Category: General Management

In the past few weeks, I’ve been asked by three folks about the legal and practical requirements of implementing a board in an early-phase organization. There is a lot of information around on the subject of corporate governance – probably the most notable resource that comes to mind for me is National Association of Corporate Directors. There are also books on the subject (e.g., Corporate Governance), but there can be a lot to wade through depending on how deep you want to go.

Here’s my introductory $0.02 on the subject:

1. The board’s primary purpose is to work on behalf of the ownership of the organization both a) to see that the organization achieves what it sets out to do and b) to provide a monitoring framework that ensures what management is doing is acceptable.
2. Boards then, can be viewed as the balance point between the shareholders (which own) and the management (which controls day-to-day operations).
3. Laws and articles of the organization may dictate the minimum requirements, but generally speaking, two key roles that are basically the minimum to organizations (profit and non-profit) are the chairperson and the secretary.
4. The chairperson is often referred to as the servant leader of the board – that is, the integrity of governance starts with the board, and the chairperson is basically a facilitator.
5. The secretary has responsibility for accurately documenting (guardian of) what the board has done.
6. In some situations, the secretary may also play a key role in helping the chairman put together board documents and doing behind-the-scenes work to facilitate the board meeting (so that it is a non-meeting in many cases). Tends to be more true in environments where more legal mechanics and knowledge of confidential organizational infrastructure is required.

Early-phase organizations may have some wiggle room (e.g., number of directors, amending by-laws) as to how governance works for numerous reasons, e.g., the management largely represents all of the shareholders.

Some key things that I would consider (in the case of wiggle room) include:

• Speed and convenience – larger boards may slow you down unless one of the following counterbalances the effects.
• Leverage – boards can be a way to get help at no to minimum cash cost. Here some key things to capitalize on are the board directors’ networks, skills (e.g., legal or accounting), etc.
• Advice – although this is one I personally put the less stock in because one can get some of this without a board director relationship, it depends on the makeup of the management team and desire of the owners. Board directors can complement the management team’s experiences.
• Independence – as the owners of the organization differ in total composition as compared to management, the need for board directors to be non-management and independent increases.

As a final closing thought, fund raising is huge timesink that affects both for-profit and non-profit organizations. Some non-profits have even segmented their board into operating and fund raising groups. The former group looks at current operations, controller activities, etc. The latter group is more forward-looking and gets involved with the strategic direction and milestones for the group. Fund raising is something that should not be forgotten because it is buried in the notes I’ve outlined above (probably could be categorized as a way to get leverage). Consideration should be given as to how the board makeup should look based on putting fund raising in the proper perspective.

At my old blog last year, I recounted a story about losing a management consulting deal. Some key snips setting the context for the Dutch Uncle (emphasis added):

• Today I lost a freelance consulting deal to another consultant. Of course I’m disappointed, but once a deal is lost, it is lost …
• I think the most important things to do after a lost deal are to
  identify learnings with respect to your company’s product offering and
  sales processes and to preserve prospect relationships …
• Now I am not going to go into all of my learnings here, however, I
  think it is useful to consider a concept I learned in Ford Harding’s
  book, "Rain Making: The Professional’s Guide to Attracting New
  Clients". You need to ask as many people as possible (client prospects
  included) to be straight-up with you. No silverlining. Why did I lose
  the deal? This is the concept of getting the prospect to talk to you
  like a Dutch uncle. To quote a passage from Harding’s book, "The person
  who talks to you like a Dutch uncle does it for your own good … At
  its worst … [problems are] like a cheating spouse; friends know but
  don’t tell you about it. "

Well, as it turns out, I actually won the deal. The client prospect came back. That’s the happy story for Friday.

To change gears a bit, I actually started blogging probably back in 2003. I had one post up there for about a year on a Blogger account which I eventually deleted. I like to think that I won the deal above in part because what was embodied in my first blog post ever. The essence of what was there was (to my recollection):

• my personal mission statement as a business development professional
• my utmost goal to help people and not to sell to them
• my commitment to safeguard one’s confidential and competitive information as a business partner
• my goal to even help you find an alternative source for your problem if my company’s solution was not a good fit.

It probably went on and on for a bit, but you get the idea.

Deepak Thomas, a product manager in the Valley, recently launched a blog and catalogs some of the key functions of the product management discipline. His blog is one of the few blogs that I’ve seen address product management, and it is of special interest to me as it is one of a few practices areas (under the acronym PACE) that was core to the management consulting firm, PRTM (my alma mater), at its founding. Although lots of b-school students love to get on strategy projects after graduating and entering management consulting, I can think of no other process in a product company more core than making products. What is interesting to reflect upon after reading Deepak’s post is that in early-stage ventures, the product management "process" can be pretty compressed  – it can easily feel as if one is in a tornado as opposed to participating in an orchestrated planning process.

In any case, I find that a key aspect to focus on in venture with respect to product management is making sure that sales, marketing, and R&D work on product management jointly (i.e., on a cross-functional basis). This is probably #1 on my list of things that is usually broken in companies that come from predominantly technical origins. An essential question is this: Can the company list out the features of the product for future releases as mapped against R&D resources needed against competitive positioning and against sales & marketing priority? Time to get out the Excel spreadsheet. It will be easy to lose one’s way without having a guiding voice of the market built into a company’s products.

The post has been reproduced from my blog at 21Publish.

As I’ve started to put myself in the shoes of customers and prospective
customers of 21Publish, I not only try to absorb the technology
environment people are
facing but also try to consider the culture and organizational
processes
that they follow and/or want to implement. To be frank, sometimes it can be overwhelming to talk with people of all walks of life from fishing to K-12 education to
Southeast Asian Health initiatives, but I find the discussions
fascinating and humbling too.

One aspect that I have been trying to keep in the back of my mind
during these discussions is this. For those that have read Malcolm Gladwell’s
book, "The
Tipping Point", you may recall loose references to optimum community
sizes of 150. Now as you may recall, 21Publish launched a free
pricing
plan configuration that covers 100 users. Is that the right number? Who
knows? But I will say that registrations have ramped up fast since we
introduced this. I hope that we are adding value.

I have found it interesting to revisit some of the theories behind the
Dunbar Number. Christopher Allen has an incredible (but older) post about the
Dunbar Number. Here’s a select snip from Christopher’s post (but you should really read the whole thing if you can):

I also like the matrix of mean group size vs. neocortex ratio done by
the Boston Consulting Group. Little did I know that they had monkey
frameworks to complement the infamous farm animal-growth share matrix
of the stars, cash cow, dog, and problem child or (?) …

On June 1, I started a new endeavor as COO of 21Publish, a leading cooperative publishing and hosted multi-user blogging service. Being clear so as to not divulge any confidential information, I thought it would be useful to share some general thoughts on getting grounded in any general management role.

Early on stuff:

• The first few days are like drinking from the firehose – Learning more about the subtleties of operations overwhelms one in the first few days. In general management roles, one covers lots of ground including sales, systems, pricing, unknowns, competitors, psuedo-competitors, different uses of terminology, what’s working, what’s not, conversion rates, buzz in the blogosphere, PR outlets, international resources, etc. After the deep dive, step back and figure out the high leverage points.
• Figure out how to position oneself in the company – People’s roles shift about when new people get introduced. Have to be diligent to make sure that tacit knowledge gathered by people in the organization is harnessed.
• Get talking to customers, prospects, and employees – Figure out how the product really gets sold and the decision-making process people use to buy. See what roadblocks and concerns people have. As an example at 21Publish, perhaps people aren’t getting a clear understanding of how to integrate existing individual blogs into a community. Or perhaps people have a hard time understanding how the 21Publish system enforces greater aspects of community interaction (say with non-profit memberships, university alumni groups, classrooms, or church communities) as compared to blogging platforms targeted at individuals (like TypePad). Or maybe people don’t understand the concept of a hosted service/no software/no hassle model. In any case, get way down in the trenches to see what is happening in customer service, lead generation, etc. Figure out how to resolve these issues for marketing and sales operations.
• You should have no delusions about the company having a right to fire you if you do not perform – Perhaps I’m a little harder on myself than most people, but having been a traditional management consultant, I’ve always believed that if I do not perform as a manager within a firm, the company has every right to put me out on the street. In the case of 21Publish, I have sales, marketing, and operating goals. For me to meet these expectations, I need to deliver and add value to customers prospects first (which may in turn, "turn strangers into friends and then strangers into customers", in the wise words of Seth Godin). The company one works for needs to get indicators from customers and the market that one is doing a good job. Otherwise, why are you a senior manager there?
• Eat your own dogfood – A classic example is development of one of the operating systems at one of the Big Corporations. The development team had to develop the new operating system using applications on the prior version of the operating system. This structural arrangement clearly got bugs out of the system faster and put company employees in the shoes of the customer. In the case of 21Publish, I need to become a user of the product in blog community settings. As such, I will be starting some new blogs to give me an appreciation for 21Publish’s unique offering at different levels. 21Publish has sometimes been referred to as "the TypePad of group blogging and multi-user blogging services (i.e., turnkey blogging communities)". Although I’m stumbling over the words a bit still, I’ve got to learn how customers (like Amnesty International, 20six, Mercury, Whittier Elementary School ) and customer prospects define the product in their own minds. This will help me to refine what 21Publish means to me, and this will in turn help 21Publish to better adapt it’s message.

In closing, general managers need to create tension to perform and to get grounded in reality very quickly. I always ask myself, where can I add value and make my mark?

Steve Shu

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I forget how I ran into this excellent essay by Scott Berkun on "Why Smart People Defend Bad Ideas" (probably through del.icio.us), but I like it on many levels because it touches on things like business, logic, organizational behavior, and personalities.

I think two of Scott’s sentences capture an angle that I wanted to post about. Scott writes in two places:

• "… How can smart people take up positions that defy any
  reasonable logic? …" and
• "… I’m
  not proud to admit that I have a degree in Logic and Computation from Carnegie Mellon
  University …"

Although I’m not for defending stupid ideas unto death, I have to say that there’s a lot of value in my book in being trained to defend stupid ideas unto death. More precisely, I think there’s tremendous value in the business world in being able to take either side of an argument and to defend that position whether you like it or not. In the business world, it’s a courageous/West Point type of training that I’ve always associated with Harvard MBAs (based on those that I used to work with in the field at management consulting firm PRTM).

I’m not prescribing being irrational or two-faced in either business or personal settings. What I am prescribing is to open one’s mind, to be able to develop courage, and to develop a leadership style. By being able to defend and argue two sides of a coin, your creativity stretches and you learn to reveal weak spots in your own reasoning. That latter part may be the most important thing to me as it leads to a path of self-improvement.

I am somewhat envious of Scott’s background in logic and computation. After taking what I consider to be one of the more unusual GMAT tests on critical reasoning many years ago, I developed a deep appreciation for honing skills in weakening and strengthening arguments. Many people visit my blog seeking information out about the value of an MBA. Studying for GMAT, and in particular the critical reasoning section of the test, is unlike studying for any GRE or SAT exam I know of. You can learn a valuable life lesson before your MBA by studying for that section of the GMAT. Stupid is(n’t) as stupid does (always).

This entry has been cross-posted at The CIO Weblog.

Kory/Ferry International, one of the well-known executive search firms, has an interesting article in Computerworld entitled, "Is There Really A Glass Ceiling For CIOs?" Probably interesting for all ambitious technology managers to reflect on. In the article (snipped a bit, ellipsis and bold added by me):

As more and more CIOs aspire to general management roles and to become chief operating officers or CEOs, it’s important to ask if there really is a glass ceiling arresting the upward mobility of technology executives …

As executive recruiters, we at Korn/Ferry International have so far found no hard evidence of a glass ceiling for CIOs … Our research has revealed important differences, as well as similarities, in the ways in which CIOs and CEOs approach critical leadership issues.

Here’s the some similarities and differences they found:

1. CEOs and CIOs have similar leadership styles
2. CIOs exhibit a more adaptive thinking style (CEOs tend to steer more than adapt)
3. CIOs tend to demonstrate less tolerance for ambiguity than CEOs
4. CIOs demonstrate (on average) noticeably less confidence than their CEO counterparts

Some random selections of things they say will help to further the cause of getting a CIO promoted:

• Move form cost-center to profit-center mentality
• Understand financial statements
• Bring in the money

With this as backdrop, would I conclude that there are no glass ceilings for CIOs as Korn/Ferry did? Perhaps. But unless a CIO is very proactive, the presence of the trench that CIOs are in is pretty close to a glass ceiling to me. Although its nice to talk about working on the three bullet points I’ve outlined above, many CIOs will have a hard time finding opportunities to really cut their teeth in these areas when they are nose deep in CIO stuff (for example, a proactive "bring in the money" angle could be tough). Perhaps getting CIOs more opportunities to work on boards would be a good step to increasing their global view.

Steve Shu

Continue reading “Technology Executive And CIO Glass Ceilings?”