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Entrepreneurial Management 101

Entrepreneurial Management 101

One of the hardest things for entrepreneurs to learn is that most of the time, the best thing they can do is get out of the way of the people actually doing the work. That’s the core tenant of what I called “Minimally Invasive Management,” which I’ve deconstructed in ten parts below.

1. Entrepreneurs, Managers and Leaders

So much gets muddled up as we talk about entrepreneurship, management and leadership, that it’s important to tease it apart. When you do, you find a whole new way to think about management and leadership in entrepreneurial organizations.

I’m going to start with my definition of an entrepreneur – which you need to distinguish from the definitions of managers and leaders.

  • Entrepreneurs are first and foremost about creativity. They’re not about leading or managing. The role of the entrepreneur is about creation. They see a better future and strive with minimal resources to achieve it.
  • Managers enable teams to achieve objectives. They see a goal, and they empower people to reach it.
  • Leaders are about harnessing the power of people. They see a greater purpose and inspire others to achieve it.

These are three separate roles. We celebrate them when they are unified in one person, but that’s not always the case.

2. Minimally Invasive Management

Entrepreneurs should consider adopting a concept I call “minimally invasive management.”

People think about management and imagine adding dead wood on top of productive people. That’s a reflection of a time when managers were supervisors. People were the means of production. They needed to be clocked, and tracked in a Frederick Taylor-like way. Time and motion drove success. People did jobs that machines weren’t smart enough to do yet. But we’re now in a different world, where people are not the means of production – they’re the means of creation.

And management has a different role.

You need to think about management differently. Managers are not the boss. They’re a service. They serve the people doing the work. Nobody is more important in an organization than the people doing the work. Management’s role should be to remove the impediments that are in front of the people doing the work so that they can do it well – and so they can be satisfied, rewarded and motivated in their work.

If you think of managers as being accountable not just to leadership, but also to the people doing the work, you begin to come up with a different concept of management.

3. The 4-Part Sticky Note

When I worked with WebTV, where they had one of the best teams I’ve ever seen, they had a very simple process of establishing priorities. They took Post-it notes, and they wrote four things on them: schedule, cost, reliability and features, in that order. Everyone had the same note on their desk: finance, marketing, engineering. The goal was, when you were sitting around trying to solve a problem, deciding how to invest your time, figuring out how to resolve conflict, you had four very simple things to look at – and suddenly everything became clear. You knew which one to optimize for.

That sort of clarity empowers people to make decisions on their own and to do it in unison so that your company doesn’t have to build process after process after process. If your managers are spending more time talking to each other than to their people, then you have too much process.

4. Power to the People

You need to create environments that empower your people.

Today, when recruiting, you hear a lot about autonomy, they want control, deciding how to spend their time…you’ve got to have a balance between giving people the freedom to take care of their lives and their priorities in the context of their work, and also unifying the team. Frederick Taylor would roll over in his grave.

There are simple things you can do. Make sure your group meetings are in the middle of the day. Not in the early morning when someone is sending their kids off to school, or late in the day when somebody should be getting together with their family to have dinner. And keep all meetings short, people will fill the time so make it tight. The best ideas have a way of coming out first anyway. Make sure that attending meetings is not a status symbol, its a chore and people should be happy to have a small group address the issues on their behalf while they are doing the work that is most important. Make them accountable, but don’t try to make them punch a clock. That’s what we’re looking for in this creative economy. People want that freedom – and at the same time we have to build common effort and common purpose as a team. Simple things allow that to happen.

5. Freedom vs. Friction

Another key to success is the concept of creative friction. This is an idea that does not get enough attention, in part because it is so hard to do.

When you build diverse groups of people, you end up with different perspectives, different styles, different experiences … you end up with conflict and friction. If you are capable of managing creative friction well you have a highly innovative organization. And if not, you have chaos.

But the alternative is to hire an organization that looks just like you. That’s easy. It’s easy to manage, it’s easy to communicate with, it’s easy to empathize with; unfortunately, it’s also not a highly creative organization. There’s nobody testing people’s assumptions. There’s nobody stressing people’s expectations.

But managing creative friction takes a special talent. It is really hard. It takes an investment of time, it takes an investment of effort, and you have to have a soft hand to make sure the organization is on the one hand functioning and on the other hand questioning. Embracing creative friction is the high art of management.

6. Developing Managers

The notion that every strong individual performer should eventually get rewarded by becoming a manager is a mistake – a huge mistake. If your organization is set up so the hierarchy of success looks like you go from being a great individual performer to a great team leader to a manager, then you aren’t actually appreciating your means of creation.

There should be dual tracks. Individual creators and performers should have an opportunity to be rewarded, to advance their careers, to have more influence, to make more money, without having to get onto a management track. Management is a different function. It’s a service function. Coming up with a process to discern who should stay as individual contributors and who should be managers is a crucial part of the management function.

7. Apprentices, Journeymen and Masters

When you look at an organization, even if you have hired well, even if you are developing your people well, you are still going to end up with three different classes of people: apprentices, journeymen and masters.

Apprentices are people coming in and learning the ropes. They are straight out of school, they’re in a new job, they spend all their time learning the rules. They want to be great at what they do. They read, they talk to their peers, they go to conferences, they try to learn as quickly as possible everything they need to know to do their job well.

The journeymen are the people who perfect the rules. They have been doing it for a while, they are recognized as best practitioners.

The masters, those are the 5%. They know the rules, but they have moved beyond the rules. Those are the people to identify in your organization. Those are the people who can be great managers and leaders. Those are the people who are going to make a difference in the success of your organization. They aren’t simply going to move things along – they are going to change the trajectory of your organization.

Look for the masters. Find the people who forget the rules. Appreciate them. Reward them. And don’t make them managers if that’s not what they need to be. Let them be masters.

I need to come back to topic of firing people.

You can hire as well as you can, you can develop your people strongly, but ultimately you are going to be wrong a bunch of the time. Jobs change. People don’t step up to new roles. Organizations change. You need to understand who is an underperformer and who simply is an incompetent employee.

The difference is between “can” and “can’t.” Managers need to know the difference. There is a lot of cost to getting rid of a B player if they have the competence to be a B+ or even an A player. But if they don’t, you need to resolve that quickly. Organizations regress to the mean. If you have a bunch of B players that are not advancing, your organization will settle to their level.

I’d note that the first people to identify problem employees are their co-workers. You are more often the one reluctant to address the problem. But the cost of inaction is high – if you pretend there is not a problem, the staff will start to lose confidence in you, not just in the person next to them. If you think you’re hiding a performance problem from the team, you are fooling yourself. Identify the problem and act.

The organization will respond in one of two ways when you fire someone. If your organization has been operating with transparency, clear priorities and expectations, they’re going to get it. They’ve been waiting for this to happen. No explanation is necessary. But if you find it is controversial, you have to question if you’ve been doing your job correctly as a manager. Does the staff understand what the expectations are? Do they understand why this person, who may be a friendly and affable B player, is wrong for the organization? Do they understand why the organization needs to operate at a higher level?

Ergo, if you find that terminating becomes a controversial issue, you have to look at whether the company is being managed properly, whether there are clear communications and whether expectations are being set properly.

8. Creating Trust in Management

Adding managers to a flat organization is always difficult. Those first half dozen people you brought in felt like stakeholders. They were involved in every decision. You’re now asking them to pull back, focus more on their work and not be involved in every decision. This involves trust. A great manager has to create that trust with their organization. They have to do it through communication, and predictable and reliable behavior; people need to see that a manager is fair. They don’t always have to agree with them, but they need someone who is fair, and honest, and working hard for the benefit of the staff.

If you see managers fail in an organization, most often it comes down to an issue of trust. People begin to think management is there for their own purpose, rather that of the organization or the team. A breach of trust is a firing offense. It begins to seep into the team’s behavior, productivity and success.

You can build a great organization where you can solve some of these trust problems by sharing information freely. The first time you hire a lawyer, you’re going to be told to to limit what you share with your team. Ignore the lawyer. There is a reason why he’s the lawyer and you are running the company.

You need to show some discretion. You don’t blame people, you don’t denigrate people. If you have a controversial firing, you don’t have to explain how bad the person was, that undermines the organization, because no one is going to trust you when it comes to their own welfare and well-being. But the meta information, what expectations were, what performance was like, what you want from them and the rest of the team, how fairly you dealt with the termination…this is the sort of information you should share freely. People need to feel there is fairness and integrity in the process.

9. How Managers Become Great Leaders

In his book Emotional Intelligence, the author Daniel Goleman cites four essential qualities of a great leader.

One is self-knowledge. If you don’t know yourself well, your biases and your prejudices, if you become a slave to them, then you can’t make the decisions and earn the respect of the organization and give them a sense of fairness and honesty and integrity in the leadership process. You’ve got to know yourself first.

The second is self-regulation. Once you know what your prejudices and biases are, you have a duty to your organization to intervene, to make sure those prejudices and biases are not influencing your decisions and behaviors. You have to be smart enough to anticipate them and get ahead of them.

The third is empathy. If you know yourself well, and neutralize your bad qualities, you will be prepared to empathize with your organization. When somebody walks into your office with what seems like a small problem, you owe it to the organization to understand and appreciate their issue, to see it from their perspective as well as your own.

Empathy is about listening. Listening is the most under-valued skill in an organization. I used to think that when someone walked into my office with a problem, it was my job to solve it. I realized my job was to listen –listening and redeploying them with a sense of empowerment to solve the problem.

The fourth quality Goleman talks about is strong social skills. You have to be a great communicator. To be sure, styles can vary. You can have a boisterous style or a quiet style. But you have to be able to express yourself well to get the following you need in order to motivate your staff and earn their buy in.

Every sunny day, every good day, you’ve got to put money in the bank with every individual. To build trust and confidence. Because there’s going to be a rainy day, and you’re going to have to take that bank account down. They have to trust you, they have to believe in you, and they have to have faith in your fairness. They don’t have to agree with you – but they have to understand you and know even if you make a mistake it was not because you were self serving; it was because you felt it was the best decision for the team.

10. Advisors, Coaches and Mentors

Managers can turn to three kinds of people for advice: Advisors, coaches and mentors.

Advisors are people who give you input. They have experience that may be unique to them that you don’t have, they have information and knowledge you need.

Coaches are people who help you figure out how to do something. It’s not about the input, it’s about the how. While you have many advisors, you probably have one coach at a time. A coach is somebody who works around your particular challenges, your particular strengths and weaknesses, to help you get something done that is critical to your success.

And then there are mentors. Mentors are very special people. They don’t give you information, or tell you how to do something. They are there to help you figure out what to do. Mentors are extremely rare because they unconditionally invest in your success. A coach may tell you how to do your job better; a mentor might tell you to get out of your job.

If you are fortunate enough to find a great mentor, hang on to them. They are invaluable.

Randy Komisar is a General Partner at Kleiner Perkins Caufield & Byers.