Over the years, I’ve read a number of management books CEOs have written. Andy Grove, the CEO of Intel, wrote “High Output Management”. T. J. Rodgers, the Founder and CEO of Cypress Semiconductor, wrote “No Excuses Management”. Jack Welch from GE wrote several books on his management style, including “Winning”.
What compels super-busy CEOs to spend time writing these books? As Chowbotics grows bigger, I’m understanding the motivation some more. I think its largely three reasons:
(1) These books clearly communicate performance expectations and company processes to the company’s managers and executives. This is particularly important to managers who are newly hired into the company.
(2) Like me, these CEOs like writing and teaching.
(3) The books allow you to teach and mentor people outside your company’s four walls.
As Chowbotics grows bigger, I felt its good for me to write down our management philosophy as well. This blog post gives a summary.
The governing philosophy in Chowbotics is that every team member needs to produce 2X the progress of a big company employee (over the course of a quarter). This 2X progress is so just crucial for a startup with limited resources to grow and become a big size company. The 2X higher efficiency comes from a combination of factors.
“When you have 3 paths available to you as a manager, you could place 1/3rd of your resources on each path. Or you could place all your resources on the path you think will win. If you bet right, you get 3x more progress since you have 3x more resources invested.”
So said Eli Harari, the founder and CEO of SanDisk. SanDisk was my first job after my PhD, and I learned a lot from Eli’s management philosophy.
Picking the right path is really the main function of a manager in your organization. To pick the right things to work on, a manager needs expertise in the area they are managing – they should ideally be able to do any task they set their employees to do. This provides intuition which allows good decision making.
Picking fewer things to work on also unclutters an employee’ mind and gets them more energized. People can rarely work with high productivity on more than 1 thing at a time, but working on more than 3 tasks at a time is a recipe for disaster. See this article on “The Rule of 3” – there are scientific studies showing people cannot process more than 3 things at a time well.
This is really how we judge effectiveness of managers in Chowbotics – on the ability to focus on the right things and prioritize well. The ability to keep things simple is a crucial element of this: I’m a big believer in William Shockley’s “try simplest cases” maxim.
HIRING AND RETAINING ONLY SUPERSTARS
When I was in Rambus, I used to hear about the 80-20 rule – that 20% of the employees make 80% of the useful progress in big companies. Over the years, I’ve learned that’s true. These are the people I refer to as superstars. I obsessively recruit such people and try to take fantastic care of them once they join. My dream is to have only these types of people working at Chowbotics – and I think we’re pretty close to that now.
The ability to attract such superstars is a function of a manager’s ability to inspire. The manager needs to be seen as a superstar in the new hire’s eyes too. Superstars want to work with other superstars – its only when you have incompetent people that you start seeing politics and bureaucracy. Over the years, I’ve learned it is important to have high performance standards and filter out people who don’t meet the company’s standards in the long-term. Else it could compromise everyone’s jobs. We have zero tolerance for people who indulge in politics and power grabs. Neither do we tolerate people who make others within the company unhappy with their tantrums.
The most important thing which impacts “superstar-like” performance is passion. People who love what they’re doing turn out to be the highest performers almost always.
A METRIC FOR EVERY EMPLOYEE
As I’ve managed diverse teams, I’ve learned its best to create 1-2 Key Performance Indicators (KPIs) for each team member in an organization. And judge them based on these KPIs. Numbers don’t lie. It creates a result driven culture as well, which gives emphasis to productivity, hard work and skill.
Managers in our company typically have one meeting every week to keep track of progress. Where all stakeholders present their results. At the end of the meeting, an email with meeting minutes, action items and progress goes out to the company. This ensures not everyone needs to attend the meeting but they still know what’s going on.
The subject matter expertise I talked about earlier in this blog post is crucial to managing progress well. It allows the manager to coach the employee, help them learn new skills and do their work more effectively.
“KUDOS” AND “CHALLENGES”
One of our managers brought in the “kudos” practice from his team at Intel. If someone on the team does something very very special, we give them “kudos” – they get a certificate recognizing their contribution in front of the company and a $25 Amazon gift card. Its not a lot of money, but it shows the company’s leadership cares.
We’re increasingly starting to give employees “challenge projects” – these are given through the year where employees make 3-10% more than their total take home pay for the previous year if they succeed. Its a form of variable pay. A true meritocracy is one where people get paid based on the work they do and a fixed salary system isn’t the best way to achieve that. “Challenge projects” also get people’s competitive juices flowing and drive intense focus and achievement.
For a small startup, making informed and right decisions is crucial. At Chowbotics, decisions are often made after hearing input from subject matter experts within the company. Its not a democracy where everyone gets a vote. All too often, in badly run organizations, the loudest person influences the decision the most, which is terrible and demoralizing.
TAKING CARE OF PEOPLE WHO GIVE YOU THEIR BEST
If your team members are getting you “2x” the progress made in a bigger size company, its crucial that management takes good care of them. “2x” progress should mean “2x” faster growth. Clear growth plans need to be made by management for people who are delivering that “2x” progress. Areas for skill development need to be clearly identified and coaching plans need to be made for such skills. Milestones need to be identified – when the person hits those milestones, they should be promoted to the next level of responsibility.
Of course, when you are a startup, if you reach a VP level or C-level title, you essentially grow as the company grows since there may not be higher titles to grow to – for example, if you are a CTO in a $1B company, it will involve much more responsibility compared to being a CTO in a $40M company. At some point, you just work with the other leaders in the company, grow the company and make it hugely successful instead of worrying about titles. Facebook and Google leaders and Intel leaders from the Andy Grove era will identify with what I am saying here.
I personally have lost just two people in my management career over the past 8 years whom I wanted to retain. One of them wasn’t a direct report, said he had a family emergency, went on a leave of absence and we never heard from him again. The other worked with us for a week (so I couldn’t built enough of a relationship with him) and got a job offer from Google which paid him 70% more. This retention record is something I’m very proud of… since it shows I treat high performers well. We will do anything we can at Chowbotics to keep boasting about this record in the years to come.