| Dear friends,In JC’s Newsletter, I share the articles, documentaries, and books that I enjoyed the most in the last week, with some comments on how we relate to them at Alan. I do not endorse all the articles I share, they are up for debate. I’m doing it because a) I love reading, it is the way that I get most of my ideas, b) I’m already sharing those ideas with my team, and c) I would love to get your perspective on those. If you are not subscribed yet, it's right here! If you like it, please share about it on social networks! Share 💡JC's Newsletter
As readers enjoyed the book notes of “The Ride of a Lifetime: Lessons Learned from 15 years as CEO of the Walt Disney Company” by Robert Iger which I shared a few weeks ago, this week, I’m coming back with my curated notes on a book I really liked recently: Amp It Up: Leading for Hypergrowth by Raising Expectations, Increasing Urgency, and Elevating Intensity by by Frank Slootman. I strongly recommend you to buy it and read it in depth! It is a great book about scaling organisations in hyper growth context from the CEO of Snowflake. It is no bullshit, very focused on some of the things that matter. There are some parts very connected with our culture, others that are not. Most of the things (almost everything) we are already doing in our own way, but still good to see it from a different angle. As every US book, it is very direct, saying there is only one truth. It is useful to take a step back on this. It lacks the importance of fun, celebrations, being successful together, knowing that people will solve very hard problems when you trust them, about caring. It is this combination that makes Alan unique. The Power of Amping UpLeadership changes can yield immediate impact long before you can carry out more structural changes in talent, organization, and strategy. You can engulf your organization with energy, step up the tempo, and start executing the basic blocking and tackling with a lot more focus and higher expectations. The keys to accelerating performance are aligning your employees around what matters and then executing with urgency and relentless intensity. The five key steps in the Amp It Up process: raise your standards, align your people, sharpen your focus, pick up the pace, and transform your strategy.
Raise Your Standards➡️ I feel it is an easy mistake to make, and we are at risk. I’d like us to be sure we are pushing hard for high quality products. Instead of telling people what I think of a proposal, a product, a feature, whatever, I ask them instead what they think. Were they thrilled with it? Absolutely love it? Most of the time I would hear, “It's okay,” or “It's not bad.” Come back when you are bursting with excitement about whatever you are proposing to the rest of us.
➡️ I love this advice. It should be used a lot more by “senior” Alaners. Make Your Organization Mission DrivenBeing mission driven helped our people become motivated, focused, impatient, and passionate—maybe even a bit zealous. Being on a mission is a visceral experience, not merely an intellectual one. When your organization has a well-defined purpose, you feel it down to your bones. The three criteria for a great mission: big, clear, and not about money. The more defined and intense the mission, the easier it will be for everyone to focus on it. A great mission helps prevent distractions that dilute everyone's focus. In every company I've ever encountered, distractions are a huge threat.
Continually narrowing the mission aperture is key because companies have a natural tendency to lose focus over time. If you turn your time and attention to the latest shiny object, regardless of how little it has to do with your mission, you are on the path to trouble. Distractions will inevitably pop up every day and need to be fought relentlessly.
➡️ That is very hard, and I still need to grow on this! Distractions that can jeopardize the mission are everywhere, and they often seem well-intentioned, honorable, and worthwhile. For instance, companies are now expected to cater to any number of so-called stakeholders, while addressing societal ills such as climate change and social injustice. But once you get knocked off your mooring by external goals, it's hard to get back to the main mission that you're supposed to be focusing on.
Declare War on Your CompetitorsIt's no exaggeration to say that business is war. Either you already have a turf, and you have to defend it against all comers, or else you have to invade somebody else's turf and take it. You'll have to teach them that the game doesn't really start until the other guys, whose profits you are trying to seize, start fighting back with everything they have. They are not our friendly competitors. At a minimum, noses will get bloodied. At worst, in a few months or years, some firms in our industry will still be in business and others won't. Good leaders explain that none of us are ever truly safe in our roles for any length of time. If this fact makes people uncomfortable, that's good. You need to get comfortable with being uncomfortable because the only alternative is denialism.
➡️ This is the hard truth of business. Competition is fierce. Winning is very hard. That is what every Alaner should get comfortable with being uncomfortable. The War Against IncrementalismIncrementalism is merely a lack of audacity and boldness. Maybe you won't lose, but you won't win either. Many of these companies end up killing themselves gradually, through stagnation. Rather than seeking incremental progress from the current state, try thinking about the future state you want to reach and then work backward to the present. What needs to happen to get there? This exercise can be inspiring and motivating, as you become guided by your future vision. I've seen how incrementalism can suck the life force out of people and organizations. In too many internal meetings, managers articulate their goals in terms of the delta from where they are today. “We want to have 30% more customers in two years.” That sounds safe and respectable, but why not 100% more? Why not 1000%? How big is this market? Are you planning to go from 1% to 1.3% share? If so, what would it take to get to 5% or 10% share?
➡️ A big part of our culture. Let’s keep having it even on the insurance core. Put Execution Ahead of Strategy➡️ Very true. Reality can rattle us, making us nervous and uncomfortable. To cope with the stress, we talk ourselves into a less damning interpretation. This is why groupthink and confirmation bias are common and incredibly dangerous to the well-being of the enterprise. It is the role of leadership to maintain a culture of brutal honesty.
➡️ We can have a tendency internally to celebrate the good news a bit too much, and challenge the bad news. Align Your People and CultureHire Drivers, Not Passengers, and Get the Wrong PeopleWe adopted a goal for recruiting that we only wanted drivers, not passengers. Passengers are people who don't mind simply being carried along by the company's momentum, offering little or no input, seemingly not caring much about the direction chosen by management. They are often pleasant, get along with everyone, attend meetings promptly, and generally do not stand out as troublemakers. They are often accepted into the fabric of the organization and stay there for many years. The problem is that while passengers can often diagnose and articulate a problem quite well, they have no investment in solving it. They don't do the heavy lifting. They avoid taking strong positions at the risk of being wrong about something. They can take any side of an issue, depending on how the prevailing winds are blowing. In large organizations especially, there are many places to hide without really being noticed. Passengers are largely dead weight and can be an insidious threat to your culture and performance. They inadvertently undermine the mojo of the organization. Drivers, on the other hand, get their satisfaction from making things happen. They feel a strong sense of ownership for their projects and teams and demand high standards from both themselves and others. They exude energy, urgency, ambition, even boldness. Faced with a challenge, they usually say, “Why not” rather than “That's impossible.” Celebrate people who own their responsibilities, take and defend clear positions, argue for their preferred strategies, and seek to move the dial.
➡️ I really like this framework Passenger/Driver, and it is close to the sense of ownership we are creating at Alan. That being said, I feel it is important to increase the talent density towards drivers only. Getting the Wrong People off the BusYou can't let their anxiety slow you down from immediately assessing your people. Don't surrender to the temptation to go into wait-and-see mode, hoping that time will reveal everyone's true value. You need to make things happen, not wait around and hope for the best. You have to practice sizing up people and situations with limited and imperfect information—because that is all you are ever going to get. It wasn't hard to see which departments and functions were falling behind expectations. You're not so much inspecting the people, you're inspecting the work. If I don't know that people, obviously I can't tell, but I can certainly look at what they're responsible for is functioning or not. And on the basis of that, I'm going to make decisions really, really quickly.
If you don't act quickly to get the wrong people off the bus, you have no prayer of changing the overall trajectory. We often believe, naively, that we can coach struggling teammates to a better place. And sometimes we can, but those cases are rarer than we imagine. When I was a younger man, I used to wait things out, even in spite of the evidence, because it seemed like a reasonable thing to do, but it was stupid. I just avoided what I already knew. I avoided the inevitable, lost a lot of time.
Things were rocking and rolling from the beginning, which is unsettling to the organization. I get it, but it's always unsettling. You're better off ripping the band-aid off and moving and create clarity sooner rather than letting things percolate and people just staring at each other, like what's the next shoe and the next shoe to drop.
➡️ It is hard to read and even counter-intuitive in some senses, but it is the exact experience I have had over and over. When discussing with other CEOs, I think it is one of the most recurring messages too. ➡️ That is something I want to fight very actively too. Finding the Right PeopleHire people ahead of their own curve. Hire more for aptitude than experience and give people the career opportunity of a lifetime. They will be motivated and driven, with a cannot-fail attitude. The good ones would grab the opportunity to accelerate their careers with us. Checking boxes on a resume is easy. Assessing aptitude is harder. Look for hunger, attitude, innate abilities. I have misfired with great resumes plenty of times.
➡️ I’d like us to push more and more to hire for aptitude (like we were doing at the beginning of Alan). And also to give people the career opportunity of a lifetime. I tend to think we are too scared in our hiring process and want to check all the boxes. We should bet on people who are super smart, high potential, and that will enjoy our culture. It's hard to maintain an active recruiting posture. We recruit for a role, fill the position, check the box, and move on to other matters that demand our attention. But some of our hires do not pan out, get moved around or leave, and then we have to start all over again. That is often the reason why we tolerate mediocre performance—because it is so hard to relaunch a recruiting effort. We want to always have a list of prioritized candidates for each critical role. Candidates we would seek to engage as needed. It starts with knowing who is who in the field, how well are they regarded, and keeping tabs on their ongoing status. Status is always changing of course, so it requires tracking candidates over time, checking in with them, having some sort of ongoing relationship until the time comes to actively engage. You must staff ahead of need. Recruiting never stops.
➡️ Each Alan leaders should do that, and keep this list of potential hires they build a relationship with. Build a Strong CultureMost enterprises aim for making employees feel good, secure, and safe in their roles. They are aiming for strong net promoter scores (NPS) on their employee surveys. Management is angling for kudos for their virtuous leadership style. While there is nothing wrong with good intentions, we need to align the culture with the mission.
➡️ Make sure we optimise for the right metrics. Employee NPS might not be the right one in all cases. High-growth enterprises are not easy places to live. The pressure is relentless. Performance is aggressively managed. There is no let up. I have seen employees depart after a short time because the intensity and pace just wasn’t their cup of tea. Culture is not about making people feel good per se, it’s about enabling the mission with the behaviours and values that serve that purpose. It’s unlikely that a strong, effective, and mission-aligned culture will please everybody.
➡️ I think that is a very important point, and I want to make sure of the strength of our culture. We can have this while being caring about the team though. Culture results from consequences, good and bad, as well as from the lack of consequences. If you want a strong culture, you will have to make hard decisions to let certain people go for the greater good. There's no way to avoid those cases.
➡️ It is hard, but it is very important to maintain a great culture. If they want to work with us, they have to take our values as seriously as we do. If they can't agree to that, they should save everyone a lot of time and frustration and go somewhere else. If you succeed in building and protecting a strong culture, it will simultaneously attract people who admire the culture while repelling those who find it distasteful. That's an intentional feature, not a bug.
➡️ We should be clearer about this and not try to please everyone. Building TrustTrust never just happens—it needs to be earned and developed. Everyone has to aim for it and work on it constantly. Most of us start off relationships with a show-me attitude, rather than blind trust, and a single disappointing experience can make it hard to recover.
➡️ That is why we should push Alaners to build relationships especially when they onboard or join a new crew/Unit. Sharpen Your FocusOrganizations are often spread too thinly across too many priorities, and too many of them are ill defined. Things tend to get added to the pile over time, and before we know it, we have huge backlogs. First, think about execution more sequentially than in parallel. Work on fewer things at the same time, and prioritise hard.
➡️ Really important. It is what I’m pushing about having one A+ problem at a time. It forces to sequence, and to decide what is the most important now. Even if you're not sure about ranking priorities, do it anyway. The process alone will be enlightening. Figure out what matters most, what matters less, and what matters not at all. Otherwise your people will disagree about what's important. The questions you should ask constantly: What are we not going to do? What are the consequences of not doing something? Get in the habit of constantly prioritising and reprioritising.
➡️ I love it, and I should do it more. If you can only do one thing for the rest of the year, and nothing else, what would it be and why? People struggle with this question because it is easy to be wrong, which is exactly the point.
➡️ Very important question. Even if the nuances of the reality are a bit different, it really forces us to think. It is more an exercise to determine a relative priority route than, "Oh, we're only going to do one thing." In reality that never happens. Certainly, in our organization at our scale, we have many work streams. But it's really healthy to step back and go like, "What is the absolute most important thing that must happen this year?"
Put Analysis Before Solutions ➡️ Very important on how we approach discussion with customers. I redirected the conversation to the nature of the problem rather than fast-track the proposals already presented. I am generally not a fan of just trying things, throwing ideas against the wall to see if they stick. We lose time and waste resources that way. Let's try a rifle shot instead of a scatter gun.
➡️ Spending the time to define the problem has value. I tend also to push for creativity and test things (it is easier when you know what you want to measure). Slow down and critically examine situations and problems before settling on an explanation, never mind a solution. This requires intellectual honesty—the ability to stay rational and set aside our biases and past experiences. Consider the full range of possibilities, not just the first one that jumps out at you. My preferred tactic is to start with so-called first principles. Break problems down into their most basic elements. Ignore what you think you already know, and imagine you are facing this kind of situation for the first time in your life. The more you have seen, the harder this tactic gets, but it's worth the effort.
➡️ Very important to ignore what you think you already know! One of the more irritating habits VCs have is “pattern matching,” making recommendations and suggestions based on what other supposedly successful companies were doing. No two companies are alike, and just because another company is doing it, doesn't make it right.
➡️ Very important lesson. We should inspire ourselves from other models to get creative, but then go back to first principles on why it could work for us. Pick Up the PacePeople sometimes ask to get back to me in a week, and I ask, why not tomorrow or the next day? Start compressing cycle times. We can move so much quicker if we just change the mindset. Once the cadence changes, everybody moves quicker, and new energy and urgency will be everywhere. Good performers crave a culture of energy. It's using every encounter, meeting, and opportunity to increase the pace of whatever is going on. Apply pressure. Be impatient.
➡️ We have to apply this for our rhythm at opening and closing issues. If we sequence them, we should be able to close them a lost faster. Make decisions quicker! Ramp Up SalesAre you happy with your current sales productivity metrics? If not, how can you improve productivity before adding more sales headcount? Are you happy with the metrics of your lead generation pipeline? If not, how can you improve it? Are you being realistic in your timeline of sales targets? Are you projecting too much too soon, or too little too late? Are you being aggressive enough and thinking big enough to outpace your competition? Is your sales team buying into your targets and timeline? Are they owning the goals and fully committed to hitting them? Trying to staff a whole sales team prematurely is a very common managerial mistake. So is failing to figure out what distinguishes top sales performers from weak performers before ramping up headcount. There is no point in hiring ten salespeople when you don't yet know how to make even one salesperson productive.
➡️ I really liked this list of questions. You have to aggressively manage nonperformance, cut headcount if appropriate, or add headcount wherever you have the highest probability of converting sales potential to sales yield. In sales organizations, it’s extremely common that salespeople have a very hard time confronting lack of performance. That’s because sales organizations are very high camaraderie situations, we all like each other, we go to the bar after hours. That makes it hard to be intellectually honest about when the lights are going on and when they aren’t. Add headcount where managers have a record of converting them to yield and vice versa: do not add headcount to regions where things clearly are not figured out.
Develop your own distribution capabilitiesDeveloping your own distribution capabilities is a very, very high value. Most companies think it's all about the technology. If you master your own distribution, you become insanely powerful. The point is there's huge value in mastering and controlling your own distribution. You own your own destiny. If you try to farm out your distribution, you're beholden to another entity. And I think that's incredibly unwise. Our unorthodox decision to sell direct ultimately helped Data Domain dominate the market. It eventually reached fifteen times the valuation of its nearest competitor.
➡️ It is why we built our own direct distribution from scratch (contrary to the standards of our market). Stay Scrappy as You Scale UpThe most valuable leaders are those who can combine the scrappiness of a start-up leader with the organizational and diplomatic discipline needed in a big company. Those who can scale up or scale down as required. Those who can set aside their experience when necessary, apply first principles, and think through situations in their elementary form.
➡️ Very important! Some of the Alan’s early teams are fantastic examples of this. Transform Your StrategyTakeaway 1: Attack weakness, not strength. Takeaway 2: Either create a cost advantage or neutralize someone else's. Takeaway 3: It's much easier to attack an existing market than create a new one.
➡️ That is how we approached it, start with an existing category and progressively create the new one. If you can't sell close to home, you will surely fail farther afield. The closer your early customers are, the more easily you can communicate with them and gather useful feedback.
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