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Newsletter Issue 44

Every few weeks, I ask one question to a founder, CEO, manager, or business owner I respect…

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The Heartbeat Podcast: A chat with Esther Derby

Listen to the podcast and read the transcript of the interview here.

Have you been enjoying these Heartbeat episodes, lately? If so, it’d mean the world to me if you wrote us a review in iTunes. The more reviews we have, the more we’re able to share all our lessons from leaders. Thank you! <3

What I’ve been writing lately

After 5 years of bootstrapping a profitable business with 15,000+ users, we raised $500,000 with Indie.vc. Here’s why.
“We’ve been profitable since Month 1 and never raised any money – until a few months ago.”

What I’ve been reading lately

The seven stages of strategic leadership
“[…] leaders tend to deal with day-to-day challenges by invoking one of two patterns of mental activity, and thus engaging the brain circuits associated with them. The Low Ground, as we call it, is associated with transactional leadership: making deals, solving problems, designing incentives, or making expedient decisions for short-term goals. There is also a pattern associated with strategic leadership, a High Ground, in the mind and brain. This High Ground is strengthened by decisions that go beyond solving problems and are oriented toward long-term viability, breaking out of self-defeating constraints, and seeking more fundamental change.” Written by Jeffrey Schwartz, Josie Thomson, and Art Kleiner, strategy + business

The New Role for Managers in Workplace Learning
“While managers should be “hands on” enough to build cultures that support learning for their employees, they should also be “hands off” in ways that go against the old norm. Outside of compliance training, managers should refrain from choosing which skills their employees learn and how they go about learning.” Written by Kelly Palmer, MIT Sloan Management Review

Leading Change in a Company That’s Historically Bad At It
“Most reliable research estimates that 50%–70% of initiatives fall short, largely focusing on change implementation as the culprit. Common obstacles that organizations face include failure to sustain the effort over the long term, competing priorities, and under-resourcing. But some seeds of failure are sewn long before change is implemented — and some initiatives are set up to fail the moment they are conceived.” Written by Ron Carucci, Harvard Business Review

The drumbeat of digital: How winning teams play
“In earlier studies, we identified 11 strategic and operational practices that are tightly correlated with the successful execution of digital efforts. More recently, we asked more than 1,500 executives how frequently their companies carry out these 11 practices. The responses of the best-performing companies—those in the top decile for organic revenue growth—suggest that the accelerated repetition of certain critical practices is closely associated with adaptive cultures that are comfortable with change, learning all the time, and swiftly responsive.” Written by Jacquest Bughin, Tanguy Catlin, and Laura LaBerge, McKinsey Quarterly

Getting Real About Managing Up
Julia Grace, Senior Director of Infrastructure Engineering at Slack, shared on Twitter a fantastic talk written and delivered by Kellan Elliott-McCrea. It’s a wonderful primer on managing up – I highly recommend checking it out. Talk slides written + delivered by Kellan Elliott-McCrea

A handy leadership tip

From our online leadership community of 1,000+ managers in The Watercooler in Know Your Team

How transparent should you be as a leader?

Here is what some companies share company-wide:

  • Financial information at an aggregate level, with context (e.g., % of our expenses go to rent, our profit margin is %).
  • Weekly key numbers – Previous week’s numbers compared to the same week in previous years, and a cumulative chart through the year.
  • Weekly company updates – Each Friday, one CEO shares (in a Slack message) what’s going on in the company and what’s coming up next. For example, he talks about progress they are making getting into a new market, or a need to hire additional people.
  • Profit growth sharing plan – Here is Basecamp’s that they made public.

Potential team reactions to being transparent:

  • Fallout. Communication might expose some discontent, but it shouldn’t discourage you to be transparent about the company’s situation.
  • Disclosing compensation can backfire if you don’t have a well-structured definition of roles and seniority. Assumptions due to lack of context. When things are good, people don’t understand why they don’t get paid more; when things are bad, people panic and want to jump ship or focus on the wrong things.

Things people tend to NOT be transparent about:

  • Individual compensation – One member also mentioned that they don’t think someone who works a lower paid position is better served by having a higher paid position’s numbers in their face at all time. People have a general understanding that there are different salary ranges, but it’s something else to have that pressed in your face regularly.
  • Exact top-line revenue numbers – One founder of a product company said they avoid sharing actual revenue numbers with the team. Of course, there isn’t anything stopping anyone from putting 2 and 2 together to get an idea of revenue – but they’ve had horrible experiences in the past where things have gotten sideways with individuals who don’t understand or appreciate all that goes into starting and operating a business.

When being transparent, consider:

  • Transparency requires context. If you share revenue numbers without context of monthly spend, people start wondering, “Where’s all that money going?” So for example, at Know Your Team, we share revenue numbers, within the context of also our profit margin and expenses — so it’s understood how revenue supports our business as a whole, and not just “here’s the pile of money we’re making.”
  • Transparency is a spectrum. Transparency isn’t all or nothing — things don’t have to be either completely open or completely a secret. Transparency is a spectrum, and if you indiscriminately just make everything 100 percent public, you could be wasting people’s time, confusing them, or causing them strife. Everyone has a capacity of information, and overloading folks with every detail of what’s happening in marketing, support, design, engineering — it can be too much. As a leader it’s important to ask yourself: In what cases is transparency appropriate and helpful, and in what other cases is it distracting or a burden?

I wrote a bit more in-depth about transparency here.

Just for fun

10 Tips on Writing from Joyce Carol Oates
I’ve been doing a lot of writing lately, and so this piece hit home for me.

Written by Claire Lew

CEO of Canopy. My mission in life is to help people become happier at work. Say hi to me on Twitter at @clairejlew.