Drivers, Not Passengers

“Leading for Hypergrowth by Raising Expectations, Increasing Urgency, and Elevating Intensity”

Frank Slootman is Chairman and CEO of Snowflake. He recently wrote a short book on business management “Amp It Up”, sharing his experience from days at Data Domain, ServiceNow, and Snowflake.

In his book, Chapter 6 talks about “hiring drivers, not passengers” and below is some excerpts from the book:

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. …

Drivers, on the other hand, get their satisfaction from making things happen, not blending in with the furniture. 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.”

These qualities make drivers massively valuable. Finding, recruiting, rewarding, and retaining them should be among your top priorities. Recognize them privately and publicly, promote them, and elevate them as example of what others should aspire to. That will start waking up those who are merely along for the ride. Celebrate people who own their responsibilities, take and defend clear positions, argue for their preferred strategies, and seek to move the dial.

What I like about this view is that while it’s not analytically refined, it’s intuitively understood. Of course, not everyone will be 100% driver or passenger all the time across all things. But the roles we play, especially in leadership roles, we absolutely need to be drivers.

In the management classic “High Output Management”, Andy Grove defines the following:

📌 A manager's output = The output of his organization + The output of the neighboring organizations under his influence

This does not mean that manager should take credit for all of the organization’s output, but more so highlights the importance and risk of having a right/wrong manager for an organization. An organization’s output is capped (and multiplied) by the capacity of the manager, so having a wrong leader in place will hinder the organization’s effectiveness and create drag for everyone in and around that organization.

So it’s critical to organization’s existence that everyone in the leadership positions be drivers, and not passengers.

Then how do we identify the drivers? What are the qualities and traits of those who are drivers?

Drivers…

  • Deliver outcomes, not activities. They deliver great outputs to completion. They don’t focus on checking off a todo list, sending an email, having a meeting, meeting a prospect, or being busy. They deliver great outcomes = increase customer, hire A+ players, build highly qualified pipeline with real opportunities, close a great deal, completes & launches a project that makes an impact, ship quality code into production, writes a well-written blog post or article and get a lot of people to read it.
  • Raise the bar proactively, continuously, and frequently, not occasionally or sometimes when asked. Without any request or prompts, they come up with new ideas to improve, make things better, help improve others, and be a constructive change agent. They don’t just point out problems, they provide solutions and actually take it to their hand and drives it towards full completion.
  • Motivate and energize others, not wait or request to be motivated or energized. They increase the pace, are fast, and they create motivation for others, not asked to be motivated.
    • One person asked a partner at McKinsey & Co.: “How do you motivate your employees?” The answer? “We don’t motivate our employees. We hire people who are motivated and who can motivate themselves constantly.”
  • Are relentlessly resourceful. They don’t stop. They deliver despite the challenges, roadblocks, and constraints. They know how to problem solve, and not let set backs and failures stop them, ever. They know when and how to get things done, ask for help, pull in resources, and even when it’s not available, figure out ways to best deliver the outcomes.

This phrase summarizes drivers the best:

You’d rather work with someone you need to pull back than someone you have to push forward.

In reality, drivers are rarer than passengers. It can be stressful to be a driver. Imagine the pressure F1 drivers feel compared to the audience who are there to watch the game and cheer. The pressure (and the thrill) of a driver is exponentially greater than that of a passenger or an audience. And that’s why it’s essential that organizations place drivers in leadership positions so that the rest of the organization that leader is responsible for can thrive and win. We owe it to the teams that we have drivers as their leaders and managers, so that the team’s potential is maximized and realized into great outcomes.

So if we aspire to be, or are already in a position of a leadership, we need to ask ourselves “am I a driver? and do others acknowledge that I am indeed a driver in my role?”

Managing Time Horizons

I recently came across the clearest definition of a bubble in an asset class:

“When investors have different goals and time horizons—and they do in every asset class— prices that look ridiculous to one person can make sense to another…

Bubbles form when the momentum of short-term returns attract enough money that the makeup of investors shifts from mostly long term to mostly short term. That process feeds on itself. As traders push up short-term returns, they attract even more traders. Before long, the dominant market price-setters with the most authority are those with shorter time horizons.

Bubbles aren’t so much about valuations rising. That’s just a symptom of something else: time horizons shrinking as more short-term traders enter the playing field.”

The Psychology of Money (by Morgan Housel)

What was particularly impressive about this framework was that it can be applied to any forms of investment — including people. When you have a “different” time horizon when working with someone, your behaviors will change. Those with a short-term views will become more transactional (as there’s no lasting relationship or long-term time horizon to get the “returns”) and “ruthless” vs long-term views will become more relationship driven as one may see the “potential” of someone and with that have more patience to invest/coach the person to become better. Of course, there are other factors to consider such as talent/aptitude, integrity, personal values just as one would look at such in a company when value investing over a long-term time horizon.

As investors with deep pockets and lack of need for immediate liquidity can invest in asset classes that require long-term time commitments (e.g. becoming an LP in a seed fund), people and organizations who have strong teams with high bench strength can harness the time horizon to invest in people over a longer period of time. While high growth startups may not have this luxury, it is deeply rewarding to see people step up and grow phenomenally over a long period of time during their tenure.

Organizations have their natural and default time horizons for their projects and people, so being able to understand your own organization’s time horizons and navigating or altering them as the need and situations change can become a powerful tool for the management team.

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)

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.
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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:

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Scaling Leadership through Two Management Frameworks

As an organization reaches certain scale, it is inevitable, at least due to the current limitation set by human interaction mechanisms (e.g. verbal communication, synchronous meetings, groups, hierarchies, physically independent) that there is a certain level of structure that needs to be put in place to manage the organization.

There is a few frameworks that can be useful when scaling the leadership. It’s local applications of the general management frameworks, so let’s explore how they can be relevant to scaling leadership.

1. Convergence <> Divergence framework

This framework demonstrates how to navigate within the horizontal layer (x-axis) of management.

As your organization scales, one thing you constantly run into is the overall increase in diversity within the organization. The proportion of diversity may increase or decrease, but the absolute number of diverse entity (in this case, employees) will simply increase as your headcount grows.

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Situational Leadership Matrix (Simplified version)

After managing different teams of various background and scale over the years, I’ve always thought the question “what is your leadership style?” is almost a trick question. An executive from another company once shared with me a framework he learned at one of the leadership classes he took at Harvard.

It seems like the original version of Situational Leadership is a bit more complex, but the simplified version he shared made more sense to me and felt more applicable to everyday managers.

Continue reading “Situational Leadership Matrix (Simplified version)”

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