Category Archives: Self-assessment

The Three Most Important Words

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When I was a first-time founder, I aspired Question_mark2.svgto be completely in control. All of my role models were passionate visionaries who appeared to have all the right answers. I thought that part of the job of the founder was to be sure of what to do in any situation.

That, of course, is an impossible ideal and a very unhealthy attitude. Being a founder is more about questions than answers, and you are in unknown territory more often than not. Trying to pretend like you are in control is more distracting than productive.

I became a much better leader and founder when I started using three simple words. Three words that I think are the most important words any founder can say.

“I don’t know.”

It is very scary to say “I don’t know”. Whether you are meeting with your team, your board or potential investors you are admitting that you don’t have all the answers. You are admitting vulnerability and a gap in your knowledge. You are admitting you are not perfect.

Once you allow yourself to say “I don’t know”, something magical happens. You open the door to new ideas from your team. You demonstrate honesty to your board. You show potential investors that you are practical and aware of your limits.

Better yet, you encourage the people around you to admit when they don’t know something. Instead of trying to fill gaps with words or half formed ideas, teams empowered to admit they don’t know the answer will move faster and work together better. No one is perfect, and admitting that sheds unnecessary baggage.

So, next time you find yourself in a situation where you are not sure, allow yourself to say “I don’t know”. Then, follow it up with “but let’s figure it out.”

My new company, Outlier, is hiring our first few employees! If you are interested in joining an early stage company and working on the cutting edge of data intelligence, coffee is on me. Drop us a line here. 

 

Image made available via Public Domain on Wikipedia.

 

Performance Reviews That Don’t Suck

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I recently completed my end of year personal feedback process. I have long been an advocate of collecting personal feedback as I try to live my life as a process of continuous improvement. How can I improve if I don’t know where I am weak?

I find it surprising how few people solicit feedback and how few startups have an employee review process. I suspect that “performance reviews” remind everyone too much of large companies so they avoid them like the plague. It’s a shame, since early stage companies need employee feedback more that anyone else. In fact, doing regular performance reviews early in the life of your company can build a culture of continuous improvement that will be an asset when you grow.

The key is making it easy.

How to make reviews painless

Most people hate performance review processes for a few reasons:

  1. They take too long to complete.
  2. They hate hearing bad things about themselves.
  3. They hate saying bad things about others.
  4. They don’t think they add any value.

All of which are likely true for most processes. However, over the years I’ve found a simple process that is easy and most people find very useful.

Step 1. The Two Threes

Both the reviewer (usually the boss) and the person being reviewed (reviewee) prepare beforehand. They both assemble a list of the three top strengths of the reviewee, and the three top areas for improvement (weaknesses). Note that this means the reviewee is completing a self-assessment while the reviewer is doing a third party assessment.

It is important to identify specific examples that involve the identified strengths and weaknesses so that there can be useful discussion later. In fact, the more detail the better.

Step 2. The Review

The actual review should be an in person meeting at a casual setting (not a windowless room). The person being reviewed should go over their list of three things they think they do well and both people should discuss them. Then the reviewer should go over their list of three things the person does well and more discussion should ensue. The person being reviewed then should go over the three things they want to improve. Finally, the reviewer should go over the three things they think the person should improve. For all areas of improvement, there should be discussion of practical steps that can be taken.

The order is important since you want to start with the positives, which will put everyone at ease. It is also important that the reviewee goes first because their review is the hardest, and the most likely to be biased by the other.

The focus should be on the differences. Do both people identify the same strengths and weaknesses? Very rarely. In many cases, it is the differences in the lists where the most interesting insights come about.

Step 3. The Plan

It’s then up to the person being reviewed to decide what to do with the feedback. Most people will assemble a set of goals to tackle the areas of improvement that became clear through the discussion. It becomes a great way to set goals for yourself and check in on them during the next review. Whatever they decide, you cannot force someone to improve. If they choose to disregard the feedback, you’ll know because the same three areas of improvement will appear next time.

For bonus points, you can collect similar lists of 3 strengths and 3 weaknesses for someone from other members of the team and assemble it into anonymous feedback for the reviewee. That is called a 360 degree review since you get feedback from all sides.

What I like about this style of review is that you can do it as often as you like since it does not take very long. While people think of performance reviews as an annual activity, I find that six months is as long as you want to wait between them – especially at a fast paced startup.

Okay, what about your review?

To prove that I don’t just blog about these things, I wanted to share the feedback I received this year. I had to modify the process above for 2014 since I haven’t had a full time job for most of the year. Instead, I reached out to all the companies, founders and firms I advise/mentor/coach and asked them these three questions:

1. What was the most helpful thing I did for you in 2014? (Feel free to say ‘nothing’)
2. What did I not do for you in 2014 that would have been the biggest help?
3. What is the most important thing I can do to help you in 2015?

The feedback was fairly consistent and is summarized below:

1. What was the most helpful thing I did for you in 2014? (Feel free to say ‘nothing’)

I asked hard strategic questions which helped keep the founders focused on the big picture instead of getting lost in the details.

2. What did I not do for you in 2014 that would have been the biggest help?

I did not provide enough introductions to potential customers and investors.

3. What is the most important thing I can do to help you in 2015?

Continuing asking hard questions and provide more customer introductions.

The good news is that this provides a straightforward personal improvement plan for 2015. I will be finding ways to help the companies I work with source customers and investors.

So, what is your feedback for 2014?

 

The Most Important Characteristic of Successful Founders

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There are an infinite number of blogs (including this one*) that provide advice and insight into starting companies. Many of them will have flashy posts like “5 characteristics of successful entrepreneurs” or “10 things that make you a good founder”. Those lists often focus on the personal traits common in successful founders such as their personality, their work ethic or their prioritization process. They imply strongly that if you model yourself after these successful entrepreneurs you are more likely to be successful yourself.

I disagree with every single one of those articles. I think the most important characteristic of a successful founder is simply to be yourself.

Success is the only measure of whether you are a good entrepreneur, not who you are as a person. If the business you build is a success, people will attribute that success to who you are. If the business is a failure, it will be because of who you are. In either case you are the same person, but the opinion of you is shaped by your success of failure.

There is a phenomena called Survivorship Bias and it’s a well understood and common cognitive bias where we mistakenly attribute success to the wrong factors. It happens when you ignore failures and draw conclusions from only a group of successes. In this case, it means only looking at successful founders and drawing conclusions about why they were successful while ignoring all of the failures that might be comparable.

So, why do I think that it is so important to be yourself?

Building a business is hard enough as it is, but if you try to change who you are while building you are making your job even harder. Everyone, including you, has natural strengths and weaknesses. Your chances of success are much higher if you rely on your natural strengths than if you try to mimic the strengths of others.

Yes, you will need to learn new skills in building a business. Yes, you will need to overcome some of your weaknesses to be successful. But if you are to succeed it will be because of your strengths.

Remember that all of the entrepreneurs we idolize today have in some way broken the mold of what a “successful entrepreneur” was thought to look like at the time they got started. Bill Gates was too young, Colonel Sanders was too old.

Maybe if you don’t fit the mold you will break it too.

* Of course, of all those blogs this one is the best. Seriously, you should tell all your friends about it. And strangers on the street, they need to know as well. 

Confidence vs. Arrogance

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Starting companies is hard, and it is true that the world is out to get you. It is no coincidence that many of the most famous entrepreneurs and CEOs of Fortune 100 companies are borderline narcissists. In order to overcome the armies of naysayers you need a preponderance of confidence, bordering on arrogance. While everyone is telling you ‘no’, you need to continue to respond ‘yes’.

However, it is dangerous to cross that line. Arrogance can make you sloppy and lead to mistakes. You need to be confident enough to believe in yourself when no one else does, but humble enough to realize that you will only succeed if you execute flawlessly.

If you’re afraid you are near the edge, take the following quiz and find out if you are Confident or Arrogant:

1. Do you think or know that you are better than your competition?

Arrogant Answer: You think you are better than your competition because you have worked really hard, you like your product a lot more than your competition and imagine your customers must as well. This also applies if you think a great new feature you will release next week will change the market overnight.

Confident Answer: You know you are better than your competition because a majority of your customers tell you that you are, or better yet if your metrics demonstrate it. You have done a full competitive analysis and understand your strengths and weaknesses as well as expected changes in the industry over the next twelve months.

2. Do you think or know that your employees are happy?

Arrogant: You think your employees are happy because you are happy and they seem to have fun around the office. You throw office parties and have social events on a regular basis that you enjoy, so they should as well.

Confident: You know your employees are happy because you ask them regularly. You understand why they like working for your company, where they aspire to go in their careers and are doing your best to help all of them achieve their goals. You still have social events, but you ask your team what they like to do instead of just doing what you want. 

3. Do you think or know your investors are happy with your performance?

Arrogant: You think your investors are happy because your metrics are improving and you are in a hot space. You assume that since they don’t ask many questions during your board meetings that you have already answered them.

Confident: You know your investors are happy because you have asked them about their expectations for your company’s performance and how it relates to their investment strategy. You brief them about important events ahead of board meetings and meet with them individually on a regular basis to get their private feedback.

4. Do you think or know you have enough capital to reach your next milestone?

Arrogant: You think you have enough capital because your revenues are going to increase and investors will be excited at the opportunity to invest when you start fundraising in a few months. Besides, you have plenty of money in the bank.

Confident: You know you have enough capital because you understand your cash flow model and have worked out the worst case scenario. Based on your current model, even if things don’t go according to plan, you will have 9 to 12 months of runway left when you start fundraising again.

5. Do you think or know you are not burning out?

Arrogant: You think you are fine because you are not afraid of hard work, eagerly working 20 hour days and weekends for 2 years. You feel so close to breaking through that if you push just a little harder for a little longer, you will get there. You don’t think your team performs as well when you are not around, so you work even harder.

Confident: You know you are fine because you have a support network that helps you understand how you are performing and you ask them regularly. You take regular breaks to decompress and gain perspective, while trusting your team to work in your absence.

So, how did you score? Over the years, I’ve both passed and failed this test many times.

It is easy to lose yourself in the day to day chaos of building your business and in doing so cross the line. It is easier to believe you will win because you are better than to make sure you are executing well enough to win based on your merits. Self-evaluation is a critical skill to develop to make sure you maintain healthy perspective.

Stay confident.