Retail spending, Coinbase, Core values, Right coach & Top 10 signs of an A player
4th October 2020 Evolution Partners Newsletter
“Do the first things first and second things not at all. The alternative is to get nothing done” – Peter Drucker
Hope you’re Thriving!
We made it.
We’re now in the fourth quarter of 2020.
A few days ago we passed the first of October and around the world, many Governments have ended or started winding back their stimulus packages. Certainly here in Australia the Government has stopped many of the main programs and started new stimulus programs which are harder to qualify for. These are the largest Government stimulus programs ever, and for the US and many first-world nations second in debt accumulation only to World War 2.
How will history look back on this period?
The coronavirus pandemic has increased borrowing around the world. The International Monetary Fund in April projected that global net government debt as a percentage of GDP will increase from nearly 70 per cent to more than 85 per cent. Among developed nations, that figure is expected to increase from 77 per cent to more than 94 per cent, driven by double-digit increases in the debt of Canada, France, Italy, Japan, Spain, the United Kingdom, and the United States.
This is not a commentary on the validity of the Governments accruing such debt, simply the fact that the debt is now there, serviced by low-interest rates. And looking forward those low rates, coupled with the ease and quantity of the borrowing recently means there’s a good chance that Governments will borrow more money to stimulate their economies and restart industries as well as spending on large infrastructure projects. If that works maybe you could think how more money in the economy, more growth and potentially higher interest rates in 3-5 years could affect your business. Maybe.
This week in Australia the Australian Bureau of Statistics released the retail trade figures for August 2020 including the monthly and quarterly estimates of turnover and volumes for retail businesses, including store and online sales. A few interesting figures from this were:
– Total retail spend is up around 7% from August 2019
– Cafes, restaurants and takeaway food services are down about 17% from August 2019
– Household goods retailing is up around 21% from August 2019
– Total online sales in the year until February 2020 grew 14%, in the year to August 2020 it grew 81%
Coinbase defines their culture
The year 2020 has been a busy one, and we’re all sure there is still a long way to go, but before the dumpster fire that has been the year 2020, one of the big trends was societal division. Increasingly people were polarising and becoming more vocal around issues. There’s a whole range of reasons behind this which I’m not going to get into other than to say that it can have a material impact on mid-sized businesses and specifically leaders in those businesses. Amongst these developments has been increasing political discourse within the workplace, where many times employees feel it necessary or appropriate to bring their political views to work, from any persuasion, and discuss or impose those on others. Furthermore, there is an expectation that their employers should take a stand on political issues, even on issues that are completely unrelated to what the company actually does.
As a leader how do you deal with these issues which are likely going to lead to the polarisation of the workplace and quite possibly work against your efforts to execute your mission and build a cohesive team?
There was an interesting example this week from Brian Armstrong Co-Founder and CEO at Coinbase, a website for users to buy, sell, and manage their cryptocurrency portfolio with over 1,000 employees.
Now Armstrong had been through a recent controversy on June 4 with a walkout of some staff. So he was in a more difficult situation than most and perhaps forced to adopt a position.
In the past, of course, employee activism was generally organised through a union and focussed on internal matters such as pay and conditions. So managers knew what they were expected to do. To negotiate quantitative, fair outcomes in the course of executing the company’s vision and obligations.
Nowadays employee activism can be focussed on external unrelated matters which can often be qualitative and extremely challenging.
At any given moment one might expect within western democracies that 30% of the population might be left-leaning, 30% right and 30% moderate, or centre, give or take 10%. And there’s a very good chance your organisation will also have people with different perspectives.
How did Armstrong deal with this?
He documented his belief that the company should be laser focussed on its mission and looked at the issue through the lens of the Core Values. He then outlined specifically what they would and would not do, which aligned with the mission and values, and offered generous severance packages to anyone who did not want to join them on the mission moving forward. Now their employees had grown from ~250 to ~750 in 2019, which comes at an incredible cost to culture and team dynamics, especially if people are not onboarded well, something I’m discussing in my new book about onboarding. Like it or not he addressed the issue, defined what is acceptable and what isn’t acceptable and encouraged people who didn’t want to join them on their mission to find employment that might be more appropriate for their values.
Within the article, Armstrong who has an 82% Glassdoor rating defined the lens of focus and how the team should focus on achieving its mission moving forward as listed below.
We focus on the things that help us achieve our mission:
• Build great products: The vast majority of the impact we have will be from the products we create, which are used by millions of people.
• Source amazing talent: We create job opportunities for top people, including those from underrepresented backgrounds who don’t have equal access to opportunities, with things like diverse slates (Rooney rule) on senior hires, and casting a wide net to find top talent.
• Fair talent practices: We work to reduce unconscious bias in interviews, using things like structured interviews, and ensure fair practices in how we pay and promote. We have a pay for performance culture, which means that your rewards and promotions are linked to your overall contribution to the mission and company goals.
• Enable belonging for everyone: We work to create an environment where everyone is welcome and can do their best work, regardless of background, sexual orientation, race, gender, age, etc.
We focus minimally on causes not directly related to the mission:
• Policy decisions: If there is a bill introduced around crypto, we may engage here, but we normally wouldn’t engage in policy decisions around healthcare or education for example.
• Non-profit work: We will do some work here with our Pledge 1% program and GiveCrypto.org, but this is about 1% of our efforts. We are a for-profit business. When we make profit, we can use that to hire more great people and build even more. We shouldn’t ever shy away from making profit, because with more resources we can have a greater impact on the world.
• Broader societal issues: We don’t engage here when issues are unrelated to our core mission, because we believe impact only comes with focus.
• Political causes: We don’t advocate for any particular causes or candidates internally that are unrelated to our mission, because it is a distraction from our mission. Even if we all agree something is a problem, we may not all agree on the solution.
Read the article Coinbase is a mission focussed company here
Coinbase Culture doc and Ambassador video
Having been founded in 2012 and growing to 1,000+ employees, with that level of growth Coinbase needs to constantly bring in high-quality talent and dedicates a lot of energy to attract that right talent. It’s worth taking a look at the following two articles to see how they are doing that.
If you can get past the incredibly annoying, potentially seizure-inducing, colour switching GIF image at the top of the page, it will be worth your while. The way they break down the six tenets of their culture with actions is worth reading and understanding. My only issue is that it may be too long.
What I particularly like is how they have listed under each tenet and action,
a) How we live this today and
b) What we won’t do.
I find in Core Values documents or definitions detailing what not to do is almost as valuable as detailing what the value is.
Coinbase careers page
At the top of this page is a great example of the CEO, Brian Armstrong undertaking the Ambassador role to new employees in a video where he outlines their mission and values and strategy.
There’s also a great example of a Core Values video that explains what the values are and has team members explaining what each value means.
What makes an effective executive?
How will history look back on Armstrong’s de-politicisation of his company?
Broadly there are two perspectives, either he has been successful, set the standard and it is now behind him, or he is trying to fight against the tide and the societal changes to the workplace are inevitable. Either way, it cannot be argued that he took action in an effort to become effective.
And as a leader, for any leader, this brings me back to the eight practices identified by Peter Drucker in his 2004 HBR article What Makes an Effective Executive, probably one of my all-time favourites.
Drucker who in the article is reflecting on his 65-year consulting career with some of the best leaders in the world identifies what were the similarities that he saw amongst the best.
From the article;
“What made them all effective is that they followed the same eight practices:
• They asked, “What needs to be done?”
• They asked, “What is right for the enterprise?”
• They developed action plans.
• They took responsibility for decisions.
• They took responsibility for communicating.
• They were focused on opportunities rather than problems.
• They ran productive meetings.
• They thought and said “we” rather than “I.”
Finally, there is one bonus practice, listen first, speak last.
“Effective executives differ widely in their personalities, strengths, weaknesses, values, and beliefs. All they have in common is that they get the right things done. Some are born effective. But the demand is much too great to be satisfied with extraordinary talent. Effectiveness is a discipline. And, like every discipline, effectiveness can be learned and must be earned.”
This week on The Growth Whisperers podcast
On episode 25 of The Growth Whisperers, Kevin Lawrence and I talk about the following.
How do you find the right coach or advisor for your business?
On this episode of The Growth Whisperers Brad & Kevin talk about how to hire a coach and how to find the right coach for you. Firstly they discuss the difference between a coach, consultant and mentor. Then what you should expect from a coach, and do you really need a coach in the first place?
Also if you’re trying to build a great company, what type of coach should you pick? How do find an A player-coach?
Finally, they talk about the qualities to look for when hiring a coach and how to get the most from your coach.
Listen to The Growth Whisperers
From the vault
The Top 10 signs you are an A player
The best employers understand that in order to build a great company, they need the best people. In his book entitled ‘Topgrading‘ Brad Smart outlines the different types of employees an employer is faced with and classifies them into A player, B player and C player. The simplest definition is that A players are the top 10% of candidates who are available at your pay bracket.
In this article, I list the top ten signs of A players, B players and the top ten signs of C players.
If you would like to receive our weekly newsletter as an email, simply complete the “subscribe to my newsletter” form at the top of this page.