The Two Things Great Mentors Do

Recently read Daisy Wademan Dowling’s great blog entry on being an excellent coach in 15 minutes per day, which reminded me of an observation that came out of an internal Katzenbach study of mentoring networks at our firm. 

We used organizational network analysis tools to look at the links between all of our employees from the perspectives of energy, knowledge sharing and mentoring.  Certain individuals stood out as “hubs” on each of these dimensions — far more densely connected than their peers.  We then went and studied what these hubs did to have unusually effective networks.

My observation of the best mentors is that two patterns of behavior stood out:

• Conversations with (informal) mentees in which the mentee set the agenda (e.g., “How is it going working on this new project?” leading to a discussion of whatever the person is finding interesting, or challenging or puzzling…)
• Proactive reach-out on something that the mentee is interested in (e.g., “I saw this article that relates to the conversation we had” or “I know you’re really interested in scenario planning — would you like to come to this meeting with a client who is intrigued around the work we’ve done on scenarios”)

While in our development-focused culture pretty much every senior person does each of those two things at least occasionally, the mentoring hubs did — in my informal estimate — at least 10x MORE of those two behaviors.  The net impact of that difference in frequency and consistency is game-changing in terms of relationship strength, and impact on retention and on learning.

Very similar idea to Daisy’s comments on the “15-minute coach,” and not difficult to implement if you’re willing to have the discipline to do it.

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Japan — Immigration and National Vitality

Some of us involved the the US-Japan Leadership Exchange program have been debating the recent New York Times Op Ed piece by Masaru Tamamoto http://www.nytimes.com/2009/03/02/opinion/02tamamoto.html?_r=2&em

Of all the subjects touched upon in this Op Ed, many of which I don’t feel qualified to assess, one that rings true is the comment on immigration, age cohort structure, and cultural vitality.

When a democratic society has an age cohort structure that skews upward too strongly, there can be great danger that this interest group holds policy and resource flows too strongly captive, to the detriment of long-term economic growth. For Japan, age cohort structure will not evolve favorably without an increase in immigration.

At the same time, immigration can be a tremendous source of economic and cultural innovation. It is a misconception that national cultures weaken when hybrids take root. The existence, for instance of a Japanese-Peruvian sub-culture only strengthens, rather than weakens the Peruvian national culture. As an American, I am disappointed at the increased barriers we have placed on immigration. Particularly as an entrepreneur, I regret how much more difficult it is to hire the best talent globally at an early career stage than it was even five years ago. We have a ways to go to reach the optimal point; Japan has an even further distance, and a correspondingly even greater opportunity.

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Repeating the Right Failures

Just read William Kristof’s blog on Jacqueline Novogratz, CEO of Acumen Fund and one of the leaders I feel most honored to work with.  Kristof cites Jacqueline’s early experience with a micro-enterprise in Rwanda:

In Rwanda, she became involved in a bakery project, in which 20 poor women made doughnuts and samosas to sell in the neighborhood. Two charities subsidized the project at the rate of $650 a month - more than $1 per woman per day - and yet the women earned only 50 cents per day from selling the baked goods, too little to survive.

Jacqueline helped the women transform it from a charity project into a real business, in which they turned a profit and averaged $2 a day in earnings each. Yet Jacqueline also chronicles how everything that could go wrong, did. Women stole from the business. They used rancid oil that made people sick. They missed appointments. They never really learned, despite Jacqueline’s coaching, to become aggressive saleswomen. And in the end the business collapsed in the Rwandan genocide.

Jacqueline’s success, and her amazing impact on the world, is a function of her choosing to repeat that important failure, in different ways, until she could get it right.  We are too conditioned to avoid our failures; and often too fearful of the prospect of repeating failures to do what we have every reason to believe we’re truly called to do.  Jacqueline’s experience is a reminder of a specific kind of courage that innovators need to have.

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The Cost of Negative Surprises

One of the puzzling phenomena of the stock markets is the degree to which companies’ value declines when they announce a very small earnings “miss.”  If a company is expected to earn, for example, $0.50 per share in a given quarter, and then they announce that they will in fact earn only $0.48, their stock might decline not by the 4% of their miss (which would be a fair decline if investors expected that the miss corresponded to a 4% decline in all future earnings relative to prior expectation), but by 10% or more. 

The best explanation I can think of for why this would be the case is that companies in fact have significant “wiggle room” in terms of managing their earnings.  If a company has wiggle room of $0.05 per share in any given quarter, then the $0.02 miss would actually correspond to a miss of at least $0.06, or else earnings would simply be managed to hit the expectation.  A miss that large could easily justify a 10% valuation hit, based not simply on the size of the shortfall in the current quarter but in the underlying uncertainty or lack of managability that must exist in the business for a miss that significant to happen.  So much of the valuation hit may really be about the greater value attached to more predictable, more manageable businesses.

If this explanation in fact holds, one corollary would be that as it becomes more difficult to manage earnings, the “penalty” associated with missing a quarterly number would decline.  This would be a fertile question for finance research.

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Hurdle Rates, Uncertainty and Putting a Dollar to Best Use

One of the ubiquitous features of corporate life is the hurdle rate: the rate of return a business investment must be expected to make in order to be funded.  While the concept of a hurdle rate is powerful, the application is generally flawed.  The underlying issue is that where uncertainty is considered at all in the construction and evaluation of business cases, it is in the form of volatility within the current market paradigm, rather than true divergence into a new market paradigm.

Looking out five years or more, the odds that most businesses see a game-changing alteration in their terms of competition are usually high — perhaps 50 - 60%, maybe more.  If the game turns out to change in a way that fundamentally changes what drives returns, business cases will likely not prove out.  What this means in practice is that most companies should impose higher hurdle rates than they do today on investments whose primary return is within some version of the current market paradigm — and use some of the funds freed up to make early investments that create option value in some highly divergent scenarios that could come to pass over a medium- to long-term horizon.

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The On Kawara Principles

The Japanese artist On Kawara has, over the past 42 years, been engaged in a series of paintings called Today.  Each painting consists of the date of its making, painted in white, on a monochromatic canvas — most often black, sometimes blue or red.  These paintings are rectangular, usually small.  The date is represented in the language and in the form (month first, day first) of the country On Kawara is painting in — or, if they do not use the Roman alphabet, using an abbreviated Esperanto.  Each painting must be completed on the day of its making, or else it is destroyed.  Each Today painting, when not exhibited, is kept in a handmade cardboard box, with an excerpt from that day’s paper pasted on the box’s inside surface.

In the room at the Dia:Beacon where I first saw his work, on one wall there is a chart that shows the years of the Twentieth Century on the vertical axis, and the 365 days of the year on the horizontal axis.  From December 24, 1932 forward is highlighted in yellow.  Shortly after On Kawara’s 33rd birthday, there are a series of days marked by dots — the days on which one of the Today paintings were executed.  In some places, many dots line up, day after day; in others, the beat of dots is slower.  There has never been a month without a painting.  On Kawara has now painted Today in nearly one hundred countries.  The paintings hang all over the world, hung in juxtaposition to the full spectrum of art and circumstance.

On Kawara will not comment on Today, or on any of his work.  To me, the series is an embodiment of the idea that any action, even one as apparently impoverished of meaning as painting a white date on a black canvas, will, if it follows two simple principles become so meaningful as to anchor a life:

1. Intense focus on the moment at hand
2. Persistent repetition over the very long arc of a lifetime

On Kawara’s work demonstrates this so powerfully because it is nothing but an acknowledgement of the day itself and a demonstration of the act of continuing.  (In Steve Reich’s Proverb, eleven minutes of repetition and modulation of Wittgenstein’s words: “How small a thought it takes to fill a whole life.”)

This pairing of qualities – concentration and enduring repetition — can guide almost any endeavor.  It is emblematic of a life of purpose — whether in the context of profession, observance, marriage, or any of the cornerstones of being.  Annie Dillard, from The Writing Life: “There is no shortage of good days.  It is good lives that are hard to come by.  A life of good days lived in the senses is not enough.  The life of sensation is the life of greed; it requires more and more.  The life of the spirit requires less and less; time is ample and its passage sweet.  Who would call a day spent reading a good day?  But a life spent reading — that is a good life.  A day that closely resembles every other for the past 10 or 20 years does not suggest itself as a good one.  But who would not call Pasteur’s life a good one, or Thomas Mann’s?”

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The $500B University

In the context of some strategy work we’re doing for one of the leading schools of public health, I’ve found myself thinking about the 20-30 year evolutionary paths of major universities more broadly.  With returns on assets and capital campaign successes even significantly lower than what we’ve seen in recent years, Harvard should amass an endowment that reaches $500B in today’s dollars by 2030.  That represents a net worth as great as the largest private enterprises in the world.  Yale, Princeton and others will presumably not be very far behind.

It is my belief that concentrations of assets will fundamentally change the nature of the role that the largest universities play regarding issues of global concern.  The pressure to change tax treatments of universities will inevitably grow, well before any endowment hits $500B, and in order to address those pressures, universities will need to expand their spheres of concern and learn to make different kinds of promises of broader public relevance.  The changes could be even more significant than those that result from the rise of truly massive private foundations, such as Gates today.

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The Mindset & Skillset to Start from Scratch

One of the current Marshall Scholars reached out to me as an alumnus to ask for support for a new political organization called Vote from Home.  I couldn’t make their fundraising event, but reached out to two of the founders, Marc Gustafson and Ross Baird, to get their story.  With tongue a little bit in cheek, they shared:

Vote From Home started because we couldn’t get a burrito shop going.  A few of us Marshalls were walking through the Oxford University Parks one day, talking about how much we missed Mexican food.  We came across a guy who runs a crepe van in the parks.  We thought, “Surely it wouldn’t be too hard to start this.”  And after talking with him through the minutiae of getting a license alone, we thought it would be hard.  But we did come away from that with a resolve that whatever we put our mind to, we wanted to try (as an entrepreneurial venture) and do (because we thought we could).  Now, the three of us talked about Obama almost daily.  We had all, living abroad, taken a serious interest in foreign policy, and Obama’s position on that, as well as his other substantive ideas, got us interested in doing what we could to get elected.  So a few of us went out to dinner and talked about what we could do.  I had done serious research on voter turnout in undergraduate; Marc had worked extensively on the Dean Campaign, and a few others had various political experience.  Finally, we settled on the strategy of absentee/early voting as an untapped resource to drive turnout, and a new law in Ohio (combined with Ohio’s strategic importance and the fact that a couple of us had Ohio roots)  led us to try out this strategy here. 

There is a certain very learnable skill here: asking the practical questions needed to figure out how an idea becomes reality, figuring out what size bite to take of an idea (large enough to matter, small enough to maximize the odds of getting off the ground), building a coalition to launch something that has enough different skills to be formidable and not so many people as to be unwieldy.  We have an opportunity to better educate people — at school or in organizations — about more of these basics.  That education, and the permission it implies, could unlock tremendous entrepreneurial potential.  And potentially change the outcome of an election….

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Leadership Development: A Calling, Not a Profession?

Two experiences in the past couple of days underscored a theme aligned with the comments I’ve made about the “new HR.” 

Over the weekend, read Jennifer Reingold’s excellent piece on Bill Campbell, the leading leadership coach in Silicon Valley, who applies his own combination of sports wisdom, executive experience, common sense, and learnings from having observed more first-rate companies than almost anyone else in the tech scene.  Bill is clearly someone whose calling as a leader and whose calling as a coach are of a piece.

Today, had the opportunity to meet Charlotte Sibley at Shire Pharmaceuticals, until recently their SVP of Global Business Research, and now their head of Leadership Development.  Charlotte is a serial market research function builder (Pfizer, BMS, Millenium, Pharmacia, etc.) and truth teller, in an industry where the stakes for each product make it particularly challenging to tell the truth.  She gave a wonderful speech  as the Healthcare Businesswomen’s Association Woman of the Year this past year.  Charlotte had a clear, no-nonsense view of what leadership development needs to accomplish at Shire at this pivotal moment in their evolution.

In large business today, we have an almost-irresitable urge to professionalize everything.  It is not clear that leadership development is an endeavor that fits this model well.  Yes, there is room for specialized expertise.  But there is an even more important need for deeply experienced leaders to scale up their commitment to develop others.  They can use the best of the methdologies out there — but those are purchasable.  What can’t be bought is the wisdom & credibility that comes from having forged one’s own way. 

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Launching People Who Launch Experiments That Matter

I was recently catching up with Leila Chirayath, who left Katzenbach Partners about 18 months ago to launch Samasource, an innovator in the field of socially responsible outsourcing.  Leila’s early focus is on building a stronger market for offshore capabilities in Kenya.

I was excited to see the Katzenbach alumni community rallying around Leila’s early-stage venture in ways that were in no sense planned from the center.  From Leila’s note to me:

The Katzenbach alumni community has been incredibly helpful — Brooke provided input on a zero-draft definition of “ethical outsourcing” that we’re using to convey the social impact of what we do, and Michael Dawson helped me interview a couple of CTO candidates and think through some early challenges. Thanks to an introduction Michael made, we launched a partnership with oDesk  — a major milestone for an organization as small as ours.

One of my aspirations for our firm is that ultimately we have as great a decentralized an impact on the world, through connections among the people who spend time with us, as a first-rate small college.  The great firms of the past have certainly met that standard — and to think of our impact over a time frame of decades, through the lives & ideas of hundreds (eventually thousands) of people whose life courses are in some way altered for the better by what they have learned and experienced with us, is a good counterbalance to the urgencies of the moment.

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