Work Matters

  • CEO Decision-Making: A Great Observation By Venture Capitalist Ben Horowitz

    I have been reading through "Ben's Blog," which is written by Ben Horowitz of Andreesen Horowitiz (a firm that just raised 650 million, yikes!)  He wrote a great post awhile back on how the firm evaluates CEOs. Read the whole thing, it is inspired.  I especially love this part, because it is so true and explodes the myth of the all knowing and all powerful CEO:

    Courage is particularly important, because every decision that a CEO makes is based on incomplete information. In fact, at the time of the decision, the CEO will generally have less than 10% of the information typically present in the ensuing Harvard Business School case study (emphasis added by me).  As a result, the CEO must have the courage to bet the company on a direction even though she does not know if the direction is right. The most difficult decisions (and often the most important) are difficult precisely because they will be deeply unpopular with the CEO’s most important constituencies (employees, investors, and customers).

    This point dovetails well with the quote at the top of Ben's Blog:

    There's no sense in being precise when you don't even know what you're talking about. - John Von Neumann

    I will poke around more; he is a very thoughtful guy. Also, Ben's point reminds of something I heard Andy Grove say several years back along similar lines — see this HBR post on how a good boss is confident, but not really sure.

  • Dan Pink: “It’s a short step from scale to sclerosis.”

    Dan's lovely quote is from a story in this morning's New York Times.  It is about how Google has become so big that it has lost its start-up feel and some of its best employees are heading for more exciting places, especially Facebook.  As further evidence of Google's concern about a talent drain, Google gave every employee a 10% (or larger) raise this month.  I agree with the story's premise that Facebook is one of the hottest employers in Silicon Valley, partly because they do give technical folks very cool work (although so does Google) and partly because they are pre-IPO, so there is the lure of a big payday when they go public. 

    The challenges of scaling an exciting small company into a big one are not easy (see this great post by venture capitalist on Taking The Mystery Out of Scaling a Company, which I will likely do a longer post on soon).  But I do think that Google has done a pretty good job here; size creates complexity that is unavoidable, but they've done a good job of staying pretty lean and not adding excessive rules and constraints compared to most rapidly growing companies.  But the process whereby people leave a once small company to start their own company or to join a smaller and more exciting one has always been part of the growth cycle in every company, especially in Silicon Valley.  Indeed, during the glory days of Hewlett-Packard, they fueled the growth of Silicon Valley with employees who left to start their own companies (including Steve Wozniak; his Apple PC to them, but they didn't want it).   Although the loss of specific employees was regretable, these same employees helped fuel an ecosystem of innovation that benefits HP to this day — and the same is true of Google. 

    I wonder, what other companies have impressed people for their ability to scale without sclerosis, and which companies are horror stories of red-tape, unnecessary rules, and petty politics, and bulky bureaucracies?

    P.S. The large company that has done the most impressive job of scaling (although there are some unattractive features about them) is Wall-Mart.  Their lack of excessive complexity and action orientation is really something.

  • Snakes Graphic from New York Times Bad Apples Story, Plus Workplace Asshole Resources

     
    28pre-articleInline Snakes My Sunday New York Times piece on How Bad Apples Infect the Tree was printed with this graphic, which portrays the vile workplace that the star of the story, "Ruth," coped with successfully — and then escaped.  I like it, as it conveys the way it feels to be in a workplace where assholes are everywhere.  Here are some key posts related to challenge of dealing with vile bosses and workplaces:

    1. Check out my tips for dealing with asshole infected workplaces

    2. If you want to help determine if you are a certified asshole or not (or someone you work with is or is not), take the ARSE, a 24-item self-exam.  About 250,000 people have completed it.

    4. Here is my honor roll of places that have no asshole rules.

    5. If you want to determine if you work for a great boss, or a "brasshole," complete the BRASS (Boss Reality Assessment System).

    6. Here are two videos of me talking about The No Asshole Rule, the first is a 50Lessons interview and the other is a CNBC Story called The Jerk at Work.

    7. Here are two videos about my new book Good Boss, Bad Boss.  The first is a CNN appearance and the other is a speech I gave that summer at an AlwaysOn conference at Stanford.

    8. Check-out my post on "Bad is Stronger Than Good" to see more detail about the damage that rotten apples do, and ways that good bosses deal with them.

    Please let Work Matters readers know of other resources that you find to be helpful.

     

     

  • The Power of Escaping a Vile Workplace: His ARSE Score Dropped from 12 to 2

    One of the main themes in The No Asshole Rule is that, if you work with a bunch of mean-spirited creeps, it is difficult to avoid catching these "adult cooties."  There are at least two reasons this happens.  The first is that a pile of studies show that emotions and behavior patterns are remarkably contagious — that without realizing it, we mimic the way that people around us act.  The second reason is self-preservation: If you work with a bunch of nasty creeps who put you down all the time, treat you as if you are invisible, bad-mouth you, and tease you in hostile ways, sometimes the only way to protect yourself (for better or worse) is to return fire.   These points are supported by academic research, especially on emotional contagion.

    Yet it is always fascinating to see how this stuff plays out in the real world. I got an intriguing email the other day from a fellow (who had written me a second time) to report a big drop in his ARSE (Asshole Rating Self-Exam) score after leaving an asshole-infested workplace and moving to a civilized one.  Here is his email, with names of companies and people removed:

    Hi Bob, I sent you an email several years back (I believe around March 2008) when I left a horribly poisonous company after less than 3 months of employment.

    Since then I have started with [an energy company].  Very different environment. It's not Shangri-la but it's definitely a more positive workplace.

    When I was working for [the horribly poisonous company ] I had taken the ARSE exam and scored a 12 (after answering honestly). Today, I retook the test (answering honestly again) and scored a 2. I've sent the test to others in my work group and asked them to give me their test scores. The highest score was a 6.

    I also find myself much more productive and spend most of my time working on how to achieve the group's goals instead of how to protect myself.

    This story also reinforces a point I make over and over again on this blog and  other places that I write and speak: If you are in an asshole-infested work group or organization, the best thing you can do is to get out as fast as you can.  Yes, there are ways to limit the damage, fight back, and to make changes — but they don't always work, and even when they do, you can suffer a lot of damage in the process.

    Note, for readers who may not know, the ARSE, or Asshole Rating Self-Exam, is a 24 item self-test that you can take to determine if you are a certified asshole, a "borderline" case, or not an asshole at all.  Many people also complete with someone else in mind, such as a boss or co-worker.  At last count, it had been completed by just 250,000 people.

    P.S. This is a revised version of a post that first appeared here early this year.  I thought it was a good time to reprint it as it is related to the "bad apple" story that was published in Sunday's New York Times.  In particular, this post reinforces  the importance of escaping from a vile workplace.

  • Bosshole Sues Clown For Not Being Funny Enough

    Since The No Asshole Rule was published in paperback a couple months back, the inflow of asshole stories into my inbox has been on the upswing.  I am getting at least three a day lately, and last week, I got ten one day.  I also expect an upswing next week, as I have a piece coming out in The New York Times business section this Sunday called "When Bad Apples Infect The Tree. "  I only share the most striking and instructive of such stories here; I got one Wednesday that certainly qualifies. The woman who wrote me works for a guy who clearly is a candidate for bosshole of the year. I am leaving out some parts of the email for length and also to protect her identity.  Consider this excerpt from a woman who finally took a job after searching for over a year:

    I was kind of desperate and took this job even though my gut said, "not a good idea."  You should always follow your gut.  I have almost walked out several times.  He lies about my benefits and salary.  He stated one salary and then told me once I started that the salary he quoted included potential bonus.  Of course, there is not going to be any bonus. 

    I don't get a lunch hour, and have to work at my desk or he calls me or texts me all the time.  In this year's time I took some time during lunch twice to go to doctor's appointments and he complained that I needed to not go so much as he was feeling taken advantage of.  Of course, his asking me to stop off at the grocery store and buy milk for him and his family and bring it to him (he was working at home) since it was on my way doesn't constitute being taken advantage of. 

    Needless to say, he has been a nightmare.  He has even texted me in the middle of the night demanding a report be redone immediately, and I actually did it.  Complete and total asshole.  And he's an asshole in his personal life.  His son had a birthday party and they hired a clown.  Well, he wasn't happy with the clown so he and his wife sued the clown to get their money back.  Seriously, this guy make millions a year and he sues a clown??? 

    She added "I've got to get away from asshole.  He's is like a vampire, sucks the joy out of life."  

    No kidding. I hope she finds a better job with a better boss as soon as possible.  I was careful to advise her, however, to resist the temptation to storm out, to tell her boss to take this job and shove it, as it is a lot easier to find a new job when you already have one.

     

  • Why a CEO Needs a Candid Advisor from OUTSIDE the Organization

    I was reading through notes I took about six months ago during a talk given by a CEO of a large company, who was fired by his board because his firm had serious performance problems — and was taking great risks — that he never learned about until it was too late, and the firm was in deep trouble.  I can't identify him, but as I have warned here, at HBR,and in Good Boss, Bad Boss, every boss risks living in a fool's paradise — and the more power the boss wields over others, the greater the risk.

    Here is his comment:

    "You desperately need a candid adviser.  When you become CEO, you get a lot of bullshit.  You don't information so much as you get sales pitches.  You're alone in the ring."

    This guy learned the hard way; I offer it so others can avoid the pain and obvious embarrassment he felt.  He looked like wounded animal during this talk, but I had to give him credit for being honest. 

    P.S. If you read Andrew Sorkin's well-crafted Too Big To Fail, you can see how out of touch the leaders of big financial services firms were in the run-up to the meltdown.

  • Tips: How To Be An Effective Asshole

    The post I did yesterday about the All-Star Certified Asshole, Steve Raucci, reminded me of stuff I had written on the virtues of assholes, which is the focus of Chapter 6 of The No Asshole Rule.  I thought a bit of this material might be fun and perhaps instructive for those of you who went to leave a trail of victims in your wake, while using your nasty ways to get ahead in the local pecking order.  That is what Mr. Raucci did for decades;  although please keep in  mind that he will be at least 84 years old when he gets out of prison, if he lives that long.  Here is a list from Chapter 6 of NAR (which is Jeff Pfeffer's favorite chapter in the book, although it isn't mine):

    Do You Want to Be an Effective Asshole?

    Key Lessons

     1. Expressing anger, even nastiness, can be an effective method for grabbing and keeping power.  Climb to the top of the heap by elbowing your “colleagues” out of the way by expressing anger rather than sadness, or perfecting a “general’s face” like George S. Patton.

    2. Nastiness and intimidation are especially effective for vanquishing competitors.  Follow in the footsteps of baseball legend Ty Cobb, and succeed by snarling at, bullying, putting-down, threatening, and psyching-out your opponents. 

    3. If you demean your people to motivate them, alternate it with (at least occasional) encouragement and praise.  Alternate the “carrot” and the “stick,” the contrast between the two makes your wrath seem harsher and your occasional kindnesses seem even sweeter.

    4. Create a “toxic tandem.”  If you are nasty, team up with someone who can calm people down, clean-up your mess, and who will extract favors and extra work from people because they are so grateful to the “good cop.”  If you are “too nice,” you might “rent-a-jerk,” perhaps a consultant, a manager from temporary staffing firm, or lawyer.

     5. Being all asshole, all the time, won’t work. Effective assholes have the ability to release their venom at just the right moment, and turn it off when just enough destruction or humiliation has been inflicted on their victim.

    A final reminder for readers who are dreaming of putting these principles to work.  Here is how I end Chapter 6:

    'In closing, I want to make my personal beliefs crystal clear. Even if there were no performance advantages to barring, expelling, and reforming nasty and demeaning people, I’d still want organizations to enforce no asshole rules.  This book isn’t simply meant to be an objective summary of theory and research about the ways that assholes undermine organizational effectiveness.  I wrote it because my life and the lives of the people I care about are too short and too precious to spend our days surrounded by jerks.        

    And, despite my failures in this regard, I feel obligated to avoid inflicting my “inner jerk” on others.  I wonder why so many assholes completely miss the fact that all we have on this Earth is the days of our lives, and for many of us, huge portions of our lives are spent doing our jobs, interacting with other people.  Steve Jobs is famous for saying that the “journey is the reward,” but for my tastes, as much as I admire his accomplishments, it appears that he has missed the point. We all die in the end, and despite whatever “rational” virtues assholes may enjoy, I prefer to avoid spending my days working with mean-spirited jerks and will continue to question why so many of us tolerate, justify, and glorify so much demeaning behavior from so many people.'

     

  • An Amazing Story About a Certified Asshole on This American Life

    As regular readers of Work Matters know, since I published The No Asshole Rule in 2007 (or really, since I published a short essay on the rule  in Harvard Business Review in 2004) I have since been deluged with stories about certified assholes of every stripe. An astounding story about a candidate for the worst of the worst, the winner of this race to the bottom, perhaps the worst bosshole I have ever heard about, was played on This American Life a couple weeks ago.  It is called "Petty Tyrant,"and you can listen to it for free here. 

    The story is about Steve Raucci, who was in charge of the the maintains department at the school system in Schenectady, New York.  It sounds like an innocent and valuable position, but the pattern of his behavior was just outrageous. He was a masterful bully, doing everything from forcing his employees to socialize with him, to making constant and open threats, to forcing them to campaign for members of the school board he supported (indeed, it appears that most of the members of the school board were beholden to him), to firing and demoting people who were disloyal, to relentless taunting that ranged from sliding burning papers in a bathroom stall were an employee sat to outrageous sexual harassment. 

    Listen to the story if you want to hear the nuances, I can't do them justice here.  But this case is intriguing because, in many ways, Steve Raucci demonstrates the hallmarks of what might be called, for lack of a better term, an effective asshole.  He did a masterful job of "managing up" so that he had very powerful political allies in the administration and the school board, and was arguably the most powerful person in the school system.  He also did a pretty good job of running the department so that they did their job well.  And he used heavy handed tactics to force his employees to be loyal to him — or else.   Yet, it still stuns me to discover how these power strategies provided cover so that he could get away with consistently outrageous behavior.  

    Eventually, Mr. Raucci was sentenced to 23 years to life, "convicted on 18 of 22 counts against him for intimidating co-workers and perceived enemies with explosives at the school and union where he worked."  The picture above shows him at his sentencing hearing last May.  My only quarrel with the story on This American Life is that the term "petty tyrant" does not quite capture his evil nature.

     

  • “Lend Me Your Wallets:” Research on the Link Between Charismatic CEOs and Stock Price, Featuring Steve Jobs

    I was exchanging emails the other day with Dave Ulrich, my co-author on Asian Leadership, and asked him what he was working on.  He answered that he was pretty interested in the link between CEO actions and stock price.  Dave's interest reminded me of a delightful and imaginative 2004 study of such links by Frank Flynn (co-author of the narcissism study I discussed last week) and Barry Staw.  It is called Lend Me Your Wallets: The Effect of Charismatic Leadership on External Support for an Organization.  Flynn and Staw did two studies on charisma in this paper, which they defined as follows:

    Such individuals exude confidence, dominance, a sense of purpose, and the ability to articulate a vision for followers
    to grasp (House, 1977; Conger, 1991). Charismatic leaders are able to communicate this vision to their followers, and by the force of their own excitement and enthusiasm, induce their followers to support this vision (Yukl and Van Fleet, 1992). In this sense, charismatic leaders are said to have remarkable influence over subordinates who internalize the leader’s vision of what can be achieved through collective effort (Bass, 1985).

    The first was a field study, where they compared 46 firms led by CEOs who were identified as charismatic (a total of 44 CEOs.. it appears two were used twice) who led Fortune 500 firms between 1985 and 1994.  They found that, independently of objective financial information, firms led by charismatic CEOs enjoyed higher stock prices.  Moreover, this effect was magnified during difficult financial conditions — during economic downturns, charismatic CEOs had an even stronger effect on stock price. (Perhaps when people are under duress, they especially gravitate to the hope and energy that such leaders exude).

    This first study was used to set the stage for a second study using Steve Jobs. Note that although this study was published in 2004, the data collection was actually done years earlier (things move slow in academia), in late 1998, barely a year after Jobs had returned to Apple.  There was a lot of hype and hope about Jobs, but he was not seen as the magical CEO heis now.  This research was done  in the very early and uncertain days of the turnaround. 

    The set-up of the study was as follows (I am simplifying): 150 students were asked to imagine they had inherited $10,000 from a relative and were asked to alocate the money among three investment options: an indexed mutual fund, a money market certificate, or Apple stock.  All were shown objective fiancial information about Apple's recent performance (and the performance of money markets and mutual funds too). Half were given information suggesting that Apple's prospects for a turnaround were bright and half were given information that Apple's prospects for a turnaround were dim.  Then came the big manipulation: Half were shown a videotape of Jobs doing a 20 minute presentation at a trade show (I am pretty sure I loaned this to them for the experiment, Jobs talks about all the ways things are getting better and is his usual compelling self) and half did not see the video. 

    The results were pretty interesting.  The subjects who saw the film rated Jobs as considerably more charismatic than those who did not. And those who saw the film were willing to invest more money in Apple than those who did not. This effect was driven primarily by people who were presented negative predictions about Apple's future. Those who did not see Jobs invested an average of $1329 but those who saw Jobs invested an average of $3327 (compared to a $400 bump for those who saw the film but were presented information suggesting that Apple's future was bright).

    This study is imperfect, as all studies are. But I find it fun, imaginative, and intriguing.  For starters, it shows both the dangers of charismatic leaders — because they can distract people from the facts or at least color the ways those facts are construed (especially when fear and pessimism are in the air).  This research also shows how charismatic leaders have the potential to start a positive self-fulfilling prophecy.  And in the specific case of Jobs, it is intriguing to think about the astounding long-term success of Apple under his leadership the last 13 years or so, especially in light of Jim Collins dim view of charisma in both Built to Last and Good to Great.  I have complained about Collins' mediocre and over-hyped methodology before (see here and here) and the fact that he elected to ignore literally hundreds of past studies (including many studies on charisma and performance) and to simply rely on two very small samples to make sweeping claims.  As I have also said before, I find his books to be compelling in terms of the writing and despite this specific complaint about charisma, I generally agree with his claims and  could point to many other studies that support them.

    What do you think?  Is Jobs' charisma an important part of the Apple turnaround?  And what are the virtues and dangers of charismatic leaders?

  • GE Doesn’t Block Work Matters … I Was Wrong!

    So much for my well-placed well sources.  You may call that  I wrote a post last week asking if it was true that GE blocks Work Matters. I got message from Mark Guthrie, who serves as Global Personnel Realtions Manager at GE.  Mark reports:

    FYI:  I am a colleague of Max Brown … last night over dinner he mentioned you were looking for confirmation regarding internal-to-GE access to your website / blog.  Max forwarded me your link and I was granted immediate access via the GE server. I used the "email me" tab to shoot you this note.  I hope this helps.

    Mark, thanks for clearing this up, and Max, thanks for your help.

    P.S. I try to check my facts when I post things on this blog, but this is a reminder not to believe everything I write here.  And it is a reminder to me that staying paranoid, and even gewtting more paranoid, about fact-checking is wise.