Changing the conversation

The call was about the future.  There was now a clear, risk=-free path to getting our product into the market, and the discussion turned to what to do next.  What is the best way to drive commercial growth, product line expansions, clinical adoption, and rising revenues in the first year after introduction?   Would an independent trial or an independent channel yield greater returns: would demonstration of clinical effectiveness suffice, or was economic evidence the key?

We’d had a good walk-through of the issues, weighing evidence, stories of other companies, and enumerating alternatives.

Good, I closed, well, is there anything else?

“You don’t get off that easily.  You’re a great one for letting a conversation go without a conclusion.  Now I’m going to hold you to giving one.”

I was a bit taken aback (not the least because it’s very un-British to be so frank).  Does every business conversation need an agenda, minutes, summary and action points? It reminds me of similar maxims: ‘No action actually happened unless it is documented’ and ‘The right things won’t happen consistently unless there is a procedure and training’, or ‘signatures are only valid when made with a black pen’’.

The truth is, I need to think about a wide-ranging conversation before I am ready to summarize and decide.  I might want to bounce some points off of other people (in fact, I did) or do some reading.  I need a block of quiet time, wind whistling over the car,  without thinking about it, for my intuitive side to agree with my rational one.

I did summarize and give a bias towards an answer, but left the conversation open-ended.

I’ve been getting a number of suggestions about how to conduct better conversations recently.  A favorite was the notion that the order of events in emails should be inverted.

I tend to order correspondence as Hi, ‘hope that things are going well and that your weekend was fun.   I have been going through the proposal and wondered if I could ask a favor before the next meeting….

Simon Sinek holds that this tends to make people cynical about my good wishes if they lead to asking for something.  ‘better to say Hi,  I have been going through the proposal and wondered if I could ask a favor before the next meeting…. ‘hope that things are going well and that your weekend was fun.  best, Dave

I’ve been reversing the order and think that it strengthens my correspondence, a good tip.  (and never, ever say ‘best wishes’ in closing a letter in the UK: its often a backhand way of saying that you don’t wish them well at all).

Another criticized me for holding up decisions until I understand the issue being decided.  Good people, the sort that I bring on board, do understand the facts and know what needs to be done.  They get frustrated if they feel like I’m not respecting and trusting them. 

I get that, it’s not a control and authority ploy. Rather, I feel like I need to understand the actions that I am responsible and accountable for.

So, we have agreed that I will delegate without interfering, but on the agreement that the solution will be patiently explained to me after it is implemented.

Another, finally, says that I am too averse to confrontation, and that this keeps me from dealing effectively with problem people.

That is, indeed, a character flaw.  I am much more likely to avoid an argument and withdraw from passionate advocacy to let tempers cool and facts to become known.

So, I’m drawing bright lines, deadlines and actions with consequences for underperformers that I can feel just about enforcing.  And I am leaning into some arguments, trying to engage better and let a bi of passion show about issues that I care about.

CEOs and social networks

Brendan Eich was forced to step down as CEO of the Mozilla Foundation this week after less than two weeks as CEO.  He’s an exceptional technical talent and visionary, but failed to understand the criticism that his personal donation of $1000 to support California’s Proposition 8 initiative in 2008 would attract.  His tone-deaf defense, that business and personal are distinctly separate domains of his life, failed to sway his customers, investors, or Board. 

These days, much like politicians, CEOs are expected to mirror the soft aspirations of their organizations, purpose, values, tolerance, and character, as well as embody the hard business aspects of vision, honesty, competition, and leadership.

I started experimenting with social media ten years ago.  Beginning with a personal web page and an early Facebook account, I went on to start albums on Flickr, a narrative blog to share my expat experiences, and code to push my Pocket saves to Twitter for friends to read.  I talked to my students about the difference in personal and public presence, static and dynamic content, and ways to align their content with the purposes of each combination.

I had discovered the limits occasionally.  When content spilled into the wrong bucket (a creative writing assignment, memorably), I would hear about the leak from colleagues.  I was surprised at parties when a stranger would greet me with details of my travels or activities.

And so I learned to tweak my privacy settings, cull my user lists, and moderate my content.

Once I started creating a business organization, once I became a CEO, I also found that more people, more distant from knowing me, also began drawing inferences from my social media.   An out-of-date Linkedin profile misled people about my continuing involvement with prior consulting.  The tweeted stream of article links raised doubts about my focus; the blog was too candid about some personal issues.

I have to manage my bank accounts so that personal and business money are kept strictly separate.  Cash only flows between them in particular, proscribed ways: invoices and expenses. 

A similar concept needs to be observed for social media.

Omar Ishrak’s internet presence is an instructive example. The statistic of his life are posted on his Business Week profile, but they are also reflected consistently throughout his social media outlets.   His LinkedIn is professional, a CV (not up-to-date, but professional).  His Twitter stream notes business-related articles and motivates his team: there are no indications of broader or personal interests. 

Everything supports and motivates his corporation and its mission: his online presence is a personal reinforcement of his position representing the corporation.

The contrast between Mr. Eich and Mr. Ishrak is instructive.  A CEO is a public figure representing the company to investors, employees, customers, and communities.  What is said online will be indexed, aggregated, linked, discovered, broadcast, and discussed.  So, even leading a small, young company, keep the management of your personal brand in mind:

• Separate your personal and professional presences as rigorously as you do your personal and professional finances.
• Be a resource and curator for your followers; reinforce the messages that you give to them face-to-face.
• Be honest and interesting, but do not over-share personal details.
• Keep content up to date and factual; monitor comments.
• Manage privacy appropriately, distinguishing content seen by family, friends, colleagues, followers, and the general public.
• Set triggers (Google Alerts) to notify you when content relevant to your sites and name appear.

Power politics

I binged on House of Cards last weekend.  This is the 13-episode Netflix political drama (derived from the BBC series of the same name) about House Majority Whip Francis Underwood’s venal scheming and manipulation as he works his way to power in Washington.  It’s not a very pleasant series: nobody is very nice, everyone uses everyone else, and even the sympathetic characters come off as hopeless.

But it  does get me thinking about the ways in which I try to gain power, or try to tilt those who have power to act to my own advantage..

My relationship with power, as one of my angel investors once told me, is complicated.  On the one hand, I know and can do lots of things, have a good record of accomplishment, and that gives me a foundation of authority.  But, he observed, I also tend to be deferential and hesitant, overly rational and soft-hearted, too easily intimidated and too quick to try to see both sides.

In particular, I tend to avoid conflict, and to either take indirect or extended approaches to resolving it when a quick, face-to-face confrontation is necessary.  I remember someone in college characterizing me as The Instigator: setting up actions but then stepping back to observe the results.

I prefer to think of myself s more of an Influencer.

.

The approach is valid, works for me generally, but I’m currently in situations here it simply won’t work.

One is a negotiation for an asset that likely enhances our product offering.  I’ve established a relationship with the owners, made an assessment, put down an offer,  been  clear about my limits.  However, the other side has been inconsistent in responding, used my offer to elicit interest from other parties, and is overvaluing the item out of sheer naiveté about what I’m able to do with it.

The other is a confrontation in which we are trying to wrest control from one person and vest it in another.  We’ve discussed the need and the alternatives, put a brief, clear proposal out and have set limits around the process.  While initially agreeing, the other side then had second thoughts and withdrew, angry.  To take the emotion out of it,we sides lawyered up, and threats and demands are now ongoing.

Without a middle ground, both have moved me towards unfamiliar and uncomfortable ground where resolution depends on effective exercise of power.

Since my generation uses movies as a touchstone, this brings me around to thinking about House of Cards (Most people see fear as a weakness. It can be. Sometimes for my job, I have to put fear into people), Frost/Nixon (I shall come at you with everything I got, because the limelight can only shine on one of us. And for the other, it'll be the wilderness, with nothing and no one for company but those voices ringing in our head) or even Road House: (Never underestimate your opponent;  Take it outside unless an immediate response is absolutely necessary; Always be nice, until it’s time to not be nice.)

‘Which really serves to convince me that this is not my style.  Instead, I work from three principles:

• Be very clear and resolute about  my position: know where the line is that I won’t back across.
• Believe and be prepared to walk away when and if that line is crossed, and
• Bring along experienced, objective, trustworthy help, and take their advice.

By doing what’s uncomfortable and trying new strategies when  traditional strategies fail, I’m hopeful that I’ll be able to resolve the problems in front of me (or learn to stay away from these tactics in the future). 

It’s all adapting, learning, and rehearsal:  Seth Godin wrote this week about how to prioritize time to drive business and personal improvement.  Eliminate the things that don't matter, that you're never going to get better at or that you're already good at, and focus on:

• The important
• The things that you currently don't do very well
• The things that you're capable of doing a lot better if you invested effort and time

It’s all ‘way better than turning into soul-less Francis Underwood.

Bases loaded, no outs.

The two things I was never good at in school were Chemistry and Languages  (okay, and Handwriting in elementary school). ‘Ironic that these hold center stage now.

But I do know baseball.

Our chemists tracked the ‘covering the coating’ problem down to an unexpected diffusion of silicone from the catheters.  This suggested a half dozen approaches to removing the material prior to applying the coating, and they ran everything in parallel. 

But, after two weeks, nothing seemed to work.

Their disappointment at the review call was really palpable: they sounded tired and discouraged, and didn’t immediately have an answer for what they might do next.  That sent shivers through the rest of the organization: I worry about a vicious spiral setting in where lack of confidence is more damaging than lack of progress.

October 11, 1995

The Seattle Mariners were in the American League playoffs against the Cleveland Indians in the Kingdome.  22-year old Rookie Bob Walcott started for the Mariners, who were desperately short of pitchers.  He immediately got into trouble, walking the first three batters and loading the bases.

Manager Lou Piniella headed to the mound after Wolcott threw his sixth successive ball.  They had a conversation, Piniella went back to the dugout, and Wolcott caught fire, retiring the side and eventually allowing only two runs in seven innings.  The Mariners went on to win 3-2.

I was there: I really wanted to know what  Piniella said that turned things around.

"I talked to him about hunting in Oregon," the manager related afterward. "I said, 'You can enjoy your winter in Medford'; he's from Medford. I said, 'Look, if it's 11-0, who cares. Just give us five or six innings. Have some fun and relax out here.' "

We had a good lunch, we talked about life, I let them tell their story.  We speculated more widely about what might be happening, and we brainstormed a few solutions.  My chemistry is at a metaphorical level, I’m afraid, but the purpose was to stimulate confidence and new approaches, not to suggest an answer.

At the end of the day it seemed to have restored their optimism an ideas: we all knew what we were doing next, how we were helping, and that we were backing their team.  I headed south with cautious optimism myself: hopefully to convey to the wider organization.

Okay, there was a jerk on the Doncaster – Stevenage train who had spread out across my reserved seat and table, who loudly declared that reserved seats were rubbish, and who forced me to squeeze in elsewhere in the train.  It was really irritating.

But I’m just not going to let the jerks ruin my day.

Especially when there’s a playoff at stake.

Soft power and the Low Countries

Growing up, I wasn’t exactly the biggest, strongest, richest, charismatic, or cutest kid in the group.  (I note, of course, that it’s all different these days…).

In the absence of “strong power”, muscle or money, I found my level through alternative means.  I was joining lesser recognized activities (computer assistant, flute section, science club, props master for the school plays, recognizing what I was good at (math, science, boy scouts) and building a circle of like-minded friends (many are still on Facebook).

Diplomatically, this is essence of Soft Power, a 90’s concept of building global political influence through attractive culture,  progressive policies, and tolerant political values.  For many years, the Netherlands was a “Soft Power” leader among nations; cohesive, confident, socially inventive.  However, conservative politics, immigration issues, and global recession have all eroded the image: Finnish education reforms or German mittlestand are more likely touchstones today.

I was thumbing a copy of Lewis’ When Cultures Collide, an excellent guide to working across cultures, and the specific section on Dutch business norms.  Here’s his outline of how decisions get made in the Netherlands:

Delightfully true, but not an attractive beacon for others.

This month, Tyler Brule’s Monocle Magazine released it’s third annual “Global Soft Power” survey, ranking nations according to their influence on world affairs.  The Netherlands have fallen from 10 to number 15, between Norway and Spain, based on a combination of  politics, diplomatic infrastructure, cultural output, capacity for education and appeal to business.  Britain was number one this year; two winners were from Asia and Turkey entered the list for the first time.

The Dutch need to be selling their contemporary culture and get over their contemplative decade, was the short verdict, noting that there is still an intense internal debate about what it means to be both modern and Dutch.

it’s interesting to think about: is Soft Power important for the Netherlands, should they care about a decline in influence, and what can they do about it?  I think they have to care: the Dutch will never be a great military power, and becoming a financial hub would require destructive changes to their culture.  The remaining option is to lead by example and influence rather than by force (co-opt instead of coerce, in the words of political scientist Joseph Nye).

I suspect that building a progressive, inspiring, attractive face to the outside world starts with doing more good things for your own people as well.

Medica 2012

Each year, the medical deice industry comes together in Dusseldorf at Medica.  It’s a gigantic trade show, the biggest I know, where device manufacturers from around the world meet distributors, hospitals, and agency representatives. It’s raw capitalism: no science, no instructional seminars, no market research. Just 17+ gigantic exhibit halls filled with backslapping deal-making.

And good German bratwurst.

For us, this as a chance to talk with companies sourcing products that we could improve; companies that might distribute the result.  There were luncheon discussions of business models and partnerships, afternoons exploring new monitors and interfaces.  The country-sponsored booths were delightful: it’s great to see smaller companies being brought forward with their new ideas.  There was the occasional delight of finding  a vendor with a really good insight. There was also the disappointment of one who asked for a meeting and then drifted, or of who thought they had a unique idea that was, in fact, replicated a hundred times over among the endless aisles.

It’s a vibrant and delightful industry: this show is all about the energy and creativity that it’s participants bring  to patient care.

Even if it gets a bit goofy sometimes.

 

 

 

Collaborating across cultures

The Working Knowledge newsletter sent me an essay on Collaborating Across Cultures last week that I thought was really interesting.  It summarizes research by Roy Y.J. Chua, an organization researcher investigating how Western businesses build working relationships with China.

I’ve always found expatriate life to be professionally stimulating as well as personally enriching.  Interactions with Dutch, British, an Japanese scientists often surface new ideas, technologies, and perspectives.  These help me to ask broader questions, to recognize the limits of my own assumptions, and to adopt alternative solutions that improve the quality of my work.

This is also the starting point for Dr. Chua’s  research:

Innovative products and deals are developed when (cross-cultural) conversations bring together disparate ideas that have never previously been connected…resulting in novel combinations of ideas. 

He also notes that cross—cultural interactions foster reflective thinking about cultural assumptions and heightened awareness of novel aspects of foreign thought and environments, all of which can heighten creativity.

But the benefit is lost if the relationship degrades into miscommunication and misunderstanding, if people are unwilling to offer their ideas for fear of having them stolen or ridiculed.  In short, they have to trust one another for collaboration to work.

So if mutual trust is the key, then how do you build it between dissimilar people?

The study shows that trust comes more easily between individuals who share two qualities.  They can can each perceive and understand the other’s different social contexts, and they are able to select and adapt their speech, actions, and behaviors in response.

He gives this the unwieldy designation ‘Cultural Metacognition’, but it’s easy to see what it means in practice. 

When posed with a problem, someone who scores high in these qualities is adept at working out differences in how it’s is represented by two different cultures.  They can then use that insight to tailor their approach, building respect and rapport that facilitates finding a solution.

Building trust is thus important, but all trust is not created equal.  Cognition-based trust, respect for each other’s competence and reliability, is not the most important.  Rather, Affect-based trust, which captures reciprocal emotions, matters.  How do you feel about them; how much concern do you think that they have for you?  Do you feel like you are both on the same wavelength, that you share personal interests?  Do you have one another’s best interests at heart?

Researchers put this to test with a  simple experiment to see how well teams, each consisting of a cross-cultural pair, performed on a collaborative task.  Half of the teams were allowed 10 minutes to talk and get to know one another before they were presented with the task while the other half weren't.   The team given the personal time, that scored higher on measures of Affective trust, did better.  But the researchers also found that even if only one member of the team scored high in cultural metacognition, able to understand and adapt to the other, then creativity was also enhanced.

Their conclusions really drive home one point that I’ve always believed: that making time for small talk before getting down to business is vital for successful work.  But it also suggests that you have to enter the conversation with an open mind, listening and learning, if the conversation is to create lasting benefit.

The full article is available on Dr. Chua’s website or Chua, R. Y. J., et al. Collaborating across cultures: Cultural metacognition and affect-based trust in creative collaboration.
Organizational Behavior and Human Decision Processes (2012).

Photo credit to Christopher Anderson/Magnum Photos/New York Magazine

A little wisdom and its consequences

I used to have a hierarchy of definitions mounted on my cubicle wall giving the definitions of data, knowledge, understanding, and wisdom.  Our systems captured data, but our challenge was to interpret it, place it into context, and to give it insightful and actionable meaning.  Wisdom (poetically, de wijsheid in Dutch, where it’s: a state of being) is the ability to bring experience, knowledge and judgment together to act correctly and effectively.

So I read with interest the article Older and Wiser in a recent Economist, examining the question of whether Age brings Wisdom.  Their conclusion, based on a study at the University of Waterloo, was that Americans get wiser as they age, while while Japanese scores were more age-independent.

Almost more interesting was the psychological definition of “wise reasoning”:

1. Willingness to seek opportunities to resolve conflict,
2. Recognition of the limit of personal knowledge,
3. Willingness to search for compromise,
4. Awareness that more than one perspective on a problem can exist, and
5. Appreciation of the fact that things may get worse before they get better.

I’m surprised that there is a definition, and pretty happy with the qualities that the boffins are proposing (“Being able to interpret  events in their proper context” would be a good addition, along with “Understanding the motivation behind people’s actions”). Passions and emotions are (purposefully) excluded.  Reflecting to my own life, I like to think that these maxims are foundational principals for interacting with the world and resolving interprersonal conflicts.

It’s been put to the test this past week.

In one instance, a stock transaction at one of my companies has become hopelessly entangled in the individual fears and greed of the participants.  This had led to a widening ripple of frustration and concern as more and more spectators get sucked into the process.

In the other, a revision of the governing agreement between founding members of another business has resulted in a change in wording that partners see as threatening and the authors believe is innocuous.  The lawyers are now involved in spinning the language.

In both cases, I’ve approached the negotiations with as much wise reasoning as I can muster.  In particular, I have tried to resolve rather than highlight conflict (usually though clarifying points of agreement and exposing the underlying issues that remain, always with recourse to facts) and appreciate the kernel of truth in both sides of the argument.

I expect acknowledgement of common ground and constructive focus on bridging gaps.

I get emotional and extreme emails: bad behavior.  What’s going wrong?

I am starting to believe that a mediator acting from “wise reasoning” paradoxically frees people to act on their worst impulses.  In part it may be because it allows them to vent passions without consequence; in part it may be to pull the compromise point in their direction.

I have met fire with ice so far, but may change to an uncompromising stand (eg: stopping the process and letting consequences fester until people come to their senses) or setting up a gladiatorial arena (eg:  let the two most strongest opponents duel it out between them).

It’s a bit discouraging, and probably reflects why the world is ruled by politicians rather than philosopher-kings.  People can trench into achieving particular goals with strong convictions, com what may.  The resulting process has little to do with wisdom, so may not be amenable to solution as though everyone is a rational actor.

Sometimes, Harvard Law holds: Under the most carefully controlled conditions, keeping all variables within specifications, the organism will do as it damn well pleases. 

(Webb’s Corollary, If the organism can't do as it well pleases, it will expend its energy 'stuffing up' what the controlling agent wants.)

And that remains wijze uitspraak, a piece of wisdom.

Storytelling

People put meaning into narrative by telling stories.  Personality, expectation, causes, morals: it’s what makes history and drama compelling and instructive. When people give advice to friends, or present their opinions in business meetings, they tell stories.

And the best story usually decides.

I don’t know whether long-form stories are in vogue anymore: we used to mine books, movies, plays for their connections to larger personal and philosophic dilemmas.  Videos, tweets, TED and stacks ‘o stuff don’t give the same insights.  I watched The Descendants last night, four tangled dilemmas, developing and crossing one another.  George Clooney tried to stay sane through it all.  His character endures, but doesn’t change.  And he tells himself stories, looks for them from others, rationalize, compare, decide.

In general, I know what I’m doing.  But it’s been coming thick and fast lately and I needed to step out and get some perspective.  Management books and pundits are pretty superficial, a reassuring pat on the head. I needed to hear some stories.  I took a few hours to sit down for a quiet talk with a couple of peers, also running startups, and a few people whose experience I value.  They were fun conversations: everyone had good history and anecdotes, motivations and reflections to share.  There was wisdom on working with governance and suppliers, why to establish offices and how to phrase websites, approaches to angels and exits that were variously successful of discouraging.

There’s really nothing new, nor particularly deep in running a project or a company.  A lot of it, like the books say, is vision and commitment to core principles.  But learning strictly through errors of execution squanders scarce time and resources and erodes confidence.  That’s where I’m finding case examples more valuable than theory.

In physics we practice with problem sets; in art we perform critiques.  In business school we role play.  In life, we share stories.

It must be 2012 when…Thor arrives

Another busy week – patent filings underway, IRB submissions going in, pitch-training ahead of investor evenings. 

And on those occasions that I look to see what’s cooking on my Twitter-feed from Dutch Daily News, it’s looking bad:

Over 9.5 thousand Dutch bankruptcy filings in 2011 dutchdailynews.com/?p=9744

Ready, set, hike in Dutch property taxes dutchdailynews.com/?p=9693

The Netherlands lost 12 thousand millionaires in 2011 dutchdailynews.com/?p=9690

Dutch household wealth down 12% in 1 year dutchdailynews.com/?p=9688

And the Netherlands is one of the bright spots in Europe just now. 

A colleague of mine who specializes in creating computer models of complex systems released a new analysis of the world economy this week. He forecasts that the EU will break up in Q3 2013, while the US economy, “its structure weak and unable to absorb any increase in uncertainty or inefficiency”, will hold on only until 2018.

Similarly this week, a writer for the Times Higher Education magazine echoed the concern, suggesting that western economies are  facing a fundamental realignment:

All mighty historical upheavals are crises of belief and ideas. The present splitting open of neoliberal capitalism is no exception. What happens when an economic system and its political order reach their terminus is that governments will try anything, at whatever human cost, to retain the old system, fighting to the end and at other people's expense to retrieve a familiar world.

I’m afraid that I’m still in the optimist’s camp, though.

I see growing technology and knowledge as the fuel for vigorous innovation, enabling products and enterprises to emerge from vision, hard work, and execution, There are scores of talented people who can be fit together to staff projects; opportunities for any entrepreneur to win big through through insight, luck, and persistence.

Even in 2012.

I attended a talk given by Björgólfur Thor Björgólfsson at the MIT Enterprise Forum in London this week.  Thor, a billionaire investor who was leading two of Iceland’s leading banks during the run-up to their 2008 collapse, spoke on Entrepreneurship in Challenging Times, and he was similarly optimistic.  You spot opportunities, take risks, build companies, exit, move on.  Sometimes you lose, but then you dust off and, again, push on to the next opportunity.  Overall, listen to your intuition and not to believe your own hype.

Good, but not enough, I was thinking between the lines of his talk.

He assumed that success in one area (his self-professed love of building factories) translated directly to another (banking).  But skills don’t leverage laterally, across domains, only radially within them.  In his case, both charismatic and successful, wealth brought hubris.  He did not have, and still does not have, and sense of his limits.

His immense wealth enabled him to gain immediate control of companies without any understanding of their business.  “Banks made money; banks were safe.  How could I go wrong?”  He admitted to feeling like it was all moving too fast, but “the smart people seemed to know what they were doing.”  He forgot that these are also people who want to please him, and perhaps catch crumbs from his table.

We’re in the middle of fundraising for CamStent now, and a big part of the process is engagement with investors.  They are rightly critical, challenging our assumptions, analyzing risks, and finding flaws in people and projections.  The tempering has made our processes stronger, and it’s a step that I think Thor, self-financed, never had to take.

What if large acquisitions could be vetted just like large mergers already are.  Maybe there should be oversight able to ask the basics: Can the buyer run the company competently; Do their plans make sense; Are there risks that extend beyond the company; Will their actions threaten customers or employees.

Perhaps buyers should be allowed only provisional control until they demonstrate their abilities; maybe they need to carry insurance or hold assets against unanticipated costs imposed on customers and employees.

‘Back to creating pitch slides…

Trolling through Medica

When hospitals who need to buy things and companies who wish to sell them meet, the result is Medica, a yearly trade show held at the Dusseldorf fairgrounds.  I’d never attended before, there’s no scientific program and physicians generally don’t attend, so it really wasn’t my audience.  This year, though, I was shopping for service providers and exit partners, design ideas and competitive pricing.

And everyone was asking if we could meet at Medica.

The show is absolutely vast: 17 gigantic buildings, each holding all of the companies serving a particular specialty.  Genomics, for example, were in Building 1; electromedical in 9-11; plastics in 5, physiotherapy in 4.  It can take an hour to survey one building, methodically walking each aisle and scanning every booth.  Fortunately, it runs for four days, 8 1/2 hours per day.

 

The exhibits range from fascinating to bizarre: in a venue that big, companies reach to get noticed.  Usually it’s a matter of putting souvenir pens and young greeters out front, cookies and coffee farther back into the booth where the salesmen lurk.  Other times it’s a matter of mounting models in the scanners or sweating on the treadmills.  The biggest crowds seemed to gather where samples of handcreams were being distributed.

Sometimes the promotions work, sometimes not. 

 

It was a good show, though – despite being refused entry to the US Chamber of Commerce pavilion (for lack of an appointment!?), I met a lot of people and did a lot of business in a very short time.

My brief life as a consigliere

The assignment was simple – to convey an “offer they couldn’t refuse” and secure a cash for  shares ‘win-win’ exchange.  But I couldn’t close it.  Robert Duvall might have – I’ll study his moves all weekend to understand where I went wrong.

The phones started ringing before 9: a client struggling with a ‘pay or vacate’ ultimatum from their landlord.  This isn’t a situation that I have resources to solve (nor was that my role), but the folks I work with were willing to help.  Initially we talked about covering the rent with a loan, but shifted to a discount share offer to keep the balance sheet clean.  Terms were set, subscribers lined up, we were good to go.

I went in and laid out the terms, a good deal under the circumstances: cash immediately in exchange for 0.5% of the share offering at 50% discount.  I’ve taken worse offers to secure services or supporters that were critical to the business, and know that sometimes you have to be practical in giving some to get some.

But they refused.  No counter-proposal; no discussion.

What went wrong?

I’ve learned that “Time kills deals” – the longer you talk about terms, the more doubts can overwhelm the early enthusiasm. The close has to happen in days.

I’ve learned to “Stay in the room” – given the chance, people will shop around in search of something better.  Car dealers tell you that their offer ends once you leave the showroom, knowing that you’ll go next door to ask if they’ll beat the offer.

I’ve learned to “Guard the exits” – currency is hope: if there’s one offer, there are probably more.   Heartless as it sounds, the alternatives have to be methodically extinguished ahead of time.

But I haven’t learned enough.

It all sounds heartless, I know, but three times, now, I’ve negotiated good, equitable deals that fell through. In each case, our work was leveraged to stimulate a better offer, rather than refused outright.

The job of a  consigliere is to make an offer that sticks, to close the deal.

Maybe its time to bring out the horse’s head.

Layers of Leadership

“Dave, a Board meeting is not a milestone review,” the Chairman gently chided. “They are there to advise, not to judge.”

We walked through the consequences together: a higher-level agenda, more focus on financial performance, less detail on development, questions phrased as propositions, a single-page operating summary. 

Yet another way of doing business.

The seamless hierarchy of business organizations suggests that every manager understands the detail of what people beneath them are doing.  It implies that managers at all levels differ in the quality, but not the type, of their reviews and presentations.

Employees earn promotions based on performance: applying knowledge, leveraging contacts, and gaining experience that qualifies them for the next level of leadership.  A research manager will have successfully innovated; a research director will have completed several projects.  At each level, new skills (budgeting, market analysis) and processes (financial reporting, disciplinary rules) are added.

And so, there was a straight progression from scientist to director.  Department meetings were large versions of project meetings.  And everyone there shared a vocabulary and design model; everyone understood the company’s expectations and the customer’s needs.

We told similar stories. We lived by stage-gate reviews.

And it defined how I did my job: I knew the format of the weekly milestones list and how to frame a goal.  There was a particular report outline and presentation template that spoke to my engineering audience, much like scientific papers and conferences fit diverse information to an expected style.

This changed a lot when I became a general manager at Vitatron.  The people around the table came from different departments, with different processes and vocabularies.  I viewed the group as a confederation of specialists: I was the science guy who could help others understand what was going on in the literature and the design teams.

But what they wanted was confidence that someone understood and had control of the science. I learned to frame the details rather than to present them, touching on aspects familiar to the diverse perspectives around the table, and addressing the risks that they worried about.

How did my activities fit into their processes, what would I need from them?  How did it fit the portfolio budget, how did it support the strategy, , when would I be in the market?

It’s qualitatively different from engineering leadership meetings, where Matlab graphs were the norm.

And, again, at the Board level.  They approve goals, pose questions, leave instructions for the next meeting.   My response would be to give a detailed rundown on what had been accomplished, performance against expectation. A milestone review.

But, again, there is a qualitative difference.  These folks have a very distant and abstract view of the business, not an operating perspective.  They want to know that the leadership has it’s priorities straight, that I have a plan, that I am on top of problems and events, and that I am making money.  Our monthly agenda runs through those aspects, more reassurance than judgment.

Detail only matters when matters become public or affect investors.  The press release and fundraising were disproportionately discussed; operational status matters much less than financial ones. 

There’s a temptation to say “Look, this is important; we worked hard on his, look what we did”, naked approval-seeking <laugh>.

But I’m learning to create and stick to brief updates and Q&A.  They willingly engage if I have a question, but I’m also learning what questions they can be most helpful with.

It’s not that milestone reviews aren’t important, or that experience doesn’t matter.  It’s that audiences are more diverse at the top of the hierarchy than lower down.  So Board presentations are not just more polished department presentations.  And there are still meetings that will want technical detail (the science review) and operational status (my CFO and I).

The trick is not in being able to hold more polished conversations, but in being adept at leading more types of conversations.

Innovating in a culture of consensus

  “Consensus culture and team work water down innovative ideas to a level of being just incrementally relevant.”

This was the core of an email I received yesterday from a creative friend working on new research.  It’s a provocative charge – I shared  it with colleagues over a partners meeting today and it generated a lot of discussion.

On one side are those who see consensus as inertia.  In an environment that minimizes business risks, consensus among many specialist gatekeepers has to be achieved before any new product can be branded and shipped to customers.  To minimize their  personal risks, each avoids sins of commission in favor of sins of omission: a decision that goes bad is punished more severely than the negligence of not making a decision.  Together, a consensus culture who’s objective is to minimize risk can result in a conservative culture that resists product or process innovation.

Even though individual department heads may encourage innovation, they can only do so within their own pond.  Once they reach out into the organization, the same politics hold.  This is true of efforts to translate new ideas from research to development, to cross-fertilize ideas among operating divisions, or to replace an established product with a next-generation version. 

Consensus cultures resist change.

But others held that the process of reaching consensus is what drives innovation: a generative discussion leads to truly breakthrough ideas.

Take the famously consensual Dutch poldermodel?  The process seems to work differently here: there’s an argumentative engagement that drives examination of alternatives until a ‘best’ opinion emerges.  Once that is agreed, then they execute aggressively.

I’ve had the same experience in startups, where friends debate the merits of different approaches, arguing the alternatives and prototyping competitive versions (a “demo or die” process).  We’re in a vigorous exchange now about whether the product should be a “one-box” or a “two box” solution, then whether to make the connections wired or wireless.  The decisions demand arriving at a consensus decision, not a compromise solution: we won’t make two boxes that can be joined as one.  We must do one or the other (or neither).

Consensus cultures promote innovation.

So, the difference between a consensus culture that can innovate and one that can’t lies, paradoxically, in the willingness of colleagues to engage in open and adversarial debate of alternatives.

This still differs from a straight adversarial approach in that there is mutual respect for differing points of view, a openness to evaluate evidence in spite of bias, and a willingness to put practical gains ahead of ideological positions.  Without this, there’s only the ‘winner-take-all’ result that has afflicted the decision-making process in governments.  Straight power politics, like conservative consensus, is no basis for innovation.

A day out with the Board

My UK company, CamStent, is moving through three major milestones this month: the feasibility results that determine our technology viability, the formal close of our fundraising round, and the change in governance.  The latter one is the focus this week: we are adopting new Articles, appointing new Board members, and moving forward as an investor-run company rather than a founder-run company.

It’s a big, and welcome change.  Granted, I’ve loved establishing the company, acquiring technology, identifying the market, and recruiting staff and service providers.  But the questions are covering more areas that are outside of my experience at the same time that the answers become more consequential, leading to commitment of resources that can’t be undone.

A typical problem is the “deep vs. broad’ choice.  We have two possible customers for our anti-microbial products; medical device vendors like Bard or Medtronic, and medical material vendors like Dow or BASF.  If we want to appeal to the first , we need a focused portfolio of results that will lead to regulatory approval for an investigational clinical trial. In the second case, we need to complete a spectrum of physical tests and demonstrate resistance to a range of organisms.

This is a situation that requires” time by the river”: my thesis advisor said that there were problems that couldn’t be solved by searching the Internet.  They required a block of uncommitted time for *thinking*.  Bill Gates famously takes a yearly sabbatical just to read and think; astronomer Kip Thorne keeps a cabin in Oregon for solitude and reflection.

However, that can also become an exercise in naval gazing, yielding only solipsistic homilies.  To be effective, you need to add a social component, discussing ideas with experienced peers.

The Dutch were really good at this: our management team would take a day off-site every month, sometimes to discuss strategy, sometimes to “fix the plumbing”: always to communicate, clarify, share, and decide.  And to have a great lunch.

And so it was with my Board (mijn raad van bestuur).  We spent a couple of hours going through the chemistry and microbiology results, discussing what is known for sure and only assumed, speculating as to how this might affect market opportunities.  They challenged my thinking about where the line was between being a device or a drug (or both: a Combination Device).  I think I’m on the right side of being a device (with a simplified regulatory pathway), but it was an insightful discussion.

I almost succumbed to my old vice of arguing with a recommendation when I needed to take a note and investigate it: it’s a  fine line between clarifying and arguing an issue.  I need to remember to listen and to take time to react.  And I need to follow-up on promises to get information or to make a contact.

But overall I found the experience very worthwhile and enlightening.  We have these scheduled monthly and I’m looking forward to seeing how the dynamic and teamwork grows.

Leadership is ‘deciding’

Leadership, like innovation, is much discussed but seldom understood.  What makes a leader?  Ideas?  Charisma?  The willingness to lead?  The passion to believe?  Derek Sivers, in a wonderful TED talk, says simply that Leaders have Followers (click the picture to watch his examples).

I think that Leaders Decide.

Every day, decisions must be made about how we run our business.  Who will we trust to take on tasks; what conditions govern investment?  What is fair compensation for a valuable contributor; do lab results  justify further development? 

Or, today, Is this single sentence, buried in a contract, important or trivial? It has the potential for mischief, but the investor says he’d never use it that way. Still, he wants the sentence in or he won’t invest.

Accept the condition, or forfeit the money?

I’m realizing how important the quality of decisions, as well as the process that I use to make them and the style that surround the process, defines my leadership in many ways.  It’s not just about making successful choices, it also determines whether people talk with you, trust you, follow you, believe in you.

I met with a business coach yesterday (bewilderingly, one supplied by the UK government to encourage job creation in micro-businesses).  We had a good talk around one question: What are you good at; what can you be better at?

I’m good with ‘hard’ skills: plans, numbers, analysis, budgets.  Existential things that are what they are, can be manipulated as fixed components, and that can be connected to reveal truths and accomplish goals.

I’m worse with ‘soft’ skills: negotiating, persuading, presenting, arbitrating. These are subjective things that are what they are perceived to be, and that must be formed and fit.  It takes skill and (for me) focused effort to be an open listener, to patiently understand reasons beneath the positions, to create common ground, to build trust despite competing agendas.

Effective decision-making, and good leadership requires both skills: the style and the substance of the process matter.  When I look at my own methods, I find that I move through five steps:

• Understand:  Take time to understand the question  and the points of view. (Be aware of but don’t give into intuition.)
• Collaborate:  Talk to people with vested interest and also to outsiders with relevant experience.  (Be aware of but don’t give into personal bias.)
• Judge:  Take a “time-out” to reflect and choose.  (Take ten minutes of peace: listen to your gut.)
• Communicate:  State the decision, left vs. right, the reasons, and make peace with the people I disagree with. (Be clear and crisp.)
• Commit: Move on, and don’t revisit the choice unless the evidence mounts against it. (Lets all act like adults.)

Confident decision-making is not confidence that I have chosen the right path all the way to the endpoint.  It’s confidence that I have chosen the best step towards that goal from my current position; confidence that, once I’m there, I can deal successfully with whatever I find there.

So, if I decide not to take an investment because the conditions are onerous, I am confident both in that choice and that I can find alternatives.  I may not know who, yet, but I know I can.

In 2006, Pres W famously called himself “The Decider”, affirming his leadership through his personal responsibility and accountability for his administration’s actions.   But the quality of his decisions were poor, people questioned his biased rationale, and his stubborn policies.  Ultimately, many refused to follow his leadership.

Substance, process, style: thus do decisions define and legitimize leaders.