Rich Moran - Business Success, Leadership Stupidity, and Employee Happiness

Steve

Hi, this is Steve Hunt with People Performance Radio. Today's interview is with Rich Moran, who is a partner at Venrock, which is a venture capital company. As well as a very wide-ranging thinker and author, or "raconteur", as he put it, on talent management programs in general, and this interview, I have to say, of all the interviews that we've done on People Performance Radio, this was the most far-ranging in the topics that were covered, it's really interesting, Richard's got some very interesting perspectives, we range from the three fundamental things people want from work to what makes Dominos different from other companies as a pizza company, to why you should smoke dope in parking lots, so this interview absolutely has something for everyone, so I think you'll really enjoy it, so let's give a listen to Rich Moran from Venrock Associates.

Hi, you're here with People Performance Radio, and today we are happy to be talking with Rich Moran, who is a partner at Venrock, and an author and raconteur of talent management, and Rich'll have to tell us a little bit about what an author and raconteur does.

Rich

Thanks Steve. Firstly, I'm a partner at Venrock, which is a venture capital firm, and I see lots of people coming through looking for lots of money, and my job is to evaluate ideas and deals, and determine whether or not they're going to get funded. ‘Author and raconteur' is more about telling stories about talent management that I think resonates with people in ways that they can understand, and might affect their behavior in positive ways, so that they can be more successful.

Steve

I see, I would think in your role you must see a wide variety of ideas around talent management, probably some really good and some really just bizarre for people, looking for money to fund various schemes and things like that? So what have you learned from working in this field, and in particular, a kind of unique angle that you have on it, which is the financial backing of different tales management programs?

Rich

Well, I come from a perspective that, I think talent management is really important, and I think, in fact I just heard Robert Weiss, the former Secretary of Commerce, talking yesterday about how President Elect Obama should have a human capital csar, should have somebody who's in charge of talent in the country and utilizing it well, which I think is a great idea that I'm sure will never get put into effect, but is a great idea, but the ideas that I see, it's mostly software companies that come in and try to sell us on talent management systems and processes and I find that almost all of them are, I believe, too complicated to be successful, and that doesn't mean that they can't be a very effective small company, but the venture capital world is in the business of funding small ideas that can grow into really big companies, and so many of the ideas I see are, they look like spaghetti diagrams of forms and processes, and I can just tell that they might be effective for the organization in checking off a box, but they're not going to be effective for any of the people who need the feedback, or the managers who need to manage their talent.

So my advice to so many entrepreneurs who come in with some kind of a talent management solution is that they need to think about the user, rather than the processes and the procedures, and sometimes people listen to me, sometimes people don't.

Steve

So by end user, you really mean the employee that's out there —I always joke sometimes that you talk about talent management programs, and the only thing that links together a company is HR strategy, is the poor employee, or as one client called it, "the victim", of all these talent management programs.

So, can you tell us about a story maybe of a talent management program that you saw that really did do this well, it was simple, it was effective, because often the things that are simple we've been doing for a long time, because they're simple —something that was simple, new and powerful?

Rich

Well, the best one I saw, and of course it relates to SuccessFactors, but I think that all employees only want to know three things: they want to know what's my job, how am I doing, and how does my contribution at the end of any given day contribute to the success of the company, and any talent management system that can address all three of those questions is going to be successful, and I'm always surprised at how few companies can answer all three of those questions, and I'm not talking about mission statements framed on the wall, or pink forms versus yellow forms, I'm talking about when an employee shows up in the morning, do they know that they're supposed to do something more than drain the voicemail and email? —and I'm talking about when they, not an annual review or a quarterly review, but when they leave at the end of the day, do they feel like they really did something that was productive? And then lastly, do they feel like they're contributing to something bigger, and I have seen ideas that address all three of those, and those are the ones that usually work —it doesn't mean they get funded, but my own hypothesis is that, if, from the end user, who's the employee, if they can get good feedback on all three of those things, then it's going to be a happier dude, and a more successful organization.

Steve

I think that's a great insight, you said again that people really should be able to say, "What am I supposed to be doing, how well am I doing it, and what difference does it make —how does it contribute to the company", and I just thought I'd share a really quick story, because I think of those three, the contribution part is often really not done well, we're getting better and better at defining what people should do and setting goals and giving them feedback, but often you worry about what difference does it make in the grand scheme of things, and I just remember, as you said, that it triggered a time when I worked, I used to work with a client that was a very large petroleum product manufacturer, so massive industrial plant factories, and you go into this factory job, blue collar hourly workers, very dirty environment, and then they had on this case, all of the products that this stuff went into, all of these different car parts, packaging and all these very familiar brands, and the people said, we did this because the employees really want to know, well how's this stuff used, when my kids ask me, "Dad, what do you do?", now I can point to that bottle of Tide, and say, "I helped make that".

Rich

Yes, that's a great example, and it's amazing how few organizations do that well, and the power of that thought is that it relates, whether you're the CEO or rank and file person making nuts and bolts, those are the same three questions.

Steve

Can you share an example, some of the things you've seen in your work, where maybe you're getting it, that third one, contribution, where you've seen maybe a technology or tool that you guys have funded that really has helped companies let employees know that their work makes a difference?

Rich

There are some examples, they're few and far between, but I'll tell you one anecdote that I think works well, and that is a simple one from Dominos Pizza, and Dominos Pizza is an organization that, all they want to do is get a pizza to your door quickly, and I think that all of their systems, their forms, their ovens —everything is based on the delivery model more than it is on the pizza model, so when they design a facility, it's not about sitting there and eating pizza, it's more about how do we get that pizza hot, fast, so our delivery guys can get it out there fast, so the power of that is that everyone at Dominos Pizza knows that we are in the delivery business more than we are in the pizza business, and that's all that they focus on.

Steve

And so it really helps them to think about that in terms of, how did I make a contribution to delivery, which probably keeps them from spending lots of time trying to come up with, really investing in the wrong time, which is, "How can I come up with a new and different kind of pizza", and they're saying, "We're not really in the pizza creativity business, we're in the pizza delivery business."

Rich

Yes, or worrying about the décor of their facilities, because they don't want people sitting there eating pizza, they want to deliver it. So that's an example that doesn't have anything to do with software or a system, but it has something to do with the power of being focused on what's my job, how am I doing, and how does my effort relate to something bigger.

Steve

I think also, you could say, the classic thing about missions, and I remember, if you've been in this field long enough, we go through different fads, and one of them was, everybody needs a mission statement fad, but for somebody, those missions were so generic, that they really didn't say what the company did at all. "We add value through leveraging technology" —that doesn't mean anything; a powerful mission like that Dominos' one doesn't just say what you do, it also defines what you don't do.

Rich

Yes, and I've often, as a consultant and as a venture capitalist, I field calls from major corporations who say, "We're having a management retreat, we're going away for five days to Napa Valley or Carmel or somewhere, and we're going to focus on our mission, and my response always is, well hey, I can do it over, if it's just a mission, I can talk to you about it over the phone right now, the mission is to design an intergalactic customer responsive, the words go on and on, but the way I like to describe it, and it really relates to performance as well, is much more simple than this, and I will work with the company if they want to figure this out, and that is the simple three words that are "actions follow intent", and the metaphors I use are, if you intend to lose weight, you act like you're on a diet, if you intend to stay married, you act like you are married, and I think if you can clarify your intent as an organization, or as an individual, then all of the actions flow directly to that, and it's very powerful, and I think the most dissatisfied employees I always come across are ones where they feel like they have a false sense of activity, that they're really really busy, that they're scheduling meetings and they're staying late, but they're not sure to what end all of those activities are following, so when I hear the word "vision" or "mission" or "strategy", I often boil it down to, let's talk about what your intent is, because then we can come up with some really good actions, and I think that plays all the way down to an individual and their own performance, because if an individual's intent is clear, so are their actions.

Steve

I think that's interesting, as you were talking about that, what struck me, and I think so many people too, especially with all the email and everything, we're caught up in reacting, not doing —we're reacting to things as opposed to doing something, and if you could frame work to people, and a mission about, "Every day come in and do this", it's almost doubtless, it's what is the best way to be is to do, or something like that?

Rich

Be in the moment.

Steve

Be in the moment —how do you take that sort of nice sounding, somewhat New Age-y intangible concept? Give me an example of a company that's actually done that, or a person or an individual that has said, "I'm tired of just responding", and I love your phrase, "draining the voicemail and email", "I want to do something" —can you give an example of somebody that has done that, or a company that's done that?

Rich

Yeah, I think that there are no better examples than what are happening today, and given the environment, and we're all trolling for words to describe exactly what is happening today, whether it's called the meltdown, or the financial crisis, or who knows, I'm sure history will define it one way, but there are activities that everyone needs to focus on right now that will be quick in responding to what's happening externally, and marrying that with what's happening internally, so an example might be, without naming names, there's a video game company that hasn't had a hit in a while, and they need a hit in order to be successful, and so they're allocating the most creative people to do what they do best, which is just, eat jelly beans and think of creative games, and not get bogged down, they've totally released them from anything other than big creative thoughts, and everyone else is focusing on feeding that monster, and setting up the infrastructure so that, when those games are produced, they can be successful, so it's almost like, what are the most important things that we need to do today that will make this company be successful, as opposed to, what am I supposed to do, or what does my job description describe, and I think that those are the companies and those are the people who are being successful right now, and I think lowering expectations is probably also a part of that today.

Steve

What do you mean by, "lowering expectations"?

Rich

Lowering expectations regarding, from an organizational perspective, we felt we were going to have a year where we did $500 million in revenue and we're happy that we have $450 million, even though that's not what the board of directors wants, and on the personal side it might mean that, "I thought I was going to get a bonus of x-y-z, and instead I'm happy to be able to contribute in a productive way and keep benefits in my job for next year", so I think lowering expectations is happening all around us, and I don't think it's a bad thing.

Steve

I think that's an interesting point, you're in this industry, I have a question for you —I've always, so many from outside the company, the people investing in companies on Wall Street are saying, "We expect whatever —20% or 25% or 50% year on year growth after and after ," and you're constantly expanding, increasing productivity, and companies are tightening down on people, and I think that ultimately this comes down to an individual —do you as a person think that you can sustain 30% growth in productivity every single year for the next 20 years of your life —is that realistic?

Rich

No, it's impossible, so I'd describe it as, the mood has changed from, "Take this job and shove it", to "It ain't love, but it ain't bad", which are two country songs, and when I think that, we can all reconstruct our jobs and our attitudes, so that instead of looking for the medal and the bonus, we're starting to recognize that, "Hey, maybe I haven't contributed, or maybe the organization is suffering, and maybe I need to understand what my true role and what my real value is", and it may not be what you thought it was two years ago.

Steve

Yes, I think when looking at that, I'm comparing how I interact in my job with people from a wide variety, from front line hourly employees up to senior CEO level executives —I think when you get down into an organization, people tend to think that way more, they more think about, "This job, it is my job, my whole life isn't wrapped up in it", whereas you get higher up, it's like, "If we're not achieving this financial metric and driving this, I'm somehow insufficient, if I'm not getting that bonus" —do you think people are actually, in that higher level financial world, are going to make that shift? —especially the people outside of organizations that, I've always said, look, if I'm investing in a company, and they're just steadily profitable year on year, that's not a bad thing, I wouldn't think, yet it seems like that's not enough, you can't just make money.

Rich

There's a burden of responsibility that a lot of people feel, and one of my many goals in life is to eliminate guilt, and of course I haven't succeeded yet, but I think a lot of people feel guilty for what they haven't done or for not fulfilling their potential, and sometimes this is enough, performing at the best level that you can, and hitting growth and being a going concern, that phrase is coming back into play again, ‘going concern', I think that might be enough, and we shouldn't be burdened by the responsibility of hitting 30% growth year after year after year, in this environment it's just not going to happen.

Steve

Well Rich, this is what's fascinating, it's so interesting, this conversation, we talked about innovations in talent management, what companies should be focusing on, and now we're talking very philosophically about really how companies and people should just change their mindset in an economy that isn't artificially fuelled growth, it's like, look, the days of artificially fuelled growth are over, now the hangover is beginning from our binge spending, and it's interesting, I would not have expected this to come from a venture capitalist, I guess I was stereotyping, but you seem more philosophical, or I just perceive that.

Rich

There's a word that's often used to describe venture capitalists, but maybe I'm not the typical one, but the metaphor I use, Steve, is sometimes that, when I was a kid, if you were in Little League, or played soccer, if your team won, you got a small trophy, and that was it —no-one else did, and now, if you participate you get a trophy, and I think what we're moving back toward is, if you win, you get the trophy, and if you participate, you get to acknowledge that you were a good part of the team, and that's enough.

Steve

That's enough, and it should be enough to do it, just to do it, not for what you get as a result of it?

Rich

Well, you should recognize and feel good about your contribution, and not expect a trophy.

Steve

Yeah, wow, that's interesting. Well, the last thing is, that I would be remiss if I didn't ask you about the books you've written, because in addition to other things that Rich has done, he's written a couple of what I'm assuming are probably humorous books, but you can never tell these days.

Rich

They are.

Steve

One called, "Never Confuse a Memo with Reality", and "Fear No Yellow Stickies" —can you tell us a little bit about what those books are about?

Rich

Sure, and my most recent one is called, "Nuts, Bolts and Jolts", and I am, I like to consider myself an observer of the workplace, and in fact I have an anecdote that just happened recently, where, as I was sitting in my office, like many people I'm sure who are listening, my office is a low slung building with black glass where I can see out but people can't see in, and I was sitting there with my assistant going over my calendar, and she was squinting out the window, and she said, "It looks like those three guys out there are smoking pot", and it's 11 o'clock in the morning, and there's three guys all dressed in black, and 30 years old, and sure enough, I recognized it, and I say, "Wow, I didn't know anybody did that at 11 o'clock in the morning any more", then we went back and finished our calendar, and then 15 minutes later I get buzzed, and there are those three guys waiting to have a meeting with me, they asked for $5 million for a video game company!

Steve

So did you give it to them?

Rich

No, they didn't get the money, but my point is, why do I have to tell people in 2008, "Don't smoke dope outside the building of where you have an important meeting where people can see you", and so many of my, well all of my books are based on the observations of the behaviors, how to make yourself more successful in the workplace, and it is often based on using very simple ideas and applying them, including don't smoke dope in the parking lot.

Steve

That's great career advice, there's a reason they call it dope, you dope! Wow, well hey, I am sensitive to the time, but I appreciate what has been a really interesting and enjoyable conversation, and I don't know, Rich, if there's any last thoughts that you want to leave our audience with in terms of talent management, as you've shared a lot of great ideas and insights, but as they're going forward, is there any last advice for our listening audience?

Rich

Just a parting shot that, I tell the story recently that, when I was a young boy, I'd drive round with my grandfather, and he would point to a mansion and say, "See that? —during the Depression, I could have bought that for $5,000, but I didn't have it", and he would go on and tell stories like that, and as a young boy I would be sitting there thinking, "Jeez Grandpop, I wish you would have been a little bit more opportunistic during the Depression, so that I could enjoy that mansion", and I think these are opportunistic times, and I think, rather than go into a malaise, and say, "I can't believe how bad it is out there", I think this is a time when people should be looking at being very creative about opportunities, and try to seize them.

Steve

I think that's great advice, so much of this recession has just driven the fact that people aren't spending money they have. All right, well we have been talking with Rich Moran from Venrock, which is a venture capital company, he's also the author of several books, including "Fear No Yellow Stickies", and "Nuts, Bolts and Jolts", as well as obviously a very enlightened thinker about talent management and career development in general. Thank you Rich, and I look forward to maybe talking with you again on People Performance Radio.

Rich

Thank you Steve.

Speaker

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