Operating Principles
I was fortunate early in my career to be given a lot of responsibilities and I in turn embraced those responsibilities and gained results. One of my earliest lessons was to build a great team of people around you. Don’t be afraid of hiring someone who is smarter than you or has other skills much better than you – to build and grow a business, you need great people around you. If you plan on making all the decisions yourself, your business will eventually stagnate. So what I did early on was to work with my management team and we developed a list of Operating Principles that were simple, but were meant to guide everyone in the organization how to operate with one another and to ensure we were using a common language in our various management styles. I have since used these operating principles for 20 years. The principles are as follows:
1. Do the right thing
Kind of obvious and simple, but very powerful. I know what you are thinking though – If you always tried to do the right thing, how is it that you were convicted of a felony? A good and fair question – One that my answer is simple and consistent. I am not running away from or hiding from my conviction. I don’t agree with it and believe I was wrongly convicted. I won’t go into any detail, as I have filed an appeal and I want that to proceed properly. That appeal likely won’t be decided until I have completed my incarceration period. All of that said, I am where I am, so the right thing for me to do right now is to share my experience with others and hopefully help give a few people some tools they can use to improve their life and career.
In business, many times doing the right thing is to gather as many pertinent facts as you can and then utilized them in making an informed decision. Making a snap decision generally isn’t the right thing to do unless circumstances dictate that action. Always try to be objective in the decisions you make – letting your emotions direct your decisions is a recipe for continued mistakes. In those times when you realize you did not do the right thing, it is important to step back and look at what led you to make that decision and then set to fixing it. If you made a mistake, then the right thing to do is to admit it and do what you can to rectify it.
2. Say what you do, do what you say
In 30 plus years of business experience I can tell you that while this may appear to be the most obvious of principles, I can tell you that it is far more common for people to routinely miss the boat on this one. Many people will only give generalities so that they don’t get ‘pinned down’ with making a specific commitment. Be specific – Don’t say “I’ll get it done next week”, rather say “I will complete the report and deliver it to you by Tuesday of next week by end of the business day”. And then follow up and make sure you do everything in your power to do in fact what you said you would do.
Take the next week or two and pay particular attention to what people say, and then watch and follow up and find out if they did what they said they would do. If you pay close attention, you will find many occasions when they just don’t do what they said they would do. They don’t mean anything bad by it, they don’t intend to miss out, they just were not committed. Now, why is this an operating principle? Very simple – in the business world, the competitors who rise to the top are the ones who consistently out-perform their competition. Just imagine if everyone on your team was specific in what they said they would do, and then followed up and did it! They would separate themselves from the competition over time and it will be noticed.
3. Trust but Verify
Those of you who are 50 or older will remember this Ronald Reagan saying. To me, this is nothing more than closing a loop. If you are a manager of 10 people and your team makes commitments to get something done, are you doing your job if you just assume everything is done right and on time? The absence of any information means that all is good, right? Wrong, it means you are in an ambush and something negative is about to happen. All a manager needs to do is to set up a system where people self-report when their actions or projects are complete, and then the manager periodically reviews to make sure things were done properly and gives coaching comments where appropriate. If you don’t find a way to verify, then you are abdicating your responsibilities. You won’t catch everything that perhaps was not completed properly, but you will be a better manager.
Some people have the perception that when you verify something that you are “micro-managing”. That is flat out – WRONG! It is actually a part of MANAGING. When people brought that up in the past, I gave some examples of micro-managing – basically outlining every single step of a process that they need to accomplish and what to do with each piece of information they gather. They quickly understand that simple verification of the completion of a task is not remotely close to micro-managing. It is inevitable that if you stop verifying critical tasks that they will start getting missed. People aren’t perfect no matter how hard the try, and I would prefer to find out that someone didn’t complete a task or project during my verification so that we could rectify the situation before it became a much bigger issue that could affect product safety, quality, or expectations of the customer.
4. No Surprises
I hate surprises! Well at least most surprises in business anyway. Yes, surprises happen and it is impossible to prevent them all from happening. That said, I assert that a person that is properly managing their responsibilities and doing their job will have far fewer surprises than a person who is lackadaisical about their job or who are not very focused. A salesperson who is dialed into their accounts and is carefully watching their competition will not be surprised when a certain doctor starts using more of the competitor’s product. If that salesperson sees it coming and is not surprised, then he or she can formulate a plan for winning their business back before the competition gets too entrenched. However, if that person is surprised, then likely all the activity happened much earlier and it will be much harder to regain that customer.
I am often asked “what about positive surprises, surely they are good, right?” Well, my answer is that they sure are better than negative surprises, but I still don’t generally like them. The reason is that means that if they happen regularly, then you just don’t understand the market or the situation that is creating the surprises very well. If you don’t understand the underlying dynamics of what is going on, how many times will the surprises be positive? How long before those surprises turn negative and then really disrupt your business? I would much rather be in a situation where when bad things happen, we saw them coming and did everything we could to either prevent them from happening or to at least mitigate the damage or impact to my business. The same goes with the positive things – If I see something positive coming down the road, I can prepare for it and find a way to maximize the benefit to my company and organization. If I am surprised at it, my chance of maximizing the benefit is greatly reduced.
5. WAIT is a 4-Letter word
I remember when I was a kid my parents would ask me “do you have ants in your pants?” That happened a lot. I couldn’t stand to wait around when I had something I wanted to do. Well, that trait turned into a good thing in business, but for different reasons. When I was a kid, I just wanted to get outside and grab a baseball mitt and ball and head for the ball diamond to play a game. In the business world, that drive to keep moving in the right direction can be the difference between a successful business and one that fails.
I’ve been in slow-growing businesses before, and I’ve been in hyper fast-growing companies. One of the key differences between the two is that hyper fast-growing organizations don’t slow down or wait for anything. The trick is finding the right balance of risk vs reward from an organizational perspective. If you move quickly on a decision before you have all the available facts, what will the ramifications be if you made a mistake? One of the businesses I was in that was hyper-fast growth was in regenerative medicine. The development of new uses of the technology were using was going rapidly, but the clinical studies needed to gain reimbursement and medical use took time. A slower growth company would gather as much research information as they could before they made a call which configuration they thought would be best utilized for optimal performance. A fast-growth company would gather some of that information and then create a configuration that would work well enough and run with it. For example if the product was to be used in healing hard to heal wounds like Diabetic Foot Ulcers where conventional treatment would only heal 25% of the wounds in 12 week. A fast-growth company would gather perhaps 60-70% of the information and develop a configuration that would heal maybe 70% of the wounds in 12 weeks and could be on the market in perhaps 9 months. A slow moving company would wait until they were able to gather perhaps 95% of the available information and then would develop a product that could heal 75% of the wounds in 12 weeks, but it took them two years to get to market. If both companies started at the same time then one would have been on the market for well over a year before the other, gaining market share that is hard to take over.
Depending on what type of business you are managing, and the associated market opportunities and competitive environment, you need to decide what is the threshold of information you need before you make a decision. Do you need 90% of available, 80%, 60%? The quicker you make a decision, the better, but the less informed you are the more likely you will have to change course later.
The bottom line for me is that you always need to be moving forward and make decisions and go into action as soon as you can. If you wait to see what is happening in the market or wait until you just get the perfect amount of information – you could be giving up market share.
6. Turn Complaints into Actions
I remember when I was just out of college and working as an engineer designing blood glucose monitors for personal use. I was frustrated with the long development time and thought there could be a better way. I voiced my complaints to an engineer mentor of mine. He looked at me and simply said, “what are you going to do about it?” He basically was saying that he didn’t want to hear any complaints unless I had a proposal for how to fix or address a given situation. I ended up working with a number of colleagues outside of normal work hours as we created a “tiger team” that spent several months working on ways to streamline the development process and cut months off the timeline. We presented our ideas to management, and they were adopted and used as a standard going forward. The Tiger Team was the action that stemmed from our complaint.
I’ve used my mentor’s comment hundreds if not thousands of times over the years. Whenever someone says something that sounds like a complaint, I’ll just ask them what they are going to do about it. Sometimes they say they can’t do anything about it, and then that is when I tell them that they need to stop complaining and either accept what it is or give a proposal for improving the situation. People often are surprised at their own ability to effect change in an organization. If a process is broken or inefficient, most people will readily accept a solution that makes it better. But again, most people find it easier to complain about something than it is to find a way to fix it, so they do nothing. A strong organization finds ways to turn those complaints into actions.
7. Lead by Example
This is a common principle found in many management books. That said, many managers just don’t do it. A good leader should be visible to employees and be seen doing things that they themselves do. It doesn’t have to be every day or all the time, but it is important to show them that you are willing to do what everyone else is doing when help is needed.
8. Get better every day
I tell people that if you don’t devote time to get better at what you do by even small incremental amounts that someday the competition will catch up to you and surpass you. It is that simple. Perfection is not attainable but getting a step closer to perfection every day is perfectly attainable.
9. Celebrate success, admit mistakes, learn from both
I’ll be honest, I’ve had to ask people around me to remind me to celebrate success more often. It is a tough thing for me sometimes because in business, I EXPECT to be successful and those in the organization around me to also be successful. Because of my expectations, I sometimes forget to provide short celebrations for success. It can be as simple as a lunch for the whole organization, or a small plaque commemorating a milestone, or simply a town hall meeting where you thank everyone who had a hand in the success and ask for the whole company to applaud their efforts. The celebration doesn’t always need to be big or extravagant, it is the act of celebration that is most important. But don’t forget to give something big away sometimes!
I’ve told people many times that mistakes are just part of the business world “tuition”. I have much more tolerance for “honest mistakes” over those that people make because of them simply being reckless. In any case my advice to people who make a mistake is very simple. Don’t ever, ever try to hide or cover up a mistake. That will always make the ramifications of the mistake get amplified – Always. If you admit a mistake and bring it to me or the management team, it becomes the team’s responsibility to help correct it. And we will help correct it.
When someone comes to me admitting they made a mistake, I ask them two things: What are you going to do about it? What are you going to do to make sure you don’t do it again? Then I offer help to address how to create a solution to the problem, but I almost always include that same person in providing the solution. It helps build confidence and it also helps them see things differently so they can be better prepared and avoid similar issues in the future.
At the end of big projects I like for our teams to put together a “lessons learned” document. It doesn’t have to be long or complicated, but just highlight the key things that went right and we want to be sure to duplicate, but also mistakes that were made that we would like to avoid. Then this document needs to be circulated and made part of training materials to help the organization continue to improve. It is important to find a way to systematize such learnings – otherwise the knowledge will reside in specific employees heads only (some call it Tribal Knowledge), but if this knowledge cannot be documented and shared, the learnings will be lost when that employee retires or goes to another company.