The Latitude to Make Mistakes
I had a chat with someone who’s early in her career. She’s evaluating a variety of career paths, including working for a start-up or a venture capital firm. When asked what she was looking for in her next opportunity, she said one thing that stuck with me. She wants to be at a place where she has the latitude to make mistakes and perfection isn’t the expectation.
People learn by doing. Sometimes that means the outcome won’t be as planned. When that happens, people often reflect to figure out what they did wrong. Environments that allow for mistakes also allow for learning and growth. They have a culture of bias toward action. People feel empowered to try new things and experiment. When perfection is the expectation or mistakes are viewed negatively, the opposite culture is the result. People hesitate to act until they’re confident the outcome will be what they want. They’re less likely to experiment. Managers often end up involved in every decision made, which makes things slower and more bureaucratic.
Unexpected outcomes aren’t mistakes unless you don’t learn anything from them. I prefer to think of them as slightly painful learning experiences. Environments that embrace learning from doing instead of perfection attract the best people and can produce outsize outcomes.
What Is Culture?
I was debating the importance of culture with friends recently. Specifically, I said it’s a big competitive advantage in recruiting and retaining top talent. A good culture can be as or more important than salary. Not just in start-ups, but all organizations. An example I gave was that star athletes will sometimes take less money to stay with or join a team with a great culture.
During this debate, one friend asked me to define “culture” in one sentence. I told him it’s how people act when nobody’s looking.
If people are doing the right thing when nobody’s looking, you’ve got a good culture. If not, you’ve got a bad and possibly toxic culture. Guess which environment talented people with good values want to be in.
Carlyle Group’s Secret to Building Culture: Persuasion
David Rubenstein is the founder of Carlyle Group, a publicly traded private equity firm in DC. The firm has about $373 billion in assets under management as of this writing. David is a good example of what I call investor entrepreneurs—investors who have an entrepreneurial spirit and found their own investment firms rather than work for someone else. I’ve been learning more about David’s outsize success and the founding of Carlyle. I listened to an interview he gave recently at Wharton’s Private Equity & Venture Capital (PE/VC) Club.
David believes that culture is one of the most important things in an organization. He was purposeful in crafting the culture of his firm, and it’s been a competitive advantage and part of Carlyle’s brand. David was asked what’s needed to build a great culture. He shared something I didn't anticipate: persuasion skills. He went on to say that life is about persuading others to do what you want. Family, coworkers, friends, spouses, everyone—if you can persuade people you’re right and get them to do what you want, it’s an advantage in life and helps build a great culture.
He explained how to persuade people:
- Writing – Effective writing is important because it helps you communicate your point succinctly, which can persuade others.
- Talking – Oral persuasion is about making your case by speaking. If you can speak clearly and succinctly, that will help you be persuasive. Practicing helps.
- Actions – Leading by example is an effective way to persuade. Do what you want others to do to set an example that they’ll follow.
David is right. Persuasion is an important life skill that can be a superpower for entrepreneurs who lead other people. Culture is about how people act while they execute the company’s mission. Effective leaders are good at persuading their teams to act in a manner that aligns with the company’s core values.
Company Holiday Parties
I’ve attended many holiday parties over the years. My general thought is that the larger the company, the larger the party and the less depth there is in people’s interactions at the party. For some (not all), the party can feel like a chore. For a big company, team holiday gatherings can be a better option than a single large party. For example, if the sales team has 12 people and the marketing team has 8 people, have two separate team parties organized by the team leaders.
Small gatherings like this can bring more value. They’re more like a big family’s Sunday dinner than a huge family reunion. Teams who work closely every day can bond outside work and add a social layer to their relationships. Instead of trying to connect with people you barely know or don’t know at all at a huge party, you can strengthen relationships with people you already know in a more intimate setting.
Holidays are a great time to get team members together, and small team gatherings can be a great alternative to a huge company holiday party.
Intensity Isn’t the Only Way
I listened to someone share his observations about entrepreneurs. The gist of it was that intense entrepreneurs are the most successful entrepreneurs. By “intense” he meant outspoken and demanding—characteristics that push them and others to get things done.
I disagree. People of all personality types can be successful. People who are laid back or don’t say much can be just as ambitious and convicted as outspoken, demanding people. They just communicate it differently.
Building something great isn’t about pounding your fist on the table and yelling. It’s about giving your team clarity on what the mission is, holding everyone accountable, motivating them along the way, and celebrating wins together. If you do these things and have the right people, and they’ve bought into what you’re trying to accomplish, you can accomplish what seems impossible. Notice that these management skills don’t require intensity. You can do them all and still be as laid back as you want.
If you’re a founder or aspiring founder, remember that intensity isn’t an indication of your ambition, conviction, or likelihood of success. Be yourself. Lead in a way that fits who you are naturally.
Communicating Popular—and Unpopular—Decisions
I listened to a friend criticize a founder’s decision on an important issue. The founder originally told his staff they would do X. A few weeks later, he changed his mind and decided to do Y. I was curious why he changed his mind, so I asked. In short, the data changed. His initial decision was based on a projection that had materially changed since then. If he’d stayed the course, the result could have been serious challenges for his company in the future. The initial decision was well communicated and well received. But when the decision was reversed, there was no official communication; people heard about it through the grapevine.
Hard decisions must be made when you’re leading others. There’s no way around them. Making difficult or unpopular decisions isn’t what gets leaders in trouble; it’s the way they’re communicated—or not—that can land leaders in hot water. Some leaders avoid delivering unpopular news for fear of upsetting their teams. What they don’t realize is that people are often OK with whatever happens if they know why it’s happening. And people don’t like uncertainty. They want to hear from their leader when there’s important news that could affect them.
If you’re a founder, there’s nothing wrong with changing your mind or making unpopular decisions. It comes with the territory. But be aware that how you communicate your decisions can have a lasting impact on your team’s confidence in you as a leader.
Leaders Be Warned: Smart People Are Watching You
I had a discussion with a buddy about different leadership styles. We talk about a few founder friends and compared their styles. I believe leaders have to figure out what style works best for them. Some people are great motivational speakers. Some are quiet and lead by example. All can be effective.
My buddy expressed a view that I hadn’t thought about: Leading by example is your only option when you have a team of A players because smart people don’t care what you say—they’re watching what you do and will take their cue from that.
I don’t totally agree with my friend. Smart people listen to what leaders say, but they take it a step further. They verify by paying attention to what leaders do. They make sure there’s alignment between a leader’s words and actions. When there’s a disconnect, they take note. Saying something is a lot easier than living it. So, when words and actions don’t align, smart people believe that action represents the truth. If a leader’s actions aren’t what they expect or don’t align with their values, you can expect them to start planning their exit.
If you’re a leader and you want to build an amazing team, remember that A players are listening and watching. Your actions must align with your words. If they don’t, you’ll end up with an average or worse team and average or worse results in your organization.
Proximity to Success
Earlier this week, I shared my takeaway from an interview of coach Mike Tomlin. A friend read the post and pointed out something else that we had a great discussion about. Tomlin shared how impactful working with Tony Dungy was. Tomlin was a 28-year-old new coach in the NFL and also a new father. He was nervous and not sure if he had what it took to succeed in either role. He specifically pointed out that a big part of his nervousness was due to not knowing what to expect—he’d never worked in the NFL and wasn’t raised in a two-parent household.
Tomlin had dreams and aspirations and was working hard to make them happen. But he didn’t know what it looked like to be a successful NFL coach or a good father. Dungy showed him not only what each looked like but also what it looked like to do both at the same time. Dungy led by example, which gave Tomlin proximity to success and changed the trajectory of his career and his life.
Tomlin is a great example of the impact of proximity to success. When you can see people to whom you relate succeed, it starts to make the impossible feel possible!
I watched an interview in which coach Mike Tomlin described how he stays at the top of his game. After winning two Super Bowls, he still has the same fire he had when he first became an NFL head coach fifteen years ago. Tomlin shared something that really stuck with me. He resists comfort. In fact, he tells his team, “Don’t seek comfort,” because special outcomes—outsize outcomes—are the result of being uncomfortable. He explained that he views thinking back to his success as a Super Bowl champion as seeking comfort. So, he ignores his past success and the comfort it breeds.
Tomlin may ignore his track record, but it’s impressive and speaks to his credibility as a coach and leader.
Growth often comes from being in uncomfortable situations. You’re forced to think about and do things that are unfamiliar. Succeed or fail, you’ll learn from those experiences. I really like how Tomlin is intentional about resisting comfort. It tells me that he’s a learner and constantly looking for ways to improve himself and the team he leads. It makes sense that after fifteen years, he’s still at the top of his game.
If you’re aiming to do something special, consider asking yourself, “Am I resisting comfort—or seeking it—when I make decisions?”
What’s Important: The Right Answer, Not Being Right
Sean McVay, head coach of the Los Angeles Rams, shared how he led the Rams to win the Super Bowl this year. Sean is the youngest head coach in the NFL. Some of his players are his age or older. I was curious about what he had to say. Part of his formula for success is listening to his players. He acknowledges that he and other coaches don’t have all the answers. He cares about what’s right, not who’s right. This stood out to me and reminded me of something similar Ray Dalio said:
I just want to be right—I don’t care if the right answer comes from me.
Dalio also tweeted a similar thought a few months back.
It’s telling that two credible people in different industries are saying the same thing. If you’re a founder, consider taking a second to ask yourself: Do I care more about being proven right or about getting to the right answer?