You never quite know in business if what you are doing is the right or wrong thing. Unfortunately, by the time you know the answer, someone has beaten you to it and you are out of business. I used to tell myself that it was ok to make little mistakes, just don’t make the big ones. I would continuously search for new ideas. I read every book and magazine I could. Heck, 3 bucks for a magazine, 20 bucks for a book. One good idea that lead to a customer or solution and it paid for itself many times over. Some of the ideas i read were good, some not. In doing all the reading I learned a valuable lesson.
Everything I read was public. Anyone could buy the same books and magazines. The same information was available to anyone who wanted it. Turns out most people didn’t want it.
I remember going into customers or talking to people in the industry and tossing out tidbits about software or hardware. Features that worked, bugs in the software. All things I had read. I expected the ongoing response of “Oh yeah, I read that too in such-and-such.” That’s not what happened. They hadn’t read it then, and they haven’t started reading yet.
Most people won’t put in the time to get a knowledge advantage. Sure, there were folks that worked hard at picking up every bit of information that they could, but we were few and far between. To this day, I feel like if I put in enough time consuming all the information available, particularly with the net making it so readily available, I can get an advantage in any technology business. Of course my wife hates that I read more than 3 hours almost every day, but it gives me a level of comfort and confidence in my businesses. AT MicroSolutions it gave me a huge advantage. A guy with little computer background could compete with far more experienced guys just because I put in the time to learn all I could.
I learned from magazines and books, but I also learned from watching what some of the up and coming technology companies of the day were doing. Its funny how the companies that I thought were brilliant then, are still racking it up today.
Every week a company called PCs Limited used to take a full-page ad in a weekly trade magazine called PC Week. The ad would feature PC peripherals that the company would sell. Hard Drives. Memory. Floppy Drives. Graphics Cards. Whatever could be added to a PC was there. What made the ad so special was that each and every week the prices got lower. If a drive was 2,000 dollars last week, it was $ 1940 this week. For the first time in any industry that I knew of, we were seeing vendors pass on price savings to customers.
The PC Limited ads became the “market price” for peripherals. I looked for the ad every week. In fact, I became a customer. I was in Dallas. They were in Austin.
I remember driving down to pick up some hard drives that I was going to put into my customers PCs. I had no idea up to that point, but it turns out that they had just moved from the owner’s dorm room into a little office/warehouse space. I was so impressed by this young kid (I was a wise old 25 at the time), that I actually wrote a letter thanking him for the great job he was doing, and…I’m embarassed to say now, I told him that if he kept up what he was doing he was destined for far bigger and better things.
I kept on doing business with PCs Limited, and Michael Dell kept on doing what he was doing. I dont think he really needed my encouragement, but i have since told him that I thought his weekly full page ads with ever declining prices, changed the PC industry and were the first of many genius moves on his part.
Michael wasn’t the only smart one in those days.
One of the PC industry’s annual rituals was the Comdex trade show in Las Vegas. Every November, it was the only 3 days I knew I would get away and get a break from the office. It was work during the day. Visiting all the new technology booths. Trying to get better pricing from vendors. Trying to find out where the best parties were. If you could believe it, back in those days, the number one party was the Microsoft party. I sold some Microsoft products, so I could get in.
One particular year, I was on my way to having a memorable night. I had met some very, very attractive women (I swear they were). Got them some tickets to come with me to the big party. All is good. I’m having fun. They are having fun. Then we see him. Bill G. As in Bill Gates dancing up a storm. I’m a Bill Gates fan, so I wont describe his dancing, but he was definitely having fun.
At that point in time, Microsoft had gone public and Bill Gates was Bill Gates. If you were in the business you knew him or knew of him. The girls I was with were in the business. Long story short, I went to the bar to get some drinks for all us, I come back, they aren’t there. Come to find out the next day, Bill stole my girls. As I would learn later in life, money does make you extremely handsome.
Bill G also taught me a few things about business. Put aside how he killed IBM at their own game by licensing PC DOS to anyone that wanted it. What MicroSoft did to knock Lotus 1-2-3 and WordPerfect off their thrones was literally business at its best.
At that point in time, software was expensive. WordPerfect and Lotus 1-2-3 both sold for $495 and their publishers were proud of that fact. In order to be able to sell Lotus 1-2-3, you had to go to special training to become authorized. How crazy does that sound now going to a special class to be able to sell a spreadsheet. WordPerfect wasn’t quite as bad, but they had their own idiosyncrasies as well. Meanwhile, Microsoft was on the outside looking in. Excel, Word, Powerpoint were all far down the list of top sellers until lightning struck.
Microsoft decided to go against industry protocol and package those 3 programs as a suite and offer them as an upgrade to competitors’ products for the low, low price of 99 dollars. Of course you needed to have and use Windows for it to work, but in a time when people were buying new PCs with every dramatic increase in power and decrease in price, it was a natural move for us at MicroSolutions to sell the bundle. It made the effective price of the PC and software together far, far lower. We loved it. It also taught me several big lessons.
Always ask yourself how someone could preempt your products or service. How can they put you out of business? Is it price? Is it service? Is it ease of use? No product is perfect and if there are good competitors in your market, they will figure out how to abuse you. It’s always better if you are honest with yourself and anticipate where the problems will come from.
The 2nd lesson is to always run your business like you are going to be competing with Microsoft. They may not be your direct competitor. They may be a vendor. They may be a direct competitor and a vendor. Whatever they may be to your business, if you are in the technology business, you have to anticipate that you will in some way have to compete with Microsoft at some point. I ask myself every week what I would do if they entered any of my businesses. If you are ready to compete with Microsoft, you are ready to compete with anyone else.
Watching the best taught me how to run my businesses. Along the way I taught myself a few things.
Source: Mark Cuban
Showing posts with label ceo. Show all posts
Showing posts with label ceo. Show all posts
Mark Cuban - Success and Motivation Pt. 2
So my career in Dallas begins. I’m a software salesperson with Your Business Software in Dallas. $18k per year. The first retail software store in Dallas.
I have to sweep the floor and be there to open the store, but that’s not a bad thing. When I tell my future ex-girlfriends that I sell software and am in the computer biz, I’m not going to mention the sweeping the floor part. Plus, I had to wear a suit to work, and the 2-fer madness specials looked good at happy hour after work. Better yet, the store didn’t open till 9:30am, which meant if I had a fun night, I had at least a little time to sleep.
I bet right about now you are questioning where my focus was? Where was my commitment to being the future owner of the Dallas Mavericks? Please. I was stoked I had a good job. I was stoked it was in an industry that could turn into a career. At 24, I was just as stoked that the office was close to where the best happy hours were and that I might finally have more than 20 bucks to spend for a night on the town.
Since I’m talking about partying, I do have to say that my friends and I were very efficient in that area. Beyond living off bar food and happy hours, we literally would agree that none of us would bring more than 20 bucks for a weekend night out. This way we all could pace each other. At least that was the way it was supposed to work, and it did until we figured out the key to having a great night out on the cheap. They key was buying a bottle of cheap, cheap champagne. I can’t even spell the name, but it was a full bottle, and it cost 12 bucks. Tear the label off and as far as anyone knew it was Dom. Each of us would grab one, and sip on it all night. It was far cheaper than buying beers or mixed drinks all night, and we never had to buy a drink for a girl, we just gave them some champagne! Of course the next day was hell, but since when was I responsible enough to care about a hangover…
But I digress. Back to business. As fired up as I was about the job, I was scared. Why? Because I have never worked with an IBM PC in my life. Not a single time, and I’m going to be selling software for it. So what do I do? I do what everyone does: I rationalize. I tell myself that the people walking in the door know as little as I do, so if I just started doing what I told my boss I would do, read the manuals, I would be ahead of the curve. That’s what I did. Every night I would take home a different software manual, and I would read them. Of course the reading was captivating. Peachtree, PFS, DBase, Lotus, Accpac… I couldn’t put them down. Every night I would read some after getting home, no matter how late.
Of course it was easy on the weekends. After drinking that cheap champagne, I wasn’t getting out of bed till about 9pm, so I had tons of time to lie on the floor and read. It worked. Turns out not a lot of people ever bothered to RTFM (read the frickin’ manual), so people started really thinking I knew my stuff. As more people came in, because I knew all the different software packages we offered, I could offer honest comparisons and customers respected that.
Within about 6 months, I was building a clientele and because I had also spent time on the store’s computers learning how to install, configure and run the software, I started having customers ask me to install the software at their offices. That meant I got to charge for consulting help: 25 bucks an hour that I split with the store. That turned into a couple hundred extra bucks per month and growing. I was raking it in, enough that I could move from the Hotel (that was what we called our apartment) where the 6 of us lived, into a 3 bedroom apartment across the street, where instead of 6 of us, there were only 3. Finally, my own bedroom!
I was earning consulting fees. I was getting referrals. I was on the phone cold calling companies to get new business. I even worked out a deal with a local consultant who paid me referral fees, which lead to getting a $1500 check. It was the first time in my adult life that I was able to have more than 1k dollars in the bank.
That was a special moment believe or not, and what did I do to celebrate? Nope…I didn’t buy better champagne. I had these old ratty towels that had holes in them and could stand on their own in the corner, they were so nasty I needed a shower from drying off after a shower…I went out and bought 6 of the fluffiest, plushest towels I could find. I was moving on up in the world. I had the towels. Life was good. Business was good and getting better for me. I was building my customer base, really starting to understand all the technology, and really establishing myself as someone who understood the software. More importantly no, most importantly I realized that I loved working with PCs. I had never done it before. I didn’t know if this was going to be a job that worked for me, or that I would even like and it turns out I was lucky. I loved what I was doing. I was rolling so well, I was even partying less… during the week.
Then one day, about 9 months into my career as a salesperson/consultant, I had a prospect ask if I could come to his office to close a deal. 9am. No problem to me. Problem to my boss, Michael Humecki. Michael didn’t want me to go. I had to open the store. That was my job. We were a retail store, not an outbound sales company. It sounded stupid to me back then too, particularly since I had gone on outbound calls during the day before. I guess he thought I was at lunch.
Decision time. It’s always the little decisions that have the biggest impact. We all have to make that “make or break” call to follow orders or do what you know is right. I followed my first instinct: close the sale. I guess I could have rescheduled the appointment, but I rationalized that you never turn your back on a closed deal. So I called one of my coworkers to come in and open up, and closed the deal. Next day I came in check in hand from a new customer and Michael fired me.
Source: Mark Cuban
I have to sweep the floor and be there to open the store, but that’s not a bad thing. When I tell my future ex-girlfriends that I sell software and am in the computer biz, I’m not going to mention the sweeping the floor part. Plus, I had to wear a suit to work, and the 2-fer madness specials looked good at happy hour after work. Better yet, the store didn’t open till 9:30am, which meant if I had a fun night, I had at least a little time to sleep.
I bet right about now you are questioning where my focus was? Where was my commitment to being the future owner of the Dallas Mavericks? Please. I was stoked I had a good job. I was stoked it was in an industry that could turn into a career. At 24, I was just as stoked that the office was close to where the best happy hours were and that I might finally have more than 20 bucks to spend for a night on the town.
Since I’m talking about partying, I do have to say that my friends and I were very efficient in that area. Beyond living off bar food and happy hours, we literally would agree that none of us would bring more than 20 bucks for a weekend night out. This way we all could pace each other. At least that was the way it was supposed to work, and it did until we figured out the key to having a great night out on the cheap. They key was buying a bottle of cheap, cheap champagne. I can’t even spell the name, but it was a full bottle, and it cost 12 bucks. Tear the label off and as far as anyone knew it was Dom. Each of us would grab one, and sip on it all night. It was far cheaper than buying beers or mixed drinks all night, and we never had to buy a drink for a girl, we just gave them some champagne! Of course the next day was hell, but since when was I responsible enough to care about a hangover…
But I digress. Back to business. As fired up as I was about the job, I was scared. Why? Because I have never worked with an IBM PC in my life. Not a single time, and I’m going to be selling software for it. So what do I do? I do what everyone does: I rationalize. I tell myself that the people walking in the door know as little as I do, so if I just started doing what I told my boss I would do, read the manuals, I would be ahead of the curve. That’s what I did. Every night I would take home a different software manual, and I would read them. Of course the reading was captivating. Peachtree, PFS, DBase, Lotus, Accpac… I couldn’t put them down. Every night I would read some after getting home, no matter how late.
Of course it was easy on the weekends. After drinking that cheap champagne, I wasn’t getting out of bed till about 9pm, so I had tons of time to lie on the floor and read. It worked. Turns out not a lot of people ever bothered to RTFM (read the frickin’ manual), so people started really thinking I knew my stuff. As more people came in, because I knew all the different software packages we offered, I could offer honest comparisons and customers respected that.
Within about 6 months, I was building a clientele and because I had also spent time on the store’s computers learning how to install, configure and run the software, I started having customers ask me to install the software at their offices. That meant I got to charge for consulting help: 25 bucks an hour that I split with the store. That turned into a couple hundred extra bucks per month and growing. I was raking it in, enough that I could move from the Hotel (that was what we called our apartment) where the 6 of us lived, into a 3 bedroom apartment across the street, where instead of 6 of us, there were only 3. Finally, my own bedroom!
I was earning consulting fees. I was getting referrals. I was on the phone cold calling companies to get new business. I even worked out a deal with a local consultant who paid me referral fees, which lead to getting a $1500 check. It was the first time in my adult life that I was able to have more than 1k dollars in the bank.
That was a special moment believe or not, and what did I do to celebrate? Nope…I didn’t buy better champagne. I had these old ratty towels that had holes in them and could stand on their own in the corner, they were so nasty I needed a shower from drying off after a shower…I went out and bought 6 of the fluffiest, plushest towels I could find. I was moving on up in the world. I had the towels. Life was good. Business was good and getting better for me. I was building my customer base, really starting to understand all the technology, and really establishing myself as someone who understood the software. More importantly no, most importantly I realized that I loved working with PCs. I had never done it before. I didn’t know if this was going to be a job that worked for me, or that I would even like and it turns out I was lucky. I loved what I was doing. I was rolling so well, I was even partying less… during the week.
Then one day, about 9 months into my career as a salesperson/consultant, I had a prospect ask if I could come to his office to close a deal. 9am. No problem to me. Problem to my boss, Michael Humecki. Michael didn’t want me to go. I had to open the store. That was my job. We were a retail store, not an outbound sales company. It sounded stupid to me back then too, particularly since I had gone on outbound calls during the day before. I guess he thought I was at lunch.
Decision time. It’s always the little decisions that have the biggest impact. We all have to make that “make or break” call to follow orders or do what you know is right. I followed my first instinct: close the sale. I guess I could have rescheduled the appointment, but I rationalized that you never turn your back on a closed deal. So I called one of my coworkers to come in and open up, and closed the deal. Next day I came in check in hand from a new customer and Michael fired me.
Source: Mark Cuban
Mark Cuban - Success and Motivation Pt. 1
I did it too. I drove by big houses and would wonder who lived there. What did they do for a living? How did they make their money? Someday, I would tell myself, I would live in a house like that. Every weekend I would do it.
I read books about successful people. In fact, I read every book or magazine I could get my hands on. I would tell myself 1 good idea would pay for the book and could make the difference between me making it or not.
I worked jobs I didn’t like. I worked jobs I loved, but had no chance of being a career. I worked jobs that barely paid the rent. I had so many jobs my parents wondered if I would be stable. Most of them aren’t on my resume anymore because I was there so short a time or they were so stupid I was embarrassed. You don’t want to write about selling powdered milk or selling franchises for TV repair shops. In every job, I would justify it in my mind whether I loved it or hated it that I was getting paid to learn and every experience would be of value when I figured out what I wanted to do when I grew up.
If I ever grew up, I hoped to run my own business some day. It’s exactly what I told myself every day. In reality, I had as much doubt as confidence. I was just hoping the confidence would win over the doubt and it would all work out for the best.
I remember being 24 years old, living in Dallas in a 3-bedroom apartment with 5 other friends. This wasn’t a really nice place we all kicked in to move up for. This place has since been torn down. Probably condemned. I didn’t have my own bedroom. I slept on the couch or floor depending on what time I got home. I had no closet. Instead I had a pile that everyone knew was mine. My car had the usual hole in the floorboard, a ’77 FIAT X19 that burned a quart of oil that I couldn’t afford every week.
To make matters worse, because I was living on happy hour food, and the 2 beers cover charge, I was gaining weight like a pig. My confidence wasn’t at an all time high. I was having fun. Don’t get me wrong. I truly was having a blast. Great friends, great city, great energy, pretty girls. Ok, the pretty girls had no interest in my fat and growing ass at the time, but that’s another story….
I was motivated to do something I loved. I just wasn’t sure what it was. I made a list of all the different jobs I would love to do. (I still have it.) The problem was that I wasn’t qualified for any of them. But I needed to pay the bills.
I finally got a job working as a bartender at a club. A start, but it wasn’t a career. I had to keep on looking during the day.
About a week later I answered a want ad out of the newspaper for someone to sell PC Software at the first software retail store in Dallas. The ad was actually placed by an employment agency. The fee was to be paid by the company, so I gave it a shot.
I put on my interview face, and of course my interview suit, which just happened to be one of my 2 polyester suits that I had bought for the grand total of 99 dollars. Thank god for 2-fer, 2-fer, 2-fer madness at the local mens clothing store. Grey Pinstripe. Blue Pinstripe. Didn’t matter if it rained, those drops just rolled down the back of those suits. I could crumple them. They bounced right back. Polyester, the miracle fabric.
I wish I could say the blue suit and my interview skills impressed the employment agency enough to set up the interview with the software store. In reality, not many had applied for the job and the agency wanted the fee so they would have sent anyone over to interview. I didn’t care.
I pulled out the grey for my interview at Your Business Software. I was fired up. It was my shot to get into the computer business, one of the industries I had put on my list!
I remember the interview well. Michael Humecki the Prez, and Doug (don’t remember his last name), his partner double-teamed me. Michael did most of the talking to start. He asked me if I had used PC software before. My total PC experience at the time was on the long forgotten TI/99A that had cost me 79 dollars. I used it to try to teach myself Basic while recovering from hangovers and sleeping on the floor while my roommates were at work. They weren’t impressed.
I was trying to pull out every interview trick I knew. I went through the spiel about how I was a good salesperson, you know the part of the interview where you are basically begging for a job, using code phrases like “I care about the customer”, “I promise to work really, really hard” and “I will do whatever it takes to be successful”. Unfortunately, I was getting that “well if no one else applies for the job, maybe” look from Michael.
Finally, Doug spoke up. He asked me. “What do you do if a customer has a question about a software package and you don’t know the answer?” All of the possible answers raced through my mind. I had to ask myself if this was the “honesty test question” you know where they want to see if you will admit to things you don’t know. Is this some trick technology question and there is an answer everyone but me knows? After who knows how long, I blurted out that “I would look it up in the manual and find the answer for them.” Ding, ding, ding…Doug just loved this answer.
Michael wasn’t as convinced, but he then asked me the question I was dying to hear: “Would you not go back to the employment agency at all, so when we hire you we don’t have to pay the fee?” I was in.
What does all this mean? Nothing yet. It was just fun to tell. You have to wait till part 2, if you care, and if there is a part two. Right now, it’s much more important that I go play with my daughter.
Source: Mark Cuban
I read books about successful people. In fact, I read every book or magazine I could get my hands on. I would tell myself 1 good idea would pay for the book and could make the difference between me making it or not.
I worked jobs I didn’t like. I worked jobs I loved, but had no chance of being a career. I worked jobs that barely paid the rent. I had so many jobs my parents wondered if I would be stable. Most of them aren’t on my resume anymore because I was there so short a time or they were so stupid I was embarrassed. You don’t want to write about selling powdered milk or selling franchises for TV repair shops. In every job, I would justify it in my mind whether I loved it or hated it that I was getting paid to learn and every experience would be of value when I figured out what I wanted to do when I grew up.
If I ever grew up, I hoped to run my own business some day. It’s exactly what I told myself every day. In reality, I had as much doubt as confidence. I was just hoping the confidence would win over the doubt and it would all work out for the best.
I remember being 24 years old, living in Dallas in a 3-bedroom apartment with 5 other friends. This wasn’t a really nice place we all kicked in to move up for. This place has since been torn down. Probably condemned. I didn’t have my own bedroom. I slept on the couch or floor depending on what time I got home. I had no closet. Instead I had a pile that everyone knew was mine. My car had the usual hole in the floorboard, a ’77 FIAT X19 that burned a quart of oil that I couldn’t afford every week.
To make matters worse, because I was living on happy hour food, and the 2 beers cover charge, I was gaining weight like a pig. My confidence wasn’t at an all time high. I was having fun. Don’t get me wrong. I truly was having a blast. Great friends, great city, great energy, pretty girls. Ok, the pretty girls had no interest in my fat and growing ass at the time, but that’s another story….
I was motivated to do something I loved. I just wasn’t sure what it was. I made a list of all the different jobs I would love to do. (I still have it.) The problem was that I wasn’t qualified for any of them. But I needed to pay the bills.
I finally got a job working as a bartender at a club. A start, but it wasn’t a career. I had to keep on looking during the day.
About a week later I answered a want ad out of the newspaper for someone to sell PC Software at the first software retail store in Dallas. The ad was actually placed by an employment agency. The fee was to be paid by the company, so I gave it a shot.
I put on my interview face, and of course my interview suit, which just happened to be one of my 2 polyester suits that I had bought for the grand total of 99 dollars. Thank god for 2-fer, 2-fer, 2-fer madness at the local mens clothing store. Grey Pinstripe. Blue Pinstripe. Didn’t matter if it rained, those drops just rolled down the back of those suits. I could crumple them. They bounced right back. Polyester, the miracle fabric.
I wish I could say the blue suit and my interview skills impressed the employment agency enough to set up the interview with the software store. In reality, not many had applied for the job and the agency wanted the fee so they would have sent anyone over to interview. I didn’t care.
I pulled out the grey for my interview at Your Business Software. I was fired up. It was my shot to get into the computer business, one of the industries I had put on my list!
I remember the interview well. Michael Humecki the Prez, and Doug (don’t remember his last name), his partner double-teamed me. Michael did most of the talking to start. He asked me if I had used PC software before. My total PC experience at the time was on the long forgotten TI/99A that had cost me 79 dollars. I used it to try to teach myself Basic while recovering from hangovers and sleeping on the floor while my roommates were at work. They weren’t impressed.
I was trying to pull out every interview trick I knew. I went through the spiel about how I was a good salesperson, you know the part of the interview where you are basically begging for a job, using code phrases like “I care about the customer”, “I promise to work really, really hard” and “I will do whatever it takes to be successful”. Unfortunately, I was getting that “well if no one else applies for the job, maybe” look from Michael.
Finally, Doug spoke up. He asked me. “What do you do if a customer has a question about a software package and you don’t know the answer?” All of the possible answers raced through my mind. I had to ask myself if this was the “honesty test question” you know where they want to see if you will admit to things you don’t know. Is this some trick technology question and there is an answer everyone but me knows? After who knows how long, I blurted out that “I would look it up in the manual and find the answer for them.” Ding, ding, ding…Doug just loved this answer.
Michael wasn’t as convinced, but he then asked me the question I was dying to hear: “Would you not go back to the employment agency at all, so when we hire you we don’t have to pay the fee?” I was in.
What does all this mean? Nothing yet. It was just fun to tell. You have to wait till part 2, if you care, and if there is a part two. Right now, it’s much more important that I go play with my daughter.
Source: Mark Cuban
Good To Great
Start with 1,435 good companies. Examine their performance over 40 years. Find the 11 companies that became great. Now here's how you can do it too. Lessons on eggs, flywheels, hedgehogs, buses, and other essentials of business that can help you transform your company.
I want to give you a lobotomy about change. I want you to forget everything you’ve ever learned about what it takes to create great results. I want you to realize that nearly all operating prescriptions for creating large-scale corporate change are nothing but myths.
The Myth of the Change Program: This approach comes with the launch event, the tag line, and the cascading activities.
The Myth of the Burning Platform: This one says that change starts only when there’s a crisis that persuades “unmotivated” employees to accept the need for change.
The Myth of Stock Options: Stock options, high salaries, and bonuses are incentives that grease the wheels of change.
The Myth of Fear-Driven Change: The fear of being left behind, the fear of watching others win, the fear of presiding over monumental failure—all are drivers of change, we’re told.
The Myth of Acquisitions: You can buy your way to growth, so it figures that you can buy your way to greatness.
The Myth of Technology-Driven Change: The breakthrough that you’re looking for can be achieved by using technology to leapfrog the competition.
The Myth of Revolution: Big change has to be wrenching, extreme, painful—one big, discontinuous, shattering break.
Wrong. Wrong. Wrong. Wrong. Wrong. Wrong. Totally wrong.
I want to give you a lobotomy about change. I want you to forget everything you’ve ever learned about what it takes to create great results. I want you to realize that nearly all operating prescriptions for creating large-scale corporate change are nothing but myths.
The Myth of the Change Program: This approach comes with the launch event, the tag line, and the cascading activities.
The Myth of the Burning Platform: This one says that change starts only when there’s a crisis that persuades “unmotivated” employees to accept the need for change.
The Myth of Stock Options: Stock options, high salaries, and bonuses are incentives that grease the wheels of change.
The Myth of Fear-Driven Change: The fear of being left behind, the fear of watching others win, the fear of presiding over monumental failure—all are drivers of change, we’re told.
The Myth of Acquisitions: You can buy your way to growth, so it figures that you can buy your way to greatness.
The Myth of Technology-Driven Change: The breakthrough that you’re looking for can be achieved by using technology to leapfrog the competition.
The Myth of Revolution: Big change has to be wrenching, extreme, painful—one big, discontinuous, shattering break.
Wrong. Wrong. Wrong. Wrong. Wrong. Wrong. Totally wrong.
Starbucks CEO Howard Schultz Q&A
Q. Do you remember the first time you were somebody’s boss?
A. The first time was when we opened up Il Giornale, which was the coffee-bar business that I started in 1985. At that moment, I realized I was responsible for something much larger than myself — people were relying on me.
Q. And was that an easy transition for you?
A. That was a time when we had unbridled enthusiasm for an idea, and I think it covered up a lot of mistakes and it covered up a lot of naïveté. But I also remember at that time writing a memo that has become kind of the template for the culture and values and guiding principles of Starbucks today.
What we set out to do then, and it has held true today, was really try to build a company that had a set of values and guiding principles that were as important as the equity of the brand or the product we were selling.
Q. Where did you get the idea to do that?
A. It was my experience as a young child and growing up in Brooklyn, where my dreams were beyond my station in life, and I wanted to build a different kind of company that perhaps my father never got a chance to work for. It came from seeing firsthand that if you were not a highly educated or a very successful person — that perhaps as a blue-collar worker or lower-middle-class person, as my parents were — that the work environment didn’t treat you with a level of respect.
Later on I realized that, not unlike a young child, new businesses are formed in the imprinting stage and organizations have a memory. People have come to me over the years and said to me: “I admire the culture of Starbucks. Can you come give a speech and help us turn our culture around?” I wish it were that easy. Turning a culture around is very difficult to do because it’s based on a series of many, many decisions, and the organization is framed by those decisions.
Here’s one example: In the late-’80s, before we went public in ’92, Starbucks gave comprehensive health insurance to part-time workers and equity in the form of stock options to part-time people. That created an unbelievable connection, and we still do it.
Q. What is your advice to an entrepreneur who asks you: “I’m just starting a company. How do I create a culture?”
A. I would say that everything matters — everything. You are imprinting decisions, values and memories onto an organization. In a sense, you’re building a house, and you can’t add stories onto a house until you have built the kind of foundation that will support them. I think many start-ups make mistakes because they are focusing on things that are farther ahead, and they haven’t done the work that has built the foundation to support it.
People ask me what’s the most important function when you’re starting an organization or setting up the kind of culture and values that are going to endure.
The discipline I believe so strongly in is H.R., and it’s the last discipline that gets funded. Marketing, manufacturing — all these things are important. But more often than not, the head of H.R. does not have a seat at the table. Big mistake.
Q. What are the some other lessons you’ve learned over the course of your life that have shaped the way you lead?
A. I was part of a family that grew up on the other side of the tracks, and that gave me tremendous motivation to want to exceed at a level that would create an environment for my own family that was different from the one I was in. I also think that I was insecure about being a poor kid, but with that came a sense of values and sensitivity about those people who didn’t get respect and had low self-esteem because of that.
So in the early days of Starbucks, my office was in the roasting plant. And I ended every day by walking the plant floor and thanking people who were the unsung heroes of the company. For many people, that demonstrated that I wasn’t sitting in some ivory tower. I was one of them. And I think the leadership style I have is that I’ve never put myself above anyone else, and I’ve never asked more of anyone than I was willing to do myself.
Q. What about early work experiences that influenced you?
A. I was working probably at the age of 10, when I had my first paper route. I had every different kind of job you could possibly imagine as a young kid.
Q. What was the strangest one?
A. I had a friend whose family had a furrier, and after school I took the subway from Brooklyn and came into Manhattan and I stretched skins with my hands.
Q. What kind of skins?
A. Fox. I was in high school, so I’d get there in the afternoon, and there’d be a pile of skins. You had to wet the pelt with a brush, and you had to stretch the skins. You were paid by the pelt. It just teaches you at a young age what it takes to make money.
I also worked in a garment company in Queens. It must have been 100 degrees in the summer, and I was steaming curtains. There was no air-conditioning. It was death, just death, but it was the only job I could get.
Q. How do you hire? What are you looking for in, say, somebody who would be a direct report?
A. I want big thinkers. I want people who are going to be entrepreneurial. I want people who are going to have important things to say and the courage to say them. I want people to challenge the status quo, but I also say something to everyone I hire, and that is: “You don’t have to come in here and try to hit a home run, and let me tell you why. You’re coming in here because I and many others believe very strongly in who you are and what you can bring to the company. So you don’t have to come in here and prove something right away.”
People who succeed at Starbucks are going to demonstrate a healthy level of respect and understanding of the culture of the company and the people who have come before them. There have been great people who have come into the company who haven’t succeeded because they have not embraced the culture and values of the company, so you need to do that.
I think the first 30, 60 days after a new person arrives at Starbucks is the most critical stage. So I will spend more time with that individual on the front end than I probably will that whole year, ensuring that they understand the deep level of sensitivity around the heritage and tradition of the company.
Q. A lot of the qualities you’ve mentioned are intangibles. How do you find out if a job candidate has them?
A. I think one of my strengths is that I have a very good antenna about people. I’ll ask a few things that are probably different from a traditional interview. First off, I want to know what you’re reading and then I’ll ask you why. Tell me what work-life balance means to you. I would want to know specifically their level of understanding about our company and Starbucks culture, and I’ll see early on who’s faking it and who’s not.
I obviously want people who enjoy coffee. I think it would be very difficult for me to hire somebody who doesn’t drink coffee. I want happy people. I want people who enjoy other people. And we’ll talk about what it’s going to take to win and I’ll ask people to describe that for me.
Q. Talk more about the winning question.
A. I’m aware of what it means to build a team. I played quarterback and I understand what it means to win, and that the guy throwing the ball or the guy scoring the touchdown only did that because the linemen protected the quarterback or opened the hole.
I think it’s so difficult to succeed today in business. The ability for the team to function together, to support one another, to trust one another, to have cohesion and to also have creative tension, is just mission-critical.
If you came in to our weekly Monday-afternoon meeting, you would think, “Man, this company’s in trouble.” Because we are incredibly self-critical, and that’s an attribute I have because I know there are always areas of improvement. But we also have to find opportunities to celebrate success, and I want to find opportunities for the people in the company to find those moments where people are doing things really well and recognize them and support them and celebrate them, especially in this kind of environment.
Q. If you could ask somebody only two questions in the job interview, what would those questions be?
A. I think I’d ask them about their current family and their family history. Now you’ve got to be careful with some of this, but I’d want to know that.
Q. What are you listening for?
A. If you don’t love what you’re doing with unbridled passion and enthusiasm, you’re not going to succeed when you hit obstacles. I want to see emotion. We are in an emotional business, and I need people around me who understand that we are an emotional business and have a visceral affection for it.
Q. What advice would you give to somebody who’s about to become C.E.O.?
A. I would say the following: Very few people, whether you’ve been in that job before or not, get into the seat and believe today that they are now qualified to be the C.E.O. They’re not going to tell you that, but it’s true. So everyone you meet has a level of insecurity. The level of insecurity that you have is a strength, not a weakness. The question is, how are you going to use it?
For whatever reason, people believe that when they get to that spot, they have to know everything. They’ve got to be in total control, and you can never show weakness. I would say one of the underlying strengths of a great leader and a great C.E.O. — not all the time but when appropriate — is to demonstrate vulnerability, because that will bring people closer to you and show people the human side of you.
Now, in order to demonstrate vulnerability, you have to make sure you have people around you who will never use that against you, because you trust them and they trust you. So the ability, behind closed doors, to have open and honest conversations with your team about the concerns you have, the fears you have, and the opportunities, is the balance that someone needs to succeed.
Source: The New York Times
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