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How Junior Programmers May be Setting Your Strategy

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Companies spend megabucks on beautiful, well-designed web sites that end up losing customers, thanks to technical decisions made by the designers and programmers. Is some consulting firm’s junior programmer really the one you want making your strategic customer acquisition and retention decisions? With a little understanding of the interplay between technology and customer experience, you can start engaging your web developers in supporting your business with smart technical decisions.

The problem is that the world is diverse.

The web has developed dozens of technologies to help build bigger, more beautiful web sites. You will recognize some of the terms: "layers," "cookies," "javascript," "java," "style sheets," "flash," "shockwave."

Unfortunately, these technologies just don’t work on all versions of all browsers. I use Netscape for Windows and IE on the Mac. Two or three times a day, one of them reports a Javascript error and asks "Do you want to keep running scripts on this page?" C’mon, get real. How in the world does any user know whether to answer YES or NO to that, or what the implications are for my purchase?

Furthermore, some users disable cookies, Javascript or Java. I’ve heard companies pooh-pooh those users and say, "Well, I’ll just require you to enable cookies/Javascript to view my site." Uh, huh. When was the last time you were willing to reconfigure your browser on demand? Hard-core customers will do it. But those sites will lose customers who don’t know how, don’t want to be bothered, or aren’t allowed to change their system. Befuddled users don’t hang around to complete their purchase, they just leave. At best, the site loses one sale but the customer returns. At worst, the customer leaves forever.

So why do these technologies end up in web pages?

Flash sells. Look at any television commercial. When a designer is pitching a site laden with cool stuff, the management reviewers like it. It’s jazzy. It’s cool. It’s like a high-end ad. And that’s the wrong criteria to be using to design your web site.

Customers don’t care much about cool looking sites. They care about sites that get them the information or products they want. Yahoo is the most popular site on the web. It uses no fancy features, and it’s downright ugly. But it gets people what they came for. And that’s a much harder outcome for a graphic designer to pitch.

The programmers push the leading-edge technology, too. Take it from an ex-programmer: web site—even large database driven sites—require very, very basic programming, if any at all. The latest version of Quicken is about 10,000 times more sophisticated than 99% of the commerce sites in existence.

So most competent programmers find web sites kinda, well, mind-numbingly boring. But add in layers and flash, javascript and Java and Lingo, and suddenly the complexity is back to the point where it makes the job fun. Besides, all the advanced technology really *does* make certain things easier to program, and trying to use basic HTML to accomplish those same things just isn’t nearly as engaging.

Specific Problems

Here are some places in your site to dig to find out if you’re using these technologies:

1. Disable Javascript in your browser. This is the biggie. If your site isn’t usable with Javascript turned off, that could be a problem. Especially click on [SUBMIT] and [OK] buttons. Many sites have buttons that, for incomprehensible reasons, only work if Javascript is enabled.

2. Do you have Javascript running that makes sure the user types the right things into fields? If so, you just paid your programmers to do the same thing twice, because the data is almost certainly validated once it gets to your server, as well. You now have the maintenance expense of maintaining both the Javascript checks and the server-side checks. Yowza!

3. If you use Java, you’ll lose everyone who keeps Java disabled for security reasons.

4. Do you use layers or style sheets? Many sites do. They make some aspects of site creation much easier. They also tend to break in various browsers and look awful. Modern tools like Dreamweaver give a designer everything they need to create a consistent look and feel in basic HTML that works in all browsers. If your designers simply must use style sheets or layers, test the site in a wide range of browsers to make sure it looks decent across the board.

(And note that your designers will point out how convenient style sheets are, since you can revamp the whole look of the site by changing just the style sheet. But balance that against the increased testing and QA costs of making sure the style sheet solution works everywhere your customers are.)

The business question to be asking

The decision to include these technologies in a site is simple, when approached in business terms:

Is the expected increase in business from the Javascript/Flash/etc. more than the cost of losing even 1% of your visitors due to incompatibility or security concerns?

For most sites I’ve visited that use these technologies, the site would be equally useful without the technologies. So there’s no incremental gain from using them, while there is a risk of losing a customer. In a dramatic example of this, a site (let’s call them "GenericSTORE.COM") recently lost my $400 purchase when their Javascript consistently crashed in both Netscape and IE browsers. Their order desk was closed, and my special coupon expired the next day. I’ll now buy from a competitor, and if that competitor does a good job, they will probably have a new customer for years.

How much did that flashy bit of Javascript cost GenericSTORE.COM? Quite a lot.

There are certainly times when the extra technology helps. A highly-technical web-delivered product probably requires advanced technology by virtue of the kind of product it is. But most sites simply don’t.

As a businessperson, make sure your programmers understand the business case behind the technology. They’ll fight tooth and nail. They’ll say things like, "But Javascript is so basic, 99% of the browsers are compatible…" Yet if it’s that basic, why did GenericSTORE.COM’s scripts fail? And why do people continue to experience incompatibilities? And can we really expect customers to turn Javascript on, if their system manager requires that they keep it disabled? And more to the point: what is the lifetime value of the customers who have the 1% incompatible browsers, and is the extra Javascript functionality really worth losing that much money?

What’s the solution?

One solution is to test your site in as many browsers and environments as possible. Test in Netscape, all versions 4 and above. Test in AOL. Test in Internet Explorer (4,0, 5, 5,5, 6). Test in Opera. Test in Omniweb. Test test test. Test with Javascript turned on. Test with it off. Ditto for Java. Test.

Another solution is to have a site that uses very minimal technology. The HTML on my site works on every browser in use today. Only Netscape 1 and 2 would have trouble with the pages. The site uses Javascript to highlight menu items, but it still works fine with Javascript disabled. Yes, achieving this degree of accessibility has meant sacrificing some of the neato-cool features I could have added to the site. But look at it this way: no matter what browser you’re reading this on, you made it. It works. And you’re here.

So make your site simple and accessible. If you’re tempted to use technology that might lose even a single customer, ask yourself how much you’re losing with that customer, and whether it’s worth the extra bell and whistle. Amazon.com manages to do a hundred million dollars’ worth of business with a site that uses no Javascript and can almost survive with cookies disabled. When your site is rock-solid, your customers will love it, and at the end of the day, they’re the ones who keep you in business.

Don't let bad IT decisions hold your company hostage

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Business leadership isn’t just about people. It’s also about process and systems. Your computers are part of your processes, and these days, they’re too critical to be treated as casually as you’d treat a screwdriver. Yet few business leaders know anything about them, and they happily delegate strategic, life-or-death technology decisions to IT folks who haven’t a clue about business.

A few weeks ago saw one of the largest email virus outbreaks ever. Fortunately, it didn’t do nearly the damage it could have done. But ladies and gentlemen, we are all at risk. You may be a non-techie, but if you’re reading this, your organization isn’t. You use computers and they are part of your critical infrastructure.

Bad decisions cost more than you think

If an avoidable virus or IT glitch stalls your company for a day, how much does that cost? Simple. It costs the entire cost of your company for a day. Not just the salaries of the IT folks who have to clean up the mess, but the salaries of everyone who can’t work because their computers are screwed, plus the utility bills, etc. Add on salaries for the time it takes people to get back to where they were before the virus attack. And if your IT infrastructure halted commerce, add on the value of all the lost orders. Now you have the cost of a bad IT decision.

IT costs are rarely allocated wisely

If you’re a senior executive and you make a bad call, you live with the results. In fact, if life throws you a curve ball, you live with the results. Your new distribution channel didn’t reach the market you wanted? Oops. That’s time and money down the drain, it shows up in your bottom line, and it gets factored into your evaluation.

But not true of most IT departments. They get to make lousy decisions at bargain basement rates. You see, few companies charge back the cost of IT failures to the IT department. Let’s think about a virus outbreak. IT folks must run virus removal software over your network and clean up the servers that got screwed. Fine, that gets charged back to IT. But the salaries of the non-IT employees during their downtime, and the cost of the rework they have to do all gets allocated back to their departments. So what incentive does IT have to really take the time to understand the security issues? Very little. Most likely, they’re evaluated and paid for the projects they have to build, but aren’t charged for the business impact of what they don’t build that they should. As a result, the emphasis is on rolling out new stuff, not protecting the business.

To be fair, this isn’t IT’s fault. Most IT organizations are chartered as development organizations, with no emphasis on security or preventing problems. Few engineers have the training or big picture to make good security decisions. But guess what–it’s our fault, too. We who build the organization must make sure IT has enough staff with the security skills and judgment to build a solid IT infrastructure. If computer security isn’t on your hiring radar screen, put it there, or be prepared to pay the costs.

(Speaking of which… A misconfigured web server can expose all kinds of great company documents to the web. See: http://www.securityfocus.com/columnists/224 for a column describing exactly how to get really juicy internal information almost instantly using only Google.)

IT decisions ignore the cost of failure

"If I buy this lottery ticket, I’ll win a million dollars!!!" — Anonymous

We make lots of our decisions because we think they’ll get us what we want. We set our goals that way: "Go build a system that can style my hair, read my email, and coordinate meetings over the internet while singing Broadway showtunes." But every decision is a double-edged sword (even the decision not to decide). We rarely consider the downside of a decision beforehand, unless it’s blindingly obvious and catastrophically unpleasant.

When your IT team is choosing solutions, chances are, they’re asking, "Which solution meets our needs?" Also have them ask, "What is the cost of this solution failing?" Microsoft products have a huge advantage: they’re standard, they allow interoperability, they’re pretty, and, as they used to say about IBM , "nobody ever got fired for buying Microsoft" (though they should have). The downside, however, is products like Outlook are buggy and contain huge security holes. Several of the most destructive viruses have exploited holes in Outlook and Internet Explorer1.

Upgrading can kill your company

Microsoft has certainly endorsed a dangerous trend: software that requires activation to install and run it. More and more, it’s not enough that you purchase software and install it with a serial number they give you; you must also be connected to the internet or call their telephone activation center to activate the software when you run it.

The reason for this is simple: the software publishers basically don’t trust their users, and want to monitor every installation of the software closely. It makes sense from their point of view, as long as you assume your users are out to screw you. But from our point of view, this trend is dangerous.

The first of these activation schemes was Adobe Corporation’s "Type on Call." They would sell you a CD full of fonts, and you would call Adobe to "unlock" fonts you had purchased.

Over the years, I purchased over $2,000 worth of fonts from Adobe. That really isn’t as many as it seems, as some of the nicer faces cost upwards of $500 to purchase all the different weights and styles. My corporate identity was built using the Adobe fonts.

Then a couple of years ago, I bought a new computer. I went to install my Type-on-Call fonts and discovered that the activation servers had been shut down. Adobe had decided to discontinue the service, and suddenly I was no longer able to access fonts I’d paid dearly for. No one at Adobe was able to help, until bombarding the upper management with letters led one marketing manager sent me a CD-ROM of the fonts in question.

Herein lies the danger: in the interests of their fraud protection, you are integrating the business fortunes and decisions of the software vendor into your infrastructure. If they go out of business, get acquired, or just decide to stop supporting their service, the next time you need to install their software, you can’t do it. If that software is critical to your business, you’re just plain out of luck2.

And even if they’re still in business, it’s still a business burden for you. You won’t always have a net connection when setting up a new machine. Sometimes–for security reasons or otherwise–you might want to install your software with your new machine disconnected from the network. Whatever the case, you’ll now have to jump through activation hoops2. Windows already takes way too long to reinstall, thanks to its convoluted architecture. If you have to make activation phone calls and convince the $3.95 /hour clerk on the other end that you own the software you’ve already bought and paid for, you’re spending more of your time and money just to satisfy their paranoia.

Of course, no company would ever use this as a technique for forcing you to upgrade. Microsoft, for example, would never abuse their activation system by dropping activation of old products, forcing you to upgrade to a new version. But if a Microsoft doobie reads this article, watch out, they just may change their mind.

Avoid Outlook like the plague

Most of the windows vulnerabilities and worms have spread through Outlook and its address book. I don’t know why Outlook is so remarkably poorly written, but it really doesn’t matter. Every security-conscious technologists I know uses Eudora or a text-only mail reader of some sort. Most won’t even allow Outlook to be installed on their machine. I’m sure Microsoft is working to resolve all problems in Outlook, but if the development team couldn’t avoid the problems in the first place, I don’t have much faith in their ability to catch all the potential problems in retrospect.

Back up regularly, off-site

It’s amazing how many companies have no regular backup regime in place. Back up regularly to write-once media (e.g. CD-R), so even if a virus invades, it can’t destroy your backups. Make sure to keep an off-site copy of your backups, just in case. I’ve seen companies lose man-months of work because they didn’t do regular backups. IT isn’t pretty.

I used to back up to CD-R until my drive self-destructed a couple of months ago. Now, I back up every night over the Internet, using an encrypted connection to a secure data center that can be accessed from anywhere in the world. It’s a great service that costs about the same as doing my own physical backups. I liked it so much I became a distributor. Check out:

http://www.ezbackup.com/leadership
if you’d like to download a 30-day free trial.

Teach people: don’t open attachments

Yes, the software designers could have made viruses harder to spread, but this week’s attack was an email attachment that requires people click on it to open it. When someone succeeds in getting people to violate their own security, it’s called "social engineering." The latest virus was a masterpiece of social engineering.

It was also a testimony to how little we’ve educated people about computers over the last five years. The rule is simple: never open an attachment you didn’t expect beforehand, even if it’s from someone you know. Period. Never. If the message appears to be an error message, don’t click. Is it a "cool screen saver?" Resist the impulse. How about "The latest version of that document you requested."? Punt. On the other hand, if you asked for a Monday status report from Sue Jenkins, and the attachment is "Sue Jenkins’s Monday status report.doc", you’re probably safe.

Don’t let IT set strategy by default

There have been a number of business failures due to strategic inflexibility caused by inflexible software and/or hardware systems. For further reading, see my essay "Are Your Junior Programmers Determining Corporate Strategy."

Learn how to use IT well

Like it or not, we’re living in a world pervaded by information technology. I’ve outlined a few major gotchas, from business to technical, that you should have some awareness of if you’re leading an organization. But the time is past when we could afford to ignore technology. It’s changing industries, it’s changing businesses, and it’s making us powerful and vulnerable in ways we must master if we’re to succeed in our organizations.

A postscript for the techie reader

Yes, I know perfect security is impossible purely through software. In fact, good security usually has to be built into a system’s design from day one. But most of the viruses we’ve seen over the last four year could have been prevented through better design. Microsoft could have created a sandbox mechanism and launched attachments in a sandbox. They could have created a security model that required downloaded code to request privileges before being able to do anything malicious. They could stop embedding full programming languages in all their products, with security turned off by default. And they could certainly use a separate stack and data space so stack overflows aren’t an invitation to run arbitrary code. They could even code in a post-1980 language that detects attempts to overflow the stack and doesn’t let it happen! They could even have created a firewall that blocks unexpected outgoing connections.

By the way, these aren’t fanciful ideas. All of them have existed in past systems or exist today. Tiny Personal Firewall gives you the sandbox. Zonealarm, the firewall. Java gives you buffer overflow protection. And disabling active scripting, ActiveX, and deinstalling VBScript at least helps with the programming language problem.

1. Microsoft likes to claim, "because we’re ubiquitous, hackers target us especially." That’s true. But I’m an ex-techie. I’ve looked at a lot of the failures. They’re due to bad programming practices and poor design. I would like to think that if they know they’re target #1, that would make them extra vigilant about such practices. back

2. Volume purchasers can often get non-activation-required versions, but smaller businesses are out of luck. back

A Rant About CEOs Who Don't Know

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Warning: This isn’t an essay. It’s a rant. Don’t look for deep logic, well-thought-out arguments, or statistically supported statements. Think of this as an amusingly public catharsis from someone who’s horrified, outraged, offended, dismayed and (let’s be honest) just a wee bit jealous because I haven’t yet found a way to get rich regardless of whether or not I do a good job.

White collar crime pays. It pays very, very well. Just ask Kenneth Lay, Michael Milken, Ivan Boesky, and a whole host of others. And to top it off, a lot of the horrifically unethical behavior isn’t actually illegal. We just trust good people not to do bad things. And our trust gets betrayed. Even when the behavior is illegal, penalties may be large in absolute dollar numbers, but they’re laughably small relative to the crime(1).

We pay salary for adequate performance, except for CEOs

If an engineer in a company suggested, “Yes, you’re paying me $90,000 salary, but I need an additional 500,000 stock options on top of that to motivate me to finish my project,” we would want to fire them just to make a point. The reason we pay them anything is to get their job done. We only pay a bonus if they perform exceptionally well, and even then, we wouldn’t pay an engineer a 500,000 share bonus.

Yet we consider it completely reasonable for a CEO to ask for a huge option pool on top of an already over-the-top salary, just as a base part of their job. There are occasional lame justifications “We need to give those levels of option to attract a good CEO.” Sorry. I just don’t buy it. Yes, some percentage of CEOs are really that good. But most aren’t. Let’s have them start working for base salary, and award them options only when they prove they’re worth their already-bloated salary. Warren Buffet manages dozens of businesses, replacing option grants with performance-based bonuses. Maybe the richest investor in the world has insight we should pay attention to?

But with the CEO, let’s add an additional stipulation. In a company that can reinvest its free cash in revenue-producing activities, its revenues will rise every year as retained earnings are reinvested, regardless of any actions on the CEO’s part.

That mean we can expect share price to rise by roughly the company’s ROE every year. So a CEO whose options have a set strike price can do nothing and still collect their obscenely bloated bonus. Fair? I think not.

The CEO should get their base salary for doing their job adequately. They should receive a bonus only if the company does substantially better than expected, and expectations should include the internal equity compounding.

So what is a CEO’s job, anyway?

Legally, a CEO’s job is making a company successful: crafting strategy, building a senior team, creating a culture, and yes, making money for shareholders. If they don’t do all four, they aren’t meeting the minimum job requirements. If the CEO isn’t keeping the company profitable, they aren’t even earning their salary much less their bonus.

Rogue’s Gallery

So let’s just explore some recent shenanigans of those wacky corporate CEOs. In each case, the defendant was accused of wrong-doing, and their excuse was, “Golly shucks, I just didn’t know what was happening with my company. Sorry boss.” To the best of my knowledge, not a single one offered to return any of the money they received in salary, stock, or bonus which they were awarded for doing a supposedly stellar job:

Kenneth Lay. CEO of Enron. Made hundreds of millions from selling stock while restricting his employees from selling their 401(k)-owned shares while the price plummeted. Claimed his understanding of accounting and complex financial transactions was “vague at best.”(2) Uh, huh. Is this a man who deserves the rewards associated with being CEO of a $101 billion company? A man who has a “vague understanding” of his company’s main business, which involves over 3,000 financial partnerships?

Jeff Skilling. Founded the trading arm of Enron and served as its COO and CEO. Built the organization from scratch. Did the hiring, set the goals, determined the culture. Had full responsibility for its performance. Was happy to take bonuses and stock worth tens (hundreds?) of millions, essentially claiming responsibility for that performance. When Enron collapsed under the weight of more than 600 off-balance-sheet partnerships, Mr. Skilling’s defense(3), according to a Feb. 7, 2002 article in Time, was “I was not aware…” “I did not believe…” and “I did not have any knowledge…”

Jeff, babe. Your job was knowing. You built the company and didn’t know? C’mon. You’re an ex-McKinsey consultant and a Harvard MBA, and you didn’t notice something was a bit odd? Perhaps when your Board of Directors two times voted to suspend your company’s ethical guidelines to allow certain deals(4), you might have taken note. As CEO, COO, and founder of the division, perhaps you have heard of the Board of Directors?

Chief C. Gregory Earls, chairman and CEO of U.S. technologies is charged with misappropriating $13.8 million and criminal charges of securities, mail and wire fraud(5). He says “It’s ludicrous. I practically have no assets right now.(6)” Earls said in a telephone interview. “If I stole $15 million, where is it?” Well, apparently at least $500,000 of it was happily posted by Earls for a personal-recognizance bond so he doesn’t have to wait for his trial in jail. Great use of that bonus money, isn’t it?

Earls bypassed the “I don’t know” defense, in favor of the “charges are substantially embellished” defense. It’s a shame he can’t say “charges have no bearing on reality.” A wishy-washy response like that suggests that Mr. Earls’s benefits, perks, and job title are perhaps also “substantially embellished”(7) from where they should be.

Henry C. Yuen, former CEO of Gemstar-TV Guide (and once named America’s Most Successful Asian Executive) was fired after the SEC recommended jail time for his refusal to testify in an investigation into the company’s accounting practices. I guess this isn’t “I didn’t know,” but rather, “I really don’t want to help you know.” In any event, he may be about to waltz off with a $30 million cash severance(8). That will buy a lot of tvs, and probably a lifetime subscription to tv guide. The $30 million must be his reward for doing such a good job that the SEC wanted to review his books in sheer admiration. And by the way, he stays on the payroll for the time being. Doncha love it? Other people’s employment is linked to the company’s ability to pay and the quality of their work. And we wonder why the rank and file are a tad cynical?

My Favorite “I Didn’t Know”

My favorite, I’ve saved for last. Just for jollies, let’s keep him anonymous for now.

John Doe of XYZ corp received $60mm in cash, stock, etc. when he left his company. The company had loaned him $24 million to buy company stock, and forgave the loan when the stock price dropped. His latest achievement: selling 120,000 shares of stock last August, less than one month before they didn’t meet analyst expectations and the stock dropped. He claimed he “had no insider knowledge” he said. Um, really? As CEO, a mere three weeks before the announcement, he didn’t know that his company would miss the projections that he promised Wall Street? Once again, the defense is basically, “I did nothing wrong. I was just incompetent.”

Well, surprise! John Doe of XYZ, is really John Snow of CSX, the new Treasury Chief of the United States. I’m sure he will do just fine at the new job. And if there are any important issues that crop up at the treasury, the rest of us can sleep easy knowing that he’ll be able to give us three weeks’ notice(9).

Return to my tamer article on how you can use ignorance to get ahead—only with ethics and integrity!

(1) At the Harvard Business School conference on April 22, 2003, “Restoring Confidence in American Business,” a major SEC player pointed out that Michael Milken paid almost a $1b fine for his 1980s market manipulations. That sounds impressive until you realize he still walked away with more than a billion. Yes, a billion-dollar fine is high, but is it enough, given that the criminal still has enough left to support 5,000 people for life? back to article

(2) Ken Lay’s Best Defense, Forbes, 2/13/02. back to article

(3) Skilling: The CEO Who Wasn’t There, Time Online, 2/7/02. back to article

(4) The Role of the Board of Directors in Enron’s Collapse, report by Senator Joe Lieberman, 5/7/2002. back to article

(5) U.S. Technologies Assets Frozen, Washington Post, 3/14/03. back to article

(6) Earls Faces Additional Charges of Defrauding Investors, Washington Post, 3/25/03. back to article

(7) U.S. Technologies CEO Accused of Fraud, by Erin McClam, Associated Press, 3/24/03. back to article

(8) Fired Gemstar exec may get $30M, Reuters CNN Money, 4/23/03. back to article

(9) Public Citizen Seeks Government Records on Treasury Secretary Nominee, Public Citizen web site. 12/12/02. back to article

A Tribute to Ignorance: Your Greatest Leadership Tool

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It’s shameful; the business community neither understands nor respects ignorance—one of your most powerful tools as a business leader. The last two years have seen ignorance vastly misused by heads of companies and their advisors(1).

Oh, we’ve seen certainly seen ignorance galore. CEOs happily accepting $100,000,000 bonuses when times are good, yet declaring “I didn’t know there were problems” when their company tanks a month later. It’s hard to imagine a company owner who would reward that management with anything other than a pink slip, delivered with a swift kick to the private parts. If you’re going to use ignorance, don’t hide behind it as an excuse when things go wrong; use it to build something great.

Before you can get dumbness working for you, you have to conquer the fear of ignorance. It terrifies us, you know. Many people would rather die than admit they don’t know something. But taming the fear is easy. You don’t need a ropes course, or a month-long vision quest. Your demons are simply memories, right now. Probably memories of grade school. Third grade. When you were taunted mercilessly for saying “I don’t know” when a teacher asked a particularly tricky question. Or was it the parents, disappointed when you said “I don’t know.” Either way, get over it. That was decades ago. Now, you’re grown up. As kids in school, “I don’t know” gets us punished. But in the real world, “I don’t know” is the norm, and it brings great power.

Ignorance frees you to move

You see, the moment you say “I don’t know,” you’re safe. You can venture into the unknown and if things don’t work out, you’re blameless. In fact, you’ve already pointed out that you didn’t have the answers; but hey, you were willing to try anyway! You may try and fail, but you stepped up and gave it a shot. And that’s cool(2).

“Giving it a shot” includes doing what’s new, unusual, and out-of-the-box. When you purposely put yourself outside your realm of expertise, your full creativity can come out for the problem at hand.

And in the unlikely event you fail miserably, rather than collapsing in a gutter and living a life of utter desolation, you can use it as a learning opportunity and move on. Have you ever worked with someone who confidently drove their team/business/life off a cliff, because they were flat out wrong yet never questioned themselves? “I don’t know” saves you from over-confidence. When you know you’re in uncharted territory, you know to expect the unexpected (and learn from it).

Of course, even in uncharted territory, you always stride forward confidently; that’s what leaders do. But if you know the path is uncharted, you’re ready to change direction if it ends up leading straight off a cliff.

“I don’t know” unleashes leadership

One reason most people are afraid to say “I don’t know” is they think it means they’re somehow less than they were. Nonsense! It may create a bit more humility, but that’s a good thing. Humility gets your ego out of the way, making room for other people and their ideas.

Now, many of us are proud of having a mind like a steel trap; I know I am. But have you ever caught your leg in a steel trap, especially one of their own making? Ouch. It’s not pretty. Even if you have a mind like a steel trap, it’s not your ideas that will take you to the top; other people’s ideas will make you successful.

You’re a leader. Leaders, by definition, bring out the greatness of everyone around them. Key words, everyone around them. You won’t lead by doing everything yourself. You must let others contribute, even if you can do the job better. Proclaiming ignorance—even when you may know the answer—tosses the problem back to your team. If they whine, take the bait: step in and coach them. But don’t solve the problem for them; coach them to develop the skill to solve the problem.

(Yes, yes, of course you could have done the job yourself in half the time, but this way, you’re building an organization that will complete the next job for you, while you spend your time on much Greater Concerns.)

Oddly, people will respect you for taking this approach. Admitting your ignorance builds respect. It shows you have the strength of character to admit you’re not perfect, and if accompanied by confident delegation and coaching, it turns into a development experience for those around you. And best of all, delegating will give you time to lose sleep over strategy, instead of just daily emergencies.

Sometimes, you need to know

Have I convinced you, yet? Good. But remember to use common sense. Sometimes, it is your job to know the answer. CEO should know how their company is doing at any moment. The VP of Sales should know the names of the three biggest customers. Functional specialists should know their content areas. If you find yourself saying “I don’t know” about things you should know, go set up systems to stay informed.

But otherwise, say “I don’t know.” Say it proudly. Say it with confidence. You’ll discover it’s a powerful phrase that, used correctly, will unleash your creativity, give you the freedom to experiment, and help you build a strong organization rather than carrying the load yourself.

Action steps

  1. Are you afraid to say “I don’t know?” If so, start saying in about unimportant stuff and watch the reactions of those around you. You may be surprised.
  2. Choose a problem you’re stuck on in an area you know. Now clear your mind, say “I don’t know,” and approach the problem from a mindset of knowing nothing. Play with the problem. Engage your creativity. Find out what happens.
  3. What are you doing because you’ll the best job, even though there are better uses of your time? Look in the mirror, laugh, and say, “I don’t know how to do that any more.” Then stop knowing, find someone else and let them take over. It will drive you nuts, but enjoy it.

(1) I feel strongly about this topic. Strongly and with much random angst. See my essay “A Rant About CEOs Who Don’t Know” for a thoroughly irrational diatribe on CEO behavior. back to article

(2) Have you seen American Idol, yet? It’s a dreadful tv show in which hundreds of talented (and thousands of untalented) singers get made into losers—nationally. But as much as I ridicule the washouts in fluorescent spandex, they had the guts to go for it in front of fifty million people. And that’s worthy of respect, spandex or no. back to article

Creating Your Identity as a Leader

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Becoming a Leader is a matter of identity, not position.

Eric was about to scream. His latest plan somehow wasn’t moving forward. Once again, his employees left the planning meeting and went right back to what they were doing, as if his presentation hadn’t even happened. Eric didn’t realize that being “the boss” didn’t make him a leader. You can be a good CEO by mastering the job requirements. Leading people is not so clear cut. Leadership isn’t a job; it’s relationship. Without followers, you can’t lead. Cultivate the relationship beginning with yourself; create an identity of leadership.

Leave Your Follower Mentality Behind

The first step is deceptively simple: choose. You probably said “Yes” to your job as a conscious decision. Now decide you will begin leading…

This article is continued in “It Takes a Lot More than Attitude … to Lead a Stellar Organization!” Click here to purchase.

Motivating employees: Bring Out the Best in Everyone Around You

Motivating employees: Bring out your team’s best by setting expectations—Yours!

Who have been the leaders in your life? The people who expected you to give your best, and usually knew you could do far more than you imagined. Leaders expect the best in ways that transcend merely making demands: they expect you to exceed your limits, and somehow in their presence, you do. It’s no coincidence. Positive expectations are powerful, and you can use them to help those around you break through their own barriers…

This article is continued in “It Takes a Lot More than Attitude … to Lead a Stellar Organization!” Click here to purchase.

Warren Buffett on CEO Measurement

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Reprinted from the 1988 Berkshire Hathaway Annual Report.

Their performance, which we have observed at close range, contrasts vividly with that of many CEOs, which we have fortunately observed from a safe distance. Sometimes these CEOs clearly do not belong in their jobs; their positions, nevertheless, are usually secure. The supreme irony of business management is that it is far easier for an inadequate CEO to keep his job than it is for an inadequate subordinate.

If a secretary, say, is hired for a job that requires typing ability of at least 80 words a minute and turns out to be capable of only 50 words a minute, she will lose her job in no time. There is a logical standard for this job; performance is easily measured; and if you can’t make the grade, you’re out. Similarly, if new sales people fail to generate sufficient business quickly enough, they will be let go. Excuses will not be accepted as a substitute for orders.

However, a CEO who doesn’t perform is frequently carried indefinitely. One reason is that performance standards for his job seldom exist. When they do, they are often fuzzy or they may be waived or explained away, even when the performance shortfalls are major and repeated. At too many companies, the boss shoots the arrow of managerial performance and then hastily paints the bull’s-eye around the spot where it lands.

Another important, but seldom recognized, distinction between the boss and the foot soldier is that the CEO has no immediate superior whose performance is itself getting measured. The sales manager who retains a bunch of lemons in his sales force will soon be in hot water himself. It is in his immediate self-interest to promptly weed out his hiring mistakes. Otherwise, he himself may be weeded out. An office manager who has hired inept secretaries faces the same imperative.

But the CEO’s boss is a Board of Directors that seldom measures itself and is infrequently held to account for substandard corporate performance. If the Board makes a mistake in hiring, and perpetuates that mistake, so what? Even if the company is taken over because of the mistake, the deal will probably bestow substantial benefits on the outgoing Board members. (The bigger they are, the softer they fall.)

Finally, relations between the Board and the CEO are expected to be congenial. At board meetings, criticism of the CEO’s performance is often viewed as the social equivalent of belching. No such inhibitions restrain the office manager from critically evaluating the substandard typist.

These points should not be interpreted as a blanket condemnation of CEOs or Boards of Directors: Most are able and hard-working, and a number are truly outstanding. But the management failings that Charlie and I have seen make us thankful that we are linked with the managers of our three permanent holdings. They love their businesses, they think like owners, and they exude integrity and ability.

Reprinted with permission from Warren Buffett from Berkshire Hathaway
annual report, 1988

Copyright © 1988 Berkshire Hathaway and Warren Buffett.

Warren Buffett on CEO Measurement.
Reprinted from the 1988 Berkshire Hathaway Annual Report.

What does a CEO do? A CEO Job Description (part 4: keeping your competence)

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Part 4: Coaching tips to stay sane and skillfull at the top of the heap.

These coaching assignments will help an executive avoid some of the pitfalls of the CEO job. They are simple, easy, and won’t take much time. They’ll help a CEO stay connected with workers, keep herself humble, and increase her learning while becoming more successful. The suggestions strive to be quick and easy to do, while still producing real results.

Make Space to Practice These Assignments

Set aside 5 to 10 minutes, daily, to developing as a leader and human being. This will be the time you think about the below topics and set your mind for the day. Schedule the time if necessary. Just make sure that you do what’s right for your growth.

Pace yourself. Life is long. Adopt these suggestions one or two at a time, and practice until you make them your own. Then move on. Forcing won’t help; this is about developing at your own natural rhythm. Do one assignment for a few weeks, then move on to another. Keep the ones that work for you and drop those that don’t.

Staying connected with “the little people”

Cultivate an attitude of respect—your respect for them. The “little people” are the ones turning your vision into reality. Meditate on this for a few minutes and ask yourself whether you can their jobs as well as they can. If you can, then you’re not hiring the right people—go change that! Otherwise, once a day, go talk to one of your low-level employees—someone more capable than you in their area of expertise—and learn from them. Choose a different person each day. Get as close to the front line workers as possible.

Listen with an open mind and learn. Learn about their job. Ask what works for them and what doesn’t. Above all, listen to their comments without judgment. Your goal is to connect with their experience of the world, not impose your own. Learn about their life. Find out what motivates them. Why did they come work for you instead of somewhere else? Simply by spending a few minutes understanding their life, you can greatly increase your appreciation of how they’re different (and similar!).

Share your vision and job with them, from a position of service. Pretend that your job is to make this person a success. Ask them how their job fits into the work the company does. If they don’t know, take on the responsibility of helping them understand how their job links to the vision. Clarify any confusion they may have about where the company is going. And ask them what you can do to help them succeed at doing their best. Then do it.

Staying humble

Acknowledge, often! Without your employees, your dreams and plans wouldn’t amount to much. Take every available opportunity to acknowledge the contribution of those around you and give them credit, especially in public. Feedback is rare in most companies, and positive feedback is rarest of all(1).

“Get” that it’s all your responsibility. When things don’t go the way you want, take responsibility—whether or not it’s your fault. The mindset of responsibility will put you in a much more powerful place than the mindset of blame. Regularly review circumstances asking, ”What could I do differently (or stop doing) to make a positive difference?” Identify the action and then take it. You’ll be surprised how much more power you have over externalities, operating from responsibility rather than blame.

Gather honest advisors to held you accountable for your behavior. Sometimes a Board of Directors will give honest feedback, but they are removed from your day-to-day behavior. Actively solicit feedback from third parties: friends, peers, associates. Share your issues and how you’re handling them, and ask for an honest assessment. Everyone in a comany is accountable to someone for their behavior, except the CEO. Make yourself accountable as best you can.

Identify your limits. Ask, “can someone else in the world do my job better than I am currently doing it?” If the answer is Yes, seek out that person and ask for their guidance in getting better. If the answer is No, validate that answer by asking your advisors, competitors, suppliers, customers, and employees. Many companies have crashed and burn because they believe they were the best, for no good reason but pride and ego.

Create measurable performance criteria for your executive team, including yourself. Make sure people within the organization know your goals, and know what you can be counted on to do. Hold yourselves accountable. If you don’t meet your goals, withhold your bonus, take no raise, and treat yourself exactly as you would treat an employee who missed their targets. It sends a powerful message to the company than you’re serious about performance.

Ask your direct reports, your Board of Directors, and anyone else you work with for feedback a couple of times a year. You can use a 360-degree feedback process or simply ask in an e-mail. It’s a lot easier to hear feedback on your performance if you’ve explicitly asked for it.

Videotape yourself receiving bad news. Watch the videotape and decide whether or not you would want to work for that person. If the answer is No, learn to chill when you hear bad news.

Learning well

Study excellent CEOs. Call a CEO you admire and invite them to lunch. Exchange tips and adopt tactics that others have found useful. Read books like First, Break All the Rules, which are broad-based studies of habits of top-performers. Adopt at least one new habit a month.

Create systems for gathering feedback. Interview customers, competitors, analysts, and others in your industry to know how your company and products are perceived. Make sure you’re gathering feedback that will disconfirm your beliefs about the world, as much as confirms it. For example, if you think you’re #1 in your market, don’t just ask customers why they like your products. Ask what other products they use, and how your products fall short.

Spend time learning about the fundamentals of a CEO’s job:

  • Setting strategy. The strategy and vision for the company determine where everyone will focus their efforts. Find a vision and strategy and use it to align your entire company.
  • Creating the corporate culture. Your culture will determine what people do and don’t try, who will stay, who will leave, and how business will get done. Culture starts with you. Decide how you want people to act and start modeling the behavior publicly.
  • Capital allocation. Every dollar you raise and spend should produce more than $1 of return for the company, or it’s a waste of money. Learn how to make these judgements.
  • Hiring and Firing. The job of executives is primarily team and culture building. Hiring and firing are must-have skills. Read, take classes, and review past hiring successes and mistakes. Do whatever you can to hone your abilities.

Raise the Bar

Hold yourself to higher standards next year than you did this year. Challenge yourself to learn to get more done with fewer hours and fewer resources whie creating a more balanced life for yourself.

These are just a few of the things you can do to increase your chances for success as a senior executive. I also believe in working with a coach to identify and overcome (or compensate for) blocks in your performance. Success can be had with many different skill sets. The more you learn about yourself and your capabilities, the better you will be able to shape a job that works for you. The more you learn about the capabilities of those around you, the better you will be able to build teams that produce spectacular results.

Do Great Things!

(1) Social psychology has shown that rewarding desired behavior is far more effective than punishing bad behavior or non-performance. For reasons that aren’t entirely clear, our culture has evolved around using punishment as the main way of controlling behavior. Unfortunately, punishment doesn’t work very well. Interestingly, animal trainers have known this for years. For an excellent book on the subject, check out Don’t Shoot the Dog by Karen Pryor. back