The Consumerization Of Procurement

The other day I was talking to a founder of a B2B software startup about how hard it is for big companies to buy things. Even at a super low price point (a couple hundred bucks a month) software purchases still have to go through a litany of approvals. I was telling her how almost exactly two years ago I wrote a post titled, Individual Employee Budgets, where I predicted that employees would have their own discretionary budgets that could be used to buy things that would make them more productive and profitable employees. With the growing trend towards the consumerization of enterprise and the ability for anyone in their basement to build and distribute a great productivity application to millions of employees, individual budgets, I thought, would be a requirement for companies to succeed and retain employees. For smaller purchases, traditional procurement eventually has to get out of the way.

I still believe this will happen, but it's moving much slower than I predicted.

That said, two years after writing that post, when I think about the software I use to get my job done, much of it is 'consumerized'. That is, it's sold directly to me and in order for me to use it my company doesn't have to go through a painful procurement process. Software like Wunderlist, Google Maps, TripIt, Sunrise, Feedly, Evernote and Google Docs, to name a few. There are only a couple of applications that I use that were procured through a traditional procurement process -- and most of those aren't as useful or as easy to use as those that I procured myself. Self-service software has to be really, really good as the switching costs are near zero.

It's disappointing that the way companies buy hasn't become more flexible as enterprise software has become more consumerized and easy to procure. Employees are ready for self-service productivity tools and software makers are ready to build and distribute them. The only thing we're waiting for is for big buyers to let it happen.

7 Lessons From A Tough Negotiation

Lots of people that know me know that I'm huge fan of Bill Belichick, the coach of the New England Patriots. The thing I like about him more than anything else is that he never, ever makes excuses. When the Patriots lose a close game, the media will ask him about the weather, the referees, the tough schedule, the rules, the player injuries, you name it. And he never acknowledges any of it. He only talks about the things that his team can control. As a result, he's the winningest coach of the last decade. He obsesses about what he can control and ignores everything else. That is the exact approach people should take at work -- especially when negotiating a deal. You can't control the prospect, the prospect's attorneys, the bad economy, your product capabilities, the law, or your executive team. You can only control your own actions. And when you fully take that approach, you'll find that your energy won't go outwards towards things you can't control, but will instead go inwards towards things that you can. That's how you get better. That's how you win.

I recently finished a long, painful and frustrating 3 month negotiation. Thinking back on it, I'm tempted to blame the other side or blame other factors for why it was so long and so frustrating. But that's not helpful because I can't control any of that. I can only control what I do and try to do it better.

So with Bill Belicheck in mind, here are seven tactical things (that I can control) that I'll do better next time:

1. Never assume the deal is done. Make sure you have asked and asked and asked about the other side's approval process. More often than not someone is going to come along to do one final review of your deal. Document their process and track to it.

2. When you've created urgency, continuously validate that the other side values that urgency. Over a long negotiation they may not.

3. In addition to urgency, throughout the negotiation continuously reinforce your value and why the other side should want to partner with you. Don't get too caught up in the weeds and the specifics of the deal and neglect to remind the other side why they wanted to partner in the first place.

4. Have a 'time and energy walk away point'. Most negotiators know the concept of BATNA (best alternative to a negotiated agreement) but don't forget to include your own time and energy in that calculation. Take this really seriously. Focusing on a deal that is too time consuming has an exponentially negative effect. You can dig yourself deeper because you're not focusing on other opportunities and you lose your leverage (you need the deal more now because you have fewer options now because you've been too focused on this one deal).

5. When you're down to the last few items, setup a recurring daily meeting with the other side until it gets done. It's amazing how you can lose weeks if you don't do this. People get busy and each side may use time lags to build leverage.

6. When things get ugly, negotiate in person. Your situation will improve 10x faster in person than it will over the phone.

7. Bring in other people. I tend to be a lone wolf when it comes to these things. It's better to have multiple personalities involved. Two people are harder to read than one and the other person will always think of things you haven't.

15 Things I Know Now That I Didn't Know Before I Started

When I interview job candidates, one of the questions I almost always ask them is: "If I was going to start doing your job tomorrow, tell me something that you know that would make me better at the job that you didn't know before you started?" You can learn a lot from the answers you get. With that in mind, 2014 marks the 15th year that I've been a working "professional". During that time I've worked with start-ups in e-commerce, real estate, finance, biotech and healthcare. I've been in some fast-paced and really competitive environments. And I've made a lot of mistakes and learned a lot of stuff that I didn't know before I started.

So I thought I'd put together a list of 15 key things that I've learned (one for each year) that have helped make me successful. Specifically, these are things that I didn't know or appreciate before I got into the real world. Here we go:

1. It's a grind. Work is hard and painful and complicated. If it's not a grind then you're probably not trying hard enough. Get comfortable being uncomfortable.

2. Be candid. Try to facilitate a work environment where if someone is doing well you tell them instantly and if someone is not doing well you tell them instantly. Get used to being honest and upfront about what's working and what's not. This is only hard when your culture isn't used to it. Force people to get used to being candid.

3. Assume that most people are lazy and incompetent and what you want from them isn't important to them. This definitely isn't always true, but you're better off assuming it is.

4. There's no such thing as sales. There are just two parties trying to do something good for themselves and their families. Everything is driven by self interest. Never defer to a buyer. They're not doing you a favor, they're getting something and you're getting something. You are equals. Act like it.

5. Cannibalize yourself. Too long to describe here. I wrote a post on this a while back. But in short, put yourself out of business before someone else does.

6. Always do the the right thing. Don't take credit for other people's work. Publicly recognize your peers that are doing good things. Share your ideas and insights with other people. Don't go over your boss's head. Help people. Don't one-up people. Do the right thing. Don't think about this from an ethical perspective. That might make it too blurry. Think of it practically. I'm telling you with 100 percent certainty, it might not feel like it at the time, but I promise you that doing the right thing is better for you in the long term.

7. The worst trait in a colleague or a boss is insecurity. Avoid insecure people. And avoid insecure managers like they have a contagious disease.

8. Manage yourself harder than your manager manages you. Don't even make it close. If your performance is being actively managed by your manager you are losing. Get in front of it. Innovate on how you should be measured and developed and managed. Never fall behind on this.

9. Try to find the trifecta job. Something that you're good at, something that someone will pay for, and something that you love.

10. Firing someone is almost always the best thing for the person being fired. I've worked in a lot of cut-throat environments and I've seen a lot of people get fired and I've fired a lot of people. Not once can I point to a time where it wasn't the best thing for the person and the company. Both sides always wind up in a better place. And be respectful to people that get fired. Someone that is awful at their job could easily be a top performer somewhere else and someone that is awesome at their job could easily be a bottom performer somewhere else. It's all about fit.

11. Credentials are meaningless. I've worked right alongside several Harvard Business School grads and several software engineers from Apple. There's absolutely no correlation between success at work and these credentials.

12. Hiring good people is really difficult. The traits I look for are grit, adaptability, curiosity and humility. These things are almost impossible to measure in a traditional interview.

13. Admit when you're wrong. If you're the kind of person that can't admit when you're wrong, please stop being that kind of person. Being wrong and admitting it 1,000 times is way, way better than being wrong one time and not admitting it. Embrace being wrong.

14. Be a lynchpin. Seth Godin has a book on this that you should read. But the point is that you should run as fast as you can to be a completely critical piece of your organization. If you're not that, then try harder or move on to somewhere where you can be.

15. Always think in terms of metrics. Whenever you think about an initiative or a new role or a team structure, think of what metrics it will impact. If what you do every day doesn't impact your company's key metrics then you're not a lynchpin.

Do What Computers Can't

I read Peter Thiel's new book, Zero To One, the other night. I highly recommend it. It's a quick read (about 240 pages) and is full of great insights on startups and growth. He talks about the fears that the public has over technology. At one time, everyone was afraid that globalization was going to take all of America's jobs because there'd be someone overseas that would do our jobs cheaper than we would. Instead, American jobs have simply transformed. While's there's always some short term pain caused by a transforming economy, unemployment isn't all that much different than it was 20 years ago. The new fear is that software and technology will take all of our jobs. Thiel points out that this is a myth as well. See this excerpt:

Now think about the prospect of competition from computers instead of competition from human workers. On the supply side, computers are far more different from people than any two people are different from each other: men and machines are good at fundamentally different things. People have intentionality—we form plans and make decisions in complicated situations. We’re less good at making sense of enormous amounts of data. Computers are exactly the opposite: they excel at efficient data processing, but they struggle to make basic judgments that would be simple for any human. To understand the scale of this variance, consider another of Google’s computer-for-human substitution projects. In 2012, one of their supercomputers made headlines when, after scanning 10 million thumbnails of YouTube videos, it learned to identify a cat with 75% accuracy. That seems impressive—until you remember that an average four-year-old can do it flawlessly. When a cheap laptop beats the smartest mathematicians at some tasks but even a supercomputer with 16,000 CPUs can’t beat a child at others, you can tell that humans and computers are not just more or less powerful than each other—they’re categorically different.

I love this. There are things that humans can't do as well as computers and things that computers can't do as well as humans. There is now and will always be a ton of opportunity to do things that computers can't.

4 Ways to Improve Email

Many have written before that email is ripe for disruption. Something has got to give and I think we'll see lots of innovation over the next few years. In the meantime, here are four features I would love to get added to Outlook and Gmail that would make my life a little bit easier: 1. Character count. I'd love a character countdown (from, say, 200) to appear in the top corner of a new email. It would be a critical reminder to keep emails short. I'd even love a feature that would not allow the email to be sent if it exceed a particular character count. 'Pithiness', as required by the 140 character limit, is the best feature of Twitter. There's no reason it shouldn't apply to email as well.

2. Like button. I stole this idea from a comment that Donna White made a while back. One of the best features of Facebook is the 'like' button. It's an incredibly easy way to let people know you appreciate something they've posted without engaging in a back and forth. It's a super-efficient, low effort way to keep in touch with lots of people. Instagram and Twitter do this as well. I'd love the same feature to be added to email. Instead of having to respond with a one or two word response, the reader could just 'like' the email and that could be tracked and not require a new email to be generated. This would probably reduce the volume of email by 20%.

3. Reply tracking. I'd love to be able to click on a folder that show all of the emails I've sent that haven't been responded to for easy follow-up and tracking. I know there are plug-ins like Toutapp and Yesware but they're painful to install -- this is so basic it should be native to email programs.

4. External/internal reporting & filters. One of the pitfalls for people that are externally facing is ensuring that you're focusing the right amount of energy towards customers as opposed to internal work. A simple widget that tracks the percent of email flow that is internal versus external over time would be super useful. In addition, it would be great to have the ability to easily switch between internal and external inboxes and sent items folders.

A Word About Employee Stock Options

There's been a bunch of talk in blog circles about employee stock options over the last couple of weeks. I wrote a quick thought on this topic in a comment on a blog post the other day and thought I'd post it here as well. Put simply, in order to have an effective stock option plan that motivates and rewards employees, the employee must know three things:

1. The number of options they have.
2. The current valuation of the company.
3. The total number of shares outstanding in the company.

If an employee doesn't know these three things they should place no economic value on their options. Don't get me wrong, employees should take the options if they're offered, especially if they believe they're working for a high growth company, but the options should not be considered a measurable part of their compensation package.

You can't value something if you don't know its value.

Adaptability

A few weeks ago I read Thomas Friedman's new book, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back. One of the early chapters begins with this quote from an unknown source:

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.

This is so true. I've been fortunate to work with incredibly smart people with incredible credentials: people who have worked at the top consulting firms and investment banks that have worked at some of the world's most admired companies -- Goldman Sachs, Apple, Google and Amazon -- and have attended the best colleges and business and engineering graduate programs. But when I think back on the people who were successful in the start-ups I've worked in, I've seen that there is almost no positive or negative correlation with those great credentials (great companies, great schools, high standardized test scores) and actual success in the workplace.

As the quote suggests, it really isn't the smartest or the strongest that are the most successful.

To emphasize this point, it's helpful to use a sports analogy here (I like sports analogies because sports is very results-driven and the results are extremely transparent).Regarding strength, you might think that the best NFL players are the strongest and most athletic and come from the best college football programs and had the best college football careers. But this isn't true at all. There are countless instances of great college football players not making it in the NFL -- particularly in the more complex and cerebral positions. Case in point: Tim Tebow won the Heisman trophy and a national championship at the University Florida, Tom Brady was a third string backup at Michigan.

Regarding intelligence, each year every professional football recruits takes the Wonderlic Test. It's a test that measures the intelligence of the player and is often used in making decisions about which players to draft. You might suspect that higher scores lead to greater success. Wrong again. Ryan Fitzpatrick, the Harvard educated, backup quarterback for the Tennessee Titans scored a 50 -- the highest score of any current player in the NFL. Peyton Manning, arguably the best quarterback in the NFL, scored a 28.

I see the exact same thing in the workplace. It isn't great credentials or talent or SAT scores that makes people successful in a start-up, it's traits like grit and humility -- and perhaps most of all, adaptability. Something to keep in mind when looking for "A-players" to join your team.

This Is How I Work (Series)

I was asked to participate in Lifehacker's How I Work Series where writers answer a series of questions on their work life. I thought I'd post my answers here. Here goes. Location: I'm based in Manhattan (live in Flatiron, office in Soho) though I'm on the road in another city about 40%-50% of the time.

Current Devices: iPhone 5S, ThinkPad T420s, Eccolo journal, Cross pen, Kindle.

What apps, tools, software can't you live without: A bunch. I use Wunderlist to manage my to-do lists, the Cal app to manage my calendars, Evernote to manage notes, TripIt to manage travel itineraries, Google Maps to navigate, Salesforce to manage client stuff, LinkedIn to manage connections and Feedly to keep up on work-related news and blogs. I use a lot of others but those are probably the apps I use most frequently for work.

What's your workspace like: I try to have a minimalist workspace so that it feels the same no matter where I am (home, office, plane, train, hotel, etc.). I try to eliminate paper and just have my laptop, phone and notebook on my desk. I do all of my calls from my iPhone with my headphones. I even try to do group conference calls from my iPhone's speakerphone. It's important to me to be equally productive regardless of where I am. A minimalist approach helps me do that.

What's your best time saving short-cut/life hack: Working offline. At least twice during the work day I’ll turn my email to “work offline” mode and close my browser so there are no digital distractions.

What everyday thing are you better at than everyone else: I'm not sure I'm better than everyone at anything, but one thing I think I do well is to take a complex situation, strip it down to the core issues that really matter and identify and prioritize solutions to improve it. I think I’m pretty good at getting through the clutter that makes situations more difficult than they need to be and coming up with actionable solutions that will work.

What's your favorite to-do list manager: I've used a ton of different to-do list tools over the years and I think (hope) I've finally found a keeper with Wunderlist. It's super simple and the mobile and desktop experiences are really seamless.

What do you listen to while you work: I almost always listen to music while I work. The music I listen to while working is pretty different from what I listen to when I'm not. Right now it's the Bon Iver station on Pandora and a couple of different playlists on Spotify -- the "Your Favorite Coffeehouse" playlist is a good one.

What are you currently reading: Lead with a Story: A Guide to Crafting Business Narratives That Captivate, Convince, and Inspire by Paul Smith and That Used Be Us: How America Fell Behind in the World It Invented and How We Can Come Back by Thomas Friedman and Michael Mandelbaum.

What's your sleep routine like: I take sleep really seriously. I freak out if I don't get at least seven hours. I try to get to bed by 11 and up between 6:30 and 7, though more often than not I go to sleep later and get up earlier.

What's the best advice you've ever received: This is a tough one as I've had some great mentors that have given me some great advice over the years. But one that sticks out is: "attitude is everything". The most consistent trait I've seen in people that are successful is that the vast majority of them have a great attitude in work and life.

Cannibalize Your Own Job

If you have a job, especially if you have a good job, that pays a decent wage, the odds are that it's only a matter of time before your employer outsources, automates, or finds a way to do the work that you do more cheaply. And when they do, you're either going to take a pay cut or you're going to be out of work. The days of working in the same job for 30 years, getting a nice watch every decade, and a retirement party at the end are long over.

In a global economy, mediocrity is unsustainable. Companies must constantly be getting better -- faster, smarter, more profitable. Successful companies are perpetually searching for ways to cut costs and add efficiency, and that includes getting rid of expensive humans.

Given this, to survive in this world, most of us have two options:

The first option is to fight it. Stay below the radar and try to fit in. Make friends with your boss and delay the inevitable. Don't make a raucous, don't try to scale things. Stay quiet and stay out of the way. This is not a bad short term strategy. It will likely work for some amount of time. But in the long-term, the forces of profitability and efficiency are going to catch up with you and your average performance will be out the door.

The other option -- the much, much better option -- is to embrace this reality. Instead of fighting it, actually help your company outsource, automate or cheapen the things that you do. You should help make your job more scalable. There's nobody in a better position to identify which tasks can be done more cheaply and which tasks can't. Help your company identify those things that can be done more cost effectively and come up with ideas on how they can be done more efficiently and advocate for it. You don't want to be doing that kind of work anyway.  You want to be doing the hard stuff that adds value. And this will allow you to spend more time on the stuff that your company needs.

And after you’ve scaled your current work, do it again. Keep cannibalizing your own job.

Of course, depending on the complexity of your job, it could take a long time to cannibalize yourself. In some cases it could take years.

Also, note that once you cannibalize yourself, you don't have to leave your company. Just the opposite. You should be thriving at your company and getting promoted, or at least spending more time on more valuable work (which you should be compensated for).

So in your job today, keep producing -- writing great code, building great products, closing big deals, etc., but while you’re at it make sure you’re aggressively looking for ways to scale -- before somebody else does.

Facebook, Twitter & Middle Class Jobs

Thomas Friedman had a great piece a couple of weeks ago in the New York Times, titled Why I Still Support Obamacare. I recommend checking it out. He talks about the ACA but points out a much larger economic trend -- the disappearance of the middle class. It used to be that big companies needed lots of workers to run their businesses. Those businesses created lots of good paying, long-term, reliable jobs. Those jobs are what made up the middle class.

But more and more companies are finding that they don't need as many employees as they used to need in order to thrive. As an example, Facebook is a $110 billion company but only has 8,000 employees. GE, a more traditional company, has about 3 times the market cap of Facebook but has 40 times the number of employees. Fast growing tech companies are creating lots and lots of value but they're not creating lots and lots of jobs.

Friedman quotes James Manyika from McKinsey:

To be in the middle class, you may need to consider not only high-skilled jobs, “but also more nontraditional forms of work,” explained Manyika. Work itself may have to be thought of as “a form of entrepreneurship” where you draw on all kinds of assets and skills to generate income.

This could mean leveraging your skills through Task Rabbit, or your car through Uber, or your spare bedroom through AirBnB to add up to a middle-class income.

Friedman's point in the column is that affordable, mandated healthcare is going to be critical as more people begin working independently.

In many ways this is an exciting trend, but this shift in how people work, who they work for and the emergence of the "free agent" job market is going to have an extremely wide-ranging political and economic impact. It's something our policymakers need to be thinking about.

Being Wrong

Last week Penelope Trunk had a good post on 5 things she was wrong about. I've found over and over again that people that are alright with being wrong are far more successful (and pleasant to work with) than people that have to be right.  People that can be wrong have the right mix of confidence and humility -- two of my favorite qualities in a colleague. I recommend reading Penelope's full post, but in the excerpt below she captures why being able to be wrong makes people more successful. I liked it so much that I thought I'd post it here.

The real reason I don’t mind being wrong is that you can’t ever be right in a way that matters if you’re never wrong. Think about it: if you are right on something where everyone knows you’re right then it doesn’t matter that you’re right. If you are right about something where people think it’s surprising, then you take a risk of being wrong but you also open yourself up to the joy of surprising yourself with your own insight. It’s a risk high performers are willing to take.

Yahoo! & Working From Home

Much has been made of Marrisa Mayer’s controversial decision to stop allowing Yahoo! employees to work from home. I've heard pretty convincing arguments for it and against it. I feel pretty strongly about allowing employees to work when and where they’re most productive. Personally, I’ve often found that I can be incredibly productive working from home on Saturday mornings. And not so productive when in the office on a Friday afternoon. And often it can be vice versa. But having the flexibility to manage my own productivity makes me a better employee. Having that kind of control is really important.

But none of this takes into account collaboration with my company and team. There are things that I can’t do on my own time. I have to collaborate with my colleagues, and when and where we do that is not always up to me. So I need to balance optimizing my own productivity with finding time to collaborate and learn and innovate with my colleagues. Ideally, a CEO should allow individuals to manage that balance on their own. But when a company is going through a massive change in management and structure and mission (like Yahoo! is right now) it absolutely makes sense for the CEO to mandate that balance.

Right now, according to Mayer, it appears that Yahoo! is in transition. And in need of better collaboration and teamwork and that’s why she made the decision to bring employees back to the office.

In short, I guess my opinion is to not have an opinion. Those of us that are not on the executive team at Yahoo! can’t really know the circumstances at Yahoo! and, given those circumstances, can't really make an intelligent judgement about the most appropriate work from home policy.