Advice From the Top Read online

   Intel’s Andy Grove was right, only the paranoid survive.

  “Understand the real reason why you’re losing share and respond intelligently. Too often, leaders cut prices. They take two aspirin without knowing what the illness is.”

   Happy customers create a barrier to entry. They won’t switch for a lower price, only for a superior product at a lower price.

   Keep an eye on competitors, but ultimately the company that delivers for customers wins.

   Business is not a Pop Warner football game. It’s OK to run up the score.

  Did you know?

  Bennett played baseball at the University of Wisconsin. Golf handicap: 5. Favorite course: Lake Course at the Olympic Club in San Francisco.

  Collects wine. Favorite: Amarone from Italy.

  Became CEO after 23 years at General Electric. Intuit revenue grew from $801 million in 1999 to $2 billion in 2005. Quicken personal finance software had a 70% market share, TurboTax had a 79% share, QuickBooks, had an 87% share despite repeated intrusions by Microsoft.

  Don’t be a scold

  — Larry Brown, NBA and Olympic basketball coach on positive coaching

   Strive for a high ratio of positive-to-negative comments.

   Explain to players/workers you’re trying to teach, not criticize. Be sincere when you tell them you want them to reach their potential.

   When they trust you’re on their side, then correct them. That's coaching.

   No player/worker thrives on intimidation or shame.

   Don’t hire people unless you believe in them.

   Recruit “A” players with great character. Reward them with money, but they must be part of the team. Great NBA players get more public adulation, but they must be good teammates or there are problems in the locker room. Likewise, hire “A” employees who don’t need to be treated like prima donnas.

  “If your best player has great character, the chances of succeeding are incredible. If your best player is not of good character, then you have a problem.”

  Give pep talks. Tell the team to play hard, play together, play smart, and have fun.

  Win by maximizing everybody's talent.

  Tell them they don’t win as individuals. They win by being unselfish and doing their jobs.

  Put people in an environment where they can be successful.

  “Getting beat doesn’t mean failure. When I was at the University of Kansas we lost five straight and ended up winning the championship.”

   Don’t play it safe. Accept mistakes are a part of taking the risk to win.

   There are different kinds of mistakes. Mistakes for lack of effort are bad. Mistakes for fear of losing are bad. Mistakes from giving best effort are good.

   Take the blame when the team screws up. Give them credit when they do well.

  Did you know?

  Brown never had a regular job. He says that coaching is the only thing he could do. Enshrined into the Basketball Hall of Fame 2002.

  Joined the advisory board of the Positive Coaching Alliance after his 8-year-old son was screamed at by a youth baseball manager.

  His 2004 Detroit Pistons won the NBA championship months before his U.S. Olympic team limped home with a bronze medal. He said he was proud of both teams.

  Inching towards perfection

  — Lewis Campbell, Textron CEO 1998-2009 on Six Sigma

   Change will be resisted. Expect people to be content with the way things are.

   The work will seem harder until you get traction. Persist. You must be “all in.”

   Six Sigma fails when it’s used as a "Hail Mary" pass.

   Define a problem, take measurements to be crystal clear on what needs to improve, analyze the data using statistical tools to sort through the noise.

   Don’t backslide. Once something is fixed, make sure it’s fixed for the last time.

   The Six Sigma goal is three defects per million.

   Apply it to service departments, such as legal, as much as to manufacturing.

   Use it to let employees question the boss about how they manage. Challenge leadership with irrefutable data.

  “Somebody out there has to be the premier company. Why can’t we?”

   Resist the urge to pull key people out of training.

   Don't leap to help customers eliminate waste until Six Sigma is ingrained at your company.

  Did you know?

  Campbell’s an avid fly fisherman. Also skis and scuba dives.

  Six Sigma falls in and out of favor. It was introduced by Motorola engineer Bill Smith in 1986. Jack Welch embraced it at General Electric in 1995. It lost steam in the late 1990s. Campbell resuscitated it in 2003 when Textron’s stock took a nosedive. By 2006, the stock had climbed to an all-time high.

  Old dogs must learn new tricks

  — John Chambers, Cisco Systems CEO 1995-2015 on embracing technology

   It’s not more difficult to learn technology when you grow older. It’s how you approach life.

   Geezers don’t need to be geeks. Learn technology from a practical business approach.

   It’s OK if you’re not gadget-savvy. That’s irrelevant. Figure out how to use technology to get closer to customers. Look for new market opportunities, get quick feedback. Gain advantage.

   Ask the geeks to quit using jargon.

   Be honest with engineers. Say, “I really didn’t understand what you said. Can you explain it in terms that I can grasp?”

   Spend time with people who know technology better than yourself. Listen to them, make them teach you something.

  Did you know?

  Chambers graduated near the top of his high school class despite having dyslexia.

  First job out of college was selling million-dollar mainframe computers at IBM. They didn’t have the processing power of today's phones.

  Doing business with the Red Dragon

  — John Chen, Sybase CEO 1998-2010 on China

   China will stop stealing intellectual property once its middle class grows. Hong Kong, Singapore and Taiwan all graduated from rampant pirating. History runs its course.

  “Japan took our cars and TVs apart to make them better. Even the United States stole writings from Charles Dickens in the 1800s. The Chinese are proud, they’d rather not be labeled as copycats.”

   Resist protectionist urges. Hiring American restricts companies to 5% of the potential talent pool.

   In times of controversy, companies must strive to be neutral. Thread the political needle and move on.

   English remains the international language of business, but knowing Mandarin will prove more valuable than learning Japanese in the 1980s. Japan’s economy was never open, so the opportunity lost wasn’t as great.

  Did you know?

  Chen was born in Hong Kong. His parents escaped communism in Shanghai and moved to Massachusetts.

  Testified before Congress on U.S.-China trade relations. Served on President George W. Bush’s export council.

  Governor of San Francisco Symphony. Favorite composers: Mendelssohn, Tchaikovsky.

  No balls, no babies

  — Mark Cuban, Self-made billionaire on risky business

   Go for it when you have nothing. If you lose, you still have nothing.

   Don’t borrow, especially from friends and family. Lose your money, not other people’s. Accept 100% of the risk and reward of any new venture.

   Fear of failure forces you to prepare.

   If preparation tells you that risk-aversion is the right way to get results, be risk-averse.

  “When the opportunity arises, most people don't have the courage to go for it.”

   Business is Darwinian. If you go broke you get to start over as a more evolved entrepreneur.

   Find something you love. If you don't make money at it, at least you like going to work.

   In business deals, look for the fool. If you don
't see one, the fool is you.

  Did you know?

  Cuban first heard “no balls, no babies” from a blackjack dealer in Las Vegas.

  Got rich launching tech companies.

  First job was selling garbage bags door to door at age 12.

  He owns the Dallas Mavericks. First dunked a basketball at age 37.

  Best sports bar in any NBA city: Kilroy's in Bloomington, Ind.

  Advises small investors to stay out of the stock market and put their savings in a bank. Favorite book: The Number by Alex Berenson, about how corporate fraud is driven by Wall Street's focus on quarterly earnings.

  When it rains it pours

  — Michael Dell, Dell Computer founder and CEO on thriving in hard times

   Don’t focus on stock price. Focus on things you can control such as costs and product mix. Through good days and bad, worry about building a company.

   As more and more customers order directly, let them tell you what they want and need. If you listen, they’ll tell you where to go next, where to expand.

  “Let customers order what they want. Don’t try to get them to buy what you’ve made.”

   Customers want flexibility and value. Whoever provides it will win.

   Ask: what do customers most want us to do next? Do it, then learn quickly if it’s a dud or a winner.

   Get insiders off your board. Independent directors not only keep the company honest, they help it succeed with outside ideas.

   Be known as a prestigious place to work. Get people beating down the door to join your company.

   Find out where competitors are making too much money off a product. That’s where opportunity lies.

   When capital dries up, big companies are in a better position to score on new products. Reach out to those who are working out of their garages. Let them be part of your R&D ecosystem.

  Did you know?

  Dell was a pre-med major at the University of Texas. He dropped out at 19. His only business course was macroeconomics.

  “My parents were very upset until I showed them my first financial statement.”

  Owned a BMW at age 16 after targeting newspaper subscriptions to newlyweds.

  Pre-Zuckerberg, Dell was the youngest-ever CEO of a Fortune 500 company at 27 and a billionaire at 31. By 34, he was richer than Bill Gates at the same age.

  Roll up your sleeves

  — Bob Dickinson, Carnival Cruise Lines CEO 2003-07 on grunt work

   Listen to front-line employees. They know their jobs far better than you.

   Don’t come down from the mountain with tablets of stone. Be the most humble around your company’s lowest-paid.

   Focus on the needs of employees, especially those who are face to face with your customers.

   Do your grunt workers a big favor by managing customer expectations. Don’t advertise your product as luxury or gourmet unless it is. The hard-working front-line workers will absorb the blame for any shortfall.

  “We challenge the marketing department to create the lowest level of expectations but just high enough for customers to buy the product.”

   There are more productive places for top leadership to spend time than in the trenches.

  Did you know?

  Dickinson was the first to appear on the PBS program Back to the Floor. He worked five jobs on a cruise from Miami to the Caribbean including maid service.

  Says he’d rather be CEO for minimum wage than a cabin maid for $3 million in salary, bonus and restricted stock.

  “If you’ve been the conductor, you don’t want to be first violin anymore.”

  Had never seen a cruise ship until he went on a job interview at Carnival. He was once seasick on a sailboat. There was "no loss of fluids."

  Were he forced to do karaoke on a cruise ship, he would sing American Pie.

  Trench jobs he’s worked include pumping gas in Pittsburgh and selling industrial tires.

  Offshoring is not a dirty word

  — Uwe Doerken, DHL executive chairman 2004-08 on outsourcing jobs to foreign countries

   Don’t feel guilty. Offshoring and outsourcing benefit the consumer and the world economy.

   Outsourcing doesn’t hurt first-world economies. Efficient and less costly production leads to affordable products and services that allow the first-world to stay competitive.

   Encourage your country or community to establish clusters of expertise. Those clusters keep good jobs and attract new ones.

  “It’s about adapting and keeping the highest value-added jobs.”

   Over time, expect economies to move up the skill curve. What was a high-skill job yesterday becomes a medium skill today and low skill tomorrow. Sewing was high-tech in the 19th century. It has migrated to India, China and now to other Asian countries.

   Education is continuous. It's no longer enough to learn a trade for life.

   Convince governments not to tax or otherwise punish companies trying to produce more affordable products and services.

   Don’t fear backlash. Educate.

  Did you know?

  Doerken was born in Schwelm, Germany. Fluent in English, German, French, Spanish and Dutch.

  Rides a Harley along coastal and mountain roads.

  Slept in a different bed, on average, every third night.

  Favorite travel destination: Thailand, with its natural beauty, kind people and wonderful food.

  The recipe

  — Tim Draper, venture capital investor on the secret of success

   Pessimists serve a purpose, but optimists accomplish.

   Work a full day and then an extra 10%. The full day is reactive, doing things people tell you to do, returning emails, checking off to-do lists. The 10% is the creative time to do proactive things—all the things that you want to do.

   The extra 10% serves the employer. It also helps you enjoy your work more. The extra 10% is what matters to you.

   Everyone’s success is different.

   Look on failure as stepping stones to success.

  “I missed out on Yahoo, Google and Airbnb. I missed out on Facebook. Some failures can be overcome by hard work, but failures to act are just blah.”

   Muscles get weaker but more efficient – even the muscle between your ears.

   Practice the things you want to be good at, they will get easier. Fight the urge to do the same things over and over again.

   Try new things to live a more interesting and happy life, but expect to fail more often.

   Surround yourself with young, flexible minds.

   Love. It’s very powerful.

   Fire people by telling them the good things about themselves. Tell them what the job required and how the two were not a fit.

   Respond if the media gets something wrong. Correct mistakes immediately. Errors in the press go uncontested in social media and spread geometrically.

  Did you know?

  Draper is a third generation venture capitalist. Helped launch Hotmail, Skype and Tesla among others.

  His sister is actress Polly Draper of thirtysomething.

  A libertarian, he’s behind an initiative to split California into three states.

  Keep a straight face

  — Annie Duke, professional poker player on the leadership lessons of Texas Hold’em

   In poker and in business look for patterns. How do opponents behave in comfortable and uncomfortable situations. Gather data so you can predict.

   Understand how opponents perceive you.

  “If people are perceiving me to be too conservative, then I’ll play in an incautious manner until they readjust their perception.”

   Bluff sometimes in adversarial roles, but never in a partnership. People will suspect you’re untrustworthy.

   Most decisions are mathematical. Take more risk when the return is huge. Take less risk when it’s small. Know the pot size.

   You can’t alwa
ys be right. It’s about being right often enough.

  “Great poker players free themselves from the worry of being wrong.”

   Business is not always fair. The person who does the best job doesn’t always get promoted.

   It’s more like poker. You can put your money in with aces and your opponent has fives. You win that pot 82% of the time, but the 18% happens.

   There are things you have control over and things that you don’t. When you have a bad outcome, analyze the decision and try to figure out if you did something wrong.

  “If it’s out of your control, don’t get tilted, which means emotionally upset. That’s when we make poor decisions.”

   Make decisions in your self interest, but self interest is not being overly greedy in the short run.

   Those on a good streak say, “I’m the best player in the world. Look at me, I’m so wonderful.” Those on a bad streak shift blame to luck or a scapegoat. Neither attitude is helpful.

   Take time off when an extended bad streak affects decisions.

   Women are underestimated. If men think you’re dumb, let them think so. Use it to your advantage

  “Women spend too much time trying to prove themselves instead of saying, ‘I hope everybody underestimates me.’”

   If you see a woman at the table, assume she’s not that skilled. But the minute she puts her first chip in the pot, start updating your opinion.

   Smart, successful executives who try something new have to set their egos aside and say, “I’m obviously a very talented individual. I could become good at this, but I have to be willing to learn. I have to open my mind to the possibility that I’m wrong and to listen to other people.” That’s hard for someone who’s gotten to the top.