A friend recently asked me about how I might define performance for web developers. It was an interesting question coming from one startup founder to another. He was concerned with how to present performance-based incentives to his developers when performance itself is so hard to measure for engineering work. I had a few thoughts to offer him and I wanted to share them here.
Engineering has a complex and difficult work flow – it happens on a maker’s schedule. Understanding this, it’s extremely difficult to determine a fair objective/set of criteria by which to measure someone. Lines of code are simply not going to cut it. So what does? Shipped stories? Defect counts? As far as I’m aware, none of these have worked.
However, if you kick the measure of performance up one level-of-altitude to overall business performance, another problem comes into play. Engineers don’t always have a direct connection to driving business value. They are charged with delivering whatever is on the product backlog in a way that is elegant, stable, and secure. Ideally, they also deliver it quickly. But whose fault is it when the backlog is less than actionable or badly organized?
This is an even harder question, and the answer varies from business to business. The core goal behind offering performance-based incentives is to ensure the business keeps working, and maybe even winning. This makes sense. And it probably makes the most sense to provide these incentives to people who are actually making the business win (i.e. managers and other strategic roles).
The flipside is that everyone, in theory, should be incentivized to make the business win. Let’s imagine a hypothetical scenario in which this is the case:
Step 1: Engineer looks at backlog. He realizes that the first three ideas suck.
Step 2: Engineer pushes back because he want the business to win.
Step 3: Product Manager reconsiders one of the ideas in the backlog.
Even in this scenario there are potential flaws: would the incentives actually motivate the engineer over the hump of inaction? Are incentives enough or does it take a particular archetype to motivate themselves through these extra steps? (I know engineers who will push back on tasks they don’t like, even if they’re paid $1/hr.)
Startups, in theory, have a built-in incentive for all employees (or most, depending on where you are): equity. If the business sells for millions, each person will get their piece.
But is that potential enough to rule out incentive pay? Probably not. In my experience, human beings are remarkably impatient. Most non-founders don’t think on the time horizon required to care about this outcome. Furthermore, even if the engineer does have the long con in mind, the average person needs small incentives to hold them over. (Imagine any video game. You don’t go from level one to sixty in one jump. You need all the levels in between to feel like you’re progressing.)
I think it depends a lot on the type and scale of the business. In most creative product-focused startups, I would argue against non-stock incentive-based pay that is specific to tech goals such as lines of code, uptime, etc.
However, I DO think that operating businesses (with real revenue) can benefit from goals that everyone can get behind (i.e. a quarterly revenue or profit goal). The case for a shared bonus pool here is reasonable, and I would argue net-positive. I like P2P systems combined with management-driven allocations. So your peers and your managers decide what slice of the total bonus pool you receive.
The key here, however, is that it’s a BONUS. It’s NOT an excuse to pay someone less than they deserve.
N.B. I didn’t use the term “market rate” above. I think that market rate is a faulty concept in startup land. Startups have been systematically over-funded in a way that makes bootstrapped startups totally unfit to compete. So what the market can bear doesn’t matter. What matters is how passionate someone is about the opportunity and what they are willing to work for. Generally, equity levels the playing field here.
One final footnote: Decent bonus schemes act as a nice deferred comp plan for very early stage companies. Let’s say a new engineer wants $10,000 in annual salary, but you can only afford $7,000. You can offer that engineer $7,000 with a $3,000 bonus if the company reaches $X in revenue. This way, if you can afford it, you’ll pay it and the engineer is in a better position to bet on the company.
In short, there is some room in an early stage company for a “company-wide performance” bonus pool. But goals have to be well-defined enough for everyone to know what they are marching towards (i.e. post-product market fit). An attempt to create a bonus system before such a time seems like putting the cart before the horse. Chances are your business won’t even work – so why create complex incentive programs?
I often get asked, “What do you do, what’s best for the person or what’s best for the company?” Or, “What happens when what’s best for the employee isn’t best for the company?”
In my mind, doing what’s best for each individual person in an organization is what’s best for the company at large. At least today. Here’s why.
If you think back in the days before America was discovered, on through the Industrial Revolution and when there was a boom in railroad construction and building skyscrapers in Manhattan this situation may have called for a different kind of thinking. Back then, maybe the kind of boat you had or the land you owned was the big differentiator.
Today, we’re in a Knowledge Revolution where things are created based on knowledge and information. Brain power is the key generator. The business landscape is more complex than what it was because people are more complex and harder to manage. They have ambitions, hearts, minds, and families that are important. The brains you have can make or break your company’s success.
Since companies run on people, it follows that the best companies are going to have the best people. Therefore, the people within the company – its human resources – are the big differentiator.
The performance of a company is often a lagging indicator of the quality of its people. Over time, you’ll start losing the quality of your product, culture, brand, and all the things that make a company strong if you don’t have good people.
That’s why I believe that, in the end, what’s best for the person IS best for the company. You have to treat people like the most important asset they are. If someone says I’m moving to Timbuktu with my spouse because it’s what’s best for me, don’t fire them to protect yourself. And don’t throw more money at them hoping they’ll stay when you know their mind is made up. Life is too short for that. Instead, embrace what they need. Celebrate the work they did and the contributions they’ve made. Support them in whatever way you can in making the transition.
How you treat your people becomes part of your company’s DNA, part of your reputation. And that’s absolutely why you have to do the right thing by your people because your reputation is built on that. The future success of your company depends on a strong DNA and a stellar reputation. Companies who put their people first will have an edge on getting the best talent and will ultimately win because of it.
What do you do when the interests of the company and the interests of your people seem at odds? I believe when you look at all the factors and weigh how important they are, you’ll come to the conclusion that what’s best for the employee is ALWAYS best for the company.
In his essay, Maker’s Schedule, Manager’s Schedule Y Combinator’s Paul Graham points out that managers’ schedules and makers’ (i.e. programmers’ or writers’) schedules are quite different:
As Graham points out, each type of schedule works fine by itself. Problems arise when they meet.
I’ve been in the position of both maker and manager throughout my career, so I can certainly relate to what he’s saying. Meetings are hard, and as a maker I dreaded meetings. As a maker you can either do or talk, and talking seems wasteful. As a maker, meetings suck. They’re terrible. But as a manager, I can see that meetings do have their place. There’s specifically a need for meetings because there are certain things you need to talk about. It’s hard to be strategic if you can’t sit down and talk about stuff. Although I still don’t love meetings today, I realize they need to happen.
The problem I see with meetings is that they’re often done poorly. For the amount of time people spend actually sitting in the room talking about stuff you’d think they’d actually get better at holding them. People don’t take meetings seriously, so how are you going to get better at conducting them?
I admit, I’m not great at meetings either. Death By Meeting by Patrick Lencioni is essentially a fable about a video game company with really good people who have really bad meetings. Lencioni saw two primary problems with meetings:
Inspirational meetings, where you actually kick around ideas or resolve conflicts can be fun, interesting and productive. But informational meetings are far less interesting, so I have to question why they exist. If you don’t have conflict, you should ask yourself why you’re having a meeting in the first place. If everyone’s going around the table agreeing with each other, why do you need to sit down and talk about it? Couldn’t this just have been emailed? The typical rebuttal to that question is that things can get done urgently in person. But if everyone’s in agreement, where’s the urgency?
People have a habit of using all the time allotted to a meeting by expanding what they do to fit in the timeline. So if you have a one-hour meeting scheduled and you’ve already covered what you needed to cover with time to spare, the pace of the meeting slows down and everybody thinks they have to fill the entire hour. A better practice is to end the meeting early so people can get back to work.
Most people think 30 minutes is the minimum for a meeting. They don’t often do quick meetings. Agile uses “standup” meetings – which I think can be powerful. In real life I’ve seen 5-minute standup meetings every day actually do work. Standup meetings have to be on time and because you’re standing (like a huddle): they’re not designed to go long.
Why in the world would you set a minimum time for a meeting?
As manager, I don’t like recurring meetings. In my opinion, there should be very few recurring meetings. Have a meeting as something comes up and the need to have a meeting arises. Don’t just have a meeting because it’s scheduled. The most wasteful meetings are those that occur weekly or monthly to talk about XYZ, although it may depend on time frame. For example, board meetings happen every quarter and they’re not wasteful as the group hasn’t been together for an entire quarter.
Meeting facilitation is a lost art. I’ve gone to way too many meetings where somebody called the meeting who didn’t create the agenda and doesn’t actively run the meeting. If no one runs the meeting there’s no way the meeting can be functional. If everyone has a different agenda and no one is running it, the meeting can’t be functional by definition. Someone should always be designated to run the meeting – ideally the person who set the agenda whenever possible.
Instead of meetings, I get a lot accomplished with “drive-bys” (see my post Management by walking around). A significant part of my calendar is blocked throughout week. I have a backlog of things I want to talk about with each of my direct reports. So my “drive-bys” involve walking by and chatting with them. If they’re busy and need to be in the zone, I don’t bother them. But I can knock out 5 or 10 drive-by discussions in an hour’s time or less. And I cover a lot of small topics, which might have led to meetings in a less disciplined world.
While I got into the habit of doing drive-bys out of necessity as the number of my direct reports has grown, I’m a big proponent of doing them as you can nip things in the bud just by stopping by someone’s desk for 5 minutes. If you can’t accomplish what you have to in that way, then it’s okay to eventually do a meeting.
I saw an interesting article recently titled “What is the Most Difficult CEO Skill? Managing Your Own Psychology” by Ben Horowitz on TechCrunch. In it, Horowitz talks about the stressful aspects of being a CEO (there are many) and shares some techniques he uses to calm his nerves.
The startup environment is frothy now. Money’s coming back into play and investors are looking for the next big thing in tech. Sound familiar? When the market heats up, so does the pressure. So I got to thinking about stress, how it can impact the quality of life and some of the things I do to help manage it. Stress is important. 90% is self imposed or imposed by other people and it doesn’t help you. So why are we so bad at dealing with it?
I’ve yet to to see any truth that stress does anything good for people. Sure, there are those out there who claim, “I perform well under pressure.” That’s just a total load of bull to me. I’ve never seen anyone under stress perform better. In my mind, people who say that are either going to perform well anyway, or they’re constantly putting themselves in a position where their backs are against the wall. To me, anyone who says they’re only good under pressure is sending out a big, bright red flag.
Naps. If you know me at all, you know I’m a fan of taking naps. I’ve even written about why you should insist on taking naps and if you can’t nap, meditate. I take naps every day if I can because I find it’s a HUGE stress reliever. I’ve never woken up from 15 minutes or more of napping and still felt stressed. Most times, I can’t even remember what was stressing me. I consider taking naps a form of cheating life – an “unfair advantage” of sorts.
Journaling and talking to myself. I also do an insane amount of journaling using Evernote. At last count I think I had 11,000 Evernotes. I talk to myself at every possible opportunity – or type to myself if I’m not in an open setting where someone might think I’ve lost my mind. I use a digital voice recorder and talk about whatever things are starting to interest me at that moment. I think these habits are compatible with two techniques Horowitz mentions in his article: “Make friends” and “Get it out of your head and onto paper.” Oftentimes people need someone to talk to. You’re probably most compatible with yourself, so talking to yourself out loud and journaling makes perfect sense to me.
Getting into student mode. I find I’m most productive and least stressed when I’m in what I call “student mode.” When I’m in student mode, my attitude is “I’m here to learn, it’s okay to be wrong.” In student mode you can meta think – what’s the best way to solve this problem?
Student mode entails asking ourselves things we might have asked when we were in school but don’t ask ourselves in real life. In school, you don’t really think so much about the fact you have a problem. Instead, you’re thinking, “How do I solve this in the best way?” – or “How do I handle this to get the best grade?” Mentally, student mode has been a huge win for me. I tell myself, “Don’t forget you’re a student of entrepreneurship. This is your life in the classroom. Let’s think through the current challenge and potential solution options and then work through it”. Student mode mentally/emotionally removes me from the situation. It’s like I’m someone else looking at my life.
I feel like I’m pretty chill most of the time. I see flying off the handle as a sign of weakness; a character flaw. If you can’t control yourself, you need to go back to square one. Do not pass Go; do not collect $200. We all need ways that work for us to relieve stress so we can stay calm under pressure. It’s just (an important) part of life.
Easily, one of the most fun parts of my job is management by walking around (MBWA). It’s not just fun, but its also quite effective as a tool in leading organizations. My experience, however, is that its an underutilized tactic. And for those of us who do it, its one of the easiest things to ‘bump off the schedule’ for something seemingly more important.
“Management by Wandering Around” is a term that was made popular by Tom Peters and Robert Waterman, the authors of the 80′s bestseller In Search of Excellence. The concept was originally developed and touted by Hewlett-Packard executives in the 1970s. Since HP and In Search of Excellence made the term popular, its been a reoccurring topic in business books over the years.
Simply put, Management by Walking Around (I prefer the ‘walking’ to ‘wandering’), is an unstructured approach to interacting with employees in your organization. The idea is to ‘get out of the office’ and interact with real people doing real work in your organization. Companies that tout MBWA often push managers to spend more time out of their offices than in their offices, if they can swing it. The goal is to use these informal visits to listen to how employees are feeling, understand the challenges they face, gather ideas for improvement, and connect on a personal level.
Let me start by saying that I haven’t done any formal research on the topic. All my experience here is anecdotal, but I feel like it has served me well. The reason MBWA works is pretty simple: the best decisions are not often made in isolation. Its really easy, particularly when (you think) you are a smart executive, to make conclusions and solve all the businesses problems without talking to folks. But the reality is that you get better data, insight, and ideas from talking to people who are actually exposed to the problems you are trying to solve.
Also, as a leader in any organization, its important that you interact with people on a regular basis. If for no other reason, this is valuable because it enables you to keep a thumb on the pulse of the organization. When you are in your office the whole day, you don’t often get a sense for what is really going on. Furthermore, people don’t get to connect with you on a personal level and get to know you. Another important factor in all this is that people vary widely in their comfort level in talking with leaders and gregariousness. So, if you are not out there actively seeking out conversations, there is some distinct population of your team that you just aren’t going to hear from.
The truth is, I am still working on getting good at this whole MBWA thing. I’ve learned a thing or two so far, but I certainly have a ways to go. Here’s what I’ve got:
I continue to learn more about this tool every day. I’ll continue to employ it and report back with my results. I hope it works for you, too! Please post comments with anything you’ve learned!
Effectively managing conflict in the workplace has been a topic on my mind for some time now. Having a new topic on your mind is kind of like buying a new car; you start to notice it everywhere. Now that I am thinking about effectively managing conflict, I am starting to see conflict or opportunities for healthy conflict everywhere. One of the most challenging things for one to think through as they try to create a healthy conflict culture is figuring out exactly what is worth ‘fighting over’ and what isn’t.
One has to be careful not to let the pendulum swing too far in the other direction, and turn everything into a ‘fighting moment.’ It’s very easy to get ‘caught up’ in disagreements about all sorts of details that aren’t worth the time. That’s not the kind of culture anyone wants to create. Healthy conflict has to be effectively separated from petty conflict.
So far, based on my reading and studying of the subject, there are three tests that a topic can pass to be worth engaging in healthy debate and conflict over:
The second bullet is perhaps the hardest one to figure out. I think that Dr. Saj-nicole Joni describes the concept pretty well in her book titled “The Third Opinion.” She describes three types of thinking:
The key to finding the right problems lays in exponential thinking. The first two types of problems are typically too simple to try and bring multiple perspectives to the table on. Also, there is likely to be one right answer that is simply a matter of knowledge or expertise.
The key takeaway for me here is that conflict takes energy and time. For most of us (especially me) it has a sapping effect. I don’t necessarily love conflict, and I suspect that I am not alone. So it’s important to find the right balance of it, and it’s even more important to do it for the right reasons. While no acid test is perfect, the one above has been pretty effective for me so far!
The term ‘conflict’ typically carries with it negative connotation. But it’s something I have been thinking a lot about lately, and I feel like conflict is not necessarily a bad thing. As our company continues to grow at a very rapid trajectory, there are lots of new faces, roles, and even whole organizations. Managing the responsibilities and roles during the growth has been a challenge, to say the least. The reality, however, is that friction in this kind of situation is unavoidable. I’d even go as far as to take that a step further. I am not sure I want to avoid it. I think that open and healthy dialogue about disagreements can be a good thing.
I was happy to see that my thoughts on the topic of conflict were seconded by many authorities in the management arena. There is a fascinating book titled: “The Right Fight”, which espouses the belief that conflict is a welcome element in any organization. The authors have coined the term “productive dissent”, which is essentially harnessing the power of well organized and respectful debate.
For most people, including myself, the last thing we desire is an argument. However, when working in a collaborative environment, some level of conflict is unavoidable. The key is using disagreements as a catalyst to improve our overall work environment and customer experience. This may sound far fetched, but I have seen where productive dissent has been a powerful tool.
If you think about it, to stay competitive in the marketplace, a company must continuously evolve. Stagnation literally equals death, no matter how good your initial product or service is. Technology, the competition, and customer expectations will demand constant improvement. Embracing the principles of the “right fight” is a great way to stay on the cutting edge.
So, what does that really mean?
I am very fortunate to be a part of an organization filled with extremely intelligent and motivated individuals with diverse backgrounds of experience. However, inherent in this is the fact that, at times, we may disagree with each other about the specs of a project, the ideal organizational structure, or the best process. Instead of agreeing to disagree, we should instead aim to get all thoughts and perspectives placed on the table for consideration. When you approach issues in this way, wonderful things can happen.
It’s often not until you really get into someone else’s thought process by allowing full and honest discourse, that you uncover the gems of innovation and creativity. In this Euntreprenuer.com article titled “Conflict in the Workplace”, the columnist stresses the point that for a leader, “How employees deal with conflict is usually a direct reflection of the tone or atmosphere you set for your company. If you shy away from conflict, so will your employees. If you confront others in a negative manner, so will they. If you embrace conflict as a potentially positive engagement between individuals or groups, they will, too.”
This statement made me reflect on my own management style and manner of handling conflict. While I always make a conscious effort to be inclusive of the viewpoints of others, I am sure that I can do more to foster a culture that appreciates and grows from any disagreements we may have. My ultimate goal is progress and I fully embrace it — no matter what the source.
Jeff Weiss, a prolific author on collaboration in the workplace is quoted in the Harvard Business Review as saying “Assume you have something to learn, assume there is a more creative solution than you’ve thought of.” This wisdom, along with striving to identify common ground and branching out, are keys for the successful resolution to workplace conflict. This is advice that can be used in our interactions within the company structure, as well as in our everyday lives.
To me, good teams are built on healthy relationships. Healthy relationships don’t mean that avoidance of conflict. In fact, they mean quite the opposite. Healthy relationships are about trusting someone enough to share your honest feelings with them, even when that means you disagree. In the end, you and the other person are better for it. And perhaps most importantly, the whole company is better for it.
The next time you encounter a conflict, employ the principles of the “right fight” and observe the outcome. I would love to know how it works out for you. (I’ll certainly let you all know how it works out for me…)
Recently, I wrote about how advantageous I feel naps can be, and how thrilled I am that there is some evidence to support what I’ve suspected for some time now. Unfortunately, whether the day is just that hectic, or I’m simply not in the mood, there will be times when taking a nap is just not an option. I also know people who are just ‘not good at sleeping during the day.’
Meditation provides a great alternative when it comes to relaxing and refocusing the brain. Peter Bregman wrote this great article on meditation and how it can be especially beneficial from a professional standpoint. The brain can be a powerful thing, but it will only reach full potential when we use it to think proactively. The problem here is that most of us are caught up in thinking reactively. We are caught up in current events, fires, and other issues that spring up throughout the day.
Thinking reactively slows our pace because more time is spent reflecting on past events and current details. Focusing on these lowers our impact because they aren’t necessarily the most important things we can be thinking about. Worse yet, by filling our heads with so much noise, we reduce the quality of the decisions we make. In a sense, this collection of thoughts can be thought of as our ‘cache.’ The more full the cache is, the more time it takes to process information, and the less ideal the outcome will be.
I’m sure everyone can agree that making critical decisions while under stress is a bad idea. Even if time is not a factor, solid decisions will not be made effectively when the brain is full of noise. The cache needs to be cleared routinely in order to achieve clarity of thought. Meditation does precisely this, by focusing and realigning the mind to a steady and relaxing pulse.
There are many techniques when it comes to meditation, but the common element involves clearing your mind of thought. Most folks say that the best way to do this is to focus on your breathing. By doing so, you accomplish several things. Here are just a few:
After a few moments, the cache will be cleared and the brain will be more relaxed.
I highly recommend taking a few minutes to read Peter’s article so that you see how productive doing nothing can be. I still think taking naps is the best way to do nothing, but meditation is a close second. For me, the only way to clear my cache is to meditate or nap. I suggest everyone do one of these daily. You will be amazed how much more productive you can be by doing less.
As I have seen our company grow, I have been thinking a lot about the best way to serve its employees. One lesson that I have repeatedly learned is that people are very complex and different. I am continually taught new lessons about how what works for one person does not work for another. Every effort I have made to treat a group of different people the same way has backfired. I am slowly, but surely, beginning to respect the complexity of human beings.
So, as I got to reading about this topic, I realized that a lot of really smart people have thought much more about this than I have. I came across a really interesting book titled “Workforce of One” by Susan Cantrell and David Smith. I am pretty excited because a lot of ideas in it really resonate with me.
What is a Workforce of One about?
The core premise of Workforce of One is that you treat your workforce like your customer. For executives and leaders, your employees really are your customers. And just like we have been doing in e-commerce for years now, the key to success is to segment your customers so that you can provide a personalized experience that strives to give everyone what they really want.
There are six core trends that drive the need for customization for the talent management organization:
Ok, Ok, I get it. How do I customize my People practices?
There are four core ways that an organization can customize its people practices.
The core takeaway for me is that you really have to customize your approach to the dynamics of your workplace. A segmentation scheme that works in one organization may not work in another. Furthermore, you should only start thinking about this kind of personalization when your organization is above a certain size (I’d say it starts getting relevant at about 200). Finally. you have be sure that you are staying within the confines of the law, particularly if you are segmenting your workforce.
Why should I care?
Driving a customized approach to people practices is more critical today than ever. In today’s knowledge work economy, people really are your largest asset. If other companies start to offer these kinds of customized benefits, you are already one step behind. As your organization grows, you will find that a one-size-fits-all strategy simply won’t be good enough. (That’s what I am learning more about every single day.)
I read a great article by Tony Schwartz in the Harvard Business review about why companies should insist on their employees napping in the workplace. Those of you that know me well can imagine my delight!
I have been napping consistently for about 4 years now. I make it a point to trade my lunches for a nap in the middle of the day, and I can’t feel better about it. In fact, it’s gotten so routine that I don’t really even need to look at the clock to know that it’s nap time.
Anyway, the short of the story is that I can’t say enough in the way of good things about it. I feel like I get two days for the price of one. (As someone who starts working at between 4:30am and 6am, I sort of do.) I don’t have any afternoon slumps to deal with. I am able to be high-intensity the whole day. I also feel much better when I get home in the evenings. Instead of just wanting to veg out and do nothing, I at least have the energy to read interesting books and articles.
Anyway, over the years, I have gotten various levels of pushback and scepticism about my napping. I’ve responded with a simple rule: “I don’t pretend to know enough about everyone else to prescribe what they should do to perform their best, but I support their decisions, provided they are within reason.” I believe that we are all adults here (at the workplace), and that we can each figure out what is best for us. I expect the same respect from others in the workplace.
So I never really tried to convince folks that napping is for them too. Mostly because I don’t know if it will work for other folks as well as it does for me. I also don’t want to come across as the crazy ‘nap pusher.’
But upon reading Tony’s article, I have to say that there is some really compelling evidence out there to support napping. The research seems to align with the feelings I have gotten from napping, so it seems that at least some people out there get positive benefits too.
I suggest you read Tony’s article .. I won’t spoil it for you!