Company of One Page 6

  BEGIN TO THINK ABOUT:

  ■ Whether you are paying attention to your existing customers or to just your potential customers

  ■ Whether you could make your business better (however you define that) instead of just making it bigger

  ■ Whether your business really needs scale to succeed

  ■ Where the upper bound to that scale might be, the place where profit and enjoyment have diminishing returns

  ■ How you could turn envy of others into enjoying their successes and learning from them

  3

  What’s Required to Lead

  So far, we’ve touched on what a company of one is and why betterment of your quality of life should be valued above blind growth. Now we can turn our attention to who should lead a company of one and what specific traits are required — whether as an entrepreneur going solo, with no desire to hire others, or as the leader of an agile and autonomous team within a larger company.

  What’s required to lead a company of one may be different from what you think is called for, and we’ll also look at the worrisome burdens of leadership and power — and how to avoid them.

  THE NOT-SO-TYPICAL LEADER

  Business and Hollywood share a prototypical vision of what a leader should be — a charismatic, dominant, type-A person (in most cases, a male) who commands attention simply by being the loudest and most vocal person in a room. That kind of leader can sometimes have a place, but it’s not the only possible kind of leader (especially the being-male part). Companies of one can be led and run by quiet, thoughtful, introspective folks, even when there’s a team to manage.

  Companies of one do require leadership. If you work for yourself, you’ve got to be a leader to successfully pitch your services or products, as well as maintain relationships with clients or customers. If you work with a team of contractors or freelancers, then you’ve got to be able to lead them as well. Within a corporate setting, you cannot gain the control, resilience, and speed required to be autonomous without demonstrating leadership, even when corporate structure says that leadership is not your role.

  Charisma — the so-called X-factor that leaders are supposed to be born with in order to make compelling pitches, inspire urgency, and encourage cooperation — isn’t an innate quality that you either have or don’t have. In fact, charisma can be taught or brought out when required, even in quiet individuals. Research from the University of Lausanne business school showed that training managers in a specific set of traits improved their charismatic qualities (even if they had no such inherent qualities) and thus their overall effectiveness as leaders. By using stories and metaphors, high expectations, and even facial expressions, anyone can employ and gain charisma to inspire others.

  Another quality that helps is setting extremely high goals — for yourself and for others. Gandhi, in his famous “Quit India” speech, inspired an entire nation to liberate themselves from British rule without using violence. Katsuhiko Machida, the former CEO of Sharp, energized his employees in 1999, when their business faced collapse, by telling them the unthinkable: that all CRT televisions (those massive, clunky, deep boxes that TVs used to be) would have to be replaced by much thinner LCD models by 2005 to meet consumer demands. But setting these almost outrageous goals and expectations was not enough; they had to be accompanied by the confidence that they could be achieved. Gandhi did this through countless examples of peaceful protest, and Machida did it by convincing his engineering team that they could achieve this goal and that he trusted them to do so, and by giving them the resources to realize it.

  Because Mark Zuckerberg, the CEO of Facebook, is a classic introverted leader, he enlists the help of COO Sheryl Sandberg, who offers him social and political guidance. Mark leans on smaller, genuine, collaborative connections rather than attempting to keep a large number of employees or subordinates under his rule. He’s also been very competent at persuading other startups and their founders (typically very entrepreneurial in spirit) to join Facebook, by spending a lot of time with them and listening keenly.

  A study done by professors at Harvard Business School found that introverted leaders, especially when they are managing skilled and proactive teams, can be highly successful. That’s because a quieter, calmer leader is more likely to listen carefully, stay very focused, and not be afraid to work for long stretches of time without interruption. And they are able to lead a team of people who can do the same. Just as autonomy can only be of benefit once a skill set is mastered (as we discussed in Chapter 1), a company of one that operates as a small team requires real expertise from each member if they are to function both separately and as a whole without very much managing required.

  This research from Adam Grant, Francesca Gino, and David Hofmann suggests that introverts can make better bosses — and that extroverted leaders, who sometimes speak first and think later, can actually lose the respect of their team, leading to poorer results. However, any leaders who listen carefully and are receptive to smart and useful suggestions from their team, whether they’re introverted or extroverted, can build the trust required to earn cooperation.

  Introverted leaders do have to overcome the strong cultural presumption that extroverts are more effective leaders. Although the population splits into almost equal parts between introverts and extroverts, more than 96 percent of managers and executives are extroverted. In a study done in 2006, 65 percent of senior corporate executives viewed introversion as a barrier to leadership. We must reexamine this stereotype, however, as it doesn’t always hold true. Regent University found that a desire to be of service to others and to empower them to grow is a key factor in becoming a leader and retaining leadership. So-called servant leadership, dating back to ancient philosophy and the Tao Te Ching, adheres to the belief that a company’s goals are best achieved by helping workers or customers achieve their goals. Such leaders do not seek attention but rather want to shine a light on others’ wins and achievements. Servant leadership requires humility, but that humility ultimately pays off. Companies of one recognize that elevating others elevates the entire team or business.

  Companies of one are sometimes quiet people who are internally motivated to make a difference in the world without shouting. Many people think they aren’t the type of person who could start and run a business or inspire others to work with them or buy from them. I myself am the first to admit that I’m socially awkward and not well spoken in groups — I have a hard time functioning at everything from conferences to parties. What I have done is structure my business around what I’m better at — online teaching and written communication. I’ve turned my introversion into a positive tool, instead of an excuse for inaction. I find ways to lead that suit my personality and skill set: I avoid speaking to large groups and instead lean more on one-to-one communication. My introverted nature is the primary reason I teach online courses instead of doing speaking gigs. Online courses allow me to use a channel through which I can communicate effectively, and in a way that my audience connects with.

  Since my practically nonexistent ability to lead could easily be a detriment to my company of one, I only work with freelancers and contractors who don’t require management of any kind. They’re A-players who know exactly how to get their work done. I simply need to provide them with the parameters and let them do their work. I give the people I hire full autonomy to do their jobs so I can do mine, with no need for meetings, or check-ins, or management. I ask them to let me know if a problem comes up; if I don’t hear from them, I assume that their silence means they’re accomplishing their tasks. I let my perceived shortcomings, like being awkward or bad at managing others, work for my business, not against it. My leadership style may require that I spend more when I hire (A-players come at a premium), but their work is always worth it and nets a positive return for my business.

  AUTONOMY ISN’T A MAGIC BULLET

  Leading a company of one that allows its workers to have autonomy isn’t as simple as removing all rules, processes
, and prescriptions. The result of that would be anarchy, which would be terrible for profitability and sustainability.

  Today 79 percent of companies in the Fortune 1,000 and 81 percent of manufacturing organizations have empowered, self-directed, or autonomous teams, all of which are still led or managed in some way. It might seem odd that self-directed teams require direction, but in reality, they do require a specific type of direction.

  Henrik Kniberg, a management coach who’s worked with LEGO and Spotify, believes that assuming an organization can have either full autonomy or full alignment (where tasks for employees strictly align to the goals and directives of their managers) amounts to a false dichotomy. A bit of each is required, both for starting a business and maintaining it. A leader of a company of one has the role of enabling autonomy while providing alignment-setting processes and making sure there are common goals. Achieving this delicate balance can be challenging.

  Kyle Murphy, the vice president of design at Hudl (a sports team software company), has gone from being the company’s very first hire to one of 600 employees over the last nine years. When Hudl started, there was “autonomy overload” — every team worked on whatever they wanted, sometimes duplicating work and sometimes creating deliverables that didn’t even fit together with other teams. This created chaos. What Kyle quickly identified was a need for global organization systems — not so much to limit the creativity and ingenuity of employees as to give them a common framework and playbook to work from.

  Kyle’s design team was struggling to hire enough designers to cover the amount of design work their company had to do and their current needs. This led Kyle to rethink the way in which Hudl’s design team was operating, which was mostly as a flat group. By establishing rules like a common style guide for visual elements in their software (buttons, colors, fonts, etc.), Hudl needed fewer designers to do more work, because they now had a common set of building blocks. He also streamlined how feedback and revisions worked, so less time was required for those processes. In effect, hiring more people ended up not being the solution; instead, introducing more processes and structure helped fewer people accomplish more — while allowing them the autonomy to solve problems in their own way, using a common tool set.

  Autonomy can also be badly abused. The problem is not so much employees taking advantage of perks like flex hours or remote work, but leaders assuming that they need to give less direction. A leader’s job is to provide clear direction and then get out of the way. Even companies of one require direction and set processes — it’s this common constraint that allows creativity to thrive and goals to be met. This alignment has to be carefully orchestrated, not as binary autonomous/non-autonomous decisions, but as a balance between guidance and trust. Provide too much guidance and a team will start to rely on it and leadership will become a bottleneck for decision-making. Provide too little and things devolve into anarchy. The middle ground is where high-performing teams excel, providing the most benefit to a company and delivering the most innovative and amazing results.

  Even a company without employees still requires constraints. In serving clients with very specific deliverable requirements as well as customers who need your product to perform in a precise way, the more you can lean on processes, systems, and reusable building blocks (from code to marketing language to visuals) in your leadership, the better and faster you’ll be with your work and the less you’ll require in terms of hours worked or people hired, even as you gain more in terms of revenue, finished processes, and paid customers.

  A VARIED SET OF SKILLS

  In school and work, we’re often taught that specialization is better and a key to success. From a young age, we’re asked to pick a track that will lead us to a specific profession. In our jobs, we often use only one specific skill set to accomplish the tasks we’re assigned. This is helpful in gaining domain expertise in a subject, but companies of one truly need to be able to know and understand a multitude of topics and skills in order to be in control of their work.

  As a good generalist, you’ll usually start with a specialization and then add auxiliary and complementary skills as needed, until you’re able to understand all or most aspects of the business as a whole, not just one specific job within it. This is especially true when you work for yourself: you’ve got to know the skill you use to get paid or build the products you sell, but you also need to have a thorough understanding of key facets like marketing, bookkeeping, and sales.

  In business, conditions are, of course, never perfect. In fact, they’re typically less than ideal, with changing markets, differing trends, and consumer demand often flip-flopping. Specialists in the corporate world can thrive during certain surges. For instance, COBOL programmers were in demand in 1999 as Y2K approached — but then that need quickly diminished on January 1, 2000. In contrast, generalist programmers, who can write code in any language, have been in demand since computers started to become mainstream in the 1980s, and they have continued to see demand for their varied skill set.

  According to Carter Phipps, author of Evolutionaries, generalists will continue to thrive in business as it becomes increasingly valuable to know “a little bit about a lot.” Where you fall on the spectrum of generalist to specialist could therefore be the most important aspect of your survival as a company of one. Vikram Mansharamani, a lecturer at Yale, said that acknowledging specific expertise is overvalued. There are certainly domains, like hard science, that require specific knowledge, but for the most part specialist knowledge, if it is blind to everything else, just can’t work in the business world today (or in companies of one) because there is too much uncertainty and ambiguity and metrics are so poorly defined. The time is at hand to embrace generalist thinking and the understanding of many things.

  A generalist company of one leader needs to understand quite a few aspects of work to succeed. Not only do such leaders need to be masters at their core skill set, but they also need to understand how business works in general. There are a few leadership qualities of generalization that the leader of a company of one should either have to begin with or be willing to cultivate.

  Psychology

  Being able to understand how others think is critically important to a company of one. You need to know how and why people make decisions about your products or services. What leads them to buy what you create? What makes them hesitate? Where do they place value in their lives? If they do buy from you, what is considered a win for them? Where does churn happen in your business and why? Understanding these key factors can make you a better leader, a better salesperson, and a better marketer.

  Communication

  Even though we may not think we’re communicators or writers, most of us spend a large portion of our days writing. Everything from emails to tweets to talking on the phone is communication. The more we can learn about how to communicate clearly and effectively, the better we’ll be at leading, as our directives will be better understood.

  Resilience

  Miles Kington, a British journalist, reportedly said that “knowledge is knowing that a tomato is a fruit. Wisdom is not putting it in a fruit salad.” We should never assume that having an abundance of knowledge is the same as having an abundance of wisdom. Even if you have access to a plethora of data or experience, there are still so many factors beyond your control. The truth is, much of business is a guess. That’s why it’s important to be able to bounce back and reenergize a team when failure strikes. Because it will.

  Focus

  A company-of-one leader has to become an expert at deftly saying no. You can learn to view saying no as an actual actionable strategy, as opportunities, tasks, distractions, plans, meetings, and so on all come up frequently. By saying no to anything that won’t serve your business or your team, you can open up space to focus on a better opportunity in your business. You need to learn how to evaluate those options quickly and figure out which ones are good to pursue and which ones to say no to.

  Decisiveness

>   Decision-making can be mentally taxing and draining, and when that happens, many people start to make bad decisions because they’re tired of deciding. By scaling down large, stressful decisions into smaller, more digestible decisions, you can choose a direction more quickly, in a smarter way, and with less stress involved.

  “EVERY DAY I’M HUSTLIN’ ”

  While working at scaling up resilience, control, speed, and simplicity is important to leading a company of one, if you fail to approach this work with mindfulness, big problems can ensue.

  There are more than 500,000 articles listed on Google about “hustling” in entrepreneurship (and none are about the Rick Ross rap song quoted in the section title). For some reason, working for yourself and pushing yourself to the limits every single day are inextricably linked — as if working more is working better. Just as we discussed in Chapter 2, more isn’t better — better is better. There are advantages to putting in the time and effort to master a skill, but there’s also a great need for balance. When hustling turns sleeplessness into a badge of honor and work demands push health, family, and friends to the back burner, it’s definitely time to take a break.

  On Apple’s television show Planet of the Apps, one contestant admits, “I rarely get to see my kids. That’s a risk you have to take.” Is it really? That kind of hustling, putting work above everything else, is inconsistent with the mind-set of running a company of one — with working better instead of working more. A company of one who disagrees with this idea that workaholism is required to succeed in tech and big business alike is David Heinemeier Hansson, a Danish programmer who created the popular Ruby on Rails web framework and is a partner at the software development firm Basecamp. Hansson despises this paradigm of working more as the only way to be successful. He believes that the pressure to work more doesn’t just get passed down from leadership; rather, it’s amplified as it moves outward through a company. He believes that companies need to stop hustling and should encourage their employees to focus on accepting that there’s life outside of work, that there’s real usefulness to sleep and recuperation, and that their work habits should be much calmer.