Career Advice

Management screws up – what do you do?

Something is wrong and management has messed up again, how do you react?

One of the ways people react and hurt themselves in the process is by being immediately negative. Cynically: “well this is just the norm for this effed-up company” or “yet again we are going to screw our customers”. Maybe with resignation: “I’ll have to work more hours now to correct their mistakes”.  Maybe as a victim: “I have no power and I can’t take the risk of saying anything”. Maybe on the attack: “We need to get rid of our VP”. You’ve heard them all I am sure, standing around the water cooler discussing how, yet again, management is no good.

How is that helpful to anyone? It’s only helpful to you for 30 seconds as you feel better venting (but it’s better to save that for your dog). It’s not helpful to your team mates because while they might pile on for a moment they will be left feeling worse.

But most of all it is not helpful to your management. When there is a problem usually everyone knows it, including management who, though they may not show it, are probably worrying too.  Quality issues, high turnover, bad process – it’s probably a known issue that is languishing or not being solved for whatever reason. Or maybe you’ve identified a problem. Either way piling on to complain or roll your eyes does not contribute to the solution.

What most leaders long for is for the people on their team to describe the problem constructively and offer solutions. Pragmatic or harebrained, cheap or expensive, start the conversation and you become part of the solution.

If you are not sure how to do this maybe role-play with a friend. Practice describing what you see without being negative, cynical or frustrated. Don’t be a Pollyanna either. Focus on facts, process, unconscious culture – whatever is contributing but in a pragmatic tone. Make sure you are clear up front that your objective is to bring a new idea or solution so you don’t get derailed in the description of the problem before your audience knows your intent (so he can keep listening and not stop listening and start composing his response in his head before you get to your idea). For example, first sentence “I have been thinking about the quality issue on the latest release and I have an idea” or “I’m concerned about the turnover in our department and I have an idea as to how we could reduce it”.

There is a mind game you can play with yourself. Imagine you are the CEO listening to you. You are busy and burdened with the challenges of the job. You (the CEO you) may know the problem you (the employee you) is about to bring up, you may not. Either way, what is the best way to quickly describe the problem/your observation and your idea? Practice that – without being negative or sycophantic.

If you get skilled at this you will become part of the solution and you will be recognized and appreciated by your management. It will create opportunity for you. Early in my career I was not as skilled at this as I wish I could have been, but I was good at pointing out the problems and offering to fix them. Taking on broken programs, developing new programs from scratch to solve a problem or develop an untapped opportunity and this definitely accelerated my career.

Now you may say this would not work in your company. That’s not the culture. Management doesn’t want to hear, HR doesn’t listen etc. etc. To that I say get out. Find a better company that is worthy of your talent. And when you do, chalk it up to experience, or if you think it’s really egregious maybe write a blog like Susan Fowler did and bring down leadership. You are never powerless.

Photo: At the wall in Bethlehem, Palestine © 2018 Penny Herscher

Leadership

Winning as a CEO takes courage – does your CEO have it?

It takes courage to be a great CEO and yet our world is populated with mediocre ones so how do you assess a company CEO before you chose to join his company, or whether you have the mettle to be one yourself?

The evidence is there if you know where to look. It’s not just about a CEO who can give a rallying speech (although it’s fun to watch a CEO like Marc Benioff do it). It’s not just about a brilliant technical founder CEO who can talk product and vision. Once the company is off the ground courage is needed for the big moves that set the future, and because they are big moves they are inherently risky.

Take a look at your company, or the company you are thinking of joining, and look for the signs of courage in the CEO. For example:

Buying a large company, spending a billion dollars or more takes real guts. It has to be for strategic reasons, product reasons, and make sense to the shareholder. But no matter how compelling the strategic and financial argument the CEO knows so many things can go wrong during or after the transaction and in the end it is the CEO who will take the blame if they do. The board will question (that’s their job) and weak boards won’t want to take the risk – it’s easier to do nothing. So they will look to the CEO for the final courage to make the move. I do, however, think M&A of small companies doesn’t take much courage. “Tuck-ins” as corp dev teams like to call them can be justified on financial terms and, unless you greatly over pay, don’t incur much risk. But the big ones take courage and conviction.

Changing  the business model – for example moving software to the cloud. The courageous CEO takes a stand and makes it happen. He tells the shareholders what he’s doing and how many quarters it is going to take and then he leads the organization to make the change happen fast. Transitioning a software business from a perpetual, on-premise licensing model to a subscription model in the cloud is really hard because it always causes the stock to drop in the near term (although it will recover and be stronger if you execute). There are always a thousand reasons why to wait – “customers are not asking, we’re not ready, our shareholders won’t tolerate it” – and it’s true that revenue drops and margins take a hit for 8-12 quarters. It takes courage to lead your employees and shareholders through the transition and to stay the course as your stock suffers – but in the end you have much more resilient revenue and higher multiples.

When an industry is going through a major transition does the CEO face it with courage and double down to get ahead of the change or stick her head in the sand? The automotive industry is facing its biggest challenge ever with the rapid adoption of electric vehicles, ride-sharing and with Level 4 autonomous driving only a few years away. Ten years from now we’ll look back and see which CEOs had the vision and courage to lead their auto companies into the new world and which didn’t, because some car companies will no longer exist. But in the short term pouring investment into new technologies to get and stay ahead of the rapid rate of change is a huge decision. At Faurecia (a $20B auto company where I am on the board) the employees are not confused. The CEO is direct with them about the need for tremendous change and he is showing significant courage investing and leading them through it.

Firing non-performing executives is another area that takes courage. When an executive is weak the employees know it. But so often CEOs are slow to act. There is an old adage that by the time you know you should fire someone you are probably already 6 months too late. So why then will a CEO know he has an executive that is not cutting it and yet wait? Because firing people is hard and carries the risk that you will not hire well – maybe you’ll make a mistake and hire someone who is no better? Or maybe you are just so busy you can’t face putting the time in to do the search for a replacement? Firing a B-player senior executive is risky but so necessary because their department/group/division will be populated with B players, not A players and so probably not as competitive or effective as they need to be.

And finally a more subtle one. The courageous CEO is accessible. He will answer emails directly from employees rather than hiding behind an admin. He’ll walk the halls and factory floor to really listen to what employees think. He won’t stay behind glass in mahogany row and limousines, he’ll make sure his customers and his managers can find him, talk to him, and most importantly bring him bad news without him shooting the messenger. It’s a subtle form of courage to truly listen, but it’s courage none the less.

Can you put yourself in your CEOs shoes? Do you see courage and the willingness to take risk to grow the company, to listen, to make the big moves? Take a good look and then make your own assessment of whether your CEO is going to win. And whether you want to be one yourself one day.

Photo: Florence © 2018 Penny Herscher

Career Advice

Why being kind as a leader trumps yelling every time

Are you conscious of how you react as a leader when someone makes you angry? With an attack or with kindness?

I once worked with a head of sales who, when things were not going his way, would curse out anyone not on his team who he thought didn’t appreciate how hard his job was. Unkind, unnecessary accusations of incompetence or intentionally obstructing sales. Engineering, customer success, marketing – you name it – they all got yelled at instead of constructively engaged. But unpredictably so everyone walked on egg shells around him.

I recently saw a situation where an employee disappointed a startup CEO and the CEO chose to call her up and scream at her. Profanity laden, unfounded accusations of mal intent. The employee had resigned at an inopportune time and the CEOs reaction was to attack. Not give the employee the benefit of the doubt, or quietly share her disappointment.

And sometimes it even happens with customers. But in all cases shouting and bullying is not only poor leadership – it is harassment.

It’s so easy to react emotionally and react with anger. To raise your voice and attack. To clench your fists and shake with emotion. It is so much harder to react with kindness and yet being kind is often one of the characteristics of great executives. Not soft or weak; kind.

This is because it takes extra energy and thought to manage your reaction. It takes caring about the people you are leading or working with more than yourself. You have to step back and make the mental space to think through what’s behind the employee’s action. Have they made a mistake because they did not have enough information? Or because they didn’t think their action through? And if so how should you react to help them make a different decision next time?

I had the pleasure of working for a COO once who was a master at this. He never got angry, never raised his voice. He had a staff who were strong willed and opinionated – we must have been a nightmare to manage. Several of us went on to bigger jobs as CEOs, professors, GMs but at the time we were never satisfied, always pushing for more and for change. And we were definitely not always constructive. I learned, while working for Chi-Foon Chan at Synopsys, that you never need to attack to get your way. You can listen, respond with thought and patience and still exercise tremendous power. Very, very occasionally the chief would get angry but he would go quiet and still and wait us out and then quietly corner us with intellect. Impressive and something I aspired to once I was a CEO (although not always successfully).

The net result of having the self-control to think of your employee first and be kind is that people will remember you positively, will want to work for you, and will recommend other people work for you. You will make their lives better and they will be in the foxhole with you as you grow your company. And if their own careers are growing and they want to move onto a bigger job they will talk with you about it so a) you will not be surprised and b) you can help them find their next position – thereby earning their lifelong loyalty. I worked with a first-class CFO once who had three department heads: Accounting, FP&A and Treasury and he was clear that part of his job was to groom each one of these heads to be a CFO, knowing that when they were ready they would leave him. He succeeded and inspired deep loyalty in everyone who worked for him.

So if you find yourself reacting with anger and raising your voice, or worse yet yelling at an employee, step back and count to ten. Breathe deep and find another way. It’s simply not worth the destruction of relationship that occurs when you lose your temper.

Photo: Capital in Vézelay France © 2018 Penny Herscher

Equality

Equality as an ingredient for peace: from Gaza to Ramallah to Tel Aviv

It’s hard to know if you can make a difference. Small actions, personal actions, can they in some small way change the path to peace? Who knows, but why not do them anyway just in case? Here’s the story of our efforts; the story of WE2, women for economic equality, and our mentoring mission in January 2018.

Early this year I led a delegation of Silicon Valley executive women to Israel, Gaza and the West Bank to mentor women entrepreneurs. As I posted before we left:  I am more deeply convinced now in 2018, than ever before, that the long-term path to a more sane, peaceful world is equality for women. The research is conclusive. Investing in girls and women transforms economies, and healthy, growing economies are more peaceful. We were six women from Silicon Valley with a broad set of experiences between us as entrepreneurs, leaders, engineers, lawyers, recruiters and product designers and plenty of experiences, good and bad, to share. Together we believe women achieving economic equality is essential for sustainable peace.

It was an extraordinary experience.

Tel Aviv is one of the great startup success stories with energy and intellect oozing out of every crack in the pavement and second only to Silicon Valley. But even in Tel Aviv startups need help and their statistics for women are bad as ours. Low numbers of female founders, crazy low percentages of venture capital going to women. Frustrating for Israeli women, but the norm in tech, and something we can actively change by mentoring and investing in women. I had done some business plan coaching for female Israeli founders a year earlier and so knew of the hunger for women mentors – and this time I reached out to the non-profit Startup Nation Central for help to put the delegation together – asking first if they thought there was demand.

SNC more than exceeded our expectations of what we could accomplish in a handful of days! We met with hundreds of female entrepreneurs, executives and aspirers through panels, round table coaching sessions and one on ones. We talked about the “hard knocks” of our careers and shared the experiences that we had learned from – such as grasping opportunities before you feel ready, taking risk, becoming a CEO or realizing being fired is sometimes the best thing that happened to you. We met with women board directors of Israeli companies to compare notes on the challenges of being (often the only woman) on boards and with leaders of non-profits working on the role of women in Israeli society.

We learned how even hip and liberal Tel Aviv is patriarchal, of the challenges working in startups or technical jobs while holding to Orthodox rules and the lack of role models for successful female CEOs.  I had naively assumed that since young Israeli women serve in the Army alongside of men they’d both be tough (and I know a few stellar examples) and would have equality opportunity. But not the case. Everyone spoke to us about the elite intelligence Unit 8200 (famous for cyber security excellence and the best unit to be from if you want to do a startup). In 8200 we learned that while the initial numbers of boys and girls joining are equal the gender stats are that the more technical the departments and roles, the lower number of women. Is this because you sign up for more years if you join 8200? Or because the roles are more technical? I doubt it, and no one we spoke to could explain it, but the Israeli women seeking equality for the next generation of technical entrepreneurs are trying to understand the underlying reasons.

Startup Nation Central also made sure we got educated about the politics too, which we appreciated. We listened to, and learned from, community leaders – political, societal and peace makers. It is an understatement to say the politics and history is complex so we chose to listen carefully, not take a position and to simply try to understand better than we did before. Some of what we heard appalled me, some reassured me. We learned a powerful metaphor for the calamity of the peace negotiations which has stuck with me: The Israeli and Palestinian political bodies are like a traumatized divorcing couple who can chose one of two paths. They can try to mutually destroy each other, and destroy the future for their children, or they can acknowledge their trauma and work together to create a future for their children. The metaphor fits the current situation and it is unclear which path will prevail in our lifetimes.

Our experiences in Gaza and the West Bank had very different top-level issues, and yet many of the core issues of being women in business are the same. How to raise money, how to grow your career, how to balance family and work, how to challenge the traditional role of women in your society when you know you can do more!

In Gaza we were hosted by Gaza Sky Geeks which is a subsidiary of the Mercy Corps NGO who arranged our entry. The Gaza Strip is a desperate place where the borders are controlled by Israel and Egypt, you cannot enter and residents cannot leave without a permit, which often is not granted.  Unemployment is 42% in Gaza, the highest in the world and youth unemployment is close to 60%. Poverty rates are high and living conditions are bad. Little clean water, limited electrical power, issues with sanitation, medical care, infrastructure maintenance… you name it it’s hard. And yet, to the great credit of the GSG leadership, the GSG team has built a tech accelerator with its own power and a shared work space for more than 140 young people, men and women, to learn how to code and to start small businesses, taking advantage of the freedom the internet and digital skills can provide. The space is warm, light and full of optimism, like an incubator should be. Volunteers come through frequently (by far the most useful are full-stack developers or people who can teach design thinking) and, like entrepreneurs all over the world, the young people we met with wanted to tell us about their businesses and the challenges they are up against.

Here we mentored both women and men. Some of us taught small classes on early stage product design, some reviewed business plans and worked with the entrepreneurs to find ways around the unique product development and distribution challenges Gazans face (remember the borders of Gaza are closed to all but a very few). The amounts of funding in Gaza are very small, maybe $10,000 to start a business, so it impressive to see how far some entrepreneurs have come on less money than many Silicon Valley startups would spend on frivolities.

We met with young women to share our careers and while our lives in Silicon Valley are, without question, so much easier than those of the women in Gaza, we had plenty of laughter around our shared experiences. The feeling of being overwhelmed and learning how to simply survive every day while your husband, children and job compete for your time, or to survive the judgement by others as to whether you should be a leader or not. But for many of the young women at GSG they not only had all our challenges and more; they are also working two jobs. One is their startup, the other is a paying job to survive. They just do not have the luxury to only work on their startup.

One example is Amal AbuMoailqe, a young woman who is a degreed, qualified mechanical engineer and who is CEO of a Gazan product and consulting company solving engineering problems she and her team sees in Gaza. Here is her product, the Sketch wheel, designed to help get heavy loads up stairs when you have no power. It is said “necessity is the mother of invention.” It is certainly true in Gaza.

We stayed overnight in Gaza City and, unlike when I visited a year ago, we were very limited in what we could do outside the office or the hotel. Tensions are high after America’s stated intention to recognize Jerusalem as the capital of Israel and so we were not able to walk around and explore. There isn’t money for maintenance for most properties (water came in under the window and flooded my hotel room floor when there was a heavy storm overnight) but food for special occasions, even in Gaza, is delicious and our hosts took pity on us before we left and took us out for kanafeh – the heavenly Palestinian dessert made of honey and cheese. Sharing the pleasure of food with friends is important, no matter what the situation.

And while in Ramallah there is more physical freedom than in Gaza, life is still very hard for entrepreneurial young women. There we met with students studying computer science and young women in technical and product roles who had so many questions about how to grow their careers. It’s so much harder for women to take risk with their careers in a society with high unemployment. They simply cannot put their current job at risk by applying for a new job, even in the same company. Low unemployment such as we have in tech in the US is a luxury which allows a young engineer to move around and try different roles to see what she most enjoys.

But high unemployment in the West Bank is also unleashing female business creativity. Because it can be hard to get a job, young women are building their own businesses in creative ways. We were also hosted by the Palestinian Business Women Forum where we met, and listened to, a remarkable group of young, female business owners. Traditionally women are not bakers in Palestinian society, and yet we met with three who are breaking with tradition and building bakery businesses. One is even now being hosted in London because of the quality of her desserts. One 28 year old woman had built a food distribution business to get local products from farm to store efficiently and determinedly shared her samples with us to show us the quality of the cheese. Women are organizing travel, designing clothes, using the internet and social media to get their message and products out.

It’s impossible to visit the West Bank and speak with Palestinians living there without feeling the pain of the ordinary people living with check points and restricted movement. As is so often the case the individual Israelis and Palestinians we met want peace. They hold no ill will at the individual level, but politics gets in the way. The emotion is intense and I was deeply moved by a Palestinian friend who, after a dinner we hosted, said to me in shock “I have never hugged an Israeli before” – yes women hug when they are talking about intense subjects.  I do not presume to take a position on the political crisis in the Palestinian territories – I say again this is complicated – but whatever the reasons the human pain and suffering being felt on both sides, for different reasons, is real. We felt honored and humbled to listen to young women’s stories and share, in some small way, our experiences with them. The trip also confirmed for me that I can read all the books in the world, and watch films and documentaries, but I cannot begin to understand until I go on the ground, experience and listen.

So was it helpful to the women we met? We hope so but from two very different perspectives.

First, the closer an entrepreneur was to having her business plan under way, and some level of product in development the more helpful we could be at a practical level. I met with an entrepreneur with a terrific voice analytics technology to diagnose the progression of dementia who needed business presentation advice, and one who has a brilliant idea (and patent) for stroke treatment who needs to talk with VCs with FDA and medical device experience. Advice, brainstorming and connections are things we can provide. Several of us are in follow up sessions on Skype and in person now; on the ground, sharing our practical experience and Silicon Valley resources.

But the second, which we did not fully appreciate beforehand, is that we are existence proofs that women can lead. We prove, consciously or not, that it’s possible and young women told us over and over how exciting it was to hear our stories – which we did our best to make funny and self-effacing. We talked about anger, and fatigue, and lack of confidence – we did not hold back on the reality of being women in the minority swimming against the current. We appreciate, and do not take for granted, how privileged our starting points were and yet the six of us also shared how hard we had to work, how much crap we took from some men around us and how much personal and professional risk we had to be willing to take to get ahead.

Finally, on a personal note, it is so clear to me that it’s time for women to take an equal role in business. It’s unacceptable that company after company, in Israel, in the West Bank, in the United States has all male leadership or maybe one token female executive or female board member. Women are half the population, they are highly educated in many cases, and we now know that when economically empowered they create a more peaceful society. It’s time for women to have economic power, economic opportunity, economic equality. And no more so than in places where peace is so elusive.

Thank you to the Startup National Central, to Gaza Sky Geeks, to the Palestinian Business Women Forum and the Ramallah executives (you know who you are) for organizing and hosting us, and to Indagare for arranging our travel. We self-funded our trip. If you’d like to help the women on the ground come with us next time and/or invest in women led startups in the region.

Here’s my TV interview on our delegation on i24 while in Tel Aviv:

A delegation of female Silicon Valley tech executives & entrepreneurs are helping empower their Israeli & Palestinian counterparts; Penny Herscher & Start-Up Nation Central's Ayelet Tako on i24NEWS English's #TheRundown, with Calev Ben-David & Nurit Ben

Posted by Calev Ben-David on Tuesday, January 16, 2018

 

Our delegation with Israeli community leaders who are advocating for equal opportunities for women

Three of us on a panel in Tel Aviv sharing “hard knocks”

With young women who are building their own businesses in Ramallah

Selfies are a big deal in Gaza Sky Geeks

Two types (Gaza and Nablus styles) of amazing kanafeh. We were hooked!

Photos: Jerusalem, Tel Aviv and Gaza City © 2018 Penny Herscher

Equality, Leadership

It’s time for economic equality for women: WE2

Sometimes it’s just time. I am more deeply convinced now in 2018, than ever before, that the long-term path to a more sane, peaceful world is equality for women in society. The research is conclusive. Investing in girls and women transforms economies, and healthy, growing economies are more peaceful. But I am not a politician, I am not a Sociologist, I am a tech executive and so I need to practice what I know in order to do my part.

Women, and men, need to invest in women. Invest in education, opportunity, and advice. Put the time, focus and effort in to help women build businesses and careers that give them independence and equality so they can themselves invest in their society. And no more so than in the places where peace and hope and dignity are a daily challenge. Even in Israel, second only to Silicon Valley in startup funding, the statistics for women entrepreneurs are crushingly low.

I held a Salon at our home in the heart of Silicon Valley last Summer on Women Led Startups in Israel and Palestine (I choose different topics of interest to my  network of  SV women 3-4 times a year). The evening was a panel of four women in our garden: two entrepreneurs from Israel, one from Gaza and a Mercy Corps board member who has been focused on Palestine – followed by a discussion and Q&A. It was dramatic, inspiring and very thought provoking. The challenges of building a business as a woman in Silicon Valley have nothing on doing it in the Near East!

WE2 – Women for Economic Equality – was born from that evening. In a moment of passion I asked for volunteers to come with me to mentor women in Palestine and Israel and as a result we now have a delegation of Silicon Valley executive women visiting Tel Aviv, Gaza, Jerusalem and Ramallah in January.

It’s a mentoring delegation. We have a broad set of experiences between us as entrepreneurs, leaders, engineers, lawyers, recruiters and product designers and plenty of experiences, good and bad, to share. Together we believe women achieving economic equality is essential for sustainable peace. We’ll be meeting with female entrepreneurs, executives, VCs, board directors and business leaders, and supported by partners on the ground in each location. We’ll hold panels and small group mentoring sessions, one-on-one coaching and business plan reviews; we’ll share our career learnings and listen to the experiences and resource needs of the women we meet. And we’ll do it in the three, very different, regions of Israel, the West Bank and Gaza. We are not political, we just want to invest in women.

Hopefully this is the first of many to different parts of the world where women want to build economic independence (so ping me if you want to participate in the future). And if you want to follow us you’ll find updates on this blog, and on my social media.

Career Advice

When to apologize and when not to

I recently got a question in email from a woman (who is early in her career) which I answered, but then as a few weeks passed, I began to think about all the times I wish my coworkers had apologized and when they did it too much.

The question was:

“Should I apologize when I make a mistake at work, and if so, how? If not, what should I do instead? I notice I am apologizing for mistakes that are mostly my responsibility, but not only, and that nobody else is apologizing.”

The hard thing about apology is some people do it, and some don’t. Some are comfortable making mistakes and being imperfect, others are not. But done thoughtfully apology is a powerful way to build trust.

So first – why not to apologize unless absolutely necessary

– Some men (and some women, although fewer) see it as a sign of weakness and will use it against you, bringing up your ownership of a mistake to weaken you in the future. Be conscious of when, where and to whom you apologize.

– If you are trying to manipulate or being insincere to achieve some other end then you will erode trust because most people can tell when you are insincere.

– If you are not the one who made the mistake. Again, not dealing in the truth erodes trust, even if you are trying to show you will own problems. Don’t throw someone else under the bus, but don’t step in and apologize if it is not your mistake because it may also be used to undermine you in the future as someone who can themselves be thrown under the bus.

The bottom line is mistakes are a normal part of learning. If you make a mistake admit it, see if you need to fix it, and move on. Don’t apologize unless someone else is hurt by your mistake. Don’t apologize unnecessarily, or profusely.

But then again, why apology is powerful

– Owning your mistakes openly builds trust, so if you have hurt or inconvenienced someone then take the time to apologize and try to do it one-on-one so you can be sincere and open.

– It takes courage to apologize which is why so many people don’t. You make yourself vulnerable when you do, but being strong enough to admit your imperfections (within reason) will make you a more compelling leader. Being authentic is a very powerful way to lead.

– The people who can’t admit their mistakes have a huge issue building trust as leaders. Too many times I have heard the comment “well s/he can’t admit when s/he’s wrong so s/he’ll make it someone else’s problem.”

These examples are all internal, but the one area where you need to be courageous and ready to take ownership is with customers. Your customers often need to hear from someone senior that you recognize a mistake has been made and you are going to fix it or make sure it gets fixed. If you are the senior person in the room and your company has made an error or let a customer down then own it, whether or not you are directly responsible.

In the end it is important to be thoughtful about how and when you apologize so your apology is both authentic and appropriate for your level of ownership of the issue. And make sure you do apologize when you own a problem and you don’t become one of those people who can never admit their mistakes.

 © 2011 Penny Herscher

Leadership

Five tough lessons on being a mentor

Coaching and mentoring is increasingly popular, everyone wants one, everyone has one. This is somewhat a result of the explosion in the number of startups over the last ten years, but also because the word is out that getting a good mentor can really help you grow faster at any stage of your career. And women want to help women!

I have mentored on and off for the last 20 years but in the last 2 years since I stepped down as CEO I have focused almost entirely on women, especially new CEOs and entrepreneurs. And I have learned some hard lessons in this process – all of which are obvious, but all of which can be easily forgotten.

1. Not everyone who asks for your help is a good match

The chemistry has to work. The mentee has to truly want your advice, and you need to enjoy being with her. Trust your gut. If you find the interaction tough on the first meeting then it is unlikely to get better (a bit like dating). If you find the mentee talks more than they listen take a deep breath and assess whether you can be effective (unless that is the issue she is asking for help on). If you are irritated, or even bored, in the interaction ask yourself honestly can you be helpful.

2. Trust is essential

And the trust needs be to two-way. You must trust enough to be truly yourself and give the honest advice you believe in as constructive a way as you can, and vice versa. If you start to believe that either of you cannot, or is not, being open and honest then gently end the relationship.

3. Again, trust is essential

Growth is hard and takes introspection and vulnerability; it takes the mentee having the ability to admit when she has messed up, or to hear difficult feedback. Only by facing mistakes can you get to the bottom of why it happened and then talk through a change in knowledge or skills to be pursued. If you are mentoring someone who has answers for everything, or who cannot admit their challenges, then again, gently end the relationship. Likewise if you don’t feel emotionally safe in the relationship.

4. Be clear about motivation, especially yours

Because coaching becomes a labor of love it’s important to be clear about what is motivating you in the relationship. I get asked many times a week to be a mentor and I have learned, the hard way, to pay attention to what is driving me. It’s not about making money (because even if you charge for your time as a consultant or take stock options there are easier ways to make money). It might be about responding to a friend who has asked you to help someone they are vested in in some way. But in the end the most productive relationships develop because you care; you care that she grows and becomes successful. I recently started mentoring a future star who was willing to pay for basic workplace skills coaching in her first job but I feel so privileged that she is genuinely seeking my help that I signed up and said “no I won’t take your money”. Sometimes I do, if many hours are needed and the company will pay, sometimes I don’t.

5. Have integrity about your standards

I’m passionate about women achieving economic equality. So passionate I am leading a delegation of women into a tough part of the world next year to help female entrepreneurs. But I am realizing equality also means no short cuts for women. Women leaders need to be held to the same ethical and legal standards as men, no matter now much I may want to cut a female leader some slack when I see bad behavior. And I need to hold myself to the same standards. So sometimes the process hurts because I want so much for women to win, but not at the cost of my integrity.

All that said, mentoring and coaching can be incredibly rewarding, especially when I work with smart young women who are becoming amazing leaders and I get to participate helping them in some small way (ladies you know who you are!).

Photo: Snippet of Caravaggio’s Judith and Holofernes, Rome  © 2016 Penny Herscher

Career Advice

Five practices you can learn so that “I told you so” is a gift

Does it irritate you when someone says “I told you so” to you?

You’d be quite normal if it does. There is nothing quite as annoying as having a know-it-all tell you that they knew better than you all along and you did not listen.

And yet, if you can check your ego, and if he did actually tell you so, then you’ve been missing a gift. Of course, this only makes sense if you are getting advice from someone who is often right, and who cares about you, otherwise it could be the blind leading the blind!

I have been fortunate enough to have two mentors who were not shy about telling me what they thought, and that I was an idiot when I didn’t listen. I saw one yesterday who, as we talked about the last couple of years, found not one, not two, but three times to say “I told you so”. By the last one he gave me a big grin and said “I think I told you that too!”

On the heels of the laughter, and the chagrin I feel that he was so often right, here are five practices that can help you milk your mentors for their wisdom and make sure you can hear it!

1. Learn to listen to business advice from people who have done it before. Whether it comes to building your engineering or service team, designing a big customer contract or hiring your first sales people if you are working with someone who has done it before, and who is respected, listen carefully. While their advice may not be perfect, and you may not like what they have to say, if they are willing to put the time in to work through an issue with you listen, take notes, and if you don’t follow the advice have a damn good reason. And frankly the argument of “you are not current” or “things are different now” is bs. While pace, technology and regulations changes, the fundamentals of what it takes to build a team and a thriving, profitable business are in common across a huge range of styles of company (as my mentor and I agreed yesterday comparing notes of the range of companies we are both working with now).

2. Pay attention to when someone is sharing a personal story with you. A story which is painful to tell probably has a strong lesson in it. If your advisor is sharing a major mistake they made dig in and try and understand what do they wish they had seen beforehand, or what did they see and ignored? Are there parallels for you today where you are avoiding something that is in front of your eyes but you don’t want to see it? This could be as far ranging as a personnel mistake, or a personal mistake!

3. When someone tells you something you don’t agree with, and your first reaction is to think in your head that you don’t agree – and so to argue – stop yourself and ask questions. I love the Covey habit “seek first to understand, then to be understood” and too few people use this habit. As someone who coaches every day now, I pick up very quickly whether an entrepreneur understands the power of questioning to figure out what they should know that they don’t know.

4. Pay attention when someone is angry with you. Either they are a jerk and have no business being angry with you, or they care enough that your reaction is upsetting them. Now you can’t take on everyone else’s issues, of course, but anger or intense emotion or stress is a guide that is often worth following. Don’t react with anger, take a deep breath, apologize that you have upset them, acknowledge that they care, and ask questions (see above) seeking to understand the source of their emotion. Maybe you’ve heard them but you are not being skilled in acknowledging that, or maybe you have not been listening. For myself, I have found the skill of active listening “I think you said xxxx, did I understand that correctly?” can be very powerful when an advisor is frustrated with me.

5. Follow the joy in business. Too often we spend time talking through what’s going wrong, and yet some of the best lessons I could have learned (and got an “I told you so” about later) were about where/how I was going to be happiest. Work can be terrific fun if you stay grounded and don’t get wrapped up in your ego so if someone who cares about you is trying to give you advice to “lighten up” (as one of my early mentors told me) do yourself a favor and find a way to ground yourself.

And if you can do all that you’ll be a better able to hear advice than most!

Photo: Villa Farnesina, Rome  © 2016 Penny Herscher

Leadership

5 reasons it’s critical to truly understand your P&L

In the last month I have had the experience of three small business leaders talking to me about their P&L in moment-in-time terms. Something like this… for this quarter (or this year) we’ll make $X, we spend $Y less than I thought so we’re $Z ahead. Usually followed by why $X and $Z are so great, and how they’ll spend those extra dollars they are ahead, or why their company is successful as a result. Naive.

Unless you have a steady business that has been the same for a while, is not growing and is profitable the moment-in-time view of your business tells you very little. It might make you feel good that your bottom line is black and not red, or not as red as you thought it would be, but all you’re getting is the warm and fuzzies – no insight.

So, five reasons it’s critical you truly understand your P&L over time – to be able to answer what is your revenue, costs, profit/loss and collections every quarter (or month depending on the cadence of your business) for the last year and the coming 2 years?

1. Cash

Cash is Queen for a growing business of any size; it’s the fuel for growth and the security for longevity. So you need to see how cash flows every month for the foreseeable future. Unless you are selling products for cash in the local market, every sale comes with a delay in collection. Sometimes it’s when the credit card vendor pays you for your product, sometimes it’s 90 days later when your customer’s AP department pays you, but there is typically a delay. But you are paying your people anyway, and maybe opening up new offices, hiring etc ahead of being paid for your sales.

This means the collections line item in your P&L is critically interesting. What cash are you collecting every month, and so what is your ending cash every month after your expenses? You need to have this carefully modeled over the next 18-24 months, and intimately understand it so that as your business fluctuates and changes you know what it will do to cash flow. Combine this with a need to always have at least 6 months of payroll in the bank and this will tell you how much risk you can afford to take with your business at any moment in time.

I’ve seen businesses where the CEO is telling him/herself how great they are doing because of all kinds of positive indicators but the cash collections line is not changing over time, it’s not growing. You can’t hide from cash flow and so it’s a great indicator of the true underlying health of the business. Are the dogs eating the dog food and, more importantly, are they paying for it?

2. Measuring your progress

If your business is immature (less than 10 years old) then almost no matter what business plan you build for the next 24 months it will not be what you actually do. Something will change, you’ll do better, or worse, or differently than you thought. But having a 2 year outlook and then measuring yourself against it is how you’ll learn the nuances of the business and learn how to predict and measure the changes.

Going through the discipline of putting an 8 quarter plan together together to present to your stakeholders and your management team forces you to think through what assumptions you are making about your business. Don’t tell me you don’t know enough to do this yet – if you take someone else’s money, or even hire other people to work for you, then you are responsible, and that means you need to put your assumptions down on paper and fold them into a P&L model so you can measure your progress against your assumptions and course correct accordingly. You can’t correct your course if you’re not on one.

And don’t fall into the trap of comparing your business to last year’s business at the same time. While an interesting statistic it tells you nothing except whether you are growing. It does not tell you how you are doing against your plan and so how your top line and expenses are flowing into cash. See #1.

3. Learning financial management

No-one comes out of the womb knowing how to manage a P&L. Most students graduate college without ever learning how to read a P&L and a balance sheet (a crime I think) so no one expects you to just know it. If you are not a trained financial professional, but you want to lead a business team or be a CEO then you need to learn it. Step 1 take a class. Step 2 learn on your own P&L. Do the spreadsheets yourself until you understand the relationships between revenue and collections, costs and margin.

Yes you’ll need a CPA to do your books, but when it comes to forecasting the next 2 years of your business there is no reason you should not be able to build a simple model yourself. I despair of entrepreneurs who hand the financial modeling off to someone else, and never really grasp the financial dynamics and dependencies of their business.

4. Valuing your business

As I mentioned up front, unless your business is mature and not growing then how it is doing at any single point in time does not tell you much about it’s true value, except a low value such as 1X revenue, or 1X profit. If you want to establish and communicate the value of your business to, for example, a potential investor, you need to tell a story over time. Last year, and next 2 years at a minimum.

Except with mature businesses that generate cash, businesses are valued on their potential. How much revenue and profit will the business generate in the future? Is it growing, and so what does that mean for future cash flows? Should it be valued as a multiple of LTM (last twelve months) revenue or NTM profits?

Building, and deeply understanding, your business’ next 2 years of growth and being able to present it in a believable way (because you understand the dynamics so well) is how you establish value with an investor or buyer.

5.  Communicating with your employees

Your employees, or partners, are following you because they believe. Hopefully you’re paying them a fair wage, but they are probably with you because they believe in what you are trying to do. Even in a large company this can be true – people join a team because they believe in the mission.

So given they are following you, you need to keep them updated on how the business is doing so they can both help you solve problems, and celebrate with you when things go well. I am a big believer in sharing the basic P&L of your business with your leadership team at a minimum, and with your employees once it stabilizes. If they don’t have a good understanding of the future of your P&L how are you going to enable them to fully participate in the building of the business? And how will you celebrate the wins with them if they don’t know whether you are making the plans you set out or not?

I don’t buy the argument that employees are not able to handle the numbers – that it will “scare” them. Yes you don’t tell them you are running out of cash, but if you are hiring college graduates you can at least share your top line plans with them and if they don’t understand the basics of a P&L you can teach them. They will thank you for it, and be much more vested in the end results of the business if you share progress with them. I recently put together a 2 hour class on the basics of reading a P&L for a friend’s business (where most of the employees have liberal arts degrees) and it was not only great fun for me and the employees, but it gave them a starting point to understand the terrific progress the company they are working for is making.

Bottom line – whether your business is wine or weather prediction, if you are leading a team with financial targets, or are the CEO of your own venture, you owe it to yourself to learn and truly understand your own business’ P&L.

Photo: Photo Frescobaldi Winery, Tuscany  © 2016 Penny Herscher

Leadership

The importance of being humble

Photo: At the Jordan river where Christ was baptized and Israeli and Jordanian soldiers watch each other, guns cocked
We’ve all met this person in our professional lives. Smart but self-absorbed, in love with their own success so far, or with the self-importance of their title, or the size of their business, or how attractive they are. Executives who are so used to everyone catering to their every need that they forget to be courteous. VCs who are so used to entrepreneurs beating down their doors they forget to be kind (or worse). Entrepreneurs with hubris who think because they have raised money they are already a success. Lawyers and bankers who have been making so much money for so long they think their time is more important than the people around them.The behavior is irritating, but why does it matter? It’s not my place to moralize in the greater sense but in my experience the behavior does catch up with most people in their careers, one way or another, in the end.

Unless you have fast runaway success, or true genius (very rare), or are the Zaphod Beeblebrox, you are going to need the people around you for you to succeed long term. If you are arrogant it is hard to get your peers to want to work with you, or for you. Weaker people will, but the strong ones will move on. And, in the end, you are only as good as your team. People might stay with you while the money is good – attaching themselves to your coat tails – but when your company/responsibility hits a bump in the road, or they don’t need you, they will leave you.

Being self-absorbed might not hurt you at work because you’re the man with the big, hard-driving job… but chances are you are hurting the people who love you with your self-absorption. Yes, I am speaking from personal experience here both as the one doing the hurting and the one being hurt, and now observing professional friends who, in their self-absorption, forget who they are hurting.

As a good friend (and mega-company CEO) once told me: for the smart, strong, over-achievers it helps to think about life as a three-legged stool and all three legs need to be stable for your life to be balanced.

The first leg is work. How you get intellectual satisfaction and earn a living.

The second leg is fun. Family, friends, good times. How you find pleasure and love.

The third leg is spirituality, whatever that means to you. How you remind yourself that this is a huge, mysterious world and you are (no matter how important you think you are) just a small part of the grand scheme of things.

When the world is beating a path to your door, the money is rolling in to you or your company and the people who want things from you reinforce how terrific you are… how do you keep the third leg planted firmly on the ground?

A shock might do it for you for a while. A project fails, you lose a customer, you have a health scare, maybe you lose your job, but if you’ve done well in the past chances are you will do well again, so how do you keep the humbling realization that you are not the center of the universe with you?

Me, I find it in many ways. Through understanding history where the complex, messy story of our world and our humanity puts my insignificance squarely in perspective. Or through nature by hiking into the beauty of the mountains or the desert where I am reminded just how small I am. For some it is their God and faith. For some it is volunteering to help other people in need. What is it for you?

In my experience of powerful business leaders the truly great ones stay humble. Yes, they have strong opinions and expect to be listened to, but they also never forget who they are. The great ones treat admins, junior staff and vendors with respect, they put time into their family, they vacation with their friends, they are far from the entitled, the-one-with-the-most-toys-wins culture. They are the ones that people follow from company to company and remember with a smile for the rest of their lives.

How do you or I become one of them? I think that along with all the professional skills and opportunities in the world it is critical to remember who you are, truly, in the grand scheme of things and stay humble.

Written for a dear friend who tells me he is working on it.