There are five degrees of initiative that the manager can exercise in relation to the boss and to the system:
wait until told (lowest initiative);
ask what to do;
recommend, then take resulting action;
act, but advise at once;
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 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.
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)
Reward Power: Ability to reward to do something unpleasant
Diminishing returns, short-term effect, regularity removes its effectiveness completely
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
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)
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.
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.
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.
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:
Below is a post I wrote in August 2019 within Y Combinator community (which luckily received 300+ upvotes 🙇♂️). Now that I get a pretty steady stream of inquiries about fundraising and accelerator/demo days, I thought it might be helpful to repost here in public format. Hope it brings hope to a few.
Hi S19 founders,
Now that the demo day has officially begun, I just want to share our experience at SendBird (W16), so that perhaps some of you guys can relate.
I’ll admit upfront: We were not the hot company of the demo day. No where near. We didn’t get the overly enthusiastic emails from investors piling up in our inbox.
I thought we were doing okay during the batch, but on the demo day, the ones that got the most amount of ‘likes’ and ‘quickest raises’ were not necessarily the ones we thought did the best during the batch. Some companies raised a lot of money almost on the day of the demo day, while most of us felt like we were punched in our stomach, grasping for air.
One of the macro trends we’re seeing in the software industry today is the rise of the API economy. API (Application Programming Interface) allows implementation, operation, and maintenance to become simpler by providing a set of input rules to the developers outside of the API software and giving them functionalities and processed results in return.
As discussed in the management framework #2 — abstraction and reduction — API is analogous to hiring a good management layer in a company, to provide more leverage to the developer allowing productivity gain through an abstraction layer of software. This abstraction stage is a critical phase in any industry to grow exponentially, as in any complex-enough industry, building all of the value chain end-to-end becomes infeasible and the trade-off between control and speed/quality/resource gets exponentially larger.
The information and knowledge I know today will quickly become obsolete as years go by, so instead of focusing on the transfer of knowledge, I came to believe that providing a useful set of core values and life’s frameworks are more scalable for the generations of family members. So here is the 1st version of family core values.
The core value is to help our family live and grow with a purpose and meaning in life. It will help us prioritize, make decisions, stay genuine and consistent, maintain integrity, with a long-term perspective. This is a living document and we should continue to evolve it throughout the generations.
The theme of the core values is “Entrepreneurship (企業家精神, 기업가정신)”. Entrepreneurship is a mindset and a way of living as a leader, that involves identifying problems and opportunities, coming up with solutions to those problems, and executing them resourcefully and tenaciously to create significant value to the world.
Our Family’s 4 Core Values
1. Positive Tenacity
Positive tenacity means we’re being tenacious towards positive missions and goals. It means we look at the future with optimism and execute with high energy. We are biased towards action and we believe in positive changes. We get things done by being resourceful. We work smarter and harder to achieve our goals. We are tenacious and pursue our dreams relentlessly.
We are the leaders and we take responsibility in any situation regardless of the circumstances. We embody first-principle thinking and decision making. We uphold our integrity and always do the right thing. We are able to think both strategically and tactically. We are independent thinkers. We also know the importance of great communication and being positive examples to others. We believe the good in people and focus on their strengths and positives, rather than their shortcomings and negatives. We inspire people to take action and lead towards a positive future.
3. Learn & Adapt
The world and the universe is constantly changing and the only way to survive and grow is to adapt to the changing world rapidly. We continuously learn and adapt to any environment. Adaptation is not a single event, but a continuous and never-ending state of being. It means to learn anything as quickly as possible, stay curious throughout our entire lives, never get complacent, always pursue becoming better than the best.
4. Think Long-term
We are long-term forward thinkers. We aspire to a positive future and make that dream become a reality. We live with a long-term perspective and are patient through our lives, stay generous and resilient, and are able to embrace the challenges with a long-term view.
Over the first few days of the new year, I’ve took the course on the big five model of personality — “Discovering Personality.” It was a fascinating refresh of the big five model and had the opportunity to go deeper into the understanding of the two aspects for each of the five factors.
It was helpful to understand the amount of statistical rigor that went into building this model, although as noted in the lecture, the names of the factors I think is somewhat poorly done and feels more biased than neutral.
The key takeaways from the lecture were being able to better understand myself beyond what I had before, especially around the aspects of conscientiousness and how these aspects interact with other factors.
While I was setting up the goals for 2020, instead of grouping to traditional categories (areas of goals) like before, I’ve layered the goals based on the impact across the different layers of society.
There’s a phrase “修身齊家治國平天下” from an ancient Chinese classic “大學”, which translates into four phases of ruling the world:
修身: Developing and disciplining yourself to raise your intellectual and moral capacity
齊家: Taking care of your family and organizing your household
治國: Ruling the country
平天下: The world will be peaceful
Inspired from this phrase, I’ve organized the goals into the following four laters of 2020 goals hierarchy: