Almost all strategy discussions start the same way. First, you list all of your strengths and then you list all of your weaknesses. Then you move on to opportunities and finally you cover threats. From those you try to build strategies that use your strengths to take advantage of your opportunities while negating your threats.

If that sounds familiar, it’s called a SWOT analysis and it’s a very common strategic tool.

Unfortunately, it’s only effective if the strengths needed to win in your market are strengths that you already have. If not, you are just trying to do the best you can with what you have and that might not be good enough.

Or, in other words, you might not be able to win with your current strengths.

A much more productive way to start strategy sessions, in my experience. Is to start with two lists:

1. What are our strengths?

2. What strengths are needed to win in our market?

Those two lists are rarely the same! The real question of strategy is how we can turn 1 into 2. How can we use the strengths we have to create the strengths needed to win in our market?

For example, take a company that was the leader in their market until a slew of lower cost competitors entered the market. The strengths of the company include distribution partnerships, tons of customers, product features and brand recognition. Unfortunately, the market shifted and the only strength that matters is low cost which this company does not have.

Could they just lower prices? Sure, but price is often tied closely to the business model and it can be hard to be profitable at a lower price point, especially for an existing business built for a higher price. Losing money on every sale is not a great way to run a business.

Instead, can they use their existing strengths to build a strength that will win in the market? There are a few options:

• Use their distribution and brand advantages to create a “premium” product category, making the higher price seem worthwhile. This happens in luxury goods all the time.

• Use their product features advantage to create an “entry” level price point with reduced capabilities, where the existing customer base helps subsidize the lower price. Then upsell these entry customers to the higher priced, full product.

• Undercut the competition by giving partners an incentive to work exclusively, perhaps by paying a share of revenue. That would be better than lowering the price as it would ensure distribution and growth in the future.

Those are just some examples of how you can turn your existing strengths into the strengths that matter. This is where creativity is rewarded! Think outside the box and look at your existing strengths as building blocks to work with, not as museum exhibits that cannot be touched.

Every market shifts, and no strengths last forever. When the strengths required to win shift and you no longer have them, don’t try to force your business model to keep working. Use your strengths to build new ones.

For more on Strategy, see:

• You Can’t Force it to Work

• Don’t Confuse Strategy and Tactics

• Winning at Liar’s Poker

• Feast and Famine Markets

One of the hardest parts of leadership is admitting that you can’t solve every problem right away. We are all limited by time, people and resources and we can only do so much. The larger the company the more resources you have, but you also have more problems. No one can solve everything immediately.

You will need to let some problems fester while you solve others.

Deciding which fires to put out right now, and which ones you can let burn for a while is the hardest kind of decision. All of these problems have negative consequences for the business, which is why they are problems! So there are no good choices to be had, just a bunch of bad choices.

It’s common that leaders get stuck on these kinds of decisions, unwilling to let any fires burn. They try to solve everything at the same time, but end up solving very little and making it worse.

Similarly, it’s common that leaders get overwhelmed by the number of fires and can’t make a decision. In these cases the paralysis leads to more problems developing and a vicious cycle begins!

Neither of those is what you want. So, how do you decide which fires to put out and which fires to let burn?

Step 1. Triage

You need to be ruthless in prioritizing the list of problems. If you don’t do this well, you will waste your time solving small problems while major problems wreck the business. How you prioritize is up to you, but important criteria include:

• Urgency. Is this problem going to hurt us today or tomorrow?

• Impact. Is this problem threatening to put us out of business, or just slow us down?

• Damage. Is the problem causing permanent damage to the business, or can we recover?

• Blast Radius. Will this problem cause more problems, or is it self contained?

When you’re done, you should have a prioritized list of problems.

Step 2. Scope.

Should you work your way down the list, starting from the top? Maybe! Sometimes there are less important problems that you believe you can solve very quickly with little effort. Knowing how much effort you expect each problem to take is critical for later planning.

At the same time, any scope you provide for a problem is a guess at best. You might be wrong! These scopes are just guidelines on how much time you should spend on a problem before re-evaluating. If you think a problem will take a day, you can spend one day on it until you need to reconsider. You won’t spend two or three days on it, you’ll stop and make a new decision.

So scope the problems with your best guess, realizing that you aren’t making a firm commitment. You’re just getting ready to act.

Step 3. Act.

It’s time to solve problems! Yes, tackle the top problem first. It’s by definition the most important thing you can do.

If you need your entire team to solve that top problem, then that will be all you can do. But that’s rarely the case, as too many people solving a problem brings overhead and slows things down. If you can tackle more than one, what do you choose?

If there are problems with very small scope, consider trying to solve them quickly. Shortening the list will make it easier to focus later. Or, if the second and third problem might kill your company, tackle one of those too. Use your judgement, just because you can’t solve everything at once doesn’t mean you can’t do more than one thing.

Make sure that you keep track of how long you’re spending on solving problems. You should never spend more time than your scope on a solution without stopping and re-evaluating. It’s possible the priorities or your plan will change with that new information.

In short, don’t try to solve everything at once.

Focus on solving the most important problems first and trust that you will solve the rest of the problems later.

The more you do this, the easier it becomes. The best leaders I’ve ever worked with run this process constantly in their head, which makes them seem decisive and calm during emergencies. In reality, they have already moved on to Triage while their team is panicking about the long list of problems.

Like anything, making these decisions gets easier with experience. As a leader, you’ll get a lot of experience very quickly because your list of problems will always be longer than your capacity to solve them.

Success here is not getting better at solving problems. Success is getting comfortable with the fires you let burn, knowing you will solve them later. That comfort comes with stress, but it’s a fundamental part of leadership.

In fact, it’s why we need leaders in the first place!

For more on Leadership, see:

• Methods and Outcomes

• Managing Outcomes

• Getting Comfortable with Being Uncomfortable

• What Happens If You Miss a Goal?

There is a certain kind of person who enjoys pointing out why something will not work. They come to meetings and try to sound smart, shooting down other people’s ideas. Eventually, they become gatekeepers of new ideas as they represent a hurdle any new idea needs to overcome to get anywhere.

These people are not helpful.

There are always reasons something will not work. There are always reasons to fail. Those reasons are not interesting.

What matters are the reasons it might work.

To be a compelling idea, it needs to have reasons it might work that can overcome the myriad reasons it might fail. That potential is the true measure of an idea, and not all ideas have it. Great ideas are defined by it.

For example, let’s say that you are considering expanding to a new country. There are a lot of reasons that might not work! For example:

• It will require costly up-front investment that you might not recoup.

• International tax can eliminate margins due to double taxation.

• Language and translation issues might require significant product changes.

• Local employment laws can make hiring and managing a team very expensive.

In fact, that list can be dozens and dozens of items long. Just listing them out will take forever, and trying to respond to each would take even longer. You could spend an entire year just dealing with the potential, perceived problems.

Or, you can look at the reasons it might work. For example:

• The new country might represent a large enough market to double our business.

• Maybe the market is similar enough to places we already operate that we’ll enjoy economies of scale.

• If our competition is not prepared to expand, it can become a significant competitive advantage.

If any one of these reasons is strong enough, with enough data to back it up, it might be reason enough to act. In fact, just one of these opportunities could be enough to significantly expand the business in the future! These kinds of bets are what make up the company strategy (See Making Big Bets).

So, the next time someone tries to shoot down a new idea with reasons it might not work, stop the conversation. Look them in the eye and ask: “But can it work? And if it can, why?”

For more on Strategy, see:

• Making Big Bets

• The Best Strategy Framework

• Betting The Company

• Finding Hidden Leverage

I’m not young anymore, and every year I feel things getting a little harder. Running a mile, lifting weights, playing sports. It’s just a little harder every year to do as well as I have done in the past.

As a result, I spend a lot of time exercising. Investing in my fitness is an investment in my future, and if I want to continue doing active things in 20 years it will be because I invest now. The fact that it gets a little harder is a warning, not an excuse.

I talk to a lot of leaders who aren’t young anymore either, but who don’t find time for fitness. There are always excuses: I’m on the road too much, I have back-to-back meetings, I have family obligations. All of those are likely true, but the net result is no investment in fitness.

Someday, that bill will come due.

You cannot be a great leader if you don’t invest in yourself. Learning new things, improving your leadership skills and finding new challenges are all investments in yourself. Spending time on your fitness, eating well and sleeping well are also investments and just as important.

It’s easy to push yourself to the bottom of the priority list. Business is a voracious consumer of your time, and the larger your team the more time it will demand. The easiest path is to give more and more.

Great leaders do work for their teams, enabling them to do their best work. However, there must be a limit where you don’t sacrifice too much for your team. If you aren’t a priority, you aren’t really helping.

You expect your team to learn, so you need to keep learning.

You expect your team to stay healthy, so you need to stay healthy.

You expect your team to adapt, so you need to adapt.

All of the things that you expect from your best team members, you need to expect from yourself. In fact, you need to expect them from yourself first! Leading by example doesn’t just pertain to doing the work, it involves how you manage yourself as well.

It might sound hard to make the time to invest in yourself with all of the demands of your business, and it can be. However, like any investment it pays off in the future. Better health makes it easier for you to deal with stress. Learning new things keeps you ahead of where the business will be in the future. The cost of not doing these things today goes up in the future.

Narcissists don’t have this problem, of course. Helping their teams doesn’t even occur to them, and focusing on themselves comes naturally. Perhaps that is why narcissism is so common among CEOs.

I am not recommending you become a narcissist! There are many degrees between focusing entirely on yourself and focusing entirely on your team. In those degrees is a balance that allows you to do your best work, while also enabling your team to do their best.

Think about everything you are sacrificing today and think about how you would manage yourself. You make sure your team is not burning out, you make sure they are taking care of themselves and you make sure they can do their best work.

Now it’s time to make sure the same is true for you.

For more on Mental Health, see:

• Staying Positive

• Getting Left Behind

• No One Has Your Problems

• Fall Down Seven Times, Stand Up Eight

We’ve all seen companies where things aren’t working. The product doesn’t work, customers aren’t buying and management is just pushing harder and harder. More money is spent on marketing, generating more leads and they don’t convert either.

These businesses are like broken cars where the wheels have seized. They look like cars, so it’s easy to believe they can move. But, no matter how much you push them they won’t move. They aren’t cars, they just look like cars from the outside.

At the core is a leadership team that refuses to admit they made mistakes. It is easier to try and force things to work than step back and admit fault. Admitting you were wrong is painful and likely means layoffs, cutbacks and other hard decisions.

But refusing reality is not a winning strategy.

The longer you try and force something to work, the more damage is done. The team loses confidence in leadership, potential customers become detractors and the market perception of your company erodes. Reality is unyielding.

At the same time, many businesses have rough patches. It requires persistence and effort to overcome those bumps and build something that really works. No business executes perfectly over its entire existence.

How do you know if your company is pushing a broken machine, or just persisting through a rough patch? Good question!

Your company might be forcing it to work if…

… There is no improvement or learning. If you aren’t gaining insight and making changes with every customer to slowly improve results, you aren’t moving forward. You should be seeing at least small, incremental improvements on a continuous basis.

… There is no acknowledgement of the problems. If leadership won’t talk about or acknowledge the problem, then no one is really dealing with the fundamental problems. Avoidance is obvious to most people, and the attempt to avoid these problems just makes them worse.

… Everyone is waiting for magical solutions. “This next release will fix everything.” Reaching for magical solutions is a sign of desperation, not a real strategy. There is no single fix for deep, structural problems. If all hopes are pinned on one thing instead of a cohesive strategy and hard work, then things aren’t going to get better.

What do you do if the company really is just trying to force things to work? Don’t stay silent! Make sure it’s a conversation the team is having, as the first step to solving these problems is admitting you have them. Propose solutions, point out opportunities and be a voice for change.

At some point, if no one listens, you might have no choice but to leave. That is a sad outcome, but certainly worse than pushing against a mountain hoping the mountain will move. There are too many companies who need your help with problems they admit need to be solved.

For more on Strategy, see:

• Playing Catch Up

• The Best Strategy Framework

• Betting The Company

• Finding Hidden Leverage

When I was a CEO, I used to joke that I had a “no bad news” policy. No bad news allowed, I only wanted to hear good news! If anyone on the team had bad news, they were to keep it to themselves.

It was, of course, a joke.

But, it was a joke with a purpose. There is always bad news, no matter how well you are doing as a business. The bad news is contagious and spreads further and faster than good news, coloring everyone’s perception of how things are going.

For example, let’s say you have a big customer that decides not to renew. That is bad news! If it starts to spread around the company, everyone might begin to fear the company is struggling. Lost is the fact that the customer is going bankrupt, shutting down and the cancellation has nothing to do with your product and service. All the nuance is lost in the transmission of the bad news.

Then, everyone starts to worry about which other customers might churn. A customer cancels a meeting, and all of a sudden people jump to conclusions. Pretty soon, a dark cloud hovers over the team as bad news has shaped their view of everything.

Negativity bias is a phenomena where people give more weight to bad news as compared to equivalent good news. It makes sense from an evolutionary perspective, as survival was paramount and bad news was more likely to kill early humans. Today, however, it means we have to be careful with bad news.

This doesn’t mean you should hide bad news! Being transparent with your team is critical for building trust, and nothing destroys trust faster than trying (and failing) to hide bad news.

So, what do you do?

Here’s a formula for a real policy around bad news:

1. Be Public. Share bad news in a public forum. If you don’t, rumor mills and informal paths will be created to share the news. These paths will make things worse by creating a game of telephone where the bad news evolves and shifts every time it’s shared.

2. Provide Context. If there is bad news, communicate it along with the context necessary to understand it. A customer churned? Explain why and what is being done to make sure that it doesn’t happen again (if possible). Treat your team like adults by educating them.

3. Emphasis Good News. To overcome negativity bias, you need to emphasize and reinforce good news. Share it multiple times, with the context, so the team understands why the news is so good. The more they listen to good news, the more ready they will be to absorb bad news.

These seem easy to do, but they require you to trust your team. Not all leaders have that trust, and they worry too much about how their team will react to bad news.

As soon as you start to control the flow of information in fear of how your team will react, you are no longer running the company. The team is running it. You need to overcome that fear and have faith they will understand with the right context and communication.

One of my biggest weaknesses as a CEO was always focusing on the next problem. I didn’t celebrate wins enough, as I immediately moved on. I learned the hard way that doing so makes it harder for the team to absorb bad news, as they discount the good news.

So, celebrate your wins! Share good news! And, when bad news arrives, share that too. Your team will be ready for it.

For more on Managing People, see:

• You Cannot Be Afraid of Your Team

• Hard Conversations

• That Will Never Work

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I’ve recently helped a few companies restructure their customer success teams. In all cases, it starts with the same phone call:

“I just found out we have a ton of hidden churn I didn’t know about…”

How does churn hide? Sometimes there is a reorganization at a customer and a new group starts using the product while another group churns off. Like a shell game some gains hide other losses.

Other times it’s a surprise! The team tells you that a customer is happy, only to get ambushed by them right before renewal when there is no time to save the relationship.

Behind all of these is a lack of understanding of the customer. Your customer success team needs to understand the customer so well that there are none of these surprises. That doesn’t stop at the customer engagement analytics, it means understanding how the customer thinks, what their problems are and how they solve them.

But many customer teams are not set up to do this because they are support teams. Customer support teams are reactive, they respond to questions customers ask of them. They only talk to customers when they ask a question, so they don’t have any other information about the customer! They might believe the customer is happy after helping them with their most recent issue, but not see the myriad other issues the customer never even mentions.

If you have customers, you have three teams to support them:

1. Onboarding. This team is responsible for getting the customer from zero to using the product. When the customer is up and running, they are considered “onboarded”.

2. Customer Support. This team is responsible for answering any questions from customers after they are onboarded. They are product experts, who can help with almost any problem.

3. Customer Success. This team owns the relationship with the customer and understands how the product fits into the rest of their world. They specialize in understanding people and building relationships.

Your company might combine these teams, which happens a lot. If the product is easy to adopt, the Customer Support team might help with Onboarding. If the product integration is really complicated, Customer Success might help with onboarding. But, even if you combine them, you still have these three distinct roles.

The problem arises when you confuse them. Many companies hire Customer Support teams and call them Customer Success. These teams are smart and professional, but they aren’t relationship building experts. They spend so much time answering customer questions they don’t have time to be proactive!

In these cases you lack important insight into your customers. As a reactive team the Customer Support people don’t have enough information to really understand customer health, and will be unreliable witnesses. You need a proactive team whose job is to focus on customer health that is separate from Customer Support. That is what Customer Success can be for you.

Each of the companies I helped suffered from this confusion. The good news is that fixing the problem is straightforward! If you have a Customer Support team, call them “Customer Support” and hire a Customer Success team. If you have onboarding problems, hire an Onboarding team instead of expecting Customer Support to do everything.

The bad news is that these fixes take time. It’s slow to hire a new team and train them well enough to be effective. Even with AI tools the process takes months. Everyone wants immediate solutions to their problems and these solutions take time.

So, if you want to avoid that trap, get started today. Make sure you separate Onboarding, Customer Support and Customer Success. Give those teams the focus to do their jobs well, and in return you will get deeper customer insights and understanding.

You will know you have mastered this when you no longer get surprised by customer churn. You should know what your customers are going to do long before they do it.

For more on Customer Success, see:

• Measuring Customer Happiness

• Preventing Churn

• Firing Customers

• Customers Are People Too

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Searching for a new job is really hard. It’s not just the time and effort involved in applying for jobs, doing interviews and negotiating offers. It’s the constant rejection, the ghosting and general poor treatment you get from potential employers.

When you do land a new job, it’s an exciting experience! There are new people to meet, new ways of working to learn and an entire culture to absorb. When you start you are in learning mode and trying to get up to speed as fast as possible.

If you do that too well, you’re missing your best opportunity to be a change agent.

One of the most important questions I asked new hires at the end of their first week was simple: “What can we do better?” It sounds like a loaded question, but it was genuine. I wanted to know what they saw that I did not.

The best people to improve an organization are the newest hires.

Once you are fully onboarded you become part of how the organization works. You start to adopt all the same bad habits as everyone else, and follow all the same flawed processes. After a few months, you likely won’t even see the problems as you get used to how things are done.

But in that first week, you see all the challenges clearly. It’s your best chance to help the new company acknowledge and start to fix them! That short period of time between when you start and get absorbed is golden.

Now, I don’t mean you should start a new job and start lecturing everyone about the “right” way to do things. That would be very counter-productive. However, you can start to ask the right questions about “why do we do this” and “have we considered alternatives”. Just by shining a spotlight on problems you are helping everyone else who might not see them anymore.

Yes, there might be good reasons for why they do things. It might be that what you perceive as a problem is not really a problem. Or maybe not! If you are afraid to ask in fear of seeming naive then you are losing that golden time entirely.

We call these new hires who point out problems “Change Agents” because they are agents of change. They have no vested interest in the status quo and as a result they are the best people to help create change.

If you can successfully create positive change, then you have a quick win at your new job. There is no better way to start a new position than having a quick win, and there is no quicker win than just pointing out problems and making sure everyone is aware of them.

So, if you start a new position, keep your eyes open. Write down problems you see. Even if your boss doesn’t ask, volunteer to provide observations at the end of your first week! A great team will appreciate it.

And, if they don’t appreciate it, you might have made a mistake in joining that company. That’s important to know as well.

For more on People, see:

• Managing Up and Managing Down

• Hire Before It’s Too Late

• You Cannot Be Afraid of Your Team

In the early stages of all new products, projects and businesses there is a period where you don’t have much. You’re starting something new! You are on your way to having a productive business but you’re not there yet.

During these periods how do you measure success? For most people, the measurements of success are metrics like revenue, engagements and adoption. If you try to apply those metrics to your early project it will drive you to do short term things that don’t help reach your long term goals.

For example, if you prioritize revenue you will grasp for revenue wherever it might be. You don’t have a product to sell yet, so maybe you’ll sell services? People pay for consulting and it’s an easy way to show revenue. Unfortunately, that’s not the business you want to be in but you might soon be running a consulting business.

So, how do you measure success in those early days?

By how fast you are learning.

All new things involve a lot of learning at the beginning. Who is the customer? How do you reach them? What does it take for them to buy the product? These are questions you need to answer, and learning is how you get there.

Measuring your rate of learning is tricky, because you can feel like you are learning just by talking to more customers, doing more research and going through the motions. You need an objective way to measure learning that doesn’t let you trick yourself.

There are no perfect solutions, but here is what I have settled on after many years of doing this:

1. Start a blank document.

2. Every time you learn something you add it to the document.

3. Measure your learning velocity by how many lines you add every day.

I know, that sounds really simple. The best tools usually are! At first you’ll be adding a ton of new lines everyday. Eventually it gets harder to add new learnings and you need to work harder to find them. That’s good, as it pushes you to learn faster.

It is, of course, easy to game. You could just type random things into the document to add lines, or just have AI do it for you. It requires discipline to be honest about what you add, and what counts as a new learning. Sometimes learning requires you to remove lines, and that just makes it harder.

But, it’s supposed to be hard. Learning is never easy. If you are going to cheat on this, you’ll cheat on everything and the new project is already doomed to failure. The incentive is clear: do not cheat because if you do you’re just wasting your own time. That’s a powerful incentive.

I have a learning document for every new thing I start, whether it’s a new product, a new customer target or anything else. Whenever I see the number of new lines stall out, I know I’ve stopped learning and it’s time to work harder.

For more on Innovation, see:

• The Energy of Innovation

• The Day Zero Problem

• Your Product is Boring

Every company has emergencies. Things go horribly wrong at the worst moment and you need to mobilize the entire team to try and handle the situation. Maybe your biggest customer is churning and a team jumps on a plane to try and meet with them. Or maybe your systems are down and engineering is working around the clock to figure out why and bring them back. Emergencies happen.

Emergencies force everyone to align, as they provide focus and clarity. All that matters is resolving the emergency and any bad processes, politics or other organization issues are thrown aside. In an emergency the organization becomes the best version of itself.

Unfortunately, eventually, companies figure out that emergencies become an alternative to the normal operating procedure. If the company is dysfunctional, the best way to get things done is to have an emergency. Or, the company is so dysfunctional that emergencies happen all the time because they are the only way things get done.

In these companies, emergencies are constantly happening because it’s the only way the company knows how to operate. Instead of having an “emergency” button that you can press, someone puts a brick on top of the button to hold it down.

These companies are not doing well.

You can understand how it happens. Fixing organizational, process and people problems are hard and time consuming. Once you realize that pressing the emergency button makes those problems fade into the background, it’s easier to keep pressing it than to fix the problems.

Sadly, constantly being in emergency mode comes at a cost. There is no time for long-term thinking in an emergency, everything is about short term survival. Emergencies do not build up repeatable good habits, so very little institutional knowledge is developed. Eventually, people become desensitized to emergencies and treat them with less and less urgency.

If you feel like your organization is treating emergencies as the normal course of business, it’s time to hit reset. You need to take a step back and get out of that cycle. Here are a few ways to do that:

• Have an emergency team. Emergencies can, in theory, suck in anyone and everyone in your team. That is dangerous if emergencies keep happening, as everyone starts to brace for the next emergency! Designate a specific team to deal with emergencies so that everyone else knows they need to focus on fixing the real problems in the organization. It minimizes distractions and aligns incentives.

• Hold post-mortems. Don’t let an emergency go to waste! Hold post-mortem meetings to analyze what went wrong and how you can prevent it from happening again. Commit to executing on at least 1-2 action items from that analysis immediately so the team sees real change happening from an emergency.

• Track emergencies. It sounds depressing to have “number of emergencies” as a metric, but it’s important! People are good at optimizing metrics, and if you have a metric for it then it provides a scoreboard to track any improvements you make. It should be zero, but it won’t start out that way.

The key to getting out of the constant emergency trap is to give the team incentives to prevent emergencies, not just to resolve them. Giving them space and time is great, but if the incentives are not clear you won’t see any real progress.

You will know you have made progress when you start to see people tackling the hard work of fixing organizational problems. That is much harder than hitting the emergency button, and it means you have the right incentives and priorities.

Emergencies should be rare. To make sure that is true, get ahead of the problem and make sure emergencies aren’t better than normal operations in your business.

For more on Managing People, see:

• A Grand, Unified Theory of Team Conflict

• The Secret to Effective Employee Onboarding

• Incentives Rule the World

When you hire a new person, you aren’t just bringing on someone who can contribute great things to your business. You’re bringing on all of the bad habits they have learned at all of their previous jobs. Most companies have bad habits, and every new hire brings a few of them along when they join you.

For example, most companies are bad at hiring. Those companies think (wrongly) they are good at it, and their employees learn their process believing that they are learning an important skill. However, in the end they are just getting good at a bad process which is becoming a bad habit. When they join your company, they will continue to be bad at hiring.

Worse, they may start to “teach” others those same bad habits. Pretty soon, a team that was great at hiring becomes bad due to the infection.

Bad habits are dangerous.

Instead of hoping for the best, or believing that good habits will replace bad habits, you need to approach this problem head-on. Assume every new hire is coming in with bad habits you cannot see, and proactively train them on what is important. How do you do that? Be explicit.

Before a new hire can…

• … join an interview panel, train them on what interviewing means at your company. Have them observe interviews and sit in on discussions. Only after they prove they know your process do they get to join, regardless of how many times they have interviewed people in the past.

• … talk to a customer, train them on how you treat customers. Have them watch recordings of good customer conversations, and learn how you talk about your business. Record their first attempt and review it with them.

• … build something, train them on your development process. Do you favor velocity or quality? Have them observe a great build from zero to completion so they know what great looks like.

A lot of this involves discussing why you do things. Training someone on your process is not enough, because they still might believe their bad habits are wisdom and try to change your process. You need to explain why you do things so that they start to see the bad habits.

All of this extends the on-boarding time for a new hire and means it takes longer for them to make an impact. If you are moving fast, that can seem expensive! However, what is more expensive is losing velocity when bad habits infect the rest of your team.

If you want to build a top performing organization, you need to realize most organizations are poor performers. You can hire great people from them, but be careful. Flush out their bad habits before they take root in your team.

For more on Recruiting, see:

• Two Types of Team Building: Up and Down

• A Better Hiring Process

• Recruiting is a Skill

What’s the hardest thing I’ve ever faced as a leader? Having one of my best employees leave my company. It happens to all of us, but it hurts every time.

Employees leave for many reasons, and even if you were the best leader creating the best employee experience they might have personal reasons to leave. It doesn’t make it any easier.

Unfortunately, whenever someone leaves it makes it likely others will follow. Having a co-worker leave can encourage others to look around and see if they too might find better opportunities elsewhere. Even if you have non-solicit agreements in place, it’s also likely they might want to follow the person who left to a new team at a new company.

If your company is struggling, this all becomes much worse. Employees know when a company is struggling, no matter what you tell them. They might be willing to keep going to see if things turn around, but as soon as someone leaves it becomes a sign that it’s time for everyone to leave.

Soon, one departure becomes two. Two becomes four, and now you’re losing employees faster than you can hire them. The departures become a cascade that is hard to control as it takes on a life of its own.

Even if your company is doing well, these cascades can happen and convince the remaining employees that the company is struggling - even if it’s not true!

If you find yourself in the midst of an employee departure cascade, you need to act quickly. You can’t afford to have your most valuable employees all start to depart at the same time. The solution is not to lie, nor is it to panic. Here’s a three step process to follow:

1. Start hiring. The best way to convince employees to stay is to have new, brilliant people join. Not only do these new folks improve the team, but the fact that they joined is a signal the business is doing well. It will quickly overshadow the departures. Just starting the interview process can go a long way towards having everyone focus on the future.

2. Be honest. It doesn’t help to pretend that employees aren’t leaving, or that there are no reasons to do so. Acknowledge the reasons but reinforce what you are doing about them and why your company is still a great place to work. The more transparent you are, the less likely they are to think employees are leaving for reasons they don’t know.

3. Reinvest in your team. Think about how you can improve your employee experience and make those changes now. Some folks immediately reach for retention bonuses, but equally important is whether the team looks forward to work every morning. The more enjoyable their day, the more likely they are to stay.

At the heart of this is the simple fact that you cannot prevent people from leaving, but you can give them reasons to stay. What makes your company the best place to work? What do you offer that they cannot find anywhere else? Whatever that is, lean into it and remind everyone about it.

If you don’t have an answer, find one. If you don’t, you might find yourself in the midst of an employee departure cascade and not have the tools to make it stop.

For more on Managing People, see:

• Managing Up and Managing Down

• Hire Before It’s Too Late

• You Cannot Be Afraid of Your Team

• 1:1s

We’ve talked previously about Methods and Outcomes, specifically that you should focus on deciding one or the other - not both at once. Conflating methods and outcomes is one of the most common causes of decision paralysis.

As leaders, we generally focus on outcomes. We set goals for the team, and hire great people that can figure out how to achieve them. If we try to tell our teams their goals and how they need to achieve them, we’re micro-managing everyone.

However, there are times that focusing on methods is important! Just because we trust our teams to do great work doesn’t mean every possible approach is acceptable.

A great example is using AI for software development. AI has become the best way to write code, and has made software developers 10x more productive. However, there are still engineers that refuse to use AI for development. Should you let engineers choose if they use AI or not?

No.

Using modern tools is part of modern jobs. You would not let a salesperson refuse to use Zoom or Salesforce, and you wouldn’t let your CFO run your accounting on paper with a pencil. Modern software engineering uses AI.

Similarly, should you let a salesperson sell your product using a process and pitch different from anyone else?

Maybe!

If they get better results maybe their methods are better and everyone should adopt them.

Methods matter when they affect the productivity of the business. Processes exist because if everyone follows the same process you can improve the company by improving the process. If everyone does things differently, it’s hard to improve overall performance.

Your team should have leeway to explore new methods, but those are experiments. If they provide benefits they should become the new method! If they don’t, they should be discarded and reverted to the normal process. That sales person who uses a different pitch? If it doesn’t work they need to stop.

This might seem like micro-managing, and you certainly can take it too far. How you balance the freedom to explore new methods and enforce standard processes depends on your team, your business and the outcomes you are trying to achieve.

So, continue to focus on outcomes and give your team the ability to explore new methods. But don’t let everyone work in a different way, because that method is a path to madness.

For more on Leadership, see:

• Methods and Outcomes

• Managing Outcomes

• Getting Comfortable with Being Uncomfortable

• What Happens If You Miss a Goal?

Until AI takes over everything, companies are still made of people. Those people need to work together to achieve the goals of the business, and the better they work together the better the business performs. To work well together, all those people need to communicate.

Therein lies the problem.

If a team only has two people, communication is easy. Both people likely know everything that is happening, and there is only one other person to coordinate.

If a team has twenty people, communication is harder. Not everyone knows everyone else, and everyone only sees part of the business. Communication requires knowing who to talk to and what to say.

If a team has two hundred people, communication is difficult. There are so many things happening that no one knows them all. It’s hard to know who to talk to and what to talk about.

Most companies spend time on their org chart, but fail to think through the communication design. How does someone know who to talk to about a particular problem? How do you find an answer to a specific question? How do you even know what is going on? If you don’t have easy answers, your communication design is broken.

If that includes your organization, don’t worry. You are in good company! Communication is often the hardest part of any business.

The problem is that communication has two costs. It’s expensive if your team can’t easily talk to each other, and it’s expensive if they can.

For example, there is a debate not between remote and in-office work. I don’t have an opinion on which is better, but it illustrates the two costs well:

Remote teams make communication slow and purposeful, as you need to schedule time for a video call or wait for someone to see your email. That can be good, as it limits distractions, and it can be bad as it slows things down when discussions are needed.

In person teams make communication fast and simple, since you can just talk in person about anything. That can be good, as you can talk through issues immediately, but it can be bad as the interruption rate can inhibit focused work.

Which is better? That depends on your team and what you need them to do. Do they need to do complex focused work, or quickly changing inter-dependent tasks? There is no one answer, just a series of costs you need to balance.

The first step in designing a good communication system is to understand these costs and make explicit decisions about which costs you want to incur and which to avoid. Being purposeful about your decision will lead to a better org design and less overhead.

You’ll know when you have succeeded when communication no longer feels like a burden. Then, all of the people on your team can focus on doing their jobs.

For more on Teams and Communications, see:

• Org Charts

• Hard Conversations

• That Will Never Work

• High Trust Teams Move Faster

Tomorrow at 9am PT / noon ET I’m holding a live Q&A session thanks to the team at Skyp. It’s a live session, designed for you to ask questions and get answers in real time! You can register for it here:

Register for Live Q&A with Sean

Our main topic will be how AI has changed the world of business. Now that Vibe Coding has made building software so easy, the entire technology industry is in flux. What used to take years to build takes days, and we’re seeing an explosion in the number of products coming to market.

What hasn’t changes is how hard it is to market and sell a product. In fact, those things are getting harder with so many new products competing for attention!

But what does it take to build a differentiated go-to-market strategy? How can you turn go-to-market into a competitive advantage? How do you fend off the hundreds of vibe coded competitors that will chase you every day?

We’ll answer all of those questions and more. When I am not writing The Breaking Point (or Two Steps Forward), I’ve spent the last few years building and launching 6 new AI companies. I’ve been in the trenches building GTM strategies from the ground up and seeing what works (and what doesn’t) in this new environment.

If you can’t make the live session, feel free to post questions here in the comments and I’ll answer them in the post-session write up!

I hope to see you tomorrow.

Register for Live Q&A with Sean

Narcissism is a great tool for managing the stresses of leadership. If you are delusional enough to believe that everything you do is perfect, you don’t need to worry about making mistakes! Even better, not caring about anyone else means you don’t carry the burden of their emotions.

Of course, working for a narcissist is a horrible experience and I don’t recommend it.

For the rest of us, we stress about our decisions and our goals. If you’re an empathic leader you also stress about the emotions on your team. We all want our teams to be motivated and happy, and we do our best to make that happen. Seeing them sad or frustrated feels like failure.

I have seen a lot of leaders burn themselves out trying to make sure their teams are always happy. It’s hard enough work making sure you hit your goals, but doing so while maintaining happiness at all times is impossible. These leaders take everyone’s emotions on their backs and try to carry everything at once, and fail.

The reality is that you cannot make someone else happy.

You cannot be responsible for someone else’s emotions. People are just too complex! There are many reasons we’re happy or sad, and only a few of those involve our jobs and the work we do. You can never assume you know everything another person is dealing with.

I once had a great employee who was always positive and made the company culture better as a result. At one point, however, he seemed down all the time and I was worried about what changed in the work. Was it his responsibility? Was it his boss? Was he looking to work somewhere else? No. It turned out that he had broken up with his partner and his mood had nothing to do about work, but I didn’t know that at the time! In trying to fix his mood I was attempting an impossible task.

The best you can do is put people in a situation where they can choose to be happy.

If you treat your team with respect, reward them for doing good work and give them chances to grow, you are doing your best. They can choose to be happy in that situation or not, that’s up to them. But at the point where you’ve created the best work environment you can, your job as a leader is done.

This makes sense, but is hard to remember when you have a team member who is clearly unhappy. It’s easy to take it personally and try to work harder to turn that person’s mood around. And it’s easy to be hard on yourself when you fail.

So the only solution is reinforcement. Remind yourself that other’s emotions are not your responsibility, and focus on what is: creating the best possible work environment. Find reward in the people who choose to be happy and respect those that do not.

Leadership is a heavy burden, don’t make it heavier by adding things you don’t control.

For more on Leadership, see:

• Emotional Leadership

• Methods and Outcomes

• Getting Comfortable with Being Uncomfortable

• What Happens If You Miss a Goal?

Every leader has two voices.

There is your voice as an individual, where you express your personal opinions, perspectives and decisions. When you use that voice your team sees you as a peer, and they are open to disagree and debate. If you have a good team they will! Disagreement and debate leads to better outcomes when you’re in the realm of opinions.

But, companies are not democracies and not everything can be debated. There are many goals and decisions that it’s a waste of time to debate. Sometimes the business demands things itself, such as aggressive goals, cost cutting or strategic pivots. When that happens the team needs to fall in line, not fight about it. These are not opinions.

As a leader you have a second voice, the voice of the company. That’s the voice you use in these moments where debate is not welcome, where the decision or direction is set and everyone’s job is to follow it. When you use that voice, there should be no debate - just action.

Unfortunately, many leaders confuse the two voices. They use the voice of the company for their own opinions, to stifle debate. Or they use their individual voice to deliver company goals, which leads to unnecessary distraction. Or, worse, they use only one of the voices all the time, for everything.

A great leader balances the two voices, using the right voice in the right situation. But how does your team know which voice you are using? (You’re not changing your literal voice, afterall.)

You need to tell them.

If you’re using your individual voice to share opinions, tell your team. Start the meeting by making it clear that debate is welcome and other points of view are encouraged. Qualify it by sharing that these are only your opinions. Be explicit, don’t assume they know.

If you’re using the voice of the company, tell your team. Make it clear these are non-negotiable decisions or goals, and that the company needs them to be achieved. Ask them to disagree and commit, because everyone needs to be pushing in the same direction. Give the reasons why this is an imperative and why this is not a matter of opinions. Leave no room for confusion.

The most common mistake is not being clear which voice you are using with your team. If they need to guess, you have already failed them. You know which voice you are using, obviously, but you cannot assume they know as well.

This is a learned skill, and all leaders make mistakes using the two voices at some point. Especially when you’re angry, it’s tempting to pull rank and use the voice of the company to win the argument. But, as you get better, you realize that the two voices are one of your most powerful tools to both lead your team and keep them focused.

So speak with two voices. Just be clear when you do.

For more on Leadership, see:

• Managing Outcomes

• Getting Comfortable with Being Uncomfortable

• What Happens If You Miss a Goal?

• Cargo Cult Leadership

I’ve been an artist most of my life, and I’m happy to report that I have (a few times) actually been paid for my art. As someone who does art as a hobby, that is a big deal!

However, I need to be honest that the drawing I was paid the most for wasn’t one of the pieces I spent a long time on that channeled my artistic vision. It wasn’t even one of the pieces I’m most proud of. It was this diagram:

Apparently this is art that pays

It’s from a blog post I wrote, many years ago, about negotiation and I might have spent a total of 2 minutes making it. If you’re familiar with negotiation, there is no shortage of diagrams and explanations of BATNA, ZOPA, etc. On the surface there doesn’t seem to be anything special about this one.

So, I was shocked when I was contacted by a publishing company eager to license it for more money than I would have thought to ask. I assumed publishing companies had plenty of graphic designers to hire to create such diagrams, especially for what I was told was a textbook. Why would they want to pay me so much?

I later found out that the author had put this diagram in the book and they had not caught the copyright violation early enough. It was already in the book, so they needed to pay me enough to ensure a license! It turns out that image was valuable not because of its quality, but because of the circumstances.

This is a key to negotiation. The other side has motivations that drive their negotiation strategy and leverage, things that might not be obvious on the surface. A customer that is trying to drive down your price might have a tight budget, or they might be trying to get promoted by showing how hard they are on vendors. An employee asking for a raise might want to get paid more, or they might have a job offer from someone else.

If you can tease out the hidden motivations for the other side, or at least infer that one exists, you can find much more leverage. In some cases, you might have all the leverage!

Let’s say you are selling your company to a large conglomerate. It might seem like they have a lot of options and most of the leverage in negotiating a deal, and that might be true. However, the executive that is sponsoring your deal might have a mandate to make an acquisition happen as part of their annual plan. If that is true, and it’s the end of the year, they might need the deal more than you do.

How do you find hidden motivations? Insert friction into the negotiation. If you have very little leverage, your instinct might be to remove friction and try to create a clear path for the deal to close. Introducing a bit of friction is an important test to see if there are hidden motivations, since if they are, the other side will leap to remove the friction. If not, well, you can always remove it yourself.

Of course, there are not always hidden motivations. Sometimes all the leverage is on the table and you need to play the hand you’re dealt. In the vast majority of negotiations I’ve done there are no hidden motivations and what you see is what you get.

But in a few, they have helped me get a lot more than I could have hoped going in!

Next time you’re going into a negotiation with very little leverage, be patient and observant. Look for signs that you might have more leverage than you think, and if you do lean into it!

For more on Strategy, see:

• Don’t Confuse Strategy and Tactics

• Winning at Liar’s Poker

• Feast and Famine Markets

• Selling is not a Backup Plan

When you are learning a new skill, you get better very quickly. After a while, your rate of improvement slows down until it seems like you’re not making any progress at all. This is called the learning curve, and we’ve all been on it.

The plateauing of progress is frustrating, since you need to put in more and more effort to see less and less improvement. Eventually it’s a struggle to improve at all! This is when people start to give up and/or burn out.

I enjoy learning new skills, ranging from art to woodworking to sports. I find myself on the learning curve very often, and as a result I get frustrated by the plateauing of results very often!

One of the hardest things to see is that improvement isn’t just about a better end result. Often, improvement means you get there faster.

For example, the art I make is not noticeably better than the art I made 2-3 years ago. Despite daily practice, the quality of my art has hit one of these plateaus. However, I can create a piece in just a few hours that used to take me weeks! The quality is the same but my speed has vastly increased.

This is true of teams as well. If you measure your team solely on the quality of their work you might not see continuous improvement every week. If you look at how much effort it takes them you might find a lot of improvement.

This is also why hiring subject matter experts is so important. As a smart, motivated person there are likely few jobs at your company you can’t do extremely well. But no matter how smart you are, you will not be as fast as someone who is an expert at that task. Hiring an expert isn’t giving you a better outcome, it’s giving you the outcome a lot faster.

For example, I’m sure you can file your corporate taxes yourself! All of the rules are published and the forms have checks and balances to make sure you don’t make mistakes. However, it will take you much, much longer than an experienced accountant. You pay your accountant to get it done faster and avoid wasting your time.

That might seem like an extreme example, but it’s true of a lot of things! You can plan your business trips, but an expert can do it faster. You can organize events, but an expert can do it faster. You can design a new website, but an expert can do it faster!

Even in the age of AI, experts matter. An expert in using AI to achieve a task will get it done faster than you learning about it and then learning how to use AI to achieve it. Yes, you can do it. But it’s so much faster to have an expert get it done.

When your team is taking on new tasks, you’ll see quick improvement in the first few weeks. After that, keep an eye on their speed in addition to output to see whether they are improving. You might see a lot more improvement than you’d expect!

And, if not, it might be time to hire an expert.

For more on Productivity, see:

• Say/Do Ratio

• Switching Costs

• Efficiency Isn’t Always Good

• Fundamentals are an Investment

• Status Meetings are a Failure Mode

Every company faces critical moments where everything is on the line. Moments when the status quo is not an option, the future is uncertain and the options are all difficult. Moments where the survival of the company is at stake.

Hopefully, you don’t encounter these moments very often.

But, you will encounter them. When you do, the decision that you need to make is unlike every other decision that you make. You need to bet the future of the company on a single choice, and if you get it wrong then the company goes away.

I’ve faced a few of these moments and some I got right and others I did not. Even experienced leaders only see a handful of these moments in their career, so it’s hard to get better at them through practice.

All of these situations are different so it’s hard to generalize, but there are a few important things to keep in mind when you are betting the company:

1. Don’t rush. The worst thing you can do is get nervous/excited/stressed and rush to make a “bet the company” decision. You might not have months, but you certainly have days and maybe weeks. Take your time and don’t let the world think you have to gamble blindly.

2. Generate more options. The most common cause of bad decisions is that the right options weren’t in your consideration set. Instead of looking at the obvious options, or the ones presented to you, spend time to create your own options. Be creative and make sure you are thorough.

3. Trust your gut. You need to believe in yourself, and trust your instincts. You likely know a lot more about the business and the decision than you could ever write down, and all of that translates into your intuition. Trust it.

When you do make a decision, commit. The worst thing you can do when betting the company is to waffle and/or change your mind. That will almost guarantee the company will fail! You need to commit completely and focus on making your choice work, instead of wondering if you made the right decision.

If you make these decisions right, you will be hailed as a genius. If you get them wrong, it will shake your confidence and everyone’s confidence in you. In either case, you’re the same person! Remember that these decisions are bets and we’re never as great or as bad as the results make us seem.

Don’t make a habit of betting the company, but you will have moments where you have no choice. Those are the defining moments of any leader’s career, and you need to trust that you are ready. Make a call and commit.

For more on Leadership, see:

• How to Avoid Doing Fraud

• Urgency

• Emotional Leadership

• Methods and Outcomes

• Managing Outcomes