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Checking our blind spot when making a decision

Checking our blind spot when making a decision

In a previous post, I discussed a tendency for startup teams to be blindly optimistic.

So today I’m going to share a simple exercise to help check our blind spots when taking decisions.

We start by asking ourselves…

… how do we tend to react by default?

Understanding our default behavior provides critical details on who we are, what we stand for, and how we behave in our job.

It helps us acknowledge where we stand, and whether we’re going in the desired direction. By reflecting upon our natural tendencies, we shine a light onto behaviors that we don’t usually notice. It allows us to make corrections to subconscious actions.

For example, I once asked my team: “what is the first thing that you do when you get to work and why?” 

To which a team member responded: “I check my emails to check for any fires to fight, but I really should review and adjust my to-do list before reacting to anything…” Simply thinking about something that is more or less a habit can trigger a correction.

To paraphrase famed author David Foster Wallace, a fish may not even know what water is, being surrounded by it since birth. Similarly, there are so many elements in our day-to-day that require our active focus that we may not know how our subconscious is behaving. Personally, I had a tendency to hyper-focus on my work and neglect chats I receive throughout the day, leading some people to think that I don’t care about them. I only realized it after a team member joked about the situation over lunch, after which I became more aware of my chats throughout the day.

In the context of an organization (or a team), default tendencies act as a reflection of its culture. A proactive diagnosis thus helps to ensure that the team’s culture is aligned with its desired culture.

To diagnose my team’s tendencies, I like to first recognize three entities including:

  1. The team;
  2. The team leadership; and
  3. The team’s relation with other teams.

Next, I ask each team member to reflect on the tendencies and behaviors from these three perspectives. Specifically, I ask: “In your perception, what does the team or the team leadership…” OR “In your perception, when collaborating and working with other teams, what do we…”

  • “…enjoy spending their time on?”
  • “…don’t enjoy spending time on?”
  • “…excel in?”
  • “…repeatedly fails to achieve?”
  • “…never get the time to do?”
  • “…usually ask about?”
  • “…not ask about?”
  • “…forget about?”
  • “…get confused by?”

Compiling results from all team members provides us with a comprehensive picture of our tendencies, our blind spots, and our culture in general. Our goal is not to judge, but to effectively observe differences.

Next, we need to ensure that our culture is moving in the right direction. I thus pull all team members together and review whether each trait is desirable or not. In the case that it is not, we try and identify ways to actively remind ourselves of our bias and compensate for it. For example, if we have a tendency to avoid working with other teams, we could compensate by first asking “Does any other team need to be involved?” before kicking off any new projects.

How often should we assess our tendencies? I recommend performing this exercise every quarter or two. Culture is slow to change.

I do advocate for someone to act as a culture champion to hold people accountable to any tweaks and changes we decide to pursue. In the example above, a champion would praise people when they remember to consider whether other teams need to be involved in a project, and reprimand when we fail to do so.

In my opinion, success does not translate into achieving our dream culture, but very much being conscious of our existing culture. Simply being aware our biases, weaknesses, and tendencies helps to avoid taking decisions blindly.


Recommended exercise

The next time that we’re faced with a decision, let’s analyze our immediate response (default tendency) and then take a day to think and see if we change our opinion. Is our default state of mind limiting our abilities?


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

How to not let failure hurt morale and diminish ambition

How to not let failure hurt morale and diminish ambition

We had missed our quarterly sales target. Again.

The news was given during a company all-hands. All over the room, I saw people staring at our CEO, not sure how to react. Frustrated, confused, and scared.

We had extremely ambitious targets to begin with, as is the case with most VC backed companies. Most individuals knew we’d be lucky to meet them. Yet as results were announced, we all felt like failures.

In the following weeks, the mood in the house was grimmer than usual. People were doubting the company’s ability to succeed, ever. Many feared losing their job as this downtrend continued.

Personally, the bad news didn’t surprise me, nor did it hurt my optimism. I never expected to hit those numbers, knowing full well they were best-case scenarios. They were not set based on what we could realistically achieve, but rather on numbers investors wanted to see (~somewhat imaginary). So it didn’t affect my outlook of the future. I knew we had a strong team and we did the best we could.

To help my team get back on track, I set up a meeting and said something along the lines of:

“Team, I know that some of you are feeling grim about the fact that we missed our sales targets again. I’m not going tell you that things will be better in the future or that the sales team will do better next quarter. I can’t predict the future.

However, I will remind you of the reason all of us are here for. Every single one of you told me that you wanted to join a startup to make an impact and to learn by doing. And the only promise that I ever made to you is that you’ll be able to do both. Does anyone in this room feel cheated by my promise?

Nobody ever promised you that it’d be an easy ride. In fact, you knew from the beginning that it was going to be a challenging and chaotic ride. Yet you still joined.

Many of us are doing things for the first time. It’s my first time leading a team. It’s our founders’ first company. For many of you, it’s your first job. So I don’t expect us to always get things right.

What I do expect of all of us is to work hard and work smart. To never let bad news and missed results beat us down. To always get back up and continue our journey.

We’re all here to do one thing and one thing only: Give out best shot. So I don’t care if we missed our targets. Let’s focus on the day-to-day and do our best.”

My point isn’t that a pep talk will fix things. Rather, it’s that people are too emotionally and mentally attached to results. So much so that when they fail to achieve their goals, regardless of how realistic it was, they lose confidence. I needed to remind my team that hitting targets, winning deals, and achieving milestones only play a small part in our overall success. It’s our day-to-day work, the time that we spend grinding and planning, that matters.

We missed our targets. So what?

I attribute our team’s grim reaction to prevalence of a fixed mindset in our culture.

[To quickly remind readers of the meaning of a fixed mindset versus a growth mindset, allow me to quote Carol Dweck (top researcher on the subject): “Individuals who believe their talents can be developed (through hard work, good strategies, and input from others) have a growth mindset. They tend to achieve more than those with a more fixed mindset (those who believe their talents are innate gifts).” I find it fascinating how these two mindsets affect how we approach life. To learn more, I highly recommend readers to checkout Mrs. Dweck’s book: Mindset.]

In my opinion, people with a growth mindset would look at the missed targets and say to themselves: “Well, looks like there’s more work to do and things to learn. Let’s try harder.” On the other hand, a person with a fixed mindset would say: “Shit. Maybe we’re just not cut for this.”

I like to think I have a growth mindset, and that my team does as well. Yet fact is many of my colleagues have quite fixed mindsets. I don’t blame them for it. It’s my opinion they’ve received too many praises supporting a fixed mindset.

Allow me to elaborate… Every time that we compliment someone with “Wow, you’re so good at…” or “You were really born to do…,” it gives the impression that success is tied to who that individual is. Their genetics. How they’re wired. It couldn’t be more wrong. Ask anyone successful and they’ll tell you that success comes from thousands of hours of practice, bouncing back from failure, and many iterations. To quote Thomas Edison: “Success is 99% perspiration.” If that’s not enough evidence, I highly recommend Malcolm Gladwell’s book Outliers, which argues that it takes 10,000 hours to master anything. I believe that. I also acknowledge that some people are better positioned to achieve those 10,000 hours faster than others, but nobody said that life was fair. The point being that success is correlated to work and effort, not simply our genes.

Are targets detrimental to the team’s motivation?

No. Targets are absolutely necessary.

Targets and goals provide direction to our teams and help gauge our progress. Without them, we’d be all running in different directions and without a clue about whether or not we’re successful.

But hitting our targets is not the only thing form of success out there. People need to feel good for having tried really hard and giving their best.

How do we prevent missed expectations from de-motivating our team?

In my opinion, it comes down to setting realistic goals, having an underdog mindset, and rewarding a growth mindset. Let’s explore each in detail:

Set realistic targets

Set targets too high and we’re bound to miss them. Team members will feel like we’re asking the impossible. Set targets too low and the team loses the ambition to achieve more (they’re already there, why try harder?). I thus recommend to set targets slightly higher than what we can achieve today.

For example, if we forecast $100 in revenue based on historical performance, and $150 in revenue under a best-case scenario, I’d set our target as a range between $120 and $150. I’d proportionally increase the reward should we hit higher than $120. This challenges the team to do more than they have done historically, while incentivising even better results should they actually hit the lower goal.

If the team fails to meet the target in their first try, I’d keep the target unchanged until we achieve it. The goal is to keep learning and iterating until we succeed. The critical part of this approach is learning how to leverage scenario planning to set targets, instead of forecasting based on the best possible outcome. I thus recommend checking out author and VC Guy Kawasaki’s Art of the Start, which has a great section on how to set realistic goals from the bottom up.

Maintain an underdog culture

The moment that we think we’re successful is the moment that we stop trying.

I therefore believe we need to support an underdog mindset. We need to feel like we’re always chasing a bigger fish with limited resources. We cannot be too positive in our assessment of the company – the best underdogs feel that they’re behind and need to work harder.

For example, we need to avoid saying things like: “We have a ton of money in the bank from our investors;” or “We’re growing faster than any competitor in the field, ahead of the game by a good margin.” Even if these statements were true, it creates the perception that we’re successful and can relax a bit.

In addition to saying the right things, we also have to act like underdogs. Buying $2,500 Macbooks for everyone, giving free lunches and craft beers, and stocking the office with $1,000 chairs and standing desks does not paint the picture of an underdog company. These “perks” create a culture of entitlement, where people fail to value what they have, and perceive that they are in a pretty comfortable spot.

We don’t want our people to feel comfortable. We want our teams to feel like their survival is at risk. We need people to work hard to win. If we’re going to give perks, people need to earn it: e.g. Food should only be offered when there’s progress to celebrate, like when the team pulled an all nighter, or made an awesome attempt at hitting their goals.

We can’t give anything for free.

Praise effort and progress

Creating a growth mindset culture starts by praising team members’ daily effort. As leaders, we need to make the time to observe team members regularly.

A couple years ago, I’d only high five people when they hit their targets (which meant rarely), and had 0 hours dedicated to observe and praise people. Little did I know that I was actually supporting a fixed mindset.

Nowadays, I spend at least 30min to an hour every day to see if team members are trying harder than usual, and praise people’s efforts. For example, if I see someone is practicing ahead of a presentation, I’d stop by and say “Hey, I see that you’re working hard on the presentation. Feel confident yet?” Or if I see team members brainstorming solutions to a problem, I’d approach them before the end of day and say “I saw you spending a good amount of time brainstorming in that room with so and so. Looked like there were some good ideas on the whiteboard. How are you feeling?”


Recommended exercise

Let’s observe team members when they fail to achieve a goal. Are they optimistic and already thinking about how to improve, or are they simply feeling down?


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

Why my boss needs and wants my feedback

Why my boss needs and wants my feedback

I want to start this blog post by saying that I love my boss, and almost all past bosses I’ve had. In each case, each job, they taught me invaluable lessons. I’m not trying to kiss ass (ok maybe a little haha), but I’ve honestly been really lucky in meeting awesome bosses and mentors.

Yet once in a while I do get frustrated at my boss (like everyone else in my life).

When that happens, I first keep it to myself, let a good night sleep dissolve my emotions, and move on. I sometimes raise up the matter with them with a clear mind the next day, especially if the issue impact my team, but often not, when it only impacts me.

I never thought to explore why I get frustrated at my boss as compared to other people. That’s until a few days ago, when I was reading The Road to Character (highly recommended), while also being frustrated at my boss for failing to address a situation I raised up weeks ago that has now turned into an urgent fire.

What I realized was that I tend to get frustrated at my boss for failing to be perfect. Being in a position of power (in this case, a VP of our company), being superior to me, and being able to affect our startup’s long-term direction, I expected my boss to know everything I know, take the best decision all the time, and have the answers to everything. How unreasonable, right? Nobody is perfect. Nobody can predict the future accurately. And more importantly, no manager should ever be as technically knowledgeable and experienced as their subordinates (advocated by many top leaders including Andy Grove in  High Output Management).

So why did I expect my boss to never make a mistake? I attribute it to our educational system, where teachers have the answer to everything they teach, and are in a capacity to judge the quality of our work. Especially in STEM programs, there are actually “correct” answers that get perfect scores, and professors whom know the “correct” answers. Our educational system has created the perception that individuals in authority know everything.

This expectation doesn’t stop with bosses. We expect our politicians to be perfect and bark whenever they are less than statesmanlike. We expect our parents to be perfect and get frustrated when they don’t “get us” or don’t understand modern trends. It’s a sign that we simply want people, especially those that have influence over us, to always do what’s best for us.

I personally do not believe that such an expectation is reasonable, for several reasons:

  1. Everyone makes mistakes. As this blog shows, I certainly make a ton of them. And if my boss is anything like me, a human being, they ought to also have emotions, exposure to new situations, and other traits that contribute to a less than perfect response once in awhile.
  2. What’s bad for us may not be bad for others. No other individual in the world has experienced life exactly as I did. Each one of us can only witness life in our own eyes. This leads to various interpretations on the same situation, differing priorities, and diverse goals in mind. This means that what I interpret as a negative outcome may not always be a negative outcome for others. Yet because we think that we’re at the center of the world, we interpret anything that has a negative impact on us as bad. Fact is that a bad decision for us may have been positive one for our boss and the rest of the team.
  3. We don’t share the same responsibilities. As a team, our skills should not overlap, but rather complement each other. Especially in relation to my boss, I’m not supposed to share the same expertise and day-to-day responsibilities. So any expectation that my boss knows what we know perfectly and can do it even better is unreasonable. Personally, I can’t do what many of my team members do technically and that’s great.
  4. Expectations were not communicated. I also notice instances where I expect certain things of my manager, but have never communicated them. How reasonable is that? I once became frustrated at my manager for failing to reprimand a fellow colleague’s manipulative ways, yet I never spoke up about my colleague’s behavior. Without any evidence or insight on the subject, how can I assume that my boss has any idea that my colleague is behaving negatively? When I did bring up the subject, my manager was actually very receptive.

The only element that’s within our control in the above list is the proactive communication of our expectations. Everything else is outside our control, so I’d argue that we need to learn to appreciate them for what they are, rather than complain about any of it.

So if we have any expectations for our superiors, the only thing we can do is to communicate them. Any frustrations that we have in regard to an expectation are only justified if our boss has agreed to that expectation. Just like when we set expectations with our team members.

Let’s also remember that our manager’s goal is to guide our team toward our company goals. This includes making sure that we are happy and successful. Any good manager should thus be trusted with the ability to listen to our expectations of them, along with any constructive feedback.

If by experience, we find that our boss isn’t receptive to feedback, doesn’t have our best intentions in mind, and has a selfish agenda of their own, it’s time to change teams. But let’s make sure we give it a couple of tries and maybe even address the issue with their manager.

Finally, let’s also remember that all of us are in a position of authority to someone else. A team member, a child, a student… The sooner we set the expectation that we’re not perfect, and that we want their feedback, the less frustrations they’ll experience.


Recommended exercise

Let’s sit down with our boss and ask them if they are interested in receiving feedback from time to time. If so, let’s also ask them how to best communicate them.


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

Should I speak up and voice my thought?

Should I speak up and voice my thought?

I’ve definitely had strong thoughts about things at work, and yet kept them to myself.

In many instances, it was absolutely the right thing to do (e.g. when I’m frustrated at a client), but in other cases, it was most likely counter-productive. Especially in a startup environment, it’s my opinion that ideas need to flow freely. 

So in this blog post, I’m going to explore a few situations where not voicing our thought can be detrimental to the company:

“That’s a good point… now I don’t need to bring it up anymore.”

My process for reviewing product plans goes something like this: 1. Review the entire plan; and 2. Give feedback that others haven’t given yet (e.g. ask about how my team will be impacted).

What I fail to do is show support for other people’s thoughts and feedback with +1’s.

That hurt us bad one time:

After reviewing the plan for a new product feature, I noticed a comment that a colleague put in: “The design team failed to gather input from the customer success team, which would eventually have to use and educate our clients on the new feature.”

I agreed entirely with that comment, but didn’t show my support. My colleague ended up being the only one that voiced that concern.

So guess what happened… They designed and launched the feature without input from customer success. It resulted in flaws that caused some frustrations among users at launch. There’s a high chance that it could have been avoided by simply including the CS team in the product design process. That wasn’t the only negative outcome either. By neglecting their input, the customer success team had also lost a good amount of trust in the design team.

Speaking with the design team leader over the issue, it became clear that they didn’t get feedback from customer success because they thought that it wasn’t as important as some other issues. Afterall, only one person voiced the opinion that CS feedback was warranted.

So what did I learn? That +1s are important. People gauge the priority of issues by evaluating how much support it has.

“I don’t think they’d listen to me…”

I have dozens of conversations each month listening to colleagues’ frustrations about their managers and other team members. Most of the time, they’re simply venting sessions and I sit there listening. Yet on more than one occasion, people also shared with me thoughtful and well researched ideas that they didn’t share with their managers.

And when I ask them: “That’s a really good idea. Have you shared it with [manager name]?”

The answer is almost always: “No, I don’t think they’d listen to me.”

This clearly indicates that the individual lost some trust in their managerI therefore spend time helping individuals gain the confidence to voice their thought, and formulate a pitch that properly communicates their idea. We then rehearse it together and prepare against potential rebuttals.

In most instances, I’m happy to report that people find the confidence to effectively communicate their idea to their boss. Their ideas aren’t always adopted, but they always feel acknowledged and listened to. And more importantly, they learn a crucial lesson in how to influence leaders.

So if they don’t listen to us, let’s find a way to make the message more appealing and manage up.

“There’s nothing we can do about that…”

When discussing long-term or low-priority issues, I noticed a tendency for me to end a discussion with “Yeah, oh well, there’s nothing we can do about that.”

And right after, I’d feel like a naysayer rather than a problem solver. Why did I even spend time talking about the issue if there’s nothing we can do about it? Clearly I care enough and want to do something.

Yet fact is, there are situations where I’ve heard “no” to an idea so much, or witnessed the de-prioritization of an idea so often, that I think nobody cares anymore.

So how do I deal with that? With time, I’ve learned to stop complaining and take action instead. I actively discard ideas that I also feel are low-priority, but re-work how I pitch an idea that I believe is important. I may gather further evidence to support my viewpoint, or assess if other individuals and teams in the organization feel similarly to gain additional support.

This helps me avoid feeling bleak about the future, and continue fighting for ideas that matter to me.

When should I not voice my thought?

In my experience, there’s only one scenario under which an individual should not voice their thought and that’s when our emotions control the best of us.

Too often, I’ve reacted emotionally to frustrations and concerns I have with a team member. It’d usually put the individual in an awkward spot. Even if the concerns were valid, I always regretted my reaction. It’s simply unprofessional and demeaning to others, and fails to demonstrate that I can keep my cool under pressure.

How do I deal with my emotions now? I have a 24-hour rule. I don’t react for 24 hours and let a good night sleep help me think about the situation. It helps me take the emotions out of the situation, so that I can think and act rationally the next day.


Recommended exercise

Let’s identify one thought that we failed to voice this past week and find a way to communicate it.


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

Do I care about my team more than my company?

Do I care about my team more than my company?

When a start-up company scales from a core team of 10-20 team members to 100+ people, I’ve witnessed a tendency for departments to lose touch with one another. Thats when we become hyper-focused on scaling our own individual team.

This often results in the loss of cross-team communication, break-downs in collaboration, along with other inter-department conflicts.

In this blog post, I’m going to share one exercise that will help our teams avoid conflicts and stay cohesive. It starts by seeing the organization as one entity, rather than a group of separate teams.

Do I see the company as one?

Adopting this perception is critical to the success of an organization, because the alternative, to see the company as parts that work separately, will never grow the company as a whole. Allow me to elaborate:

In our day-to-day, we often view ourselves as part of one specific team, one group. In turn, we subconsciously view the organization as a group of separate entities such as marketing, sales, customer success, product management, engineering, R&D, finance, etc.

The danger of this perception is that it can create inter-team conflicts: e.g. when goals are missed, we tend to blame it on other teams; when budgets are planned, we tend to fight each other for a bigger piece of the pie.

As we don’t emotionally relate to other teams as much as we do with our own team, we focus on improving only one team: Our team. This can be detrimental. Improving only one segment of the company will not result in a better company: e.g. Hitting our sales goals may not result in higher revenue if the sales team is not collaborating with customer success on retention goals.

A company thus needs all teams to be aligned on a single strategy for it to grow. It becomes clear that improving how teams interact and work with each other is more important than improving the team itself.

In one case, I was helping a clothing retailer’s merchandising team identify product trends. The goal was to find characteristics of clothing items that people would buy as part of repeat purchases, then advertise them as part of newsletters. However, because the marketing team had differing priorities, the products we identified as leading to a higher chance of repeat purchases failed to be advertised. Instead, newsletters featured customer stories in an effort to connect emotionally with users. This is not to say that the marketing team’s tactic wasn’t effective, but because both teams failed to coordinate, time and resources were wasted. The merchandising team’s effort was in vain.

The good news is that everyone is capable of seeing the company as one. We do this every day when we look at other companies.

For example, we don’t react to news on Google’s self-driving cars and say: “Wow, the marketing team on Google’s self-driving car project is really effective at …” Instead, we say: “Wow, Google is really catching a lot of eyeballs with their cars.”

Now we only have to see our own company as a unit.

Does my team see the company as one?

team

To help our team members see the company as one entity, we can perform a diagnosis of the company’s traits. This translates into the creation of a profile that defines our organization and exposes our group dynamics.

Having team members evaluate the organization as one re-enforces the mindset that we are all on the same boat, regardless of what teams we work with.

One approach is to survey all team members’ perception of the organization, asking the following questions:

  • What is your perception of our company’s current vision and strategy? How do we hope to impact the world, why, and how do we plan to achieve that?
  • What are natural tendencies and behaviors that you notice of your team, other teams, and the company as a whole? What are some biases that you observe, what do we enjoy/don’t enjoy doing, what mistakes do we repeat, and what do we prioritize and de-prioritize?
  • What frustrations do you experience that gets in the way of our company achieving its strategic goals? What are you repeatedly frustrated by?
  • What do you feel are our company’s strengths and weaknesses? What helps us achieve our goals and what drags the team back?
  • What values do we live by? Based actions and behavior observed, what values do you think we stand by?

Assembling a company profile based on every team member’s perception allows for the entire company to actively reflect on what type of animal it has become. This awareness alone will make team members more empathetic to other teams. Should we take it a step further and incentivize changes while praising improvements, teams will also implement changes to eliminate behaviors they perceive as negative or unproductive.

How often should we do this and why?

I recommend for this exercise to be performed at least twice a year for a couple reasons:

  1. Start-up companies tend to get distracted by new ideas that pull teams off alignment from the company strategy, so regular assessment helps to diagnose whether any team is going off-course, and to actively re-align them;
  2. Similarly, as a company evolves, its traits change. It’s thus important to regularly assess whether the company’s behavior is evolving in the direction that we want, creating the culture that we desire.

Let’s explore these two points in more detail.

1- Aligning teams to the company strategy

one team

In my opinion, it is easier for top leadership to set a competitive strategy than it is for them to keep all teams aligned to the strategy.

Especially at start-ups, individual teams tend to get distracted by new ideas and initiatives that fall outside of the company strategy. This is caused by a combination of factors including:

  • Ambitions and smart team members that want to change the world, but are easily distracted;
  • Ineffective communication from senior leadership about the actual strategy; and
  • Lackluster enforcement of the strategic plan.

The result is that actions across teams and individuals are misaligned and the company is pulled in all directions.

For example, a payment solution provider’s competitive strategy may be to focus on providing payment systems for large hotel management businesses, offering industry-specific solutions.

If that strategy is ineffectively communicated and ill-enforced, teams may take actions and decisions that are counter-productive. Marketing may run campaigns that attract all hotel operators, large and small, to get as many leads as possible. On the other hand, customer success may adopt a low cost strategy to boost profit margin rather than offering enterprise level support for clients.

The result will be that marketing money is wasted on attracting the attention of small and medium hotel companies we don’t want. And down the line, customer success will have a hard time retaining large clients without proper resources to create deep relationships.

Misaligned goals across an organization will thus slow down the company’s growth, if not reverse it.

To avoid such a fate, it’s critical to first decide and agree on a competitive strategy among the senior leadership team. Each department head should have a clear idea of their role as part of the strategy and who they need to collaborate with. Afterward, leaders will need to design and communicate the strategic plan to all their team members.

Results from the company profile survey will reveal whether everyone understands the strategy. Should there be confusion, misalignment, or lack of information on what team members believe the company strategy to be, we’ll need to clarify the strategy (i.e. highlight decisions and initiatives that are aligned or misaligned), actively refuse resources to misaligned initiatives, and review team goals for strategic alignment.

With limited resource, there’s no time to waste on misaligned initiatives.

Following up on our example above, the payment solution provider’s marketing goal should be to attract as many large hotel operators as leads as possible, and to neglect any small and medium size operators. On the other hand, customer success needs to provide enterprise level support with an appropriate budget.

2- Is the company maturing as desired?

evolution

Keeping an eye on the company’s behavioral tendencies, strengths, and weaknesses helps leaders acknowledge the company position, and whether we need to change course to stay relevant.

As teams gain experience tackling their problem, and as new individuals join the team, a company’s strengths will evolve and new skills will be added. On the other hand, a larger team will also bring new organizational challenges (e.g. bureaucracy, processes, politics) that may add to the company’s weaknesses and frustrations. Externally, competition and changing customer expectations will often redefine whether a company trait has become a new strength or a new weakness.

Blockbuster‘s rise and fall is a great example of a company that failed to understand itself, and its position within a rapidly changing market. With the introduction of Netflix type services and changing customer expectations, Blockbuster’s competitive advantage evaporated. What were once strengths (e.g. a lot of physical stores and access to customers) became weaknesses (e.g. too much overhead cost), while existing weaknesses grew in impact (e.g. limited stock and selection). Should they have acknowledged these market changes early, there was certainly a chance to stay relevant.

Since a start-up’s operating environment can change month-to-month, it’s critical that we regularly evaluate its evolution and position within the market.

Are we too optimistic?

optimism

It takes a healthy dose of self-belief, courage, and optimism to found a start-up company. This positive outlook on the future is foundational to the culture of most start-up companies, shared by almost all team members that decide to join a start-up and forego a safe job.

I, for one, certainly believe in my company’s eventual success, even though we’ve yet to make $1 of profit.

Fact is, a positive mindset is necessary to pursue dreams and work on unproven solutions. If we had any doubt in our success, we wouldn’t be pursuing this venture. We know that the odds are stacked against us, and yet, we decide to put up a good fight.

The upside of having an optimistic mindset is clear: We always have the energy to get back up after experiencing failure, and keep moving forward.

Yet, there is also a danger to our optimism: It can make us blind to our weaknesses. At start-ups, we have a tendency to turn a blind eye to our company’s structural problems, strategic threats, and other long-term issues. These issues tend to be ones that we can’t solve right away and necessitate company-wide collaboration. And because there’s always more urgent short-term issues to solve at a start-up, we tend to ignore our long-term challenges. With time, the team learns to turn a blind eye to structural problems and let their optimism take over.

What’s the result? Blind optimism can cloud the evaluation of a company’s true situation. And slowly, it can become culturally unacceptable to voice negative thoughts. Team members may not raise or report their frustrations and challenges, for fear of being perceived as pessimists or even worse, not believing in the company’s future success. Complaints and frustrations will often follow with someone saying “Yeah, but we work with really smart people. We’ll figure it out.” Like that adds any value to the conversation…

The leadership team is certainly not immune to blind optimism (they need it most!), so they may become unreceptive to team members’ concerns, shielded by ego and by the fear that there’s nothing they can do about the issue.

At that point, the entire company is no longer capable of objectively assessing itself. Everyone drank the cool-aid. As it is no longer looking to improve itself, the company will slowly become unable to face changing market forces, to resolve internal challenges, and ultimately, to hit its goals.

So allow me to share a word of advice: When assessing the company’s profile, ask team members to be brutally honest. In the wise words of my yoga teacher: “Observe differences, don’t judge.”

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