers the non-profit space quite a bit.

Update (10/19/05): Beth has an update here. Feel free to join the discussion.

Update (10/21/05): Beth summarized and consolidated here. Thanks!

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Blogging Observations: Nine Months Of Posting Versus One Month And Ten Posts

Some facts first. Dave Sifry (CEO of Technorati) recently posted about growth in the blogosphere. 19.6 million blogs. If I checked the Technorati ranking of my blog here, it has been somewhere between 35,000 and 40,000. That’s in about the top 0.002 or 0.2% of all blogs and took about nine months. Additionally, this blog has a very modest following of probably 50ish readers via Feedburner RSS (still some renegade feeds out there) and 20,000 some page views since inception.

Of course, blogging is about microaudiences, the long tail, etc., etc. so expectations from the average person that they will get huge audiences is probably against the odds/base rates unless they are really targeting a niche segment.

The highest number of comments I received on a blog post on my individual blog here (including my own comments) was seven comments. It was a post linked to from Virginia Postrel’s site.

In contrast, at my BusinessWeek blog (which has only been around for about a month and has ten posts) … well I have twenty comments on a post I did there (including my own comments) on ethics – the comments include many more people in the discussion.

A key difference in my blog at BusinessWeek is that my blog is part of a blog community, as opposed to being an individual blog (like the one here) that sits out on an island connecting to context and other users. Of course, another key difference is that the blog there leverages from the BusinessWeek reader base.

But I keep coming back to this … nine months on individual blog with seven comments as a high versus one
month and ten posts on blog as part of blog community with twenty
comments as high. Which method had a better efficiency in creating
dialogue? Just stepping back at a very crude level, the blog as part of a blog community seems to win out.

One could make many other arguments that I have not controlled for factors that level balance the two blogs. Nor I have sought out disconfirming evidence to explain the difference.

But I wonder whether blog use as we know it will shift given the stats and observations I’ve made above. For me, individual blogging has been a substitute for a electronic newsletter. But is it really that way for the majority of people? Is it more about conversations? If a community framework provides a better way to generate that dialogue, should we see more of this?

Disclosure: I am a gun for 21Publish, a provider of turnkey group and branded blog communities. BusinessWeek is a 21Publish customer.

Update (10/19/05): The comparison is nine months and 300 posts (individual blog) versus one month and 10 posts (blog community).

Interesting Article Pointing Out Why Corporate Ventures (Versus Startups) May Have Higher Mortality Rates

Accenture’s Outlook Journal has a somewhat older article (vintage 1999-2000) describing the benefits of "fast ventures", a strategy to bring a new eCommerce company to market fast using new company and new equity structures.

I have been involved with a number of internal venture and new business
initiatives within large corporations (not generally eCommerce though) and resonate with some of the pressures cited in this article that
must be compensated for or actively managed (I cannot speak factually on
the comparative findings on incubation and return timeframes). The passage that caught my interest from the article is as follows:

One research review by Patricia G. Greene and Candida G. Brush, "The
Corporate Venture Champion: A Resource-Based Approach to the Role and Process"
(Entrepreneurship Theory and Practice, Spring 1999), suggests
that compared with entrepreneurial startups, corporate ventures require a much
longer incubation period before commercialization and take twice as long to
reap a profit.

It’s unclear why this is the case, but experience
suggests five answers.

First, corporate executives tend to have a much smaller
universe of ideas to choose from than does the typical venture capitalist.
Second, they may have less objectivity about which ideas should succeed; this
may be due to internal politics or hardened views about their particular
industry. Third, internal initiatives are limited by the company’s own
capabilities, which may fall far short of best- of-breed.

Fourth, getting the green light for an internal venture
typically requires layers of approval that sacrifice swiftness for a certainty
that is rarely attainable in today’s fast-moving markets. Staffing allocation,
annual budgeting and political power struggles all conspire to limit a
company’s ability to innovate.

Fifth, and perhaps most important, corporate initiatives
suffer because managers are seldom personally on the line. To paraphrase Samuel
Johnson, nothing so concentrates a manager’s mind as the prospect of an IPO in
just three months.

In a corporate environment, a fast venture can minimize or
eliminate these impediments. New-venture teams tend to make decisions motivated
less by career advancement or company politics than by the opportunity for
personal and financial gain, creating powerful incentives for success.

Random Stuff On Business Ethics (And Competitive Intelligence)

Some good comments over at my BusinessWeek blog post on "Teaching Ethics In the Business Schools:What Do You Think?". Kathleen also has a post that touches on leadership and ethics here.

When contemplating what my life would be like if I were a full-time competitive intelligence person (as opposed to doing competitive intelligence as part of general startup efforts or management consulting), I found the following PDF (from Competitive Intelligence Review) to be excellent on highlighting some concrete cases of how competitive intelligence can walk a fine line with ethical behavior. Here’s a snip from early on in the article that demonstrates a situation with Marriott:

For example, a 1988 Fortune magazine article outlined Marriott’s practice of using headhunters to interview regional managers from each of five competitors’ economy hotel chains when it was investigating that market. Marriott was able to obtain information regarding salaries, training, and managerial expectations. Some people may view such tactics as unethical. Marriott maintained that they were ethically acceptable because job candidates were told no jobs were currently available, but might be available in the future, and because several of the interviewees were later hired (Dumaine, 1988).

Not making any judgements here, I also have an interesting article that my wife uses in marketing class that outlines how ex-law enforcement agents are used by a company to survey the frozen pizza production capacity of one of the major pizza players and how that intelligence, while it clearly uses deception on the ground floor by the intelligence person, it enabled the vendor to become the #2 player in the market. Company gone bad? Agents gone bad? Or in the spirit of winning the game? Seems like the original PDF I pointed out (did I say it was a good paper?) can help one to decide (and also get a perspective on how one’s opinion may fit within a cross-section of other professionals).