Thinking Second-order Effects

💡 I was going to write a longer piece on this topic, but found this article to be helpful.

One of the key elements of being better in leadership, strategy, and organizational changes is being able to think and anticipate second-order effects.

When you want to roll out programs, systematic changes, (re)budgeting, headcount planning, introducing new processes, thinking beyond the first intended first-order, being able to navigate second-order effects will be critical in how successful those initiatives will be. Most outcomes will be lagging and have lasting/trickling effect throughout the organization, so the quality of the decision and the thoughtfulness matters a lot to save a lot of people’s time, effort, and pain.

Being a thoughtful individual is thinking about the delivery of messages and actions to be able to understand the perspective of and have empathy towards the recipient of the messages and actions.

Being a thoughtful leader is thinking not only about the delivery, but also being able to simulate and consider the trickling effect throughout the organization — what challenges does it bring to different teams’ goals and organizational systems, who will feel the increase in pressure, what does the message say to the other teams outside of your immediate org, who will feel more frustrated vs appreciated, and so forth.

So when you are thinking of introducing changes to your team or broader organization, especially one-way door decisions*, being able to plan and anticipate second-order effects will likely to be even more important than the first-order effects.

“We think about one-way doors, and two-way doors. A one-way door is a place with a decision if you walk through, and if you don’t like what you see on the other side, you can’t get back. You can’t get back to the initial state. A two-way door, you can walk through and can see what you find, and if you don’t like it, you can walk right back through the door and return to the state that you had before. We think those two-way door decisions are reversible, and we want to encourage employees to make them. Why would we need anything more than the lightest weight approval process for those two-way doors?”

Amazon way (Quote Source)

SendBird’s First Billboard

We’re in this together

As part of a new initiative to strengthen SendBird‘s brand, market presence, and reach our developer community better, we’ve decided to start a long-term brand campaign, including, yes, a billboard.

While we’ve debated whether this was really a SendBird-way to engage our developer community, given that a lot of our current and future customers are heavily concentrated in the San Francisco Bay Area, we decided to move forward with the campaign.

Due to the Covid-19 global pandemic, the billboard campaign may not have the initial scale of impact we had planned for, but we decided to use this time window to address a bigger message for our Bay Area community. Instead of focusing on what we do and our value proposition, we crafted and delivered a message to give hope and empathize with the community.

We’re in this together

SendBird Team

We’ll continue to engage and stay connected with our local community of developers around the world, and this is just the beginning of great things to come!

PS. If you want to check it out in person, it’s on 7th St and Harrison St in San Francisco, CA.

How to Cultivate Your Resilience

Practices to strengthen your resilience

 People love a guy who rises from the ashes. Remember that.

Whitey Durham

Resilience is something that many talk about, but is hard to come by. It can be quite useful to have innate resilience in you to overcome the hardships of life, professional career, and even entrepreneurship. Things worth pursuing in life are hard. That’s why it’s rare to see great achievements, and it is that very journey of overcoming the difficult challenges with resilience makes it fulfilling and worthwhile.

There are many words used to describe resilience: perseverance, tenacity, relentlessness, and some even may use the word stubbornness, but they all describe one common theme: not giving up, trying again, being resourceful to achieve a seemingly impossible goal, and ultimately getting to that very success. (Also recommend reading Paul Graham’s essay “Relentlessly Resourceful“)

So how does one harness such resilience?

Continue reading “How to Cultivate Your Resilience”

QOTD 2020-04-10

On creativity

“You can’t rehearse what you ain’t invented yet.”

Wayne Shorter (American jazz saxophonist and composer)

Personal Energy Management

4 Dimensions of Personal Energy

I’m a big believer that our two primary constraints to progress are time and energy. Of course, we need to be physically and mentally healthy to manage them well, but based on how you manage your time and energy, you also reap the benefit of better overall wellness, reinforced through a positive feedback loop.

With that said, (yet another) HBR article “Manage Your Energy, Not Your Time” by Tony Schwartz and Catherine McCarthy is a good one to understand the framework on how to manage your personal energy well.

Here’s an excerpt from the article on renewing the four dimensions of your personal energy and I found them to be quite helpful:

PHYSICAL ENERGY

  • Enhance your sleep by setting an earlier bedtime and reducing alcohol use.
  • Reduce stress by engaging in cardiovascular activity at least three times a week and strength training at least once.
  • Eat small meals and light snacks every three hours.
  • Learn to notice signs of imminent energy flagging, including restlessness, yawning, hunger, and difficulty concentrating.
  • Take brief but regular breaks, away from your desk, at 90- to 120-minute intervals throughout the day.
Continue reading “Personal Energy Management”

The Anatomy of Managerial Initiative

The five degrees of initiative of the managers

Below is an excerpt from "Management Time: Who's Got the Monkey?" (HBR)

There are five degrees of initiative that the manager can exercise in relation to the boss and to the system:

  1. wait until told (lowest initiative);
  2. ask what to do;
  3. recommend, then take resulting action;
  4. act, but advise at once;
  5. and act on own, then routinely report (highest initiative).

Clearly, the manager should be professional enough not to indulge in initiatives 1 and 2 in relation either to the boss or to the system. A manager who uses initiative 1 has no control over either the timing or the content of boss-imposed or system-imposed time and thereby forfeits any right to complain about what he or she is told to do or when. The manager who uses initiative 2 has control over the timing but not over the content. Initiatives 3, 4, and 5 leave the manager in control of both, with the greatest amount of control being exercised at level 5.

In relation to subordinates, the manager’s job is twofold. First, to outlaw the use of initiatives 1 and 2, thus giving subordinates no choice but to learn and master “Completed Staff Work.” Second, to see that for each problem leaving his or her office there is an agreed-upon level of initiative assigned to it, in addition to an agreed-upon time and place for the next manager-subordinate conference. The latter should be duly noted on the manager’s calendar.

👉 Summary: When an employee brings a problem to you, outlaw use of level 1 or 2. Agree on and assign level 3, 4, or 5 to the monkey*. Take no more than 15 minutes to discuss the problem.

* Monkey: It’s from “monkey-on-the-back” metaphor, and means a task that needs to be done/handled/responded to.

The Five Forms of Power

Leadership powers to cultivate

The five forms of power were introduced by John French and Bertram Raven, and depicts different forms of power that exist in organizations. There are ones that are short-lived with limitations and ones that are more sustainable and scalable.

  1. Coercive Power: Being able to force someone to do something (against one’s will)
    • Cause of many problems, poor form of leadership, can be easily overthrown (or abused)
  2. Reward Power: Ability to reward to do something unpleasant
    • Diminishing returns, short-term effect, regularity removes its effectiveness completely
  3. Legitimate Power: Exercise a degree of reward or punishment based on role/title
    • Loses power immediately as the position or title is changed, weak form to persuade/convince people
  4. Referent Power: Respected, approved, admired
    • Highly scalable and effective, but may decrease dramatically based on circumstance (e.g., popular politician getting taken off the show upon scandal)
  5. Expert Power: Knowledgeable and capable
    • Long-lasting, high value, and defensible form of power

Later on, they added 6th power — Informational Power: Ability to control the information that others need to accomplish something which usually comes from a position or a role. This too can be effective, but can also be interpreted as political or gossiping.

One of the most effective ways to build and demonstrate your power in the organization is the combination of #4 Referent Power and #5 Expert Power. By combining the two, leaders can build and demonstrate scalable and long-lasting form of influences in their organization and beyond.

Managing through COVID-19

Adapting to the new norm

This is a note for the future, to adapt the company and self through a global pandemic caused by COVID-19. I have full trust that the world will have a better playbook to deal with such pandemic in the future.

Short-term Shock and Long-term Recovery

  • While it’s uncertain how long the Covid-19 global pandemic will last, the impact on the overall economy is real, as seen from some of the markets where Covid-19 hit earlier, the consumer industries are already experiencing real loss of business. The travel industry collapsed, airlines in Korea are down by 80%, freights revenue down by 44%, ship manufacturing revenue down by 76%, and so forth. These are not the market caps, but the actual revenue decreases already being realized as months have gone by since the initial outbreak of Covid-19. Now the impact data on U.S. economy is starting to surface and except for a few industries (e.g. digital healthcare, online education, food delivery, grocery, etc.), most industries are getting crushed. Unemployment ratio is rocketing through the roof and companies and physical stores are shutting down with massive lay offs.
Continue reading “Managing through COVID-19”

A Guide to Scaling Yourself

How to keep your head above water

I was having lunch with a friend today, and we were discussing how does someone know when a person is scaling or not. Who will scale as the company grow and what stops someone from scaling further?

Some companies have early members scaling beautifully as the organization grows, while some don’t. A lot of smooth scaling happens typically when the company is growing organically and the growth rate is relatively modest (< 50% YoY). When a company is growing > 50% YoY, and in some cases, doubling or more, it becomes incredibly difficult for people to keep up with the scale of the company, as humans grow linearly, yet companies grow exponentially.

Below are a few questions to ask yourself to check if you are scaling with the growth needed and some tips and strategies to continue on the fast growth trajectory.

1. Am I “going horizontal?”

I came across the concept of “Going Horizontal” during 10xCEO program and we discussed extensively on how to make sure the executive team is continuing to scale at the right capacity level for the growth needs of the company.

The team internally might already be “over capacity” if the company’s growth rate is modest and the team is experienced. But if the needs for the leadership capacity emerging from growth out weigh the current capacity, then it will hurt the growth rate and the potential upside of the company as long as the leadership team is not fully built to handle the needs.

Continue reading “A Guide to Scaling Yourself”

VPC Framework in Management

Balancing between Value, Price, and Cost

I first learned the VPC Framework (VPC: Value-Price-Cost) back in 2006 and the simplicity of the framework made an impression on me. I still revisit a few times a year to think about where our company is in the position within the framework and how we are investing our resources.

The concept is quite simple. Let’s start with the definition:

  • Value: This is the value your offering is creating and delivering to customers.
  • Price: This is the price you charge and customers pay for to acquire or use your offering.
  • Cost: This is the cost of creating and delivering your offering to the customer.

The differences between these elements create the benefits:

Continue reading “VPC Framework in Management”