Category: Management

A Founding Manager (aka Project Entrepreneur) Has the Motivation, Knowledge, and Power to Keep His Firm Innovative

In my Openness book, I discuss “project entrepreneurs” who overlap considerably with what is called “founder mode” in the commentary quoted below.

(p. B4) People like Elon Musk and Steve Jobs at times seemed to have a je ne sais quoi that allowed them to act and behave as leaders of their companies in ways that would have tripped up mere mortals.

This past week, Silicon Valley put a name to it: “Founder Mode.”

It’s a term coined by Paul Graham, co-founder of Y Combinator, an influential startup incubator in the San Francisco Bay Area. He wrote an essay this month gaining a lot of attention in tech circles that pits his “Founder Mode” against what he calls “Manager Mode.”

Graham tries to put his finger on the special relationship entrepreneurs have with their companies that he argues outsiders just lack.

. . .

In a podcast late last year, Chesky, who co-founded Airbnb originally as AirBed and Breakfast, talked about the three traits he said better equip a company’s founder over an outside manager.

“They’re the biological parent—you can love something but when you’re the biological parent of something, like, it came from you, it is you, there’s a deep passion and love,” Chesky said. “The second thing a founder has is they have the permission…like I can’t tell another child what to do but if they were my child I probably could.”

This empowers a founder to make dramatic changes, such as rebranding.

And finally, according to Chesky, a founder knows how the company was built in the first place. “You know how to rebuild it, you know the freezing temperature of a company, you know at what temperature it melts,” he said.

. . .

Before publishing his essay, Graham ran it by a few tech titans, including Musk. After it was published, Musk weighed in on X with his own endorsement: “Worth reading.”

For the full commentary see:

Tim Higgins. “Micromanaging Is Cool Again in Tech.” The Wall Street Journal (Monday, Sept. 9, 2024): B4.

(Note: ellipses between paragraphs added; ellipsis within paragraph in original.)

(Note: the online version of the commentary has the date September 7, 2024, and has the title “With ‘Founder Mode,’ Silicon Valley Makes Micromanaging Cool.” The French phrase is italicized in the print version.)

My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Start-Ups Succeed When They Give Up Work-Life Balance in Order to “Work Like Hell”

(p. B4) Eric Schmidt, ex-CEO and executive chairman at Google, walked back remarks in which he said his former company was losing the artificial intelligence race because of its remote-work policies.

. . .

“Google decided that work-life balance and going home early and working from home was more important than winning,” Schmidt said at Stanford. “The reason startups work is because the people work like hell.”

For the full story see:

Joseph De Avila. “Ex-CEO Criticizes Google, Retracts It.” The Wall Street Journal (Thursday, Aug. 15, 2024): B4.

(Note: ellipsis added.)

(Note: the online version of the story was updated Aug. 14, 2024, and has the title “Eric Schmidt Walks Back Claim Google Is Behind on AI Because of Remote Work.”)

Dick Nunis Was Resolved That Walt Disney’s “Dreams Would Live On”

(p. C3) When Disneyland opened in 1955, it was, in many ways, a disaster: There were rides out of service, restaurants that ran out of food, soft asphalt that consumed the heels of women’s shoes—all of it broadcast on national television.

Little wonder, then, that there was trepidation as the Walt Disney company approached the 1971 opening of the far more ambitious Walt Disney World, especially as the word spread that it might not open in time. So, when Dick Nunis, the head of operations at the parks in Anaheim and Orlando, took control of the project, he was given carte blanche to do whatever it took to open the gates on Oct. 1.

. . .

Nunis, who died Dec. 13 [2023] at the age of 91, fired contractors who got in the way, held meetings at 5 a.m. and put signs up all over the property that said the park would open on Oct. 1. He made sure construction workers knew that their families were invited to the park a week before opening. He flew palm trees in on helicopters the night before the gates opened.

Not only did he understand the logistics of what it would take to hire thousands of employees, motivate construction workers and oversee the myriad details of opening a resort, he had worked closely with Walt Disney for a decade and knew how the company’s founder and creative visionary—who had been dead for almost five years—would have wanted it done.

“He understood the culture that Walt wanted there,” said Sandy Quinn, who started as marketing director of the resort years before it opened. “Walt didn’t want employees, he wanted a cast. He didn’t want customers, he wanted guests. They weren’t uniforms, they were costumes. And it was a mindset.”

Nunis didn’t just get the Magic Kingdom and the first phase of Disney World open as planned. He spent his 44-year career at Disney opening and overseeing parks around the world, and acting as a steward of Walt Disney’s philosophies as the company grew in the decades after his death in 1966.

. . .

“I had no idea at the time, but in those early years with Walt, he was looking for someone he could mentor by nurturing, challenging, and testing, to ensure that his ideals and those dreams would live on,” Nunis wrote in his memoir. “He was looking for an ‘apprentice.’ As that apprentice, my role and my life expanded beyond what I had ever imagined.”

. . .

Mary Nunis said that although the couple visited Walt Disney World on occasion after he retired, he didn’t walk the park as he had for the more than 40 years he was with the company, which she believed was because he wouldn’t be able to handle seeing something he wanted to change and not be able to change it. But he remained fiercely loyal to Walt Disney and his ideas.

“He just loved Walt Disney,” Mary Nunis said, “and knew that dream was what he wanted to try to maintain.”

For the full obituary, see:

Chris Kornelis. “Dick Nunis Got the Magic Kingdom Open.” The Wall Street Journal (Saturday, Jan. 6, 2024): A10.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date January 5, 2024, and has the title “Dick Nunis, Walt Disney’s ‘Apprentice’ Who Got the Magic Kingdom Open, Dies at 91.”)

Nunis’s memoir, mentioned above, is:

Nunis, Dick. Walt’s Apprentice: Keeping the Disney Dream Alive. Los Angeles: Disney Editions, 2022.

Apple’s Bold “1984” Super Bowl Ad, Had Failed Marketing Test

(p. C4) Conceived by the Chiat/Day ad agency and directed by Ridley Scott, then fresh off making the seminal science-fiction noir “Blade Runner,” the Apple commercial “1984,” which was intended to introduce the new Macintosh computer, would become one of the most acclaimed commercials ever made. It also helped to kick off — pun partially intended — the Super Bowl tradition of the big game serving as an annual showcase for gilt-edged ads from Fortune 500 companies.

. . .

FRED GOLDBERG The original idea was actually done in 1982. We presented an ad [with] a headline, which was “Why 1984 Won’t Be Like ‘1984,’” to Steve Jobs, and he didn’t think the Apple III was worthy of that claim.

. . .

HAYDEN Steve Jobs was excited but frightened by it. Steve Wozniak offered to pay to run the commercial himself.

SCULLEY Before the commercial ran, we had to take it to the board of directors. The board sees the commercial, and then there’s just dead silence in the boardroom. They turn and look at me, and [a board member] says, “You’re not really going to run that thing, are you?”

HAYDEN As the closing credits scrolled up, the chairman, Mike Markkula, put his head in his hands and kind of folded over the conference table, and then slowly straightened up and [proposed hiring a different ad agency].

SCOTT I made it. I thought it was pretty good. But I was thinking, “Really? They’re going to run this on the Super Bowl? And we don’t know what it’s for?”

GOLDBERG I had them do a theater test. We get back the results, and it’s the worst business commercial that they’ve ever tested, in terms of persuasiveness.

SCULLEY The board said, “We don’t think you should run it. Try to sell the time.”

GOLDBERG And it was Jay Chiat who told us to drag our feet, basically, when we were told to sell off the time on the Super Bowl.

HAYDEN At long last, it came down that we would run the “1984” commercial once.

For the full story, see:

Saul Austerlitz. “The Super Bowl’s Big Ad Touchdown.” The New York Times (Saturday, February 10, 2024): C4.

(Note: ellipses, and bracketed year, added. The bracketed words in comments from Goldberg, Sculley, and Hayden were in the original.)

(Note: the online version of the story was updated Feb. 5, 2024, and has the title “40 Years Ago, This Ad Changed the Super Bowl Forever.” In the print and online versions, the names of panelists were in capitalized and bold fonts.)

Apple’s bold and famous “1984” Super Bowl ad could only be understood by those who were familiar with:

Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1st published in 1949].

A PC Industry Run “By Middle-Manager Types” Is No Longer “Fun”

(p. B10) John Walker, a groundbreaking, if reclusive, technology entrepreneur and polymath who was a founder and chief executive of Autodesk, the company that brought the ubiquitous AutoCAD software program to the design and architecture masses, died on Feb. 2 [2024] in Neuchâtel, Switzerland.

. . .

AutoCAD — the “CAD” stands for computer-aided design — was based on a program called Interact created by Michael Riddle, another company founder. With the contributions of Mr. Walker as well as Greg Lutz, who was also a founder, and the rest of the team, AutoCAD would go on to revolutionize industries including architecture, graphic design and engineering by allowing design professionals to ditch their pencils and paper and render their creations on a screen using an inexpensive personal computer.

“To him goes the credit for the Second Design Revolution,” the California software executive Roopinder Tara wrote in a tribute to Mr. Walker on the site Engineering.com. The “First Design Revolution,” as Mr. Tara called it, was the creation of earlier CAD programs that ran on expensive mainframes or minicomputers. But, he wrote, it was with AutoCAD, which “burst onto the scene in 1982, after the advent of the IBM PC, that the computer actually started to deliver on the promise.”

. . .

“In 1977, this business was fun,” Mr. Walker wrote in a book-length history of Autodesk that he published on his site. “The sellers and the buyers were hot-shot techies like ourselves, everybody spoke the same language and knew what was going on.”

“Today,” he added, “the microcomputer industry is run by middle-manager types who know far more about P/L statements than they do RAM organization.”

For the full obituary, see:

Alex Williams. “John Walker, 74, Recluse Who, as a Tech Mogul, Popularized AutoCAD.” The New York Times (Thursday, March 7, 2024): B10.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date March 6, 2024 and has the title “John Walker, Tech Executive Who Popularized AutoCAD, Dies at 74.” In both the online and print versions, the word fun is in italics.)

In Managing Workers Firms Should “Experiment with New Forms of Freedom”

(p. C1) In a classic 1958 lecture, the philosopher Isaiah Berlin distinguished between two types of freedom. Negative liberty is freedom from obstacles and interference by others. Positive liberty is freedom to control your own destiny and shape your own life. If we want to maximize net freedom in the future of work, we need to expand both positive and negative liberty.

The debate about whether work should be in-person, remote-first or hybrid is too narrow. Yes, people want the freedom to decide where they work. But they also want the freedom to decide who they work with, what they work on and when they work. Real flexibility is having autonomy to choose your people, your purpose and your priorities.

. . .

(p. C2) We need boundaries to protect individual focus time too.

. . .

One effective strategy seems to be blocking quiet time in the mornings as a window for deep work, and then coming together after lunch. When virtual meetings are held in the afternoon, people are less likely to multitask—probably in part because they’ve been able to make progress on their own tasks.

. . .

Flexible work is here to stay, but companies that resist it may not be. One of the biggest mistakes I saw companies make before Covid was failing to experiment with new forms of freedom.

For the full commentary, see:

Adam Grant. “The Real Meaning of Freedom at Work.” The Wall Street Journal (Saturday, Oct. 9, 2021 [sic]): C1-C2.

(Note: ellipses added.)

(Note: the online version of the commentary was updated October 8, 2021 [sic], and has the same title as the print version.)

Akio Toyoda Had the Courage to Predict the Current EV Debacle

On Nov. 25, 2022, I ran a blog entry that reported on the severe criticism that then-Toyota-President Akio Toyoda [sic] was receiving for his skepticism that charging infrastructure and consumer preferences were ready for an immediate full switch to electric vehicles. Because he had the courage to keep Toyota focused on hybrids, consumers now have more of what they need and want. As a result Toyota prospers. In a capitalist system, firms run by executives with foresight and courage receive their just reward.

(p. B1) TOKYO—Gasoline-electric vehicles are flying off dealer lots in the U.S. and generating a windfall for the reigning hegemon of hybrids, Toyota Motor.

Toyota on Tuesday [February 6, 2024] forecast a record $30.3 billion net profit for the fiscal year ending March thanks to higher sales of hybrid vehicles in all of its major markets. The results sent Toyota shares up 4.8% in Tokyo to close at a record high.

Hybrid sales grew last year at a faster clip than sales for pure electric vehicles in the U.S. and some other markets. Signs have emerged that the EV push might have gotten ahead of U.S. consumers who are worried about charging problems and higher prices. That has steered them toward less expensive hybrids, which can be filled up with gasoline.

Automakers that had been rushing to pivot toward full EVs are now reconsidering. General Motors said last week it would introduce some plug-in hybrid models in North America after facing pressure from dealers. Ford Motor said last year it would seek to quadruple its hybrid sales in the next five years.

For the full story, see:

River Davis. “Toyota Is Cashing In As Hybrid Sales Boom.” The Wall Street Journal (Wednesday, February 7, 2024): B1-B2.

(Note: bracketed date added.)

(Note: the online version of the story has the date February 6, 2024, and has the title “Toyota Cashes In on Booming Hybrid Sales.”)

Zuckerberg Praises Musk for Not Being Too Shy to Reduce Staff at X

(p. R3) At the beginning of the year, many were quick with predictions of X’s demise, in part because of the dramatic staff cuts made by Musk.

. . .

Perhaps the biggest impact of Musk’s staff reductions was provoking a broader conversation about staffing needs and overall productivity throughout Silicon Valley.

Even rival Mark Zuckerberg praised Musk for removing layers of management. “I also think that it was probably good for the industry that he made those changes because my sense is that there were a lot of other people who thought that those were good changes but who may have been a little shy about doing them,” the Facebook co-founder said.

For the full commentary, see:

Tim Higgins. “Elon Musk as Technoking? More Like DramaKing.” The Wall Street Journal (Monday, Dec. 18, 2023): R3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date December 16, 2023, and has the title “In the Year of a DramaKing: Elon Musk.”)

The Social Security Administration Is Badly Administered

(p. B1) Few government agencies touch the lives of more Americans than the Social Security Administration — the agency pays $1.4 trillion in benefits to more than 71 million people every year.

But Social Security has been grappling with a customer service mess that threatens to grow worse before it gets better. The problems include long wait times on the agency’s toll-free phone line, a large backlog in disability applications and a growing problem with overpayments to low-income beneficiaries.

. . .

Training new workers typically takes more than a year because Social Security rules are so complex.

. . .

The waiting time on S.S.A.’s phone line, which is crucial for people with questions about benefits or those applying for benefits, averages 36 minutes. Average wait times have fluctuated over the past decade, but in 2013 the average wait time was 10 minutes. The agency recently began using a modernized toll-free phone system, but noted that more trained employees will be needed to reduce wait times.

There is a backlog of more than one million people waiting an average of seven months for initial decisions on disability benefit applications — a process that has been slowed by staffing issues at the agency and in state governments, which receive S.S.A. funding to determine applicants’ eligibility at the local level.

The agency also is under fire over overpayments of benefits that have led the agency to claw back billions of dollars, with some people receiving notices that they owe tens of thousands to the S.S.A.

. . .

Earlier this year [2023], the Social Security Administration placed last in a ranking of the best places to work in the federal government — . . . .

For the full commentary, see:

Mark Miller. “Social Security’s Customer Service Struggle.” The New York Times, SundayBusiness Section (Sunday, December 3, 2023): 7.

(Note: ellipses, and bracketed years, added.)

(Note: the online version of the commentary has the date Dec. 2, 2023, and has the title “When You Call Social Security, Expect to Wait Even Longer.” In a couple of places where the online version is slightly longer than the print version, the passages quoted above follow the online version.)

“Context Switching Is the Mindkiller”

(p. B7) “My mind often feels…like a very wild storm,” Musk said Wednesday in the same interview. “I’m a fountain of ideas. I mean I have more ideas than I could possibly execute. So I have no shortage of ideas. Innovation is not a problem, execution is a problem.”

He was speaking at the New York Times DealBook Summit on Wednesday [Nov. 29, 2023] in New York City, a high-profile event run by one of the media juggernauts he has been openly needling.

He was only there, Musk said, because of his friendship with the host, Andrew Ross Sorkin. Or, as Musk called him on stage, “Jonathan.”

“I’m Andrew,” Sorkin said.

. . .

“Context switching is the mindkiller,” he tweeted the day after Thanksgiving, a favorite axiom of his that mixes a quote from the sci-fi book “Dune” with computer lingo for multitasking.

In “Dune,” fear is the mindkiller—the idea that the primal reaction to fear is to recoil rather than go forward. In essence, fear is an obstacle to be overcome to reach success. For Musk, the challenge to overcome is being able to handle switching between rockets and tweets and cars and brain computers and drilling machines and superhuman artificial intelligence.

. . .

In the moment that ricocheted around the world, Musk told advertisers unhappy with him to go f— themselves, saying he was unwilling to pander to their “blackmail” and warned they threatened to bankrupt the social-media platform he acquired slightly more than a year ago. And if they were successful, he warned, “See how Earth responds to that.”

. . .

To Musk, the likes of Disney are trying to squelch his freedom of speech. To others, they are simply exercising their rights to walk away.

“Go. F—. Yourself,” Musk said on stage to a stunned audience. “Is that clear? I hope it is. Hey, Bob, if you’re in the audience.”

For the full commentary, see:

Tim Higgins. “Storm in Musk’s Mind Casts Shadow on Vehicle Launch.” The Wall Street Journal (Monday, Dec. 4, 2023): B7.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the commentary has the date December 2, 2023, and has the title “The Storm Brewing Inside Elon Musk’s Mind Gets Out.” The 7th, 8th, and 9th sentences quoted above, appear in the online, but not in the print, version of the commentary. Also, the online version of the sentence on being able to handle switching, contains seven added words of detail.)

The science-fiction Dune book mentioned above is:

Herbert, Frank. Dune. Deluxe ed. New York: Ace, 2019 [1st ed. 1965].

Planners of Megaprojects Almost Always Over-Promise and Under-Deliver

(p. B5) Bent Flyvbjerg is an expert in the planning and management of “megaprojects,” his name for huge efforts that require at least $1 billion of investment: bridges, tunnels, office towers, airports, telescopes and even the Olympics. He’s spent decades wrapping his mind around the many ways megaprojects go wrong and the few ways to get them right, and he summarizes what he’s learned from his research and real-world experience in a new book called “How Big Things Get Done.”

Spoiler alert! Big things get done very badly.

They cost too much. They take too long. They fall too short of expectations too often. This is what Dr. Flyvbjerg calls the Iron Law of Megaprojects: “over budget, over time, under benefits, over and over again.”

The Iron Law of Megaprojects might sound familiar to anyone who has survived a home renovation. But when Dr. Flyvbjerg dug into the numbers, the financial overruns and time delays were more common than he expected. And worse. Much worse.

His seminal work on big projects can be distilled into three pitiful numbers:

• 47.9% are delivered on budget.

• 8.5% are delivered on budget and on time.

• 0.5% are delivered on budget, on time and with the projected benefits.

. . .

Humans are optimistic by nature and underestimate how long it takes to complete future tasks. It doesn’t seem to matter how many times we fall prey to this cognitive bias known as the planning fallacy. We can always ignore our previous mishaps and delude ourselves into believing this time will be different. We’re also subject to the power dynamics and competitive forces that complicate reality, since megaprojects don’t take place in controlled environments, and they are plagued by politics as much as psychology. Take funding, for example. “How do you get funding?” he said. “By making it look good on paper. You underestimate the cost so it looks cheaper, and you underestimate the schedule so it looks like you can do it faster.”

For the full review, see:

Ben Cohen. “SCIENCE OF SUCCESS; 99% of Big Projects Fail. Lego Is the Fix.” The Wall Street Journal (Saturday, February 4, 2023): B5.

(Note: ellipsis added.)

(Note: the online version of the review has the date February 2, 2023, and has the title “SCIENCE OF SUCCESS; 99% of Big Projects Fail. His Fix Starts With Legos.”)

The book under review is:

Flyvbjerg, Bent, and Dan Gardner. How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything in Between. New York: Currency, 2023.