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Every Tough Choice Has Management Debt – Are You Accounting For Yours?

There are no easy answers to hard decisions. You might be able to postpone a hard decision, or find a comfortable answer, but the problem will return with a vengeance down the line.

GG van Rooyen

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Tech start-ups love pithy mantras. For Google, it was ‘Don’t be evil’. Apple, of course, has ‘Think different’. With Facebook, it was ‘Move fast and break things’. Of the three, ‘Move fast and break things’ seems the riskiest.

The last thing you want to do when building a company, after all, is to break things. But in the early days of Facebook, Mark Zuckerberg and his team believed (correctly) that the importance of moving fast and staying agile outweighed the risk of occasionally breaking a part of the Facebook platform.

For the first few years, the company was small enough to pull this off. It moved at breakneck pace, expanding its offerings, signing up new users and taking risks.

Related: How To Make Better Business Decisions That Drive Productivity And Profits

Move fast, but don’t break things

Sadly, no company can maintain that start-up mindset forever, though. Eventually, the risk of ‘breaking things’ start to outweigh to advantages that come with moving quickly. By 2014, Facebook was no longer a start-up. It was a publicly-traded international tech behemoth with thousands of employees and more than a billion monthly users. When you’re that size, and the stakes are that high, a mantra like ‘Move fast and break things’ becomes problematic.

Shareholders tend to become a tad nervous when they picture a bunch of millennials running around and breaking things as if acting out a scene from Lord of the Flies.

So, Facebook changed its motto to ‘Move fast with stable infrastructure’. Not nearly as edgy or catchy, but also far less risky. Moving fast and breaking things can be great if you’re a young start-up, but it’s important to remember that it comes with something that famous computer programmer Ward Cunningham calls technical debt.

You can save time by writing quick and dirty code, and not worrying about breaking things too much, but there will come a time when you are forced to pay the debt for it. And the quicker you scale, the more this debt can end up being. At a certain stage, the time and energy you save simply no longer outweigh the possible repercussions.

Management debt

The Hard Thing About Hard Things

In his book, The Hard Thing About Hard Things, Ben Horowitz argues that entrepreneurs are faced with something similar to technical debt, which he calls management debt. Horowitz was the CEO and founder of a tech company called Loudcloud when the tech bubble famously went bust during the early 2000s.

He managed to save his company and his people, and eventually sold the company to Hewlett-Packard for $1,6 billion, but it was a traumatic experience. The psychological toll that the experience took on him was significant, and it inspired him to write The Hard Thing About Hard Things. As its name suggests, the book argues that there are no easy answers to hard problems.

Related: Leaders Who Make Good Decisions Do These 6 Things Constantly

Building a company is difficult, and there is no point in pretending that it’s easy. If you want to be the boss, you need to be willing to do the hard things and make the hard decisions. If you opt to take the easy way out at any point, you incur management debt.

“Like technical debt, management debt is incurred when you make an expedient, short-term management decision with an expensive, long-term consequence. Like technical debt, the trade-off sometimes makes sense, but often does not. More important, if you incur the management debt without accounting for it, then you will eventually go management bankrupt,” writes Horowitz.

Are there two employees in your organisational chart that fit the same spot, but you’re keeping both? Are you overcompensating a key employee because she received another job offer? Are you ignoring performance management because you don’t want your start-up to feel like a ‘big company’? These are difficult situations that need to be resolved, argues Horowitz. The longer you ignore these kinds of issues, the greater the eventual management debt will be.

“Every really good, really experienced CEO I know shares one important characteristic: They tend to opt for the hard answer to organisational issues. If faced with giving everyone the same bonus to make things easy or with sharply rewarding performance and ruffling many feathers, they’ll ruffle the feathers. If given the choice of cutting a popular project today, because it’s not in the long-term plans or you’re keeping it around for morale purposes and to appear consistent, they’ll cut it today. Why? Because they’ve paid the price of management debt, and they would rather not do that again,” says Horowitz.


Can you make the tough choices?

Top CEOs have one thing in common: They make the hard choices, even if they’re not the popular choices.

GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.

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Leadership: What Is Your Why? (Read Purpose)

Stop the violence that you inflict upon yourself with that type of nonsensical chatter and replace it with loving words. Most importantly…… (Wait for the drumroll) …….. Yes you guessed it …………FIND YOUR WHY!!

Dirk Coetsee

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“We know what we are, but know not what we may become” – William Shakespeare

What moves you?

What moves you? To me it’s Connor McGregor straining his potential in every training session and then some more. When everyone tires and wants to give up during training with him, he asks everyone, “How badly do you want it?”, and then providing the example, trains even harder.

Rumi’s’ poetry reaches the depth of my soul and reveals my own scars to me. Rag ‘n Bone Mans’ song “Skin” stirs within the depths of my heart and beckons me to a deep sense of longing. Above all what moves me is the transformation from disbelief to belief. From hate to love and from lack of self-confidence to being on fire. That look in someone’s’ eyes when they truly and unconditionally love you shakes the very ground around me.

Related: Leadership: Honesty Is The First Chapter In The Book Of Wisdom

That is my purpose, my why to facilitate transformations and to coach and teach whether it is by voice or ink. What is yours? And how badly do you want it? Are you prepared to do what others will not to be a success as an entrepreneur? Are you willing to fail several times and tirelessly apply the learnings from it?

Find your why. If you cannot find a coach to help you find your why, but find your why. Not finding your why means a life of doing things that you have no real passion for, doing things that is not authentically you. That saddens me and hopefully you too, because there is nothing that ensures your long term failure more as an entrepreneur than doing things that you have no passion for, purely to survive.

Are you happy?

Most of all: Are you happy, truly happy?

If not that is your queue for a transformation. Money without happiness is trivial, business success without a full heart is empty. Can you have both business success and happiness? Yes, a yes that echoes throughout eternity, which is if you have made money as a by-product of living your “why”.

William Badenhorst, (MD of Global Strengths) a coach to the coaches says, “Let your test be your testimony, and let your mess be your message.” I want to add to that and say, AND FIND YOUR WHY. Socrates wisely exclaimed: “Know thyself”. How can you know yourself if you haven’t found what truly moves you, what you are truly passionate about?

When you have found you’re why you are willing to work harder than anyone else. And when you have worked really, really hard at something it is very much harder to give up on it as opposed to something you have made half-hearted attempts at.

Both attaining entrepreneurial success and happiness is indeed reaching dizzying heights and therefore very challenging. Indeed therefore everything worth attaining is challenging. Most people find at least some comfort in the status quo even when the status quo does not paint a very appealing picture. It is challenging to leave the known of the status quo for the unknown of your true purpose.

Are you brave enough to transform? Have you suffered enough? Or do you want to linger a little bit longer in the ease of your comfort zone where, unfortunately, no growth is possible?

True Leaders and Entrepreneurs become comfortable with the discomfort of growth. Is this a tough ask? Yes, the ones telling you it is easy are in general, delusional. I will always advocate being mentored or coached purely because it is extremely hard to be totally objective about yourself, by yourself.

Related: Leadership: Total Commitment To The Purpose Of The Business

Self-confidence

Self-love (tempered by humility) and Self-confidence (not arrogance) is a requirement to live an exemplary life of purpose as a leader which others would love to aspire to. As Ralph Waldo Emmerson said:

“If I have lost confidence in myself, I have the universe against me.”

Find and have faith in your purpose and back yourself because if you will not, whom will? Love yourself by speaking to yourself with love. Honestly answer the following question: Would you speak to others openly as you would speak to yourself? Why are we in general violent to ourselves saying things like: “ I am worthless”, I am not good enough”, “I am not as good as….”? Stop the violence that you inflict upon yourself with that type of nonsensical chatter and replace it with loving words. Most importantly…… (Wait for the drumroll) …….. Yes you guessed it …………FIND YOUR WHY!!

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3 Tips For Succeeding After You Fail

Failure is pretty much inevitable. What comes afterward is a choice.

Tor Constantino

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If you’re an entrepreneur, you will fail. It might not be a complete meltdown, but you will experience a failure of some aspect of your venture at some point.

My first business failure occurred during my mid-20s. I tried to launch a product I invented, which was a durable, pocket-size strap that carried different kinds of recreational sports gear.

After determining the market need and securing piece-work manufacturing, as well as retail packaging complete with trademarked logo, I had several thousand units in hand.

Distribution was, ultimately, the one trick I couldn’t turn and ended in failure. I tried everything I could think of. I engaged several independent and sporting goods retail chains that weren’t interested in the hassle of adding a single-product vendor to their ops management systems.

I offered to give hundreds of units away to dozens of specialty ski, skateboard and inline skating shops on consignment to “seed the market” but was rejected. They all said my product undercut higher-margin competing products.

I tried to contract with different retail brokers to add my product to their sell-in portfolios, but was rejected three times due to the low-price point for my product and limited margin potential.

Related: Flourishing Through Failure And Finding Fortune

The greatest success I had was when I broke even for a catalog ad I purchased in a Sharper Image-type printed publication.

Mind you, this was all pre-Google, Amazon, PayPal or eBay when ecommerce was still finding its way on the Interwebs. However, my lack of offline success drove me to have a developer build my own ecommerce website (at great expense at the time) with an incredibly clunky, pricey payment system managed by Visa.

Sad to say, I shuttered the website after six months due to lack of sales and lack of traffic caused by the overall lack of consumer confidence in the whole “internet spending thing” at the time. During the three-year span of this odyssey from my initial concept to collapse, I had spent countless hours and in excess of $40,000 trying to convert my vision into a viable venture.

As a 20-something kid, I felt like a complete failure. I was afraid to ever try again, but eventually I did – several times – and had success. Fast forward 20 years and here’s what I would share with the failed entrepreneur I was back then.

Failure is painful but not fatal

Failure is not final, fatal nor forever. I had a great mentor who completely re-framed my thinking regarding failure when he told me:

“If you’re not failing, you’re not trying hard enough.”

That phrase has been a touchstone through tough times during my subsequent entrepreneurial endeavours.

Related: Why, When You Fail, You Should ‘Fail Forward’

Fail faster

Back then I thought I had to exhaust all my distribution options, which took a significant amount of time and resources, because I didn’t want to look back in 20 years and say “what if?”

In retrospect, I’m glad I did it then but there are signs I should have seen sooner. For instance, the first retail broker who rejected my product was very clear that my effort to keep the retail price under $10 for the consumer did not make it worth his while to sell it.

I should have bundled it with another product or enhanced it in some way to boost it to a higher price point, but I naively thought he was just being porky before two other potential brokers I engaged had schooled me on the economics of their services.

Looking back now, I could have compressed my failure cycle by at least 50 percent if I had been more teachable then.

Find insights from failure

At the time, $40K was all the money in the world and (thanks to scholarships I had earned) was eight times more than my total college student loans. But, I learned a lot about intellectual property, financing, materials sourcing, vendor research and selection, production timelines, operations management, sales and marketing as well as ecommerce. I came to view that lost $40K as a masterclass in real-world business. Most importantly, I learned what I didn’t know and that propelled me to pursue my M.B.A.. degree, which my then-employer paid for.

In hindsight, I perceive this greatest failure has been my greatest success because I earned it and learned from it. No one is immune to failing, but we must understand that it is not an ending but rather a beginning – if we choose so.

This article was originally posted here on Entrepreneur.com.

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4 Tips To Become A Team Whisperer (And Improve Your Employee Engagement)

Engaged employees are motivated, innovative and willing to take on more responsibility.

Pieter Scholtz

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Your team needs to be nurtured on an ongoing basis if you want to attract and retain the best employees. You can hire people, you can fire people, and you can tell them what to do. But you can’t make them like what they do. Some business leaders are content with having an unhappy team; as long as they do what they are paid to do then the state of their mental health is seen as superfluous.

This line of thinking is not only wrong, but it is entirely counterproductive to the continued survival of a business. Gallup has run some excellent pieces that demonstrate the difference between engaged and disengaged employees. In particular, they list several additional things that engaged employees bring to the table: Motivation, innovation, and a willingness to take on more responsibility within the company. So how can you keep your team engaged?

That level of motivation contrasts greatly with employees who don’t even want to be there. They do their jobs, but they never put in more than the bare minimum of effort. Don’t expect them to ever go beyond what their job description requires, and if there is a chance for them to duck out of work without getting fired, they’ll take it. Obviously, you don’t want to have a team that consists of these people. But without the right knowledge of how to motivate a team, you’ll find yourself unable to inspire your employees to go above and beyond what is required of them.

Related: How You Can Make Leadership Excellence An Effortless Effort

A great company cannot exist without great employees, and there are steps you can take to mould them into the people you want to have working for you. These tips are proven methods of getting your employees to be engaged in what they do, and anybody can learn to apply them.

1. Be a team, not a dictatorship

Every ship needs a strong captain, but that doesn’t mean that you have to spend every second reminding your employees who’s the boss. Your employees look to you for guidance, but they also want to feel as though you are in tune with everything that is going on. Some managers come off as though they are giving mandates from heaven, or worse, they rattle off long lists of orders because they don’t want to do the work themselves.

If you give the directive and then pitch in to reach the goal, you’ll show your employees that they are all part of a team, and they sink or swim together.

2. Give them a chance to shine

It’s true that some people are placidly content with being a cog in the wheel. I’m sure you know of at least one person who is sitting in a job they are relatively indifferent to just so they can collect a pension in twenty years. Those that fit that mould will gravitate towards jobs that give few chances to stand out and plenty of job security. For those who want to achieve more, they will never settle for a job pushing pencils all day.

Related: Effective leadership – Serving Your Team To Serve Your Clients

These restless employees are always looking for a way to prove to you that they are capable of so much more than low-level work. Denying them this opportunity will either push them to greener pastures, or if they can’t/won’t quit, cause them to become disillusioned with what they do.

If you find somebody who wants to prove themselves, let them. An employee who shows the initiative and drive to better themselves is a person who will bring your business an incredible amount of value. Don’t waste this potential.

3. Don’t take them for granted — show your gratitude

This goes beyond a simple “thank you,” although those two words can have quite a bit of power in themselves. If your employees feel like their contributions are not recognised or rewarded, they will feel little incentive to go above and beyond in what they do. How you show this gratitude is as important as the action itself, because a perceived token gesture is even more insulting than a lack of a reward. Put another way, if somebody comes up with a million-dollar idea and you give them a monogrammed lanyard as a gift, don’t expect that person to stick around. Rewarding achievement is the flip side to punishing failure, and a balance between both is necessary to craft the ideal team.

As intuitive as these three traits seem, you probably know from personal experience that a lot of managers don’t quite know how to implement these strategies effectively.

Related: Leadership Hustle: A Modern View On Leadership

4. Share the bigger picture with them

A really important element of keeping your team engaged is to share the bigger picture with them. This involves amongst others:

  • Constantly communicate the Vision and Mission of your business to your team. If your team can buy into why the business was started, where it is headed and why you exist as a business, they will be able to be as passionate as you are.
  • Provide a monthly update on how the business is tracking against its plan and this will empower them to focus on the areas that matter most to the business at that time. This includes sharing financials with the team — here one needs to take into account any legislation that might be applicable — but the more you share, the more you show your team that they are trusted with the information as well as being able to make better decisions that affect the business.
  • Keeping your team engaged, excited and energised is a pre-requisite to developing a high performing team that is able to take the business to the next level. It takes a team of dedicated people to build a successful business. Without this team, your ability to expand at the rate you had planned to will be severely hampered.

IN YOUR TOOLKIT

Become a leader that inspires greatness

multipliers-how-the-best-leaders-make-everyone-smarter-by-liz-wisemanREAD THIS: Multipliers: How the Best Leaders Make Everyone Smarter, By Liz Wiseman.

Multipliers is profound. It’s been lifechanging for me and everyone that works with me. Leadership is not about having the best answers. You need to ask the best questions, and what happens is that you are turning people into productive engines. Micro-managing stops people from thinking for themselves as they wait for answers from you. The principle is that micro-management on that level means you are paying people 100% salary for 50% productivity. The multipliers effect allows you to pay 100% salary for 200% productivity.” — Robin Olivier, co-founder and MD of Digicape, a R240-million business based in Cape Town. Go to multipliersbooks.com for additional tips, tricks and surveys.

 


WATCH THIS

Radical Candor means challenging employees directly and showing you care personally at the same time. It will help you and your team do the best work of your lives.

Developed by Kim Scott — who led AdSense, YouTube, and Doubleclick Online Sales and Operations at Google and then joined Apple to develop and teach a leadership seminar — Radical Candor is all about becoming a leader who is both respected and followed, without being falsely ‘nice’.

There are two great YouTube videos that will give you her tips and lessons in under 20 minutes:

And if you’re interested in really unpacking the lessons behind radical candor, read the book: Radical Candor: Be a Kickass Boss Without Losing Your Humanity.

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