Yesterday, I had the unexpected opportunity to speak with a former executive of a major fruit and produce company. I always find it really fun to talk with someone about something I know nothing about – and in this case, the topic was bananas. So, I asked him about the economics of bananas, and this is what he said:
- Depending on location, retail price is ~$0.70 per pound.
- That retailer buys them by the box which is 40 pounds. So $28 is the retail revenue per box.
- The producer charges the retailer $12 for the box.
- The retailer also incurs additional costs for 7-days of storage and refrigeration at 56 degrees for ripening.
- The producer pays $10-$11 in costs for that box ($6-$7 for pick and pack, $1 for packaging, $2.50 for shipping, and $1 of marketing/sales overhead)
- Within a few hours of picking, the bananas are stored and shipped in refrigerated containers at 56 degrees. Shipping can take 7+ days.
- The picker probably makes ~$12/day and is paid per stem picked.
It’s always interesting to look at a supply chain of a product and decipher where in the chain you’d want to be. In this case, I’m happy to be the one eating the banana.
This post is prompted by a number of conversations I’ve had over the past several weeks with friends and colleagues in the technology and investment industries. As year-end approaches, the primary topic of these discussions has been how they should approach compensation, bonus, and promotion discussions in their respective situations. For the most part, we’re in a pretty good cycle. The stock market is up. The IPO window is open. Technology is hot. Things are good. For the most part, these specific individuals can make a strong claim that they have performed really well. And, for the most part, they come with the mentality that they expect to get rewarded generously for their performance. At the highest level, I don’t have any issue with this point of view.
That being said, my guidance in these conversations is rarely about money, but about mentality.
First and foremost, we need to remember that it’s easy in the good times for us to take too much credit for our success. While undoubtedly we may deserve a lot of credit, in reality, our successes are probably dependent on other factors as well. Our success probably begins with someone giving us the opportunity to be successful, even when it might not have been obvious that we deserved that opportunity. There are probably many people around us who have contributed to that success – whether professional colleagues, family and friends that supported us, or that one person whose vote of confidence made all the difference. Our professional success almost always has some dependency on the assets of the company that we work at – assets which we may have largely inherited. Especially in the investment business, our success is also influenced by external factors completely out of our control like economic growth, Fed policy, the stock market, and consumer sentiment. Before we claim full credit for our success and expect to get paid accordingly, it’s important to be grounded in the reality that our success is never solely our own. It would be a healthy exercise to thank some of the individuals that helped us achieve our successes this year, before going into some of these compensation discussions, to help get into the right frame of mind.
Secondly, we need to maintain perspective. In the good times, especially in this business, it’s important to remember that bad times are inevitable. None of us will have careers without hard times. Therefore, we need to remember to represent ourselves during the good times in a way that we will still be proud of and not regret when the bad times come. If we claim all of the credit and operate with a sense of entitlement during the good times, it’s very easy to erode the foundation of support from longstanding relationships that we all need to sustain us through the bad times. Once we lose that support, we have lost something that is far more valuable than any near-term compensation. It’s hard to see that when we’re in the moment, but it’s the most obvious observation in hindsight.
Finally, we need to remember that in the long run, it’s not money that will bring the most happiness. The fulfillment of increased income is typically a fleeting fulfillment. It’s often other aspects of a job that drive a person’s joy in their careers. It’s working with people we enjoy and respect. It’s being in a position to learn and grow as a person. It’s about being part of something we value. It’s about having fun and contributing. It’s about being able to achieve professionally while still being able to be the person we want to be at home and with our families. If we’re fortunate enough to be in a situation where all of the intangibles line up for our enduring professional fulfillment, it would be unfortunate to compromise that over something like money that will never quite fulfill us.
That being said, this doesn’t excuse people making compensation decisions from being generous with the talented people around them. They absolutely should be. This is more of a reminder for us not to lose ourselves in near-term financial decisions when over the long-run, so many other things matter more.
After hearing dozens of company pitches over the last week or so, I noticed a common theme with how CEOs told the story of their business. They typically expended great energy explaining what their company’s product or service does. They will talk about features and functionality that no other player in the market has. Where appropriate, they will dive into a demo to show exactly how their product is such a game changer. While this is important, in some respects, I think it is putting the cart before the horse.
Personally speaking, I think a good story for a business starts with the problem that is being solved. It’s hard to fall in love with a product, if you don’t believe it solves a big problem. A problem worth solving is one that is a high priority issue for the one experiencing it. It is a problem that is experienced to a similarly high degree, by a large and common constituency. It is also a problem that people are willing to pay, and sometimes pay substantially, to resolve.
In every company pitch, the CEO will try to tell me what the company does. But, you may be surprised that in many pitches, the CEO may neglect to really spend time articulating the problem their company solves. Sometimes when I ask very directly what problem it is that they solve, the response will be a description of product functionality, not in fact a problem. This to me is a telltale sign that the company was started to create functionality, not necessarily to solve an important problem.
If we were ever to get into due diligence on a company, we will likely spend as much time validating the magnitude and priority of the problem the company solves as we do on the merits of the product. If we love your product, but are unconvinced on the problem it solves – we are unlikely to get across the finish line on an investment. The reality is a company can control how a product evolves and develops. But, the problem is what it is – so choosing the right problem to solve is critical for the ultimate success of any business.
So my simple advice is that when you tell the story of your business, start with the problem. If you convince people of the problem your company is trying to solve, you have laid the foundation for them to love what your company does.
It happens every day. You visit a website. Information on your visit is passed to a third party (such as an ad network). That third party uses the data for purposes that is not something you’ve explicitly condoned. For example, go to Zappos and look at your favorite red shoe. Then go about your daily web life – and notice how that red shoe will show up in Zappos ads on other websites unrelated to Zappos. This form of advertising, called re-targeting, happens because Zappos has given information from your site visit to various third parties who then run the ad. But, what if you didn’t want Zappos to give any information on your visit to any retargeter? What if you didn’t want your data given to any third party for any purpose at all?
A myriad of solutions have been proposed to address this problem, but they all revolve around the same fundamental framework. The framework is that your browser communicates to the website you’re visiting whether you consent to being tracked through your data being shared with third parties. And that website complies. Here are some of the competing philosophies:
- Every website has to explicitly ask you what your preference is when you visit it and then lock in that preference for future visits (e.g. certain EU countries).
- You have to proactively opt-out of tracking in your browser settings, otherwise there is implied consent for all websites to track you (e.g. U.S. Do Not Track Legislation).
- The default setting of the browser should turn off tracking (e.g. Microsoft).
While a disproportionate amount of energy has been spent arguing about the merits of these varying philosophies, they are all based on an assumption that is flawed. The flawed assumption is that if a website receives notification from your browser that you don’t want to be tracked – they can actually technically comply with that request. Think for a moment how hard that is. The instant you hit a webpage, your tracking preference is communicated, and somehow that website has to turn off all tracking applications in the website before any of those applications run. It all has to happen in a nanosecond.
To date, there have been two primary approaches to addressing this technically. Both have their flaws.
- Comply, after the fact. This is referred to as “un-pixeling”. The way this works is your browser communicates your tracking preference at the time of your visit, but the website does nothing differently. You are still being tracked. After your visit, though, the website communicates to the various third parties that they shared your data with that you did not want to be tracked – and then they expect that third parties honor that request by deleting your information in their records. The flaw with this approach is it’s not actually compliant at the time of your visit, and there’s no guarantee of compliance after your visit either.
- Centralize all tags. Given that all tracking applications are tag-based, this approach involves putting every tag-based application on a website into a single tag management system (TMS). By having all of the tags in a TMS, the website can then control whether the applications run after receiving your tracking preference information. The flaw with this approach is two-fold. Most websites don’t use a TMS, though I personally expect that to change very quickly. The more important issue is that even in the most comprehensive TMS deployments, it’s never the case that every single tag across a company’s web properties sits in a TMS. So, complete compliance in this model is not realistic.
So, where do we go from here? Are we destined to have all of this debate on Internet privacy philosophies and policies, all the while lacking a realistic means to implement any agreed upon policy? That was the case until recently. Just this week, Volition portfolio company, Ensighten, received a patent on a novel approach to consumer Internet privacy management. It’s finally a practical and easy way to comprehensively comply with your privacy preferences. How does it work?
Ensighten’s privacy management platform is both simple and brilliant. It only requires that a company puts a single line of code in the header of their webpage. It then auto detects all existing and new tags on the page. Then, when you visit a webpage with Ensighten’s privacy service running, it can automatically suppress any and all tag-based applications that require suppression based on your stated preferences and the regulations of your country. Importantly, Ensighten can do this prior to any of these applications running. This solution also does not require the deployment of a tag management system. Simple, comprehensive, and real-time privacy compliance has arrived.
So let the debate rage on. Whatever the final answer is, there will now be a way to act on it.
Periodically, some of the partners at Volition will do network television spots on shows related to business and technology. Today, I paid a visit to 30 Rockefeller and the MSNBC studios to participate in J.J. Ramberg’s show, “Your Business” (also author of It’s Your Business). The show won’t air until later, but this will give you a sense of what happens behind the scenes.
People often ask me whether or not I know what questions will be asked before going on the show. In general, I know the topics that will be discussed, but the questions actually asked are far more fluid. So, generally I prepare comments around the topics and then hope that the questions asked align with what I’m prepared to talk about. If not, winging it is the only option. But, the preparation still helps to think quickly.
It’s always a bit intimidating when you arrive at the studio, and you realize it’s the same studio used to tape all of the same shows you watch on TV. In this case, the studio for MSNBC is at 30 Rockefeller. The Today Show was taping when I arrived. And, no, I did not run into Tina Fey.
After making it through security, I’m ushered up to the green room. Before I visited a green room, it sounded like a fancy place where the big TV personalities hang out. In reality, it can be a rather humble room in some cases. Typically the show that you will be participating in, if it’s a live show, is playing in the green room so you can get a feel for what’s going on.
I didn’t appreciate how important make-up is until I saw myself on TV without make-up. Not a pretty sight. It’s non-obvious when you’re watching a show, but everyone on camera has substantial make-up on. It looks normal on TV – it looks abnormal in person.
If it’s a live show, typically I get brought into the studio during a commercial break and have less than a minute before we go live. It’s somewhat nerve rattling that right after the technician gets your microphone hooked up, you hear someone else counting down, “In 5, 4, 3, 2, 1…” Today, it was a taped show, so there was a little less pressure.
When we’re on air, we’ve been coached not to look at the camera. We’re supposed to ignore the cameras and simply have a conversation with the host and any other folks on the panel. You can see all of the final segments on Volition’s “On Air” section of our website.
That’s the whole process in a nutshell!
Following up on my prior post, “What Is Tag Management”, this second post will be specifically about why Volition Capital invested in enterprise tag management leader, Ensighten. Often when we announce a new investment, like we did with Ensighten last week, people ask me why we invested. Hopefully this post will serve to help answer that question. Let me emphasize that for any investment, the management team and the people behind the company is the most important factor. That being said, I will start with some other key factors on why we invested and end with the most important one, the team.
#1: Clear Competitive Separation and Market Leadership
When a new market emerges that we think will be a high growth and strategic market, like tag management, we want to invest in the market leader. While the term “market leader” is easily thrown around in marketing collateral, we use it sparingly when it comes to our investment decisions. Our analysis on whether Ensighten is the market leader in tag management rests on a number of objective measures.
The first sets of measures are financially oriented. Is Ensighten the largest and fastest growing tag management vendor? Yes and yes. We are very confident that Ensighten is the largest independent tag management vendor in the market based on revenue. The revenue difference between Ensighten and the next largest player in the market is quite substantial. We also believe that Ensighten is the fastest growing company in the market in terms of revenue growth. These size and growth characteristics combined suggests that Ensighten is scaling aggressively and expanding its lead over the competition.
A second key measure of leadership is competitive win-rate. When Ensighten goes up against its competitors in a sale process, they win 90%+ of the time. This is an astonishingly high win-rate. After talking to dozens of blue-chip, brand name customers who tested Ensighten against its competitors in proof-of-concepts (POC), we think Ensighten is winning because of superior technology. I will expand on the technology later, but a 90%+ win rate is a clear indicator of competitive separation.
A third important measure of market leadership is customer retention. Ensighten has a near 100% customer retention rate. This means that once Ensighten wins a customer, they almost always keep the customer. This level of retention indicates that the value the customer receives is extremely high. When you combine these attributes: largest company, fastest growing, 90%+ win rate, and near 100% customer retention – we think Ensighten has both established and is extending its leadership position in the tag management market. That’s a great dynamic to invest behind.
#2: High Customer Value – Must-Have Product
We talked to dozens of Ensighten’s blue-chip enterprise customers including Microsoft, Sony, Seagate, Symantec, United, Dell, and many others. Typically, Ensighten’s buyer comes from the marketing organization of these companies. The customers communicated to us, both with their words and their tone, that in no uncertain terms, the value they are receiving from Ensighten is exceptionally high. We think of value as the differential between how much pain the customer experiences from a problem and the delight of the customer when that problem is remediated. On both measures, Ensighten’s customers measured exceptionally high.
In their own words, the key problem marketing organizations have before deploying Ensighten is a fundamental inability to do their job. As I discussed in greater detail in my prior post, “What is Tag Management”, if adding, changing, fixing, or deleting a tag requires dependencies on IT release cycles that can run in intervals of many months – marketing is completely hamstrung. They can’t modify website analytics with ease. They can’t test different ad networks or tailor their website with ease. They can’t deploy and customize important customer centric apps like chat, voice of the customer, and recommendation engines without substantial dependencies on IT. They just can’t do their job. When marketers describe this pain point – it’s very clear in their tone that the problem is debilitating.
On the flipside, when customers describe what life is like after deploying Ensighten’s tag management system (TMS), the joy in their tone is obvious. It was clear to me that the dozens of customers we spoke with were smiling ear-to-ear on the other end of the phone when they talked about Ensighten’s value. That’s rare in customer references. Often times customers will say nice things to be polite to their vendors, but their tone will be more muted. In Ensighten’s case, the customers were raving fans. The reason is that Ensighten’s TMS gave these marketers unprecedented agility and control not to just do their job, but importantly, to do their job well.
#3: World-Class Technology
We spent an extraordinary amount of time evaluating Ensighten’s technology because the tag management space is noisy. Our conclusion is that tag management is one market where the distinction between complexity in servicing basic tag management needs and enterprise-scale tag management needs is dramatic. This market will evolve to be the tale of two worlds. We believe that low-end tag management is a relatively easy technical proposition and will be commoditized quickly. Conversely, we also believe that supporting the complexity and scale of large enterprise tag management deployments is one of the hardest engineering problems we have seen.
From inception, Ensighten has had four philosophical pillars underpinning all technology development. 1. All Ensighten products must be able to be delivered through a single line of code. 2. The platform must support all tag-based applications. 3. The platform must support any device (e.g. PC, smartphone, tablet, kiosk, ATM, etc.). 4. Everything must enhance page performance. First of all, this is an outlandish vision in many respects. Many would have said at the outset that it couldn’t be done. To those who would try, there would have been hundreds, if not thousands, of engineering decisions along the way where it would have been simpler to relax these constraints to get to market more easily and quickly. But, Ensighten pulled together a team with both the technical genius and discipline to architect the solution that stayed true to these principles.
Adherence to these principles is why Ensighten now stands in the position of having the only tag management solution that can truly meet the needs of any and every enterprise-scale customer. This is why Ensighten wins over 90%+ of the time against its competitors. Ensighten’s entire platform was designed from the ground up with rigid adherence to principles that would ultimately prove to be critical to servicing enterprise-scale deployments. After the conclusion of an exhaustive technical diligence process, we sat back and just said, “Wow.” It became clear that Ensighten has a brilliant technical team that cares deeply about their engineering – and the biggest beneficiary of that is their customers.
#4: Large Strategic Market Whose Time Is Now
A year ago, not many people knew much about tag management. We believe that a year from now, tag management will be known as one of the most strategic and important enabling technologies in digital marketing. While Ensighten aims to be the enterprise leader in this market, we believe that thousands of companies large and small will be deploying some form of tag management in the years to come. Large enterprises in particular will have to deploy an enterprise scale tag management system (TMS) like Ensighten just to be competitive. Not having a TMS will soon be an unacceptable position for any enterprise whose web and digital properties are mission critical.
Tag management will become a critical part of web infrastructure as it sits between a company’s digital properties and potentially every third party application that interacts with those properties. This position will be very strategic as the TMS will have potentially unparalleled visibility into the activity and data of a company’s digital properties. Therefore, we expect the tag management market to evolve as quickly and as pervasively as the web analytics market. We anticipate consolidation early in the lifecycle of the market, but also believe there is room for one or two significant independent companies – a position we expect Ensighten to occupy.
#5: Talented and Trustworthy Management Team
Let me finish this post with where my interest in Ensighten all started, the management team. Specifically, I connected with Josh Manion, founder and CEO, the first time in August 2011. He was kind enough to return the cold call of an associate who was in his first month on the job (related post: What Happens After The Associate Cold Call). I met with Josh five times before we seriously engaged in discussions on an investment. Josh is unique – home schooled through high school, chess champion, MIT grad, and grew up in a small town in Wisconsin. The first thing I came to appreciate about Josh is an alignment of values. He’s a nice guy. He’s trustworthy. He’s a grounded and decent person. He’s got old-school values which I respect. The second thing I came to appreciate about Josh is he’s just inordinately smart. The third thing I liked about Josh is he’s deeply competitive and wants to win. Don’t be fooled by him being a nice guy – he wants to dominate.
As I got to know the rest of the management team, I could see Josh’s characteristics throughout the team – off-the-charts intelligence, good people, and fiercely competitive. They also happen to be real domain experts in the field of tag management and passionate about the problem they are solving. At the end of the day, it was our confidence in the team that was the deciding factor on our investment.
So, there you have it – that’s why Volition Capital invested in Ensighten. Needless to say, we’re excited to be involved and honored to be part of the team.
This week we announced Volition’s newest investment in enterprise tag management leader, Ensighten. I couldn’t be more excited to be involved with the company and to join their Board of Directors. I was sitting down to write a post about why we invested in Ensighten, but after some thought, I realized it would probably be best to first write this post to explain what tag management is for those who don’t live it every day. My next post, therefore, will be about why we invested in Ensighten.
So, what is tag management? Let’s set the stage for the problem.
For many companies, their website is a mission critical part of their business. Hence, to get the most functionality and intelligence from their websites – the webpages themselves interface with many different best-of-breed third party applications. You may not realize it, but when you visit a reasonably sophisticated webpage today, it’s probable that many different third-party applications are loading on that page because of your visit. Some of these applications are visible to you as the end user. Examples of these are ad networks, recommendation engines, video platforms, chat applications, social network plug-ins, re-targeting platforms and feedback engines. Some of these applications are not as visible to you as an end user. Examples of these are web analytics applications, a/b testing platforms, content optimization engines, audience measurement applications, affiliate networks and marketing automation systems.
The way these applications interface with a company’s webpage is typically through a tag. Think of a tag as a little program that is inserted into the html code of that webpage. When the webpage loads, the tag fires, and the application runs. That tag contains the instructions for how that third-party application will operate on that particular webpage for that particular user. For a web analytics platform, it could define what specific parts of the webpage to measure. For an ad network, it could contain instructions on what type of ad unit to run. For a feedback engine, it could set the parameters for what type of feedback module to render. For an a/b testing platform, it could set the algorithms for how different tests will run. Simple enough.
Here’s where it starts to get complicated.
First of all, the tag for a single application can take many different forms. For example, if you want a different ad unit on one webpage versus another, it could necessitate a different tag even if the ad is delivered from the same ad network. If you want the web analytics platform to pull different data from different webpages, which is often the case, that could require different tags. In short, tailoring any application creates many different variants of tags from any single vendor. So, the first complication is there are many different tags, within a single application vendor.
The second complication is that sophisticated websites have lots of different tag-based applications running. In our conversations with Ensighten’s enterprise customers, they may have 10-50 different tag-based applications on any single webpage. The volume of tags is driven by two things. First, companies want best of breed functionality on their websites across all application categories. Secondly, they may be testing different application vendors within each application category. So, that adds even more complexity to the equation.
The third complication is volume. A single website can have hundreds of thousands, if not millions, of webpages. If a tag for a single application needs to be placed on every page, that can be hundreds of thousands of tags on hundreds of thousands of webpages for a single application. Not only can companies have websites with lots of webpages, they may in fact have lots of different websites. Many large enterprises have different web properties with distinct domains often in many different geographies. Some enterprises have hundreds, if not thousands, of distinct web properties. That obviously multiplies the volume problem. Then throw on top of all those websites and all of those webpages – tons of web traffic.
Therein lies the complexity: (lots of tags) x (lots of tag-based applications) x (lots of websites) x (lots of webpages) x (lots of traffic) = millions of tags firing every day to users like you and me from a single company’s web properties. And, I won’t even start talking about other platforms like mobile and flash at this point.
That sets the context, now what’s the problem?
The problem occurs when you want to change, delete, add, fix or reconfigure a tag. Think of a typical marketing analytics or optimization organization at a large enterprise. They’re sitting on top of this sea of potentially millions of tags firing every day as users interact with their web properties. Let’s say they need to change a single tag. Maybe they want to run a different ad unit or capture slightly different analytics data. Because that tag sits in the html code of the webpage, marketing must convince IT that the single change should be in the cue of the next release cycle for the website. If they are successful in that, which is an if, then they must wait until the next IT release cycle for the website which could potentially be many months away. Think about that, it could take months to make a single and simple change to one solitary tag.
In reality, large enterprises need to change tags all of the time. Tags can be programmed improperly, so they need to be fixed. The website itself could change which could necessitate a change to a tag. Maybe they were testing an application on part of the website, and now want to roll it out to other parts of the site. Maybe they want to take down an application or deploy a new one. There are reasons why enterprises need to engage with their tags and their tag-based applications in a dynamic way. But the current model of being beholden to the IT release cycle brings marketing agility to a halt.
That’s where Ensighten comes in.
Ensighten turns the entire methodology for managing tags upside down through its Tag Management System (TMS). They start by placing a single line of code in the header of the website:
That’s it, one single line of code. That code interfaces with Ensighten’s cloud-based TMS every time a user views a webpage. The magic of Ensighten’s TMS is it enables marketing organizations to manage all of their tags without ever touching the code of the website. That means they can now fix, change, add, delete, and reconfigure any and all tags in Ensighten’s TMS right there in the cloud without ever engaging with IT – and those changes will render on the webpage as if the tag was hard-coded onto the page itself. It bears repeating, Ensighten enables this flexibility for any tag-based application. Enterprises now have ultimate flexibility to try different applications, configure existing ones differently, and remove underperforming applications with complete ease. What could take months, if not years to do, can now be done in a days with Ensighten’s TMS. We talked with many of Ensighten’s blue-chip clients like Microsoft, Sony, Symantec, United, Dell, Seagate and several others – and the feedback was very consistent with this sentiment:
“For me to get a new tag added to the site or change an existing one, it would take 4-5 months. In order to get that tag changed, I would have to go through IT, log a defect, get in a release cycle, fight and claw. I was at the mercy of our bureaucratic IT processes. This is one of the best things we’ve ever done. I can go in and change tags within a day. If I need to add something new, I can add it within a day. It has made my life much easier. I am in control of my own destiny.” – Fortune 500 Ensighten customer.
Hopefully that gives you a window into what tag management is and what Ensighten does. I could go into how Ensighten does it, but that would be a longer post. But, let me just say that what sounds simple required some really brilliant technical minds to come together to create. We think the problem of tag management will be a pervasive problem. We think the tag management market will quickly accelerate to be one of the most prominent sectors of the web because the problem is unavoidable. And, we know that Ensighten has a significant lead in the market. But, I shouldn’t get ahead of myself. Now that you know what tag management is, my next post will be about why we invested in Ensighten.
I am excited to be co-hosting a monthly webinar to introduce International Justice Mission (IJM). IJM is a human rights agency that works with victims of violent oppression among the global poor. Their clients are victims of bonded labor, sex trafficking, sexual assault, false imprisonment and other forms of violent crime. IJM works with their clients to represent them in the legal process to secure justice against their perpetrators as well as to provide the appropriate aftercare services for them. IJM also works to bring systemic change to the public justice systems in the areas that they work to help protect the global poor from further victimization. I wrote a blog post called “The Rule of Law and the Global Poor” which captures the problem and their work in greater detail. After visiting the IJM field office in Guatemala, meeting with their leadership and Board members, I have become a big believer in IJM and hope that others can learn about IJM through these webinars.
2012 Webinar Schedule
- July 27, 2012 at 12 Noon EST / 9:00am PST (COMPLETED)
- August 31, 2012 at 12 Noon EST / 9:00am PST (COMPLETED)
- September 21, 2012 at 12 Noon EST / 9:00am PST (Topic: Guatemala Field Visit. Click Here For Recording)
- October 26, 2012 at 12 Noon EST / 9:00am PST (Friday)
- November 30, 2012 at 12 Noon EST / 9:00am PST (Friday)
- To participate, you must access the meeting website and call into the dial-in number.
- Meeting Website: Click Here or use this link – http://www.readytalk.com/?ac=8302305. After reaching the website, click “Join” in the Participant Box, then submit the participant registration form to join the web conference.
- Dial-In Number: 866-740-1260 or 303-248-0285. Access Code: 8302305. (International Toll Free – Click Here)
- Test your computer for compatibility: Click Here.
Please feel free to invite your friends who may be interested in the work of International Justice Mission.
They say that one man’s trash is another man’s treasure. Unfortunately, this statement is more reality than idiom for a large swath of the global poor that find their daily sustenance in city dumps. Perhaps the only shortcoming of this statement is that it leaves out the women and children that also scavenge city dumps around the world. Alas, city dumps are brutally equal opportunity.
The city dump pictured above (June 2012) is in Guatemala City. The specs in the picture that look like people, are in fact people. They are referred to as scavengers in the local community. There are 13,000 of them that live in 16 slum communities surrounding the dump. Since the dump is located at the bottom of a canyon, it requires at least an hour walk down the canyon to get there. The people in this community are scavenging for recyclables that they can bundle and sell. On a typical day, they will work 14 hours and might earn $3 to $6 for the materials they collect. That’s before they pay a truck driver $2-$3 to drive their collections out of the dump. Mondays are typically good days because there’s more trash to sort through from the weekend. They risk themselves daily against the garbage trucks whose drivers have learned to ignore their presence. It is common for people to get run over or lose limbs. The dump has a preponderance of children – who are working. Many parents are forced to trade the long-term value of education for the near-term necessity of income. If you ask a child in this dump what they want to be when they grow up, they will say truck driver. For what better job can there be than the one who they pay $2-$3 to every day? This is the daily reality for some of the poor in Guatemala City.
Sadly, poverty looks the same around the world. The city dump pictured below (April 2012) is in Cebu, Philippines. Children are born in this dump. Umbilical cords are cut with sticks. Shelters are built out of trash on the worthless land surrounding the dump. Proximity matters to have fast access to prized trash. Drug abuse and alcoholism are common to blunt the full and perverse effect of the daily routine. The cycle repeats, for generations.
Thankfully, there are people who have dedicated their lives to care for the people in these dumpsite slum communities. In Guatemala City, it’s Potter’s House. In Cebu, it’s Grace Community Empowerment. In both cases, despite the dumpsite being a patently dangerous place, the staff members for these organizations are protected by the very people they serve. Walking around with them in the chaos of a dump, you would actually feel strangely safe. These organizations have had a profound impact on the lives of those they have served. They have helped parents create businesses. They have enabled children to go to school. They have treated wounds and delivered babies. They have listened and cared. But, probably most important of all, they have treated a community of scavengers, not like scavengers at all, but with the decency, love, and respect that all human beings deserve. For that alone may be the starting point for a brighter future.
Every venture-backed CEO wants “A” players at every executive position.
“A” players are executives that are 10x more productive than their peers. They are equally excellent strategically and operationally. They are equally capable at rolling up their sleeves or leading others. They thrive – with or without direction. They are big picture and detailed. They are the perfect mix of confidence and humility. They fit into any team culture, thrive under any leadership style, and raise the game of everyone around them, while befriending them all at the same time. Best of all, they miraculously fit within your pay scale, and you can retain them despite brutal competition for their services. “A” players are perfect – except for one small issue – as defined here, they don’t really exist.
In reality, all human beings have strengths and weaknesses. There are certain support structures and cultures within which we will thrive, and others in which we will not. It’s the rare person who is a persistent “A” player across any and all circumstances. A more realistic assessment is that many of us are “B” players who could perform like the “A” player in certain environments and perhaps even function like “C” players in other environments. We are profoundly influenced by co-workers, firm cultures, leadership styles and roles – rather than completely set apart from them. We are not robotic in the execution of our talents.
Therein lies one of the most important roles of the CEO. Many CEOs come with the emphasis that they’re trying to hire “A” players at every role. It’s an admirable goal, but may have a misplaced emphasis. The supposed “A” player arrives and 6 months later they are functioning like a “C+” player. The natural conclusion is that it was a hiring mistake – stoke up the recruiting engine and go out looking for that “A” player again. This might still be the right answer, but it may miss an important point.
The point is that a CEO’s job is to build a championship team, and that may be distinctly different than building a team of champions. A CEO’s job, when it comes to human capital, is to create the environment which will get the best out of people. Some of that is around hiring the right people. But, there are important elements to the equation that are completely distinct from hiring. There are important ingredients like firm culture, organizational structure, leadership style, delineation of roles, team dynamics, development, and others – which can be the difference between the same person functioning like an “A” player or a “C” player.
While I am loathe to use overused sports analogies – this dynamic shows itself very clearly in sports. It is not uncommon at all for a player of average historical performance to change teams – with a different system, different set of teammates, different culture, etc. – and to perform like an All-Star (e.g. Patriots’ WR Wes Welker). And, it is not uncommon at all for an All-Star to change teams – and perform like a mediocre player for the exact same reasons (e.g. Red Sox OF Carl Crawford). This dynamic plays itself out just as frequently in the corporate world.
Therefore, it is important for leaders of companies to not only hire excellent people, but to create a culture and system where the people they hire can and are likely to excel. For whether an executive becomes an “A” player may have as much dependency on the talents of that executive as it does the leader they’re working for and the environment they’re working within.