Jeff Lawson – co-founder and CEO of Twilio – discusses why developers are more important than ever and any successful tech company will need to understand their developers, what matters to them, how to motivate them, and invest in their success
Build Vs. Buy has become build vs. die. The great companies will need to be world class builders
If something is core to your business , something hour customers deeply care about, you should build. Otherwise, buy. The way you integrate micro services and build the customer facing solutions is what will differentiate you
Don’t neglect to ask your developers what you should build vs buy
Leverage and lean on software over hardware as much as possible. Software can iterate and be updated daily. It can plug into other tools and always become more useful. Hardware, by contrast, is quite static and slow
If you’re an incumbent, it isn’t enough to simply hire developers, you have to change your entire culture and mindset. Own the code and be agile, move quickly and iterate. You should think of yourself as a software company that happens to do X, rather than simply doing X
We are in the third great era of software, one of building blocks rather than solutions. These building blocks are APIs and today’s leading companies stitch together APIs into unique value propositions. They are chunks of code that can be combined in an infinite way. These now comprise your digital supply chain and it is important to understand how they work and what to look out for. AWS changed the game by creating the foundation for these building blocks. This created a new species of startup that was much faster and leaner than their predecessors. It also allowed for small teams and individuals to buy software rather than only the C-Suite at large enterprises
Business people and developers tend not to naturally work. However, things get easier when business people start sharing problems rather than solutions and let the creative developers figure it out. Code is creative
Experimenting is key but you have to have a hypothesis. What are you measuring? What does success and failure look like? Will the opportunity be big enough? These things must be written down before you start and will help guide your progress
Think of each small team as an independent startup where the product or service is clear, pricing is transparent and there is a contract. This makes collaboration easy as it is mostly automated through documentation and APIs. Think of your output as a product that is serving a customer, even if that customer is internal.
Small teams are easier to coordinate and they need a vision and a customer they care about. Small, multidisciplinary teams with single threaded leaders keeps the teams agile, accountable, close to the customers, and knowing that their work matters
Agile – plan, develop, test, deliver, assess
Expect changes (limit WIP, push decisions out as much as possible), close collaboration between business development and devs
Rather than adding bodies, look to see if you can invest in improving your infrastructure
What I got out of it
Sharing problems rather than solutions, understanding how to structure effective developer teams (small, customer they care about, transparent pricing, agile, single threaded leaders, accountable, close to the customer) will stay with me
Many CEOs put the success of their organization in jeopardy as they’re unwilling to face themselves and the 5 temptations of a CEO
Temptation 1 – placing ego over achievement.
Running a company is simple, but people make it complicated as they’re not willing to face their own issues, revealing their temptations for others to see and help with. Don’t trade the lack of short term pain for long term success
Temptation 2 – popularity over accountability
Have to hold people accountable or they won’t know how seriously to take you and you won’t be consistent
Temptation 3 – certainty over clarity
Have to set vision and expectations for yourself and entire team. Can’t hold people accountable if they don’t have clarity on their expectations
Clear and timely decisions are so important. Nearly any decision is better than no decision
Temptation 4 – harmony over conflict
Healthy dialogue and conflict is necessary to grow
Must benefit from all the ideas and feedback from your team
Temptation 5 – invulnerability over trust
What I got out of it
A fun, short read that highlights the importance of an achievement oriented mentality, accountability, clarity, healthy conflict, and trust
This book is a belated answer to Tom Watson’s probing questions as to why programming is hard to manage…Briefly, I believe that large programming projects suffer management problems different in kind from small ones, due to division of labor. I believe the critical need to be the preservation of the conceptual integrity of the product itself. These chapters explore both the difficulties of achieving this unity and methods for doing so. The later chapters explore other aspects of software engineering management….The Mythical Man-Month is only incidentally about software but primarily about how people in teams make things. There is surely some truth in this
A rule of thumb, I estimate that a programming product costs at least three times as much as a debugged program with the same function…Programming system component costs at least three times as much as a stand-alone program of the same function.
First, one must perform perfectly. The computer resembles the magic of legend in this respect, too. If one character, one pause, of the incantation is not strictly in proper form, the magic doesn’t work. Human beings are not accustomed to being perfect, and few areas of human activity demand it. Adjusting to the requirement for perfection is, I think, the most difficult part of learning to program. Next, other people set one’s objectives, provide one’s resources, and furnish one’s information. One rarely controls the circumstances of his work, or even its goal. In management terms, one’s authority is not sufficient for his responsibility. It seems that in all fields, however, the jobs where things get done never have formal authority commensurate with responsibility. In practice, actual (as opposed to formal) authority is acquired from the very momentum of accomplishment. The dependence upon others has a particular case that is especially painful for the system programmer. He depends upon other people’s programs. These are often maldesigned, poorly implemented, incompletely delivered (no source code or test cases), and poorly documented. So he must spend hours studying and fixing things that in an ideal world would be complete, available, and usable. The next woe is that designing grand concepts is fun; finding nitty little bugs is just work. With any creative activity come dreary hours of tedious, painstaking labor, and programming is no exception.
The challenge and the mission are to find real solutions to real problems on actual schedules with available resources.
More software projects have gone awry for lack of calendar time than for all other causes combined. Why is this cause of disaster so common? First, our techniques of estimating are poorly developed. More seriously, they reflect an unvoiced assumption which is quite untrue, i.e., that all will go well. Second, our estimating techniques fallaciously confuse effort with progress, hiding the assumption that men and months are interchangeable.
Key point – men and months are not interchangeable, but we make assumptions that they are
Fifth, when schedule slippage is recognized, the natural (and traditional) response is to add manpower. Like dousing a fire with gasoline, this makes matters worse, much worse. More fire requires more gasoline, and thus begins a regenerative cycle which ends in disaster.
For the human makers of things, the incompletenesses and inconsistencies of our ideas become clear only during implementation. Thus it is that writing, experimentation, “working out” are essential disciplines for the theoretician.
The second fallacious thought mode is expressed in the very unit of effort used in estimating and scheduling: the man-month. Cost does indeed vary as the product of the number of men and the number of months. Progress does not. Hence the man-month as a unit for measuring the size of a job is a dangerous and deceptive myth. It implies that men and months are interchangeable.
The bearing of a child takes nine months, no matter how many women are assigned. Many software tasks have this characteristic because of the sequential nature of debugging.
Since software construction is inherently a systems effort—an exercise in complex interrelationships—communication effort is great, and it quickly dominates the decrease in individual task time brought about by partitioning. Adding more men then lengthens, not shortens, the schedule.
For some years I have been successfully using the following rule of thumb for scheduling a software task: 1/3 planning 1/6 coding 1/4 component test and early system test 1/4 system test, all components in hand.
Programming managers have long recognized wide productivity variations between good programmers and poor ones. But the actual measured magnitudes have astounded all of us. In one of their studies, Sackman, Erikson, and Grant were measuring performances of a group of experienced programmers. Within just this group the ratios between best and worst performances averaged about 10:1 on productivity measurements and an amazing 5:1 on program speed and space measurements! In short the $20,000/year programmer may well be 10 times as productive as the $10,000/year one. The converse may be true, too. The data showed no correlation whatsoever between experience and performance. (I doubt if that is universally true.)
I have earlier argued that the sheer number of minds to be coordinated affects the cost of the effort, for a major part of the cost is communication and correcting the ill effects of miscommunication (system debugging). This, too, suggests that one wants the system to be built by as few minds as possible.
The dilemma is a cruel one. For efficiency and conceptual integrity, one prefers a few good minds doing design and construction. Yet for large systems one wants a way to bring considerable manpower to bear, so that the product can make a timely appearance. How can these two needs be reconciled? Mills’s Proposal A proposal by Harlan Mills offers a fresh and creative solution. Mills proposes that each segment of a large job be tackled by a team, but that the team be organized like a surgical team rather than a hog-butchering team. That is, instead of each member cutting away on the problem, one does the cutting and the others give him every support that will enhance his effectiveness and productivity.
Even though they have not taken centuries to build, most programming systems reflect conceptual disunity far worse than that of cathedrals. Usually this arises not from a serial succession of master designers, but from the separation of design into many tasks done by many men. I will contend that conceptual integrity is the most important consideration in system design. It is better to have a system omit certain anomalous features and improvements, but to reflect one set of design ideas, than to have one that contains many good but independent and uncoordinated ideas.
The purpose of a programming system is to make a computer easy to use…Because ease of use is the purpose, this ratio of function to conceptual complexity is the ultimate test of system design. Neither function alone nor simplicity alone defines a good design. This point is widely misunderstood. As soon as ease of use is held up as the criterion, each of these is seen to be unbalanced, reaching for only half of the true goal. Ease of use, then, dictates unity of design, conceptual integrity. Conceptual integrity in turn dictates that the design must proceed from one mind, or from a very small number of agreeing resonant minds.
Architecture must be carefully distinguished from implementation. As Blaauw has said, “Where architecture tells what happens, implementation tells how it is made to happen.”
Not trivial, however, is the principle that such mini-decisions be made consistently throughout.
In most computer projects there comes a day when it is discovered that the machine and the manual don’t agree. When the confrontation follows, the manual usually loses, for it can be changed far more quickly and cheaply than the machine.
The project manager’s best friend is his daily adversary, the independent product-testing organization. This group checks machines and programs against specifications and serves as a devil’s advocate, pinpointing every conceivable defect and discrepancy. Every development organization needs such an independent technical auditing group to keep it honest.
The second reason for the project workbook is control of the distribution of information. The problem is not to restrict information, but to ensure that relevant information gets to all the people who need it.
The purpose of organization is to reduce the amount of communication and coordination necessary; hence organization is a radical attack on the communication problems treated above.
The means by which communication is obviated are division of labor and specialization of function.
On larger projects it is very rarely workable, for two reasons. First, the man with strong management talent and strong technical talent is rarely found. Thinkers are rare; doers are rarer; and thinker-doers are rarest.
Practice is the best of all instructors. —PUBLILIUS
Experience is a dear teacher, but fools will learn at no other. —POOR RICHARD’S ALMANAC
The linear extrapolation of such sprint figures is meaningless. Extrapolation of times for the hundred-yard dash shows that a man can run a mile in under three minutes.
Fostering a total-system, user-oriented attitude may well be the most important function of the programming manager.
First, writing the decisions down is essential. Only when one writes do the gaps appear and the inconsistencies protrude. The act of writing turns out to require hundreds of mini-decisions, and it is the existence of these that distinguishes clear, exact policies from fuzzy ones.
Chemical engineers learned long ago that a process that works in the laboratory cannot be implemented in a factory in only one step. An intermediate step called the pilot plant is necessary to give experience in scaling quantities up and in operating in nonprotective environments. For example, a laboratory process for desalting water will be tested in a pilot plant of 10,000 gallon/day capacity before being used for a 2,000,000 gallon/day community water system.
In most projects, the first system built is barely usable. It may be too slow, too big, awkward to use, or all three. There is no alternative but to start again, smarting but smarter, and build a redesigned version in which these problems are solved. The discard and redesign may be done in one lump, or it may be done piece-by-piece. But all large-system experience shows that it will be done. Where a new system concept or new technology is used, one has to build a system to throw away, for even the best planning is not so omniscient as to get it right the first time. The management question, therefore, is not whether to build a pilot system and throw it away. You will do that. The only question is whether to plan in advance to build a throwaway, or to promise to deliver the throwaway to customers. Seen this way, the answer is much clearer.
Structuring an organization for change is much harder than designing a system for change.
Things are always at their best in the beginning,” said Pascal. C. S. Lewis has stated it more perceptively: That is the key to history. Terrific energy is expended—civilizations are built up—excellent institutions devised; but each time something goes wrong. Some fatal flaw always brings the selfish and cruel people to the top, and then it all slides back into misery and ruin. In fact, the machine conks. It seems to start up all right and runs a few yards, and then it breaks down.
A good workman is known by his tools. —PROVERB
The most pernicious and subtle bugs are system bugs arising from mismatched assumptions made by the authors of various components.
Many poor systems come from an attempt to salvage a bad basic design and patch it with all kinds of cosmetic relief. Top-down design reduces the temptation. I am persuaded that top-down design is the most important new programming formalization of the decade.
Add one component at a time. This precept, too, is obvious, but optimism and laziness tempt us to violate
Lehman and Belady offer evidence that quanta should be very large and widely spaced or else very small and frequent. The latter strategy is more subject to instability, according to their model. My experience confirms it: I would never risk that strategy in practice.
How does one control a big project on a tight schedule? The first step is to have a schedule. Each of a list of events, called milestones, has a date. Picking the dates is an estimating problem, discussed already and crucially dependent on experience. For picking the milestones there is only one relevant rule. Milestones must be concrete, specific, measurable events, defined with knife-edge sharpness. It is more important that milestones be sharp-edged and unambiguous than that they be easily verifiable by the boss. Rarely will a man lie about milestone progress, if the milestone is so sharp that he can’t deceive himself. But if the milestone is fuzzy, the boss often understands a different report from that which the man gives. Sharp milestones are in fact a service to the team, and one they can properly expect from a manager. The fuzzy milestone is the harder burden to live with. It is in fact a millstone that grinds down morale, for it deceives one about lost time until it is irremediable. And chronic schedule slippage is a morale-killer.
The preparation of a PERT chart is the most valuable part of its use. Laying out the network, identifying the dependencies, and estimating the legs all force a great deal of very specific planning very early in a project. The first chart is always terrible, and one invents and invents in making the second one.
Most of the big last gains in software productivity have come from removing artificial barriers that have made the accidental tasks inordinately hard, such as severe hardware constraints, awkward programming languages, lack of machine time. How much of what software engineers now do is still devoted to the accidental, as opposed to the essential? Unless it is more than 9/10 of all effort, shrinking all the accidental activities to zero time will not give an order of magnitude improvement. Therefore it appears that the time has come to address the essential parts of the software task, those concerned with fashioning abstract conceptual structures of great complexity. I suggest:
Exploiting the mass market to avoid constructing what can be bought.
Using rapid prototyping as part of a planned iteration in establishing software requirements.
Growing software organically, adding more and more function to systems as they are run, used, and tested.
Identifying and developing the great conceptual designers of the rising generation.
The gap between the best software engineering practice and the average practice is very wide—perhaps wider than in any other engineering discipline. A tool that disseminates good practice would be important.
The development of the mass market is, I believe, the most profound long-run trend in software engineering. The cost of software has always been development cost, not replication cost. Sharing that cost among even a few users radically cuts the per-user cost. Another way of looking at it is that the use of n copies of a software system effectively multiplies the productivity of its developers by n. That is an enhancement of the productivity of the discipline and of the nation.
No other part of the conceptual work is so difficult as establishing the detailed technical requirements, including all the interfaces to people, to machines, and to other software systems. No other part of the work so cripples the resulting system if done wrong. No other part is more difficult to rectify later. Therefore the most important function that software builders do for their clients is the iterative extraction and refinement of the product requirements. For the truth is, the clients do not know what they want. They usually do not know what questions must be answered, and they almost never have thought of the problem in the detail that must be specified.
I would go a step further and assert that it is really impossible for clients, even those working with software engineers, to specify completely, precisely, and correctly the exact requirements of a modern software product before having built and tried some versions of the product they are specifying. Therefore one of the most promising of the current technological efforts, and one which attacks the essence, not the accidents, of the software problem, is the development of approaches and tools for rapid prototyping of systems as part of the iterative specification of requirements. A prototype software system is one that simulates the important interfaces and performs the main functions of the intended system, while not being necessarily bound by the same hardware speed, size, or cost constraints. Prototypes typically perform the mainline tasks of the application, but make no attempt to handle the exceptions, respond correctly to invalid inputs, abort cleanly, etc. The purpose of the prototype is to make real the conceptual structure specified, so that the client can test it for consistency and usability.
Incremental development—grow, not build, software. I still remember the jolt I felt in 1958 when I first heard a friend talk about building a program, as opposed to writing one. In a flash he broadened my whole view of the software process. The metaphor shift was powerful, and accurate. Today we understand how like other building processes the construction of software is, and we freely use other elements of the metaphor, such as specifications, assembly of components, and scaffolding. The building metaphor has outlived its usefulness. It is time to change again. If, as I believe, the conceptual structures we construct today are too complicated to be accurately specified in advance, and too complex to be built faultlessly, then we must take a radically different approach. Let us turn to nature and study complexity in living things, instead of just the dead works of man. Here we find constructs whose complexities thrill us with awe. The brain alone is intricate beyond mapping, powerful beyond imitation, rich in diversity, self-protecting, and self-renewing. The secret is that it is grown, not built. So it must be with our software systems. Some years ago Harlan Mills proposed that any software system should be grown by incremental development. That is, the system should first be made to run, even though it does nothing useful except call the proper set of dummy subprograms. Then, bit by bit it is fleshed out, with the subprograms in turn being developed into actions or calls to empty stubs in the level below. I have seen the most dramatic results since I began urging this technique on the project builders in my software engineering laboratory class. Nothing in the past decade has so radically changed my own practice, or its effectiveness. The approach necessitates top-down design, for it is a top-down growing of the software. It allows easy backtracking. It lends itself to early prototypes. Each added function and new provision for more complex data or circumstances grows organically out of what is already there. The morale effects are startling. Enthusiasm jumps when there is a running system, even a simple one. Efforts redouble when the first picture from a new graphics software system appears on the screen, even if it is only a rectangle. One always has, at every stage in the process, a working system. I find that teams can grow much more complex entities in four months than they can build. The same benefits can be realized on large projects as on my small ones.
The differences are not minor—it is rather like Salieri and Mozart. Study after study shows that the very best designers produce structures that are faster, smaller, simpler, cleaner, and produced with less effort. The differences between the great and the average approach an order of magnitude.
My first proposal is that each software organization must determine and proclaim that great designers are as important to its success as great managers are, and that they can be expected to be similarly nurtured and rewarded. Not only salary, but the perquisites of recognition—office size, furnishings, personal technical equipment, travel funds, staff support—must be fully equivalent. How to grow great designers? Space does not permit a lengthy discussion, but some steps are obvious:
Systematically identify top designers as early as possible. The best are often not the most experienced.
Assign a career mentor to be responsible for the development of the prospect, and keep a careful career file.
Devise and maintain a career development plan for each prospect, including carefully selected apprenticeships with top designers, episodes of advanced formal education, and short courses, all interspersed with solo design and technical leadership assignments.
Provide opportunities for growing designers to interact with and stimulate each other.
Turski and I both insist that pipe-dreaming inhibits forward progress and wastes effort.
Capers Jones, writing first in a series of memoranda and later in a book, offers a penetrating insight, which has been stated by several of my correspondents. “NSB,” like most writings at the time, was focused on productivity, the software output per unit of input. Jones says, “No. Focus on quality, and productivity will follow.” He argues that costly and late projects invest most of the extra work and time in finding and repairing errors in specification, in design, in implementation. He offers data that show a strong correlation between lack of systematic quality controls and schedule disasters. I believe it.
Representation is the essence of programming.
Fixing a defect has a substantial (20 to 50 percent) chance of introducing another.
Vyssotsky: “I have found it handy to carry both ‘scheduled’ (boss’s dates) and ‘estimated’ (lowest-level manager’s dates) dates in the milestone report. The project manager has to keep his fingers off the estimated dates.”
The subsystem boundaries must be at those places where interfaces between the subsystems are minimal and easiest to define rigorously.
Featuritis. The besetting temptation for the architect of a general purpose tool such as a spreadsheet or a word processor is to overload the product with features of marginal utility, at the expense of performance and even of ease of use. The appeal of proposed features is evident at the outset; the performance penalty is evident only as system testing proceeds. The loss of ease of use sneaks up insidiously, as features are added in little increments, and the manuals wax fatter and fatter.
If one believes, as I have argued at many places in this book, that creativity comes from individuals and not from structures or processes, then a central question facing the software manager is how to design structure and process so as to enhance, rather than inhibit, creativity and initiative. Fortunately, this problem is not peculiar to software organizations, and great thinkers have worked on it. E. F. Schumacher, in his classic, Small is Beautiful: Economics as if People Mattered, proposes a theory of organizing enterprises to maximize the creativity and joy of the workers. For his first principle he chooses the “Principle of Subsidiary Function” from the Encyclical Quadragesimo Anno of Pope Pius XI: It is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social and never destroy and absorb them. . . . Those in command should be sure that the more perfectly a graduated order is preserved among the various associations, in observing the principle of subsidiary function, the stronger will be the social authority and effectiveness and the happier and more prosperous the condition of the State.
What I got out of it
The importance of thinking in parallel vs. series, adding margins of safety (things always go wrong, so do you bake that into your assumptions or do you pay for it dearly at a later point?), adding more software developers generally makes projects even later, as few minds as possible to make the system easy to use (top-down design one of the most important aspects to consider), the importance of testing and iteration at every step along the process (grow, don’t build software), sharp rather than fuzzy milestones
Ben Rich, CEO of the Skunk WOrks after legendary Kelly Johnson stepped down, describes what makes the Skunk Works so special and some behind the scenes looks at how they operate
Ben Rich took over Skunk Works from legendary Kelly Johnson. Rich’s first big test was his confidence in stealth when those around him were doubtful of its potential
Kelly deeply believed that an airplane that was beautiful would fly the same way
Engineers had to live with their design through production. They were expected on the floor and couldn’t abdicate responsibility just because a design had been approved. Engineers spoke to designers who spoke to manufacturing who spoke to quality and then to flight testing. Quality reported directly to the CEO
To save time, they built the plane vertically which allowed them to work in parallel rather than in series
14 Skunk Works mantras
The Skunk Works manager must be delegated practically complete control of his program in all aspects. He should report to a division president or higher.
Strong but small project offices must be provided both by the military and industry.
The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10% to 25% compared to the so-called normal systems).
A very simple drawing and drawing release system with great flexibility for making changes must be provided.
There must be a minimum number of reports required, but important work must be recorded thoroughly.
There must be a monthly cost review covering not only what has been spent and committed but also projected costs to the conclusion of the program.
The contractor must be delegated and must assume more than normal responsibility to get good vendor bids for subcontract on the project. Commercial bid procedures are very often better than military ones.
The inspection system as currently used by the Skunk Works, which has been approved by both the Air Force and Navy, meets the intent of existing military requirements and should be used on new projects. Push more basic inspection responsibility back to subcontractors and vendors. Don’t duplicate so much inspection.
The contractor must be delegated the authority to test his final product in flight. He can and must test it in the initial stages. If he doesn’t, he rapidly loses his competency to design other vehicles.
The specifications applying to the hardware must be agreed to well in advance of contracting. The Skunk Works practice of having a specification section stating clearly which important military specification items will not knowingly be complied with and reasons therefore is highly recommended.
Funding a program must be timely so that the contractor doesn’t have to keep running to the bank to support government projects.
There must be mutual trust between the military project organization and the contractor, the very close cooperation and liaison on a day-to-day basis. This cuts down misunderstanding and correspondence to an absolute minimum.
Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures.
Because only a few people will be used in engineering and most other areas, ways must be provided to reward good performance by pay not based on the number of personnel supervised.
There was a secret 15th rule – don’t work with the navy
There was so much secrecy around many of the skunk Works projects that inefficiency and obscurity was a feature not a bug. They had to fail their assembly locations plans and blueprints so well that it added in Normas friction and costs to their overall process
There were of course technical and governmental problems but they succeeded and the stealth fighter became phenomenally profitable, making Lockheed billions of dollars
No other manufacturer came close to building the intimate relationship between designer and user like skunk works did. They had the pilots responsible for flying the F1-17A part of the production process
They developed homegrown talent that was able to get up the learning curve very quickly through proper training motivation and incentives
Stealth plus precision missiles was a quantum leap in warfare rendering nearly useless billions of dollars spent on defense systems by the Russians and other enemies
Kelly was of Swedish origin – “as stubborn as a Swede”
The greatest compliment Kelly ever got was from a British colonel that said, “this old Swede can see the damn air!” That’s how efficient his designs were and how intuitive he was with aerodynamics and airplane design
Hologram in the Head
Kelly believed that if he didn’t have the hell scared out of him as a test flight pilot at least once a year he wouldn’t have the proper perspective to design airplanes. He was one of the leading experts in nearly every aspect of the design and build of airplanes. Nothing ever got past him and he was frustrated by those who try to cover up their mistakes rather than own up to them
One of Kelly‘s key mantras was to have everybody as close to the production floor as possible – even a stones throw away was too far as he wanted structural changes and questions to be addressed immediately. Any delays were to be reported to Kelly immediately and stock items were to be used in place of special parts, even at the expense of added weight – the potential for delay was too great if too many special parts were used
Kelly was strong as an ox and challenged people to arm wrestling. He hardly ever lost
The U2 spy plane was another great success and allowed the US to get reconnaissance data on the Soviet union without fear of being shot down. This was the greatest success and greatest bargain, allowing policy makers to know what they were truly up against
The black bird may be the pinnacle of 20th century aviation and Kelly considered it his crowning achievement
The SR 71 blackbird was the most advanced plane of the 20th century. However, they stopped building them in the 1970s and it was officially retired in 1990. The incredible thing is that the titanium skin and the speed at which it flew cause such he got the metal was annealed on every flight, making it stronger overtime
A lot of the technology, planes, and ships that the Skunk Works built allowed for a much smaller team to have the same impact as a past larger team would have. However, in terms of an officer’s prestige, ego, and future prospects, more and bigger was better so they had a hard time attracting ambitious and capable officers to these smaller yet more effective teams. Their stealth ship, Sea Shadow, fell into this category.
An interesting paradox about stealth technology is that it is built to disappear, but it can’t be more quiet than the background noise or else they stand out just as much as if they were using no stealth at all
They were two people set to potentially take over for Kelly when he retired. Ben was Kelly’s favorite since he was technically great but more importantly a good leader straightforward and someone who had big ideas and big vision. There are many great engineers but a few good leaders
Don’t build anything you don’t believe in
Skunk Works would likely not be able to exist without a parent organization who they could push and pull talent from. This helps keep the team streamlined and focused without growing excessively large and bureaucratic
Another important skunk works mantra is to stick with suppliers who perform well. Switching suppliers just because of cost eats up expenses in different ways and is almost never worth it. Form long lasting relationships with good suppliers
What I got out of it
Exciting book to get behind the scenes of one of the most innovative and important aerospace groups of the past 50 years. A lot to learn from in terms of leadership, velocity, and management organization
There have been some many superb books published in recent years dealing with successful busines sundertakings. This book, however, takes a contrapuntal viewpoint and adopts the perspective of learning from a business gone awry. It is much as is the practice at medical conventions – where it is generally considered that a greatl deal can be learned by not focusing on healthy people.
There are 52 total laws, the most compelling (to me), outlined below
There are no lazy veteran lion hunters – margin between victory and defeat is miniscule
If you can afford to advertise, you don’t need to
1/10th of the participants produce 1/3 of the output. increasing the number of participants simply reduces the average output
The last 10% of performance generates 1/3 of the costs and 2/3 of the problems
It is very expensive to achieve high unreliability. It is not uncommon to increase the cost of an item by a factor of ten for each factor of ten degradation accomplished
Any task can be completed in only 1/3 more time than is currently estimated
If a sufficient number of management layers are superimposed on top of each other, it can be assured that disaster is not left to chance
The optimum committee has no members
Hiring consultants to conduct studies can be an excellent means of turning problems into gold – your problems into their gold
The weaker the data available upon which to base one’s conclusion, the greater the precision which should be quoted in order to give the data authenticity.
The more time you spend talking about what you have been doing, the less time you have to do what you have been talking about. Eventually, you spend more and more time talkinga bout less and less until finally you spend all your time talking about nothing.
Managerial intellect wilted in competition with managerial adrenaline
In the words of Rick Mears, “to finish first you must first finish.”
Quantity has a quality all its own
An irate banker demadned that Alexander Graham Bell remove “that toy” from his office. The toy was the telephone. A Hollywood producer scrawled a rejection note on a manuscript that became Gone with the Wind. Henry Ford’s largest origianl investor sold all his stock in 1906. Today, Sears may sell $25,000 of goods in 16 seconds.
Adding people to speed up a late software project just makes it later
People are the key to success in most any underatking
Teamwork is the fabric of effective business organizations
Self-image is as important in business as in sports
Motivation makes the diference
Recognition of accomplishment (and lack thereof) is an essential form of feedback
Listening to employees and customers pay dividends – they know their jobs and needs better than anyone else
Delegation, whenver practicable, is the best course. As Plato suggested, justice is everyone doing their own job
Openness with empoyees and customers alike is essential to building trust
Customers deserve the very best
Quality is the key to customer satisfaction. It means giving the customer what was agreed upon – every time.
Stability of funding, schedules, goals, and people is critical to any smooth business operation. Avoid turbulence at all costs
Demanding that last little bit of effort from oneself is essential – it can make the difference against competitors who don’t have the will to put out the extra effort
Provision for the unexpected is a business person’s best insurance policy. It is said that the ultimate form of management is managing under uncertainty. One must identify sources of risks and unknowns and make provisions to overcome them – in the form of financial reserves, schedule reserves, and performance reserves. Promise only that which can be produced and produce that which has been promised.
“Touch Labor” – people who actually come into contact with the product – are the only certain contributors in any organization. Others may contribute – managers, lawyers, accountants, consultants, auditors – but they may not.
Rules, regulations, policies, reports,a nd organization charts are not a subsitutte for sound management judgment.
Logic in presenting decision options, consequences, benefits, and risks is imperative. Whenever parameters can be quantified, it is usually desirable to do so
Conservatism, prudent conservatism, is generally the best path in financial matters
Integrity is the sine qua non of all human endeavors including business. It has even been said that if rascals knew the value of honesty they would be honest simply because of their rascality.
Much of the above simply boils down to DISCIPLINE – and in particulars that finest form of the art – SELF-discipline. DIscipline not to take the easy way out, discipline to forgeo “nice-to-have” features, discipline to minimize change, discipline to demand a quality product, discipline to treat a customer fairly even when it costs, and discipline to “tough out” and solve the problems which will occur in even the best-managed undertakings. As Robert Townsend, the former chairman of AVIS, put it in his book Up the Organization, managers must have the discipline not to keep pulling up the flowers to see if their roots are healthy. Most of our problems, it seems, are, as could be their solutions, self-imposed.
David Packard walks through the evolution of Hewlett-Packard from tiny startup to behemoth
Finally, they hit upon the audio oscillator and sold eight units to Walt Disney, earning the company its first substantial revenues.
Culture and the HP Way
“But they had a great idea—the ultimate source of competitive advantage—if you can just see it,” I’d push back. “What might that be?” After ten or fifteen minutes, someone would likely voice the key point: Bill Hewlett and David Packard’s greatest product was not the audio oscillator, the pocket calculator, or the minicomputer. Their greatest product was the Hewlett-Packard Company and their greatest idea was The HP Way.
The point is not that every company should necessarily adopt the specifics of the HP Way, but that Hewlett and Packard exemplify the power of building a company based on a framework of principles. The core essence of the HP Way consists of five fundamental precepts.
The Hewlett-Packard company exists to make a technical contribution, and should only pursue opportunities consistent with this purpose;
The Hewlett-Packard company demands of itself and its people superior performance—profitable growth is both a means and a measure of enduring success;
The Hewlett-Packard company believes the best results come when you get the right people, trust them, give them freedom to find the best path to achieve objectives, and let them share in the rewards their work makes possible;
The Hewlett-Packard company has a responsibility to contribute directly to the well-being of the communities in which its operates;
Hewlett and Packard rejected the idea that a company exists merely to maximize profits. “I think many people assume, wrongly, that a company exists simply to make money,” Packard extolled to a group of HP managers on March 8, 1960. “While this is an important result of a company’s existence, we have to go deeper to find the real reasons for our being.” He then laid down the cornerstone concept of the HP Way: contribution. Do our products offer something unique—be it a technical contribution, a level of quality, a problem solved—to our customers? Are the communities in which we operate stronger and the lives of our employees better than they would be without us? Are people’s lives improved because of what we do? If the answer to any these questions is “no,” then Packard and Hewlett would deem HP a failure, no matter how much money the company returned to its shareholders.
Therein we find the hidden DNA of the HP Way: the genius of the And. Make a technical contribution and meet customer needs. Take care of your people and demand results. Set unwavering standards and allow immense operating flexibility. Achieve growth and achieve profitability. Limit growth to arenas of distinctive contribution and create new arenas of growth through innovation. Never compromise integrity and always win in your chosen fields. Contribute to the community and deliver exceptional shareholder returns. Behind these specifics lies the biggest “And” of all, the principle that underpins every truly great company: preserve the core and stimulate progress.
Any great social enterprise—whether it be a great company, a great university, a great religious institution, or a great nation—exemplifies a duality of continuity and change. On the one hand, it is guided by a set of core values and fundamental purpose that change little over time, while on the other hand, it stimulates progress—change, improvement, innovation, renewal—in all that is not part of the core guiding philosophy. In a great company, core values remain fixed while operating practices, cultural norms, strategies, tactics, processes, structures, and methods continually change in response to changing realities. Lose your core values, and you lose your soul; refuse to change your practices, and the world will pass you by.
Yet the ultimate test of a great company is not the absence of difficulty, but the ability to recover from setbacks—even self-inflicted wounds—stronger than before.
As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so they are able to accomplish something collectively which they could not accomplish separately. They are able to do something worthwhile—they make a contribution to society (a phrase which sounds trite but is fundamental).
We must realize that supervision is not a job of giving orders; it is a job of providing the opportunity for people to use their capabilities efficiently and effectively.
If our main thought is to make money, we won’t care about these details. If we don’t care about the details, we won’t make as much money. They go hand in hand.
Our first obligation, which is self-evident from my previous remarks, is to let people know they are doing something worthwhile. We must provide a means of letting our employees know they have done a good job. You as supervisors must convey this to your groups. Don’t just give orders. Provide the opportunity for your people to do something important. Encourage them.
Profit is the measure of our contribution to our customers—it is a measure of what our customers are willing to pay us over and above the actual cost of an instrument.
Get the best people, stress the importance of teamwork, and get them fired up to win the game.
I found, after much trial and error, that applying steady gentle pressure from the rear worked best. Eventually, one would decide to pass through the gate; the rest would soon follow. Press them too hard, and they’d panic, scattering in all directions. Slack off entirely, and they’d just head back to their old grazing spots. This insight was useful throughout my management career.
Another example of sharing, though in a much different way, occurred in 1970. Because of a downturn in the U.S. economy, our incoming orders were running at a rate quite a bit less than our production capability. We were faced with the prospect of a 10 percent layoff. Rather than a layoff, however, we tried a different tack. We went to a schedule of working nine days out of every two weeks—a 10 percent cut in work schedule with a corresponding 10 percent cut in pay. This applied to virtually all our U.S. factories, as well as to all executives and corporate staff. At the end of a six-month period, the order rate was up again and everyone returned to a full work schedule. Some said they enjoyed the long weekends even though they had to tighten their belts a little. The net result of this program was that effectively all shared the burden of the recession, good people were not released into a very tough job market, and we had our highly qualified workforce in place when business improved.
GE was especially zealous about guarding its tool and parts bins to make sure employees didn’t steal anything. Faced with this obvious display of distrust, many employees set out to prove it justified, walking off with tools or parts whenever they could. Eventually, GE tools and parts were scattered all around town, including the attic of the house in which a number of us were living. In fact, we had so much equipment up there that when we threw the switch, the lights on the entire street would dim. The irony in all of this is that many of the tools and parts were being used by their GE “owners” to work on either job-related projects or skill-enhancing hobbies—activities that would likely improve their performance on the job. When HP got under way, the GE memories were still strong and I determined that our parts bins and storerooms should always be open. Keeping storerooms and parts bins open was advantageous to HP in two important ways. From a practical standpoint, the easy access to parts and tools helped product designers and others who wanted to work out new ideas at home or on weekends. A second reason, less tangible but important, is that the open bins and storerooms were a symbol of trust, a trust that is central to the way HP does business.
Many companies have a policy stating that once employees leave the company, they are not eligible for reemployment. Over the years we have had a number of people leave because opportunities seemed greater elsewhere. We’ve always taken the view that as long as they have not worked for a direct competitor, and if they have a good work record, they are welcomed back. They know the company, need no retraining, and usually are happier and better motivated for having had the additional experience.
No operating policy has contributed more to Hewlett-Packard’s success than the policy of “management by objective.” Although the term is relatively new to the lexicon of business, management by objective has been a fundamental part of HP’s operating philosophy since the very early days of the company. MBO, as it is frequently called, is the antithesis of management by control. The latter refers to a tightly controlled system of management of the military type, where people are assigned—and expected to do—specific jobs, precisely as they are told and without the need to know much about the overall objectives of the organization. Management by objective, on the other hand, refers to a system in which overall objectives are clearly stated and agreed upon, and which gives people the flexibility to work toward those goals in ways they determine best for their own areas of responsibility. It is the philosophy of decentralization in management and the very essence of free enterprise.
I don’t argue that the job can’t be done that way, but I do argue strongly that the best job can be done when the manager has a genuine and thorough understanding of the work. I don’t see how managers can even understand what standards to observe, what performance to require, and how to measure results unless they understand in some detail the specific nature of the work they are trying to supervise.
I learned everything I could about the causes of failure and decided to spend most of my time on the factory floor, making sure every step in the manufacturing process was done correctly. I found several instances where the written instructions provided the manufacturing people were inadequate, and I worked with them on each step in the process to make sure there were no mistakes. This painstaking attention to detail paid off, and every tube in the next batch passed its final test.
That was the genesis of what has been called MBWA. I learned that quality requires minute attention to every detail, that everyone in an organization wants to do a good job, that written instructions are seldom adequate, and that personal involvement is essential.
It needs to be frequent, friendly, unfocused, and unscheduled—but far from pointless. And since its principal aim is to seek out people’s thoughts and opinions, it requires good listening.
Linked with MBWA is another important management practice at Hewlett-Packard, and a basic tenet of the HP Way. It’s called the “open door policy.” Like MBWA, this policy is aimed at building mutual trust and understanding, and creating an environment in which people feel free to express their ideas, opinions, problems, and concerns.
The open door policy is very important at HP because it characterizes the management style to which we are dedicated. It means managers are available, open, and receptive. Everyone at HP, including the CEO, works in open-plan, doorless offices. This ready availability has its drawbacks in that interruptions are always possible. But at HP we’ve found that the benefits of accessibility far outweigh the disadvantages. The open door policy is an integral part of the management-by-objective philosophy. Also, it is a procedure that encourages and, in fact, ensures that the communication flow be upward as well as downward.
Bill’s audio oscillator represented the first practical, low-cost method of generating high-quality audio frequencies needed in communications, geophysics, medicine, and defense work. The audio oscillator was to become the Hewlett-Packard Company’s first product.
We designated this first product the Model 200A because we thought the name would make us look like we’d been around for a while. We were afraid that if people knew we’d never actually developed, designed, and built a finished product, they’d be scared off. Our pricing was even more naive: We set it at $54.40 not because of any cost calculations but because, of all things, it reminded us of “54°4o’ or Fight!” (the 1844 slogan used in the campaign to establish the northern border of the United States in the Pacific Northwest). We soon discovered we couldn’t afford to build the machines for that price. Luckily, our nearest competition was a $400 oscillator from General Radio, which gave us considerable room to maneuver.
At the end of 1939, our first full year in business, our sales totaled $5,369 and we had made $1,563 in profits. We would show a profit every year thereafter.
In those early days Bill and I had to be versatile. We had to tackle almost everything ourselves—from inventing and building products to pricing, packaging, and shipping them; from dealing with customers and sales representatives to keeping the books; from writing the ads to sweeping up at the end of the day. Many of the things I learned in this process were invaluable, and not available in business schools.
He said that more businesses die from indigestion than starvation. I have observed the truth of that advice many times since then.
Although the pressure to meet production deadlines was enormous, there was also lots of excitement and a great sense of camaraderie.
Eventually, because of big gains in productivity, the bonus to our entire workforce rose to as much as 85 percent of base wages. At that point, which was some time after the war, we abandoned this particular bonus plan. But in no way did we discontinue the practice of sharing profits among all our people. To this day, Hewlett-Packard has a profit-sharing program that encourages teamwork and maintains that important link between employee effort and corporate success.
Bill and I had decided we were going to reinvest our profits and not resort to long-term borrowing. I felt very strongly about this issue, and we found we were clearly able to finance 100 percent growth per year by reinvesting our profits. After some discussion with the members of the board, they seemed to be impressed with what we were doing but said they had a limit of 12 percent of profit they could allow on equity. I pointed out that our business had been doubling every year and that it would continue to do so for several years. I also told them that I had kept my salary at a lower level than it should have been because I did not think it was fair for my salary to be higher than Bill’s army salary.
We developed additional instruments, and later on, again working with Dr. Haeff, we built a device his group developed that was capable of jamming an enemy’s ship-board radar. It was at the core of what was code-named the Leopard project. We were very conscientious about meeting our delivery schedule on this project, working around the clock. I recall moving a cot into the factory and sleeping there many nights.
I believe this decision to focus our efforts was extremely important, not only in the early days of the company but later on as well. During the war, for example, we could have taken on some big—at least for us—production contracts. But that would have built the company to a level that probably couldn’t be sustained later on. I felt that we should take on no more than we could reasonably handle, building a solid base by doing what we did best—designing and manufacturing high-quality instruments.
The counter was so useful when it did work that our customers tolerated its unreliability.
Our collaboration with Stanford and Fred Terman continued, and in 1954 we expanded on the fellowship program and established what became known as the Honors Cooperative Program, which allowed qualified HP engineers to pursue advanced degrees at Stanford. The program made it possible for us to hire top-level young graduates from around the country with the promise that if they came to work for us and we thought it appropriate, they could attend graduate school while on full HP salary. Originally, the company paid part of their tuition as well, and more recently has paid all of their tuition. More than four hundred HP engineers have obtained master’s or doctorate degrees through this program. It has enabled us to hire the top engineering graduates from universities all across the country for a number of years—an important factor in the ultimate success of our company.
As I have said many times, our success depends in large part on giving the responsibility to the level where it can be exercised effectively, usually on the lowest possible level of the organization, the level nearest the customer.
There were about 4,000 people at this facility, and we were the first Americans ever to visit. It was obvious to me that what they were building would be entirely useless in modern-day combat, but I didn’t say anything at the time, except to compliment them on their workmanship.
Bill Hewlett and I were raised during that depression. We had observed its devastating effects on people, including many families and friends who were close to us. My father had been appointed as a bankruptcy referee for the state of Colorado. When I returned to Pueblo during the summers of the 1930s, I often helped my father in looking up the records of those companies that had gone bankrupt. I noted that the banks simply foreclosed on firms that mortgaged their assets and these firms were left with nothing. Those firms that did not borrow money had a difficult time, but they ended up with their assets intact and survived during the depression years that followed. From this experience I decided our company should not incur any long-term debt. For this reason Bill and I determined we would operate the company on a pay-as-you-go basis, financing our growth primarily out of earnings rather than by borrowing money.
Our long-standing policy has been to reinvest most of our profits and to depend on this reinvestment, plus funds from employee stock purchases and other cash flow items, to finance our growth. The stock purchase plan allows employees to apply up to a certain percentage of their salaries to purchase shares of HP stock at a preferential price. The company picks up a portion of the price of the stock. The plan has been in existence since 1959 and has provided us with significant amounts of cash to help finance our growth.
I was convinced we could correct the problem through greater self-discipline. I quickly visited nearly every one of our major divisions, meeting with a host of managers and giving them a lecture that was later characterized by one manager as “Dave’s give-’em-hell talk.”
One of our most important management tasks is maintaining the proper balance between short-term profit performance and investment for future strength and growth.
The pricing of new products is an important and challenging exercise. Often a product will be introduced to the market at a price too low to make an adequate short-term profit. The thinking is that “we’ll get our costs down and that will enable us to make a good profit”— either next month, next quarter, or next year. But that time seldom, if ever, comes. Often pricing also falls prey to the goal of “market share.” Many managers in American industry are caught up with the idea of capturing a larger share of a market, often by undercutting the competition’s prices. In the short term, that often results in an impressive sales volume . . . but at the expense of little or no profit.
What we did decide, however, was that we wanted to direct our efforts toward making important technical contributions to the advancement of science, industry, and human welfare. It was a lofty, ambitious goal. But right from the beginning, Bill and I knew we didn’t want to be a “me-too” company merely copying products already on the market.
A constant flow of good new products is the lifeblood of Hewlett-Packard and essential to our growth. Early on we developed a system for measuring the flow and success of new products.
At HP, as in other technical companies, there is no shortage of ideas. The problem is to select those likely to fill a real need in the marketplace. To warrant serious pursuit an idea must be both practical (the device under consideration must work properly) and useful. Out of those ideas that are practical, a smaller number are useful. To be useful an invention must not only fill a need, it must be an economical and efficient solution to that need. we often used to select projects on the basis of a six-to-one engineering return. That is, the profit we expected to derive over the lifetime of a product should be at least six times greater than the cost of developing the product. Almost without exception, the products that beat the six-to-one ratio by the widest margin were the most innovative.
How do managers provide encouragement and help the inventor retain enthusiasm in the face of such disappointment? HP shows off its first computer in 1967 at the IEEE trade show in New York City. Many HP managers over the years have expressed admiration for the way Bill Hewlett handled these situations. One manager has called it Bill’s “hat-wearing process.” Upon first being approached by a creative inventor with unbridled enthusiasm for a new idea, Bill immediately put on a hat called “enthusiasm.” He would listen, express excitement where appropriate and appreciation in general, while asking a few rather gentle and not too pointed questions. A few days later, he would get back to the inventor wearing a hat called “inquisition.” This was the time for very pointed questions, a thorough probing of the idea, lots of give-and-take. Without a final decision, the session was adjourned. Shortly thereafter, Bill would put on his “decision” hat and meet once again with the inventor. With appropriate logic and sensitivity, judgment was rendered and a decision made about the idea. This process provided the inventor with a sense of satisfaction, even when the decision went against the project—a vitally important outcome for engendering continued enthusiasm and creativity.
In 1994, HP’s sales in computer products, service, and support were almost $20 billion, or about 78 percent of the company’s total business. In 1964, our sales totaled $125 million and were entirely in instruments. Not a penny was from computer sales. This represents a remarkable transformation of our company and its business. It would be nice to claim that we foresaw the profound effect of computers on our business and that we prepared ourselves to take early advantage of the computer age. Unfortunately, the record does not justify such pride. It would be more accurate to say that we were pushed into computers by the revolution that was changing electronics.
Several years later, at a gathering of HP engineers, I presented Chuck with a medal for “extraordinary contempt and defiance beyond the normal call of engineering duty.” So how does a company distinguish between insubordination and entrepreneurship? To this young engineer’s mind the difference lay in the intent. “I wasn’t trying to be defiant or obstreperous. I really just wanted a success for HP,” Chuck said. “It never occurred to me that it might cost me my job.” As a postscript to the story, this same engineer later became director of a department . . . with his reputation as a maverick intact.
The fundamental basis for success in the operation of Hewlett-Packard is the job we do in satisfying the needs of our customers. We encourage every person in our organization to think continually about how his or her activities relate to the central purpose of serving our customers.
Noel, a key member of our top-management team, was a strong advocate for helping the customer, so much so that he wanted our sales engineers to take the customer’s side in any disputes with the company. “We don’t want you blindly agreeing with us,” he’d tell them. “We want you to stick up for the customer. After all, we’re not selling hardware; we’re selling solutions to customer problems.” Noel stressed the importance of customer feedback in helping us design and develop products aimed at real customer needs. He also insisted that our salespeople never speak disparagingly of the competition. This reflected our feeling that competitors should be respected, the type of respect that existed between General Radio and HP when Bill and I were starting out.
“More for less” became the goal for each new LaserJet model. This objective reveals a lesson learned from our experience with calculators. For many years we continued to introduce increasingly sophisticated calculators with greater capabilities at greater cost to consumers. Meanwhile, our competitors were offering basic features at a lower price. For the mass market, basic features were sufficient, and the lower-priced models decreased HP’s calculator market share. The sophisticated HP calculators sold to customers who needed more advanced capabilities—but we lost a large portion of the marketplace. With LaserJet printers, we decided that each revision would offer our customers greater capability at a lower price than its predecessor.
Kenzo Sasaoka, our manager in Japan, and he said that I had shown him the way—that gains in quality come from meticulous attention to detail and every step in the manufacturing process must be done as carefully as possible, not as quickly as possible. This sounds simple, but it is achieved only if everyone in the organization is dedicated to quality.
Especially in a technical business where the rate of progress is rapid, a continuing program of education must be undertaken and maintained.
Another requirement is that a high degree of enthusiasm should be encouraged at all levels; in particular, the people in high management positions must not only be enthusiastic themselves, they must be able to engender enthusiasm among their associates. There can be no place for halfhearted interest or halfhearted effort.
Thus, we made an early and important decision: We did not want to be a “hire and fire”—a company that would seek large, short-term contracts, employ a great many people for the duration of the contract, and at its completion let those people go. This type of operation is often the quickest and most efficient way to get a big job accomplished. But Bill and I didn’t want to operate that way. We wanted to be in business for the long haul, to have a company built around a stable and dedicated workforce.
Growth also affected the size and nature of company picnics. Bill and I considered picnics an important part of the HP Way, and in the early days we had an annual picnic in the Palo Alto area for all our people and their families. It was a big event, one largely planned and carried out by our employees themselves. The menu consisted of New York steaks, hamburgers, Mexican beans or frijoles, green salad, garlic French bread, and beer. The company bought the food and beer. It became customary for the machine shop people to barbeque the steaks and burgers, with other departments responsible for other parts of the menu. Bill and I and other senior executives served the food, giving us the opportunity to meet all of the employees and their families. In the early 1950s the company bought a parcel of land, called Little Basin, in the redwood country about an hour’s drive from Palo Alto. We converted part of it into a recreation area, large enough to have a picnic with two thousand people or more. We also made it available year around for our employees and their families to go overnight camping. This was such a popular benefit that we decided, later on, to duplicate the idea in other parts of the world where we had concentrations of HP people.
The underlying principle of HP’s personnel policies became the concept of sharing—sharing the responsibilities for defining and meeting goals, sharing in company ownership through stock purchase plans, sharing in profits, sharing the opportunities for personal and professional development, and even sharing the burdens created by occasional downturns in business.
In the United States and many other countries, employees participate in stock purchase plans and in cash profit sharing. U.S. employees with more than six months of service are eligible for profit sharing, and each year receive amounts calculated on the company’s pretax earnings. Over the years this payout has been as high as 9.9 percent and as low as 4.1 percent of base salary. Since the company has always been profitable, the program has continued uninterrupted since we started it in the 1950s.
An important responsibility of managers is the selection and training of their potential successors. Management succession is especially critical at the upper levels of an organization, where a manager may be responsible for a wide scope of complex activities involving the expenditure of many millions of dollars and the efforts of many thousands of people.
I have always felt that the most successful companies have a practice of promoting from within.
Today Hewlett-Packard operates in many different communities throughout the world. We stress to our people that each of these communities must be better for our presence. This means being sensitive to the needs and interests of the community; it means applying the highest standards of honesty and integrity to all our relationships with individuals and groups; it means enhancing and protecting the physical environment and building attractive plants and offices of which the community can be proud; it means contributing talent, energy, time, and financial support to community projects.
It took forty years for the company Bill Hewlett and I started in 1939 to reach one billion dollars in annual sales and a major part of that was from inflation. In the 1994 fiscal year that ended last October, we began the year with twenty billion dollars in worldwide sales and added five billion to that by year’s end. This occurred with essentially no inflation. Other technology companies have shown similar growth. Just as it has in the past, our growth in the future will come from new products. In 1994, we spent two billion dollars in new product development. Beginning in 1939 we generated at least six dollars of profit, spread over five or six years, for every dollar spent on new product development. By new products, I mean products that make real contributions to technology, not products that copy what someone else has done. This must be our standard in the future just as it has been in the past.
I had to work very hard at Latin, but the math and science courses were easy because I already knew about as much as the teachers did. I was elected president of my class all four years.
Bill went to a private elementary school, going to and from on a cable car. He did well with numbers and arithmetic but had great difficulty reading. He was thought to be a slow learner when, in actuality, he was dyslexic. But in those days no one knew what dyslexia was. He continued to have trouble reading and writing, and later on, in lecture classes, he couldn’t write notes fast enough to keep up with the lecturer. So, as is the case with many dyslexics, he learned how to listen, to file thoughts and information in a logical form and have them readily available from memory. “This procedure worked particularly well in learning math and science,” he says.
I learned everything I could about possible causes of failure, and I decided to spend most of my time on the factory floor to make sure every step was done properly. It soon became apparent that the instructions the engineering department gave the factory people were not adequate to ensure that every step would be done properly. I found the factory people eager to do the job right. We worked together to conduct tests and identify every possible cause of failure, and as a result, every tube in that batch of twenty passed its final test without a single failure. That was a very important lesson for me—that personal communication was often necessary to back up written instructions. That was the genesis of what became “management by walking around” at the Hewlett-Packard Company.
These miscellaneous jobs made us more sure of ourselves and our skills. They also revealed something we hadn’t planned but that was of great benefit to our partnership—namely, that our abilities tended to be complementary. Bill was better trained in circuit technology, and I was better trained and more experienced in manufacturing processes. This combination of abilities was particularly useful in designing and manufacturing electronic products.
Another benefit from ranching was my friendship with Bill Hewlett. By running the ranches together—as well as the company—Bill and I developed a unique understanding of each other. This harmony has served us well every single day in running HP.
Shortly after my arrival at the Pentagon, I called on all four of the Joint Chiefs in their offices and told them I wanted to work with them and that I needed their help. Bill and I had a deer hunt every year at our San Felipe ranch southeast of San Jose. He and I brought all the food, and we cooked and served the meals and washed the dishes ourselves with the help of our guests. In the spirit of friendship and collaboration, I invited the Joint Chiefs to join us at the deer hunt in 1969. They came and each got a deer. When it was time to wash the dishes, they rolled up their sleeves and helped us. That hunt helped establish a good rapport with the Joint Chiefs.
Before I went to Washington, even the people who encouraged me to go warned me that a career in business would ill prepare me for the frustrations of government bureaucracy. And they were right.
When i think of the phenomenal growth of the electronics industry over the last fifty years, I realize how fortunate Bill Hewlett and I were to be in on the ground floor. But it reminds me of a story I like to tell on myself. In my sophomore year at Stanford I took a course in American history and had the opportunity to study the westward movement beginning with the early pioneers and continuing throughout the nineteenth century. I remember lamenting that I had been born one hundred years too late, that all the frontiers had been conquered, and that my generation would be deprived of the pioneering opportunities offered our forebears. But in fact, we went on to make breathtaking advances in the twentieth century.
What I got out of it
Some incredible business lessons from one of the original silicon valley companies that started it all
This book examines Great Groups systematically in the hope of finding out how their collective magic is made.
Focused on seven epic teams that have had enduring impact. They are:
The Walt Disney studio, which invented the animated feature film in 1937 with Snow White and the Seven Dwarfs
The Great Groups at Xerox’s Palo Alto Research Center (PARC)
Apple, which first made computers easy to use and accessible to nonexperts
The 1992 Clinton campaign, which put the first Democrat in the White House since Jimmy Carter
The elite corps of aeronautical engineers and fabricators who built radically new planes at Lockheed’s top-secret Skunk Works
The influential arts school and experimental community known as Black Mountain College
The Manhattan Project.
Truly profound and original insights are to be found only in studying the exemplary.
Great Groups have some odd things in common. For example, they tend to do their brilliant work in spartan, even shabby, surroundings.
Efficiency is, in fact, not a word much used by the groups in this book. Driven by a belief in their mission, unconcerned by working hours or working conditions, these groups aim to make a difference, not to make money. Could efficiency, productivity, and the desire for immediate pay-offs occasionally be road blocks on the way to greatness?
The more I learned, the more I realized that the usual way of looking at groups and leadership, as separate phenomena, was no longer adequate. The most exciting groups—the ones, like those chronicled in this book, that shook the world—resulted from a mutually respectful marriage between an able leader and an assemblage of extraordinary people. Groups become great only when everyone in them, leaders and members alike, is free to do his or her absolute best.
Great Groups are inevitably forged by people unafraid of hiring people better than themselves. Such recruiters look for two things: excellence and the ability to work with others.
But probably the most important thing that young members bring to a Great Group is their often delusional confidence. Time forces people, however brilliant, to taste their own mortality. In short, experience tends to make people more realistic, and that’s not necessarily a good thing.
Virtually every Great Group defines itself in terms of an enemy. Sometimes the enemy is real, as the Axis powers were for the Manhattan Project. But, more often, the chief function of the enemy is to solidify and define the group itself, showing it what it is by mocking what it is not.
Life in Great Groups is different from much of real life. It’s better. Bambi veteran Jules Engel recalls that the great Disney animators couldn’t wait to get up in the morning to get back to their drawing boards. Fermi and the other geniuses of the Manhattan Project continued to work on the Gadget even when hiking in the mountains on their Sundays off. It wasn’t simply that the work was fascinating and vitally important. The process itself was exciting, even joyous.
Something happens in these groups that doesn’t happen in ordinary ones, even very good ones. Some alchemy takes place that results, not only in a computer revolution or a new art form, but in a qualitative change in the participants. If only for the duration of the project, people in Great Groups seem to become better than themselves. They are able to see more, achieve more, and have a far better time doing it than they can working alone.
The leaders who can do so must first of all command unusual respect. Such a leader has to be someone a greatly gifted person thinks is worth listening to, since genius almost always has other options. Such a leader must be someone who inspires trust, and deserves it. And though civility is not always the emblematic characteristic of Great Groups, it should be a trait of anyone who hopes to lead one.
“I explained my views to the orchestra. I did not impose them. The right response, if forced, is not the same as the right response when it comes out of conviction.”
Who succeeds in forming and leading a Great Group? He or she is almost always a pragmatic dreamer. They are people who get things done, but they are people with immortal longings. Often, they are scientifically minded people with poetry in their souls, people like Oppenheimer, who turned to the Bhagavad Gita to express his ambivalence about the atom and its uses. They are always people with an original vision. A dream is at the heart of every Great Group. It is always a dream of greatness, not simply an ambition to succeed. The dream is the engine that drives the group, the vision that inspires the team to work as if the fate of civilization rested on getting its revolutionary new computer out the door.
The way an environment is structured can have an enormous imp
act on creativity, for good or for ill. The atmosphere most conducive to creativity is one in which individuals have a sense of autonomy and yet are focused on the collective goal. Constraint (perceived as well as real) is a major killer of creativity, Amabile has found. Freedom or autonomy is its major enhancer.
Many Great Groups have a dual administration. They have a visionary leader, and they have someone who protects them from the outside world, the “suits.”
The zeal with which people in Great Groups work is directly related to how effectively the leader articulates the vision that unites them.
The best leaders understand very basic truths about human beings. They know that we long for meaning.
Jack Welch once said of his role at General Electric, “Look, I only have three things to do. I have to choose the right people, allocate the right number of dollars, and transmit ideas from one division to another with the speed of light.”
Luciano De Crescenzos observation that “we are all angels with only one wing, we can only fly while embracing each other” is just as true for the leader as for any of the others.
The ability to plan for what has not yet happened, for a future that has only been imagined, is one of the hallmarks of leadership of a Great Group,
Americans don’t like people claiming credit for other people’s work. It violates their sense of fair play. And so Walt Disney was more or less forced to come up with a satisfactory explanation of exactly what he did at the company that bore his name. The Disney version of the truth, the one that the studio would turn to again and again, was the bee story. It appeared, for instance, in “The Magic Worlds of Walt Disney,” an article on the Disney empire that ran in National Geographic in August 1963: You know, I was stumped one day when a little boy asked, “Do you draw Mickey Mouse?” I had to admit I do not draw any more. “Then you think up all the jokes and ideas?” “No,” I said, “I don’t do that.” Finally, he looked at me and said, “Mr. Disney, just what do you do?” “Well,” I said, “sometimes I think of myself as a little bee. I go from one area of the studio to another and gather pollen and sort of stimulate everybody.” I guess that’s the job I do. I certainly don’t consider myself a businessman, and I never did believe I was worth anything as an artist.
Greatness starts with superb people.
They see connections. Often they have specialized skills, combined with broad interests and multiple frames of reference. They tend to be deep generalists, not narrow specialists. They are not so immersed in one discipline that they can’t see solutions in another. They are problem solvers before they are computer scientists or animators. They can no more stop looking for new relationships and new, better ways of doing things than they can stop breathing. And they have the tenacity so important in accomplishing anything of value.
Great Groups and great leaders create each other.
Disney, John Andrew Rice, and Steve Jobs not only headed Great Groups, they found their own greatness in them. As Howard Gardner points out, Oppenheimer showed no great administrative ability before or after the Manhattan Project. And yet when the world needed him, he was able to rally inner resources that probably surprised even himself. Inevitably, the leader of a Great Group has to invent a leadership style that suits it. The standard models, especially the command-and-control style, simply won’t work.
Every Great Group has a strong leader.
This is one of the paradoxes of creative collaboration. Great Groups are made up of people with rare gifts working together as equals. Yet, in virtually every one there is one person who acts as maestro, organizing the genius of the others. He or she is a pragmatic dreamer, a person with an original but attainable vision. Ironically, the leader is able to realize his or her dream only if the others are free to do exceptional work. Typically, the leader is the one who recruits the others, by making the vision so palpable and seductive that they see it, too, and eagerly sign up.
Leaders of Great Groups inevitably have exquisite taste. They are not creators in the same sense that the others are. Rather, they are curators, whose job is not to make, but to choose. The ability to recognize excellence in others and their work may be the defining talent of leaders of Great Groups.
The respect issue is a critical one. Great Groups are voluntary associations. People are in them, not for money, not even for glory, but because they love the work, they love the project. Everyone must have complete faith in the leader’s instincts and integrity vis-a-vis the work.
The leaders of Great Groups love talent and know where to find it.
The broader and more diverse the network, the greater the potential for a Great Group. The richer the mix of people, the more likely that new connections will be made, new ideas will emerge.
Being part of a group of superb people has a profound impact on every member. Participants know that inclusion is a mark of their own excellence. Everyone in such a group becomes engaged in the best kind of competition—a desire to perform as well as or better than one’s colleagues, to warrant the esteem of people for whom one has the highest respect. People in Great Groups are always stretching because of the giants around them. For members of such groups, the real competition is with themselves, an ongoing test of just how good they are and how completely they can use their gifts.
Great Groups are full of talented people who can work together.
Certain tasks can only be performed collaboratively, and it is madness to recruit people, however gifted, who are incapable of working side by side toward a common goal.
Although the ability to work together is a prerequisite for membership in a Great Group, being an amiable person, or even a pleasant one, isn’t. Great Groups are probably more tolerant of personal idiosyncrasies than are ordinary ones, if only because the members are so intensely focused on the work itself. That all-important task acts as a social lubricant, minimizing frictions. Sharing information and advancing the work are the only real social obligations.
Great Groups think they are on a mission from God.
Their clear, collective purpose makes everything they do seem meaningful and valuable. A powerful enough vision can transform what would otherwise be loss and drudgery into sacrifice.
The army had recruited talented engineers and others from all over the United States for special duty on the project. They were assigned to work on the primitive computers of the period, doing energy calculations and other tedious jobs. But the army, obsessed with security, refused to tell them anything specific about the project. They didn’t know that they were building a weapon that could end the war or even what their calculations meant. They were simply expected to do the work, which they did—slowly and not very well. Feynman, who supervised the technicians, prevailed on his superiors to tell the recruits what they were doing and why. Permission was granted to lift the veil of secrecy, and Oppenheimer gave them a special lecture on the nature of the project and their own contribution. ’’Complete transformation,” Feynman recalled. “They began to invent ways of doing it better. They improved the scheme. They worked at night. They didn’t need supervising in the night; they didn’t need anything. They understood everything; they invented several of the programs that we used.” Ever the scientist, Feynman calculated that the work was done “nearly ten times as fast” after it had meaning.
Leaders of Great Groups understand the power of rhetoric. They recruit people for crusades, not jobs.
Every Great Group is an island—but an island with a bridge to the mainland.
Great Groups become their own worlds. They also tend to be physically removed from the world around them.
People who are trying to change the world need to be isolated from it, free from its distractions, but still able to tap its resources.
Participants in Great Groups create a culture of their own—with distinctive customs, dress, jokes, even a private language. They find their own names for the things that are important to them, a language that both binds them together and keeps nonmembers out. Such groups tend to treasure their secrets.
Great groups see themselves as winning underdogs.
Great Groups always have an enemy.
When there is no enemy, you have to make one up.
Competition with an outsider seems to boost creativity. “Win-lose” competition within the group reduces it.
People in Great Groups have blinders on.
In Great Groups, you don’t find people who are distracted by peripheral concerns, including such perfectly laudable ones as professional advancement and the quality of their private lives. Ivy League colleges are full of well-rounded people. Great Groups aren’t. Great Groups are full of indefatigable people who are struggling to turn a vision into a machine and whose lawns and goldfish have died of neglect. Such people don’t stay up nights wondering if they are spending enough time with the children. For the duration, participants have only one passion—the task at hand. People in Great Groups fall in love with the project.
But Great Groups often have a dark side. Members frequently make a Faustian bargain, trading the quiet pleasures of normal life for the thrill of discovery Their families often pay the price. For some group members, the frenzied labor of the project is their drug of choice, a way to evade other responsibilities or to deaden loss or pain.
Great Groups are optimistic, not realistic.
As Seligman explained to Fortune magazine, the people most likely to succeed are those who combine “reasonable talent with the ability to keep going in the face of defeat.”
Alan Kay once observed, “The way to do good science is to be incredibly critical without being depressed.” Great Groups don’t lose hope in the face of complexity. The difficulty of the task adds to their joy.
In Great Groups the right person has the right job.
Too many companies believe people are interchangeable. Truly gifted people never are. They have unique talents. Such people cannot be forced into roles they are not suited for, nor should they be. Effective leaders allow great people to do the work they were born to do.
Many projects never transcend mediocrity because their leaders suffer from the Hollywood syndrome. This is the arrogant and misguided belief that power is more important than talent. It is the too common view that everyone should be so grateful for a role in a picture or any other job that he or she should be willing to do whatever is asked, even if it’s dull or demeaning
The leaders of Great Groups give them what they need and free them from the rest.
Successful groups reflect the leader’s profound, not necessarily conscious, understanding of what brilliant people want. Most of all, they want a worthy challenge, a task that allows them to explore the whole continent of their talent. They want colleagues who stimulate and challenge them and whom they can admire. What they don’t want are trivial duties and obligations. Successful leaders strip the workplace of nonessentials.
All Great Groups share information effectively. Many of the leaders we have looked at were brilliant at ensuring that all members of the group had the information they needed. Bob Taylors weekly meeting at PARC was a simple, efficient mechanism for sharing data and ideas.
Great Groups also tend to be places without dress codes, set hours, or other arbitrary regulations. The freedom to work when you are moved to, wearing what you want, is one that everyone treasures. The casual dress so typical of people in extraordinary groups may be symbolic as well, a sign that they are unconventional thinkers, engaged in something revolutionary.
One thing Great Groups do need is protection. Great Groups do things that haven’t been done before. Most corporations and other traditional organizations say they want innovation, but they reflexively shun the untried. Most would rather repeat a past success than gamble on a new idea. Because Great Groups break new ground, they are more susceptible than others to being misunderstood, resented, even feared. Successful leaders find ways to insulate their people from bureaucratic meddling.
One vital function of the leaders of Great Groups is to keep the stress in check. Innovative places are exhilarating, but they are also incubators for massive coronar-ies. Sundays off helped at Los Alamos and the Skunk Works.
Civility is the preferred social climate for creative collaboration. In an era of downsizing and underemployment, many workplaces have become angry, anguished, poisonous places where managers are abusive and employees subvert each other. Such an environment isn’t just morally offensive. It is a bad place to do good work.
Genuine camaraderie, based on shooting the moon together, is the ideal climate of a Great Group. When less attractive emotions come to the fore, they have to be dealt with before they threaten the project. Taylor’s model for resolving conflicts, which encourages colleagues to understand each other’s positions, even if they disagree, is an especially useful one.
Members of Great Groups also need relative autonomy, a sine qua non of creativity. No Great Group was ever micromanaged.
Great Groups ship.
Great Groups don’t just talk about things (although they often do that at considerable length). They make things—amazing, original things, such as a plane that a bat can’t find.
Great work is its own reward.
The payoff is not money, or even glory. Again and again, members of Great Groups say they would have done the work for nothing. The reward is the creative process itself. Problem solving douses the human brain with chemicals that make us feel good.
There is a lesson here that could transform our anguished workplaces overnight. People ache to do good work. Given a task they believe in and a chance to do it well, they will work tirelessly for no more reward than the one they give themselves. People who have been in Great Groups never forget them, although most groups do not last very long. Our suspicion is that such collaborations have a certain half-life, that, if only because of their intensity, they cannot be sustained indefinitely. Since creative collaboration is done by intellectual explorers, it is not surprising that most Great Groups are temporary. They ship, and soon end.
What I got out of it
A concrete and very helpful synthesis of what traits great groups exhibit. The appendix has the 15 key lessons which is worth reading and re-reading
This book starts with organizational design – it gets the right people in the right places, empowers them to make decisions, and then holds them accountable for their results. Next are some tools of management – from systems thinking to vision documents, metrics, reorgs, and career narratives. Approaches touches on how you might need to adjust how you manage as the organization scales. Culture is covered next and touches on how to nurture an inclusive team. Last is a focus on careers – interviewing hiring, and performance management
When I want to solve a problem quickly and cheaply, I think about process design. If process is too weak a force, culture too slow, and there isn’t much time, then organizational design is a good option
One of the fundamental challenges of organizational design is sizing teams
Managers should support 6-8 engineers and managers-of-managers should support 4-6 managers
A team is at least 4 people as this diversity helps attack and solve complex problems in a more efficient manner
Keep innovation and maintenance together as this leads to higher morale and will avoid creating a two-tiered class system of innovators and maintainers
4 states of a team and the general solution. Teams want to climb from falling behind to innovating, while entropy drags them backward. Each
Falling behind – add people
Treading water – reduce WIP
Repaying debt – add time
Innovating – add slack
Consolidate your efforts as a leader. Don’t “peanut butter” the situation by trying to evenly spread yourself out. Spend the most time on the teams that need the most help. Adding new individuals to teams disrupts that team’s gelling process, so have rapid growth periods followed by consolidation/gelling periods
Do not separate high-performing teams. They can tackle new problems but should stay together. Shifting scope works better than moving people because it avoids re-gelling costs, and it preserves system behavior. You can also try rotating individuals for a fixed period into an area that needs help
Campbell – Teams > Individuals > Problems
You obviously don’t want to stop growth, but you can concentrate that growth such that your teams alternate between periods of gelling and consolidation
Counterintuitively, you can slow a team down by shifting resources to it, because doing so creates new upstream constraints. Slack is a beautiful thing. It gives people and teams time to improve areas and do it with minimal coordination costs
The real system killer is not system rewrites but the migrations that follow those rewrites
You only get values from projects you finish. To make progress, above all else, you must ensure that some of your projects finish
Funnel interruptions into an increasingly small area, and then automate that area as much as possible. Ask people to file tickets, create chatbots that automate filing tickets, create a service cookbook, and so on.
Projects and tasks must have owners – “Who owns X?”
Block out large chunks of time each week to focus. Telecommute, block out 8-11 each morning, experiment until you find something that works for you. The best solution is a culture of documentation – read documents, and a documentation reach that actually works. Try to get off the “critical path” – don’t be a gatekeeper. This is a significant implementation bug rather than a stability feature to be emulated (except for very important legal/financial/other matters that should have a gatekeeper.)
Organizational debt – the sibling of technical debt and represents things like biased interview processes and inequitable compensation mechanisms, systemic problems which prevents your organization from reaching its potential. Responding to this is central to being an effective leader. A great way to attack this is to focus on a few areas you want to improve and if you’re making progress, feel good about it. You can slack off on the other areas (for now). You can’t do it all at once
Succession planning is thinking through how the organization would function without you, documenting those gaps, and starting to fill them in. This is often overlooked but is vital for the long-term success of your team and organization. First step is to figure out what you do – write down what meetings you attend, what your role is in those meetings, recurring processes, individuals you support, emails you send, requests coming in, to-do lists, external relationships. Taking 2-3-week vacations is actually a beautiful thing – you can see what slips through the cracks and these items can be the start of next year’s list.
Change is the catalyst of complexity and these tools are meant to help lead efficient change – systems thinking, metrics, and vision
Creating an arena for quickly testing hypotheses about how things work, without having to do the underlying work beforehand, is the aspect of systems thinking that I appreciate most
Problem discovery – problem selection – solution validation – execution – problem discovery…
For problem discovery look at – users’ pain, users’ purpose, benchmark, cohorts, competitive advantages/moats
Must align on strategy and vision in order to scale effectively. Strategies are grounded documents which explain the trade-offs and actions that twill be taken to address a specific challenge. Visions are aspirational documents that enable individuals who don’t work closely together to make decisions that fit together cleanly
No extent of artistry can solve a problem that you’re unwilling to admit
Since value is gained when a project is completed, you must celebrate completions, no matter how small
Rolling out the change can be difficult/awkward but here are 3 steps to help
Explanation of reasoning driving the reorganization (particularly those who are heavily impacted)
Documentation of how each person and team will be impacted
Availability and empathy to help bleed off frustration from impacted individuals
The 3 rules for speaking with the media
Answer the question you’re being asked – reframe difficult questions
Speak in threes – three concise points, make them your refrain, and continue to refer back to your three speaking points
Failure modes – domineering personalities, bottlenecks, status-oriented groups, inert groups
Presenting to senior management
Communication is company-specific
Start with the conclusion
Frame why the topic matters
Everyone loves a narrative
Prepare for detours
Dive deep into the data
Derive actions from principles
Discuss the details
Prepare a lot, practice a little
Make a clear ask
Communicating with teams/peers
Be a facilitator, not a lecturer
Brief presentations, long discussions
Small breakout groups
Bring learnings to the full group
Choose topics that people already know about
Encourage tenured folks to attend
Checking-in – your name, your team, one sentence about what’s on your mind
Every quarter I spend a few hours categorizing my calendar from the past 3 months to figure out how I’ve invested my time. This is useful for me to reflect on the major projects I’ve done, and also to get a sense of my general allocation of time. I then use this analysis to shuffle my goal time allocation for the next quarter
Work the policy, not the exceptions – consistency is a precondition of fairness so cultures which allow frequent exceptions are not only susceptible to bias, but also inefficient
Collect every escalation as a test case for reconsidering your constraints. This approach is powerful because it creates a release valve for folks who are frustrated with edge cases in your current policies – they’re still welcome to escalate – while also ensuring that everyone is operating in a consistent, fair environment; escalations will only be used as inputs for updated policy, not handled in a one-off fashion. The approach also maintains working on policy as a leveraged operation for leadership, avoiding the onerous robes of an exceptional judge
Velocity – when folks want you to commit to more work than you believe you can deliver; your goal is to provide a compelling explanation for how your team finishes work. Finishes is particularly important, as opposed to does, because partial work has no value, and your team’s defining constraints are often in the finishing stages.
Management, at its core, is an ethical profession. To see ourselves, we don’t look at the mirror, but rather at how we treat a member of the team who is not succeeding. Not at the mirror, but at our compensation policy. Not at the mirror, but at how we pitch the roles to candidates
Strong relationships > any problem. Start debugging problems from the relationship angle before anything else. With the right people, any process works, and with the wrong people, no process works
Instead of avoiding the hardest parts, double down on them
Do the right thing for the company, the right thing for the team, and the right thing for yourself, in that order
The best management philosophy never stands still, but – in the model of the Hegelian dialectic – continues to evolve as it comes into contact with reality. The worst theory of management is to not have one at all, but the second worst is one that doesn’t change.
Long bones have growth plates at their ends, which is where the growth happens, and the middle doesn’t grow. This is a pretty apt metaphor for rapidly growing companies, and a useful mental model to understand why your behaviors might not be resonating in a new role. Execution is the primary currency in the growth plates because you typically have a surplus of fairly obvious ideas to try and there is constrained bandwidth for evaluating those ideas. What folks in the growth plates need is help reducing and executing the existing backlog of ideas, not adding more ideas that must be evaluated. Teams in these scenarios are missing the concrete resources necessary to execute, and supplying those resources is the only way to help. Giving more ideas feels helpful, but it isn’t. Away from the growth plates you’re mostly working on problems with known solutions. Known solutions are amenable to iterative improvement, so it would make sense for execution to be highly valued, but I find that, in practice, ideas – especially ideas that are new within your company – are most highly prized.
Leadership is matching appropriate action to your current context
As managers looking to grow ourselves, we should really be pursuing scope: not enumerating people but taking responsibility for the success of increasingly important and complex factors of the organization and company. This is where advancing a career can veer away from a zero-sum competition to have the largest team and evolve into a virtuous cycle of empowering the organization and taking on more responsibility. There is a lot less competition for hard work. Aim to grow scope through broad, complex projects
You need to learn how to set your own direction – talk to peers and see what they’re thinking about, read technical papers, cast the widest net possible so that you understand the problem space
For every problem that comes your way – close out, solve, or delegate
An inclusive organization is one in which individuals have access to opportunity and membership
Useful metrics – retention, usage rate, level distribution, time at level
Useful programs – recurring weekly events, employee resource groups, team offsites, coffee chats, team lunches,
Ingredients for a great ream – awareness of each other’s work, evolution from character to person, refereeing defection, avoiding zero-sum culture
The best learning doesn’t always come from your manager – create a community of learning with your peers
Humans are prone to interpreting events as causal, but it may be more appropriate to see problems in terms of a series of stockpiles that grow and shrink based on incoming and outgoing flows
Be kind to the candidate
Ensure that all interviewers agree on the role’s requirements
Understand the signal your interview is checking for
Come to your interview prepared to interview
Deliberately express interest in candidates
Create feedback loops for interviewers and the loop’s designer
Instrument and optimize as you would any conversion funnel
If you like an interviewee and will extend an offer, have everyone who interviewed them send them an email or letter saying how much they enjoyed meeting them
Have interviewers write up their feedback on candidates individually
The most sacred responsibilities of management are selecting your company’s role model, identifying who to promote, and deciding who needs to leave
If hiring from within, some necessary ingredients are: an executive sponsor, a recruiting partner, self-sustaining mission, a clear career ladder, role models, dedicated calibrations (performance reviews)
Teams have a limited appetite for new processes: try to roll out one change at a time and don’t roll out the next change until the previous change has enthusiastic compliance
Process needs to be adapted to its environment, and success comes from blending it with your particular context
What I got out of it
Some great tools, ideas, perspective on how to manage a quickly scaling organization
OKR stands for “objectives and key results.” They are important in that they help drive good ideas forward by gaining clarity, transparency, and accountability. They are a collaborative goal setting structure for individuals, teams, organizations, or anything else. Objectives are what we want to get done – they must be concrete, actionable, and hopefully inspiring. They are a vaccine for fuzzy thinking and action. The key results are how we determine and measure the progress of getting to an objective. The results must be verifiable and have a number attached to them. Specific hard goals push people and if you have verifiable measures of progress you can hold them accountable. Goals create alignment, engagement, meaning, and fulfillment if done correctly. They’ll align people within a company and clarify what is most important, they break down silos, and help people communicate in the same language. They are meant to help communicate, measure, and achieve lofty goals.
OKRs have four superpowers: Focus, Align, Track, and Stretch (FATS)
Setting objectives gives people a clear path on what to work on and what success looks like. Key results help indicate success and progress since there is a clear benchmark for what ‘success’ means for each objective
When people help set the objectives they are more likely to follow through
Hand-in-hand with focus is a deep commitment. If you waiver or switch priorities often, you will waste time and confuse your team
Objectives should be one line and clearly understandable. The key results must be objective and measurable
OKRs allow teams to move very quickly as it is clear what the priorities are and ensures everybody is moving in the same direction
Transparency is the key and modern goal setting people allow people to buy in and gives management has a clear idea of what people are working on and why.
Objectives get people to flush out their hesitations or frustrations which helps foster communication and collaboration.
Alignment is extremely important but hard to come by and is the biggest lever to go from strategy to execution – if people don’t know the business model and what they’re doing to help the company succeed, it is hard for them to go all-in and know what they’re supposed to be working on.
In addition, this transparency allows for the whole company to weigh in on the best objectives. The best objectives tend to come outside the C-suite, coming from the front line employees who have the best access to accurate information and changing trends.
You also get more people thinking about the same problems – flushing out ideas, making connections that otherwise might not have been made, and getting cross-division collaboration
OKRs are living and breathing goals, evolving and adapting with the needs of the company. OKRs are meant to be adaptive guardrails, not strict rules to follow.
The OKRs have to be visible and related to daily, or else they fade into irrelevance.
Making progress in public goals is one of people’s most motivating factors. You need to write them down and follow up on them often
The constant monitoring and making sure that you’re working on the right thing at the right time is more important than the actual objectives
Expectations are easier to set across groups and fewer surprises can be expected when OKRs are set and tracked accordingly
Post-mortem: OKRs aren’t done even when completed. You can go through a post-mortem: objective scoring (are the objectives themselves valuable and correct?
Google measures each one in a 0 to 1 scale, with anything above .7 being considered successful, subjective self-assessment, and reflection (what contributed to success, what obstacles did I face)
Google adheres to and goes after the 10 X improvement. It requires a new way of thinking and a lot of courage to go for 1000% change vs. a 10% change
A stretch goal cannot seem like a long arch to nowhere and it cannot be imposed from the top down, with no basing in reality. Employee buy-in is essential and leaders have to show that they think the objective is important and obtainable
Conversation – Feedback – Recognition
OKRs set the direction and give clarity, CFRs provide the fuel to get there. They work hand-in-hand and help boost each other up. Continuous performance management rather than quarterly or annually
A manager’s first job is a personal one – to build a deep and trusting relationship with all of their people. The quarterly feedback which is common and most companies is outdated and eats up a lot of time.
CFR is an updated way to give your people feedback – building trust and pushing them to learn and grow.
They help boost OKRs since people can go all-in, knowing that what they’re working on is important and getting appropriate feedback and recognition for their hard work.
It is important for managers to have one on one meetings with their people – the employee must set the tone and agenda, driving the conversation, but the manager must make themselves open and available to discuss and meet with them. This should help the employee with goal setting and objectives, help them look at their progress and areas where they can improve, enable two-way coaching, future career development, and lightweight performance reviews
Feedback must be timely and specific in order to be effective
Without consistent feedback it is very hard to know if you’re moving in the right direction and how you’re progressing
Ask new employees – what they love, what drains them, what their ideal job would look like. Make it clear that the expectation is that they will always tell the truth and do the right thing, and that you’ll do the same
Upward feedback – what are you getting from me that is helpful/harmful? What can I do for you to make you more successful?
Career development – what skills or capabilities would you like to develop? In what areas would you like to develop and how can I help you get there?
Continuous recognition is a huge driver of engagement and employee satisfaction.
Institute peer to peer recognition
Establish clear criteria – projects finished, values lived out, etc. Replace employee of the month with achievement of the month
Share recognition stories – blog or newsletter
Recognition should be simple and attainable
Tie recognition into company goals and strategies – customer satisfaction, product launch…
Ideas are easy execution is hard – OKRs help turn bold and audacious ideas into sustainable, scalable, and repeatable processes
About 3 to 5 OKRs per quarter is about right.
There should be one sole owner for each OKR or else you dilute ownership and accountability
Don’t confuse your mission with your objectives. Your mission is the direction you want to go and your objectives are the steps you need to take to get there. The mission should be extremely aspirational and the objectives more obtainable. This process allows you to be ambitious yet realistic
Doerr’s favorite quote or definition of entrepreneur is “someone who does more than anyone thinks possible with less than anyone thinks possible”
It is important to have rules from the start. Just like trying to give a teenager rules when there were none as a child, it will be difficult to implement after the fact
The best turnover is internal turnover, where people move to different roles within the company to grow and learn
The adoption period can be difficult and take up to a year, but it is worth it. It has to come from the top and everyone has to buy-in
Culture is the only thing which can’t be commoditized or copied
Conviction and buy-in from leaders is most important to make this process work
Should establish both ambitious and incremental OKRs
What I got out of it
Some great, actionable takeaways on how to think about and establish OKRs, and why that’s important. CFRs is another great idea to take to heart and implement. Simple but definitely not easy
Most management books deal with how to manage others but this one deals with how to manage oneself; how to lead by example. Effectiveness is not natural and has to be learned and practiced deliberately. Being effective means doing the right things well
Jim Collins did the foreword to this edition and highlights his 10 Key Lessons
First, manage thyself
Do what you’re made for what you can be world class at. To work on exclusively what you’re bad at is foolish and irresponsible but you must address weaknesses which stand in the way of maximizing your strengths and achieving your full potential
Work how you work best and let others do the same
You must focus on people’s strengths and build around that and not on their weaknesses. Find people who are better than you and who can deliver in specific areas bring them into your fold
Count your time and make it count. This requires the discipline to schedule your time into blocks. The most effective people do one big thing at a time and don’t let distractions seep in. Create unbroken ‘think time’ blocks during your most lucid time of day and do them with regularity. Create chunks for people and random tasks which must get done. Attend only meetings that matter
Prepare better meetings by having clear reasons for the meeting and having disciplined follow ups.
Don’t make 100 decisions when one will do. Inactivity can be very intelligent behavior
Determine what your distinctive impact can be in an organization – the one decision, behavior, or action that might not have happened if you were not there
Stop what you would not start. Most people are too busy to work on truly important things so you must have a stop doing list and refine and rethink your daily tasks and objectives
Run lean. An organization is like a biological organism in that the internal mass grows faster than what shows externally – the volume increases as a cube of the linear dimension but the surface area only as the square. You must fight and hold back internal growth which doesn’t help drive profits and goals.
Be useful. Over success. Over wealth. Over fame. Be useful.
The best executives have personalities all over the map but Drucker found 9 shared traits
They ask what needs to be done.
You must prioritize this list every couple years. Once you tackle the biggest priority, you must redo the process. Can only focus on a maximum of two at any given time
They ask what is right for the enterprise
They make an action plan.
This must include the name of the person who is accountable, the deadline, who this effects directly and must be made aware, who should be told even if they’re not effected
They take responsibility for the decisions
They take responsibility for communicating the decisions
They are focused on opportunities rather than problems
They run effective and productive meetings
End once the purpose has been accomplished. Announce the purpose of the meeting at the beginning. Sum up what happened, action items, who is accountable, deadlines, send to everyone involved
They thought and said “we” rather than “I”
Listen first, speak last
The shift from manual labor and work to knowledge work is why the demands of executives today is so different than before
Effectiveness is so important and must be learned. Especially in today’s knowledge-based economy. Knowledge work is not graded on costs or quantity but on results. Managers in the knowledge based field are those whose decisions have an outsized impact
Hindrances towards effectiveness include being part of the system itself and not having enough perspective, not being willing to give up a lifetime of habits and work, not letting others step up, and not delegating enough.
Events should not drive what an executive does. Rather, key criteria which help inform results and contributions should be his main focus. The truly important things are not the trends – they are what cause the trends and is why you should never focus on the events but on what lies behind them
Effective executives have these skilsl
They know where their time goes
Effective executives start with their time not with tasks because they know time is a limiting factor
They record their time, they manage their time, and then they consolidate their time into long chunks.
What can you do away with totally, what can you delegate?
Don’t waste others’ time
Reduce recurrent and predictable decisions
Reduce poor organization such as too many meetings
Reduce poor information (wrong form or just wrong)
Consolidated time is the key. Most executives don’t have more than 25% of their time at their disposal but if they come in chunks, it’s usually enough. Even if it was 75% but broken up, you’d never get anything done.
It is hard and rare to over-prune
They focus on results rather than effort
The focus on contribution over effort is the key to this whole book. This is what drives how you spend your time and the decisions you make. As a leader you must make a focus on contribution rather than effort the norm. This helps with communication, getting people to go all-in
They understand what is expected of them and how they can get there
They focus on and build on strengths not weaknesses – both theirs and others’
They focus exclusively on areas where their focus will have outsized returns.
They know that they have to do the most difficult and important things first and that there’s no time for the second things
They make effective decisions and know that a few, big important decisions are the way to go. Many, rushed decisions lead to mistakes
Although there are very many personalities, the one thing they had in common when making decisions was that they were slow and deliberate in personnel decisions
Well managed business are boring and quiet. Crises have been anticipated and routinized.
Try to contribute in 3 areas: direct results, adding to culture and values, building the next generation
You must be able to see through the eyes of others and understand how they will use your output. This will help you use common language, put information in a usable form, etc. A generalist is simply a specialist who can translate their knowledge to a universal audience
You must always think and put tasks first and not personnel or else you will get politicking clash of personalities
Jobs must be big and demanding for executives to see how they live up to it. You must judge the people you are considering by their strengths and what they would need to reasonably fulfill this job and you must have clear expectations and definitions of success
With every strength comes a weakness so you must focus on and understand how does a person’s strength translate to a weakness
Staff for opportunities and not for problems
You should remove incompetent men. Not only because of their lack of results, but because if they stayed on, it would hurt the rest of the culture. This is not a slight on the man but a slight on the leader who put him in the position to begin with
George Marshall focused on strengths but also on weaknesses. He put Eisenhower in a position to learn about strategy and, even though he was never great, he was able to appreciate its importance later on
Managing upwards is as important as managing downwards. You must make the strengths of your boss productive as their success and promotions will help you as well. Knowing yourself, and your strengths and weaknesses, and how to make your strengths productive is equally as important. This is an attitude as much as a skill
The key skill is concentration on the first and most important things first and only doing one thing at a time. Effective executives also make sure that the organization as a whole focuses on one thing at a time. They review the past and anything which isn’t an emphatic yes, is curtailed or done away with completely, leaving time to focus on the most important things. Organizations need to stay lean and muscular just as biological organisms do
Fresh eyes which give fresh perspective is vital
Setting priorities and posteriorities (a list of what not to do) is more about courage than knowing what to focus on. You must be future-focused – rather than looking at the past, you must look at opportunities rather than problems, you must be willing to set your own agenda and make your own decisions rather than relying on others, and aim high for things which will truly make a difference rather than playing it safe
Effective executives ultimately make effective decisions. They take their time, know what’s truly important, focus on a few things at any one time, and know that quick decisions are sloppy and not impressive
Effective decisions have these common traits
Is this a generic or a specific situation and problem?
As generic problems can have rules and principles to deal with where a specific problem must be dealt with individually.
Executive executives don’t make many decisions because they don’t have to they figure out which problems are generic and through their rules and principles are able to adapt to situations quickly and effectively
They asked themselves if they would be able to live with the decision for a long time. If not, they keep on working on the solution
They asked them selves, “what are the specifications of the problem they are trying to solve, what are the objectives, and how will they know if their decision has been a good one?” These are the boundary conditions – the minimum results necessary that must be achieved
They ask what is right rather than what is acceptable
They ask and figure out how to turn the solution and question into action. Asking who has to know is as important as understanding the capacity of the people involved in acting out the decision. You must build the execution of the decision into the decision itself which is very difficult
There has to be a feedback loop. This has to be built into the decision to continuously test the assumptions and the actions as they face reality. You cannot get too removed from the process. You must touch the medium and see if yourself how the actions are being carried out and the reactions to it
What is the criteria necessary to determine success and how do you measure that? The effective executive assumes that the traditional measure is wrong otherwise they probably wouldn’t be in this predicament.
The best executives consider alternatives and this causes dissension and disagreements which is very healthy and can lead to the better decisions and outcomes
You must begin with trying to understand and only then trying to figure out what is right and what is wrong. Like a first-year lawyer is assigned to argue the other side’s case before they’re allowed to think about their own, we must truly understand all sides before making a decision
The last question an effective decision maker asks is, “is the decision even necessary?” Better to not act at all if not needed. Act or don’t act. Don’t hedge or go halfway. Only act if your decisions and your actions are needed and important – if things will work out without your involvement, leave them be
Above all, what is needed is courage. Courage to focus on what you think is right and ignore what you don’t believe will make a difference
Don’t just say this was a great book figure out how it will change how you act and behave. That is the sign of a great book
What I got out of it
Loved this book. So much to gain from reading and re-reading – focus on where your time goes, manage yourself first, know how you work best, focus on contributions rather than effort, know what your role is and how you can most impact the organization, few and deliberate decisions, have the courage to not follow the crowd, encourage dissension and sharing of opinions…