About the podcast The Heartbeat
A podcast about leadership – hosted by Claire Lew, CEO of Know Your Team. In each episode, Claire has a heart-to-heart interview with an industry leader she respects, distilling their most valuable leadership lessons, business learnings, and management advice.
Interview with Jeff Kahn, Co-founder and CEO of Rise Science
As the Co-Founder and CEO at Rise Science, Jeff Kahn discusses the challenge of being emotionally present as a leader, the power of gratitude, and the two levers of sleep that are essentially to high-performance for leaders. Have you been enjoying these Heartbeat episodes, lately? If so, it’d mean the world to me if you wrote… Read the full article
Interview with Jennifer Garvey Berger, Author of "Unlocking Leadership Mindtraps"
As the author of “Unlocking Leadership Mindtraps” and the CEO of Cultivating Leadership, Jennifer Garvey Berger discusses the hesitancy most leaders have around power, our relationship to conflict, and the most common mindtraps we find ourselves in as leaders. Have you been enjoying these Heartbeat episodes, lately? If so, it’d mean the world to me if… Read the full article
Interview with Matt Davey, COO at 1Password
As COO at 1Password, Matt Davey talks about eschewing perfectionism, being an empathy lead business, why it’s important that everybody has a hand in the customer service company pot to varying degrees, and their real company values being security, privacy, community, and kindness. Have you been enjoying these Heartbeat episodes, lately? If so, it’d mean the… Read the full article
Interview with Jennifer Goldman-Wetzler, Founder and CEO of Alignment Strategies Group and author of Optimal Outcomes
As a leading conflict expert who’s worked with leaders and teams at organizations such as IBM and the United Nations, Dr. Jennifer Goldman-Wetzler, Ph. D., talks about embracing hard work, freeing yourself from conflict, resolving conflict, and ideal values vs shadow values. Currently, Dr. Goldman-Wetlzer is the Author of Optimal Outcomes and Founder + CEO… Read the full article
Interview with Shane Parrish, Founder of Farnam Street
As Founder of Farnam Street, Shane Parrish talks about leaders’ tendencies to ignore positive outcomes and focus on the negative ones, being receptive to feedback, and the important concepts of “living life backwards,” and “outcome over ego.” 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! CLAIRE: Hi, everyone. I’m Claire Lew and I’m the CEO of Know Your Team, software that helps managers avoid becoming a bad boss. I am truly thrilled to have today on The Heartbeat someone who is usually on the other side of the podcast table admittedly, but someone who I have looked up to and listened to and respected his work for years. And so today, I have Shane Parrish who is the Founder and Owner of Farnam Street, which is this amazing online resource where he has this podcast called The Knowledge Project where he interviews literally the top and brightest minds in the entire resources all about helping you make better decisions in your life. I know I’ve leaned on it tremendously. I don’t even know if you know this, Shane, your book recommendations, I very regularly go through and sort of compare notes to see, “Oh, of course. Yeah, absolutely.” And the reason I particularly was so excited, Shane, to have you on the podcast is because I’ve been asking people who I respect and admire this one question about leadership. And I’d asked you beforehand if you wanted to know the question before or just live, and you said live. SHANE: All right, give it to me. CLAIRE: So, we’ll see if you picked your poison well – no, it’s all good! SHANE: [Laughs] CLAIRE: Hopefully, it’s not that scary. No, it’s totally not that scary of a question. But the question I had was, what’s one thing, or it could be several things, that you wish you would’ve learned earlier as a leader? SHANE: Oh, this is so topical. Somebody recently in the past two weeks just pointed out a huge blind spot to me in my leadership, which I wish I would’ve known sooner. And so my tendency with things is to just cut through and pick at the problems so when people come to me and they’ll be like, “We did all of these 10 exciting things, and here’s this one thing that is sort of not going 100% or not working,” I always gravitate towards that one thing and ignore everything that is positive. And for me, I don’t think in those terms. So, when people say something positive about the work that we do or something, I hear it and I listen to it and I appreciate it, but it sort of doesn’t sit or resonate with me. For me, it’s always like we can do so much better, and I’m always grabbing on to what we can do better instead of where we are. And so, I had somebody come and point out to me recently that I’m always like this. And I was like, “I had no idea. I thought everybody was like this.” And they’re like, “No, we’re telling you these 10 things because we want you to be aware of them and be excited about them.” And it’s like, “Oh yeah, but this 11th thing, we could be doing so much better on this one thing.” And so, that’s been a huge blind spot that I’ve had up until two weeks ago. And now I’m sort of struggling a little bit to address it where I’m trying to make positive comments to people in a way that is genuine to who I am and what I think. And also sort of acknowledging the work that we’ve done well while being respectful of the fact that I still think there’s a gap between what we’re doing and what we could be doing or all the room for improvement that we have. It’s kind of funny to watch actually at this point. It’s a little awkward, but that’s where I’m at. I mean, it’s just been a big blind spot to me because of the way and the teams that I’ve managed, I’ve always been so operational and we’re doing a little bit different thing with Farnam Street. But my previous career, everything was driven by operations. So it’s always the next operation. It’s always the next problem. It’s always like troubleshooting and always fixing problems. And now, I’m sort of trying to step back from that and reevaluate myself as a leader. And I don’t think I’m a very good leader at all. And this is one of the reasons why. Like this is a huge blind spot and I was so unaware of it until a couple weeks ago. CLAIRE: Thank you so much for being so candid about something that happened so recently. I feel like a lot of times, and you may have experienced this in the folks that you get to interview, you ask them about something that they learn and it’s something where it’s far enough away where there’s enough emotional distance where you say, “Oh yes, this is this thing that happened and it was resolved and I did the personal work.” And this is so raw. This is fresh. SHANE: I know, and I’m struggling through this. Part of the reason I bring it up is like rubbing my nose in it a little bit and talking about it and not only being vulnerable with it because I think that that’s part of the way that we sort of acknowledge where we’re at, where we want to be and the difference between and how to get there to ourselves. But also, I think that it’s real for me and it’s not something I can sort of absolve myself from. “Hey, when I was 21 and I first took over a team, and this thing happened, but now I’m amazing and great.” It’s like, “I’m not.” There’s a messy process that we’re all sort of going through at all stages in life or maybe I just am and everybody else has everything figured out. And I’m the one walking around going, “Am I the only one that is going through this?” CLAIRE: You know you’re not the only one. My God! I guess someone who does this for a living and asks this question literally for a living, you are not the only one. I think what’s fascinating about it, there’s like a few levels I want to dive into. One is I think just even sort of the historical context of this question, given your background, so what some folks might not know before you had a site that was read by hundreds and thousands of people following it and hundreds of thousands of downloads on your podcast. You worked for the Canadian National Security agency essentially. Essentially, what’s the equivalent of the NSA here in the US? SHANE: I’m not really allowed to say where I worked, but I did work for a three-letter agency. CLAIRE: Okay. Everyone’s going to connect the dots here, right? SHANE: Yeah. CLAIRE: And I can only imagine I’m projecting here and all sort of give you some holes here so you don’t have to sort of self incriminate, but that I can only imagine that in an environment like that, the attention to the things that could possibly go wrong far as outnumbers any sort of attention or lifting up of, “Oh, here are the things that are going well.” So in many ways, just sort of even past experiences, and this is just based on assumption, based off what you’re sharing is wiring you and you’re getting positive feedback about, “No, those are the things as a leader that you need to be pointing out and that if you don’t, who’s going to?” And yeah, ten things can be going right but the 11th thing, that’s the thing that matters. SHANE: Yeah. And the expectation is sort of like that you do your job and that is your job. And so like, where we’re not doing our job or where the room for improvement and somebody put this to me the other day too, they said, it’s like, “You’re the coach on the football team and the receiver catches a touchdown and you don’t get excited because you’re like, they’re supposed to catch the touchdown. That’s their job. They’re a receiver.” The ball’s thrown. It’s in the air and they caught it and that’s what they’re supposed to do. And it’s like, “Well, you’re that coach.” And I’m like, “Oh, man.” It hit me. Obviously, it’s still with me. But yeah, I mean, I come from a very operational background. There was no shortage of work. I started two weeks before September 11th. The world changed right after that. And I didn’t really get a break for 15 years. It was always the next thing. But that got me where I am, but it’s not going to get me where I want to go. It had served me, but now it’s sort of like not serving me if you want to think about it. And now, it’s hindering me and hindering what we can do with Farnam Street and what we can do with The Knowledge Project. CLAIRE: I think your awareness around this is really profound because I’m personally guilty of this myself, which is that oftentimes as leaders when we receive a piece of feedback, the degree to which we accept that it’s true might be there. We might go, “Oh, yeah. No, that’s true.” But oftentimes, and again, I’m just totally guilty of this myself, we say, “But that might be true, but I have to do that because it’s in service of the way we have to run the team. If I didn’t point that 11th thing out…” So, it becomes this really interesting double-edged sword where it’s like the things that people might not like or hate me for as a leader, but I also feel like are the things that help us make progress. To what extent do I compromise on those things? And I think the most interesting sort of aha moment or sorry, let me pause on that. So I think what oftentimes happens because of that is it’s very easy to justify and continue sort of making the “mistake” over and over. You go, “Oh yeah, people are going to like it. But who else is going to do it? I don’t know any other way and this is how I’m wired and look where it’s gotten us here.” And so, you can sort of self-justify. And what I think is so remarkable about what you’re pointing out though is, to your point, if you want to elevate where your performance is going to be, what that outcome is going to be, something has to change. And to whatever degree, like you think it’s true that it’s helpful, someone else is thinking it’s not. And that takes a real degree of awareness, truly. SHANE: The world gives us feedback, and whether we’re receptive to it or not is totally up to us. And sometimes it’s false feedback and sometimes you have to sort of be like, “I understand what you’re saying and that doesn’t apply in this situation,” and be honest with yourself about whether it does or doesn’t. And sometimes, in this case, I’m like, “You know what? You’re absolutely right.” It wasn’t a 180 degree turn on the spot, but it probably took 24 hours. And it was like, “I think you’re right. I think what I’m doing is getting in the way of where we want to go and help me correct it now. You pointed it out. So now call me on it. I want to get better at it.” I have a question for you because I’m used to asking questions. CLAIRE: Please, yeah. Like, “This isn’t what I’m usually doing.” SHANE: What’s the most recent piece of feedback you’ve gotten that sort of hit you and was like, “Oh man. Yeah.” CLAIRE: Yeah, that’s, something that happened. I took a big vacation at the end of November. The first I’d done in like years where I’m truly unplugged. And right before I went, I had a one-on-one with our Operations Manager who’s only been with us for six months. She’s brilliant. She wears a ton of different hats. She even started — because she’s actually such an excellent writer. Our Operations Manager started writing pieces for our blog. SHANE: That’s awesome. CLAIRE: And I’ve been the only writer for our blog for years. So, a lot of potential. And there’s sort of been a reason I’ve been the only person writing on our blog for years. I have a tendency to have a really high standard for what we’re putting out content-wise. And if what really makes us different as Know Your Team is that content, then okay, there’s a certain bar I see. And so, the piece of feedback that she gave me was, “Claire, I so appreciate all the feedback that you’re giving me about my writing. But at the same time, there’s one post where it’s like you literally rewrote 60% of it.” SHANE: Yup. CLAIRE: And I was like, “Oh my gosh, right.” I did. Like I wasn’t playing editor anymore. I literally took off that hat and was just like, “It’s not how I would have written it.” And the problem with that is that it’s her piece. That’s the whole point. She’s the writer, I’m not the writer in this role and my role has changed. This piece needs to be exactly how I would have written it about this specific subject. It needs to be her voice. It was hilarious. I went back and looked and I was like, “Oh my God.” I would take the same sentence but just change it in the way I would have written it. Just like so cringe-worthy. SHANE: It’s the exact same meaning, but it makes more sense to you. CLAIRE: Yeah. It’s just the way I would have written it. And it was a hard thing to receive in the sense that, I mean, it’s hilarious when you sort of study leadership for a living and then you actually have to practice it and to notice where the alignment and the cognitive dissonance happens. And so, it was so interesting to in so many ways be so consistent around, enabling people to do their best work. You can’t do the work themselves. There’s so many times where that lesson has been reiterated for me where I practice that really well. And yet in this specific situation, a very specific domain that I had owned for years, I wasn’t able to hold true to that. And so, that was my blind spot there. SHANE: But you were able to learn from it with the feedback and that’s what I think separates people who sort of stay in the same spot. It doesn’t matter their outwardly success, but they stay in the same spot from people who sort of go forward and get better and adapt more to what’s happening. That’s an example also of a very scalable thing. I have friends right now who run businesses and you can see it from the outside looking in. It’s easy to see because you’re not part of that day-to-day system. And you’re like, “What you’re doing is just not going to scale. It’s not going to get you where you want to go because you’re too focused on certain things that you can’t scale.” And you have to eventually trust other people, but they don’t want to invest the time to trust the other people because that’s a huge upfront time commitment. And they’re like, “We’re so busy. It’s just easier if I do it myself.” But they wake up six months from now and they’re in the exact same spot. And often, they have extra employees that they’re doing it for now. And it’s like, “Why does anybody work for you? You just do it all.” CLAIRE: What’s the point? SHANE: Yeah. But it’s like, “You’re stressed out. They’re not stressed out. You’re stressed out. They’re probably not happy because they feel like they’re not growing and they’re not learning from you. Here’s this remarkable opportunity to work with somebody who’s world-class on this really cool project and grow this company and you’re not even giving them that.” And it’s sort of like, it’s really hard to do that because you’re in the system, you don’t see it. You just see like, “We got to get this done by tomorrow and it needs to look a certain way. And I care.” And that’s the other thing. It’s because you care that you’re like, “I’m going to reword that sentence.” It’s because you’re so attuned to the detail and the brand and the message you want to send. So, it’s all positive things, but they lead to sort of like a negative long term outcome. CLAIRE: Absolutely. And it’s so easy to get so obsessive and so zoomed in on just what those short term signals are and be like, “Ah! Ah!” And not understand. Okay, big picture. Long term. You’re so blind to that view. One thing I wanted to sort of jump back to that you touched on was just this idea, you had asked me like, what was the piece of feedback recently, or similarly, I’d received something hard. And what I find so interesting is when you dive into why certain pieces of feedback are harder to receive than others, and what are times where it’s easy to kind of roll it off your shoulder and what are times when you actually do take action. SHANE: Yeah. CLAIRE: [Laughs] And it’s interesting, we study the subjects a lot and there tend to be sort of three different categories of triggers that people have around feedback. So one is a truth-trigger. So like when something’s real and like truthful, we go, “Oh shit. I’m a perfectionist and I really don’t want to do that because that just means I’m wrong.” You don’t like being wrong. So there’s truth triggers. There’s relationship triggers depending on the person who told us. We’ll receive the feedback in a certain way. So for example, for your piece of feedback, someone you were able to receive that likely because you had some sort of rapport with the person where you know they’re not just out to get you or they’re trying to throw you out of the bus or whatever. And the same thing with our Operations Manager in my case. And then the last, and this is the hardest one and this is why for me, the piece of feedback I received, I was like, “Ohhhh!” That feeling was an identity trigger is that you can fight your sense of self with your behavior. And so when something does not line up, just like, “Who am I? How can I do that?” SHANE: Does ego also fall for you in that identity center? Because to me, I find myself when I’m instinctively defensive about feedback, it’s always feedback that’s confronting my worldview of myself in an area I care about. So if somebody’s telling me that I’m not treating people in the way that I — I think I treat people really well. So the minute somebody says even anything, I’m hypersensitive to it. And I just find myself getting really defensive and then you start mentally coming up with this list. “What do you mean I don’t treat people well? Look at all these things that I do for them.” You sort of lose track of the feedback at the moment and you lose track of the fact that it could be right, it might be wrong too. But either way, that person is able to control your response. And I always find that interesting too, where if it’s somebody who’s friendly to you, that’s a different story. But if it’s somebody who’s not, now they know how to trigger me. And if that’s also a really weird sort of bit of feedback when you walk away from it and it’s like any given day they can make me upset. Why am I giving them this power to do this? Not everybody is out there to be your friend and some people abuse those things when they know it’s a button for you. CLAIRE: Absolutely. No, I think to your point, it’s when someone sort of touches this nerve of yes, your worldview is wrong or not what you say it is and it’s an area that I care about. Absolutely. I share this story actually quite often in some of the workshops that we lead around feedback where the hardest piece of feedback I’ve ever received was about, I still remember it was like 10 years ago, and it was someone who I was trying to do a partnership with and she actually called me up to say, “Claire, could I offer you some feedback?” I didn’t know her well at all. I was like, “Oh yeah, sure.” She goes, “You come across as fake to me.” SHANE: Oh, really? CLAIRE: She told me. Oh yeah. SHANE: Oh, that would be so hard. CLAIRE: I was on the phone because she couldn’t see my facial reaction and the color dropping from my face. First, it was just anger and then it was surprise, and then it was sadness. All the waves of emotion in like a ten-second span. Luckily what I did is, and this is part of the framework that we teach is, you actually just have to buy yourself some time to sort of emotionally calibrate when that happens. Take a few seconds. One, assuming some positive intent. Why would she ever say…? I don’t know. There’s no reason she would ever offer that because she’s not going to gain anything from that. So just assuming that she actually wants to help. And two, whether or not I believe that it’s true, in what ways can I accept it and actually take some sort of action on it. So I told her, I actually said thank you. I was like, “I’m going to think really hard about what you mean by that and reflect on my actions and see what I can do moving forward.” And she had said it was because there were a few emails that I had responded in a way where she thought it didn’t feel authentic, and it was funny. I said, “I would go back and I would read the emails.” In complete honesty, they were fine. But you have to balance that with. It doesn’t matter if it’s true for me, it’s what’s true to her. And I think the most beautiful thing that came out of that is you can sure bet, after that one interaction, everything that I do, I try so hard to make sure that that is never even close to a piece of feedback that someone could give me. But it hit home for me. Because that’s like the last thing I would ever want someone to tell me. SHANE: It’s confronting your identity of yourself in a lot of ways. And we all, like we’re not perfect. I mean, there’s all instances where we inadvertently do something that we don’t intend to do to other people or you just sort of not your best self that particular day. And it’s also acknowledging that you can’t always be 100% on and sometimes you’re sending a rush email and it’s like 2:00 AM and you’re like, “Cut me some slack, I’m awake at 2:00 AM. I woke up with this list of things to do in my head.” I see it from both perspectives. I see it from the perspective of somebody who wakes up at 2:00 AM because I do that occasionally when I’m super busy and I’m rushing to do stuff and trying to go really fast. And we forget the difference between speed and velocity sometimes where we’re running really fast but we’re just going in circles where we’re impacting the people around us. And if we want to go with other people in a direction, we need velocity. And velocity might mean slowing down to go faster and farther over the long term. CLAIRE: Exactly. SHANE: Yeah, I hear you. CLAIRE: It was such an important line. Literally, I still remember it 10 years later. It’s so funny how something like that can stick with you. SHANE: Did you circle back to her after? CLAIRE: Oh, yeah. It was beautiful and brilliant because we ended up doing business together. SHANE: Oh, awesome. Okay. CLAIRE: And she was like, “I really appreciate the way you received that.” And we stayed in contact. It’s possibly the best-case scenario for something like that to turn out. But I think the biggest learning I had was just the degree to which that affected me and the way that it clashed with, as you were saying, my worldview of myself. I truly have thousands of questions to ask you, Shane, mainly because, here’s the thing. You literally have spent your working life studying mental models and this idea that a huge reason why there exists any sort of gap in understanding about any singular subject is not necessarily the lack of knowledge but the lack of available sort of collective situations and scenarios and patterns and possibilities of what could be. And the reason I find it so compelling and why I follow your work so much is when it comes to leadership, I feel like that problem, it’s exacerbated. So we, as leaders, have such a hard time figuring out how to be good. Not because we don’t know what the right thing is to do, but it’s because we’re usually not exposed to sort of the library of situations or possible things. Like we don’t know that “Oh, because this person has this personality disposition or because this is happening in the market or because I have five team members and not 15 or because I come across like this, I should be holding myself and conducting my actions in a completely different way versus if the team are 50 or versus if marketing conditions were different.” We lack that sort of set of stories. And so what we’ve tried really hard to do here in Know Your Team is just getting those frameworks out there and share with people. Not like this is the one way. But this is the possible set of things and here’s how to sort of try to distill that. SHANE: It’s almost like you’re trying to build a repository of ideas in people’s head that they can pull out and try to pattern match to a certain situation and be like, “In this situation, this might not be the only way to handle this or the best way. But now I have a baseline, which is better than my previous baseline because I have an example and it’s vivid and I can sort of talk about it. And now I have fewer blind spots as a result of that.” CLAIRE: Yes, exactly. And I feel like I was saying, you’ve literally spent your working life studying this on a broader level, mental models sort of across all industries. Whether it’s around science or economics or even love. And I know you’ve had folks who’ve talked about even — you had one incredible person recently who talked about mental models around leadership [crosstalk], Dr. Berger. SHANE: Or was it? CLAIRE: And him as well, yeah. You’ve had a few. And then you’ve had Jim Collins recently on the podcast who wrote Good to Great. And so, as sort of the person who has been sort of collecting all these conversations, and this is a really open question. What are things that have been surprising to you? What are sort of pieces where you’ve assembled and sort of put into your own leadership perspective, things that had stood out to you in those conversations? SHANE: I think where I’m starting at this point, and I’m just at the beginning of this, which is we released 70 or 71 episodes, now I forget, over three and a half years. We’re biweekly now. But at the start, it was like once every three months. And what I’m starting to notice is ideas that people are talking about in different vocabulary. So we’re hitting on timeless sort of themes, if you will, or meta mental models if you want to, where different people have different ways of talking about them. But I think we’re fundamentally, and again, I haven’t deep dove into this yet, but I feel it when I’m talking to them. I’m like, “Oh, that’s like this and this and this.” And now it’s starting to be like, “Maybe we can pull those ideas out and we can create a set of metamodels for people to think about.” Just to go back to mental models for a second, the way that I thought about this, which is probably incorrect, but I went to school and then I did a Computer Science degree. And then I met and led people and then I did an MBA. But when I was doing a Computer Science degree, I was learning how to program computers. And I found myself, I don’t know, six months later or something, leading a team of people. And all these ones and zeros that I had learned in school were still super valuable because it was still doing work. But now I had to manage psychology and dynamics and I didn’t know a whole bunch of it. My education was very specialized in writing computer code and that’s what I wanted to do and that’s what I thought I wanted to do. And then the world changed and I had to adapt to the new world, but I didn’t know about all these other disciplines. And when we think of the education system, it’s increasingly specializing in a way. You’re going to get a business degree and why do you want to do that? It’s because the cost of the company to integrate you into the company and get it up to a baseline speed is really low. And so, they want the universities to specialize. But as a person that creates blind spots in all of these subjects that we don’t sort of know the big ideas from. Like, how effective are you going to be at anything if you don’t understand psychology? But not many of us do Psych majors or a lot of us don’t even do Psych 101. And the Psych 101 we do cover is not necessarily the psychology you need to understand people or living or marketing or any of that stuff. And so, I think we started out with this project, we call it The Great Mental Model series. We have 109 listed on the website and we’re just writing the big ideas you should have learned in school. And we’re just going to iterate over them. We’re not connecting them at this point, but the world is connected. But the reason we’re not connecting them is because we want people to connect them themselves. And if they connect them themselves, it’s going to be much stronger. But phase two of the project is sort of like we’ll connect them for you and then we’ll draw these metamodels out of them. Like time would be an example of a metamodel. It affects a whole bunch of things from compounding to relationships. And so when you start thinking about these core ideas, it’s like, “Nobody’s ever taught us about time and how it impacts all of these different things.” Are we compounding the relationships that we’re having with people? There’s four permutations of a relationship that you can get into with somebody. It’s win-win, win-lose, lose-lose or lose-win. But only one of those is going to survive over time. And that’s win-win. But win-win in the moment is not really what we’re taught in school when I did my MBA, they’re like, “Wring out every nickel from the supplier you can.” And it’s like, “Well, that works in the short term.” CLAIRE: Exactly. SHANE: And tell that supplier, like we’ve all been on the other end of this. And we want out of that relationship. So the minute they could walk away from us, now they’re going to leave us high and dry. Or maybe there’s a crisis and they’re never going to support us through that crisis because we’ve treated them so poorly. And so you’ve taken yourself off survivability. And then if we map our understanding of compounding, which also applies across time, we know that most of the gains to compounding occur at the end of a relationship, not at the beginning. And so we naturally just take ourselves off of these very principles, timeless unchanging ideas. And we do it unintentionally because we’re trying to optimize for the moment. And that’s what school taught us. And I think that we’re just trying to open up everybody’s ideas or everybody’s mind too. There’s a broader world out there and we’re not prescribing anything. There’s nothing on Farnam Street that is like four quick ways to get ahead or get a promotion. CLAIRE: No, you’re not. You’re not doing that. SHANE: We want to help you think better. We want to help you. But you thinking better is not me telling you how to think because that’s never going to work. And that’s a dependency relationship where you’re dependent on us for the answers. And that’s not going to help serve anybody. But if we can give you better ideas or better software, if you want to think of it in terms of better apps in your head, you’ll be able to pick and choose similar to what you’re doing with leadership stories. You’ll have a repository of knowledge where you can think through problems from multiple perspectives. And if you think about why people are so busy today in organizations, I would say most of the organizations that we’ve done work with, it’s because of poor initial decisions. They’re trying to go too fast too quickly and a lot of their time is just spent correcting those decisions. I didn’t communicate it in the right way. So now somebody went off and did a whole week’s worth of work in the wrong direction. And whose fault is that? Well, it’s really easy to blame them, but often the fault is on you. And then you didn’t check-in and that little five minutes that you thought you were too busy for has now cost a week’s worth of work for somebody else and sort of damaged your relationship. And it’s just those little things where everybody’s taught to go fast, but we really want to go far. And sometimes there are different things. In business school, you’re taught to value-efficient over effective, but we really want effective. And that sometimes, it’s not efficient. What’s effective long term is not having a whole bunch of debt on your balance sheet. What’s really efficient short term is having a whole bunch of debt, but then you can’t survive across time. And so we’re not integrating these ideas because each domain has their own way of looking at them and we just want people to sort of be aware of the other ones and find ways to integrate them themselves. And hopefully, we’re doing an okay job with that. But like I said earlier, we can do better. CLAIRE: Shane, there’s so much there that is absolute gold. Actually very specific to sort of, okay, you’re sort of stuffing out almost these meta mental models. I mean I think even — as you mentioned like time being such an interesting sort of access is which as leaders we are kind of ignorant to. And I think it makes me sort of pose two things. Actually, we’ll just start with the first, which is, why do you think for leaders, in particular, it’s so easy to ignore the long term in favor of short term gains? What is it about leadership in particular? SHANE: Think of the mismatch between just most companies. I mean, let’s exclude owner-operated companies for the time being and just think about public market companies or something. The timeline, I would imagine, I don’t know the stats off the top of my head, but the average duration of a CEO is probably three to five years max. CLAIRE: Yeah, I agree on that. SHANE: And then the shareholders, what’s the average duration of a shareholder? We’re probably down to like days, but let’s say years. A couple of years. And so you have this mismatch, right? Shareholders care about the next two years. The leadership then thus has to care about the next two years. But even without that, they’d probably care about the next five years because they know that they’re going to be gone. Whereas if you have private companies, you can actually do things differently. That doesn’t mean you’re doing them better, but you can definitely do them differently and differently could be, you can take a 50-year view, you can take a hundred-year view and you can optimize for that versus trying to optimize — and you have to have like a successful business because you have to not worry about payroll and survival, but then you can start making decisions. And the really interesting thing about that is if you think about it, it’s hard for competitors to do that because they have different pressures and you know what they’re taught in schools, so you can sort of use that to your advantage and play a different game than everybody else. Or it’s like, “Oh, we’re going to do something. We know you can’t copy us because we know it’s going to take a lot of resources and it’s not going to pay off for five years.” And at five years, it might pay off really big and it might actually not payout, but we’re not risking the company a lot. And so you can take those bets where your competitor will never do it. I mean, there’s lots of different ways to think about how time affects the decisions that people make. And if you’re near the end of your career — we went through this where I used to work where we did all these handoffs between knowledge, handoffs between people — and the people towards the end of their career weren’t really excited to pass over a lot of the information. They’re winding down, they’re going to the retirement planning. They’re sort of like trying to figure out their next step in life. And you have these younger people who are really keen to learn and you sort of have this mismatch and timelines. It’s like you only have a couple of months to tell me everything that you know. And you’re also preoccupied doing something else during that time. And so time mismatches, like a huge [crosstalk] and it affects relationships with people. It affects dating, it affects marriages. It affects not only sort of like running a business, but you might have different ideas of what life looks like over time. One person might want to work really hard for the next five years and try to make a lot of money and then sort of kickback back and the other person might be like, “I want to work less hard over 25 years and I’ll be just as happy.” And then you have this mismatch in terms of timing and sequencing. CLAIRE: Absolutely. I love that. It causes me to, actually even personally as a CEO, reflect instead of this idea of trying to get somewhere as quickly, to your point, as efficiently as possible. I mean, even questioning where. Not even how far, but like, where am I trying to go? It’s so interesting in the coaching that we’ve done, in the workshops we run, and all the conversations that I have with leaders, it’s this almost like artificial urgency. Like a myriad of different reasons and influences that’s like sort of that pressure cooker. But this question of where am I trying to — I actually think, I remember actually in a podcast that you had done with Jim Collins, I think he had asked or post the question or the question came up of what is the truth in your ambition? Just really figuring like, where are you trying to go? And to your point, when you figure out where that is, then you can align everything on a timescale where it fits, where it does match. And you can’t match it perfectly. People have their own personal timelines for where they would even be within their own career. And that might not match up with your long term view of where you want the organization to be. SHANE: Just think of your life. We’re living life forward, but in reality, you should live life backwards. And that means sort of like pitching yourself at 90 and sitting on a park bench and it’s like, “What does my life look like? How have I treated the people in it? What matters to me in this moment?” And then living your life towards that direction versus living your life unconsciously in the best direction for tomorrow. You want to optimize for your life. You don’t want to optimize for tomorrow. And those things, often the decisions are the same, but often they’re very different. What’s going to matter to you towards the end of your life isn’t probably what matters to you tomorrow. But what matters to you tomorrow, it can affect the end of your life. So you have to sort of live with the end in mind. I think that was like Stephen Covey had said that. We sort of call it living backwards. CLAIRE: Yeah, I love that framing of it. SHANE: You have to let the hindsight of your 90-year old self become your foresight today and then make choices with that in mind. And it means you’re probably going to go home and spend more time with your family or you’re going to take time to celebrate little milestones. It changes sort of like how you think. CLAIRE: Absolutely. And I think it’s funny the sort of unintentional consequence that comes when you put situations in that greater perspective and then that sort of backwards lens of I think you make better decisions. Because you’re not optimizing for, again, sort of that when tomorrow. You are a little bit more thoughtful, you have a little bit more space, you see how they sort of stack up in the long term view. It’s something that your competitors, as you were saying, can’t do as easily. And so, it’s just funny how it actually serves you right to do something that doesn’t always feel like it’s [inaudible] of the beginning. SHANE: Well, my belief and I mean, is that you live a more meaningful and satisfying life if you live backwards. The flip side of this is like I’m super ambitious and I have a lot of drive and a lot of energy to apply towards problems. And those two things, they’re not necessarily mutually exclusive. It just means keeping in mind where is it you’re trying to go long-term and are you making the decisions today that are going to get you there? One example of this in personal life that I was just talking with a friend about at lunch today was another super ambitious person runs a company with like 75 people. And what’s suffering right now is his relationship with his wife because he’s like, “I’m exhausted. And as Esther would say, like I’m giving her the leftovers. And then after the kids get to bed, I don’t even want to have the talk. I just really want to go to bed.” But he’s not investing today. This is where this comes in. He’s not investing today on what matters to him because he feels like it’s always going to be there. And it’s not always going to be there if you don’t invest in it and it will go away and then you’ll wake up too late realizing that and it’ll immediately hit you. Like, “Man, that that 15 to 20 minutes of connection time that I thought was a chore actually was probably the thing that I’m going to regret not doing because it was so meaningful to where I wanted to be in life. And it doesn’t matter how much money or how successful this company is, that’s what I’m going to hold on to. And that’s what I can change today.” And one of the ways to help people see that is sort of living life backwards. CLAIRE: I love it. You are giving me such personally a powerful reminder of viewing, not just sort of my role as a CEO, but really personally. And where we want to be in that ultimate view. SHANE: This is interesting, too. I don’t project my view onto other people, but the way that I see the world is not me as a founder of a company and me as a person, it’s like I have one life, and that life includes all of these things and they have to work — and I don’t think of it in terms of balance. I think of it in terms of harmony. CLAIRE: Right. Integration. SHANE: I don’t want to optimize one area of my life at the expense of another area. I only get one life. And so, that life has to work. And if my things at home aren’t good, then the things at work aren’t going to be good. And if my health isn’t good, none of that’s going to be good. So if I’m not doing the things that I need to do in all areas of my life, then maybe I’m optimizing for tomorrow, but I’m definitely not optimizing for sort of 90 years. CLAIRE: Exactly. And only for a part of the kind of real-life that you want to live, only a slice of it. SHANE: And your community. One thing that I’ve sort of recently been blind to is my role in the community and what it means to give back and how do I do that? And I think that that’s a part of me that’s been missing. It’s a part of me that I need to feed in terms of I want to do more on that. CLAIRE: I’m marinating in all of what you shared here, Shane. Thank you so much for being so generous with your time, your thoughts. SHANE: Oh, thank you. CLAIRE: I guess the one last thing if I had to ask before we head out here is, you are truly the expert like I was saying on having these conversations with people around assembling ways to be viewing their lives to make better decisions. And through those conversations, is there anything that’s come up where you feel like this is a big myth that needs to be dispelled? Like, “Too many people believe X and I believe Y.” SHANE: Oh, that’s a big question. I don’t know if I have a really good answer to that on the spot. I think the one that initially comes to mind… CLAIRE: Yeah, it could be like a pet peeve, like the thing that people say and you’re just like, “I get annoyed by that because it’s…” I’m sorry, I didn’t mean to cut you off of that. SHANE: I think we’re just over overconfident in ourselves and our view of the world. And I think it annoys, if you want to use that vocabulary then I’ll use your vocabulary because it’s not sort of like how I would think through it, but it annoys me when I catch myself thinking I’ve figured it out or I understand this particular dynamic or area. And it really annoys me when other people sort of do that too. Because what I notice in myself and what I’m projecting I guess is I’m closed to new ideas at that point. I’m closed to somebody improving my understanding, I’m closed to ‘and the world is dynamic’ and everything is interconnected. And the minute that you become a closed system, you eventually die. I think that I want to be an open integrated system and catching myself thinking that, “Oh, I’ve got this figured out.” And so, one of the things we’ve started doing is having different guests on the podcast with completely opposite ideas and exploring the same subjects in a very similar way and trying to be open-minded about not predisposing what I believe or what I think personally because who am I? These people are experts in these respective domains. I have my thinking on relationships, but they’ve counseled thousands of couples successfully, both of them. And in the case of Sue Johnson and Esther Perel, they have very different ways of looking at this situation. Then it’s sort of synthesizing that and coming up with what I think is my tentative view. And after talking with Annie Duke, I actually consciously use this wording, which is like, “You know, I’m 80% certain that my ideas are right in this.” But it’s just that little delta, even if you say you’re 99% certain. And you can talk with people about that and be like, “Hey, I’m pretty certain about this.” But that signals to the other person you’re open to changing your mind and it also primes you to being open to changing your mind. And then the question becomes really interesting, which is like, what would cause you to change your mind? What information would I have to give you for you to know that your view of this situation is not accurate or your model of the world needs upgrading. And so much of that comes back to debugging our [crosstalk]. If you think back to computer science terms, it’s like watching what’s going on in your brain, watching the feedback and going like, “Oh, I just need to update this.” And computers are nonemotional. And so part of the metaphor of debugging is that if you can take the emotions out of it, watch the instructions go by, either in hindsight or real-time, you can update your views of the world. And it doesn’t necessarily have to hit your ego because what you’re optimizing for is the [crosstalk]. One of the phrases that we toss around at Farnam Street is outcome over ego. You want your ego wrapped up in the outcome. You don’t want your ego wrapped up in your view of the world. And this is a lesson that I’ve constantly learned and no doubt I will learn again because I’ll make a mistake somewhere. But when you own a business and you operate a business, it becomes very apparent to you that what matters to you is not that you have all of the ideas or you have your ego wrapped up in coming up with the best idea. You just really want the company to succeed. And that might mean that somebody else has the best idea and you’re happy about that. Not only is it less pressure on you, “Oh great, somebody else has got the best idea,” but it’s also like you can see it in a way that you can’t see it when you’re a knowledge worker. It’s really hard to openly admit that somebody else has a better idea because you view yourself as a knowledge worker. And then if you’re not a knowledge worker and you don’t have the best idea, then what are you? And it sort of seems to make you less. But again, your ego is tied to your view of things and not the view of what’s best for the team, what’s best for the organization. CLAIRE: Yes, I love that, Shane. Thank you so much for sharing and reminding us all that whatever confidence that we have is just to maybe calibrate it a bit and to see what that reveals and the holes that it creates that are good for us. So, thank you so much for having us on here. SHANE: Thank you. This was great. CLAIRE: Yeah, so much fun. And for folks who have not yet, which I find it hard to believe, but if you’ve not yet checked out Farnam Street, The Knowledge Project and Shane’s book, which is a series of books which will be released over time on Amazon, please do so. Such a pleasure to have you on the show. Thank you, Shane. SHANE: Thank you so much, Claire.
Interview with Jason Fried, Co-Founder & CEO of Basecamp
This week, Jason Fried, CEO and Co-Founder of Basecamp and I, your host, Claire Lew, CEO of Know Your Team, interview each other for this special milestone episode #50 of The Heartbeat. We talk about learning how to be like yourself earlier, thinking about long-term views as leaders, how leadership roles change over time, and letting ideas go when you have to. 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! CLAIRE: Hey everyone, I’m Claire Lew and I’m the CEO of Know Your Team. Today is a super special day because on The Heartbeat, we have the one and only Jason Fried, who is the Co-founder and CEO of Basecamp, a project management tool that if you’re not using, I don’t really know what you’re using, is what we base our entire business off of. And for those of you who’ve been following Know Your Team, we were a spin-off company of Basecamp as well. But I wanted to actually ask Jason to come back on the show because Jason was the very first person I interviewed for The Heartbeat when I started this series two and a half years ago, when I look back. And today is a particularly special episode because it is the 50th episode that I’ve done of these, interviewing all sorts of leaders that I’ve admired all over the world. And I thought Jason, for this particular one, Jason and I talk regularly. He sits on our board at Know Your Team that you would be possibly the best person to maybe flip the tables this time around and ask me the one question that I’ve been asking leaders over the past two and half years on this podcast. So, I thought that’s how we would kick things off and then I have a bunch of questions for you because there’s so much to hear. Should we start there? JASON: Yeah, this is great. First of all, thanks for having me on. It’s an honor to be on the 50th episode and to be chosen to ask you this very special question which is basically as you start off all your interviews, you always ask, what’s one thing you wished that you’d known earlier about being a leader? So, let’s turn the tables and ask you the same question. What do you wish you knew, let’s call it, 10 years ago? CLAIRE: It’s so funny. I’ve literally asked this question likely more than 50 times and maybe in the best form. You try not to think of your own answer to the question that you ask. And I even knew that we were doing this episode. So, it’s funny, it’s like I didn’t really prepare for it. I’ll just share the first thing that comes to mind, which is: I really wish I had learned to be more like myself earlier, which is probably some leadership poster cliche thing that’s written everywhere. Be more like yourself or trust yourself. But I just have noticed that when I was first starting out, and I mean, you’ve known me for a while before I was even running Know Your Team and getting started. And I think one of the hardest things when you’re even just leading yourself, so before I even had a team is figuring out, “What do I believe in? What do I care about? And how true do I actually even stay aligned to that?” And I think the first instinct when you’re trying to answer those questions when you’re starting out is you pattern match and you go, “Oh, I’m really a big fan of the stuff that Basecamp does. I’ll talk to Jason and David and you hear about how they run their teams and how they work with people.” Or maybe I’ll talk to some professors or I’ll talk to other mentors or people who are older than me and wiser and making lots of money. This just seems like this would be the right path. And I would try those things and who’s to say to what degree things worked or whatnot. But what I found when things would go either faster or smoother or I would get really good feedback from the people I was working with was when I wasn’t looking at any other pattern for what I thought could be true. And so, that’s probably the biggest thing even today. It’s like having tried to internalize that lesson. Even today, I’ll even notice myself being, “Am I doing this the right way? Am I having these conversations or making these decisions in “the right way”? And then I’ll go back and talk to people. It’s almost like a funny, weird habit to try to kick off, there’s really no answer to figuring out how to do any of this well, whether you’re running your company or managing your team and how do you try to be more like yourself? So continual lesson maybe, I’m still trying to learn. JASON: That’s such a great point. And it’s something that I think a lot of business leaders at all levels struggle with, which is can they be themselves? Are they allowed to be themselves? There’s a sense that leaders need to be these strong people who are always right and always pointing in the right direction. And we try to often emulate that. But then you’re not being yourself, and you can’t lead if you’re not being yourself. And people want to follow you, they don’t want to follow the caricature of a big, strong leader kind of thing. So I think that’s really important. The thing is that you’re small company. You have what? Three people? Four people now? CLAIRE: Yeah, we’re four people total. We’re tiny. JASON: Oftentimes people I think who are new are looking out at leaders who are running massive organizations and thinking that they need to model themselves after those people, but those people have a very different challenge than the challenge you have. You’re going to be much closer to your team and much closer to your people. So it seems like it’s a different style of leadership that I think you’ll have to evolve into it as the company grows as well. But I’m kind of curious, you’ve talked to 50 leaders at least many more, but you’ve interviewed 50. CLAIRE: Yes. JASON: What surprised you most about these people? CLAIRE: Everyone actually has a different answer to that question that I asked or that you asked me rather. That’s actually been the most surprising thing. I almost assume when I started down this project of, “Oh, I’m going to ask the same question.” I have a feeling I’m going to have to stop at some point because people are just going to start saying the same things. And what’s so weird Jason is everybody says a different thing, literally. They might fall under sort of broad scopes of like, empathy is important. That’s like a theme that’s come up or communication’s important or humility is important. There are themes but everyone has a really sort of individual, not to be dramatic, but almost demon that they’re personally struggling with and trying to sort of figure out and wrestle and nail down, and I respect that. JASON: Was there a particular interview, I know I’m asking you to go back through the inventory in your mind, but was there a particular interview that surprised you in terms of like, I thought this person would have been X but they turned out to be Y in a good way, of course. But was there any lesson that was shared by somebody that you felt you really legitimately surprised by and it caused you to reflect on your own leadership. To feel like you’re learning. Part of the interview process is getting to learn from other people. So I’m wondering if anything changed your mind basically. CLAIRE: Changed my mind. Yes. One of the most memorable interviews that I did was last year with Peldi, who’s the CEO of Balsamiq. JASON: He’s great. CLAIRE: Yes, phenomenal. Been a client of ours for a while and I mean, he was immensely flattering. He’s saying, “Oh Claire, your writings deeply influenced and changed the way that I’ve been running my teams.” And it was so funny because then what he shared changed it in my mind. So the thing that he talked about was how he has this really interesting tendency to want to sort of save the day all the time. So people come to him with problems and he’s like, “Great, I fix them. I put my thinking cap on. I roll up my sleeves and I go and I fix them for people and it’s great for a little while.” And then he notices that over time, different bottlenecks start to happen where all of a sudden everyone is coming to him with these problems. And then realized that the things that he is actually good at, he needs to stop doing. I’d always sort of known and read about and there’s so many studies and you sort of look at all sorts of academic scholars who studied leadership and there are a lot of different frameworks for — yes, delegation’s important. Like the whole purpose of the teams just sort of separate tasks and so you’re not the one doing them and your role as a manager is to enable people, blah, blah, blah. But the framing of it as like, “Look at the things you’re good at and stop doing the things you’re good at.” I was like, “Huh! Interesting.” Good leadership is almost always about internalizing positive behavior change. And I felt like what is more sort of powerful than telling yourself to look in the mirror for the things that you pride yourself in and then you’re like, “I’m kind of really good at that. Everybody comes to me for that.” And being like, “Stop.” I just thought that was so refreshing. JASON: Was he trying to essentially create more responsibility for the rest of his team? Was it like, “I know I can solve this problem but it’s not going to help people if I actually solve it even though they’re coming to me for help.” The real help is to say, “Actually, figure it out yourself.” CLAIRE: Exactly. And for him, and this is what I really appreciated about what he shared as well was it was about self-sustainability for the team that if the team needs to be successful when he’s on vacation, well he can’t be the one then being sort of saving the day. What if he’s out for a few weeks, on a tactical level. And then just thinking, “If I want this team to sort of really survive and thrive and [inaudible] without me if I want Balsamiq to, in the long run, sort of outlast me. How do I think about doing that?” And I think that long-term view of leadership and you’re a perfect person to talk about this, your Basecamp, you’re at what? 20th year? JASON: 20 years this year, yeah. CLAIRE: Exactly. That’s no accident. You have to try pretty hard if you want to be around for 20 years, I think. You kind of have to really want to not die and keep doing something. I appreciate that as well because I think, it’s kind of a byproduct of our culture that we just focus on. What’s going to help me in the next six months or what’s going to help me in the next year? I’ve got so many questions for you, Jason. I was excited about this. But one of the things I was curious about is 20 years running Basecamp, I was listening to the Rework podcast the other day and you said something really interesting where you said you’re always thinking about it though as the first of the next 20 years, some ways? JASON: Yeah. CLAIRE: For people who haven’t been running anything for 20 years like myself, how do you really ingrain that long-term view as a leader? What’s happening there? JASON: A lot of the decisions we make, we put them up against like, will this help us last? So for example, one of the reasons we work 40-hour weeks is because if you work 80-hour weeks, it’s going to be hard to do that for a long time. You might be able to do it in short spurts, but the first thing is we have to establish that we want to be in business for a long time. It’s something that sounds kind of silly, but you actually have to say, “We actually want to be around for a while.” CLAIRE: You’ve got to want it first. JASON: Yeah, you got to want it first. So you got to set that out and go, “We want to be around for a while. Therefore, what are some sustainable practices we can follow?” Work week, our cadence of our projects, type of expectations we set for ourselves or don’t set for ourselves. The fact that we don’t set up unreasonable goals or unattainable goals or structure. We’re very focused on the now but also knowing that the now is hopefully going to continue for the next 20 years. So we turned 20, and I talked to the company, we had a meet up around this time when we turned 20 about, “So, what about the next 20?” So we did talk about the next 20. And there’s always momentum behind you. You’ve been around for a while. So there’s a lot of momentum, there’s a lot of decisions, there’s a lot of confirmation bias, there’s a lot of things that have happened to get you where you are. And it’s easy to think that now, like the next 20, we should keep doing the same things because it worked over the last 20. And maybe some of those things like fundamental values and principles I think are important. But when it comes to tactics and strategy, I think we need to think about this as like, “Let’s think of the next 20 like we did the first year of our last 20,” which was like, we’re new and we can do new things and we’re sort of pushing ourselves. I’m trying to push us to do interesting things that we haven’t tried before. So, product launch in Spring. We hired a head of marketing, which is something we’ve never had before. We’re doing some things that we hadn’t done before. And I think had we thought that this was year 21, we probably wouldn’t have done those things versus if we think it’s your one of the next 20, then I think we kind of give ourselves permission to experiment some more. So I think it’s important to do that and set the tone. CLAIRE: Absolutely. Do you think that re-framing helps with feeling almost like letting go of that sense of we don’t have anything to lose. What’s the plaque that sort of builds up, like mental plaque or emotional plaque of, “I’ve been doing this for a while and it’s been working well.” JASON: Yeah, it’s a great question. I find it liberating to just like, “They were starting again,” which of course we’re not really. We’ve got tens of thousands of customers. We’ve got a long history. We’ve got brand equity out there, people know us. So we’re not starting, it’s not fair for me to compare starting new to someone who’s really, truly starting new. Truly starting new and no one knows you is quite a bit harder than where we’re at. But there is this notion that as a company grows and as it’s around longer and as more customers and there’s higher expectations, there definitely is more to lose. And so you end up calcifying and you end up stiffening up because you’re afraid and now you’re just in defense mode. Like, I just want to maintain and keep what we have, instead of figuring out how to do new things. And so, I think it takes a heavy hammer to break that coding basically, and let us kind of loosen up again and say, “Let’s try some new stuff. Who knows if it’s going to work or not. But let’s not be afraid of it.” Because it’s so easy to be afraid when you have something. CLAIRE: Oh, yeah. JASON: That’s the thing I feel like I have to constantly remind people that like, “We’re okay, that’s great.” But it won’t be okay if we just keep doing the same things we’ve always done because that’s what we’ve done. We need to do new things that make sense in context of who we are today, what the opportunities are, what excites us, that sort of stuff. So, I think it’s really important. CLAIRE: Absolutely. JASON: I have a question though, actually, if you don’t mind. CLAIRE: No, go! JASON: Something I’ve always wondered about is how do you find the people you interview? So you’ve interviewed 50. What is it about… CLAIRE: I begged them, Jason. I begged them. JASON: Okay, fine. Let’s say you begged them. Who do you choose to beg and why? What is it that you’re looking for? I’m curious about that because look, there’s hundreds and hundreds and thousands of leaders. So, how do you pick these 50? CLAIRE: That’s a really good question. It’s funny too because it was cool. The podcast has been reaching more and more people and so I get a lot of emails from PR agencies and agents who are trying to suggest that their CEO or their client is the one that gets on the show. And I’ve actually said no to all of them or I don’t respond, which I don’t know if that’s necessarily the best strategy. But what I will say is I try to seek out people who I think will have something different to say and who aren’t going to sit on talking points. That’s like a really big thing. So I don’t like to, for example, accept people on the show who have a thing going on right now, like a book to promote. Sometimes, it overlaps actually. And like, I don’t know, I think the book’s really good and I’m like, “Oh, I want to talk to this person.” For example, we had Mollie West Duffy who did Emotions or the exact name that I’m forgetting, but excellent. I was like, “Oh, this is going to be great.” We’re going to have Jerry Colonna,, who wrote Reboot and is a fantastic executive coach. He’s going to be on the show shortly too. So there is exceptions in that sense, but I think the value of these conversations or why I even want to do this podcast in particular is I wanted to get away from the heavy-handed, crocheted sort of personal brand of leadership. This idea that because it works for me at GE or it works for me at BlackRock that this is the way you do things and it’s one, two, three, and these are like the catchy sayings that I have and mnemonic devices I have for you to implement these things in your team. Because I just don’t think leadership works that way. It’s proven. You look at any team in any organization and it’s just so freaking different. And so what I was more curious about are who are going to be the people who are actually going to be willing to open up about what’s been different in particular about their slice. Because I think that’s where the value is. It’s not in any one person’s particular sort of path or slice of what they learned, but it’s the accumulation of sort of seeing the whole bank of stories and being like, “Oh, interesting. This part of what Jason is sharing was really interesting about not being worried about so many things.” But maybe that doesn’t apply in all situations. “This person does trainers viewpoint. This is really interesting.” And, “Tim O’Reilly has this.” And you just sort of assemble your own collage of what’s making sense. I think that’s where the value is. And so finding people who are willing to get real about that and be honest about that. And that’s the way I’ve thought of it. And so usually that means I’d meet them in person. That’s usually how it happens is I’ll meet someone at a conference or I’ll watch and speak at an event or someone will introduce me to someone and I’ll go, “Oh!” There’s something just about the way they’re thinking, what they’re sharing with me that seems like they’d be willing to be honest. JASON: Well, that’s good. I think meeting someone first is kind of a good basic first bar, just so you can tell if they’re kind of the real thing, perhaps. I think the other thing that I had noticed about your interviews for the most part, I don’t know all the people of course, but they’re all like practicing leadership right now. Like they’re running something versus someone who used to run something and is now like writing a book about what it used to be like. So I think it’s really good for all practitioners. The thing that I think people will get confused about when it comes to leadership is that leadership is not like you’ve arrived at it and you’re good at it. Like most people, you end up there and you don’t know what you’re doing. I mean, we’re all figuring out as we go. I actually feel like pretty much every company is actually held together with duct tape. Everything’s tenuous that people aren’t really sure and no one has the real answers. We’re all trying to figure this out as we go. We have strategies and people have plans and people want things to turn out a certain way, but leaders don’t know either. We’re just someone trying to figure out our own job, like everyone else is trying to figure out their job. No one has all the answers. So I think it’s refreshing when you hear people, and I’ve heard a number of people on your podcast talk about like, “I’m not really sure what I’m doing. I’m trying to figure this stuff out too.” CLAIRE: That vein of uncertainty and the humility and self-awareness that people have to see, that’s like the consistent thread. All of the interviews. Everyone is just sort of willing to admit like, “I’m trying it out and it seems to be working,” or, “This isn’t working,” or, “I learned this the hard way. But you know, I’m not quite sure.” Someone told me this, I forget who, but I really liked this phrasing. They talked about every company, it’s a beautiful mess. So to your point of being held together by duct tape, but it’s a beautiful mess. And like the beauties in trying and putting in the effort to figure out what’s working and what’s not. But it’s just a complete mess. That’s also life. It’s not this perfectly painted picture where everything’s aligned and connecting the dots. And so, I think that’s also what makes practicing leadership so hard. Because unlike other skills, for example, being an excellent violinist or a guitar player or a golfer or a tennis or whatever the thing is, you know what excellence looks like and there’s a very, very clear path. There’s a picture of success and then they do one, two, three, four, if you want to become that. It’s like, you practice this many hours a day, you go move to this place, you get this coach, then you go to Juilliard, then you get your apprenticeship doing this, you do this for three years. We don’t even really know what excellence looks like because it’s different depending on the team and what’s going on. And so it just makes even getting there harder. As you know, it’s why I’m doing this, running your team and this is what we’re trying to figure out how to do because it’s completely unclear. JASON: Yeah. You know what’s neat about that is you think about like a great musician or a great athlete, they’re probably going to be great in any venue. Any venue they go to, they’ll put on a great performance. But leaders are really dependent upon their teams. And so you think about like, could this person be pulled out of this situation and put into another situation and be good at what they do? Maybe not. Probably not, in fact. We, as leaders, are such a product of our own teams and we rely on our teams to allow us to do what we do that if we switch teams, we might be horrible. We might get canned. I’d probably be fired if I want to work somewhere else. At some point, you’re so attached to your team. Of course, there are principles around leadership that you hope you could carry with you, but it has so much to do with the people around you and the situation and the timing and all that stuff that that’s what makes it interesting like you said, is that it’s not like, “Here’s the marathon training regimen. Then by the time you’re done with this, you’ll be able to run a marathon, guaranteed.” It doesn’t happen here. There’s no way to say by the time you’re done with this, you’re guaranteed to be able to run a team successfully. You don’t know, and that’s what’s kind of different about this. CLAIRE: It’s fascinating. There’s so many studies on this, there’s everything from [inaudible]. And so, there’s major themes, but it’s still like the — for example, like the three main skills that we found out – all leaders, the best leaders tend to exhibit, it’s trust. You have to build trust in your team. You have to communicate honestly. And then you have to create context. None of this is rocket science. The hard part is how do you build trust? What does that look like on a day to day basis? How do you create context, especially when things are nuts and the market’s changing or you’re running out of money? How do you make sure everyone’s in the loop or when you’re remote or hybrid? It’s the doing. That’s the hard part. It’s less the, Oh yeah, I know I should be honest with my team.” Yeah, you’re right about that all day. Doing it is a whole another story. JASON: And there are different phases of leadership because sometimes, you might be struggling to pay the bills. Now you’re in a survival mode, which is totally different. Then when you’re comfy and cozy and things are going well for a while and you can take some more chances or whatever. So, it does require you to sort of morph and shape shift a bit. It’s an interesting area of study because who knows, it’s always evolving. CLAIRE: It’s not rocket science. It really isn’t. Speaking of evolving, shaping, shifting, the last time we talked on this podcast, Jason, it’s actually funny that very first interview we did. I think it was 10 minutes and we filmed it in the Basecamp office and I was like, “Hey, can you just like, do you want to just come in and like do this? I’m trying this thing out. I don’t know if we’ll do any more episodes.” And here we are two years later. JASON: Were we sitting next to each other like in front of the same laptop? CLAIRE: Exactly. It was super hilarious. Everyone go watch back that first interview. It’s gotten phenomenal feedback. JASON: It’s a fun setup. CLAIRE: But looking back, it’s like you never really know what something’s going to turn into. But since then, that’s two and a half years ago and things have changed. The company’s grown. What do you feel like you’ve learned in that time or change your mind on or just feel like, “Hmm, I’ve noticed myself evolving in some ways as a leader, trying different things out?.” JASON: One of the things is we’ve, I don’t remember how many people we had back then, but we’ve probably added 10 people or something since, and that actually turns out to be pretty significant at this point. We have 56 people and it’s a lot harder I found to communicate with 56 than let’s say 46. CLAIRE: Really? JASON: Yeah, I just have found that. CLAIRE: It surprises me. JASON: Yeah. This is what I think it is. Maybe the way I communicate is the same, but there’s more communication in general happening across the company because there’s more people and there’s more projects and people’s time is more taken up by those things. When you want to communicate something, not everybody happens to run into it anymore like perhaps they may have used to. And so you find yourself having to sort of explain yourself in different ways and maybe explain yourself twice or repeat yourself. And that’s been a really interesting thing I’ve noticed is that I’ll say something and then I’ll think it was clear and then I’ll find out that some people didn’t think so and didn’t know and then I’ll have to say it again. And so, trying to tweak my communication style, I think, is really important to provide. What I’m trying to do is provide more context around why I’m making decisions, not just the decisions. I think in the past when we were smaller, it was just easier to share the decision to move on. But now with a lot of people in the company who are newer to the company, more than half of our company has been with us for more than five years, which is great. But that means that a little bit less than half, but still 20 almost the 25 people or so have been with us for just a few years and they don’t have any of the context around like how we ship products, how we launch products, why we do what we do. So I’m finding myself in a good way having to provide more justification for the decisions we make. And that’s been something that’s new for me. So learning that. When you want to communicate something, not everybody happens to run into it anymore like perhaps they may have used to. And so you find yourself having to sort of explain yourself in different ways and maybe explain yourself twice or repeat yourself. And that’s been a really interesting thing I’ve noticed is that I’ll say something and then I’ll think it was clear and then I’ll find out that some people didn’t think so and didn’t know and then I’ll have to say it again. And so, trying to tweak my communication style, I think, is really important to provide. What I’m trying to do is provide more context around why I’m making decisions, not just the decisions. I think in the past when we were smaller, it was just easier to share the decision to move on. But now with a lot of people in the company who are newer to the company, more than half of our company has been with us for more than five years, which is great. But that means that a little bit less than half, but still 20 almost the 25 people or so have been with us for just a few years and they don’t have any of the context around like how we ship products, how we launch products, why we do what we do. So I’m finding myself in a good way having to provide more justification for the decisions we make. And that’s been something that’s new for me. So learning that. CLAIRE: I’m surprised at the inflection point, by the way, being like 46 to 56. JASON: That’s probably more than 50. CLAIRE: I think that’s just interesting. I think it’s a similar experience based on other CEOs and executives I’ve talked to. So anyway, back to what you were saying, JASON: So there’s that. The other thing I’ve had to come to terms with is I’ve gotten worse at some things that I used to love to do. I used to love to do more of the hands-on design work and this is kind of probably what Peldi was talking about in a way. I used to do a lot of hands-on design work, HTML, CSS. I just found myself having less time to do that and therefore my skills have atrophied. And so at some point, you have to realize you can maybe, but it probably is a good thing that certain things you’re used to be good at, you’re not good at anymore because that means you have to get better at other things. And I’ve realized that strategic thinking, big picture thinking, having time to think, that’s where my time is better placed than me digging into the code and messing around although I have always loved to do that. I’ve stayed out of it long enough now that I feel like I’m a little bit nervous getting back into it. I feel like I’m not as good as I used to be and things have changed there. And I think that’s something that I’ve heard from a number of leaders, which is like, “Look, your job changes.” You probably used to be an individual contributor and now you’re a leader or a manager or an owner or whatever you are. And for a while, you can hang onto those old skills because they take a while to fade, but at some point they do fade and then you need to pick up new things. And just kind of coming to terms with that has been the challenge and something I’m still struggling with is like, I’m not as good at those things as I used to be and I can’t just jump in like I used to. I have to maybe ask some people to do some things for me now, which I used to do myself. And that’s been hard actually. And it’s been more noticeable over the last couple of years as web technologies changed in a way where I’m not as up to speed as I used to be. So that’s something that’s changed that I think has been interesting. And then the last thing is again getting back to this whole like 21 or the year one of the next 20 thing, just kind of recognizing that like maybe the things that we’ve done and maybe the leadership skills that I’ve had, they still work but maybe they’re not going to work as well and I shouldn’t expect that they will automatically work even over the next five. So, the notion that what has worked may not always work is I think an important thing to come to. And it took me awhile I think probably to get to that where in the past, I might fall back on habits, “This is just how we do things. So, we’re going to do it again because it worked before.” CLAIRE: Sure. JASON: For example, saying five years ago we said we weren’t going to build any new products anymore, which is one of the reasons we spun out Know Your Company and now Know Your Team. And we’ve just decided we want to build something new. We said we weren’t, so we won’t, but that’s just something we made up. That’s our own rule. We can change that rule too. I think that’s a really valuable thing to do from time to time. So we’re doing that with this new thing. We’ve got a couple other things planned next year that we’re going to do that we said we probably wouldn’t do before. And I liked this idea of things we said we wouldn’t do, those are the things we’re going to start doing and see what happens. CLAIRE: I love it. You’ve always been refreshingly just such an advocate of being able to change your mind. It’s okay to change your mind. It’s okay to change in general and that change is important. So, I love that. JASON: And tied to that, I feel like I probably disagree with myself a dozen times a day. CLAIRE: That’s a lot of times. JASON: Maybe, it’s probably accurate though. Just things I’m thinking about. You got to see it from all these different perspectives and you have to see the different sides and you have to play the other angles. And I think I’ve gotten better and better at that as well. When before, I might’ve been a little bit more of an absolutist on certain things because I’m so confident that this is the right way. And now, I’m more willing to go, “You know, I actually don’t think this other way’s the right way, but I’m going to try that to find out,” because if I don’t try it, I’m not going to know. So I think that’s a valuable thing to kind of throw yourself into situations like that where your instinct would say this is wrong and your instinct has served you well in the past, but these things should evolve, so your instinct should evolve in a way as well. So anyway, that’s kind of where I’m at right now. CLAIRE: What in these next 20 years, Jason, do you want to improve the most as a leader? You know, casual, big question. JASON: Sometimes I have a hard time if I really believe something and it’s shown not to be true sometimes or maybe the data shows otherwise or sometimes I just have a hard time admitting that. I’ll look for justifications to say, “Whoa, Whoa. Not yet.” Or maybe like, “Maybe we’re looking at the data the wrong way.” Sometimes I hold on to things a little bit too tightly or hold on to convictions or hold on to guesses or bets or whatever too tightly. And I think sometimes you need to do that because sometimes it does take a while for something to play itself out. And sometimes it takes six or seven attempts at it to make it work. But there are definitely times I know where I’m like, I should actually come to terms with the fact that this wasn’t working or this didn’t work. So, I’d like to get better at that. That’s a hard thing for me. I think I’ve gotten better at it, but I still recognize myself kind of clinging to an idea that I had because like, “I still think it’s a good idea,” but like, “Hey, it just didn’t work.” Sometimes, it just doesn’t work. You got to move on. I’m working on that. I think that’s something I’d like to get better at. And that’s a leadership thing because I don’t want to continue to ask people to go in a direction in a given project or situation or whatever it might be that just isn’t panning out, but I feel like it has to pan out. And it’s the wrong way to go. CLAIRE: It’s funny, I feel very similarly in the sense that I can get very attached to a vision or a point of view. And I find that it always ends up leading me in the wrong place. It’s like, that eventually didn’t work out or we just spent all this energy trying to make it work and it didn’t work. And then I think the other thing for me that I thought a lot about working on this myself is like, is that behavior that I want our team to learn. Do I want everyone to be that attached to their ideas? It’s my expectation actually. The expectation that I have on my team is like, we talk about things as objectively as possible and it’s all in service of this bigger thing we’re trying to build and we can’t be attached to the code that we’re putting together. We have to be able to throw stuff away. We have to view everything as an experiment. I say that and it’s always interesting to hold up that mirror and be like, these are the ideas that I like. How closely am I tying myself to that and holding myself accountable to that? That self-check is always hard. So, thank you for sharing that. JASON: Yeah, it’s really hard to do. And all we can hope is we get slightly better at it. There’s no way to perfection probably. But hopefully every year, every month, every quarter, whenever we can get a little bit better about it and let one idea go that even though you’re clinging to it, some things just need to resolve and go away, like it didn’t work or not the right idea or whatever. But the challenge of course is figuring out. It’s hard because when you pick that moment to say, “I’m going to throw in the towel on this one,” Because sometimes things do take a while. So that’s the challenge and you got to kind of figure out how to put the needle, but it’s something I think that will take forever practice to get better at. CLAIRE: Absolutely. I literally have so many questions, Jason. JASON: Part 3, another time. CLAIRE: Exactly. JASON: The 100th. CLAIRE: Exactly. Only 50 more episodes here. But the one question that I have at least on my end that I do want to ask is, especially just given this really interesting point in Basecamp’s history where it’s the biggest you’ve ever been, and for the past few years, you’ve had sort of managers in the company for the first time other than really you and David. I’m so curious through that transition, this is not just unique to Basecamp or any company that goes through that natural growth, but how have you thought about how you grow or influence, I don’t even know if influence is the right word, but even set a good example for the managers that you’re working with. Do you think about coaching them? I’m just even curious the way you think about it. Is it, “Oh no, Claire, I kind of just like try to be the best CEO and do the things that I’m doing and just hoping that by example people pick it up.” Are you really deliberate on that coaching aspect? How do you think about that relationship between you and now these managers that you’ve got? JASON: I tend not to coach that much once someone’s become a manager. But ahead of time, I have a sense. Like for example, Jonas. You know Jonas. CLAIRE: Of course. JASON: Jonas is now the design team. He’s been promoted to lead the design team at Basecamp. For the past year or two, Jonas and I had been working very closely together on product development. And in the back of my head I’m thinking like Jonas could be a great manager. And so, I’ve been kind of, over the past couple of years, helping him or involving him in more conversations, involving him in more debates with David and I. Like David and I might be going at it on something and I pull him in so Jonas can see how we think about things. Trying to get him really involved in these things before it’s time to actually say like, “I think it’s time that you’ve earned this chance,” or wherever it might be. After that, I feel like I’m much more light handed on the coaching after the fact. So, I try to bring people along and help them get better and then sort of set them free and then be like someone who checks in from time to time versus being really heavy handed with the coaching. I feel like it’s all ahead of the moment, not after the moment. That’s kind of how I’ve always done it. I don’t know if it’s good or bad, but that’s how I’ve always done it. And I haven’t had a lot of experience because there’s only been a few people in the company that we’ve kind of put in that position. But I feel like it’s really good versus taking someone who is an individual contributor, elevating them to manager because we need one today and then spending the next two years trying to make them better at their job. I’d like to make people better at their job before they get into that particular position and then let them free and let them sail. So that’s kind of how I’ve always done it. CLAIRE: I think preparing and training before the moment, that’s how you get someone hopefully sort of optimally ready. Seems to make sense in that situation. JASON: Yeah. CLAIRE: Thank you so much for everything you share. This has been a blast. JASON: Likewise. Thanks so much for having me on. It was great. CLAIRE: Yeah. You bet. Everyone, I’m sure if you’re listening, tuning in, so much to have learned from Jason as always. And yeah, I look forward to having you tune in on future episodes of Heartbeat. So, thanks again, Jason. JASON: Thanks, Claire. See you.
Interview with Matt Westgate, CEO and Co-founder of Lullabot
As CEO and Co-Founder of Lullabot , Matt Westgate talks about starting a company from scratch, teaching himself what he needed to know about business, leading with authenticity, and encouraging his company to talk openly about mental health. Every few weeks as part of The Heartbeat, I ask one question to a founder, CEO, or business owner I respect about their biggest leadership lesson learned. This week, I interview Matt Westgate, CEO and Co-Founder of Lullabot. 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! CLAIRE: Hi everyone. I’m Claire Lew and I’m the CEO of Know Your Team: software that helps leaders avoid becoming a bad boss. I am completely thrilled to have someone on The Heartbeat today who I’ve known for awhile, I’ve really admired for a while. And it’s a real honor to welcome Matt Westgate on the show. Matt is the CEO and Co-Founder of Lullabot. They are a completely remote company that has been doing amazing Drupal design, development, and strategy for the past, I want to say more than 10 years. And they’re an extremely established firm that has clients, everyone from Martha Stewart to Georgia.gov to MSNBC to IBM. And I’ve respected Matt a lot because admits the really difficult, I think, industry of building a sustainable digital agency, he’s managed to do it with an entirely remote company and the ethos, Matt, that you really have around thinking intentionally about how you treat your employees, creating the best work environment. I always learn a lot when I talk to you. And so, I’m really excited to have you on here today. There’s a ton of questions I’ve got around everything from remote work to building a company that you likely didn’t know was going to turn into what it is today. But before we even get into all of that, I do want to start with this one question that I ask every single person who I have on the podcast. And Matt does not know this question, everyone. So, coming to you completely live. The question is, what is one thing, or it could be several things, that you wish you would have learned earlier as a leader? MATT: Oh, man. Yeah, I can see why you would ask that question. Just one thing. One thing that I wish I would have learned earlier. CLAIRE: It can be several too. We got time. We can get into it. MATT: When you start a company, you may not necessarily intend to start a company. Sometimes, it just happens through the opportunities. My story is I was participating in the Drupal community. There were maybe 30 developers, not the 3000 or 30,000 developers that there are today. And I was just doing what I love to do, which was to write code with really cool group of people. And the phone kept ringing, people wanting to do paid work and stuff. And so, I sort of begrudgingly started a company and I did that because I wanted to hire my friends and build software together. And when I first started out, there’s that transition of like, I’m doing the thing that I love right now, but then the business needs a voice, the business needs structure. And so, there’s that reluctance of like, “Okay, now I got to go kind of be the company.” And when I became the company, I felt like my job was to protect people. And I feel like, in hindsight, I may have done that to a fault. And what I mean by that is someone came in, “Oh, you’re a developer now.” Now my job as the company is to take care of everything else for you. And I went through this transition of realizing that and taking care of everything for everyone. I may have limited their ability to do their best work because it’s kind of like working without context. If you don’t know what the business needs, if you don’t know if the business is healthy or not healthy, if you’re trying to shield all of your employees from all of that, all they can do is just that small part of their job, which is good and sort of like a good little soldier kind of way, but bad in sort of knowledge work and allowing people to do their best and allowing them to make decisions by knowing how does the company make money? What is defined as success? What are the company’s KPIs? I sort of wanted to shield them from all of that. I could go on and on, but there was a point where that wasn’t working anymore and our company was in jeopardy, and we made a huge pivot at that point. CLAIRE: Wow. I’m over here nodding my head because that instinct is so real. It’s so real. I don’t know if it’s the sort of founder psychology. I don’t know if it’s fueled by a fear of what will happen if people have this information. I don’t know if it’s fueled, I’m speaking for myself here, ego and thinking, only I can handle this information. Yeah, it’s such a pervasive, tangible thing that exists. I’m so curious to hear, Matt, about this time that you described where you kind of had the wake up call. What happened? Take us back there. What was going on? MATT: You know what? What came up for me when you were talking was the idea of feeling like a fraud or the realization that like, “Wow, they really knew what was going on. They would see that the business is more fragile than what it is.” Because when you’re starting off, sometimes you have to talk about lines of credit and building up the reserve and all of that sort of stuff. And you’re like, “I want to shield the company from that,” or, “I want to shield the employees from that.” And yet, they’re also the ones that are out there on the frontlines doing all the work that can help make or break things for the entire organization. So for us, we reached a point where we were running into some cash flow issues and we had to ask the team to take a pay cut. This was early on. That’s never the place you want to be. CLAIRE: It’s the worst. MATT: So we did that and people didn’t think we were ever going to reinstate those. They thought it was going to be a permanent thing, and we went through that. We had a team retreat coming up at the time. And I had watched Oprah Winfrey back when she had her television show. And I just happened to catch this show where it was about people that were in bankruptcy and people that were stopping smoking. And the first thing that she had them do when they wanted to make a change was invite all their friends over, invite their family over to their house and tell them like, “I smoke. I’ve smoked for 10 years. I never told you. I’m telling you now because I need your help and I can’t do this without you.” And the first thing we need to do is admit where we’re at. And I thought, “Oh my God, there’s something there.” And so, I read this book called The Great Game of Business. It was by Jack Stack. And that guy, his story is really interesting if you’ve never read it. But he’s sort of one of the pioneers of the open-books management philosophy where you share your income statement, profit and loss statement, balance sheet. You share that with your team because we’re all in it together. And the more they know, the better they can do their job. So I thought, “All right, let’s do this at the retreat.” My CTO had an accounting background, she was an accountant. And so she led an Accounting 101 class at the retreat. We did things where we took a stack of pennies of 100 pennies and each penny was a percent. And we played a guessing game of like, where do you think the costs go in the company? Put 20 pennies over here for admin and general expenses. How many pennies do you think for salary and stuff? And what it did is it started a dialogue. Employees generally think that companies make more money than they do. That for every dollar that a company takes in, 80 cents of it goes to the profits of the company. And so, some of it is just an education of where things are. But what it did is it opened up a really brutal conversation for us which was, “I don’t want to keep living this way of running a company paycheck to paycheck. I don’t like this idea of uneven cash flows and doing a line of credit with the bank and then the bank owns the business. I want to live differently. I don’t know everything to do, but I’ve got some ideas and I need you to help. I need everybody’s voices and brains in this because this is better for all of us.” Nobody left. Like that was the biggest fear. It’s like, I’m putting it all out there. I don’t even know if they’ll just get up and leave or what. But they didn’t. And we set a goal. I like to say intentions over goals, but we set an intention of building up a cash reserve, 10% of our revenue for a year in the bank. And we did it. It took a year, but we did it together. And that opens this whole new world for me of like, “Wow!” I don’t know the diplomatic way to say it other than like, “It’s okay to treat people like adults.” Give them everything, everything that they need to do a kick ass job. CLAIRE: Yeah. MATT: But there’s a lot of fear. There’s a lot of threat. What if somebody can do a job better than me? Or what if somebody sees a mistake on the profit and loss statement? There’s just all of that stuff to go through. And yet in a distributed company, you can’t micromanage. You can’t drive to everybody’s house and see how they’re doing. CLAIRE: Yeah, there’s so much I want to ask you about here, Matt, and so much I want to unpack. The first is just the sort of thrust behind your approach in this to begin with, your inspiration from good old Oprah. [Chuckle] CLAIRE: And I say that tongue in cheek. But what she’s modeling or what you described was it’s essentially like the science of organizational change management, which is in order to make a big shift in any company, you have to establish trust. And the number one best way to establish trust is actually to show vulnerability. I may have shared this with you. We ran this big survey last year where we asked people what they thought the most effective ways for building trust was. And the typical things that you would think, like team retreats or even thanking people for a job well done didn’t necessarily build trust. And the number one thing people said was showing vulnerability. That was it. It was admitting your mistakes, showing vulnerability and then following through on the things that you say you’re going to do. So those three things. So what you intuitively felt like would be effective, just sort of by the data is effective when you’re trying to announce a big change, when you’re about to make a big shift. And it’s really counterintuitive for us as leaders and I applaud you for this because that’s terrifying. It is terrifying to, like you said, open yourself up and be like the business might be a lot more fragile than we’re willing to admit it. “Oh, my God. Does that mean people are going to leave or does that mean they’re going to think I’m a bad CEO?” And then you use the word fraud. Like I think there’s such an interesting conflation of like identity that we have with our business and who we are as leaders that sometimes gets in the way of us trying to make the most sound decisions. And I love what you shared, how you moved past that. One of the things I wanted to ask you. I mean literally there’s like 10 things that I could just dive into here of what you shared. But one of the things that I found very remarkable was, the sharing of we’re going to make this shift, we’re going to become more of an open book transparent company and not just doing that but pairing it with the education piece. And for you, the intention being that the context for which people are operating and how they are doing their jobs is what is going to make us successful. Share a little bit more about your philosophy on that and how you thought about that education piece, and how did you balance sort of that fear of like, are people going to get freaked out? What was the thinking behind them? MATT: Yeah, there’s any number of ways to go with that. And this is a really fun conversation. This is a stuff that I live and breathe so I really enjoy sharing this too. CLAIRE: Excellent. MATT: I mean, teaching is just a part of our DNA. When I learned how to build websites, I ran to the libraries and offered if I could teach free classes because I didn’t have computers to share, if I thought I had found like the golden cup. I wanted to liberate everyone through HTML. But yeah, I mean, the sharing component, it’s interesting. Being a distributed company, sharing actually is easier. I don’t know if people buy into that. CLAIRE: Tell me more about that. MATT: It truly is because asynchronous communication is easier. So like if I have a conversation, oftentimes there’ll be meeting notes. I can write, every conversation that I have can have a URL. An audio conversation gets recorded. I write up something, I distribute it broadly. It’s there for when people want to consume it. It’s actually easier for me because everybody is using the same communication tools. I’m not just having a conversation with one person that then I have to go broadcast in a bunch of different places. I can invite everybody to the call. And so, that part I don’t find difficult, the sharing and education part. CLAIRE: What did you find most challenging about that situation? If the education part, I mean, because that’s the part that quite frankly, I found most novel is that you weren’t just like, “Okay, here are the books. Great.” It’s that you literally, it sounds like people through really thoughtful exercises and practices of like, “Can you guess?” And I found that incredible. So, if that was the easy part, curious what the hard part was. MATT: I mean, look, I didn’t grow up with a business degree. I went to university, I got a degree, but it wasn’t in that. So when I realized that we needed to know our numbers, it had to start with me and my leadership team. We took a Coursera class for, what was it? Three months. A three-month class that we did, where we had to learn the ins and outs. And so we took a lot of the things that we used from that and shared it with the team and did the same exercises with the team. Because we had hired a CFO, an external CFO at the time and they were telling us about KPIs and all of these things and net present value and all that. I was like, “I give up.” Like I’m tapping out, I can’t do this. Before I hire you, I need to go get smart and I need to go learn all this stuff so that I can be at the, not at the same level, but I need to understand what you’re sharing. And so we all did that and then could engage the team. It does make for better employees. I mean, they are making the decisions. They are trying to choose, like do I spend my time here? Do I spend my time here? How is this project structured? How much value does it have to the organization? And the more that you can include them in those conversations and actually give them a voice, shift that transparency to collaboration in some way, the more it’s like you hired the people that you hired for a reason: to be the professionals that they are at the work that they do, not just to give marching orders. And so the more that you can engage them to do that, engage their brains, the better that they can be. CLAIRE: Absolutely. MATT: The big realization that I had is that as leaders, we’re making all of these decisions and have all of these data points in our heads and then all we’re doing is sharing the end result or the conclusions with our team. And that sucks, man. That sucks to be like, stand on high and say, “I have decreed that we will do this and not this and this.” And they’re just like, “Uh, I got a question.” “Yeah.” “Why? Why are you doing this?” And like, “Why didn’t you bring us into the conversation earlier?” And so around that time that we were running into problems, I also had this thing of like, I want to value my job not just on how profitable the company is or not just on how well the employees are doing or the clients we have. I really want to try and do this thing. I want to see if I can align the goals of the company with that of the team. In other words, what if we all were going in the same direction? Why does it have to be this curtain here where the company has all these things going on and the team doesn’t. What if we’re all going the same place in the same way for all the things? God, that just seems clean and a lot less stress on my head in needing to keep everything separate and the answer to different voices and all that. CLAIRE: I’m smiling over here Matt, because what you have described is sort of the seminal management scholars of our time have proven out to be true in terms of effective and high performing teams. If you even look at, there’s this wonderful scholar whose name is Edward Nietzsche, and he spent 20 plus years studying human motivation. And he talks about how the way for people to actually do their best work is not for it to be an extrinsic motivation. So someone telling them to do, or a fear or a threat or a reward, but it’s for them to be intrinsically motivated. And the only way to do that is to really align with what it is that they want. And it’s the big challenge that so many companies and organizations have. So I love that. Like you have this, I mean, you’ve spent over a decade doing this, trying to figure out how do you align that team up, how do you get to that place? MATT: And that intrinsic motivation, that’s cool. I hadn’t heard of that, but that’s awesome. That intrinsic motivation, the reason to tap into that is because then people start to share gifts with you that otherwise aren’t accessible. I’m talking about passion, like that’s the way to passion. You can’t ask somebody to be passionate, like they have to want it. That’s the source, that intrinsic motivation. I want to do this because it feels good to me. I want to share my passion with this team, with these people. CLAIRE: And what’s fascinating is that people all have it. They don’t always show it, but they all have it. And we as leaders and the structures we’ve created in our company, sometimes or oftentimes drown that out. So it’s within every single person. And there are so many studies that have been done that when people are actually, it’s fascinating, whether it’s kids or adults, school, classrooms or in companies, when people are doing things because they truly believe that it’s something that they want to do versus someone else or out of fear or for a reward, they perform better. So the outcome is actually better. They learn more and they actually enjoy the process more too. And that’s always intrinsic motivation to your point. I think the hard thing is because I think a lot of folks who’d be listening to this will go, “Yeah, totally. I’m with you, Matt. I’m with you, Claire.” How? There’s stuff in the company that has to get done that someone has to do. There’s things that are hard. There are things that, “Hell, I have to do, as the leader,” or that, “They don’t fall into my passion.” How do you do this? How do you tap into people’s intrinsic motivation? Or how do you try to create that alignment between self and team, and team and organization? MATT: Whenever I get uncomfortable, I’ve learned to lead with authenticity. And it’s hard. It’s like, “Well, be vulnerable.” It’s real easy. But in my experience, if you’re vulnerable, by sharing your vulnerability, by being authentic about it, you sort of take the vulnerability away. There’s a moment where you become human and you trade that vulnerability for hopefully earning trust. CLAIRE: Yes. MATT: And so, what it does is it’s the start of a dialogue. The other thing that comes to mind is just like, it’s just getting out of the way sometimes. Leaders are often doers of like, “Okay, there’s a problem. I’ve got to fix the problem.” And so having that, taking that step, it’s a little bit cliche, but taking that step back and say, “How do you think we should solve it? What do you think we should do?” And allowing people to put their brains and voices and passion into the problem rather than solving it for them. Reminding yourself, “I hired this person for a reason.” They are at the forefront of this. They are our marketing person. If anybody knows the answer, it’s going to be them. And then my job is to give them the tools and the resources and the guidance that they need. CLAIRE: Absolutely. Yeah, you were saying, if anyone knows the answer, they’re going to be the ones who know. It’s so sort of reinforcing to so many other conversations that I’ve had with other executives and CEOs. You might know Wade Foster who runs Zapier. We’ve had him and we’ve had Michael Lopp who’s the VP of Engineering over at Slack on the show too. And they both have talked about something really similarly about, one, the best managers don’t solve problems themselves. They let their team solve the problems that they hired them to do. And then Michael Lopp has talked a lot about how the best leaders aren’t busy. And it’s about, to your point, holding space, creating space for people to figure things out on their own. Someone can’t be intrinsically motivated to figure something out if you don’t give them the space to do that. And so, I so appreciate that reinforcement. And to your point, it also requires authenticity and some vulnerability to give that up and say, “Alright, I’m going to back off. I don’t have all the answers. I’m not the decision maker here.” I’m wondering, Matt, you talked a lot about vulnerability, about building trust. In a remote team in particular, there are so many executives, CEOs, and managers that I’ve talked with who’ve shared and admitted that building trust in a remote team is particularly challenging in their opinion. You’re not face to face, you maybe have folks coming in from a lot of different countries, different even geographies within the United States. Like that always adds to a feeling even of distance in a company. I’m curious what your experience with building trust within a remote company has been throughout the years, how it’s changed, how you think about it at Lullabot, and what you feel like you’ve done really well on this, and maybe some of the mistakes you’ve made along the way too. MATT: That’s a great question. Maybe a place to sort of start is by an admission that you have physical companies that have their ways of doing things in person. All hands on deck meetings and stuff like that. You have remote companies that grew up with processes and systems. Any of those companies in the middle that have some remote and some physical, those are the hardest companies because everybody’s using different communication systems. Those are the companies that are going to struggle the most with this kind of a general question because it’s Sally’s birthday and there’s birthday cake in the kitchen office. The mass email goes out to all the employees, 50% aren’t there. They’re remote employees. And so, they don’t get the birthday cake. And so, like that is a really tough problem to solve. As a remote company though, it’s sort of the same as a physical company. You get to pick the same tools that everybody uses. You do have time zone differences which you need to take into account. And one of the ways that — we’ve tried to hire 12-hour time zone differences and things like that. And candidly, it hasn’t worked for us. We’ve found that a nine-hour time difference at the most is the most that we can do. Six hours for us from a US Eastern time is as far as we’ll go in the hiring process because we’ve got to have some overlap. CLAIRE: Super interesting. Is that because frequency of touch point is you think so integral to that sense of connection? MATT: Yeah. Because like, say you’re in Spain. You can work a noon to eight over there and get sort of that nine to five overlap more or less in the US Eastern time. And so there’s enough touchpoints in there. And because we do client services work and most of our clients are in the US, we’ve got to have some overlap there. But we have town halls once a month where everybody comes on and they type their questions in Slack. Any question is fine for the leadership team. And then we answer those questions. We have silly, fun things that we do that are really, really important because it’s the equivalent of going and catching a football game on the weekend or things like that. CLAIRE: What’s an example? MATT: One is we have a serendipity call that’s half an hour every Friday morning. Just sort of like, “Hey, it’s Friday.” We’ve got this long document that the whole team has contributed to about silly questions. First book that you read, first type of car, one thing that you’re scared of that nobody knows, or awkward haircut photo, whatever it is. And we have a script that puts people into groups, random groups of five and they just talk for half an hour. And the question is sort of like an ice breaker question. But otherwise it’s, “Hey, how was your week? What are you planning to do this weekend?” And it’s really important. It’s just sort of like, “Ah…” I never get to talk to this person and get to hear them. It’s not about work. That kind of thing. And so we do it. We do a team call, too, every Monday morning, the whole company. Almost 60 of us jump on the phone and we have a little script that keeps track of who’s talked and who hasn’t talked. And so each person gets two minutes and then the leadership team gives an update at the end. Just bringing those people together, the Slack channels you have are important too, a mental health Slack channel, a dog Slack channel, a cat Slack channel. all of that kind of stuff too is really, really important. Have fun. You got to remember to have fun. And with a distributed company, you need to be more intentional about it. CLAIRE: Yes, absolutely. That is definitely the consistent feedback. I mean, even for us as a remote company ourselves, we think a lot — I mean, even for being so small. But we have to think intentionally. I always think, if we were co-located, I would have sort of defaulted to being a lot less intentional about social interaction or about connection. But being remote, we really have to sort of systematize it and really think about it a lot more thoroughly, even being so small. One thing caught my attention with what you said, you talked about a mental health Slack channel. Actually, I was reading a blog, the Lullabot blog the other day and you wrote a post about how you’re doing what sounded like a mental health initiative and it was something that you talked about during the last retreat. I would love to hear more about where this came from and why this is of any importance to you as a CEO and as a leader. MATT: Yeah. I got a little emotional about this one. There’s the light and there’s a shadow is about being the remote company. Everybody likes to talk about like, there’s that whole, I don’t know, like sort of like influencer. Like, “Look, I’m in a Mongolian ger. CLAIRE: Digital nomad. MATT: Yeah, that stuff. You can do those things, but that comes with its own fear and anxieties as well of like not knowing where you’re going to work the next day. The shadows of remote work is isolation, depression. Somebody may be going through something really difficult and you don’t even know because you’re just getting this text every now and then from them. And so, our jobs is not to pretend that everything’s okay all the time. It’s to sort of be a little bit anxious about what are the places that could sort of seep into our organization that could hurt us. I was just really feeling that one day. And so, I wrote up this thing on my internal company blog and I just said, “Hey, we’ve been fortunate that we haven’t had to deal with this. But I fear that this is an area that we need to improve on.” And there’s this one guy in particular, JD Flynn, who’s an awesome human being. I saw him give a talk about mental health and open source software and all of that. And I was just totally moved by what he said. And so I said, “Well, what do you do with anything else?” You start talking about it and you just start putting it out. And so I put a message out to my team and I said, “Does anybody want to talk about this with me and figure out what we could do, what’s lacking, how we could improve? And so we just started a dialogue. And we sent a survey out to the team and said like, Where are we dropping the ball on this?” People got back like, “I’ve tried to hire a therapist, but I can’t figure out our insurance. The insurance costs are too expensive. I feel like I can’t talk to my manager about this because I’m going to get judged.” And so we’re still having these meetings and figuring out things to do. But yeah, we call it submarining is the name that we use when somebody goes dark for a while and we haven’t heard from them. And so we want to make sure that our managers are empowered to know what to do and how to reach out and how to give support and all of those things. But yeah, you got to stay present in a distributed company and have ways on how to do that. CLAIRE: I think that’s incredible. And it’s interesting sort of when you look at the numbers of actual depression and loneliness in the workplace, it actually isn’t any more prevalent [inaudible] numbers in remote workplaces as it is in physical spaces. MATT: One in five, right? One in five, one in four. CLAIRE: Yeah, exactly. It’s like oddly similar. I think sort of the assumption would be like, “Oh, definitely if you’re in a remote company, the tendency to experience that might be higher.” But what I find fascinating is we live in this new work environment where you may be a co-located company but you’re just talking to all your teammates in Slack all day and maybe they never see your face. And there’s something about the sensitivity that we have to have as leaders to this because, I mean, how many studies are there about just how loneliness and lack of social interaction affect just lifespan? Thinking about work performance. Forget about work performance but lifespan, right? And so, the approach that you’re taking to this I think is so refreshing and so in-line with your whole philosophy for how you think about pretty much everything as a leader of being open, talking about it and having the conversation. I also find so remarkable that you’ve created this environment where you actually have team members admitting to you that they don’t feel comfortable talking to their manager about it and are willing to be so open. I think some leaders who might be listening to this, their fear is radio silence. MATT: Yeah. Can we lean into that for a moment? CLAIRE: Yup. MATT: The closing thought on the mental health thing is I’ve also found that people that work by themselves at home are people that, you need to empower them to be proactive about the energy that they need to recharge. I had one person, for instance, she never bought coffee because her way of staying sort of vibrant and engaged was leaving her house, having a reason to leave her house to go get coffee. That was her way of making sure that she got out at least once a day, interacted with her friends at the cafe or whatever and did that. So oftentimes people that live with other people or have families and stuff, they’ve got enough social interaction generally speaking, but that’s just been my experience on that. Two principles have been really important to me. One is aligning the company goals with the team goals. That’s been one thing. The other thing you just talked about, which was psychological safety, which is kind of a wild concept. There was a woman, I don’t remember her name right now, but she really advocated for this. She gave a TED talk. CLAIRE: Amy Edmondson? MATT: Thank you, yeah. And she said, “You will not be punished or humiliated for speaking up with questions, thoughts or concerns.” I said, “Oh man, that’s wow.” On the surface, it sounds so easy. So I started to put it into practice. It’s hard. No, it’s not easy. CLAIRE: It’s so hard. [Laughs] MATT: No, I want to take everything personally. I’d be offended by everything that comes up and just say, “You know what, Claire, I’m going to make a safe space for you. Tell me, how do you really feel about things?” And my obligation to you is to keep that space safe. It’s not easy to do. CLAIRE: It’s so challenging. It’s so funny because we run workshops on this stuff. I do this stuff for a living and even in my day to day practice as a CEO, I find the line of setting a tone of psychological safety and yet at the same time, wanting to maintain a standard of here’s how things in the company should run and here’s kind of what I want an opinion of myself and of the team to be. They’re not always like in conflict with each other, but sometimes it’s hard to have them in concert with one another. It’s hard for them to co-exist. And so it’s to your point, it’s such a hard thing to do in practice. MATT: Right. And yet it starts with us. If we’re not modeling the behavior, nobody else is going to. And in those critical moments, everybody is looking to us to see how we respond. CLAIRE: Exactly. MATT: But it’s also been great. You ask how do you get people to surface things about mental health and how the company’s really doing? You got to make it a safe space. It’s a process. It’s a journey to get there. CLAIRE: Matt, I know so many people who are listening to this podcast are going to be looking to you in terms of how they’re thinking about leadership. This has been absolutely incredible. I have one last sort of burning question before we get off here, and I truly could talk to you for hours and so I’m just trying to cut myself off here preemptively. You’ve been running a remote company for a good, it’s been what? MATT: Thirteen years. CLAIRE: Yeah, exactly. I mean before sort of the idea in many ways of running a remote company has been in vogue and hot, et cetera, and I’m sure you’ve sort of seen the sentiment of it being something of, “Oh, what do you mean you’re remote?’ To now being popular. Really interesting. What’s your biggest pet peeve when people ask you about a remote company or you hear someone who’s trying to become a remote company or just like a thing that you hear a lot from other CEOs and managers when talking about remote companies where you’re like, “You know what, I want to set the record straight.” Or, “You know what, that’s not true.” For us, we actually have found this to work. Curious if there’s been anything of that nature. MATT: That’s really interesting. I think that probably the biggest stereotype to bust on that one is that remote companies don’t communicate. And I would argue that they communicate, they have the potential to communicate better than physical companies. I think I said earlier that you can give every piece of kind of communication that you have – a URL, a link, it can be recorded, it can be written. Oftentimes for remote companies to be their best, I’m going to go on record to say rely on written communication. And in order to write, you have to kind of know yourself. You have to find that quiet to search for your words. You’re not just spewing spontaneous things in a meeting. There is a place for that, the strategy brainstorming conversations, but not when it comes to policy and purpose and all those other things that we need to do as leaders. So to actually sit down with thought, with intention to write, it becomes like carving stones like tablets that are like canonical resources for your team to know where things are. And you can have great communication where everybody feels aligned and tapped in. And part of that is just you get to use all those fancy digital tools at your disposal to broadcast your messages. CLAIRE: Oh, completely. I will go on record to say, Matt, that I completely agree with you. I’ve found it so interesting how the lack of sort of reflexive communication, in person communication becomes a forcing function for much more intentional and thoughtful communication. It’s like you have to put more energy into it because it’s not as easy just by default. And as a result, it gets better because of that. So thank you so much for sharing that wisdom and for all the wisdom that you’ve shared. My goodness, there’s so many things that I took away and I know for everyone who’s listening as well. And so, thank you to everyone who’s listening. If you enjoyed this interview with Matt and I, definitely be sure to rate our podcast on iTunes. And Matt, thank you so much again for your time. MATT: Thank you, Claire. I had a great time.
Interview with Edward Kim, Co-Founder and Head of Engineering at Gusto
As Co-Founder and Head of engineering at Gusto, Edward Kim talks about transitioning from a developer to a leader and the difficulty he had doing so, how founders see your company versus how early employees see your company, and failing as a learning opportunity. Every few weeks as part of The Heartbeat, I ask one… Read the full article
About the podcast The Heartbeat
A podcast about leadership – hosted by Claire Lew, CEO of Know Your Team. In each episode, Claire has a heart-to-heart interview with an industry leader she respects, distilling their most valuable leadership lessons, business learnings, and management advice.