In leadership and business, setbacks are inevitable — you will have to give ground sometimes.
But how you give ground determines whether you preserve future leverage or accelerate defeat.
Strategic leaders retreat grudgingly: minimizing losses, signaling strength, and always setting up the next move.
Survival and eventual success depend less on never falling — and more on falling without surrendering your ability to fight smart tomorrow.
Introduction
The Hard Thing About Hard Things by Ben Horowitz provides a raw and insightful account of the challenges faced by a CEO in the tech industry. Unlike many business books that offer formulas for success, Horowitz provides a realistic portrayal of the difficulties and complexities involved in building and leading a company. Drawing from his personal experiences, he shares practical advice and hard-earned wisdom that can benefit anyone involved in the entrepreneurial journey.
Give Ground Grudgingly
In “The Hard Thing About Hard Things,” Ben Horowitz introduces the concept of “Give Ground Grudgingly,” emphasizing maintaining growth while minimizing degradation. This principle advises leaders to make necessary sacrifices but resist unnecessary losses. It’s about finding the balance between expanding the business and preserving its core values and capabilities. Essentially, Horowitz is advocating for cautious and strategic growth, ensuring that as the company evolves, it retains its essential strengths and integrity, thus degrading as slowly as possible.
American Football Analogy
There is a great analog to this concept in American football. An offensive lineman’s job is to protect the quarterback from onrushing defensive linemen. If the offensive linemen attempt to do this by holding their ground, the defensive lineman will easily run around them and crush the quarterback. As a result, offensive linemen are taught to lose the battle slowly or to give ground grudgingly. They are taught to back up and allow the defensive lineman to advance, but just a little at a time.
When you scale an organization, you will also need to give ground grudgingly. Specialization, organizational structure, and process all complicate things, and implementing them will feel like you are moving away from common knowledge and quality communication. It is very much like the offensive lineman taking steps backward. You will lose ground, but you will prevent your company from descending into chaos.
Final Thoughts
In The Hard Thing About Hard Things, Ben Horowitz does not sugarcoat the entrepreneurial experience. Instead, he provides a genuine look into the grit required to lead a company through its toughest times. His insights are invaluable for current and aspiring leaders who seek to understand the true nature of building and sustaining a successful business. This book is a must-read for anyone looking to gain a deeper understanding of the complexities of entrepreneurship.
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What we eventually accomplish in life may depend more on our passion and perseverance than on our innate talent - Angela Duckworth, Grit (2016)
In Grit: The Power of Passion and Perseverance, Angela Duckworth unpacks the attributes/traits of those individuals who possess grit which is defined as holding the same top-level goal for a very long time and having the passion and perseverance to see your ultimate goal through.
She challenges the unconscious biases we all have towards talent, especially in the way that we all rush to anoint people as extraordinarily talented whenever they accomplish a feat worth writing about. As much as talent counts, effort counts twice as you can see in the following picture of skill and achievement:
What we all achieve depends on talent (how fast we improve skill) and our effort. But as you can see in the above picture, effort factors in the calculations of achievement twice. This is because effort builds skill and at the very same time, effort makes skill productive!
Similar to the findings of Daniel F. Chambliss by the end of the book it is clear the most dazzling human achievements are, in fact, the aggregate of countless individual elements, each of which is, in a sense, ordinary. High level of performance is, in fact, an accretion of mundane acts.
Steve Young: An Example of a Paragon of GRIT
“You cannot quit. You have the ability, so you need to go back and work this out.” - Steve Young’s Dad, (circa 1980s)
Steve Young is the epitome of a GRIT Paragon. When he was a freshman at BYU, he was the 8th string quarterback and was barely even getting any practice time. Like most freshmen when things don’t go according to plan, Steve called his father (whose nickname was actually Grit).
Steve’s dad basically said the following: “You can quit but you can’t come home because I’m not going to live with a quitter. You’ve known that since you were a kid. You’re not coming back here.”
With the words of his father ringing in his ears, Steve Young stepped up his game and put the work in. By all accounts, he threw over 10,000 spiral passes at a practice net the summer between his freshman and sophomore year. By his sophomore year, he had risen to QB2 and by his junior year he was BYU’s starting QB. In his final year with the Cougars, Steve Young won the Davey O’Brien award for the most outstanding college quarterback in the country.
Then … It happened all again when he got to the San Francisco 49ers. He spent 4 years on the bench as the backup to four-time Superbowl champion, Joe Montana. And because of his experience at BYU, Steve stayed, learned, and flourished under Montana’s apprenticeship. He eventually got his chance and the rest is history.
Steve Young: A Gridiron Paragon of Grit. From every touchdown to each hard-fought comeback, his relentless determination on the field defines the true essence of grit. A quarterback icon who faced challenges head-on, Young embodies the spirit of unwavering passion and perseverance.
When Steve Young retired, he was the highest-rated quarterback in NFL history.
Final Thoughts
Superlative performance is really a confluence of dozens of small skills or activities, each one learned or stumbled upon, which have been carefully drilled into habit and then are fitted together in a synthesized whole.
People with grit are paragons of perseverance and effort. As much as talent counts, effort counts twice as much with them. They develop their skills by hours and hours and hours of deliberate practice beating on their craft. They master the capacity to do something repeatedly, to struggle, and to have patience over the long-term. But most importantly, they develop the stamina to go over something again and again and again no matter how difficult it is.
In closing, greatness is actually doable because greatness is many, many individual feats, and each of them is doable. When it comes to how we fare in the marathon of life, effort counts tremendously, and consistency of effort over the long run is everything. Great things are accomplished by those people whose thinking is active in one direction, who employ everything as material, who always zealously observe their own inner life and that of others, who perceive everywhere models and incentives, who never tire of combining together the means available to them.
Little Habits and Characteristics That Can Make You More Gritty
Seek to continuously improve
Focus on the daily discipline of trying to do things better than you did yesterday
Remember that the 10-Year Rule Applies to developing skills: thousands and thousands and thousands of hours spent in deliberate practice over years and years and years
Love what you do
Remember that sustained effort over the long-run counts more than talent
Interpret setbacks and failure as a cue to try harder rather than as confirmation that you lack the ability to succeed
In a world dominated by large institutions that often fail to truly serve our needs, the concept of leadership needs a fresh perspective. In Robert K. Greenleaf’s thought-provoking work, “Servant Leadership: A Journey Into the Nature of Legitimate Power and Greatness,” he introduces the idea that a great leader is, first and foremost, a servant. This notion challenges the traditional understanding of leadership and suggests that true leadership is rooted in serving others.
Greenleaf emphasizes the importance of listening, empathy, and acceptance as essential qualities of a servant-leader. He delves into the idea that effective leadership requires the ability to bridge the gap between available information and the unknown future, relying on intuition and foresight. Stressing the interconnectedness of past, present, and future, Greenleaf suggests that a qualified leader maintains a wide span of awareness. Furthermore, he advocates for leadership through persuasion rather than coercion, and he highlights the significance of both active leaders within institutions and external trustees who oversee them.
Ultimately, Greenleaf’s vision calls for nurturing strong natural servants who have the potential to lead, enriching the world through their presence, and striving to build better institutions in an imperfect world. In this journey, servant-leaders emerge as beacons of positive change, inspiring and guiding others toward a more harmonious and effective future.
Delve into the nuances that unpack Greenleaf’s ideas, gaining a richer understanding of servant leadership’s potential to reshape our institutions and empower individuals. Embrace the journey of discovery and join me in exploring how these principles can catalyze positive change in our world. Your path to enlightened leadership starts with a simple click – download now and embark on a transformative exploration!”
“Riding Shotgun: The Role of the COO” by Nathan Bennett and Stephan A. Miles is an insightful exploration of the multifaceted responsibilities and significance of the Chief Operating Officer (COO) position within organizations. The book delves into the challenges and opportunities faced by COOs, shedding light on their pivotal role in driving operational excellence, strategic execution, and organizational change.
Drawing from extensive research and real-world examples, the authors provide valuable insights into the qualities, skills, and strategies that make COOs effective leaders and trusted partners to CEOs.
In their analysis, Bennett and Miles identify seven distinct types of COO jobs, each with its own unique focus and purpose. These include the Executor, responsible for daily leadership in operationally intensive businesses; the Change Agent, leading strategic initiatives in response to dynamic environments; the Mentor, guiding and supporting young or inexperienced CEOs; the Co-Leader (Two-In-a-Box), working collaboratively alongside the CEO to balance strengths; the Trusted Partner (Other Half), fostering a strong and cohesive leadership team; the Heir Apparent, preparing future CEOs by imparting business knowledge; and the MVP, retaining executive talent without a specific business imperative.
Recognizing the parallels between sports and business, I aim to leverage various sporting partnerships to delve deeper into the diverse roles of the COO. By drawing connections between the dynamics of sports teams, I hope to help you gain deeper insight into the multifaceted nature of this critical executive role.
Ed Reed, The Trusted Partner
Ray Lewis and Ed Reed Formed a Strong Co-Leader Partnership During Their 11-Year Run with the Baltimore Ravens
During their Super Bowl XLVII-winning campaign in 2013, the Baltimore Ravens showcased their defensive prowess, despite being ranked 12th in total defense. What set them apart was the remarkable partnership between Ray Lewis and Ed Reed. Their collaboration as Co-Leaders began in 2002 and spanned an impressive 11 years, solidifying their status as one of the most formidable linebacker/safety tandems in NFL history. Together, they anchored a consistently outstanding defense that stood among the league’s best.
Ray Lewis and Ed Reed epitomize the essence of a Trusted Partner relationship. Their deep bond and understanding on the field allowed them to anticipate each other’s moves, offering unwavering support and collaboration. With Lewis’s commanding presence and Reed’s exceptional playmaking skills, they formed an unbreakable foundation for the Ravens’ defense. Their synchronized efforts and remarkable synergy elevated their team to new heights.
This Trusted Partner dynamic in football can be likened to the role of a Chief Operating Officer (COO) in the business world. Just as Lewis and Reed established a reliable and cohesive unit, a COO serves as a Trusted Partner to the CEO, fostering a strong partnership at the top. This collaboration ensures a harmonious and effective leadership team, capable of driving the organization towards success. The impact of a Trusted Partner, both in football and business, cannot be understated, and Lewis and Reed’s legacy as an exceptional tandem serves as a testament to the power of such a partnership.
Patrick Mahomes, The Heir Apparent
Alex Smith and Patrick Mahomes Formed a Strong Heir-Apparent CEO-COO Relationship During the 2017 Season with the Kansas City Chiefs
During his tenure from 2013 to 2017, Alex Smith served as the starting quarterback for the Chiefs, leading the team to the playoffs on four occasions and securing their first playoff victory in over two decades. However, in 2017, the Chiefs made a strategic decision to trade up and select Patrick Mahomes as Smith’s long-term successor. Coach Andy Reid demonstrated transparency with Smith, providing the reassurance he needed to embrace the role of mentoring Mahomes. Just a year later, Smith was traded, paving the way for Mahomes to step in as the new starting quarterback. This scenario exemplifies the Heir-Apparent CEO-COO structure, which can be instrumental in ensuring successful succession planning.
In this context, the COO plays the role of the Heir Apparent. Similar to the quarterback transition, the COO is identified and groomed as the successor to the CEO. By implementing a well-executed Heir-Apparent CEO-COO structure, organizations can facilitate a seamless transition of leadership. The COO, under the mentorship and guidance of the CEO, gains valuable experience, insights, and knowledge necessary to assume the top role when the time comes. This strategic approach allows for continuity in leadership and ensures that the organization can thrive even during leadership changes.
Venus Williams, The Mentor
Venus Williams and Serena Williams Formed a Strong Mentorship CEO-COO Relationship During Their past 25 years on the court
Venus Williams stands as one of the most compelling examples of mentorship in the world of tennis. Serena Williams herself acknowledges that her journey would not have been possible without Venus, but I believe the impact goes even further. The influence of Venus extends to players like Coco Gauff, Naomi Osaka, Sloane Stephens, and Madison Keys, who have all been inspired by her trailblazing presence.
Venus brought a new era to tennis with her remarkable speed, distinctive style, and unapologetic confidence. However, her role as a Big Sister went beyond her on-court achievements. She served as a mentor, shielding Serena from the resistance of the tennis establishment and the pervasive racism that often accompanied their rise to stardom.
This mentoring dynamic can be likened to the role of a Chief Operating Officer (COO) in the business world. In both cases, the mentor figure provides guidance, support, and protection, empowering their mentee to navigate obstacles and reach their full potential. Venus’s mentorship not only elevated Serena’s career but also paved the way for future generations of tennis players, exemplifying the transformative impact of a dedicated mentor, both on an individual and broader scale.
Scottie Pippen, The Co-Leader
Michael Jordan and Scottie Pippen Formed a Strong Two-In-A-Box Partnership During Their 10-Year Run at the Top of the NBA
Michael Jordan and Scottie Pippen established an extraordinary and cohesive Co-Leader partnership during their dominant ten-year reign atop the NBA that ended in historic double three-peats. Throughout their intertwined careers, Jordan and Pippen exemplified the essence of a Two-In-a-Box partnership. Their collaboration on and off the court showcased remarkable synergy, mutual understanding, and shared goals. Pippen’s exceptional abilities, combined with Jordan’s unparalleled talent, propelled the Chicago Bulls to unprecedented success, and Pippen flawlessly assumed the role of Michael Jordan’s Co-Leader.
Their dynamic duo not only achieved individual greatness but also fostered a collective strength that elevated the entire team. Together, they formed one of the most electrifying and potent duos ever witnessed in the NBA. In drawing parallels to the COO’s role, Jordan and Pippen’s Co-Leader partnership exemplifies the power of a collaborative approach. By working together, leveraging their respective strengths, and nurturing a harmonious relationship, they propelled the Bulls to the pinnacle of the NBA. The impact of such a Co-Leader dynamic extends beyond basketball, highlighting the significance of a strong and complementary partnership in driving organizational success.
Luis Figo, The Change Agent
Luis Figo Served as Real Madrid’s Change Agent During the First Era of the Galácticos
In 2002, Luis Figo emerged as the winner of the prestigious Ballon d’Or, recognizing him as the top football player in Europe. This accolade came shortly after his controversial transfer from Barcelona to their arch-rivals, Real Madrid.
Over his five-year tenure with Real Madrid, Figo made a significant impact, with over 200 appearances and notable triumphs, including two league titles and the 2002 Champions League. His arrival injected new vitality into Los Blancos, albeit at the expense of his former club in Catalonia. Organizations often require a COO to serve as a Change Agent, focusing on implementing specific organizational changes. In this role, the COO spearheads initiatives such as turnarounds, major organizational transformations, or planned rapid expansions, while the CEO maintains the day-to-day operations. When executed effectively and in balance, this approach can lead to remarkable progress and success.
Conclusion and Final Thoughts
Real-world examples, such as Venus Williams’ mentorship and the dynamic partnership of Michael Jordan and Scottie Pippen, underscored the pivotal role COOs play. Their ability to nurture talent, forge collaborative partnerships, and spearhead transformative change has been demonstrated time and again.
The COO acts as a catalyst for success, blending leadership, strategic acumen, and operational expertise. Their role as mentors propels organizations forward, paving the way for the development of future leaders. As trusted partners, they foster a harmonious and effective leadership team, while their role as change agents propels organizations toward new heights. By recognizing and embracing the multifaceted nature of the COO’s role, organizations can unlock their full potential and confidently navigate complex challenges. The power of the COO lies in their ability to lead, mentor, collaborate, and drive transformative change. Through harnessing this power, organizations lay the foundation for thriving and sustainable growth.
"A business that wants to be able to innovate, wants to have a chance to succeed and prosper in a time of rapid change, must build entrepreneurial management into its own system!"
--- Peter F. Drucker, Innovation and Entrepreneurship (1985)
Introduction
The book on Innovation and Entrepreneurship by Peter F. Drucker was written in 1985 and is still very relevant in 2023. At the heart of his argument lies two very simple beliefs:
Management is the new technology (rather than any specific new science or invention) that is making the American economy into an entrepreneurial economy.
Innovation and Entrepreneurship are capable of being presented as a discipline, capable of being learned, and capable of being practiced.
Drucker posits that innovation and entrepreneurship are “risky” mainly because so few of the so-called entrepreneurs know what they are doing. In order to reduce the risk of innovation and entrepreneurship and increase your likelihood of success, you need to establish purposeful innovation across the following 7 sources of innovative opportunity:
The unexpected – the unexpected success, the unexpected failure, the unexpected outside event.
The incongruity – between reality as it actually is and reality as it is assumed to be or as it “ought to be”
Innovation based on process need
Changes in industry structure or market structure – that catch everyone unawares
Demographics (population changes)
Changes in perception, mood, and meaning
New knowledge, both scientific and nonscientific
Therefore, innovation should be systematic and consist of a purposeful and organized search for changes. It should also consist of a systematic analysis of the opportunities such changes might offer for economic or social innovation.
TheSystem: Establish Entrepreneurial Management
Peter F. Drucker is the father of modern business management and in this book, he puts forth a pathway for entrepreneurs to follow. Successful entrepreneurship and innovation are based on luck or genius. It’s based on the systematic and purposeful search for opportunities within the seven sources discussed in this book.
The System of Success is establishing Entrepreneurial Management!
Entrepreneurial management of most new ventures has 4 main requirements:
It requires, first, a focus on the market
It requires, second, financial foresight, and especially planning for cash flow and capital needs ahead
It requires, third, building a top management team long before the new venture actually needs one and long before it can actually afford one
Finally, it requires the founding entrepreneur a decision with respect to his or her own role, area of work, and relationships
If you can establish this framework in your organization or new venture, you will get purposeful innovation at low risk. Drucker makes sure to state unequivocally that innovation and entrepreneurship should not take unnecessary risks. Successful innovators and entrepreneurs are not “risk-takers.” They try to define the risks they have to take and minimize them as much as possible, and entrepreneurial management helps them do that.
What I Will Do Differently?
Invest more time employing “Creative Imitation” and “Entrepreneurial Judo.” As Chapter 17 discusses, the Japanese made the deliberate decision 100 years ago to concentrate their resources on social innovations, and to imitate, import, and adapt technical innovations with fantastic success. Using entrepreneurial judo, one first secures a beachhead in the market leader’s backyard. Once the beachhead is secured with adequate market and revenue streams, you then move in on the rest of the beach.
Pay more attention to the changes in Global Demographics. In Chapter 7, Drucker discusses how Demographics are doing some funky but predictable things right now. The developed countries are seeing a rise in the
aging population as birth rates fall and people live longer, while Third World Counties are seeing a tidal wave of young adults. Aging populations historically have caused labor shortages in places like Japan and put outsized pressure on government pension plans like in Italy. Consequently, there are huge innovation and entrepreneurial opportunities.
It’s cliche but Keep It Simple Stupid. In Chapter 11, Drucker discusses his principles for innovation. In order for an innovation to be effective, it must be simple and focused. It should do only one thing and that one thing well. Throughout the history of mankind, all effective innovations are breathtakingly simple!
Downloadable Content
The book on Innovation and Entrepreneurship was written by Peter F. Drucker in 1985. The year is 2023 and his principles are still relevant. As stated above, a business that wants to be able to innovate, wants to have a chance to succeed and prosper in a time of rapid change, must build entrepreneurial management into its own system. The following raw notes were created by me to help streamline a deeper understanding of Peter F. Drucker’s concepts in Innovation and Entrepreneurship. Hope you enjoy it!
"Let everyone else call your idea crazy ... just keep going. Don't stop. Don't even think about stopping until you get there, and don't give much thought to where "there" is. Whatever comes, just don't stop."
--- Phil Knight, Shoe Dog (2016)
Introduction
In 1965, Phil Knight discovered a philosophy by which he centered everything he was doing: To have cash balances sitting around doing nothing made no sense to me. Sure, it would have been the cautious, conservative, prudent thing. But the roadside was littered with cautious, conservative, prudent entrepreneurs. I wanted to keep my foot pressed hard on the gas pedal.
By 1975, he was still having the same problem as they were undergoing an explosion in assets and inventory which continued to put enormous strains on their cash reserves. Sales were through the roof but they were still cash-poor. Fast forward to today, and Nike is a cash-rich business whose days of cash constraints are long gone!
The lesson I take away from reading this memoir is that cash in a growth company is a problem. Every penny you make will be reinvested back in the business and you will struggle to make every single payment. You will borrow every nickel you can and plow it right back into chasing growth. But always remember that fortune favors the brave. Beating the competition is relatively easy. Beating yourself is a never-ending commitment.
"The Smart Machine Age will usher in an era where the smartest humans are not those that have the deepest knowledge"
--- Edward Hess & Katherine Ludwig, Humility is the New Smart (2017)
Summary
With the dawn of the Smart Machine Age, humans need a new playbook to thrive. That playbook is laid out in detail by Edward Hess and Katherine Ludwig in Humility is the New Smart. In order to reach “New Smart” you need to:
(1) Quiet your ego
(2) Manage yourself (emotions & thinking)
(3) Reflectively listen
(4) Emotionally connect & relate to others (otherness).
“The ability to make good decisions regarding people represents one of the last reliable sources of competitive advantage, since very few organizations are very good at it.”
Most companies would agree that the single most important driver of organizational performance and individual managerial success is human capital or talent. Yet most companies still leave their talent acquisition process to chance using outdated interview techniques that lead to poor long-term results.
In June of last year, I read Topgrading by Bradford D. Smart as I geared up to hire a Director of HR. And like “every important business book” out there, Topgrading has been recommended by every who’s who in the business world. I honestly must say that the book is chalked full of strategies that promise to improve your talent acquisition process. I could spend 30+ days trying to unpack all the different tidbits I obtained by finishing this read, but I won’t. Instead, I want to share how my approach to talent acquisition has changed as a result of reading this book.
The Current Reality
The cold reality is that the average company suffers a 75% failure rate hiring people. 75% of managers hired externally without Topgrading methods are mistakes, underperformers, or miss-hires. The following chart shows the reality of talent dispersion:
The Goal
The directly stated goal of Topgrading is to fill at least 75% of positions in an organization with high performers (A Players) by hiring and promoting people who turn out to be high performers at least 75% of the time.
Topgrading companies, in contrast to their competitors, get disproportionately better talent for the total compensation dollars they spend. As ruthless as it may sound, Topgrading is all about increasing the percentage of high performers, A Players, and not being satisfied with B Players who never are worthy of a Very Good or Excellent rating.
The How and What
When you finish reading Topgrading, you are introduced to the Topgrading Interview process where you spend close to a full day accessing your potential hire. You take a chronological approach starting with school years and progressing through many questions about every job starting with the first job and moving forward to the present. The proven magic of Topgrading interviewing is to learn how the candidate has evolved across the education years and full career history.
During this tenacious interview process, you will spend hours accessing 50 separate competencies across five domains:
Intellectual
Personal
Interpersonal
Management
Leadership
The following chart details the 50 competencies and ranks each competency across three dimensions of people’s ability to change their behaviors related to each competency.
50 Specific Competencies For Managers
Most companies have 5 to 10 competencies for most jobs, but the Topgrading method believes that for management jobs these 50 competencies are all important. This means that if a new hire is only Fair or Poor on even one of the above competencies, that new hire is apt to be considered a miss-hire. How tenacious is that?
Resourcefulness is the Most Important Competency
Early in the book (Smart, 2005, p. 36), Bradford D. Smart unequivocally states that resourcefulness is the most important competency to hire for. Resourcefulness (Initiative) is defined as:
“Passionately finding ways over, around, or through barriers to success. Working to achieve results despite lack of resources. A willingness to go beyond the call of duty and a bias for action. A results-oriented “doer.”
Resourcefulness is a composite of several competencies. It’s proactivity, energy, passion, analytical skills, and persistence wrapped into one. In common terms, resourcefulness is the brains and drive to figure out how to get over, around, or through barriers to success. A Players all exude resourcefulness in spades. C Players never seem to develop it.
Resourcefulness is a crucial leadership skill for today’s generation of leaders. A resourceful person is one that is able to quickly adapt to new or different situations, is able to find solutions, think creatively, and sometimes manage with what they have available to them. Given today’s challenges leading during the COVID-19 pandemic, everyone is having to learn how to make do with what they have and develop a skill in doing more with less (Hardwick-Smith, 2020).
A Players Do The Following Really Well…
What I Will Do Differently
As a knowledge-work leader, the key to my success, in the simplest terms, is to hire the best employees, create an empowering environment, provide the necessary tools and guidance, and then get out of the way. I must continuously align individuals’ responsibilities to be consistent with their strengths, weaknesses, and interests.
“At the end of the day, you bet on people, no strategies”
—Larry Bossidy
As a result of finishing this book, I will do some things differently in my talent acquisition approach. Specifically:
I will look harder to find talent at all salary ranges. The focus will be on hiring A Players at the right salary level. Regardless of what we pay people, we should be sure to get top talent for the salary we can afford.
I will screen harder on the front end to select the right people. Time is a precious resource but more time needs to be spent in the phone screening process to eliminate B and C Players upfront.
I will act more quickly to confront nonperformance and redeploy chronic B and C Players.
I will use 360 email surveys and skip-level meetings to gain deeper insights into every manager’s strengths and weaker points, including myself!
In closing, the name of the game is to create talented teams that drive towards better results over the long term. As Peter Drucker so eloquently put it, “Culture eats strategy for breakfast & lunch.” Topgrading will help me prevent the 75% failure rate in hiring and promotions that are so commonplace in most companies. But almost more importantly, it will help me solve the three biggest hiring problems:
Rampant dishonesty by weak candidates who easily get away with fudging their resumes and faking their interviews,
Insufficient information, because most companies use superficial hiring methods that enable candidates to control and hide what they share about themselves,
Lack of verifiability, as most reference checks are practically useless.
Traditionally HR has been more about compliance than it has been about developing and managing talent, and changes in HR have been a long time coming.
After World War II, when manufacturing dominated the industrial landscape, planning was at the heart of human resources. Simply put, companies recruited lifers, gave them rotational assignments to support their development, groomed them years in advance to take on bigger and bigger roles, and tied their raises directly to each incremental move up the ladder.
But business today is far less predictable, and these “15-year plans” are no longer sustainable practices in today’s game of talent management. HR must become more agile to properly support the rest of the organization, and take its rightful place as a strategic partner to the C-Suite.
Every CEO in the world would say that employees are their greatest asset. Some would even go as far as to say that their companies are nothing without their employees. Yet traditional HR departments in most companies spend endless amounts of time, effort, and money writing and enforcing policies to deal with problems that a small subset of employees might cause.
On Reinventing HR is a collection of eleven essays originally published in the Harvard Business Review. Each of these eleven articles has been hand-selected to create a collection of impactful readings on transforming and reinventing HR in your businesses.
Outdated HR Model
Many current HR tasks, such as traditional approaches to recruitment, onboarding, and program coordination, will become obsolete, as will expertise in those areas. The problem with Traditional HR typically is that most companies spend endless time and money writing and enforcing policies to deal with problems 3% of their workforce might cause.
As a result of these outdated HR models, companies are not properly developing their pipeline of future leaders, and the battle for talent means that companies are facing a real scarcity of top talent. Globalization compels companies to have to reach beyond their home markets and compete for the people who can help them drive their companies forward. These changing business dynamics are forcing business leaders to take a hard look at our HR functions and re-skill as necessary.
After reading On Reinventing HR two companies (Netflix and Deloitte) have undertaken some radical changes to their HR processes that I would like to take some time to unpack below.
Recruit and Chill the Netflix Way
Don’t look now but Netflix isn’t just disrupting the way we consume content these days. They are also reinventing the HR function itself. At Netflix, it starts with how they define and structure HR. Traditional HR processes and routines are organized under the finance function, while HR serves only as a talent scout and coach.
Next, Netflix spends all of their efforts hiring people that will put the company’s interests first and who will support their desire for creating a high-performance workplace. They believe in their heart of hearts that if you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing.
To accomplish this, Netflix sticks to the following tenets of talent management:
Lastly for Netflix, the best thing you can do for employees is hire only “A” players to work alongside them because excellent colleagues trump everything else. If you want only “A” players on your team, you have to be willing to let go of people whose skills no longer fit, no matter how valuable their contribution had once been. As a result, at Netflix, adequate performance gets a generous severance package when performance no longer keeps up with the job requirements.
Deloitte Redesigns Performance Evaluations
We have all worked for companies that have quarterly evaluation processes, and if you are like me, you probably dread them slightly. Partly because giving and receiving honest feedback is very hard, and partly because most performance evaluation processes are poorly designed.
Since 2015, Deloitte has been working hard to redesign its performance management system and process of evaluations. Not surprisingly, when Deloitte polled their employees, more than 58% believed that the company’s current performance management approach drove neither employee engagement nor high performance.
To improve this flawed process, Deloitte went deep into the “Science of Ratings.” What Deloitte found is that on average ratings of employees reveal more about the raters than they do the ratee’s performance. So much so, that 62% of the variance in the ratings of employee performance could be attributed to the individual rater’s peculiarities and/or biases. Actual performance only accounted for 21% of the variance.These abysmal stats forced Deloitte to radically redesign its performance evaluation process.
Now, Deloitte asks managers and team leaders four future-focused statements about each of their team members:
1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus [measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].
2. Given what I know of this person’s performance, I would always want him or her on my team [measures ability to work well with others on a five-point scale from “strongly agree” to “strongly disagree”].
3. This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes-or-no basis].
4. This person is ready for promotion today [measures potential on a yes-or-no basis].
In effect, this radical redesign asks each of Deloitte’s team leaders what they would do with each team member rather than what they think of that individual, and is thus their new approach has become a much fairer system for “rating” employee performance.
My Key Takeaways
The goal of On Reinventing HR is to help people become more adept with HR strategies that will move their companies forward and raise the HR department to its rightful place as a strategic partner to the organization. Finishing this book has motivated me to spend all my time and effort carefully hiring people who will put the company’s interests first, and who ultimately understand and support the company’s desires to build a high-performance workplace. Some other key strategies I would like to employ going forward:
Be on the lookout for the employees who are energy creators and develop them because these are the people who get to the heart of issues, reframe ideas, create informal bonds that encourage collaboration, and in general make the organization healthier and more productive
Increase the number of check-ins with my people. The book has a phrase that I love: “Radically frequent check-ins.”
Continue to work hard to separate compensation decisions from day-to-day performance management.
Reconsider how we do our annual merit-based raises. Traditional one-time-a-year merit raises are less effective because too much time goes by.Radical solution:make salary adjustments twice a year.
Curiosity and potential are oftentimes better indicators of future success. Interview and promote those who show:
(1) The right motivation and commitment to excel in the pursuit of unselfish goals
(2) A penchant for seeking out new experiences
(3) The ability to gather and make sense of information
(4) A knack for using emotion and logic to communicate and connect with people
(5) The wherewithal to fight for difficult goals despite the challenges they face.
To close off, if you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing. The problem with HR typically is that most companies spend endless time and money writing and enforcing policies to deal with problems the other 3% might cause.
You should read On Reinventing HR if you are interested in learning some tactical strategies to build your people-focused organization of the present and future. When it comes right down to it, your business is simply a collection of different people. Management and nurturing of people eat business strategies for lunch.
(1) Overhaul performance management practices to jump-start motivation and engagement; (2) Use agile processes to transform how you hire, develop, and manage people; (3) Establish diversity programs that increase innovation and competitiveness as well as inclusion; (4) Use people analytics to bring unprecedented insight to hiring and talent management; (5) Prepare your company for the double waves of artificial intelligence and an older workforce; (6) Close the gap between HR and strategy
Measure What Matters is a business book by John Doerr based on the fact that ideas are easy but execution is hard. When it comes down to it the core model of execution (Objectives and Key Results – OKRs) in this book sets out to help organizations in there major ways:
·        Companies that use OKRs will focus and commit their teams to better priorities
·        Companies that use OKRs will align and connect their teams with better teamwork
·        Companies that use OKRs will better track accountability and force their teams to stretch for amazing results
The intrinsic value in attempting to use an operational model like OKR is the fact that it will focus and align your business on the most important goals that really move the needle. As an organization, consistently creating aligned goals and measuring outcomes undoubtedly leads to more clarity and job satisfaction for employees. OKRs keep you from trying to do everything.
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What’s an Objective and What’s a Key Result?
The challenge with business books like Measure What Matters is to really define in detail the principles that book is covering. And when push comes to shove, you pick up a book like this to learn something new that can be implemented in your day to day business life.Â
At the most basic level, Objectives are the “what” you are trying to accomplish. Objectives express goals, intentions, are aggressive, and realistic. Above all though, they are tangible and must provide clear value to your organization. At the most basic level, Key Results are the “hows.”Key Results express measurable milestones that advance forward the objectives.Together, Objectives and Key Results form the framework of Doerr’s operational model within Measure What Matters.
A Typical OKR Cycle
The typical OKR cycle for setting OKRs at the company, team, and contributor levels looks something like this:
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Great. I Understand OKRs at a High Level. How Do I Actually Use Them?
The hard part with any business book that details an operational model or business process is implementation back into your own day to day business life. I am by no means an expert on any of the principles detailed within this book. But having finished reading it I will give my best attempt at detailing how to use this process in your day to day.
On page 84, Doerr gives a very simple example of how to create impactful OKRs. Using a fictional NFL team, Doerr walks the reader through the following picture:
(1) As you can see from the example the Objectives are straight forward and the Key Results are simple and measurable. (2) There is zero doubt what the organization (in this case an NFL team) is focusing on accomplishing this year. (3) Poorly defined OKRs are a waste of time. Well defined and aspirational OKRs are motivational management tools that help your company execute. (4) The very nature of the OKR process is to think big but focus and this hypothetical OKR does exactly that.
Is It Really That Simple?
The short answer is yes and no. The principles within Objectives and Key Results are easy to understand. The complexity lies in writing really good Objectives and really good Key Results. As Measure What Matters details within the appendix on Google, it can be very hard to consistently write good OKRs when you first start out. Like any new process, it takes time to get really good at it.
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No operational system is perfect. But having a defined process in business is key to executing over the long-run. The Objective and Key Results model of operating will undoubtedly help focus your business on the objectives and goals that matter most to your organization.Â
