Conviction, Communication, and Coordination at Scale

Thoughts on the OS3 and OS4 Sessions in Stanford’s CS183C
(recurring themes, and ideas which surprised or resonated with me)

Once companies reach a certain size, there’s a limit to what any one person there—even a top executive—can accomplish alone. Recent speakers really revealed that results at scale are all dependent on the people (who’s recruited and retained) and the principles and processes (how those people are motivated and managed, and how culture and communication are transmitted) in an organization.

In this essay, I’ll review some salient points about (in reverse order)

• making sure you have (only) the right people,
• getting them all “on the same page”,
• empowering them to make the company better (without telling them what to do),
• and inspiring them to go do so.

I’ll start with an observation that this last goal—pumping people up about the mission—is achievable (words and deeds can inspire latent passion), but it probably cannot be taught or faked:

Conviction and Charisma

Patrick Collison spoke proudly about how “most companies build cars, [but Stripe] build[s] roads”—about how they’re empowering people, building Steve Jobs’ “bicycle for the mind,” while most companies are focused on consumption and entertainment. (That totally resonated with me, as someone who grew up as a kid excitedly using Hypercard and Final Cut Pro and other Apple power tools for various creative projects, and then—saddened to watch them shift their focus toward helping people watch TV on different-sized screens—later left Apple to found an enterprise software firm with aspirations to empower analysts).

But later, Reed Hastings talked with as much pride about his much-beloved consumption platform: “We sell something important, but not necessary. We sell something you want, but don’t need.” And he said it with total conviction, and reminded me about the value of art and entertainment, and how much pleasure I’ve derived from watching Netflix with friends and family (whether on a Macbook or through Apple TV :P).

And of course, Elizabeth Holmes expounded passionately that preventing early death is the highest calling, probably much more important than helping people watch TV on their iPads or accept payments on their phones.

Each speaker really engaged the class and has recruited and retained a dedicated and talented team to work on these very different missions. And though they each emphasized and valued different (and even contradictory) things, they shared a genuine conviction which was infectious. As many of the speakers these past couple months have said (and shown): as a leader it may be more important to be authentic than “right.”

As Hastings put it (addressing Holmes in absentia?): “don’t try to be someone else. Multiple styles work. Don’t read about Steve Jobs and start wearing turtlenecks.”

Delegation, Revisited

Taking it to the next level

Prior speakers, like Pahlka of CFA, talked about alignment, and the idea of establishing values, processes, culture, or training to ensure that people make the same decisions when you’re not in the room. Collison took delegation a step further, making a point which struck me as incredibly humble and wise: “I’m the optimal person to make a decreasing fraction of decisions” he said, so “I don’t want [my employees] to do what I would do,” but rather to just make a “Stripe-y” choice.

Hastings’ advice to “inspire and lead” rather than “micromanage” is embodied in Netflix’s culture as “Context over Control.” But Netflix appears do barely even set context when producing original content, as Reed explained: “we evaluate a team, decide to back them, then let them run.” That perfectly mirrors Warren Buffett’s acquisition methodology, referenced earlier by Eric Schmidt as a motivation for the Alphabet reorg.

It’s fascinating to hear that such capable leaders see more value in getting out of the room or out of the way.

Many terms; same idea

Nirav Tolia adopted a similar view of delegation, arguing that departmental OKRs define ‘What’, the CEO explains ‘Why,’ and everyone else figures out ‘How’, while Shishir Mehotra positioned the act of determining ‘How?’ as one level higher in the management hierarchy than individual execution, and explained how as folks at YouTube were promoted from there, they were subsequently given autonomy to figure out the general solution to a problem, and ultimately to pick which problems to solve. His general advice on management was to to set inspiring goals and coach when needed, not to dictate, micromanage, or even over-empathize.

Scaling Communication

Asked about the best advice she ever received, Dianne Greene replied: “You can never over-communicate.” [Side-note: Being in enterprise software, it was really great to hear from her about VMWare, in general.]

How do you communicate in a rapidly growing organization? Collison and Mehotra both agreed the key is to write things down. Written words provide “rigidity and clarity” (in Collison’s words) that oral communication lacks, and it persist through time to be read by later arrivals to a company or conversation. And as Mehotra pointed out, writing helps avoid “game[s] of telephone.”

Hastings’ culture deck is a powerful and useful example of the principle. And Greene (and Brian Chesky—more on him in the next post) supplement the clarity with consistency and regularity by sending Sunday emails.

By contrast, Elizabeth Holmes seemed to suggest that her weekly communications are solely live, using a large cafeteria plus conference calling. Skeptics might claim that the comparative vagueness and ephemerality of such meetings versus something written in stone (or on servers), characterizes Theranos and might partially explain their present predicament. Plus, practically, international offices down the line could make scheduling a time for an All Hands extremely challenging (Google’s tried with their TGIFs and I believe attendance is quite low in parts of the world; thankfully, their culture includes lots of asynchronous written communication as well).

Big central campuses plus A/V technology (and maybe VR!) all provide cool opportunities to leverage the numerous advantages of oral communication between people at all levels of an organization. But it appears inevitable that at least at a certain size, leaders must write.

Dead Wood

Everyone likes to talk about hiring A-players. Our speakers were also refreshingly frank and forthright about the converse:

• Greene described an “immune system”—a great group which naturally pushes out less great people. When that fails, she remarked that you never fire people too early
• To prevent waiting too long, Mehotra advised managers to periodically ask, “would I rehire this person?” and to (essentially) fire those for whom the answer is no
• And Hastings takes that idea even farther, asking managers to testify that they’d fight to keep each employee and providing them with an automatic, generous severance offering (and a mandate to use it freely), so that the urge to be nice doesn’t get in the way of a necessary decision. In addition to the practical incentive, he also explained how it’s nicer to those who remain to fire folks who don’t fit, citing an observable productivity increase after laying off a third of the company in 2002 as well as the “joy of excellence” and the synergy that emerges—process-free—from having a “density of talent.”

Conclusion

In short…

…success at scale requires

• getting the right people (by both hiring and firing wisely),
• clearly transmitting values, inspiration, context, and culture to them (probably through regular writing)
• then getting out of the way, so that your capable and motivated team members—who have the required context and your same passion for the cause—can execute on their initiatives, producing better outcomes than you could have planned.