Editor’s Note: Thought leader Grace Ueng is CEO of Savvy Growth, a noted leadership coaching and management consultancy, celebrating its 20th anniversary. Grace writes a regular column on Happiness & Leadership. Grace’s core offerings are conducting strategic reviews for companies at a critical juncture and one-on-one coaching for CEOs and their leadership teams.
RESEARCH TRIANGLE PARK – Today, we wrap up our learning of Scot Wingo’s leadership wisdom. Last week we discussed how Scot’s fanaticism on delighting the customer and treating his team right has created a winning culture: Wingo’s winning formula at ecommerce services provider ChannelAdvisor, fast-growing vehicle maintenance startup Get Spiffy and his likewise growing Tweener Fund for startups.
Culture is something important to everyone. Though some consider it an art, it is actually quite a science to have a good one.
Netflix Culture Deck
When Reed Hastings of Netflix published their culture deck, it immediately went viral and has been viewed by over 17 million people. Sheryl Sandberg has called it “one of the most important documents to come out of Silicon Valley.”
The deck captured a lot of things that Scot already intuitively knew. The biggest one was when you’re trying to build a team of top performers, the worst thing you can do is to have an underperformer on the team. A naturally empathetic person, Scot has had to shift his innate behavior to move more quickly when an employee is underperforming, for the good of the team, and just as importantly, for the underperformer.
Just today, I advised a client on the big opportunity cost of investing months of time in B level employees who are unlikely to become A+ players. A team is as strong as its weakest link, so continuing to employ underperformers drags down group performance.
Scot said that culture is something that everyone thinks is a statement in words. He disagrees. Netflix also says that it is not something that is written down….rather “values are shown by who gets rewarded, promoted, or let go.”
The Netflix culture deck boils down to 5 themes:
- Hire, reward, and tolerate only fully formed adults. Ask workers to rely on logic and common sense instead of formal policies, whether the issue is communication, time off, or expenses. As an example, the company’s expense policy is five words long: “Act in Netflix’s best interests.”
- Tell the truth about performance. Scrap formal reviews in favor of informal conversations. Offer generous severance rather than holding on to workers whose skills no longer fit your needs. Therefore, at Netflix, adequate performance gets a generous severance package.
- Managers must build great teams. This is their most important task. Don’t rate them on whether they are good mentors or fill out paperwork on time.
- Leaders own the job of creating the company culture. You’ve got to actually model and encourage the behavior you talk up.
- Talent managers should think like businesspeople and innovators first, and like HR people last. Forget throwing parties and handing out T‑shirts; make sure every employee understands what the company needs most and exactly what’s meant by “high performance.”
Amazonian culture: getting things done quickly
At ChannelAdvisor, Scot had the chance to meet with partners such as Paypal, Yahoo, eBay, and Twitter, where his customers were their customers. He would see how it took many layers and people in the room and outside the room to answer his questions.
He would be amazed at how Amazon, unlike the other large companies, had the ability to answer his questions more readily, and therefore react more quickly. So he began to study how their culture works – he focused on what made Amazon great.
Scot concluded that it boiled down to their relentless focus on the customer and how everyone has an accountability to that. It forces everyone, from SVP down, to know what is impacting their customers.
Scot cited the book Think Like Amazon to understand Amazon’s culture creation. I ordered a copy to learn about the ideas he has applies to his companies. I share three:
1: Two-Pizza Team and A+ Players
One Amazon concept that Scot uses at Spiffy is the Two-Pizza Team (TPT). The thinking is that no team should be so big that it can’t be fed by two pizzas. It’s not really the literal team size that is important, rather the team’s autonomy, accountability, and entrepreneurial mindset. The Two-Pizza Team must be properly equipped to operate independently and with agility, and has the opportunity to make a system wide difference. This frees teams from innovation killing bureaucracy.
At Amazon, teams are organized around capabilities and services, as opposed to projects, stay together for at least two years and iterate toward improved outcomes. TPTs minimize communications overhead including the number of meetings and coordination points.
Like Netflix, Amazon embraces the “only hire A+ players”, which allows the TPT concept to work. Netflix believes that the best perk you can provide employees is having excellent colleagues who take their game up a notch and offering generous severance to those whose services you have outgrown.
TPTs result in more innovation, higher quality work, and a stronger culture.
2: MBWA: Management by Walking Around
Just as Amazon believes in management getting out of the office and spending time with customers, in his prior companies, Scot had a secret management trick of bringing his dog to work. He would walk around and check in on people and see what they are doing and have ad hoc conversations as it was non intimidating with his dog in tow.
3: 1 way or 2 way door
Know if a decision is like going through a 1 way door or 2 way door. With the latter, it is testing, and with the former, there is no going back. Two way door decisions are reversible, so at Amazon and Scot’s companies, they encourage employees to make them, by applying the lightest weight approval process.
When asked what he considered important characteristics to be a successful entrepreneur, Scot offers a one word answer: “grit”. It takes him some time to figure out if they have this trait. Entrepreneurship is hard, especially determining product market fit. You must be foolishly optimistic and stubborn, like Don Quixote, willing to run through a wall. Finally on the 90th time – you punch through. You are so passionate and crazed about what you want to do, you can make it through the hard times.
Being determined, however, does not guarantee success. You must also have a unique idea that solves a customer pain.
Scot Wingo is to the Triangle tech community what Bob Ingram was to the Triangle life science community. He is beloved by us not for his record of growing larger and larger successes, but for giving back generously of his entrepreneurial wisdom and for being uniquely, authentically Scot.
I like to tell the story of how several years ago, I reached out to Scot to see if he would meet with a client who had an interesting offering. Not only did he take the time to drive to my client’s office and provide his feedback, but the next day my client received a book in the mail from Scot that he thought would help.
Scot encourages others to be entrepreneurs. As he was figuring out how to help more people, he realized that his sweet spot is after the entrepreneur figures out product market fit. So he put together a list – the Triangle Tweener List, those that were in between a very early stage start-up, but needed a bit more capital or resources to break through. Several years later, he started the Triangle Tweener Fund that writes checks to help scale these named businesses. He has attracted well over 100 individual investors interested in supporting the future of tech in the Triangle.
His TweenerFund was named one of the most active in the nation last year, and tops in the southeast with 46 investments.
When asked why he does all this, Scot shares that years ago, when he was figuring out his first start-up, entrepreneurs Chris Evans and Richard Holcomb were generous with their time in helping him. When he asked Richard how he could repay him, his response was “In the Triangle, we pay it forward. Some day down the line, you can also help a budding entrepreneur.”
When I relayed to Richard what Scot said, he was touched and said, “he is doing so much more than just paying it forward.” I think everyone in the Triangle tech community would agree.
Would you like your own Happy Dance?
I’m getting ready to don the Spiffy Penguin outfit to do my Happy Dance! If you haven’t gotten spiffy yet and would like $20 off, email me and I’ll get you this discount which will allow me the same…I love doing the #GetSpiffy Happy Dance and I think you will too!
Watch Grace Ueng’s interview with Scot Wingo in its entirety: link
About Grace Ueng
Grace is CEO of Savvy Growth, a leadership coaching and management consultancy founded in 2003. Specialties are strategic reviews for companies wanting to reach the next level and conducting 360s for leaders to uncover their blind spots.
A marketing strategist, Grace held leadership roles at five technology ventures that successfully exited through acquisition or IPO. She started her career at Bain, then worked in brand management at Clorox and General Mills. She is a graduate of MIT and Harvard Business School.
Grace and her partner, Rich Chleboski, develop and implement strategies to support the growth of impact-focused companies and then coach their leaders in carrying out their strategic plans. Their expertise spans all phases of the business from evaluation through growth and liquidity.