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Navigating The High Tech Kayak: Challenge Of Leadership

By Timothy Bentley

Executives of youthful high tech firms face extraordinary challenges. Managing the constant changes in their progress is about as relaxing as kayaking between the rocks of a runoff-swollen river.

On the plus side, few organizations offer as much excitement and accomplishment. Unlike, say, the auto manufacturers or the insurance industry, information technology and software development firms don't spin off variations on century-old products.

They're constantly inventing something brand new, magic wands which perform wonders never before seen. They produce new media for information and entertainment, or create imaginary worlds, or efficiently control the flow of natural gas in pipelines, or connect pharmacists to employee drug plans to discover in an instant who pays for what.

What makes these companies distinctive is the rapidity with which they must change course. They travel from conception to unveiling at the speed of light, and often grow in a matter of months from a handful to scores of employees.

But while fast-moving and agile, these firms are also perilously fragile. As their chagrined executives keep discovering, no sooner do they master a stretch of white water than the next curve reveals a fresh set of foam-flecked rocks.

Which explains why no executive experiences the implacable demand for continuous learning and self-development more consistently than those who guide high tech firms.

The Thrill of Code

During the first phase of the company's life, the senior executive's job as manager is more finely focused on creativity. Although demanding and exhausting, still it's an adult form of play. That means credibility with staff is rarely an issue, for the same genius who discovered the niche and gathered the troops is writing the script or code and selling the product.

The leader works at least as hard as the staff, the fabled 16-hour day fueled by pizza, beer, high enthusiasm, and genuine comradery. It's not unusual for the boss to sleep at the office and socialize exclusively with employees.

The business plan was written in haste on the back of an envelope and the financing is provided by trusting friends more often than bankers.

It's rare for people who run companies at this point in their development to look outside for help. Their attention is narrowly focused on tasks so enthralling and overwhelming that they literally do not think about such issues as strategic planning, requisite corporate structure, or succession and staff development.

Down the Tubes

But the view keeps changing and it's difficult to maintain the course. Often the first crisis hits when the money runs out. Suddenly the family is short on spare funds, friends call in their loans, and the founders' savings expire.

They've designed an excellent product which has a committed customer, but if they can't buy a few more months to mix the tracks or finish the code and flush out the bugs, they'll be out of business and their entire project will go down the tubes.

After a humiliating series of rejections by their friendly business bankers, with a frustrated landlord pounding on the door and employees increasingly snarly about the last two weeks of non-salaried work, the owners face bitter reality.

Suddenly they have to look respectable, at least to people with money to invest. They're buying new suits and often encounter their first external hireling, who helps them flesh out a believable business plan.

The Herding of Cats

So they manage the crisis and get the loan, but, as Peter Senge points out in The Fifth Discipline, there's still danger downriver. The proprietors' proven expertise, which after all is R&D, is likely to be swamped in the turbulence of other demands.

For instance, it's becoming blindingly obvious that they need to plan an orderly corporate development, ensure continued, reliable financing, and competently manage a growing number of employees.

Speaking of whom, after the first year only a few staff are still whole-heartedly committed to the founders of the company. In fact, they may be vaguely irritated to see that their leaders are frequently absent, or absent-minded, or indecently dressed in neatly pressed suits.

Spokane's Cyan, Inc. became a runaway CD-ROM success, but that wasn't enough to gratify staff for whom it had ceased to feel like a family.

In any case, after months of running on adrenaline, even the most keypad-obsessed techies tire of work. Their own private lives, ambitions, and interests begin to supplant the crusade to design the perfect product.

To make things more complicated, the management of engineers and creative people is inherently difficult. Unlike sheep, which can usually be persuaded to move as a group, these folk act like cats. Each tends to run in its own chosen direction, depending on what happens to startle it at a moment in time.

For the managers, exhilaration gives way to fatigue. The herding of cats is an oxymoron. They want help.

Vision vs. Housekeeping

And the company itself has changed. Having achieved initial success because it could pump out new products with great speed, it now handles greater revenues and a burgeoning list of merchandise.

The little kayak that could has grown as manoeuvrable as an ocean liner.

Of course the burden of managing this complex organism is still on the shoulders of the founders. And they're increasingly frustrated because they're spending less and less time doing the task for which they are best-trained: the formulation of visions.

Which means that the generation of new products begins to slow, income sags, and the company confronts entropy, its limits to growth.

At this crucial bend in the river, how management responds will have a huge impact on the future of the company.

An eternally popular solution is to ignore the problems and keep plugging away, But even if the organization survives this benign neglect, the original visionaries are likely to be turfed as soon as it becomes evident that they can no longer control their maturing firm.

A more pragmatic scenario is to take on a managing partner, frequently an investor who not only provides a needed influx of cash but also brings proven management skills.

The agonizing down-side for the original founders is that they must give up some of their ownership and much of their power. But in many cases, the up-side is more efficient management, which frees them to do what they do best.

Another solution is to bring a coaching consultant on board. This person's job is to develop the requisite skills in those members of the executive group who have an aptitude for managing.

As vice president of GSA, Jim Gibson watches high technology companies struggle to survive. "The successful firms," he says, "are ones that have early in the game invested in the external pair of hands well before the need arises. In white water, you are dead if you react. You survive if your tools and skills allow you to anticipate without conscious thought."

There's a rock hidden beneath the rapids, of course, the risk of developing a dependency relationship with hired outsiders. But the benefit is that control of the organization remains with the people who first developed the vision.

But the contract must be clear. The consultants' job is to teach the managers everything they know and then be prepared to exit. In other words, work themselves out of a job.

Confronting Mr. Nice Guy

There's nothing like enduring near-disaster to create a sense of inter-dependence and comradery. So assuming the company has survived all this rough water, it has usually developed a cohesive management team. This is the stage when it's natural to long for smooth waters ahead.

Paradoxically, that's precisely what the organization does not need right now. It's crucial that its leaders and visionaries maintain their determination to dream new dreams, call issues as they see them, and challenge each other, all in the faith that unorthodox perspectives will be respected and debated.

That kind of thinking led Netscape to achieve market share by giving a valuable product away for free.

This is a good time to find a support for the management group who's good at encouraging diverse thinking, monitoring the process (as opposed to the content) of discussions, and bringing the experience of other high tech firms to the table (so you can use their "macros" rather than re-invent the wheel).

At this stage in the development of organizations, diversity of viewpoint is as vital to survival as unanimity was two years ago. Otherwise, the executive group will begin to avoid taking decisive directions, ignoring their most creative inspirations in favor of watered-down perspectives that don't rock the kayak but do impede its forward progress.

Visualizing the Rocks

Whether your company is Netscape, Cyan, or the not-quite-famous hopeful in your basement, success in managing a high tech firm requires more than skillful manoeuvring past the rocks you can see.

It's about anticipation. Figuring out what's around the next curve, and being ready before you get there. You'll often see best kayakers apparently drifting as they take a moment to strategize in the mellow backwaters between rapids.

Here's how high tech executives can do the same:

At every stage, look beyond the immediate crisis and keep developing new competencies. Your ability to learn very quickly is the one competitive advantage over which you have complete control, and which will set you apart from the crowd.

Examine possibilities that move contrary to your usual vector of travel. Giant IBM has already done us the favor of proving that we can't simply rely on what used to work. Look at your achievements; every one of them is based on the thinking of new thoughts.

Attend to your staff. At a time when their jobs are changing, do whatever it takes to help them remain part of the family, on board and motivated.

Invite non-technical people to help you solve non-technical puzzles. GSA's Gibson believes that's not an option but essential, because when change happens, it will hit fast. And finally, nurture the churls and iconoclasts within your establishment. Given the special way their minds work, they understand white water better than anyone.

Timothy Bentley is Chief Operating Officer of Panoramic Feedback.


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