CHAPTER TWENTY-SEVEN

HAVE YOU LEARNED YOUR LESSON?

Everything is a potential opportunity to learn a lesson and apply it to your business: from the story of fig wasps in a popular evolutionary biology text (see Chapter 9), to an anecdote about dancing, drawing five-year-olds (see Chapter 11). Important as those are, you still have to formalize procedures for learning valuable lessons from the outside (benchmarking) and from within (postmortems, or after-action reviews). As always, you can be haphazard, or you can follow a few simple best practices, like the ones I outline below.

THE VALUE (AND LIMITATIONS) OF BENCHMARKING

In the past few years, my team and I have executed a ton of external benchmarking projects—comparing our processes and performance to those of our competitors or partners. Each of these projects has different leaders inside Return Path doing both systematic and ad hoc phone calls and meetings with peer companies (and companies we aspire to be like) to understand how we compare to them in terms of specific metrics, practices and structures. It's some combination of the former management consultant in me rearing its head and me just trying to make sure that we stay ahead of the curve as we rapidly scale our business.

Why go through exercises like these? One answer is that you don't want to reinvent the wheel. If a noncompetitive, comparable company has solved a problem or done some good, creative thinking, then I say “plagiarize with pride”—especially if you're sharing your best practices with them. The reality of scaling a business is that things change when you go from 50 to 100 people, or 150 to 300, or 300 to 1,000. Unless you and your entire executive team have “been there, done that” at all levels—or unless you are constantly replacing execs—there's not exactly an instruction manual for the work you have to do.

A second, equally valuable, answer is that benchmarking can uncover both problems and opportunities that you didn't know you had (or at least validate theories about problems and opportunities that you suspect you have). Learning that comparable companies convert 50 percent better on their marketing funnel than you do, or that they systematically raise prices 5 to 7 percent per year regardless of new feature introduction (I'm just making these examples up) can help you steer the ship in ways you might not have thought you needed to.

What are the limitations of benchmarking? As our CTO Andy Sautins, said to me the other day, sometimes no one else has the answer, either. We do run into this regularly: a tough technical problem where literally no one else does it well, like disaster recovery, or in dealing with channel conflict problems, or trying to streamline our commission plans. Sometimes, a particular circumstance you face is actually unique. That's not true most of the time (everyone has to have a disaster recovery plan) but creative entrepreneurs breed inventive business models and sometimes those just run into situations that others aren't familiar with.

Sometimes you find out that you are actually best in class at a particular function! In those cases, one could just chalk up the exercise to a waste of time but I still think there is learning to be had from studying others. If there are other companies that are also best in class, I always encourage group brainstorming among the top peers about how to push the envelope further and be even better. This can even take the form of a regular peer group meeting/forum.

On the whole, I find benchmarking a good management practice and a particularly good use of time. Like everything, it's situational and you have to understand what you're looking for when you start your questioning. You also have to be prepared to find nothing and go back to your own drawing board. Good entrepreneurs have to be great at both inventing and, as I noted earlier, plagiarizing.

Learning from Extremes

Earlier in the book, I mentioned that the either/or between meden agan (Greek for “everything in moderation”) and Oder gor oder gornisht (Yiddish for “all or nothing”) is a bit of a false dichotomy. There is obvious value to taking a moderate approach and there's a lot to be learned from going to extremes. Here, I want to point out how extremes can be great places to learn and develop a good sense of what “normal” or “moderate” really is. Let me give three examples:

  • We were having a buy-versus-build conversation at work a few years ago as we were considering an acquisition. Some people in the room had an emotional bias toward buy, others toward build. So we framed the debate this way: “Would you acquire the company for $1 instead of building the technology?” (Yes!) “Would you buy it for $10 million?” (No!) Taking the conversation to the extremes allowed us to frame the question in a rational way: where is the price where buy and build are in equilibrium?
  • In a moment of workplace solidarity, my colleague Andrea Ponchione and I completed a five-day juice fast a few weeks back. I came away with two really interesting learnings that I got only from being extreme for a few days:
    • I like fruits and veggies (and veggie juices) a lot and don't consume enough of them.
    • I sleep much better at night on a relatively empty stomach.
  • As I mentioned in Chapter 10, I overhauled my “operating system” at work to stop interviewing all candidates for all jobs when we got too big a few years ago. What finally convinced me to do it was something one of my colleagues asked me, which was, “Will you be able to keep these activities up when we have 500 employees?” (No) “So what is the difference if you stop now and save time versus stopping in 6 months?”

In every case, thinking about extremes gave my team and me perspective on the full spectrum.

THE ART OF THE POSTMORTEM

It has a bunch of names: the after-action review, the critical incident review, the plain old postmortem. Whatever you call it, it's crucial to institutionalize best practices and learnings after critical incidents. They're productive, and they can be cathartic if something has gone wrong.

The origins of the postmortem are with the military, which routinely uses this kind of process to debrief people on the front lines. Its management application is essential to any high-performing, learning organization.

Here are my best practices for postmortems:

  • Timing. The postmortem should be held after the incident has passed, usually for several weeks, so that members of the group have time to gather perspective on what happened, but not so far out that they forget what happened and why. Set the stage for a postmortem while in crisis (note publicly that you will do one) and encourage team members to record thoughts along the way for maximum impact.
  • Length. The postmortem session has to be at least 90 minutes, maybe as much as 3 hours, to get everything out on the table.
  • Agenda format. Our postmortems include the following section:
    • Common understanding of what happened and why
    • My role
    • What worked well
    • What could have been done better
    • What are my most important learnings
  • Participants. Err on the side of including too many people. Invite people who would learn from observing, even if they weren't on the crisis response team.
  • Use an outside facilitator. This is a must when the participants are largely senior people. We often use my executive coach, Marc Maltz from Triad Consulting. (See his contribution to Part Five.) You could also use a senior HR person from inside the organization, as long as that person or his or her “client organizations” didn't really have much to do with the incident.
  • Your role as leader. Set the tone by opening and closing the meeting and thanking the leaders of the response team. Ask questions as needed but be careful not to dominate the conversation.
  • Publish notes. We publish our notes from our postmortems not just to the team but to the entire organization, with some kind of digestible executive summary and next actions.

When done well, these kinds of meetings not only surface good learnings, they also help an organization maintain momentum on a project that is no longer in crisis mode and therefore at risk of fading into the twilight before all its work is done.

I should also note that postmortems usually connote that something went wrong. You should also do them at other times as well. Sometimes there are great learnings about successful product launches or successful recoveries of a key account, for example. We also periodically pull up in the middle of a large project and do what we call a “midmortem” to make sure we capture learnings as we go and give ourselves ammunition to course correct.

Sometimes, There Is No Lesson to Be Learned

We once had a very unusual employee situation at Return Path. A brand new senior executive we brought into the company to be our first-ever senior head of HR and organization development resigned very abruptly after only two weeks on the job, citing a complete change of heart about her career direction and moving on to a government position in economic and community development. Unfortunately, the person resigned by cell phone, gave no notice and provided no assistance with transition. What a disappointment—especially coming from an HR professional!

After getting over my disbelief/irritation/rage (not easy, not a small amount), after communicating this difficult message to the company and after sending a thoughtful-yet-cathartic note to the person, I sat down to think a little bit about how I could have prevented or at least spotted the situation in advance.

We interviewed the person thoroughly: 10 people internally conducted interviews and I interviewed the person for almost four hours myself, conducting one of the most rigorous interviews I've ever conducted given how critical this position was to our organization. I also checked five references on the person, all of which were sterling. I had an executive coach with whom I work interview the person. Everything checked out; the person's attitude and enthusiasm about the position couldn't have been better.

My conclusion on the lesson learned here? “Sometimes, there is no lesson to be learned.” There may be ancillary lessons around handling the situation once it became apparent but I think the core lesson I'd hope to get out of this—that we could have done something different in the interview process or orientation or first few weeks to prevent or at least spot this ahead of time—appeared to be nonexistent.

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Management Moment

Connect the Dots

“Connecting the dots” means helping others network internally, or helping others connect their work to the work of others, or helping others connect their work to the mission of the company—or even to the outside world.

As a business leader, you are in a really good position to help connect the dots in a growing organization because you spend time with people across different functions and teams and offices. That gives you a pretty unique view across the organization. It makes you particularly well suited to perform this unique and vital task.

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