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Kindle Notes & Highlights
by
Frances Frei
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December 22 - December 27, 2020
CEO Tony Hsieh is super clear about the rationale for investing in healthy supplier relationships: when your suppliers can’t thrive and make a profit, they start making choices that are bad for you, like cutting back on service and innovation. And when suppliers can thrive—as in Zappos’s case—Hsieh estimates the number of benefits as roughly “endless.”
Hsieh honors supplier surplus as the strategic input that it is: “Instead of pounding the vendors, we collaborate. We decide together … the amount of risk we want to sign up for, and how quickly we want the business to grow.”12
QuikTrip pays low-skilled employees mid-market wages, cross-trains them to perform different types of work, and empowers them to make decisions that matter in the absence of hands-on supervision.14 These investments lead to higher engagement, higher productivity, and higher retention, which then leads to lower operating costs elsewhere in the business.
The end result is that companies like QuikTrip are prospering because of higher labor costs, not in spite of them.
One of the lessons of TaskRabbit’s evolution is that even gig companies can create business models where everyone wins: customers, companies, and, yes, even suppliers.
TaskRabbit CEO Stacy Brown-Philpot (remember her from chapter 1?) made the leap from Google to TaskRabbit (initially in the COO role) when she felt a calling to do something new. She was captivated by the chance to empower an organization: “How can I help a community of people do something more than they could otherwise accomplish on their own?”
Great strategy asks you to work harder than that and find ways to grow everyone’s wedge.
We believe that you can align the interests of customers, shareholders, employees, and suppliers, particularly if you take a holistic, long-term view of your organization.
great strategy is creative, innovative, and above all, optimistic.
Pilot at least one idea coming out of this exercise. Send a strong “How about now?” signal and reward creative thinking by executing quickly on the best one or two ideas to come out of the exercise. Frame it as a pilot and put mechanisms in place to learn quickly from the outcomes.
One part of strategy that repeatedly gets a spotlight on the show is the importance of being able to communicate strategy quickly and persuasively, in language that everyone can understand. Your plan has to be as accessible to a shark who may know little about your industry as it is to the viewers keeping up at home. If you can’t describe simply how you’re going to win as a business, there’s almost no point in showing up and getting into the tank.
The goal here is to understand deeply so that you can describe simply. If you understand your strategy deeply but can only describe it in a complex or jargony way, then you only get to talk to the subset of your organization that speaks that esoteric language. If you understand your strategy only superficially, then it will not survive out in the wild, in dynamic conditions where the pressure to abandon the plan is relentless. Your people will be continuously tempted to deviate from the strategy—usually for excellent reasons, like responding to a customer service request. A strategic North
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Memos are drafted collaboratively and circulated without the authors’ names, to minimize politics. Strategy meetings at Amazon start with everyone reading every word of a “six-pager” and then engaging with the ideas in what one Amazon alumnus recalled as “the most efficient and exciting meetings I had ever attended for any company.”
If you want to create a better strategy, we advise writing about it early and often. Start with a blank page and give yourself real time and space (think days, not hours) to develop your ideas. Share what you’ve written with your colleagues so they can help you improve your logic—and so you can start influencing their choices, even in your absence.
“A leader communicating a strategy to thousands of decentralized decision-makers who must then apply that general strategy to specific situations must go much further. Rather than merely issuing your message, you have to be certain that every employee has truly absorbed it.”
If you seek to lead in your absence, then get your strategy right, tell everyone about it, and revisit it early and often.
And if you’re swinging for maximum absentee impact, pull that other, all-powerful organizational lever: culture. Get your culture working for you rather than against you.
Culture establishes the rules of engagement after leadership leaves the room; it explains how things are really done around here.
Strategy drops hints, but it’s culture that has the definitive answers.
FedEx’s strategy in these early years was simple: deliver time-sensitive packages with speed and certainty. But Smith and his team had also built a strong, “bleeding purple” (the company’s primary logo color) culture marked by a get-it-done ethos and disregard for external signifiers, including race, gender, and company status. Everyone mattered. Everyone had the agency and obligation to contribute in meaningful ways. Diane’s bold decision making created a lifeline for FedEx, and it wasn’t a charismatic CEO or a well-defined strategy that made the difference. Those things may have pointed out
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MIT professor Edgar H. Schein’s iconic framework, which loosely divides organizational culture into artifacts, behaviors, and shared basic assumptions.
If your ambition as a leader is maximum impact, then learn to become a culture warrior.
McCord did everything in her power to lure these autonomous creatures into the building and then set them free with a culture that told them everything they needed to know.
In other words, the most senior executives at Netflix were often intentionally absent, leading from the sidelines, where their most valuable, freedom-loving employees preferred them to be. It’s a model that reveals another foundational truth about leadership: some of your best people don’t always want you in the room. Culture gives you the confidence to exit.
Ask them what about your existing culture is and is not working. Chase down the answer with the conviction that Schein might be right and it’s the most important thing you do as a leader.
We suggest gathering this informal data in intimate, interactive formats such as small groups or one-on-one discussions. Start with the empathy anchors on your team, the people who are naturally wired into the experiences of others. Include the truth tellers and people with nothing to lose. Add a culture discussion to all exit interviews.
How well do you think our culture sets people up for success? Are there ways that it also undermines their effectiveness? Have any of our values or commitments to each other become “empty” or even “weaponized”? How aligned is our culture with our current challenges and opportunities? What do we need to change culturally to achieve our most ambitious goals?
Culture changes the people it touches, and culture change transforms them. The people touched by Riot’s extraordinary culture journey are becoming culture warriors themselves.
From the beginning, Nadella decided that creating and managing culture was the most important thing he would do as a leader.