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Management and the Start Up

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I work with businesses and organisations at all stages of the life-cycle. Pre-starts, start-ups and mature businesses.

I often see management DNA develop in the start-up phase and it is seldom a pretty site. Habits and relationships are set early and become very difficult to shake off. This is largely because of the mindset of the original founder of the business:

  • This is their baby;
  • They know how they want it to develop;
  • They have exacting standards.

Consequently their management style can be brusque, directive, bruising and ultimately damaging to the long term growth of the business.

Ideally I get to work with a business pre-start and ensure that the entrepreneurs builds their management team BEFORE the business plan is developed. This way all members of the team can own the plan and a more open and collaborative management DNA can be established from the start.

However this is pretty rare.

More usually I am working with an owner manager who has already established a pretty controlling management style. Helping them to see a different way of running the business is tough enough.

Coaching them to make it happen is even tougher.

Often it takes a real shock to the business and the entrepreneur to make them realise that something has to change.  This ‘shock’ can be bankruptcy, divorce or a significant health issue.

But sometimes that is what it takes before the need to change is fully recognised.

Are we learning? Or just looking good?

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Stanford University psychologist Carol Dweck made a great distinction between performance goals and learning goals.

  • Performance goals are about “winning positive judgements of your competence and avoiding negative ones. In other words, when students pursue performance goals they’re concerned with their level of intelligence: They want to look smart (to themselves or others) and avoid looking dumb.” A person usually does this by playing it safe.
  • Learning goals are ones that are about increasing your competence. “It reflects a desire to learn new skills, master new tasks, or understand new things—a desire to get smarter.”

Both goals are common and can drive achievement. So there’s nothing wrong with either.

“In fact,” she says, “in the best of all possible worlds, students could achieve both goals at the same time.” Unfortunately, we don’t live in the best of all possible worlds. One is usually pitted against the other. “The tasks that are best for learning are often challenging ones that involve displaying ignorance and risking periods of confusion and errors. The tasks that are best for looking smart are often ones that students are already good at and won’t really learn as much from doing.”

What she has found is that an overemphasis on performance goals – wanting to look good – can foster a helpless response. In a 1988 study they found that “many of the students with performance goals showed a clear helpless pattern in response to difficulty. A number of them condemned their ability, and their problem solving deteriorated.

“In sharp contrast, most of the students with learning goals showed a clear mastery-oriented pattern. In the face of failure, they did not worry about their intellect, they remained focused on the task, and they maintained their effective problem-solving strategies.

“When children are focused on measuring themselves from their performance, failure is more likely to provoke a helpless response. When children are instead focused on learning, failure is likely to provoke continued effort.”

Another interesting tidbit came out of the study. “Some children were told at the start of the study that they had the ability to do really well at the task. Others were told (temporarily) that their level of ability at the task was not so high. For students with performance goals, this message made a real difference: Students who were certain of their high ability were more likely to hold on in the face of failure and remain mastery-oriented. But students who thought their ability was lower fell right into a helpless response.” It made no difference to the student with learning goals.

How are we structuring the environment in our schools and organizations? It seems to me, we foster environments that encourage and reward levels of achievement and not degrees of learning. In such a case, most people would opt out for performance goals. Who wants to take a chance of being criticized for looking dumb? Are we learning or looking good?

Incidentally, an important book by Carol Dweck has just been released in paperback. It covers some of this material. Check out Mindset: The New Psychology of Success.

Jack Welch on What Leaders Do

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Here is what the legendary Jack Welch, former Chairman & CEO of GE had to say about “What Leaders Do” in his book “Winning” .

  1. Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach and build self-confidence
  2. Leaders make sure people not only see the vision, they live and breathe it
  3. Leaders get into everyone’s skin exuding positive energy and optimism
  4. Leaders establish trust with candor, transparency and credit
  5. Leaders have the courage to make unpopular decisions and gut calls
  6. Leaders probe and push with a curiosity that borders on skepticism, making sure their questions are answered with action
  7. Leaders inspire risk taking and learning by setting the example
  8. Leaders celebrate.

Ayn Rand

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On money…

“So you think that money is the root of all evil?” said Francisco d’Anconia, “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?”

“Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek.”

“The man who damns money has obtained it dishonourably; the man who respects it has earned it.”

 

What kind of Innovation Capital do we want to be?

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The Innovation Capital Programme is at the core of the new Leeds City Region Local Enterprise Partnership (LEP).  (I am still struggling personally with the identification of a city region of 3m people being  conflated with local, but we live in strange times.)

We are not talking ‘capital’ in the sense of money, but capital in the sense of a ‘leading centre’.  These are not only strange, but also cash strapped times.  And LEPs are shaping up to be nothing if not politically pragmatic institutions.

The ‘vision’ of the Innovation Capital Programme is:

A dynamic place, globally competitive and renowned for business, enterprise and innovation…An Innovation Capital

It is variously described as a roadmap, an agenda, an action plan.  The language perhaps is telling.  A chosen few, The Anointed showing the rest of us the path to the future.

The language of the Innovation Capital Programme reflects its goals and its constituents:

  • Driving growth
  • Faster growing business base
  • Centres of excellence to support growth sectors
  • Driven by the needs of business

No questions about the role of business in our communities.

No discussion about the merits of economic growth.

The faster the better. It is an unalloyed good. No question.

The engagement strategy focuses on businesses, local authorities, universities and ‘partner organisations that make our economy work’.  The cynic could reduce this to a conversation between those who believe in the Gospel of Consumption on how best to lead the congregation to economic redemption.  It is, to say the least, an ‘orthodox church’.

But what would happen if we framed the problem differently?

If instead of asking ‘how can we help businesses to drive the wealth creation that is required for our region to thrive’ we started to ask about how we engage 3 million people in the region in pursuit of their own well-being.

  • What if we opened up the challenge of ‘social progress’ to anyone who wanted to play?
  • What if talked about the role of innovation in terms broader than purely ‘economic’?
  • What if we believed that universities, local authorities and businesses were not the sole experts on the role of enterprise in our communities?

I suspect we would commission some very different activity, from some of the unusual suspects, and we may just get some different results.

Otherwise I suspect it will simply be more of the same.

If we talk about innovation it shouldn’t be about the mediocrity of having a bigger home or a faster car, but about building a wickedly better world.