How often do you project your mental image of a great working environment onto your current company setting? How often do you look for ways to improve the environment in the hope to attract more talent or retain and motivate your current staff? How frequently you, as a staff member, keep thinking about your role within the organisation and your ability to connect with other individuals and teams to achieve goals?
As AlphaSense was prepping to announce its Series B funding round led by Eric Schmidt’s Innovation Endeavours, I worked for a month in New York City, interacting closely with my team building AI. In the house where we stayed with my family, every morning and evening before and after work waiting for the elevator I kept staring at a book deck (fancy NYC buildings!) atop of which laid the book by Eric Schmidt and Jonathan Rosenberg ‘How Google Works’. I believe it was a pure coincidence this book popped into my sight as Eric’s new investment company had just invested into AlphaSense, yet a very interesting one. I decided to pull the book into the apartment and began immersing into it every day after work and some early mornings. By the end of the first chapter Introduction — Lessons Learnt from the Front Row it dawned on me, that this was the book I had been looking for, thinking a lot about company structures that enable innovation, support inclusiveness, embrace multi-culture environment and create a culture fabric that replicates itself. As the book has a reasonable number of chapters, I will highlight the message that resonated with me in each chapter.
Finland plan (Introduction — Lessons Learnt from the Front Row)
“you may want to think about picking a three hour slot in mid-august when the management presents to the board our campaign to compete with Finland.”
This is an excerpt of an email to then-fresh Google CEO Eric Schmidt from one of the company’s board members Mike Moritz (a partner at Sequoia Capital). For the wondering mind — Finland meant Microsoft and the plan was about competing with them. Calling for prepping a war plan was alien to the Google culture of little management touch, engineering freedom with top 100 projects tracked in a spreadsheet, revised quarterly (5 years into company existence). Inherently the company was wrapped in a manner of winning through great products, not through crafting extinction plans. Instead of coming up with any ‘clever’ plans to beat a competitor, the authors invite you to go talk to your engineers. In this chapter the key foundational concept of a smart creative is introduced.
“They are not confined to specific tasks. They are not limited in their access to the company’s information and computing power. They are not averse to taking risks, nor are they punished or held back in any way when those risky initiatives fail. They are not hemmed in by role definitions or organizational structures; in fact, they are encouraged to exercise their own ideas. They don’t keep quiet when they disagree with something. They get bored easily and shift jobs a lot. They are multidimensional, usually combining technical depth with business savvy and creative flair. … a type we call a “smart creative”, and they are the key to achieving success in the Internet Company.”
(italicization and bolding are mine)
Culture — Believe Your Own Slogans
If you are building a tech company, then engineers are at the core of everything you do. A particular feature or product have an issue? Talk to engineers. Need to create a new tech / product? Ask what your engineers have to offer. Engineering is your reliable partner, not a back-office. Product managers will play a key role in creating a roadmap to execute on, but your engineers will drive the key tech decisions and will need to own the stack end to end. In a more traditional top-down setup your product people will likely be considered “gods” to which your engineers cater. But this will both limit engineering impact, understanding and ownership of the product and also will make your product managers sweat over tech details they don’t (and you could argue — shouldn’t) understand in gory detail.
In decision making, the cultural aspects will underpin how your employees interact with one another on individual, team and department levels (especially in cross the Ocean interactions). And it will boil down to two possible scenarios:
- decisions will be made based on hand-waving principle. You can call it art of convincing, but if there is not enough evidence for building a feature, and you didn’t do your homework interviewing clients / internal teams, you’ll be doomed creating something potentially useless.
- data will drive / substantially supplement decision making process.
This thought by Jim Barksdale, CEO of Netscape, summarises it well:
“If we have data, let’s look at data. If all we have are opinions, let’s go with mine”.
If I were to pick one other cultural principle from this chapter, it’d be on exiling knaves, but fighting for divas.
“Jealous of your colleague’s success? You’re a knave.. Taking credit for someone else’s work? Knave. Selling a customer something she doesn’t need or won’t benefit from? Knave. Blowing up a Lean Cuisine in the company microwave and not cleaning it up? Knave.”
If the amount of knaves in the company reaches a critical mass, everyone will start to believe they need to copy this to succeed. Culture breeds itself way faster than you can think of. For many years, I have been and will be advocating for low ego individuals that collectively sum up to a bigger and more successful venture, than they could’ve been on their own. Ego creates blind spots and in general not a pleasant, inclusive culture for smart creatives. Divas will come across arrogant, because of the way they communicate or of their visibility level, however if they don’t belong to a knave group, they will propel the culture of engineering and product excellence that everyone will want to replicate.
Strategy — Your Plan Is Wrong
When I joined AlphaSense in Spring of 2010, it was a startup with the product demo, but no clients. The company was based on the core principle of improving the work of financial analysts, that traditionally did a lot of manual work by using pen a paper approach. Applying search engine technology to this problem was a key to initial success with first clients. Google was wrapped around the idea of solving the broken search: typing “university” into then existing search engines could lead you to any random page on the Internet. PageRank algorithm that stands on the principle of rewarding pages with high inbound linking from other high rank pages worked a lot better. Both companies took technical insights to form a strategy plan, rather than create imaginary better futures, and attracted top talent based on that. So if you would like to avoid creating boring business plans that will render obsolete anyway, focus on fundamental technological insights that can solve a real problem for your clients. Even if your business plan changes (for instance, how you enter the market), the tech insights will stay at the core of your product.
Talent — Hiring Is the Most Important Thing You Do
Despite AI is believed to solve all current problems and outpace humans, the single most efficient path to optimize for growth is hiring people (not building AI powered robots — yet). Startups begin hiring through founders. In a more established company managers, directors and executives will be tasked with hiring more so as the company grows.
The key idea of hiring is — aim to hire A players. There is a large gap between A and B players, because A will favour A, but B will hire peer B’s, but also C’s and D’s etc, because B’s are ready to compromise on core skills and qualities. Put differently — smart will enjoy working with the smart. Smart creatives in particular are the creatures that will expand their horizon of knowledge beyond pure work tasks. And other smart creatives will enjoy being around them and learning new things over lunch or in the social isles of your office. B’s however will have hard time enjoying the challenge A’s are living. So all this says is: you don’t want to create an alienated, cornered culture, where A’s will form a group that won’t accept B’s that will also form their own group. This can be super detrimental and negatively impact the performance of the company as a sum of its individuals, lead to fights and mis-communication. Just always go an extra mile and sift through the talent. Don’t compromise before growth. That will help you to avoid compromise in hiring during hyper-growth too.
There is a temptation to sometimes hire a specialist in some tech X. Avoid that. The issue with this is that ‘smartness’ of such individuals is deeply wrapped around the tech X. So if they are not a smart generalist, they will have a tendency to become unhappy when things will suddenly change as their company adopts new tech Y. Instead you want to hire ‘learning animals’ that are ready to change to new technologies, ideas and projects, while maintaining their affinity to gravitate to the best of these.
Decisions —The True Meaning of Consensus
The company only progresses forward thanks to making decisions at critical points of its development.
“Formulating a strategy, hiring the right people, and creating a unique culture are all preliminaries to the fundamental activity of all businesses and business leaders: decision-making.”
There are several major important components to a decision making:
- The process: what do you need to make it happen (like data / evidence collection), whom do you involve and how you maintain the communication during the process.
- The timing: when do you reach the decision.
- The way you implement the decision.
All of these are of equal importance: make one slip through and you mess the outcome of your decisions and it can adversely affect on company culture, what people think of you as a leader and how they will tend to implement their decisions (remember about culture replicating itself).
Going into a radio-silence during a critical decision sends signals to the rest of the company. Make sure you establish a process of making a decision, that will be explainable and repeatable. Don’t delay the decision, as any delays won’t solve, but only exacerbate the issue you need to decide on. When implementing your decision, consider how it will affect your company and the target.
When Chinese hackers began attacking Google services in late 2009, the leadership team ran into disagreement on whether to remain in the country or quietly leave it. The (tough) decision was made to leave, but disclose publicly the details of the attack (for instance, that Chinese dissident’s personal emails were hacked as well as emails of human rights activists across U.S., Europe and China). This was a tough decision especially for the team in China and for the business overall, but it was made and implemented using the collected data and by reaching a consensus within leadership team. The process, data and decision was presented to the entire company and received a standing ovation.
Decision-making is a pillar of any company culture and deserves its own post: https://firstname.lastname@example.org/company-culture-86f8c8cded2f
Communications —Be a Damn Good Router
Efficient communication is the blood vessel of a growing organisation operating in different geographic sites. Tools, like chat / call systems, will help deliver the message, but will not create it. They will also not urge you to send it. Not informing your team / organization of what is happening shows neglect and is only source of creating rumours in the halls of your office.
Follow a very simple yet efficient algorithm to support communication: if you know the answer to a question, handle it yourself. If you do not, route it to the person that knows. And most importantly — do it fast.
In a growing company the entropy will only increase causing mis-communication and organization malfunction as a result. To avoid this when growing it is imperative to embed information sharing into core values and reflect this in the employee rewarding. Smart creatives will only be so much more productive when information is freely shared with them. They also don’t like to be “left out” of the information flow, which tells them: this place is not meritocracy and has some artificial casts of employees “eligible” to certain information. This is plain wrong.
Another way to keep growing your organization intact is to maintain and make available OKRs (Objectives and Key Results) on each level of the company. That way you give visibility to others in the company on what your current agenda is and you also don’t need to assume what everyone else in the company is doing. A really important bit of publicly reviewing your OKR is to tell what is it you failed to achieve. If you always achieve your OKRs, you don’t aim high enough. If you always fail, you are biting too much. Succeeding in something and failing in something as part of the same OKR demonstrates your growth path.
Innovation — Create the Primordial Ooze
Alexander Oparin, author of the Primordial Soup, postulated in his theory a specific set of conditions that formed the foundation of life on Earth. In this very similar notion, there are conditions that support the formation of innovation spirit in any given organization or company or as Eric Schmidt explains:
“Innovation can’t be owned or ordained, it needs to be allowed. You can’t tell innovative people to be innovative, but you can let them.”
But what is innovation in the first place?
“For something to be innovative, it needs to be new, surprising, and radically useful”.
I’m pretty sure that at some point IKEA furniture met all three criteria, especially the surprising part of being able to assemble a sofa with your own hands.
For ideas to begin generate anywhere in the organization, innovation needs to be inclusive. Anybody in the company should be able to participate in the formation of innovative ideas and products. Within AlphaSense sales can formulate an issue and propose their way to solve it, product managers can augment / radically improve an idea, and engineers can come up with completely missed use cases. Together, these separate idea components flow into a cohesive thinking that helps evolve the product.
What stands out in the innovative thinking is thinking BIG. For that to happen, you should know that it is safe to try absolutely anything and push the boundaries of your day to day job. You don’t need to push them every day, because you have business as usual tasks, but doing only them make incremental improvements, not radical. OKRs that were already mentioned, come in handy to support innovation:
- OKR is a link between big picture and a measurable key result. It helps you avoid unattainable abstract goals (“make everyone happy”) and start thinking about big, but constructive goal (“fix education with AI”)
- Reaching 70% of an aggressive goal is better than 100% of a realistic, down to Earth goal
- Have everyone maintain and freely share their OKRs to the whole organisation
- OKRs don’t need to be comprehensive: it is exactly the reason they exist, because you can’t simply formulate the solution to a large problem. If you could, it would not be large and won’t be calling for innovative approach
- Score OKRs, but don’t use them for performance evaluations. Everyone should be free to innovate. Remember, you can’t ordain it, only let it happen.
One really important prerequisite for an innovative business and product is launching without fanfare. I have seen fanfare around launched and un-launched products so much time in my startup experience, that it gives me shivers. And guess what, most of those have failed. Why does it happen — I don’t know, but I concur with the approach also described in the book — ship silently and iterate quickly. If you ship something small and broadcast to the world as if you launched a rocket into space to save the humanity, you will fail. I know it sounds crazy, but silent launches, especially in the beginning, will save you a ton of time you can spend on convincing your future clients of the value you product has. Or time to iterate — based on their feedback. You make your product for your clients, not for the entire world. So why bother shouting on all street corners about your launch? Read the book for positive and negative examples that support this theory.
Conclusion — Imagine the Unimaginable
Every company has its own way to create an environment that supports innovation. If every one could imagine the future, it wouldn’t be innovative. Quite contrary to that: innovative ideas look crazy on the surface to those progressing linearly. Your path to facilitating innovative environments will be unique, but you can certainly derive some pointers / food for thought from the ‘How Google Works’ book. If you are interested in improving the engagement of your staff, stay tuned as the next post will dive deeper into culture as code and how you can impact on staff engagement with technology.