Parallel Processing Inside Your Company
I've had the pleasure of serving on a Board with Scott Weiss for the past six years. Scott is one of the best entrepreneurs/executives I know. Sadly, he's given up being a CEO to become a VC. That's the kind of competition I do not need.
Scott wrote a post on his partner Ben Horowitz' blog on Friday. I got around to reading it this morning. It's about the way Scott's company IronPort used a very high level of transparency with the employee base as a competitive advantage and the challenges they faced with that transparency as they approached an IPO. It's a really good post.
The part that really got my attention is the value of being super transparent on the company, its culture, and its productivity. Scott writes:
Over time, the benefits of transparency coupled with an emerging cultural norm of speaking up became more apparent:
I thought we would surface creative answers faster. When everyone had a clear understanding of the hard problems, their collective brains were on the table for parallel processing. The best information rarely sat with the senior executives but with the employees that were closest to the product and closest to the customers. And the best answers would often come from the most unlikely of places. For example, some of our most innovative features came from customer support reps identifying customers trying to use the product in ways it wasn’t intended.
I really like that image of everyone's collective brains engaged in parallel processing. It makes perfect sense that everyone needs to have a clear understanding of what is going on to be able to do that effectively. Over the past fifteen years, I've noticed a very strong trend toward more transparency in our portfolio companies. Many of them share their board presentations with the entire team. Many of them talk openly about the cash position, the challenges and opportunities in front of the business. Many of them encourage everyone on the team to ask questions and speak up. I believe that being "ridiculously transparent" as Scott calls it in the title of his post, is becoming best practice in managing a business.
And speaking of transparency, I'm really glad to see Scott blogging, even if its as a guest on Ben's blog. I've heard so many great stories from Scott over the years. I hope he'll be sharing them with all of us frequently.
Comments (Archived):
We’ve been sharing the board presos at Buzzfeed for a year. Believe strongly in radical transparency. I actually learned this at Google. Schmidt always shared the board decks, with relatively few redactions.It has all the benefits Scott mentions and many more.
When we were running SkillsPoint we had a whiteboard with our finances on it, the status off our VC/Fundraising pipeline, and the customer pipeline on it. We did a post-meeting company wide debrief after every VC pitch and major customer event.My current business partner ran his several successful startups using “open book financials” with monthly meetings. They also published a “broke in X days” number every day.We are combining all those ideas in our new startup to get even more transparent.-XCPS – I should also note that everyone in my company knew the salaries of the co-founders, but all the others were lumped into one big pile.
i’m not a fan of sharing comp with others
In general, I agree. But we were asking people to take huge pay cuts to come work at a pretty shaky startup. Part of what we wanted people to know was that the founders were all in.And since most months our comp was $0 it’s not like we were exposing much. Maybe our naivete.It was a great team – really productive, positive, and a super pitch-in ethos. When we had our first VC fly in for a site visit I went to the office early to straighten up and found the team there cleaning the bathroom, setting out bagels, vacuuming, and vainly attempting to make our mares nestcomputer room look less scary. Super people, and I keep in touch with them 13+ years later.-XC
sharing that you are taking no comp is a no brainer!!as you point it, it shows the level of commitment you have
My wife assures me that I excel at decisions requiring no brains. I used to think that was a compliment….-XC
You married well…….
Interesting, what are the major reasons you feel that way?
Which is why I am not a fan of having open finances.I want a culture of open where it comes to communication and respectfully challenging authority.I am not a fan of open finances for non-owners two reasons. Many employees don’t want to know, that I’m not going to take salary, or back a line of credit with my house.Conversely when it comes to reap the rewards, people seem to forget about the risk/sacrifice.
i think communicating the facts around equity raises is a good idea
That’s interesting. Why not?
Dan Ariely, in his book Pridictably Irrational, discusses how when CEO salaries became public (circa 1993) they actually increased ( when the desire was to have them stop increasing ).I suspect similar things would occur inside a company too. …my point isnt to avoid transparency, but to be mindful of the right levels and unintended side effects.transparency about the key problems the business faces should be a very good thing in order to get everyone to have the right ‘top idea on their mind’ (Paul Graham essay: http://www.paulgraham.com/t…
The ROI on transparancy is innovation.
And alignment, and motivation and confidence and cohesion.
It is possible to handle transparency badly. Two examples I lived through:+ a publicly traded company which to share freely, and keeps its employees under trading restrictions for all but two weeks of each quarter, but in reality reveals very little. Anything which would make it into a board presentation is off limits as being too sensitive.+ a startup talks openly about its possible acquisition, which then falls through.The startup acquisition is one I’m torn about. It was hugely relevant to the staff, and enough people would be drawn into the due diligence that the rumor would likely spread anyway, yet having it be so hyped and then fall through was hugely demoralizing.
the acquisition situation is really tricky. i’m in favor of sharing the info but being very clear that the chances of closing the deal are not high
The acquisition is a toughie. When we were being acquired I got everyone together and told them the high level plans and said I wouldn’t be able to share much because the other company had certain things they wanted kept quiet. It was hugely emotionally disruptive for them not to know. Because they’d come to expect transparency.So, maybe sometimes it’s a choice between two less than perfect options.-XC
Cannot give you opinion from experience, but it is better to fashion strategy from proactive position where you can control expectation rather than learn of the whispering later.
It sounds like how to talk in the case of the startup.
Both very high level issues. Transparency is about team building. These issues are not for everyone to manage.No on e single principle can guide you – transparency does not eliminate responsibility or appropriateness. I have no issue not telling a junior developer something that is a BoD level issue. You would be putting them in a lose/lose situation, which I feel is unethical ( setting them up to fail, basically).
We had an acquisition that was days away from completing and then fell through. I think we made the right call not sharing the situation with others because they would have been far too distracted/nervous about their own jobs. We told a couple of key people the week before (when it was still a ‘go’, days before the deal was called off) and their response and reaction made me feel it was the right decision not to share broadly.
Developers have to think through the problem from top to bottom. They are smarter than the management team at product and process… they just don’t talk as much.
A good article indeed. I’ve noticed another benefit to transparency: speed. Information travels faster, issues are raised faster and solutions come better and quicker.
Reminds me of my time at McKinsey: “The Obligation To Dissent” value was introduced on day one of the introduction program.
I agree with the obligation to dissent.”Encouraging Constructive Dissent: All first rate decision makers I’ve observed had a very simple rule: if you have quick consensus on an important matter, don’t make the decision. Acclamation means nobody has done the homework. The organizations decision are important and risky, and they should be controversial.” –The Five Most Important Questions, Peter Drucker
Totally agree. Only change I’d make is the fact the parallel is actually slightly off leading to the lines meeting.
What do you mean by “parallel is actually slightly off leading to the lines meeting”?
Parallel lines never meet. Those slightly angled either meet or move further away from each other.The bigger disruption and/or maybe best fit solution re one company’s problem will happen as multiple thinkers begin to see the same path.
SWARM IS BETTER WORD. OR MAYBE PACK.
Use both, I think. Somewhere in the early half of this decade, mainstream thought will recognize pack behavior. This keeps coming up from the bio going back to the Paleozoic to limited autonomous in the bots of today.Would help to work swarm or pack into an online game…
ONLY UNDERSTAND ONE HUMAN ALONE IS UNDERSTAND NOTHING.UNDERSTAND GROUP OF HUMANS TOGETHER IS UNDERSTAND EVERYTHING.
I wholeheartedly agree – at a firm we started in 2005, we shared finances, testing data, and potential deals because we wanted to punch way above our weight. To do that we needed the best people – people who thrived on having the authority to act and the information to do so. Some folks acted on the information by leaving – the best stayed. In the end, it was far more valuable to have a team that stayed and worked precisely because of our challenges than one that did so in ignorance of them.I would add that this approach has also worked for me within departments of larger companies. Although, in this case, perfect transparency at the corporate level is limited by the larger culture, the best teams eagerly consumed whatever clarity I could deliver.Great post!
I think one of the big challenges is scaling transparency. When the news is all good, it’s easy to do. Once you get into some trouble, then navigating the emotions of different groups of people (particularly those that are ahem – younger) becomes more difficult. I’ve worked in companies where sr. managers share too much information in the wrong way and it can be as destructive as the secrets.
I agree that it can be a big challenge to implement transparency. With transparency, managers should learn the importance of communicating the correct way. Peter Drucker, management author, says, “the principle of effective communication is to convey only the significant deviation or exception—and that in clear, precise and unambiguous form.” I think you are right about the problems that can be created by ineffective communication, which is sometimes justified by an attempt at “transparency”.
Brad Feld linked to an Apple analysis by Bill Lee – http://blogs.hbr.org/cs/201… – that is along these lines ( although he did not focus on the transparency theme ).We describe the job of executive leadership as ‘connecting the top to the bottom & the back to the front.’Transparency is mandatory in that idea, but we aim for a stronger connection than the ability to see. We want customer lifecycles and teams of teams ( see the article’s section on retail & supply chain being separated @ Apple ) to be the foundation of our organization – that’s the back to the front part.The top to bottom part used to be called MBWA. We are focused on making sure that the ideas that direct the company are founded in the day to day reality of our operations. Disconnect is deadly.Lee claims Apple is organized around functions and that the company culture disparages ‘managers’. Apparently, transparent silo management is an oxymoron.
Stuff like this always reminds me of the Triarchy Theory posited by the late Gerard Fairtlough. If you ever see a copy of his book (more a pamphlet really) The Three Ways of Getting Things Done, snap it up as it will explode your brain.
i will look for itthanks
I’ve managed staff in my own companies and for others and in all cases, transparency was the most effective way to keep people focused and motivated. When you have information, you can connect the dots and make sense of things. That helps you feel in control, which reduces day-to-day anxiety. That can only be good.Interestingly, I learned about transparency from kids. After college, my wife and I started a daycare. We worked with 2-5 year olds and, throughout the day, would casually chat with them about the outcomes of their decisions using language that was typically reserved for older kids. Over time, we set an intellectual high-bar focused on practical information and understanding the consequences of your decisions. The kids bloomed. Their language doubled, their cognitive skills accelerated, and they felt in control of their environment in a way that made their interactions more purposeful and respectful.I’ve always kept that close to heart.
It’s difficult to argue with the points in this post. All makes sense, especially for small teams as long as transparency doesn’t get pushed blindly to the point where it can be demoralizing if bad news happen temporarily. Exposing too much of the sausage making won’t make you eat any sausage.
Is that to say that transparency inherently does not scale well?It has some sort of head count hull speed?
INFORMATION REQUIRE CONTEXT OR BECOMES MISINFORMATION.AS SIZE INCREASE, SIZE OF CONTEXT INCREASE.EVENTUALLY SIZE OF CONTEXT TOO LARGE, TRANSPARENCY RESULTS IN ONLY INFORMATION UNDERSTOOD WRONGLY.
So you are sayingthe difficulty of achieving meaningful context / transparency is inversely proportional to scope and specialization of knowledge?
MORE SPECIALIZED IDEA REQUIRE MORE SPECIALIZED KNOWLEDGE.MORE SPECIALIZED KNOWLEDGE LESS LIKELY TO BE SAME IN TWO BRAINS AT SAME TIME.
Some things here are curious:Yes, via Hacker News, saw, read, saved, abstracted, and indexed the Scott Weiss blog at, let’s see, there it is,At 18:41:22 on Friday, September 2nd, 2011.That’s EST!First curious point. The post was at the blog of Ben Horowitz, but there is more discussion of that post at AVC.com than at Ben’s blog. Indeed, it appears that Ben’s blog did not open the post to comments.Second curious point. Just nowAt 11:25:45 on Sunday, September 4th, 2011.that post has”41 people like this.””137 Tweets”and in this thread at AVC.com there is”15 Comments and 54 Reactions”where apparently the “Reactions” are essentially the same as “Tweets”.In total over time, there may be more such activity about that blog post on this thread at AVC.com than at Ben’s blog.Third curious point. About that blog post, by a wide margin, the more insightful comments are here at AVC.com instead of at Hacker News (or Ben’s blog).Fourth curious point. More broadly, on average, with some exceptions, there are more insightful comments at AVC.com than at Reddit, Hacker News, Yahoo Groups, eGullet, or nearly any other ‘forum’ or part of ‘digital media’ that accepts comments.First question. Relevant to yesterday’s topic”Following Facebook Down The Wrong Path”what are the causes of a forum with insightful comments? Or, how to design such a forum?Thought experiment. Hold a violin concert and competition where the contestants have to play, in three ’rounds’, in order, the Beethoven ‘Romance #2’, the Bruch ‘Scottish Fantasy’, and the Bach ‘Chaconne’.Guess. The people will meet at the concert will be unusually knowledgeable and insightful about music, hard working, disciplined, accomplished (for their age), and good to know.Resulting theory. Topics with certain characteristics attract people with certain characteristics.Application. To build a ‘community’ of people with certain characteristics, have a forum where the only topics have corresponding, certain characteristics.For more, roughly in the sense of ‘reliability’ (important in constructing measures, especially in the ‘soft’ sciences where measures can too easily look ‘ad hoc’), focus so that the topics ‘reliably’ have the desired characteristics expected by the community with its desired characteristics. To apply this idea, what is wrong with most fora is the topics are not well focused so that they do not ‘reliably’ connect with some one community. So, no one community, desirable or not, forms.Or a marketing person might say that a forum with poor ‘reliability’ has no strong ‘brand identity’, that is, the candidate community members do not know what to expect, thus, lowering the value of the brand.Likely a ‘strong’ community has a ‘positive feedback loop’: From E. Fromm, one of the strongest motivations is membership in groups. If the community is ‘strong’, then there is motivation to try to belong which makes the community stronger for the positive feedback. Or, if the community and brand are not ‘strong’, then there is no particular ‘group’ to provide ‘membership’ and motivate people to join the community. Then there is no strong community; post quality declines, etc. To paraphrase Groucho, any group with such low quality posts no one would want to join!Issue. If a community is ‘strong’, does it then also have to be small? That is, does a strong community need so much focus that the community cannot be very large? Perhaps in general, no, but, how to build a community that is large and strong and, for advertisers, with some predictable characteristics?
I get “process overload” when too many points and questions are presented in a comment like this.For the question of communities, check out Fred Wilson School of Blogging. http://www.avc.com/a_vc/201…
Sorry you didn’t like my post; to paraphrase, “Move on. This isn’t the content you are looking for”! :-)!But I am sure you can easily enough follow what I wrote! Generally it’s easier to read such a thing than to write it! :-)!I ‘punctuated’ my paragraphs with points, issues, etc. to make the content of each paragraph easier to identify and, thus, my post easier to read! :-)!If you follow, then you may see some points not in the link you gave! :-)!E.g., with the link and yesterday’s AVC.com blog, there are some curious points, i.e., things that are incongruous. Incongruity is a good seed for more understanding! :-)! E.g., that AVC.com does more with the Horowitz blog post than the Horowitz blog is curious! :-)!Addressing these points, we can come to a point about “focus” and apply the point to compare AVC.com with Hacker News, Reddit, the Horowitz blog, and, indeed, nearly any ‘new media’ site that accepts comments — PBS, Huffington Post, Forbes, The Oil Drum, eGullet, Yahoo Groups, (some months ago Technorati was already tracking something over 100 million blogs) and, then, compare post quality and insight and the community ‘strength’.Relevance? We do want to know how to build strong communities, right? :-)!It would be worthwhile to understand some of what makes a blog, out of 100 million, have a ‘strong’ community, right? :-)!Also few days ago athttp://www.avc.com/a_vc/201…AVC.com discussed Jig, and my remarks here about ‘focus’ look relevant. E.g., so far at Jig there appear to be some problems with post quality, and, thus, there promise to be some problems with community strength. So I am suggesting that a reason is lack of ‘focus’. Jig team, listen up! :-)!Similarly, athttp://www.avc.com/a_vc/201…was a discussion about Google+ and real names versus pseudonyms. My post here suggests that for building a community Google+ is “digging in the wrong place”. That is, here I suggested that some of what makes a ‘strong’ community does have to do with ‘identity’ enough for ‘membership’ but still is distant from the high concern of Google+ about ‘identity’ as real names.There have been suggestions at AVC.com that somehow Google doesn’t understand ‘people’. Well, if E. Fromm emphasizes the importance of membership in groups and Google+ ignores this, then we can begin to see where Google has problems understanding people! That’s worthwhile, right? :-)!More generally, to get a large community of engaged users, one approach is to offer ‘membership’ in a desirable group, and for that my suggestion here is that ‘focus’ is important. Then I borrowed from Groucho to suggest that without focus there would be too little quality and too little interest in membership.We are interested in how to build communities of engaged users, right? :-)!But we want such communities to be “large”, so I raised an issue: Does focus conflict with large?So far my startup doesn’t have much to do with a community and membership, but I am looking for how to include such features. Then I come to focus and the possible conflict between focus and large. Seems relevant to me! :-)!Gee, to make my post shorter, I omitted another relevant point: With over 100 million blogs, how can one person find blogs they want to pay attention to! I have some ideas here, but I don’t want to seriously overload anyone so omit the ideas! :-)!”With all thy getting, get understanding.”. We are trying to get understanding, here, right? :-)! So, finally, yes, having things simple is good: “Things should be as simple as possible but not simpler.”. If Mother Nature does not make really simple possible, blame her, not me!Does this help with the pains? :-)!
I like your comments, I just have to reread them several times.I added the FWSB post, because I think it answers “some” of your questions.I’m interested in the development of communities as well, and have some ideas on how to solve the 100 million blogs, and how to find ones to pay attention to.[I’d be interested to hear your ideas at some point]
Sigma Algebra does tend to write long comments, but they’re often worth wading through. He is extremely intelligent, and seems to think in a different way than most commenters here, due to his background. So he tends to offer a well thought out, but different perspective than most comments you see here.
I’m noticing that, and appreciate it.
i agree with you Dave. it’s hard work though. i think he is brilliant but at times too wordy and obtuse
TO READER, DIFFERENCE BETWEEN BRILLIANT POINT BADLY EXPLAINED AND RANDOM WORDS IS NOTHING.EDITING IMPORTANT.
Agreed it is hard work. Not sure I’d characterize him as obtuse though, but he often seems to come at things from an orthogonal angle.
fair point. i do struggle to comprehend his stuff although i have found “siggy” to be among the most astute commenters
Good analysis…but I’m curious how come you’re Top 10 with “only” 363 comments here and 323 likes. Directed at @disqus:twitter mostly.
I don’t know how Disqus’s ranking algorithm works, but two speculations:1) Sigma Algebra has a high average number of likes, relatively speaking.2) His number of comments has been weighted by their length, since his comments tend to be fairly long.
I’m going to start writing novels on AVC..
that would make two of you then 🙂
Intoxicating! :-)!
LOTS OF WORDS != LOTS OF USEFUL.
ME HOPE 2 NOT TRUE. GRIMLOCK ASSUME COMMENT MORE THAN 50 LINES WRITTEN BY PERSON THAT NOT CARE ENOUGH TO WRITE SOMETHING THAT MAKE SENSE.SO FAR, THAT ASSUMPTION ALMOST ALWAYS RIGHT.
*If a community is ‘strong’, does it then also have to be small?*Hacker News was a much stronger community when it was small. Groupthink diminished the site, and making karma silent has helped only a little (I still visit every day, however). I hope the “Top X” badges don’t have a similar impact on this space.
i don’t understand why ben’s blog doesn’t have commentsit is his choice, but he is giving up a lot with that decision
It may have occurred to some venture partners that they can get a good blogging ‘cost/benefit’ ratio just by ‘lurking’ at AVC.com! :-)!
This is inspiring. And a dramatic shift from standard closed-door business practices that we were brought up on.Comp is one area that doesn’t do well as general knowledge. People naturally do poorly when comp is broadly shared. Human nature just doesn’t deal with this objectively.
Except perhaps in sales. My first job in tech (a long time ago) was as a salesperson for a recruiting company who posted the comp for all the sales staff and recruiters and ranked them weekly. Each person was handicapped by their territory size and experience with company. They developed the most positive, competitive environment I have ever experienced.
Good point.The big board (or shared doc) of all of the quotas and % attainment is the heartbeat of most companies. And certainly for every sales org I’ve ever run.The only qualification is that I’ve never listed their earnings, only their percent attainment towards quota or goal. Yes, I know this is subtle but it is different than telling the world what there W2 is.
Could you explain more depth why you think this communication structure is akin to parallel processing?
hey Shana (just share’n …not to trying to jump in for Fred here)…a visualization that came into to my mind was this: after planting seeds in a garden ( == some communication) they start to grow based on a variety of care and feeding not part of the original communication (== parallelism). I like this analogy because the growing plants are individually much more autonomous and environmentally dependant than say kicking off a bunch of threads to with the same thead function…
It is an organic approach.It amplifies synergistic cross talk between many interdependent parallel process.It organically synchronizes cross process and cross level error correcting communications.It increases the overall homeostatic flux density that drives collective creativity.Or as McLuhan might say, the real magic, the creative synthesis, it’s all a happening in the RESONANT INTERVAL between the participant process/players.
I strongly agree with this mentality. Here are the components of effective transparency and parallel processing as characterized by James Surowiecki in The Wisdom of Crowds:1) diversity of opinion (each person should have some private information, even if it’s just an eccentric interpretation of the known facts)2) independence (people’s opinions are not determined by the opinions of those around them)3) decentralization (people are able to specialize and draw on local knowledge)4) aggregation (some mechanism exists for turning private judgements into a collective decision)He also talks about the importance of simultaneous decisions as opposed to one after the other, saying “one key to successful group decisions is getting people to pay much less attention to what everyone else is saying”. I thought this was an interesting notion that the best collective brains are ones where people are stating their opinions absent the processing and judgement of those around them.
Transparency = Freedom = Creativity = Progress/Success
Transparency brings about alignment. And that has tremendous value.Couldn’t agree more. Thanks for sharing, Fred.
Ray Dalio is the best person to learn from on this topic:http://www.bwater.com/Uploa…
Depends on your moat. If you don’t have one, transparency is bad.
Iraq never really prepared to repulse an invasion because Saddam Hussein’s generals never realized that the country didn’t have nuclear weapons…
there you go
Productizing this sort of transparency seems like a big opportunity – see Jive, Yammer, etc.
There are great stories about transparency in the days of PayPal which as far as I know was the first “radically internally transparent” startup way back in the 90s. As I understand it, each Friday had an “all-hands open-book meeting” where everyone attended, and as the name says everything was laid bare which, given how often the company came close to bankruptcy, couldn’t have been easy. It’s hard not to see a connection between these kinds of practices and the impressive successes that PayPal execs went on to have.
well if you’ve almost gone under a few times, then hearing you are about to go under might be less frightening
I’m a big fan of transparency and we shared most of the entire Board package with our company each quarter. Where I always struggled was how to be fully transparent on the one hand and then hide key decisions about specific Team members and the reservations we had about them on the other side.How have people handled conversations about whether the right people are in the right seats on the bus?
HR issues (comp, performance, feedback) are one area that transparency is hard
Ray Dalio has kept everything transparent @ his firm (Bridgewater Associates), to the point of taping every meeting and having it available to everyone at the firm. Also, talking behind someone’s back there is basically tantamount to career suicide.He has created arguably one of the most successful cultures in his own industry (his fund has done incredibly well, and is now @ close to $100BN AUM or something).This concept is not new, he has been doing this for over a decade. I’m not a finance person, but this “cult-like” culture of transparency seems to work like a charm there, so I’d imagine it would generally as well in any industry.Here’s a great New Yorker article on him: http://www.newyorker.com/re…
Take a read here for more on this (intense and overwhelming at some points, but he certainly has something to show for these)http://www.bwater.com/Uploa…
TRANSPARENCY GOOD IF HIRE RIGHT PEOPLE.SOME HUMANS NOT HANDLE THE TRUTH. OR ABUSE IT.PROBLEM IS MOST HUMANS ARE THOSE HUMANS.
Great post, mental post-it created.
I’m late to the game here but read this twice – I saw Ben Horowitz’s link to the article, and then Fred’s. I have always been a huge fan of openness at the startups I’ve been at and have met with anything from mild to vehement disagreement. These posts have emboldened me to keep the faith! I have always felt that responsibility and communication were bigger motivators than stock options – folks want to know that while they may not have their hands on the wheel, they want to be able to have solid input as to whether we are turning right or left. Only by giving them all the data can they make a great decision.Great post Fred and awesome that you compliment your competition in this way.