Startup Governance

The recent debacle involving LaunchVic and 500 Startups comes at a time when startups and entrepreneurs are facing increased public scrutiny over their ethical behaviour. Having a great idea, building an innovative or disruptive business, and attracting investors is not carte blanche to disregard corporate governance and social responsibility obligations. So how do we instil a better “moral compass” among startups and their founders?

The TV sitcom, “Silicon Valley”, is drawn from experience of the software industry, but it also reveals much that ails the startup economy. As funny as it is, the series also highlights some painful truths. Scenes where founders “trade” equity in their non-existent companies are just one aspect of how startups can develop an over-inflated sense of their own worth. These interactions also reveal how startups can reward inappropriate behaviour – if sweat equity is the only way founders can “pay” their team, it can lead to distorted thinking and impaired judgement, because the incentive to go along with poor decision-making is greater than the threat of any immediate sanction.

A key challenge for any startup is knowing when to seek external advice – not just legal, tax or accounting services, but an independent viewpoint. Many startups don’t bother (or need) to establish a board of directors – and if they do, they normally consist of only the founders and key shareholders. The role of independent, non-executive directors is probably under-valued by startups. But even an advisory board (including mentors who may already be guiding the business) would allow for some more formal and impartial debate.

Another challenge for startups is that in needing to attract funding, they can find themselves swimming with the sharks, so doing due diligence on potential investors is a critical task in building a sustainable cap table that will benefit the longer term aims of the business.

Equally, if startup founders are motivated to “do their own thing”, because they are driven by purpose or a higher cause, or they simply want to make a difference, they can risk having to compromise their values in order to engage with bigger, more-established companies. So they may end up emulating the very behaviours they sought to change or challenge. Neither startups nor big corporations have a monopoly on unethical behaviour, but if founders stray from their original founding principles, they will soon alienate their stakeholders.

Finally, nurturing the “conscience” of a startup is not something that should be left to the founder(s) alone. The vision has to be shared with, and owned by everyone involved, especially as the business scales. Everything should be measured or tested against this criteria – “does it stay true to or enhance our reason for being here?” Without a clear sense of what is important to a startup, it will also struggle to convey its core value proposition.

Next week: Digital Richmond

 

Bringing Back Banter

Last week I watched “The Trip To Spain”, the latest in the “Trip” franchise. For anyone who has not yet seen these films (or the TV series from which they are compiled), the narratives revolve around a pair of actors playing fictional versions of themselves, as they embark on road trips to sample some of the best restaurants, hotels and historic locations. The semi-improvised dialogue between the two main characters is classic banter – as in “the playful and friendly exchange of teasing remarks“.

The gentle art of banter is at the heart of “The Trip To Spain” – Image sourced from British Comedy Guide

Sadly, just as the public discourse has become much uglier in recent years (despite various calls for a “kinder, gentler politics”), it seems there is something of a backlash against neo-banter (or “bantaaaaaaah!” as some would have it). Maybe there is a connection?

If our political leaders cannot engage in the natural ebb and flow of an ideological discussion shaped as informed conversation (rather than embarking on all out verbal warfare), then don’t be surprised if this is the same boorish, belligerent and bellicose tone adopted by protagonists in social media, op eds and parliamentary “debates”. (And I am not defending anyone who uses the term “banter” to excuse/explain the inappropriate.)

Banter can help to explore hypothetical scenarios, suggest alternative opinions, and take a discussion in different directions, without participants being hidebound by the first thing they say. Plus, if done really well, it allows us to see the ultimate absurdity of untenable positions.

Next week: Supersense – Festival of the Ecstatic

 

 

 

 

Expert vs Generalist

My recent blog on the importance of experts prompted one reader to comment that he preferred the term “specialist” (in a non-medical sense) to “expert”. This got me thinking about the notion of “experts” as distinct from “generalists”, and whether we need to re-evaluate our assessment of skill, competence and aptitude when assessing someone’s suitability for a task, project or role. (And these days, is “generalist” itself something of a pejorative term?)

A few days later, I was having coffee with a strategic consultant who is known as a future thinker. He describes himself as an “extreme generalist” (with no hint of irony), because he has wide-ranging and multiple interests, some of which, of course, he has deep domain knowledge and experience. But because his work and his curiosity take him into different realms, he maintains a broad perspective which also allows for the cross-pollination of ideas and concepts. (I think we all recognize the value of analogy when problem solving – taking the learning from one discipline and applying it to a new scenario.)

Separately, but in a similar vein, I was discussing career options with a senior banking executive, who did not want to be pigeon-holed as a banker, because her core skills and professional experience would lend themselves to many industries, not just financial services. So in her case, this expertise would best be applied in a particular type of role, not in a specific domain, or a specialist capability.

And during an earlier discussion on leadership with yet another futurist, I found myself debating the notion of situational styles, as opposed to structural models – both of which require skill and expertise for CEOs and managers to be successful. But broad experience will be just as important as formal methodologies, and general business knowledge just as valuable as technical specialisation. (On reflection, as with so many constructs, it’s not a case of either/or – more a question of adaptation and dynamics.)

As a result of this ongoing dialogue, I was challenged to develop what I might describe as a 3-D model, comprising the following axes:

“Generalist”/”Specialist”: In product management terms, for example, the generalist understands the full end-to-end customer life cycle and the production process. Whereas, a specialist might know their particular part of the process extremely well, but has little to no awareness or understanding of what might come before or after. (Think of those frustrating customer calls to utility, telco and insurance companies – in fact, any business with highly siloed operations – where you get passed from one “specialist” to another, often revealing contradictory information along the way.) At the extremes, this dimension might be described as the difference between knowing a subject “a mile wide and an inch deep”, and knowing it “a mile deep and an inch wide”.

“Novice”/”Veteran”: This is probably obvious, but I don’t necessarily mean seniority, age or tenure in a specific role. When it comes to new technology, for example, someone who is new to the role, but who has just been trained on the latest software and equipment, may have better technical ability than someone who has been doing the same role for several years (and thus, has more knowledge and experience), but has not refreshed their skills. Although I concede that in many situations the incumbent veteran may have better developed problem-solving, trouble-shooting and decision-making capabilities. This axis is also really important to consider when transitioning older employees to new roles within the same organisation or team – if they were younger, they would probably be given more time to adjust, adapt and grow into the role. Whereas, an older employee may simply be expected to “pick it up” much more quickly, with less leeway for learning on the job, because of assumed expertise.

“Broad”/Narrow”: Here I am thinking about aptitude, rather than the degree of specialisation. Drawing on the idea of using analogies, someone with wide experience and a broad perspective (sees the big picture, displays both critical and design thinking) will have quite different qualities to someone with a very narrow focus (especially within a very specific domain or area of practice). Based on the particular context, do you need an all-rounder, or a placekicker? This axis also relates to the age-old issue of organisations only wanting to hire square pegs for square holes – it might make sense in the short-term, but risks stagnation and lack of fresh thinking over the long-term.

Assessed along these three dimensions, we might see that an “expert” could be qualified according to how highly they rate based on their overall “depth”, measured by criteria such as experience, knowledge and reputation, as well as formal qualifications.

Next week: Making an Impact at Startup Victoria’s Pitch Night

 

Long live experts….

Along with “liberal, metropolitan elite”, the word “expert” appears to have become a pejorative term. Well, I say, “long live experts”. Without experts, we’d still believe that the world was flat, that the sun orbited around the Earth, and that the universe is only 6,000 years old…. Without experts we’d also have no knowledge of ancient civilisations, no comprehension of languages, no awareness of scientific phenomena, no understanding of how to prevent and cure disease, no patience to engage with the human condition, and no appreciation of nature, technology, art or culture.

Just a couple of “experts”: Marie Curie and Albert Einstein

I read recently that, “Marie Curie and Albert Einstein went hiking together in the Alps”. At first, I thought this was some fantastic fiction, because I wasn’t aware they knew each other, let alone went walking. But the line didn’t come from a David Mitchell novel – I came across it in Alex Soojung-Kim Pang‘s recent book, “Rest: Why You Get More Done When You Work Less”. It reveals something of the way knowledge seeks out knowledge – how great minds (experts) often get together to collaborate, or just hang out and shoot the breeze. The expert mind is also an inquiring and creative mind, open to new ideas and influences, unlike the hermetically sealed personalities of many of our current leaders.

(According to Pang, regular physical activity, creative pursuits, technical mastery and planned rest are among the key traits for many experts – so much for the 35-hour working week, 9-5 routines, and a couple of weeks’ annual vacation….)

Maybe one reason for this increased disregard for experts is the fact that many experts tend to make us feel uncomfortable (about our own ignorance?), they challenge our assumptions (and highlight our personal prejudices?), and they tell us things we’d rather not think about (even if it’s probably for our own good?).

And while I accept some experts can be patronising, aloof and even smug, there is a breed of experts, like Demis Hassabis, who are brilliant communicators. They can explain complex ideas in straightforward terms, and through their enthusiasm and natural curiosity, they show how they continue to wonder about what they don’t yet know. They also manage to bring us on their journey into difficult topics and uncharted areas, such as artificial intelligence.

Finally, and in the interest of balance, the only thing worse than a recognised expert is a self-appointed one…. (a theme Laurie Anderson explored in her satirical work, “Only an Expert”.)

Next week: SportsTech and Wearables Pitch Night at Startup Victoria