Bet on Yourself

How comfortable are you with the idea of relinquishing control over something important to you to someone who doesn’t really wish you well? How about relinquishing control over your career? Over your family’s livelihood?

Whenever alignment of interests isn’t present at the workplace, that’s exactly what employees are doing – they’re relinquishing control to the manager who has completely different incentives. If you’re working in a big company, your career success – your next years’ bonus, your promotion – are in the hands of someone who has no rational reason to wish you well.

Don’t give me the empathy argument. Don’t tell me that your manager wants to help you because it will make him/her feel good inside.

Incentives rule the world. People optimize for the way they are rewarded. The manager will optimize for what will make them get their next promotion. When it costs them nothing, they might even invest in you – if they’re what we consider a “good manager.” But do not kid yourself – there’s no incentive for them to systematically make you better off. You’re just a cog in the machine. A stepping stone.

… How comfortable are you with the idea of gambling? Of betting something valuable to you on a phenomenon with relatively unpredictable outcome? 

I’m not much of a gambler; the idea of having zero control over the spinning wheel of the roulette gives me a heartache. Someone else throwing the ball… Someone else programmed the roulette… Just standing there with my fingers crossed makes me feel powerless. A victim of the odds. A fool that disrespects the probability theory.

But what if you could change the game? What if you could be the one throwing the ball, programming the roulette, training for hours on how to beat the odds? What if after months of training, you were presented with a chance to make a bet – on yourself, on your own skill – and be the one playing your own game, with so much under your control?

That’s what startups are about.

You’re gambling – yes. You’re playing against the odds – most startups fail. But you’re betting on yourself – your own skill, your training, your intellectual horsepower. You’re creating a new world – every day. Your hunger inspires you to do more than humanly possible. You’re riding a roller-coaster – but it’s your own path.

Moreover, people around you – your manager, your peers – are all in exactly the same boat. If you don’t pull your weight, you will hear about it; others will jump in to make you better. If you’re doing well, your leaders have a purely logical incentive to get you the recognition you deserve – because it will make THEM succeed. Because it improves the odds of the startup succeeding. Because you personally are contributing a big, noticeable chunk to the bottom line of the value of the startup.

The most important factor here, of course, is the ability of every employee to make a meaningful difference on the company’s bottom line and having a share of the gains. This is what changes the incentives for everyone.

The wise Glenn Kelman says that “startups are the most intense way to live.” I couldn’t agree more. The thrill of a bet on myself – combined with the responsibility that it brings – is making me feel alive more than ever.

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Line-Drawing Fallacy and Accountability

There’s a beautiful logical paradox, a line-drawing fallacy:  it’s difficult to tell when quantity transforms into quality. Which of the cuts killed an elephant?.. Which of the thousand-dollar checks made a company go bankrupt?..

It’s so difficult to tell when an incremental, continuous process turns the corner and radically changes its character, and a temptation – a very pragmatic temptation – is to allow for wiggle room and ignore the little deviations. Meh, just another check. Our company’s big and strong, and our success depends on macro efforts – who cares about a thousand dollar check for paper clips?.. Let’s concentrate on something bigger!

I’m typically not a fan of idealistic, black-and-white / cut-and-dry judgment philosophies. I try to look for the trade-off curve – if we give up a little bit here, can we win a lot there? I usually find that an obvious decision is typically not so obvious, that for each radical judgment, there’s a set of counter-arguments that deserve to be explored.

Yet, today, I found an area where a hard-line view – a view that doesn’t allow for a gray area – is extremely important. That area is about managing accountability. I had an amazing conversation with my CEO, Ben Elowitz, and he crafted a very convincing argument – I know that it’s one of those that will be pretty transformative to my leadership style. Here it is.

There are two ways to run an organization.

One is the way of the pragmatic.

Have flexible standards – we ship when software is ready; we are OK slipping a little bit. We value commitment, but we value flexibility as well. We are reasonable – we don’t create a panic around a missed expectation unless it really cost the business.

The other is the way of commitment.

Draw a hard line: EVERY commitment that we make, we keep. Our organization does not tolerate a single hour worth of slippage. Create symbols of accountability: generate gigantic, loud, visible stinks every time a tiny expectation is not met. Don’t do it to be an asshole – do it to prevent the tiny little bit of a creep.

Oh, it’s OK to be a day late. It’s just a day…

And then we’re three days late…

How is five days late bad? It’s almost the same as how we did last time (four days late), and you, our fearless leader, seemed to be perfectly happy with the results?..

And then when you have a deadline that your team must meet, how can you expect them to deliver – with this kind of culture?

Ben argues that there are three elements to high accountability, which he equates with high performance:

  1. High standards: we set difficult goals, and hit them every single time. I don’t care that it’s 5pm on a Friday. You said that it’ll be done by the end of the week. Get to work. 
  2. Symbols of these high standards: as leaders, we celebrate victories and are VERY, very upset when any commitment is missed.
  3. Reinforcement – rewards and punishment – is immediately tied to the performance management / review process.
A couple related materials if you found this topic curious: