Since an article I wrote in June of 2009 called “How a foosball table can kill your startup” is still sparking attention and conversation, I think the time is ripe for me to expand on the topic. Yes, I still believe that tchotchke “benefits” do nothing but waste money.  Instead, use your resources to attract new, retain your best talent, and improve your team’s happiness.

Here are additional issues for us to consider:

1. If we tracked the usage of Guitar Hero setups, foosball tables, pinball machines, etc., we would see that utilization of them is not really worth their cost and the rent we pay for the space they take up.
2. Often the toy/activity choice we make is driven by what we personally like. I highly doubt anyone actually thinks about how employees from other demographic groups perceive them. Therefore, we unconsciously create an environment of discrimination.
3. Innovation happens outside of the walls of our offices. Encourage your employees to get outside and network with their customers and spend more time with their families.
4. Employees are not stupid! We may be able to attract them with these “benefits”, but the novelty wears off quickly. The deeper we can tap into satisfying the needs of our employees, the more likely they will stay with us. Maslow’s hierarchy of needs is often ignored at our own peril.

So what do I suggest?

1. There is a MUCH higher ROI on well-being focused benefits. E.g. stock your office with free healthy snacks and drinks. Motivate staff to engage in group sports. Spend the budget on group company outings organized by the staff themselves. As an operations person, I always focus on keeping my team healthy, happy, motivated, and engaged.
2. Spontaneous rewards have tremendous ROI! Focus on rewarding exceptional performance the moment it happens (not months away during performance reviews). I have personally seen it do wonders to morale.
3. Enable your staff to be able to work in other locations from time to time and empower them to spend more time with customers (existing ones or prospects).  This takes a lot of planning and thinking through to execute well, but it has fantastic ROI and increases innovation and employee loyalty.

NOTE: the dynamics are a lot different in creative industries like industrial design, advertising agencies, marketing and communications companies, etc. Talent employed in these types of companies have different needs and motivations.

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

• Keeping entrepreneurs and CEOs out of jail and an early grave
• How a foosball table can kill your startup
• Beware of corporate cockroaches

The associated risks of starting a company are hard enough when you are young and unattached (though lack of experience and naïveté keeps you brave and motivated). But being in a long-term relationship, married, or a parent adds a whole new level of complications, risks, and motivations.

It is not surprising that VCs like investing in companies led by young, single, male entrepreneurs (some think this is because it is easier to control them and make them work 24×7).  But my own experience tells me that the vast majority of entrepreneurs are married and many are even parents. Our wives/husbands/partners are the true unsung heroes. Some of the most successful business people have a great supporter behind them.

Although I’ve mostly been an intrapreneur in my career, during my last venture I was a co-founder. Sadly, the company did not work out and cost me dearly. My wife was my rock through it all!  There is a reason I call her my “angel investor” – she is my biggest supporter and the best BS detector. Having someone really smart to bounce thoughts off of is an absolutely invaluable asset.

Here is what I have learned so far from my own marriage and business successes/failures:

• Business is second to family. No business is worth sacrificing your family for, and in fact, power, support, and inspiration can be derived directly from your “home team”.
• Communication with your partner is crucial! Especially when things go awry, walking around angry and frustrated will not help you or your marriage. But, if you communicate and use your partner as an advisor, you will get to a much better place faster.
• As the saying goes – perception is reality. Be honest with yourself, err on the side of caution, and set appropriate expectations. Allowing assumptions leads to painful consequences.
• Carve out time every week for your partner. No business conversations, emails, text messages, or voicemails allowed – just you and your better half.

Lastly, one of the biggest bonuses for an entrepreneur/intrapreneur with a great partner at home is that it forces you to think more clearly and learn how to sell your ideas. Almost every idea I could not explain well to my wife turned out to be a steamin’ dud.Similar Posts:

• Move your company forward by being wrong… often!
• What to look for in a business partner
• Keeping entrepreneurs and CEOs out of jail and an early grave

I love startups and small businesses! It has been an unpredictable ride over the past 12 years, but I have always enjoyed working and meeting with some incredibly interesting people. I recently met Jason (founder of GreenhornConnect), and he invited me to write a guest blog post sharing some of the major mistakes I think entrepreneurs make. I have made tons of them myself and have also seen many others shoot themselves in the foot. But, perhaps this list will help you avoid some of the biggest ones!

Please read the rest of the article on GreenhornConnect – The 7 deadly sins of entrepreneursSimilar Posts:

• Should we glorify the failure of entrepreneurs?
• Dangers of Big Titles – post by The Operations Guy
• Why not let your customers tell you how to sell

When the word “lawyer” or “attorney” is mentioned, most business people either make a joke about how lawyers belong in hell, or complain about how their attorney recently overcharged them. As the head of operations for several companies, I had to deal with attorneys almost every day.  I was also part of a law firm at one point in my career, so I have developed a very intimate and unique perspective of the inner workings of the legal industry.

So why am I writing this open letter to lawyers? Like many others, I have a love and hate relationship with attorneys. I don’t expect I can change much, since many bad practices become engrained during law school.  But, us business people will always need lawyers, so I have a vested interest in helping attorneys understand our perspective.

95% of attorneys are guilty of almost every item on this list. My intent is to show you what you can do better. Let’s get started:

• We pay you for legal, not business, advice. Even if you have an MBA, you are not qualified to council us on business strategy. Unless you had extensive business experience before you went to law school, you are not capable of thinking like a businessperson. Your value is in figuring out how we CAN do what we want to do within the confines of the law. You should act like the safety net of a tightrope walker.
• Like doctors, you are a specialist and are not good at everything. If you don’t know how to approach a certain problem, please look for guidance from another attorney. The Socratic oath should be part of your Bar admittance.
• Hourly billing promotes YOUR inefficiency. Billing 15 minutes to listen to the voicemail we left you is ridiculous!  At least do a mix of some per-project and some hourly billing. I personally refuse to work with any attorney who wants to do straight hourly billing. The internal structure and compensation practices of your law firm are not our problem.
• Be human. An obsession with billing every minute of your life has turned some of you into very unpleasant and fake people. Attaching “Esq” to your name should not turn you into a pompous a-hole. The biggest part of business development is building a relationship. We are not stupid, we know that lunch we just had with you will show up on our bill. Set yourself apart by genuinely getting interested in our businesses and what we are about. You just may build a business relationship with some longevity in it.
• Stop posturing. Through the years I have learned one thing about lawyers of both genders - the fancier the suit, the less experienced attorney and the bigger the BSer behind it. I know a worthless attorney who owns over 70 suits and has an ego the size to match. What a joke! Blowing a large amount of money on school, a wardrobe, and a car does not give you credibility. It may be OK in court, but in the business world, playing a poser does not work. Many of you are extremely smart. Skip the BS and titles and let your work shine!
• Give before you take! I realize your industry is full of rules and that you are scared of them, but grow a pair and genuinely share your expertise with the community. You will be surprised at how many new clients you will obtain this way. If you brag about your connections, make a connection or two as a sign of goodwill.

So dear attorneys, I don’t hate you. You are very valuable guns in my arsenal. I just want the experience of dealing with you to be less like the one I have with proctologists and more like the one I have with fellow business people.

1/14/10 Update: Scott Edward Walker from Walker Corporate Law Group posted a great article on Venture Hacks with his take on the issue – “Top 10 reasons why entrepreneurs hate lawyers“. Admission of a problem is the first step to curing it!

Note re. image credit: would love to track down who is the author of it to provide proper credit.Similar Posts:

• How to create a Non-Disclosure Agreement people can understand
• How to ask for help
• How to deal with online public fiascoes, disagreements, and miscommunications.

I was recently overheard a conversation on the T (Boston’s subway) between two coworkers who were scheming on how to take more “sick time” without getting caught, brown-nose their boss to get what they want, and stay under the radar. These two individuals were corporate cockroaches!

I have an allergy to corporate cockroaches that no EpiPen can cure. They are the spoon of crap that ruins a barrel of honey and the rotten apples in a bushel of good ones. Nothing makes me angrier than those who try to game the system – their actions hurt both their team and company. As long as we turn a blind eye to corporate cockroaches, they will thrive, so we need to take an active role in keeping these people out of our organizations. 

Here’s how you can identify them.  Corporate cockroaches:

• Always ask “what’s in it for me?”
• Never show any initiative to take on anything new or even remotely risky
• Will never take responsibility for a mistake
• Spend more time brown-nosing the boss than genuinely helping the team
• Are exceptionally good at knowing office policies and play with loopholes all the time
• Never invest in bettering their knowledge
• Never work past 5pm and make excuses to leave early or take long lunch breaks
• Become the most political people during the hard times

Remember, an organization does not have to be large to have this infestation. Even a small startup can have scum on their team.

So what’s the cure? Be vigilant about the signs of an infestation and fire them without any mercy! Your organization needs to be filled with people who are passionate about their work!

Photo credit: Squall

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

• How a foosball table can kill your startup
• Keeping entrepreneurs and CEOs out of jail and an early grave
• What to look for in a business partner

I have a confession to make. Thanks to having worked for only customer revenue funded startups, I have become somewhat of a frugal nut. I love free stuff and I cringe at paying asking or retail price for anything. Anytime I pay MSRP, I feel like I have committed a sin. Whenever I would run operations in a startup, my most common response to many purchase requests was:” and with what revenue are we going to pay for that?” To me (and many others) cash is king, queen, emperor, and the whole darn extended dynasty. The only way I like cashflow in our books is incoming.

Though being that frugal of a S.O.B. is not easy, there are many more resources available now than they were when I started my career. Today I want to sing my praises to the Freecycle Network. If you have a huge ego and have an issue with used stuff… you may want to just move on to another article. For those of you who don’t know what Freecycle is, it is a network of e-mail lists and sites where people and organization give away for free or look for “stuff”.

To give you an understanding of how much generous folks participating in Freecycle have helped me, let me share with you things I have gotten off Freecycle: office supplies, whiteboards, tables, chair, storage cabinets, servers, printers, software, and various tech items. I estimate I did not have to spend in the area of about $20K-$30K, thanks to Freecycle. Sometimes we simply had no budget for a particular resource, so Freecycle helped us bootstrap. One particular case I remember very fondly. In one of my ventures I needed two servers for the office file serving, web development, and CRM. I quickly blasted out an e-mail to Freecycle network, though I thought it was a far shot. Same day I got two e-mails back. Both were from IT managers who had older decommissioned servers sitting on their shelves they did not want to trash. I quickly picked those up and found them both to be in a great shape. Yes, it did take me extra half day to clean them, update the firmware, find the older drivers, and purchase some extra memory and drives (which were dirt cheap on Ebay). But at the end I had two workhorses ready to save my day.

Now, please don’t misconstrue that I treat Freecycle in a “take only” manner. I believe in an environmental sustainability, conserving resources (which consequently also conserves the cash), and keeping my goodwill balance always in the positive. I have spared the landfills of boxes and boxes of computer components, PCs, furniture, books, etc. One man’s trash is sometimes another man’s treasure.

What is your favorite bootstrapping resource? Yes, I do plan an article on singing my praises to the opensource software.

Photo credit: John FlinchbaughSimilar Posts:

• Kill the cash cows!
• How to ask for help
• My boss does not answer my e-mails! What do I do?

I wrote a post several weeks ago about the many lessons I’ve learned from my entrepreneurial father.  Now I would like to share some tips from experience I have gained working in a startup world for 12+ years. These are things you definitely learn from rolling up your sleeves and working, not from a classroom or a textbook.

• Even one word in a 40-page contract can land you in a very bad situation. It does not matter how experienced or expensive your attorney is – learn how to read contracts yourself. Also, demand that your documents be written in “normal human” English because this helps both sides know what they need to do to be compliant with the contract. The language lawyers use serves only… lawyers.
• Family-run companies are great companies… if you are member of the family. Every organization has unavoidable office politics, but in family-run companies the office politics are at a whole new level. Again, there is nothing wrong with these companies, but you will only succeed if you are also politically savvy.
• If you hold substantial equity (read: anything more than 1/10^th of the company), require to see the books at least quarterly. Learn how to read financial documents and navigate QuickBooks. Many companies go under because those, who you thought were your partners and friends, mishandled money.
• In the startups world, those who flaunt their education or pedigree usually have nothing else to offer but their titles. I love people with proverbial dirt under their nails who were able to rise up through the ranks through their hard work. They are a very valuable asset to your company.
• A lack of adaptability is often confused with resilience. The big difference is: resilient leaders will navigate their companies around the storm, while others will drive right into the storm exclaiming they are “trailblazing” entrepreneurs (only to run out of steam and perish).
• Though I heavily advocate against using titles inside of the startups, if you are an employee, make sure you get one matching your contribution to the company (even if the company has a flat org-chart). All of us will move on someday and the outside world loves titles.
• A person with a highly complex coffee order who does not tip tends to be an egocentric and vain asshole.  If you are interviewing with senior level managers or executives, try to have at least one meeting in a coffee shop or restaurant and watch how your future boss treats their hard-working barista or waiter. Bob Sutton, author of “No Asshole Rule”, would definitely agree with this statement. He calls it “Asshole Metric: The Starbucks Test”.

Similar Posts:

• Dangers of Big Titles – post by The Operations Guy
• Thinking about joining a family-owned company? Watch out for stormy waters!
• If you are in a startup and have a title, you are not doing enough work…

I had a really fun conversation with a founder of a great company with fantastic potential today and we covered many topics, one of which prompted me to write this article. Securing money and investors are not always the biggest issue keeping startup founders awake at night. Assembling the right team from the very beginning can be a much bigger issue. I’ve previously talked about the traits you may want to look for in a possible co-founder and have covered the importance of a demographically and culturally diverse team. Today I will get down to the basics of how to start assembling your team from scratch. There are many perspectives on this subject, but I wanted to share with you what I have seen work.

Let’s start by debunking one common analogy – building a team is not like putting a puzzle together.  The number one rule I’ve learned from the best startup teams is that one trick ponies need not apply. In early to mid-stage startups, generalists should compose the majority of your team. There are two kinds of generalists: those who are Jacks-of-All-Trades and masters of one or two areas, and those who are masters of none (general management, which you don’t want).

Here are the rules of thumb I like for assembling a team:

• Until you reach a “comfortable” level of revenue, forget about specialists. (See my separate article on this issue). What makes one an asset versus a liability is the ability to step outside of the proverbial silo and competently get hands as dirty as needed. In addition, many times you can only afford one specialist for an area, which becomes a huge risk that I like to call “what if he/she gets hit by a bus?”.
• Don’t hire titles. Bring in people who are passionate about their areas of expertise and who love your industry. Passion for ones’ craft + love for mission of the company = talent worth their weight in gold. Plus, titles aren’t good for startups anyway.
• When building your team, take inventory of your strengths (even if it is just you), but more importantly, pay extra attention to your weaknesses. The best teams have members who complete each other. I like to build a matrix with the headings: “can do”, “can learn”, “can’t do” for each skill set and team member. Using this matrix allows me to keep better handle on areas we need to strengthen.
• Stay away from the “this is my baby” syndrome. Each member of your core team should be willing to build and hand off – you cannot grow your company if this is not the case. There is nothing worse than a person who micromanages or hogs an area of the business they consider “theirs”.
• Bring in people who have been at the level you want to be at in the next several years. There is no reason to bring on a big shot from a major multi-national corporation if you have no chance of being at the staffing, resource, revenue level that person is used to managing. If you are at $1MM revenue, get someone who has been at $50MM, but not $200MM or more. They will only get frustrated, cost you money, and leave before you know it.

Lastly, remember that there are always exceptions to every rule. I like to say that what makes you an expert is recognizing an exception for every best practice or rule of thumb.

Illustration credit: LuMaxArtSimilar Posts:

• Place of philanthropy in startup DNA
• 5 ways to build diversity into teams
• How to create a Non-Disclosure Agreement people can understand

I had to get several insurance quotes last week, since my current agent was not living up to my customer service expectations (especially considering the amount of commission they receive).  Only one of the three companies I contacted impressed me, and this prompted me to write this article and discuss how to better serve your customers.

I’m sure of one thing, archaic strategy of 9-5 customer phone-only support from agents who can not deviate from their scripts is live and well, but the companies practicing this strategy are on their way out. Why? We focus on maximizing the “shareholder value” and forget who pays the bills – the customer. People are becoming a lot more careful with their money and are starting to demand superior service. Companies like Zappos and NewEgg (to name a few) are setting a great example by taking the lead and focusing on their customers first. Just look at the fanatical following those companies get. You can’t stop their customers from raving about how great they have been served. Twitter, Facebook, Yelp, and countless blogs are full of glowing reviews.

I have been fortunate to work for two companies that were truly fanatical about their customers. Our accounts receivable at both organizations were great proof of what customers thought about us and the value we delivered, since we had no need to chase any bad payers. We simply had almost none. There were many instances where customers felt a bit embarrassed that they had forgotten to pay us, since we did exceed all of their expectations.  Here are several key lessons on how to provide the best customer service:

• Your business processes must allow your customer service and sales reps to have the freedom to behave in the best interest of the company. They are adults. Train them well and trust them.
• Communicate with your customers the way they want to. If they prefer to do an online chat, you better put that in place. If a team member does not feel comfortable with selling via e-mail, train them or replace them.
• Your customers will tell you how to up-sell them. You just need to listen to them. Customers actually love to be up-sold, as long as they don’t feel they are being taken advantage of and that the company is truly providing value that they need.
• Your angriest customers may be the ones who can provide you with the best feedback. Train your youngest team members on how to deal with the angriest of customers. I love customers who bring up weaknesses of the company – sometimes they will tell me things others won’t.

Photo credit: Vitor LimaSimilar Posts:

• If your staff does not get it, neither will the customer!
• Keeping customers and finding new ones in a bad economy
• Sampling of the biggest mistakes startup leaders make

I recently read a great article “Entrepreneurs: Beware the curse of the new building” by Steven Blank, who is a down to earth and experienced entrepreneur I greatly admire. While the case he describes is a bit dramatic and partly stems from deeper issues, many of his points were definitely something I have seen. The one sentence summary of his article: brand new offices disrupted SuperMac’s culture, detracted from growing the company, caused excess politics, and gave competitors lead time. I will not discuss the benefits or detractions new offices create. At one time or another we will all need to move our companies.  Instead, I wanted to share what I have learned from my experiences.

I have moved two companies during my career. One was a small move, but the other was a major production that was complicated by the fact we were moving in the middle of busy season. As I have mentioned, though I mostly agree with Steve’s points, in my case it was a bit different situation because the companies were late stage startups (4- and 7-year-old companies).  I’d like to share my tips for moving, which I acknowledge are more applicable to organizations like software development or professional services companies, that are dominated by knowledge workers.

• Avoid giving anyone offices if you can.  Even your CEO should be in the midst of it. If the mayor of NYC does not need an office, you don’t need one either. Office walls help create a “bubble” effect and rob you of 18-25% of usable space, make you less flexible, create needless hierarchy and status, and most importantly – exponentially magnifies office politics. An open office creates better accountability.
• It is a myth you can’t control noise in an open office. Cubes work, but they are not flexible. Partitions are much cheaper, more flexible, and do the job. Plus, open office helps with employee etiquette (you know, the stinky food, cellphones, and other issues). If your fish dish just stank up the office, now you have an angry CEO. You want to bet you will not do that again?
• Don’t segregate sales from your developers or other folks who make the product. Sales folks need to know what is down the pipe (meetings don’t cut it) and product people should know how hard it is to sell. Now there are product folks who cannot handle distractions. The solution is to buy them the best darn noise-cancelling headphones on the market.
• Not all the conference rooms need to be enclosed. I personally see conference rooms as an expense one should avoid. They are a waste of money. Either make a deal with a neighboring office to use their conference room, or take the money you have saved from not having that room and hold your meetings in the restaurant. If you choose to add expensive furniture in those rooms, the numbers will be even worse. The best option is to have bunch of foldable rolling tables, so the teams can put needed setups together for group conversations. Everyone can roll up their chairs too (that is $100-$400 of savings per person right there, just in chair costs).
• Those who will service the infrastructure (like your ops and IT guys) should be part of every stage of planning. Some ideas might sound great for you, but may be a huge budget drain for your infrastructure folks. One badly placed power outlet or the lack of the right number of outlets in certain places could cause major headaches and needless retrofit costs.
• Don’t EVER ignore local building codes and laws. A fire marshal can shut down your entire office for one infraction he/she deems not safe. Back when I was in IL, the fire marshal could shut down your office even for one space heater your team member decided to bring in and use. Huge bonus points if your operations person knows the fire marshal on a first name basis.
• Don’t let marketing people anywhere close to layouts, color schemes, etc. Every time they look at it, your costs go up. Most first impressions about the company are made outside of the office walls. Invest in that, not garish color schemes that cause eye fatigue.
• Buy used office furniture. You can get impressive stuff for 1/3 the cost and no one will know. If you can buy it from another soon-to-move company directly, you will save even more. If you really have the funds, than go for quality IKEA type furniture (however much I love IKEA, I am convinced it is cheaper to get more quality stuff long-term).
• Make your building manager love you. Give gifts to them on their birthdays, occasional “just cause” cases of cookies, and gift certificates to restaurants. I found that an extremely cooperative building manager is worth their weight in gold.
• And the last one - be frugal but not cheap. Example: don’t ever be so cheap you use flat paint on the walls. Pay extra for at least eggshell or semi-gloss. You will be surprised how even the cleanest team creates endless scuffs and stains on the walls.

Similar Posts:

• How a foosball table can kill your startup – part two
• Do you have what it takes to be an entrepreneur?
• The biggest mistake of my career

I’ve had the pleasure of working for companies “as diverse as the United Nations” during my career. These organizations have greatly benefited from having very diverse teams and are doing well even in this horrid downturn. Why is diversity important?

1. Customers are diverse, so varied teams are much more likely to understand what your customers really want.
2. Teams with a diverse demographic makeup will have different ideas, broader viewpoints, and a more diverse experience base – this is a sure formula for better decisions.

So, it is no surprise that I get the following question from time to time: how do you build a diverse team?

Let me start with the #1 rule for building a diverse team: as a leader (founder, CEO, etc) you should always keep your personal religious, political, and other beliefs to yourself. I worked for a company where one founder was a devout Catholic and the other was not a fan of organized religion. If you never asked, you never would have known. It worked well, because we had almost every demographic group represented in the company.

#2. Let diversity happen. You can’t force diversity in your organization by selecting people like M&Ms in a candy store: some green, some brown, some red, some yellow, some blue. That is not diversity that is “diversiwashing”.

#3. Diversity starts during your selection process. You must judge people based on their skills, ability to learn, and fit in the organization. If you want to use tests for these characteristics, then use only the ones that will not stifle diversity (cognitive and technical skills tests). Predictive Index, Devine Inventory, and many other tests that predict your personality based on word associations (or other language-based methods) are very bad for your company if you want any kind of diversity. There is a reason why sales people for PI, DI, etc, will never provide you with real peer-reviewed scientific studies and demographics used to evaluate these studies.

#4. Let your team vet the candidate, but don’t let them make final decisions on fit. As a leader of a company, you are entrusted with the vision and the path. Sometimes even the most well-intentioned teams will pick people just like them. Other times they will not be able to see how that person could be a great fit, but you know he/she will.

#5. Celebrate and educate! I am always a big fan of introducing policies that include at least X days per year for “personal reasons” and letting people work during holidays they may not be celebrating.  Example: everyone gets Independence Day and New Years off, but if you don’t celebrate Christmas, why should I force you to take a day off? On the subject of celebrations, always look for ways to include everyone. If it is Chinese New Year, why not congratulate your team members who celebrate it!  Another thing I like to do (since I am a foodie), is to bring my team together through food.  Have a company lunch where everyone brings their favorite dish, with bonus points for something most restaurants don’t serve, and extra bonus points if no one ever tried it before.

In my experience, it is never too early or too late to make sure you are thinking about diversity.  You can be a 9 or 120+ person startup and still be diverse.

Photo credit: Quinn DombrowskiSimilar Posts:

• Time to end the frat house culture! We need more women in our midst.
• Move your company forward by being wrong… often!
• Beware of the lemmings!

I am a firm believer that delegation is key to building a business. We can bring in all the technology in the world, but if we can’t delegate properly, our companies have no chance of scaling well. I have had the pleasure of spending many years in very rapidly growing companies and have made the following observations:

• Delegating work does NOT absolve you of responsibility. In the case of a failure, the blame is all yours. Investors will go after the CEO, even if a network admin made the mistake that hurt the company.
• If a failure occurs due to a person lacking skills, it is your fault for delegating work to the wrong person.
• If you have to say “if you want it done right, do it yourself”, you may want to get some education on leadership and the art of delegation.

Delegation is something leaders need to master, because you can’t scale your organization without it. Without delegating well, you are bound to flat-line or even drive your company into decline.

So here are the rules of delegation I like to use:

• Do not assume team members (even experienced ones) are clear on what needs to be done. Go into detail until YOU are confident the other person will execute the work as specified.
• Micromanaging is not delegating. You must have trust your team member and not hover. If you must hover, re-evaluate if the task is delegable or if you need to readjust your management style.
• Communicate any and all pitfalls, points of caution, and other negatives that may affect the delegated work. Also share any best practices, sources of additional information, or personal tricks of the trade. Part of delegation is teaching.
• When it comes to communications, it does take two to tango, but you need to take the lead.
• If you can’t trust someone to take on delegated work and are not willing to invest in their personal development, than you need to replace that employee. This kind of person just drags down your organization.

If you have any other rules of delegation you practice, please share them in the comments section.

Photo credit: Firefly the GreatSimilar Posts:

• 12 rules of business I learned from my father
• Can’t retain talent at your company?
• What I have learned about business leadership from competing in auto sports

As I network heavily, a common topic of conversation that comes up is how “older” workers feel that they are being discriminated against in this market due to their age. I will not argue this point, but there are three points I would like to bring light to:

• It is not your age that turns off companies – it is the staleness of your skills. If you are a marketing/PR person and have not mastered social media, a business analyst stuck in Waterfall, a developer stuck in Perl and COBOL, etc., than your age has nothing to do with it. No one is entitled to a job anymore. Bring value to the table! Gray hair and general experience is only 50% of the equation. You actually have an advantage – your experience allows you to pick up skills faster, because you already know many common elements. Do it!
• Startups LOVE experienced people. Stop wasting your time in big corporations. All the youth in startups need a healthy dose of “gray hairs” for balance. If you have up-to-date skills and a positive attitude – you are darn irresistible.
• Entitlement days are over, stop talking about the past. What keeps some people from talking to you is negativity. Times are hard for everyone. Pensions, guaranteed lifetime employment, and overly-generous benefits are gone due to evolution of the business. Such is life, move on, adapt, and thrive!

Here is a great example from my experience. I worked in a software development company where we had a couple 50+ year young developers who handled projects and code like masters. In a way, their maturity gave them the superior ability to handle the inherent stress of the industry and VIP clients. They were fun too, because the stories from their days at IBM, Digital, Arthur Andersen, etc. were great lunch conversations. They became the highest valued employees in the company, and if there was a hot new technology coming up somewhere, they were the first ones to know about it.

Photo credit: Stephen HackettSimilar Posts:

• 5 ways to build diversity into teams
• Can’t retain talent at your company?
• Place of philanthropy in startup DNA

I chat with many consultants during my busy events schedule.  Boston boasts a large number of consultants who are true experts in their areas. But, we also have snake-oil salespeople who love to call themselves business “coaches”, “gurus”, etc. If you are smart, you just smile at them, look for an excuse to run away, take their card, and chuck it the next moment you find a trash can. But, some early stage entrepreneurs fall prey to these vultures. That is part of learning process and natural selection. This article is for those of you with solid expertise and experience getting ready to start your startup consulting career.

Though being an “execution guy” is more of my cup of tea, I do enjoy occasionally performing consulting or advisory work.  I decided to write this article to share what I have discovered about startup consulting. I want to save you some time and frustration, so you can focus your talent and efforts on those who truly need and value it.

So, let me make a statement that many seasoned startup consulting pros will agree with: founders in early stages of startups don’t need your help. Why?

• Vast majority of true 1^st time entrepreneurs don’t know what they don’t know. With luck, they will start a startup in the area of their expertise. Problem is, just because you are an absolute genius software developer, does not mean you are a great business manager. Unfortunately, you can’t help someone who doesn’t want help.
• Attitude of “let’s wing it” is something that is required for survival in an early stage startup, especially if you are self-funded /bootstrapped. It is many times more expensive to fix the mistakes down the road that are being made in this stage. But, as the saying goes: “the first pancake is always burnt”. I never “chase” first time entrepreneurs in the early stage. Until you have burnt yourself, you will not know the value of good advice or execution.
• Excitement of starting his/her first venture is something that takes over someone’s entire mind. Early stage is a highly emotional stage for vast majority of 1^st-timers. It is like that high-school crush. You need to let it pass. In order for them to run their business properly, they need to learn how to control their adrenaline and emotions. Entrepreneurs in this stage need mentors and not consultants.

Bottom line: focus your efforts on people who know the value of your work. There are times when it is not worth it to educate your customer – this is one of those times.

Photo credit: Robert D. Raio

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

• Keeping entrepreneurs and CEOs out of jail and an early grave
• Beware of corporate cockroaches
• How a foosball table can kill your startup

Being in operations, I’m usually the right-hand-man for the CEO (and CFO), and have worked with some fantastic ones and a few who should have let someone else pilot the company. Not everyone is cut out to be a CEO and nowhere is this as evident and crucial as in startups. A good CEO can take the company anywhere he/she dreams it to go.

As I search for a head of operations position and talk to employees and founders of startups, one of the key phrase I am listening for is “my CEO [insert the rest of the sentence]”. That is what I want to hear. Yes, many will say “our CEO”, but there is a difference when someone adds emotion to their alliance and proclaims he works for his/her CEO.

So what is the difference? If I hear someone refer to their CEO as “my CEO”, I can ascertain people on his/her team will walk through fire for the company. Passionate trust in the leadership of a company builds resilient startups.

Here’s my table of the most common reasons people may call the head of the company “my CEO” versus “our CEO”:

I want to hear what makes you proud of your CEO.

Photo credit: Mark Kobayashi-Hillary

Note: statue in the photo is of one of the greatest dukes Lithuania ever had – Gediminas.  This statue is located in Katedra square, Vilnius – Lithuania.Similar Posts:

• Why do so many CEOs have no idea what operations people do?
• Delegate work, not responsibility
• Beware of corporate cockroaches

Back when I was working in Chicago at a late stage startup, I used to have great conversations with the president of the company about our various approaches to managing businesses. We shared war stories, ramblings about taxation in US and EU, and the software developers’ versions of Maslow’s hierarchy of needs. But one thing that stuck with me was his statement: “this company will never own a foosball table, because every company I have seen own one went under months after purchasing it”. The conversation that ensued is worth thinking about. When considering what is “cool to have” for employee morale and what they really need, we really need to distance ourselves from our egos.

• First and foremost – as leaders of companies we need to think about how to make our people more efficient and not about how much longer can we keep them in the office. Long hours do not equal good work product. If someone is tired and needs a distraction, they need to go home and recharge.
• This leads me to the next point – inefficiency caused by your team members. In the case of a foosball table, or anything else that involves more than just one person to “blow off steam”, it is bad judgment to enable an environment where one person could drag another one to “play” and therefore drag down the efficiency of the team. How do you help people not get distracted? Simple – don’t provide them with the temptation to do so.
• Last point – “cool stuff” might be something your recruiter will talk about when wooing someone to join the company, but beyond that it is a waste of time, money, and operational efficiency. It is also bad for employee morale and work-life balance. Perks like 401K matches, more days off, encouragement of the staff to get physicals, telecommuting, etc, are what matters and will make your employees stick around. All those “tchotchke” benefits have the same value as the cheap promotional items you get from vendors – cool to talk about for maybe 15 seconds.

UPDATE (2/15/10): Please see the part two of this article: How a foosball table can kill your startup – part two

Photo credit: Helen Cook

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

• How a foosball table can kill your startup – part two
• Keeping entrepreneurs and CEOs out of jail and an early grave
• Beware of corporate cockroaches

I read a Wall Street Journal article today, titled The New Résumé: Dumb and Dumber - Job Seekers Play Down Their Credentials to Avoid Looking Overqualified,” that really struck a nerve with me. This issue is not exclusive to Baby Boomer and reaches all the way into Generation X. We talk about how it is hard to find the right people for our companies, but we are not willing to think just a little bit outside of the box. Here is a novel idea, why don’t we stop forcing overqualified individuals to hide their qualifications and try to make a deal with them, while the demand is low.

Here is my recipe for hiring and keeping overqualified professionals:

1. Set the proper context in your mind. As a hiring manager, be appreciative that someone with superior skills is willing to take a position “beneath them.” This shows how well their ego is controlled. Keeping this context in mind will set you up to have a more successful conversation. Focus on making sure the candidate really fits the corporate culture and is genuinely interested in your company.

2. Show your excitement that you’re able to have someone with a high level of talent come in and help you solve your current needs and have them willingly take the compensation in line with their current value to the company. Reassure the candidate that as their value to the company increases, so will their compensation.

3. Invest time in showing “overqualified” candidates the roadmap and milestones you want to reach. Think about how this person could contribute to your team in the future, and how he/she could earn their way to the position and compensation more fit to their level. This is how you take care of your future today and ensure you have a good team member.

People have a very good memory. It is an absolute myth that top grade talent can always find a job. Usually this BS is sold by inexperienced recruiters who need to cover up the fact that their candidate pipelines are skimpy. Don’t believe the hype! Find that “overqualified” talent and do the best darn job you can selling them on joining you now! By helping someone in bad times, he/she is much more likely to be loyal to you. Just think about the money and resources you will save once things bounce back up and your competitors will not have the chance to grab that cream of the crop individual!

Photo credit: Kim KreidlerSimilar Posts:

• Difference between “My CEO” and “Our CEO”
• Companies that become unionized deserve it!
• How to build your startup core team

One of my favorite books is Sun Tzu’s Art of War. I have read it several times and is one of my top 5 favorite books. Although the teachings are very old (6th century BC), there is much that can be applied to the modern day hyper-competitive business environment. Here are some of the lessons I have learned:

• An individual contribution (or lack of it) can make the difference between a startup growing or becoming another fire sale. Everyone must be on deck and stand in the heat of the kitchen; if they can’t – show them the door. Even startups flush with cash can’t afford slackers.
• If directions are not being followed, management is failing to communicate. Clear messages don’t get misinterpreted.
• My father ran some large organizations with great success and I learned one big lesson from him: there is no gray zone in leadership. People follow you because they love you or because they fear you. The first one works much better, but you should not be afraid to chop some proverbial heads of those who endanger your company. You must be capable of both styles.
• Never engage your competitor head-on! It is good for your ego, if you win, but it is too costly in resources. It is about running a “territory game” (market share) and not about taking down your competition. Since it is the customer who pays your bills, you must “outplease” your competitors’ customers and turn them into yours. Focusing on pushing your competitor out of business does nothing to increase your bottom line.
• It is unlikely you will win with a team full of mercenaries (freelancers). Their loyalty is not to you. Build a strong team of “soldiers” with ferocious loyalty, and the drive for a common cause, and sense of belonging.
• Preparation trumps everything. There is no excuse for not figuring out everything in your control before taking huge steps. Focus on customer development. Many of us think our idea is the hottest thing in the world, but if customer is not willing to pay for it, than our idea is worthless. Do small scale pilots, work with customers to build your product/service, and build a solid foundation to scale.
• Don’t toss good money after bad. If you fail small, you live to fight another day.
• Rash, cocky, ego-driven behavior reaps some of the most bitter outcomes. Ego does not provide you with the guts to go against big challenges, it actually clouds your vision. Don’t ever stop thinking with your wallet and your brain.
• Building visions of grandeur from the stories of the very few who got lucky and made it is dangerous. Many more have “perished” on the way to success. Focus on learning how to avoid the pitfalls that broke the backs of entrepreneurs before you.

Photo credit: vlasta2

Similar Posts:

• Keeping customers and finding new ones in a bad economy
• If your staff does not get it, neither will the customer!
• Customers, not shareholders, pay your bills

Like many of you in the startup world, I have read and signed my share of non-disclosure agreements (NDAs). I have reviewed, edited, and sent hundreds of them in my career, but I am yet to come across one that really serves anyone but the lawyers who charged dearly to write it. So, why don’t we stop wasting our money on having attorneys fill in one of their NDA templates, and write one that is understandable to everyone.  Yes, let your lawyer look it over, but don’t allow him/her to insert any words your grandma would not understand. Here is how I would write my NDAs:

Non-disclosure agreement

Purpose of this document

Products, services, methods, technologies, etc. we work on in our company are considered to be a trade secret; therefore, we need to protect our “first to market” and/or other competitive advantages. We may later choose to patent, trademark, or otherwise protect our work, but for now we will protect it using trade secret status.

Who is covered by this document?

• If your signature is at the bottom of this document, you are subject to this NDA.
• If you are working on any projects for us and your superior signed this document when we engaged your company, you are also covered by this document.

How long this NDA is effective?

• This NDA covers you for the entire time you are engaged with us in any way plus X years after we sever our relationship.

What is covered by our NDA and what can you do to comply?

• If you think something is covered by the NDA, it very likely is. Ask someone in charge first before talking about it outside of our company.
• If you can’t find it in Google search or Wikipedia… assume it is covered by our NDA.
• Take reasonable and/or common sense efforts to help us keep anything subject to our NDA a secret.
• Help educate other members of your team about what is subject to our NDA.
• Keep everything related to product development, planning, strategy, and R&D as a secret from anyone who you know has not signed our NDA.
• Do not use lists of customers, vendors, employees, components, etc. for any other purpose than what it is intended for and only for the benefit of our company.
• If you get sued or subpoenaed to testify and you may need to talk about anything covered by our NDA, please notify us first, before making any statements. We are afforded by law the right to protect our secrets and we will be engaging an attorney to help you on anything related to what is covered by our NDA.
• Any products or new methods and techniques you developed here are our property. Ask first before using them somewhere else.
• If you are no longer affiliated or doing business with us, but would like to talk about anything you saw inside, please ask us first.

When is something not (or no longer) subject to NDA:

• You can prove you knew it before you signed this document.
• You can prove you learned about it from an outside source not related in any way to our company.
• You have seen or heard our marketing, PR, or CEO talk to journalists and bloggers about it.
• There has been a provisional or full patent granted for it.
• Our executives communicated to the team it is OK to talk about it.
• A judge in any level of the judicial system rules that it is against the law to keep particular information secret.

Signature:

Signature of a witness:

• Put your software developer or R&D team in a separate room with a big sign on the door that says: “Anything discussed in this room is subject to the NDA”.
• Train your team to label ANY document that they even suspect would be subject to the NDA as “Confidential”
• Have a “no personal email or browsing” rule in the areas of your office where you are working on anything subject to the NDA, but create an area where your team members are more than welcome to take a break, hit Twitter, Gmail, or check out how their bid is doing on Ebay.
• Desktop virtualization is cheap. If you let employees use their personal equipment for work, than you should pay to install virtual desktop applications and have them do their work on a VM (virtual machine).

P.S. Folks at Orrick, Herrington & Sutcliffe LLP. were kind enough to the entrepreneurial community to release entire startup kit of required legal documents. From NDAs to incorporation papers, stock option to contractor agreements, it is all in their Start-Up Forms Library.Similar Posts:

• Disaster recovery planning and business continuity for startups
• Not providing employees with healthcare insurance is absolutely reckless!
• Doing collections the startup way!

As some of you may already know, I am an avid “car guy” and starting my third season of autocross competitions (an auto sport, for those not familiar I have included a video below of what it is like). I did well in the races when I lived in Chicago, but encountered much more skilled competition when I moved to Boston, and it’s taken me awhile to move up the competitive ladder here. As I was recently pondering my strategy and goals for the season, I realized that some of the rules of racing are also very useful analogies for the world of leading companies (especially startups). Here is a sampling of several things I learned in racing that directly apply to business:

• Anticipate what is coming and let your peripheral vision and instincts deal with where the car is now. In racing we look one, two, or even three corners ahead and trust our instincts, experience, and training to handle where we are at the moment. If you spend a lot of time in the office studying your spreadsheets, reports, etc. instead of going out and talking to your customers, attending every networking event pertinent to your industry, and meeting people with the same fervor as if you were looking for a job, then the unexpected will blind-sight you.
• Multi-tasking is over-rated. You only have so much cognitive “cash”, so spend it wisely. In racing we remove all possible sources of distraction (including ignoring parts of the course that don’t matter). We never fidget with switches, mirrors, or do anything else besides driving. We prepare and learn to trust our cars, so we can focus on the road ahead. Micromanagement is the equivalent of multi-tasking when you are leading. In order to lead an organization effectively, you need to make things “instinctive”. What do I mean by that? Be very clear about your expectations and communicate them, delegate work without delegating responsibility, automate the mundane tasks, outsource the frivolous work, and empower your team to make the right decisions.
• A good driver can win even with a sub-par car. Buying a better car does not make you a better driver. Same goes for business. Better tools should only come after your team has developed sufficient skills. People with more powerful tools and lack of skill cause more damage to their organizations than if they were using something that limited them. I bet you have seen police reports of some yahoo crashing his high-performance sports car 10 miles from the dealership. Business world is no different. It is littered with “crashed” companies that were full of inexperienced and poorly trained people.
• You can’t make hard turns and change your speed (break/accelerate) at the same time. Driving organizational change is a balancing act. In racing we call it a “friction circle”. The same concept applies to business. Don’t change everything all at once or you will “over-drive” the organization and end up off-course.
• Small changes can make a big difference. Skilled drivers make small adjustments all the time. For example, they tweak tire pressure in small increments until they get exactly what they want. Focus on the impact that little details will have on the large picture. Those who make drastic changes usually end up with horrid performance, spinning out, or damaging their rides. Especially in the startup world, it is better to fail small and often, because you learn, improve, and live to try again another day.
• Smooth drivers win over crazy drivers. Fluid measured motions make the physics work for you. In the business world, the best of the best let their business dynamics work for them. It is easier to innovate when you are not battling the world. Trying to turn the market in a drastically different direction does not work.
• Going full throttle will only last so long before something will break. You can’t subject your team to non-stop high intensity work without risking a catastrophic breakdown. The goal is to last the entire season, not just win one race before your car breaks down.
• The best drivers always look for feedback and opportunities to learn. I have seen the most gifted drivers ask for other good drivers to hop in their car and give them some feedback or tips. Learning and improvement never stops! Those who invest heavily in learning are the ones who get the trophies.
• You are only as good as your competition. It is easy to win trophies when all your competitors are rookies. But that gets you nowhere in the long run. There will come time when a real competitor will come by and take away all your “glory”. In the business world I hear some entrepreneurs exclaim in their naiveté that they have no competition. I pity their investors, because fire sales are soon to come!  For those of us who are not naïve, we know that competition is a mother of evolution. We look for it, we better ourselves, and we are always vigilant.

Similar Posts:

• Lessons from Sun Tzu’s Art of War for startup leadership
• Sampling of the biggest mistakes startup leaders make
• Beware of corporate cockroaches