Can Entrepreneurs Be Made?

Interesting stuff from Tech Crunch, especially for those of us in BC who want to grow the amount of successful headquartered tech companies.

"One of the findings of Kauffman research is that of the appx. 600,000 businesses that are started every year, less than a fraction of 1% become high-growth “scale” businesses. These new firms, especially the “scale” firms, have added all of the net incremental jobs to U.S. economy since 1980 (about 40 million), and probably account for about 1/3 of GDP growth since then. So the key to boosting economic growth is to increase the number of successful high-growth startups. After all, the growth rate of our economy is nothing more than the aggregation of the growth of our firms."

Memo To CEOs and Founders: Share The Love

Those of us who lived through the tech bubble can attest to the power of equity ownership as a recruiting and, if things remain positive, retention tool. I enjoyed the benefits of stock programs at Netscape and Electronic Arts and believe it's effective when properly used. Here's a helpful article from Tech Crunch by Redfin CEO Glenn Kelman on current equity practices in the tech community and why they need to change.

Key take-aways: (a) economic pinch means more companies getting acquired earlier in their life cycle (b) investors are demanding, and getting, preferred liquidation positioning and (c) founders are taking huge positions for themselves, leaving little for remaining employees. Kelman advocates that founders and investors should be focused on building companies for the long term and being more generous for the employees because it will benefit everyone more in the long term. It'll be interesting to see how this evolves as the market heats up.

Best Companies For Leaders

Interesting stats by Dan McCarthy on a Bloomberg / Hay Group study of the best companies for leadership development.

Take a look at the full report, but here are some interesting highlights:

The study identifies a variety of factors that make the Top 20 Best Companies for Leadership stand out when it comes to identifying and developing great leaders. Ninety percent of respondents in the Top 20 agree that all employees at their company have the opportunity to develop and practice the capabilities needed to lead others, compared to 67 percent of all respondents. Nearly all of the respondents in the Top 20 (85 percent) said that employees are expected to lead, regardless if they have a formal leadership position, compared with 57 percent of all respondents. In addition, 86 percent of respondents in the Top 20 said that employees are encouraged to learn in areas outside their expertise, compared with 66 percent of all respondents.

- 94 percent of respondents in the Top 20 actively manage a pool of successors for mission critical roles, compared with 69 percent of all respondents

- 80 percent of respondents in the Top 20 noted that people stay at the organization primarily for growth opportunities, compared with 61 percent of all respondents

- 95 percent of respondents in the Top 20 use corporate social responsibility to recruit employees, compared with 60 percent of all respondents

- 66 percent of respondents in the Top 20 have a high proportion of women in senior leadership, compared with 37 percent of all respondents

- 91 percent of respondents in the Top 20 make it easy for people to work from home, compared with 46 percent of all respondents

- 87 percent of respondents in the Top 20 have a sufficient number of internal candidates ready to assume open leadership positions, compared with 54 percent of all respondents

2009 TOP 20 BEST COMPANIES FOR LEADERSHIP

1 GENERAL ELECTRIC
2 SOUTHWEST AIRLINES
3 3M COMPANY
4. PROCTER & GAMBLE
5 ACCENTURE
6 WAL-MART STORES
7 NESTLE
8 COCA-COLA
9 MCDONALD’S CORPORATION
10 INFOSYS TECHNOLOGIES
11 IBM
12 CISCO
13 UNITED PARCEL SERVICE
14 IKEA
15 ABB
16 ZAPPOS
17 HEWLETT-PACKARD
18 GOLDMAN SACHS
19 UNILEVER
20 GENERAL MILLS, INC.

Putting a Face to a Name: The Art of Motivating Employees

Here is some very interesting research from Wharton professor Adam Grant who has data showing that discretionary effort notably increases when employees see the significance of their work on others.

This resonated with me because I think it's important to focus employee engagement work using the metaphor of a body:

- Head: Intellectually understanding the role and larger context
- Heart: Emotionally connecting with the role and larger context
- Hands: Having the energy and capability to do the work

I remember Netscape Communications CEO Jim Barksdale rallying the employees very early on, when we were growing like crazy but were exhausted, by saying that we were changing the very nature of how people communicated with each other. He meant it, you knew and felt it, and as a result you worked that much harder and actually had fun doing it. You told people with pride about your work and when they told you about their experiences with the internet you were energized because you knew, in some small way, that you were contributing to something historic and bigger than yourself.

Every organization should continuously explore, and improve, the quality of relationship and connections between employees, customers, and partners. Leaders should first assess their own connection and energy levels around the customer and bigger picture and then understand how managers and employees feel. Are there common themes about the bigger picture, or are people focused on operational and tactical things, missing out or discounting the broader, more energizing possibility? Do people light up when they talk about the big picture? How is the leader's energy levels and personal (dis) connection impacting the managers and employees?

Lots of other things, of course, need to be in place in order to have a healthy, effective organization but I hope you'll take the time and really ask yourself whether you have meaningful connections to your customers and their stories, perspectives, and ideas about your organization. Like any relationship, when the heart is engaged everything else is impacted.

How To Protect Your Ideas (BC Business)

I was recently interviewed by BC Business about how to protect your ideas. Here's the article:

Ideas are what drive innovation and progress, and seeing them through to fruition usually means having to share them with somebody. Protect yourself.

But once you’ve shared your wonderful idea with the world, how do you ensure you are rightly credited? We talked with three professionals who know a thing or two about protecting ideas: David Hannah is an associate professor of management and organization studies at SFU; Bradley Herbert is owner and principal of Bradley Herbert HR Consulting Inc.; and Otto Zsigmond is a lawyer specializing in intellectual property at Nexus Law Inc.


Get your papers in order


One of the most important precautions you can take is to make sure you document everything. Once your idea has been taken from you, it is very hard to prove that it was yours to begin with. “Unless you have done something proactive in the first place, like written it down and documented it, it is extremely hard to go back and prove that it is yours,” says Hannah. Whether it is a simple email between you and your boss or something much more complex, like patenting your idea, you will need to have proof that the idea originated with you.


Know whom you’re talking to


In order to put your idea into action, you will eventually have to tell somebody; just make sure you know to whom you are revealing your thoughts. “People don’t generally steal others’ ideas, but those who do tend to stand out,” explains Herbert. Hannah agrees that “there are usually certain people that others will warn you to stay clear of.” But you can’t always be so sure who to trust. “Even when people are told information in confidence, sometimes they breach that confidence, and then it can be messy,” adds Zsigmond.


Be a team player


You may not like it, but sometimes you have to place the organization’s interest before yours. “If you’ve got great ideas and you are willing to share them, in the end this will be beneficial to you,” says Herbert. Good team players are active participants; it is important to keep your co-workers in the loop with important information and expertise. Herbert stresses that “when you are giving freely, people recognize that.”


Set the record straight


Set The Record Straight

If you think that someone has stolen your idea, the best thing you can do is talk to the person. You need to get the record straight; did they actually mean to steal the idea, or did they take it inadvertently? Herbert stresses that it’s important to have a “positive” conversation with the person you suspect of stealing your ideas; you really don’t want to make a bad situation worse.


Report it


As an employee, you can always tell your boss about the progress that you have been making concerning an idea. Keep your boss or your superiors in the loop, and then if a dispute arises, they will know that you were the individual originally responsible for the idea. “The thing about ideas is that they need to be shared,” explains Hannah. “A lot of companies will have a system in place for an employee to document an idea and report it up the chain.”

Transparency

Great article on the benefits of a fully transparent organization. In my experience smart people absolutely need and respond well to full information. There will be the inevitable hiccups along the way, but in the big picture I think this author nailed the huge benefits.

http://workforce.com/wpmu/bizmgmt/2010/02/05/the_case_for_transparency/

Structure? The Flatter, the Better.

This is a great article from the NY Times with Cristóbal Conde, president and C.E.O. of SunGard on managing modern, info-rich, highly decentralized organizations (thanks @mitchlasky).

Favorite quotes:
(1) "You have to work on the structure of collaboration. How do people get recognized? How do you establish a meritocracy in a highly dispersed environment?

The answer is to allow employees to develop a name for themselves that is irrespective of their organizational ranking or where they sit in the org chart. And it actually is not a question about monetary incentives. They do it because recognition from their peers is, I think, an extremely strong motivating factor, and something that is broadly unused in modern management."

(Q2) Besides the endless travel of that year, was there something else that made you shift styles?

(A2) "Yes, it was a huge disagreement with somebody who worked for me directly, and he ended up quitting shortly thereafter. And it wasn’t that the decision that we disagreed on was so big. It was more that, to him, it just wasn’t as much fun anymore. He felt he could do more, and I was in his way. I was chasing away somebody extremely valuable, and that is when I realized I never would have put up with that myself. If you start micromanaging people, then the very best ones leave.

If the very best people leave, then the people you’ve got left actually require more micromanagement. Eventually, they get chased away, and then you’ve got to invest in a whole apparatus of micromanagement. Pretty soon, you’re running a police state. So micromanagement doesn’t scale because it spirals down, and you end up with below-average employees in terms of motivation and ability.

Instead, the trick is to get truly world-class people working directly for you so you don’t have to spend a lot of time managing them. I think there’s very little value I can add to my direct reports. So I try to spend time with people two and three levels below because I think I can add value to them."

(Q3) Is there anything unusual about the way you run meetings?

(A3) I actively despise how people use PowerPoint as a crutch. I think PowerPoint can be a way to cover up sloppy thinking, which makes it hard to differentiate between good ideas and bad ideas. I would much rather have somebody write something longhand, send it in ahead of the meeting and then assume everybody’s read it, and then you start talking, and let them defend it.

The question from the beginning of the meeting to the end of the meeting is, “Have we added value: yes or no?” And I would say that if the meeting is mostly the presentation of a deck of PowerPoint slides, you conveyed information, but you didn’t actually add value.