While doing research for his extraordinary new book, Great at Work, Morten Hansen studied more than 5,000 managers and employees in corporate America to identify the key practices that explain why some perform better than others. What he and his research team discovered is that seven key practices explain a whopping 66% of the difference in performance among people in the sample.
I was really curious to learn more about his research and findings, but also how these practices apply to working in startups. Both kinds of organizations are experiencing high degrees of uncertainty, and I’ve found they can be more similar than people expect (though there are clear differences when it comes to scale and building new things vs transforming existing structures or processes). We talked about what being “great at work” means in both contexts.
Q: Startups are inherently unstable. Can you explain how the principles that make people successful in more traditional, less volatile work environments can also work for startups? Are there common factors?
A: Startups are clearly different from established companies, yet there are also similarities. Many established companies today are experiencing unprecedented levels of instability in their business models, brought on by technological disruption and, yes, those startups chasing their markets. We found that the best performing people in established companies are constantly innovating in their work. They look for ways to redesign their jobs to add more value, and they keep on learning new things. That means that they experiment and pivot from time to time, just like startups. For example, there’s a high school principal in my book who was leading a severely under-performing school in Detroit where 80% of students were on food stamps. He started experimenting with new ways of teaching which led his school to be the first in the entire United States to flip the classroom for the entire school—homework at school, lectures at home via video clips. Essentially, he applied the “startup way” inside a school. He had a very tight budget, not unlike a startup, and started out by using A/B testing his hypothesis around flipping with a minimal viable approach (using some basic videos and teaching plans) to see how it would work in two social studies courses. The rest is chronicled in the book, but we find these kinds of innovators and learners throughout the corporate world. We just need to give them tools, frameworks, and right encouragement.
Q: In your research, you found that top performers at big companies had two critical skills: they knew how to set a short list of priorities and also how to protect them by being really good at saying no to anything that didn’t align with those priorities—including their bosses. What happens when people at both large organizations, and startups, don’t follow your principle: “Do less, then obsess”?
A: In my experience, startup teams do obsess—they go all in on their startup and fully commit to their work. Their problem maybe the opposite which is too much hyper focus. I recently spoke with a founder of an online education marketplace. He had a laser-like focus on his key for-profit segment, but then some high-profile people approached him to extend this to a non-profit area. Flattered by their attention, he re-allocated resources to that new effort, only to encounter problems in the core area. After a while, he realized that he had prematurely branched out and had to re-focus the effort. It’s a real concern given startups have very, very limited resources. Doing less—and sticking to that narrow scope—is key, yet the temptations to prematurely expand to new customer groups, new features, new products and services, and new geographies is very strong. It requires real discipline to master this principle in a startup environment when little is known and resources are scarce.
In larger, established companies my data show the situation is the opposite and often worse. A lot of people working in innovation encounter the problems of both lack of focus and lack of obsession. Many people in our data reported work environments where people “do more, then stress”. They take on many priorities—for example, working on 3 product development projects simultaneously—and then work hard to accomplish all of them, which means they cannot go all in and obsess over a few things.
“Do more” types fall into two traps: they spread themselves too thin, which leads to them to miss deadlines and deliver lower-quality work. They also fall into the complexity traps: they spend time coordinating and juggling multiple activities. Things get dropped, and error rates go up. Many cope by working long hours and stressing to just keep all these activities afloat. It can work to some extent, but it doesn’t produce excellent work. It certainly isn’t being great at work.
Q: We tend to think of people who succeed at their jobs or in launching a startup as people who are passionate about what they do. Is passion a prerequisite to being a top performer?
A: I initially thought that people who do very well did so because they “followed their passion.” That idea has become cliched, it’s repeated so often. The problem is this: What it really implies is that passion should dictate what you choose to do, regardless of other considerations (the assumption being that it will all work out in the end). Ignoring your passion, doesn’t sound like such good advice, either, as it may just lead to a life of drudgery.
We discovered a solution to this conundrum. Top performers found a third way: they matched their passion with purpose. Passion is do what you love; purpose is do what contributes. Passion asks, what can the world give me (a hedonistic view). Purpose asks, what can you give to the world (an other-orientation). I call this “P-squared”: People who infused their work with both passion and purpose performed much better in our data set than people who had just passion, or just purpose, or neither. They placed in the 80th percentile in the performance ranking on average, while people with only passion (but no purpose) placed in the 20th percentile, and people with purpose (but not passion) placed in the 64th percentile (note that purpose more than passion correlated with high performance).
Having passion and purpose in one’s job is important because when you inspire yourself first, it’s easier to inspire others. In today’s workplaces, whether in large companies or startups, you need to get others excited about your initiatives and projects—you can’t just rely on the old style “command and control.” We found that the top performers were really good at inspiring others, surprisingly not through charisma but through other easily adopted techniques to evoke emotions in others (both positive and negative). For example, by “showing and not telling.” One purchasing supervisor we spoke to was charged with the thankless tasks of converting paper to electronic forms in the company, and no one was excited to support him. Then he learned that the CEO would be visiting his office building for a meeting, and he arranged to use the adjacent conference room. He grabbed the CEO in a break and guided him into his room, where he had displayed a mountain of paper on a giant conference table. “Holy cow, what is this?”, the CEO asked excitedly (and not in a good way!) to which he responded, “this is all the paper forms we use in this company.” His project got the support it needed.
If you’re a founder or working in a startup or thinking about forming or joining one, think about this. Don’t just follow your passion in deciding which startup and which role. Try to formulate how you can take your unique strengths and find ways to contribute to the world. What’s your personal purpose statement? We found that a very strong purpose orientation has three components: what value do you create for others—customers, co-workers, company? Is that value meaningful to you personally? And does that value provide societal benefits beyond sales and profits? Then apply this to the startup itself: What value does the company create—and for whom—and is this formidable value creation? How many of the employees find that value proposition personally meaningful? What societal benefits does the company bring, beyond generating its sales and profits and selling stuff to customers (selling advertising or selling an app to a corporate customer does not necessarily provide societal benefits).
Q: So how can people working in both startups and corporate jobs determine if they’re creating that kind of value and those benefits for the people who they work with?
A: They need to pursue different, better metrics. We discovered in our research that people in established companies oftentimes pursue the wrong metrics. They emphasize volumes of activities or internal goals, over value-creating metrics. For example, one logistics manager in a high-tech industrial company tracked the extent to which their industrial products left the warehouse on time, achieving an impressive 99% on-time shipment rate. The problem was, the customers complained that only 65% of the shipments arrived when they needed them. The 99% metric was an internal goal, whereas the 65% metric measured customer value. You need to measure value-metrics and not internal “volume” metrics.
I suspect that many startups also don’t do this. A few months ago, I spoke to the CIO of a large company that is one of the largest paying customers of Slack software. She reported that they tracked very high usage of the software. When I asked whether they had seen higher productivity as a result of Slack or tracked that, she said they had no idea and that it wasn’t clear. Then I asked them to ask Slack whether they tracked such measures of their clients, and so they did and got a negative response. That’s no surprise. When I read about Slack in the news, I come across two typical metrics: the number of users and user engagement (hours of use per day). But those are volume metrics: the fact that a group of engineers in a client company uses Slack extensively during the day doesn’t mean that they are doing better work (that’s like saying that meetings using video-conference tools are good meetings). This is not to single out Slack, which is a terrific company, but to make a general point. Startups also need value-creating metrics: what value do we create for our customers, really? And how can we modify our work and offerings to increase value?
For that logistic person shipping goods, that meant re-organizing the schedule to get better delivery time for customers (value metric: % of shipments arriving when customers needed them). For Slack and many others like that, the real measure of value is the improved results by the customers like the one I interacted with (higher engineering productivity, speed of product development etc). Yes, those are harder to measure, but they are the real measure of value.
Q: Your concept of the “learning loop” draws on the build-measure-learn cycle that is one of the pillars of The Lean Startup and The Startup Way. What does it look like for people who set themselves apart from their colleagues?
A: One of the great virtues with The Lean Startup and The Startup Way methods is the focus on learning empirically, for example by doing A/B testing on MVPs, learning from those, and pivoting if necessary. We found in our research that the best performers apply a similar “learning loop.” They try out a new way of working (say leading a meeting), then get some measurements and feedback (say, feedback on meeting effectiveness), then modify their behaviors, and then repeat. It was also striking to discover how few people do this while working. Many people become competent at a professional skill, then they stop improving—good enough is good enough, it seems. This paucity means that startups and other companies pursuing the lean method in innovation have a huge advantage over others who are not learning at the same rate. Moreover, we discovered that the learning loop method really works not just for idea development but also for most “soft” professional skills, like running a meeting, prioritizing, doing a sales pitch, and so on. Everyone can apply this to managerial and professional skill development. For example, if you’re a sales person in a startup: do you apply such a learning loop to your sales pitch? Do you A/B test it and modify it constantly to become better? Those who did in our dataset improved faster and outperformed the rest. Continuous learning and growth are important in any work environment.
Morten Hansen’s new book GREAT AT WORK is on sale today and available at bookstores everywhere.