Ten points to discuss around the coffee pot
There are a number of uncomfortable realities that must be faced when it comes to developing and continuing successful technology companies. I offer 10 for discussion around espresso machines. It is always hard to manage these well and very few of us have managed them consistently well over time. I’m hoping there is truth in the old adage that good judgment comes from experience, and experience comes from bad judgment.
1. There are three naturally hostile cultures in technology businesses: Innovation, sales and money (finance and accounting). The people attracted to each of these disciplines are driven by different things and have a tendency to assess blame on the other two when the going gets tough. HR is at the confluence of these three and can thus enjoy the enmity of all three at once. Give HR people combat pay. The only beneficiary I can think of for these kerfuffles is the comic strip Dilbert, which is by now getting tiresome due to the truth of it. There are times when all three cultures work together, but be wary, those times will be fleeting. It takes energy to create order from chaos.
2. What helps a business in the short term can hurt it in the long term, and vice versa. There is no right answer. How patient are the investors, the employees, the banks and the customers? What will competitors do? This is a topic that can not be resolved with certainty, but at times outside forces (investors) may push in one direction to drive equity value, perhaps in preparation to sell or merge the company or simply from a need for liquidity. This suggests a benefit from investors aligned with company goals and not opposed to them. The rise of going private transactions may, in part, reflect this reality.
3. Approved drugs and medical devices should be relatively safe, relatively effective and relatively economic compared to allowing disease to progress untreated. When expectations are set too high, the inevitable disappointments swing too low. Developing commercially viable solutions to disease is among the most risky and costly of all human endeavors. Companies that do not acknowledge this will pay the piper down the road. It is helpful to be reminded that each individual human is a unique combination of genetics and lifestyle. A solution that works well for all 6.5 billion of us is therefore not going to be developed. We should stop pretending otherwise in our press releases.
4. Lies, damned lies, statistics and press releases (aka “You can’t believe what you read”). Optimism is important, but it must be bounded. Otherwise the optimist is being set up for joining a herd of goats. One wag told me, “Never invest in a company started by a professor.” In response I hid behind a tree. It is said that many a pessimist got that way by financing an optimist. A genuine optimist can be hard to distinguish from a swindler at the end of the day. Results are results.
5. Large organizations just can’t/won’t make decisions fast enough to respond to entrepreneurial realities. They have inevitably forgotten their roots. Playing not to lose is not playing to win. As for a lottery, in life sciences you have to play to win. The reality is that the vast majority of the time you will lose. It’s not how you are knocked down that counts as much as if you get up and try again. This thought is especially painful for public institutions that try to play in economic development. They lose football games and recover, but for that they’ve had a century of practice.
6. Beware the thought, “Why didn’t the government do something about THAT?” This is the genesis of unintended consequences over and over again. Values trump rules. Always. When you have the opportunity to help government interpret a solution that considers both costs and benefits, you should take that opportunity before it is too late. If you know the subject and don’t offer to help, remember that it is easier to make government rules than to take them away.
7. The biggest predictor of business failure is success. There is truth to the adage that more businesses fail from indigestion than starvation. Balancing the wisdom of strategic focus versus the perceived safety of diversification is a good trick. Both are very risky. We tend to cycle between the two every decade or so. Investment banks, management consultants and law firms thrive on acquisitions to later be followed by divestments. This bidirectional “gift that keeps on giving” may explain the enthusiasm for the JD and MBA degree. Perhaps it’s time for you scientists to consider furthering your education?
8. Selling science is the toughest of all work, other than the science itself. In both cases, more than 95 percent of what you try doesn’t work as you had hoped. In both cases, there are eureka moments to savor if you stick with it. As mentioned in 1., the cultures are different, but if you can’t sell, you can’t live. Then again, you can’t sell science well if you don’t know science and sales is far too important to leave to sales people in the Dilbert tradition.
9. Not everyone deserves respect, but everyone you work with should be worthy of it or you shouldn’t work with them. Respect and the associated civility drive productivity in a way that intimidation can not. To earn respect in a technology business you keep doing, teaching and learning. The value of a “degree” is fleeting. As soon as you believe it is a license to do anything more than keep on learning, you will lose respect at a rapid pace. Credentialism is deadly. Bill Gates avoided it by dropping out of school. That’s risky, but it saves tuition.
10. Fail projects and people fast, but not too fast. I’m not aware of a harder challenge than this one. I do know from personal experience that it is harder to decide when you are the one who initiated the project or hired the person. We all hate losing and having the “L” broadcast on our forehead. Then again, the L will be in a much smaller font if you act more quickly. I see very close analogies here with holding onto an investment gone wrong. When a person you hired or a stock you bought is not performing, taking the losses soon is the best way forward. The problem can be mitigated a bit if you put people in positions where their strengths shine and their liabilities are unlikely to slow, damage or reverse progress. This is called management.
There are no correct answers for all 10 of the above topics. Leading a company is managing ambiguities and dealing with probabilities along the way to achieving the vision the board and management have so clearly expressed (we can hope). I wish I were better at these things. Give me more time. Please!