There comes a time in every person's professional career when you look back and think, "What the F&*% was I thinking?" This article is an attempt to share my four biggest professional blunders and what I learned from them.
Studies have shown that the human attention span is 8 seconds, so I better give you my 4 biggest blunders up front:
Really, really bad hiring decisions (I'll elaborate)
Short-term, paid "proof of concept" contracts. I still have PTSD.
Failing to convert a vision into an operational plan
Undercommunicating as a leader
1. Really, really bad hiring decisions
Attracting and hiring top talent is hard.
The unprecedented influx of venture capital—fueled by low interest rates and downright flippant increases to the money supply—has throttled hiring competition to new heights. When quality is scarce, there's a temptation to lower the bar; especially if bandwidth is tight.
We've all heard our peers describing a recent interviewee: "Yeah, I felt like she was a strong candidate—not necessarily as strong as the rest of the team, but very capable with a nice personality and culture fit. I think she could do the job."
Welcome to blunder #1: really, really bad hiring decisions. I'll spare you the sticky details and simply share what I learned with the benefit of hindsight:
Skills & behavior beat "experience" every time
Instead of asking about their past roles, drill into their actual skill set to determine how/if they've added value; ask about past situations or scenarios to understand how they think, decide and act. Six years at Goldman Sachs? Good for you. What did you actually DO.
You can't out-hustle stupidity
Don’t get me wrong: work ethic is a cornerstone of workplace values, but a candidate must be able to adapt, learn, and grow quickly and certain folks just don’t have a growth mindset. Despite their honest intentions and “hustle”, these candidates soon become relics reliant on old tricks.
"Personality" is subjective and often misleading
Big personalities can distract from glaring skill gaps. For example, a candidate with great energy, optimism and a sense of humor can woo you only for so long until you uncover the truth: they have zero organization or operational skills.
2. Short-term, paid "proof of concept" contracts
DISCLAIMER: This single mistake almost sank the company when churn spiked to 9% per month.
In 2014, I was working for a respectable enterprise software company that slowly shifted the way we structured commercial agreements: instead of the typical 12 or 24 month contract, our sales team began to offer paid POCs ("proof of concepts") arrangements where the customer would agree to a term—usually 3 months—and a price: typically $5-20k per month.
To truly understand the severity of the situation, this single issue resulted in churn increasing from an acceptable range of 0.5%-1.0% per month to 5-9% per month. For the finance folks reading, you know that churn of 9% per month (or even 5%) is armageddon. Churning 9% a month equates to bleeding out 68% of your revenue in a single year. Churn wasn't a "leaky bucket"—the damn was breaking loose.
What I learned:
Within 4 short months, the "POC" contract structure accounted for 80% of new deals: this shows how quickly things can shift on you without proper sales ops oversight.
It was hard to get customers to ROI positive in 3 months due to lack of resources on the customer's end.
The POC success rate was 55%—in other words, 45% of POC contracts did NOT convert into long-term customers.
AE compensation structure was the root cause: since all of our accounting and comp was done on a MRR ("monthly recurring revenue") basis, an Account Executive made the same commission on a 3-month deal vs. a 12-month deal.
"Easy come, easy go." —George Strait
3. Failing to convert a vision into an operational plan
One of the greatest callings of a leader is to set a purposeful vision and devise an operational plan with his or her team to attain it. Many execs are fairly adept at painting an attractive picture of the future, but its much harder to translate that vision into a cogent operational plan.
All too often the "vision" for the company ends up a shell of its former self, relegated to hyper-designed wall posters and the "About" section of a marketing website. But the best leaders know how to ingrain the vision into the DNA of their company.
What I learned:
Step one is inspiring the team to create a vision they're passionate about. Step two—and arguably the harder step—is project managing the vision towards an operational reality. In hindsight I would have delegated this to an aspiring team lead to source and prioritize the operational requirements.
4. Undercommunicating as a leader
We live in a world with low signal-to-noise ratios. NOISE is everywhere and “urgent” now seems to have become a feeble attempt to coerce action in a last attempt. Slack, email, Hipchat, Messenger, text. .
Fundamentally we are working in perhaps the most networked and collaborative work generation of all time, but most connectivity has not translated into empathy or even a basic understanding of coworkers. Face it: you don’t know what most of your coworkers actually do all day. And should you?
Most agree that informational transparency yields diminishing returns, but what most fail to consider is the concurrent amplification of opportunity cost carried by our scattered cognitive focus.
Similar to how a microprocessor’s speed is hindered by insufficient RAM, our brains are cognitive function is hindered by often unnecessary data sharing in the name of transparency.
The average human checks their smartphone 150 times per day.
We receive, on average, 52 notifications per day via our various digital channels. . . Another name for notifications is DISTRACTIONS which—for a human brain that’s decidedly bad at multitasking—is kryptonite to productivity.
What I learned:
If Slack channels aren't thoughtfully organized and deployed, collaboration will become even harder due to the redundancy with email and other channels.
Despite how overwhelming it might feel, you must at times join the cacophony and yell into the abyss for the sheer benefit of being heard and others knowing what your team is doing. When in doubt, overcommunicate. Send that update, schedule that meeting, ping that channel.
Take the time to ask your executive peers what information they wish to receive and what information they want pushed (proactive; synchronous) versus pulled (passive; asynchronous). This will go a long way toward solidifying your relationship with other leaders.