The importance of Art in Business, and the irrelevance of specialists

I was recently at a conference (which I shall not name) where some tech leaders – Founders,  CEOs, VCs, Angel investors  and other stakeholders, all specialists in their respective domains – were  sharing their vision and views on what the future of tech holds. The multi-billion dollar question, or potentially trillion dollar question (I do believe that in the next decade we will see the first trillion dollar startup)

I have vouched to stop going to such conferences and not just because of the bad coffee and boring chat. 

Listening to them talk, despite their obvious intellect, vast experience and success, it struck me that the more of these conferences one goes to, the less chance of predicting the future they have. Or creating blockbuster products and services which is what most of the chat in these conferences tends to obsess over. Or in the very least no better chances. Why? Mainly for 3 reasons I would argue.

  1. Everyone presenting at these events has an agenda of their own. They’re selling you something so their views are biased, by definition 
  2. The more they mingle with each other the more esoteric their views become. They develop tunnel vision. 
  3. If they could predict the future they certainly wouldn’t be sharing it with you. 

It’s no coincidence that some of the world’s top leaders failed to predict  the future or even see and react to fundamental shifts in their market. IBM failed to understand the importance of Software in a market they owned, paving the way for Microsoft and Bill Gates becoming the richest man on the planet. IBM’s CEO  Thomas J. Watson Jr. famously said back in 1943 “I think there is a world market for about five computers.”

Nokia, Motorola and Ericsson  which collectively owned the mobile market failed to see the rise of the smartphone, or react to it, as did Blackberry. 

The list goes on. Similarly, as innovative as todays tech companies are, tomorrows unicorns will likely not come out of the Googles or Facebooks of this world. They will most likely come out of, quite literally, nowhere. 

In fact you will struggle to find very many highly insightful or predictive quotes from top leaders anywhere which in hindsight have been proven right. And I would contest anyone supporting that they ever went to a conference that in retrospect was highly predictive of what was to come, in any field. 

Specialists, who tend to talk at such events, are specialists of today and often their views are irrelevant in tomorrows world. 

The artistic world in fact has been much more visionary, imaginative and predictive of the future than any of the ‘specialists’ opinions. Consider how relevant Star Trek is still to this day. Or ground-breaking films like the Terminator or Asimov’s novels from decades ago. 

Consider how David Bowies’ interview in 1999 to Jeremy Paxman was and still is perhaps the most visionary encapsulation of what was to come , a good two decades ago.  It was by an artist and musician, not by a tech leader. 

Art, music, film production, literature, fashion – all forms of Art – are in fact better places to look at to understand what’s to come. Why? Because Artists do one thing far better than most business people: they think fresh. They imagine. They don’t operate or act on data which is the mantra of the modern business world. By definition if you’re acting on data you’re already too late. 

This is not to say data is unimportant in business – very few businesses in today’s world can operate with any success without it. But trying to predict the future using data is like trying to paint with data. You will get something very dull at best. 

There’s  other reasons I think turning to the Art world is more useful than listening to specialists. I think Artists in general – of any form, be it fashion, music, fine art, film etc. –  are far better at understanding human’s inner desires than scientists and specialists. Why? Because for any form of art to be successful it must appeal to one’s taste. You listen to music you like, watch films you like, wear clothes you like, buy art you like without, in very many cases being able to articulate why. It’s not an act of logic or rationality, it drive by emotion and impulse. It just appeals to your taste.

The business world is rather tasteless in comparison. When was the last time you attended a board meeting when anyone addressed this – in my opinion vastly important- subject: taste. 

It only takes a quick glimpse at most business people to understand that in fact they are tasteless. When was the last time you saw a well dressed venture capitalist? 

Taste is hugely important. If only the business world was more consumed by it, so would we, literally as consumers. If you can understand peoples taste in the commercial world you are far more likely to create blockbuster products, and certainly much more than going to industry conferences hosted and attended by, mainly, people who have none. 

So, I would argue that industry leaders would do far better in spending their limited time going to art exhibitions, music festivals, the theatre, watching movies and reading science fiction rather than business books written by some Harvard MBA who shares a taste but with a blind donkey (and that’s on a good day).

Or maybe – even better- try to create some art.  Painting is and has always been my deepest passion and has contributed far more to anything I’ve ever achieved in business than anything else. For anyone who has never tried it, I highly recommend it: staring at a blank canvass before starting to paint is far more daunting as any exercise I have ever come across in my 15 years of running businesses. You need to create something from nothing. Logic, data or any analysis – tools you readily deploy in solving business problems – cannot come to your assistance. Empirical evidence is irrelevant as is ‘a priori’ knowledge or past experience. The things that most businesses entirely run on. 

In other words to create art you need to do something that unfortunately we do too little of in business: you need to IMAGINE. If only we did more of it. 

Why a 3-year-old makes for a better leader than most adults.

I just came back from week long trip to Dubai where I got to spent a good amount of time with my 3-year-old niece. The more time I spent with her the more the realisation dawned on me that kids really exhibit the raw traits of great leaders better than most adults! Here’s why

 

  1. Kids keep asking WHY

 

Spend time with any kid and you’ll be drowned with a series of Whys. Why are you here, why are you leaving, why are your trunks wet? Then you say “because I got in the pool” which in turn is followed by ‘Why?”.

 

Kids start with Why. And so do great Leaders, as Simon Sinek so eloquently argues in his book by that name: Start with Why.
Why are we building what we are building? Why does doing what we do even matter? Why are we doing things this way? True that was a good way to do it yesterday but Why is it still relevant today? Why have we made these decision? Or – more importantly – why have we not?

 

If you keep asking why firstly you will eventually – with a few more wrinkles under your eyes – foster a culture of always ALWAYS challenging the status quo.  This is a must for any company that wants to stay relevant. You cannot afford to take anything for granted in business.

 

Secondly, you will instil a sense of purpose within your organisation. People will understand why things are happening, why they’re happening in the way they are happening, why their sweat and hard work matters, and therefore why they should get out of bed tomorrow and come back to work.

 

This holds true for customers as well. Tell a customer what he is getting and –  unless it falls in the rare category of being a total giveaway – they will consider it sceptically at first. But tell them WHY that thing will change their life, or that of others, and you’ve got them hooked. Their purchase now has a purpose, not just a utility.

 

  1. Kids like story-telling

 

Kids don’t do well with matter-of-fact talk as I found out the hard way. Dry factual statements don’t engage them. Stories do

 

It really is the same in business. Present your team, shareholders or customers with a matter of fact statement and they will at best give you a nod.  Dress it up in a story and you may put a smile on their face. You win people with stories.

 

Which is why great leaders are great story tellers. They are anecdotal, witty, humorous, and engaging. Think Winston Churchill.  They get the message across to you via mesmerising story telling.

 

Perhaps the best known example of this is Steve Job’s Stanford commemoration speech where he famously opens up by saying “today I want to tell you three stories from my life… that’s it, no big deal, just three stories

 

That speech was literally three personal stories, but within them a wealth of wisdom dressed up in such a way that it made the messages unforgettable. Had he just recited his words of advice like he famous ‘stay hungry, stay foolish’ in a straight matter of fact way it would not have resonated the same.

 

  1. Kids like to say NO

 

Ask a kid to share their candy with you, give you a hug, come play with you… unless you hit them in a good moment or bribe them with something their instinctive reaction is to say NO. Not ‘No because…’; just ‘No’

 

Running a company is quite the same. People will keep asking for more no matter what you give them. No customer is eternally happy. Give them a discount, they’ll keep coming back for more. Until you say NO. Give your employees some perks, a salary rise, a pat on the back… they’ll keep coming for more. Until you say No.

 

The groomed ‘MBA way’ is to be transparent with them, engage in dialogue, present them with your limitations, with your annual budget, you may even transparently share your P&L and show your razor thin margins expecting naively that they will just know better than to ask given how transparent you’ve been. Wrong. They will keep asking. Until you just say No.

 

Not that long ago I made this mistake. After I overheard whispers in my company PeoplePerHour such as ‘but if we are doing well why aren’t we getting salary rises or why are we sensitive to costs’.. I thought I’d address the issue the civilzed way. I spent hours explaining to my people, team by team, drawing charts on whiteboards showing transparently how our costs are rising in comparison to our revenues. I explained that the ‘delta’ (a terms that’s now become anecdotal in the company’) needs to be widening for a healthy business. That’s it plain and simple. An undisputed statement of fact – not a story.

 

Total waste of time. None of that stuck. And given that not everything can always be packed in story telling, sometimes its just commanding to simply say NO.

 

  1. Kids are instinctive

 

When you try to bribe a kid with candy they will look at you judgingly with piercing eyes, as if thinking “what’s this guy up to…”. They are too shrewd to fall straight in the trap.

 

The logical decision would be to take the ‘candy’ if it’s up for grabs. Customers would certainly do that without blinking once! So would your employees and your shareholders. Do you think they’d be like “hmm wait why is this guy offering us a dividend, sounds fishy”. Not a chance.

 

Lacking the tools to make a fully formed logical ‘analysis’ of a situation or follow the empirical evidence forces kids to use their intuition, or instinct. They operate ‘from the gut’ as Jack Welch used to famously swear by, much more than most adults do. It’s refreshing and almost always gets a better result.

 

Conversely having an over developed logical brain can be a handicap both in life and in business. Its like having a tool that’s too sharp for its own good. You tend to over-analyse, over-think things and get stuck in indecision. Indecision is – in the end – much more expensive than even the wrong decision. Have you ever seen a kid be indecisive?

 

There’s good reason why instinct matters. Firstly it’s the thing that differentiates us from a machine. Logic is limiting by definition, whilst intuition and its derivative – imagination – is boundless. Einstein put it perfectly:  “Logic takes you from A to B, but imagination takes you everywhere”. Man can no longer compete with computers in processing logical sequential thoughts. But we do better in scattered imaginative thinking.

 

Secondly, our limbic brain – the part of the brain that’s responsible for all our feelings such as trust, loyalty and intuition -– is actually more developed than the rest of our brain, and forms first at the core of the human brain. It’s the part of our brain that controls all emotions but can’t for example process language, numbers or logic. But its what tells us if something ‘feels right’. Decisions made with the limbic brain tend to be faster higher-quality decisions but our logical brain tells us to ignore them. Simon Sinek in Start with Why calls this the ‘overthinking’ syndrome and explains

 

“The more time spent thinking about the answer, the bigger the risk that it may be the wrong one. Our limbic brains are smart and often know the right thing to do. It is our inability to verbalise the reasons that may cause us to doubt ourselves or trust the empirical evidence when our gut tells us not to”

 

Very simply the reason gut or instinctive decisions feel right is because the part of the brain that controls them controls our feelings too.

 

  1. Kids are fearless

 

Being indecisive and fearful one could argue are both different expressions of the ‘overthink’ syndrome. But not quite. Kids demonstrate this too: sometimes you’ll see a kid go for it after evaluating the odds, whilst adults won’t.

 

If logic is our brain’s desire to process information in order to make a decision, fear is HOW MUCH information we need in order to be comfortable with it. To feel safe.  A high threshold on both is a double handicap.

 

Jeff Bezos recently said in another amazing memo to his employees   “most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow

 

So true.

 

Speed matters in business (and in life), so if you multiply all the decisions that are taken daily across an organisation by that extra 20%, it could easily be the difference between success and failure.  ‘High velocity decision making’ as Bezos puts it is crucial in remaining nimble or ‘Day1’ as he likes to call it.

 

In other words, seen in context with intuition: trust your initial gut as a first port of call, your limbic brain is telling something for a reason. But if you must deploy logic and analysis, make sure it doesn’t become paralysis.

Or hire a three-year-old!

Why culture matters – again!

In a previous post of mine I write about Why Culture Matters. This was back in 2011. My company PeoplePerHour was in a totally different stage back then, and so was I. As we’ve progressed and grown up I’ve reflected back on this post to compare the then and now.

In short, the more we grow, the more we mature, the more I’m convinced of the main thesis of that post: that if you get culture right, almost nothing else matters.

You may ask: really? That sounds too simplistic and bold. What about people? What about the product ? What about the market, processes, etc etc. What about all the other stuff business schools and books rant about?

First, lets not forget that culture cannot exist without people. Culture is the fabric that brings people together to do great things. So of course you cannot have a culture without people. And for culture to work you need like-minded people who are simply ‘on the same page’. Bonded by chemistry more than by hierarchy, roles and definitions.

Similarly, without a product you can’t have people either. So yes, product is the starting point of any business. You build a product, you amass a team, and then its about growth and scaling. THAT’s when culture becomes the key ingredient.

Why? Because it renders a whole host of things that are just impossible or too painful, time consuming to get right, almost obsolete. Like rules and processes. Like lists of do’s and dont’s. As a young business you will not have time to compose a thorough ‘how to’ manual for everyone to follow, and even if you did you wouldn’t (and shouldn’t) have the time to train everyone on them, and even if you did you would not be attracting or retaining the right people in the first place! Smart people operate much better in a climate where they know the overarching goal, they see the destination, but they’re given freedom as to how to get there.

The role of the leader

Defining the role of a great CEO or leader has and will remain a subject of much debate. The more I mature as a CEO I see my key responsibilities narrow down and crystallise to these 3 and these 3 alone.

  1. To hire the smartest people I can for each role
  2. To provide a clear vision and very clear & tangible goals (vision and gaols are different)
  3. To set the right culture for them to work together to get there.

If you do those 3 things right you almost don’t have to do anything else. Or in the very least you will have more leeway for all the other things you’ll get wrong. It’s very refreshing. You will find (as I did) transcending from managing to leading. From doing too many things yourself to just setting scene and the actors for them to get done without you. A great CEO as they say should make him/herself redundant just a little more every singe day. That’s a sign that you are doing those things listed above.

Often confused: vision is not the same as goals. Some CEOs think that a bold, magnetic vision is enough. Its enough only to get peoples appetite going. Its not enough to feed it. It’s enough to inspire people but inspiration is not enough. They need goals & targets that take you collectively closer to that vision. Vision is how you imagine the future to be and how you and your company are changing it. Many entrepreneurs make the mistake of thinking that everyone can see what they can — they cannot. And thats a good thing! A world full of visionaries would mean nothing gets done. Its your job as an entrepreneur to translate how that vision manifests itself into reality by setting milestones along the way.

So in short, if you do that, and hire the smartest people you can who are like minded, culture will take care of everything else.

What is culture?

Culture itself can be a vague idea. For me culture comes down to practical things like: what you as a leader expect of people; when should they ask and when should they get on with things; what sort of ‘reasons’ for things not happening do you tolerate… Think about they way you are with your friends, spouse, or kids if you have any… If a kid misbehaves and you tolerate it that sets the tone for future action. If a friend is always late and you tolerate it, they will carry on being late. If you answer every little question that comes your way, you can be sure that more will come.

Culture therefor is not this abstract idea that lives up in the either. Its the collective behaviour of your team and it’s defined 100% by the tone the leader sets.

I will illustrate by reflecting on our culture at PeoplePerHour so its not just a vague concept.

  1. Brutal Honesty: I tell my team: I do not tolerate anything BUT brutal honesty. I cant stand ‘wishy-washiness’ and beating about the bush. I can smell BS from a mile and it makes me want to puke. So we have a very direct and outspoken culture, without fluff and waffle. Everyone in my company knows that waffle and BS doesn’t fly with me. It’s not for everyone. But for those who do fit in it amplifies results and cuts back on time wasting. And no doubt it stems from intolerance of anything other than brutal honesty
  2. Numbers, Numbers, Numbers: Similarly we have a culture around strong numeracy and measurement. We are all quite a numerical lot, and everything we do must be measured. I don’t tolerate people’s request for something unless its benefit can be quantified. I am allergic to pie in the sky kind of thinking thats not rooted in some form of ROI measurement. Hence that’s part of our culture. And again that’s probably my engineering background and obsession with knowing exactly what I get out of something I put in.
  3. Ownership & Accountability: We have a culture of accountability and ‘can-do’ attitude. Again. The tone is set by my lack of tolerance for‘reasons why something isn’t done’. I’m astonished how common this is in other companies. They foster a culture of ‘effort matters’. It doesn’t! Life does not reward you for effort: not in sport, not in the arts and not in business. You dont make it to the Olympics juts because you tried! You make it because you achieved a good enough result. Anyone who’s worked with me will know that when they come to me with a laundry list of why something didn’t happen (even though they tried hard) they well get shot down. Brutally and openly . Often humiliatingly. Is it right? I don’t really care. It’s irrelevant. Its how I do things and it sets the tone and expectation for the whole team. Come to me with results, and why things DID happen or WILL happen (at worst). I hire smart people and so I expect more than excuses from them. Otherwise i may as well hire gibbons and pay less.
  4. Less is more: We have a culture succinctness, snappiness getting to the point. I joke about the ‘3 lines rule’ : that if an email doesn’t get to the point within the first 3 lines i stop reading. It may be said half jokingly but its largely true. The result: people get to the point or get ignored. That avoids time wasting on long convoluted emails, memos, talks, presentation that have little substance in them
  5. Openness: everyone can and is encouraged to voice their ideas or concerns about something. Often this results in long team email trails, chat groups, and lengthy debate but, again, as people know that we also have a no BS, no fluff culture almost always these debates are for good cause and lead to something. It may be a new practice, a product feature, a new / team event, a new process… Its shows that people care more than just getting their own job done. They care about the overall outcome
  6. Humour: we tolerate and encourage people to laugh, say silly things and have fun while working. It wasn’t always like this, in the early days I think the company and team were too highly strung and intense. We weren’t having fun. Why ? Because I was too highly strung and intense. I probably still am compared to most people but compared to myself back then im now a Budhist monk on coolaid! Why ? Because the worst part is gone, the company is out of the red and whilst there are still many challenges a huge weight has been lifted off my chest knowing that come what may, unless we REALLY screw up, we will stay in business. And also because I’ve simply grown up! Again: the tone is set by you! If you are stressed, everyone else is stressd. If you crack a joke, and have fun others will too.

The list can go on and on. There is no definitive limit to what defines culture. It simply is the way you behave, its the way you do things, Its the things you do and you don’t do. If you have a tightly defined culture the litmus test is to ask yourself: would this (whatever ‘this’ may be) fly in the company? If the answer is a definitive ‘yes’ or ‘no’ then you have a tight culture. If it’s a ‘hmm not sure’ then you don’t.

Alas, with the right overarching vision and goals, with the right people culture is all that’s needed.

If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea”. — Antoine de Saint-Exupery

3 Defining qualities of great entrepreneurial leaders

http://upstart.bizjournals.com/resources/advice/2014/09/18/3-defining-qualities-of-great-entrepreneurial.html

Great leaders may possess a myriad of attributes, not the least of which are intelligence, charisma and natural charm. All of these things matter. However, you can be a great leader and not be naturally charming or very intelligent. In my time at PeoplePerHour I’ve learned a lot about leadership. I have come to the conclusion that there are three key attributes a great leader must have.

Vision

The ability to amass a great team, motivate and inspire them is plain useless if you don’t have a clear vision of where you need to go. Leadership is first about seeing the future and then about being able to figure out a feasiblepath to get there. It’s seeing the iceberg before the Titanic hits it and taking fast and decisive action.

It’s doing the one right thing rather than doing many things right. It’s being different, not following the herd, being controversial, and seeing what others don’t see. It’s having a nose for what’s coming and the eyes and ears to react before others do. Without vision, you can empower people all you like but you won’t get anywhere. You’ll have a following but no direction. You may make a great motivational coach, but not a leader. Every difficult situation needs a visionary leader to point the way and make a tough decision.

Influence

Once you have a clear vision (but only then), you need a sting following. That requires the power of influence. Whether you are in an existing leadership situation or the creator of a group, this is very hard thing to do. In either case, you are new to the situation and the odds are against you. Why should people trust someone new? The vast majority of people are resistant to change, no matter the odds. In order to fulfill any grand vision, you need to drive change. Otherwise you are just a puppet master holding the strings waiting for the show to end.

Influence people across the board — explain to employees the benefit of leaving secure jobs and come join you; convince investors to give you money at the very beginning, get customers and fans to support you, your bank manager to give you an overdraft, your landlord to give you a lease and rent-free period; and your wife to put up with sleepless nights, cold sweats and no pay. Carry that burden of influence with you. If you go down, you take more people with you than yesterday.

Courage

The third element is the most challenging. You’ve clarified a vision and built a following by charming, coercing, schmoozing…ultimately influencing enough people. After all this work, you realize that it’s only day one. Now you have your boat (more like a raft) and your compass. But you still need to cross the ocean. This is the final and true test of great leadership. It ultimately comes down to courage. Intelligence and knowledge are advantages of course, but without courage they are wasted.

Courage alone could and would get you there, albeit slower and with more pain. So the key question is: Do you have the courage to keep going when everyone tells you to turn back; to know you’re right when everyone says you’re wrong; to stick to your instincts when people call you crazy; to carry other people’s weight when they fall; to set the tempo and beat the drum despite how tired you may be? It’s your job to keep people together when they are drifting apart and losing faith, to give them courage but not false hope, to let go of some to save many, and to weather the storm but not bask in the sunlight when it ends — because it never does.

Vision and influence will make you a well equipped captain. But courage is what gets you there. On the other hand, courage alone makes you a fighter without a cause. You may be good at creating lots of noise, but to paraphrase Sun Tzu’s “Art of War”: that’s just “the noise before defeat.”

 

The 3 attributes of true leadership

“The ability to charm dogs off a meat truck”…   “When people want to follow you even if just out of curiosity” …  “The ability to make the other guys feel in charge”.  To “empower”, to “motivate”, to “inspire”…  The list of attributes to what makes a great leader is countless.  They all make a good read, but none of them fully capture the true essence of what makes a great Leader in a complete way, I believe

Great leaders may posses a myriad of attributes, no least of which are smarts, intelligence, charisma and natural charm. All of these things matter. However you can be a great leader and not be naturally charming or very intelligent, or many of the other attributes named. continue reading »

Are you thinking long-term enough?

Warren Buffet was once asked by Jeff Bezos a long time friend of his: “you are the second richest man in the world and yet you have the simplest investment thesis. How come others didn’t follow this?”  To which Warren Buffets responded: “because no one wants to get rich slowly” 

In a nutshell that’s what’s wrong (or rather what’s not quite right) with a lot of the investment community today, from public markets to private equity investors and unfortunately it trickles down into too many companies. You can’t time-box success. You can’t sprint a marathon. And you can’t measure success with speed but only by the  magnitude (and significance) of the end result.  Building to flip is easy. Building to last is difficult and you cannot take short cuts.continue reading »

Whats better than being the boss is being the customer

I was recently at a gathering of entrepreneurs and we talked about our challenges, what we like and what we don’t like about what we do. And one thing struck me: no-one in the group actually enjoyed being the boss (me included). And by that I don’t mean that they don’t value the independence. We all do. But we all see managing people as a necessary evil, a means to an end not the end itself.

And when i thought about it it actually makes sense. Entrepreneurs (or at least the true breed of entrepreneurs) are not people who rise up the ranks and become CEOs. They are mavericks, the round  pegs in the square holes, people who don’t abide by social norms or fit in  large groups be it social groups or corporations. What drives them is an itch to innovate, to create products that serve customers in ways that are either totally novel or just better than what’s out there already.

I’ve not heard one entrepreneur tell me that they started a business because their dream was to be a manager. In fact most exceptional entrepreneurs are terrible managers. They are visionaries who see what others don’t, they are go-getters who take risks and go out to build what they see. But they are not managers. They are too impatient, temperamental, too firey and passionate, and have high standards. Too high for most people to meet, at least consistently. Managing is something that comes with the ride and has to be thrown into the mix.continue reading »