In my early twenties, my friends and I had a weekly ritual. We would get together, smoke some weed, watch the Chappelle Show and laugh our butts off. The show marked me in this moment of time. Not only because it was an amazing sketch comedy but also for the story of its star. The show got extremely popular after the first two seasons and Dave Chappelle was reportedly offered $50 million for a third season by Comedy Central. There was one hitch though, he had to partially give up creative control. What happened next is well known. Dave refused that fortune and went into hiatus. When he made his comeback nearly a decade later, he almost immediately rose back to the top of his profession. 

Being free

What I wish to emulate the most in Dave, is not his career success but his complete freedom. He does what he wants, when he wants. He is famous for showing up at random comedy clubs and performing on stage. He’ll prepare huge specials with other comedians on a whim and sell out stadiums with only a few weeks notice. If you’ve seen any of his comedy, it’s an evolved art form. He is not only telling jokes, he is talking about how he sees reality and inserting jokes along the way. His last special which is not really a comedy show at all. The clip on YouTube is more of a rant about the current social upheaval in the US. Dave is poignant and powerful as he discusses police brutality and racism. It’s given me another perspective on the current issues and made me realize that we need more profound conversations.

Rising temperature 

The images of violence, protests and rioting are difficult to watch and hard to make sense of. There is undoubtedly systemic racism that needs to be addressed by reform. At its core, inequality (wealth, social status, etc. ) probably plays a large role in the underlying causes. We have many of the same issues in Canada albeit on a smaller scale. These are not simple things to solve. In a complex and interconnected world, we need to be able to think about how systems are created and propagated.  

My biggest fear is that we’re losing the capacity to have civil discourse about the issues at hand. Abolishing the police sounds just as crazy as some of the ideas promoted on the right, yet both sides are unable to talk to another. This is of course amplified by the platforms on which the conversations are happening. The recent controversies about social media’s policing of language miss the core of the matter, filter bubbles. Media outlets and social media platforms are increasingly sharing viewpoints that only their audience will accept. Clicks drive revenue & engagement, nothing else matters. Negative externalities like losing our ability to have a civil conversation is not a consideration. We are only at the beginning of understanding the impact algorithmic media is having on us. On first inspection, the results don’t seem great. 

Confronting the ministry of truth

In Orwell’s  1984, the ministry of truth was in charge of state propaganda. Your thoughts were subject to state control and this is the dangerous path we’re going down if we don’t course correct. The only way to truly think freely is to understand multiple sides of a complicated issue. If we’re only hearing the side we want, there’s little chance of reconciliation. 

Over two thousand years ago, Aristotle defined a first principle as “the first basis from which a thing is known”. This is not a post about how the Greeks invented everything (although I can make the case for it) but rather a post about learning and a mental model that is tremendously useful. Put more simply, reasoning from first principles is the act of breaking down complicated problems into basic elements and then reassembling them from the ground up. By building a strong foundation of a subject, you can reason up from there and create a good feedback loop. 

Becoming part of culture

The term first principles has become quite popular over the past decade or so. Silicon Valley in particular has appropriated the term – just listen to any tech podcast. The most famous person advocating for first principles reasoning is Elon Musk. He’s used this form of reasoning to disassemble complicated engineering problems and convert them into world changing businesses. For instance, his rocket ship company SpaceX is successful, not only for its innovation but for its low cost structure. Elon looked at the supply chain of building rockets and saw enormous glut. There were many suppliers all taking margin over one another which resulted in exorbitant prices for rockets. The company centralized production and built a vertically integrated structure. Arguably, SpaceX’s biggest innovation was to bring down the cost of rockets. If you are a country looking to send a satellite in space, it costs one tenth less to hire SpaceX to do it for you. 

Many of the world’s greatest innovations usually start with something hiding in plain sight. It just takes someone to look at the problem and deconstruct it. 

How this has helped me

I’ve found that when I’ve tried acquiring a new skill that is foreign to me (hello corporate finance), I need to start with the basics and just learn them over and over again. It may sound simple but learning the foundations well of any subject is not as easy as it seems. Before moving on to more advanced material, I always try to relate back to the basics of the subject/skill at hand. I’ve also created cheat sheets with guiding principles on different subjects that helps me keep track. 

At work, a useful framework we’ve been using is Wardley Mapping. You begin by breaking down something into its core components and place them along the value chain. It’s tremendously useful for being able to dissect almost any subject and formulate effective strategies.  

Why it’s relevant today

As more variables get introduced into the equation, you can argue that increased complexity is becoming the norm. Reasoning from first principles can be a great starting point to identify original solutions to wicked problems. 

Apart from building spaceships or saving the world, it’s also a great way to learn and get better. 

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Great reads on the subject

First Principles: The Building Blocks of True Knowledge – Farnam Street

Aristotle and the Importance of First Principles – Aly Juma

In case you haven’t heard, this past week was a seminal moment for the work from home movement. Many of the most important technology companies of our era announced their plans to allow their employees to work from home indefinitely. 

When the news made its way across social media, my initial reaction was to say *fuck this shit*. I couldn’t imagine wanting to be stuck all day at home without a break in between work and home life. Part of the frustration stemmed from being in forced confinement for the past two months. Yet, it wasn’t the only thing that bothered me. There was something else. Given that I’ve always worked away from home, I couldn’t imagine that not being the case. How much of this frustration was simply because I had never experienced anything else beyond the current pandemic? 

There was something else I realized about my deeply ingrained habits, there are two illusions about myself – office and home. It’s not that I transform into another person in the office, it’s just that it made me feel that I *worked*.  Maybe it’s the effort spent commuting, the sense of punching in or some nostalgic “honey I’m home” moment. 

My thinking has completely shifted over the past few days. I’m super excited about what this means for the future of work and the new possibilities that come from decoupling work from the office.

It goes without saying that this depends on the type of work that you do. If you run a restaurant, chances are that you will have to keep on going into work. However, if you run a chain of restaurants, do you really need to have all your administrative staff coming into the office every single day? Given that so many tasks are now performed on a computer, there are fewer reasons to lock people in a cubicle from 9 to 5. It’s clear that every single knowledge worker will see their routine change over the decade.

The upsides

• More human: What are your life’s priorities? Chances are that health and family are above work. If so, why spend so much time travelling to a location to do work when it can be done closer to your loved ones?
• Less pollution: Needless to say the planet needs fewer cars and buses on the roads
• Flexibility: The current confinement has given me more free time to work when I want to and not feel part of the rat race every morning. For instance, I used to wake really early to get in a workout before heading into the office. Now, I’ll lift weights after work and it gives me something to look forward to after working all day. I’ve also had more time for skillset acquisition by taking an online course.
• Fewer costs: As a business owner, I don’t feel the need to be tied into a five year lease anymore. I will surely consider more flexible options moving forward.
• Deep work: This is a big one for me. The ability to think deeply about important matters requires solitude and tranquility. Being in a crowded space with constant interruptions is not amenable to deep work.

The downsides

• Employee friendly: Some companies will surely see this as a way to pass off costs to employees. Lower salaries for instance based on location is already being thrown around. 
• Less human: what happens if you’ve never met your boss in person? Will they be as empathetic when you’re dealing with a personal issue? I strongly believe in a meritocracy but when you’re only measuring OKRs for instance, it will be difficult to be nuanced especially when working remotely all the time. My fear is tied to a scene in WestWorld where the actor Aaron Paul gets laid off by an algorithm. I don’t want to be fired by an AI!
• Culture: Transmission of culture, both good and bad, will be hard to do over Zoom or email. For companies that have not been born distributed, the challenge will be to teach the technical aspects of a job and also the softer cultural ones. When I was at Google, there was a distinct camaraderie among the teams. And for those that argue that engineering roles don’t require an office, I don’t buy it. The engineers at Google had a strong bond and were also recognized as exceptionally performers. 
• Serendipity and problem solving: “There’s a temptation in our networked age to think that ideas can be developed by email and iChat. That’s crazy. Creativity comes from spontaneous meetings, from random discussions. You run into someone, you ask what they’re doing, you say ‘wow,’ and soon you’re cooking up all sorts of ideas.” This is a quote by Steve Jobs who insisted in designing the Apple office to create casual collisions as much as possible. People are social animals by nature. We like being with people. Being alone is not always the best way to solve a problem. Being with your team in a room (with a whiteboard!) creates a safe space to be creative and imaginative. This is the biggest reason why I believe I don’t expect most companies to be 100% distributed. 

Decoupling the office and work 

For companies that were born with centralized offices, it will be much harder to make the shift to being entirely distributed. They will surely adopt some kind of hybrid approach. What I’m most excited about is the new ways to work that will emerge for new companies that are not tied to this past convention. 

This opens the door for crazy new experiments to emerge. Maybe Monday’s can be spent working from a Breather space as a team and the rest of the week remotely. Also, instead of working together, teams can get together more often for play and bonding. New types of work cultures will emerge which will give people more options to consider when looking for a new job. On top of everything else, a candidate will want to understand where and how their team works together. This opens up the door for new innovations and will make work better & more meaningful. 

Don’t give yourselves to these unnatural men – machine men with machine minds and machine hearts! You are not machines! You are not cattle! You are men! You have the love of humanity in your hearts! You don’t hate! Only the unloved hate – the unloved and the unnatural! Soldiers! Don’t fight for slavery! Fight for liberty!

Charlie Chapin, Dictator Speech 1940

There is something troubling about the predicament we find ourselves in today but for the obvious reasons. Today, what is indeed obvious is that man-made systems are fragile and imperfect. We only need to look at our most important institutions and realize that they are operating largely on old world conventions and norms. 

If we look at health care for instance, there is no robust preventative approach in place for broad disruptions like pandemics. Education is still modeled after a taylorist approach and is not personalized to the individual student. Elections of government officials have become popularity contests leaving little room for deep debating of the issues; and the list goes on. Without trying to moan too much, the point I want to raise is that there is ample room for improvement. 

If we can avoid stagnation, I’m fairly confident that there will be significant advancement in all human domains over the next few decades. It seems inevitable that these institutions will change for the better- such is human ingenuity. 

Worshipping data

Dataism (the worship of data) is quite evidently the path forward. We will implement measurement systems across many aspects of society. This will lead to longer life spans, better education and a stronger economy. If we look at the rapid progression of intelligent algorithms, the cost to implement recursive systems will drop drastically leading to important improvements. This should be all good right? Well, that’s what I find troubling. What if it’s not? What if we lose something along the way? Is there an agreed upon definition of what makes people human? 

We shape our tools and thereafter our tools shape us

The coming symbiosis with machines seems inevitable today and will most likely be widely accepted – because it will make life better! Who wants decision making to be informed by imperfect systems rather than objective facts and data. We will surely start ceding control over to algorithms and machines all in the name in advancement. It has already started with biohacking. Would we want to have kids with a risk of Alzheimer’s disease? I know I wouldn’t. So let’s modify their generic code to avoid this nasty possibility. Now draw the reasoning out further and you can imagine where it’s headed. 

Is there anything to do?

My concern is partially fueled by the fear of the unknown. I surely don’t want to be the one arguing that buggy whips are a better mode of transportation. Yet, deep down I know this isn’t such a fear of technological progress but of what it means to be human. 

There are tantalizing new possibilities over the coming decades. We’ve moved beyond the probable and entered the realm of possible. Genetically engineered humans and connecting our brains with sensors are just a few examples. Shouldn’t we be a bit more worried? Why aren’t there more people talking about this? 

I have no idea what is going to happen and I’m not offering any visions of utopia or dystopia. I just hope that this topic becomes much more important now rather than later. We need to think deeply about how these new systems will be built and what the potential impact will be. The future is not predestined and the choices we make will shape that future. I hope we figure it out before it’s too late.

Bad experiences make for good stories. I’ve always loved that quote. I like to add that bad mistakes make for good lessons. After five+ years of running a small business, I’ve learned a ton along the way- which is a nicer way of saying that I’ve fucked up a lot. 

Post-mortems have been a great tool at work that we’ve used after completed mandates. I want to focus the lens inwards to see what I can improve. As a cathartic process, I want to share what some of those mistakes have been and hopefully help others avoid them. 

Foundational errors

You need a strong foundation at the start of the journey and I’ve been blessed with having two strong partners for the ride. But you have to be careful about the decisions you make at the start. 

“A startup messed up at its foundation cannot be fixed.” These types of errors cannot be undone. Choices of the product / service you’re building and type of culture are among a few things that will be very hard to course correct.  

We chose to build a management consulting firm with a mismatch in our networks. The vision was to work with big companies to help them understand the impact of technology on their strategy. We were plugged into high level executives at big mega corporations but not at SMBs. This forced us to scratch and claw our way to work with smaller companies (ultimately successfully) but it took a while to get there. In hindsight, I should’ve spent more time understanding and researching the market. This seems like such an obvious and embarrassing point yet so it was not clear at the time. 

A deeper observation on why this occurred makes me think about the pessimism/optimism scale. When dealing with a big & risky challenge, a natural defense mechanism I have is to be optimistic. Things will work out if I just work hard! This is of course not a bad thing. What I’ve been looking to improve is adding a healthy dose of cynicism; asking not just what but how. 

Decision making

Roles and responsibilities need to be clear in order for decision making to be fluid. When there are grey zones & overlap, tension can appear. It’s not to say that tension is bad. It’s the unnecessary tension that slows down decision making. 

• Positive tension = conflict over strategy, important decisions, decisions with uncertain & probabilistic outcomes. 
• Negative tension = operational in nature, shouldn’t be debated at the leadership level, opinions debated more than facts.

Another error of decision making is letting a point slide when I know I’m right. I tend to avoid conflict as a personality trait and when encountering push back, I tend to back down.  Saying “I told you so” a year after a heated debate doesn’t help move the company forward. When you know you’re right, hold the line. Along the opposite line, when you know you’re wrong, let ego out of the way. 

I’ve had to learn to be comfortable with conflict and fighting for my viewpoint. Avoiding a stressful conversation only pushes problems later down the road. You have to run towards the problem. Being comfortable with being uncomfortable is key.

Crisis management 

It would be a bit tone deaf to avoid talking about the crisis. Even though we’re still in the middle of it, I feel like I’ve learned a shit ton. 

Clear communication is key right from the start of the crisis. I thought we were clear and it turns out that we weren’t. Given the added difficulty of remote communication, extra attention and time was necessary to let the team know what’s going on and how we’re dealing with it.  There is a much bigger downside in under communicating rather than over-communicating. 

Remote work is getting a lot of attention with the crisis and many people are correctly predicting the decline in commercial real estate as a consequence of this forced experiment. That being said, I believe that in person communication will actually grow in importance as a skill set. Strategy firms like ours won’t be able to shift to remote work entirely. There might be a mix of working remotely for deep individual work, but not 24/7.

The confinement has also provided the space to take a step back and reflect on what’s worked well and what hasn’t. I’m generally not a fan of fetishizing failure. But failure occurs when mistakes are repeated over time & not addressed. So if anything, I’m grateful for this crisis for the space to reflect and learn from them – even though it’s damn uncomfortable to look at them directly. 

The government of Quebec announced an initiative to help stimulate the local economy.  The program seems pretty simple enough. It’s an online marketplace where consumers can find curated local merchants. Consumers benefit from local options, merchants benefit from increased demand. Et voila! One small step towards helping the provincial economy. 

It is a laudable effort to protect and promote local businesses that are surely suffering from the current pandemic.  That being said, In its current form, I believe the program to be insufficient to achieve any tangible outcome. This can of course be step one of a larger effort so I will be cautious before passing final judgement. 

The website is merely a directory and does not offer any transactional capabilities. That by itself is not the main reason it will not work. To achieve any tangible and sustainable outcome, the government must think about a bottom up & long-term effort. Local merchants must be better equipped to satisfy & delight customers and
offer their services online. The government must invest and enable new companies to be at the forefront of this transformation. 

What is different in the internet era is that consumers have all the control; and consumers go where they enjoy a better shopping experience. That is the reason large tech companies dominate. They simply provide a better service. Shifting ingrained consumer habits cannot be altered with a top down dikat. It must be earned with hard work and by helping local merchants better compete. 

Putting dollars to work

Luckily, political leaders have been making concerted efforts to invest in a more sustainable and local economy. Funding in startups from venture capital, private equity firms from the government has given rise to a booming technology sector. It is time for the government to take the next logical step and start a more comprehensive digital maturity program for the entire economy. The crisis can be a great excuse to take drastic measures that otherwise would have not been accepted. 

Get online now

It is painfully evident, local merchants need to have transactional capabilities as soon as possible. Many retailers I’ve spoken to during this crisis are seeing their online numbers explode. Yet a large percentage of Quebec merchants are simply inexistent online and not benefiting from this channel. Businesses need to accelerate their shift to ecommerce. A quick way that the government can help is by providing tax rebates to companies that invest in their ecommerce. 

Customer acquisition

The next step to bolster local businesses is to help them acquire customers.  Unfortunately, there are no shortcuts here. Local companies need to get good at digital marketing. And yes, that means boosting their proficiency on Google and Facebook in particular. To win online, you need to be where the demand is. Quebec consumers are overwhelmingly using these platforms as their primary information destinations. To acquire new customers, local merchants need to understand how these platforms work and invest accordingly. Local service providers like marketing agencies, development shops, etc. can provide a big step up. There is a deep talent pool in Quebec of digital experts that can help. There are no more excuses. 

The fact remains, we’re still stuck paying the piper (e.g. big tech). Long term, I believe there is a way to reduce dependence on these platforms; retaining your customers.

Retention is the key

Local merchants need to be able to provide the same level of service than their larger & more well capitalized US competitors. This isn’t easy, the biggest piece that needs to be solved is last mile delivery. There are many innovative startups in the space like RenoRun that solve that challenge in home renovations. The government can fund startups that are working to figure out this important hurdle. Companies like Intelcom offer this service as well but more competitors and options are needed. 

Amazon has a massive head start in its logistics and prediction/recommendation engine. Competing with the company head where it is strongest probably isn’t a good idea. Local companies have the advantage of proximity, high touch customer service and niche goods. We need to find ways to emphasize those strengths. If we can remove the biggest barrier which is easy online ordering and quick & cheap shipping, local merchants have a better chance of satisfying customers and keeping them long-term. Innovative business models like subscription will help merchants create a sticky consumer habit. 

What about the media in all of this?

I’ve argued for significant investment online and in startups and unfortunately none of this will go to local media – who are probably in dire straits right now.  I’ve long argued that the current business model of advertising in media is misaligned with consumers, the only alternative is having some form of direct reader contribution.  Tax breaks to consumers that subscribe is one way to lighten the burden of the media. Given the small population base, the NY Times or Washington Post subscription model won’t save the media alone. Local media need to diversify their revenue streams away from advertising as quickly as possible. I don’t have any silver bullets here but it is something that needs to remain top of mind for elected officials. Unbiased investigative journalism costs money and the traditional advertising complex is no longer a sustainable business model.  

Bigger vision needed

There are many industries that need to be reimagined once we get past this crisis. Some have brilliantly argued on how to do this. From areas like agriculture to health care to environmental sustainability, we need to build a more resilient economy that can face large scale threats like global pandemics. The short-term limits of globalization seem to have been reached. By having a strong buy first local economy, we will be able to weather future storms more effectively and perhaps come out even stronger. 

What’s happening today is a human tragedy on a scale not seen since the second world war. It is most likely the most important global event in 70 years. It’s difficult to think about anything else than the human costs of this pandemic; death and misery is all around. As a means of escape, I’ve been thinking about this will mean once it’s all said and done and life comes back to “normal”. I took a deep breath last night and thought about this means moving forward. 

What this crisis is demonstrating is that many of our past behaviors will no longer make any sense in a post-pandemic world. The rise of connectivity have changed our behaviors, culture, economy and politics over the past two decades. Yet, these changes have coexisted with an industrial world that still believes previous ideologies dogmas. The shock & awe of forced confinement has laid bare many of these ideologies and is accelerating the transition to the knowledge economy (acceptance). After the crisis subsides a new reality will emerge with entirely new economic, social and political structures (acceleration). 

The future is yet to be written and it’s up for us to decide on what is acceptable and what is not. What I’m betting on is that everyone will embrace new mental models much more deeply than before and this will have important repercussions on the economy.

Acceptance

There is a cohort of people that don’t find computers intuitively easy to use. This is mostly due to the fact that they are not required to in their work. Which makes complete sense. It may seem quaint but the reality is this group makes up a large portion of the workforce and one with significant decision making power. This group is now being forced to work remotely, learn to engage with these tools all day long. A close friend of mine runs IT at a large university and he had to connect thousands of people to work remotely literally overnight. It is a drastic crash course in using digital programs and gaining fluency due to necessity. 

Now multiply this phenomenon across every public sector, large traditional corporations. You get the point. Many people will gain digital fluency that younger generations take for granted. 

We’re already started to see it play out. Social media platforms used to be disparaged by many are now seen as indispensable. During the early days of the crisis, while many governments were still not fully aware of the severity of the situation. Twitter was an excellent resource for quality information. Given the lack of gatekeepers like traditional media, Twitter provided the soapbox for experts to speak out and alert the public about the coming danger. Social media is already pervasive in many people’s lives and will now only become more entrenched. 

Acceleration 

Driving somewhere, fighting for parking and then walking randomly down a shopping aisle will seem rather quaint in a few years. Ecommerce adoption has been soaring as a means of avoiding venturing outside, further accelerating an important trend in shopping behavior. Amazon is being seen as a public utility and the food delivery category is exploding. 

Commercial real estate will also undergo a radical transformation. Remote work was a cute novelty that only a few tech companies had figured out (hat tip: WordPress). It will now be a common question during planning. Should I hire these lawyers that work in an expensive office tower? Or hire the same level of expertise by a legal team that is distributed at a lower price? This will reverberate across the entire service industry.  We will surely see massive deflation in commercial real estate costs as a result. 

If you ever watch a late night TV show, it reminds you of a bygone era of Johnny Carson and a three cable channel world. The current batch of late night TV hosts are now forced to record without live audiences. They are alone  simply facing the camera; and they are very clumsy at it. They are getting a crash course in what it means to be a YouTuber. Authenticity across a digital screen is a key skill of any online personality. The mobile phone is the key interface to access information. Most people will expect to consume content from stars using this platform alone. Live audiences will still have their place, but it will be ranked second. 

Evolution

The importance of quality journalism is never as evident as it is during a crisis. We are relying on journalists every day to inform everyone of key developments. The challenge for journalism is that its business model was already in decline prior to the pandemic. The radical decline of advertising dollars during a recession will accelerate the rise of subscription based models or reader funded ones. Individuals reporting news & opinions will also likely increase given the ease of use of subscriptions tools like Substack. 

Remote services will touch traditional physical services much more deeply, for instance health will be transformed. Telemedicine is a relatively new model with companies like Dialogue leading the way. It is apparent that health care will also need to be more distributed and accessible. 

With millions of parents at home being forced to play the role of teachers,  the cookie cutter model of education will also be challenged. More personalization education will become the new norm. Online tools enable students to learn at their own pace and teach them skills that they are uniquely suited for. The Taylorist classroom will hopefully transform to something more measurable, personalized and meaningful.

Entrepreneurs and leadership needed

“You never let a serious crisis go to waste. It’s an opportunity to do things you think you could not do before.” This quote by Rahm Emmanuel sums up the thought quite well. Hardship will breed a new generation of entrepreneurs and leaders that don’t take into account conventional wisdom.

Many opportunities will arise. With a likely increase of nationalism and the decline of globalism, buying local will become a bigger focus. Micro-brands selling local goods will flourish. 

A crazy theory I have is that Mother Earth created this virus to give humanity a wake up and to stop polluting/killing everything. I hope that we see more companies working on sustainability projects. Private equity and governments will provide economic incentives to these businesses which will move us to a greener world.

This is an opportunity to do things better. Let’s use this godforsaken virus as an excuse to change things and leave the old world behind. 

I’ve discovered a superpower, admitting that I don’t know what’s going on. I know it doesn’t sound like much, but it is actually quite powerful. When confronted with a challenging problem with no obvious solution, I now find it much easier to admit to innocence rather than trying to pretend to know the answer. 

I believe that we’re all fooling ourselves all the time, consciously and unconsciously and this can have a pretty dramatic impact when dealing with uncertain situations. Having intellectual honesty is the only way I’ve found to stop deceiving myself and try to get to the right answer. It’s also a powerful social signal to show humility and let others know that the truth is the only thing that matters. 

When faced with a business problem though, it’s largely a matter of probabilities rather than one singular right answer. There’s a typical gradient scale that can be applied; is the issue operational or strategic in nature? It resembles the certainty / uncertainty curve. Strategic questions are usually uncertain and have a high degree of variability. These are usually big important questions like where are we headed, who should we hire, what’s the next acquisition we should make, etc and only the people running a company can tackle. A leadership team needs to avoid bringing a false sense of bravado and ego when faced with these types of decisions. 

Intellectual honesty & probability

Leadership teams large and small can benefit from trying to eliminate bias in their decision making. One way to neutralize the uncertainty component is with probability. Map out the degree of confidence for each potential course of action and dissect the question at hand. One simple technique our team uses is Wardley Mapping. It is a map of the structure of a business or service, which maps the components needed to serve the customer or user. Mapping is a great way to dive deeper into a particular challenge and get everyone around the table to debate each of the underlying components. 

Having a high degree of intellectual honesty is a short of ninja mind trick. It helps eliminate bias when faced with important problems. It also sends a signal to the person that you’re dealing with that you’re only searching for the best possible solution. Socrates said it best, “The only thing I know, is that I know nothing.” 

Four times a year, executive teams scramble to prepare themselves for the quarterly board meeting. This simple gathering can take dozens of hours to prepare for leaders of a company.  The tradition has become routine and its importance unquestioned. I want to ask if we can make this process better. 

A small disclaimer, I’m not an expert on boards. I’ve served on a few boards of small companies and nonprofits. In my line of work, I also deal with many boards and see how our customers interact & engage with them. Even with this small sample size, a few patterns have kept repeating themselves. My goal is to call out what I see as improvements.

The bad

Boards have been around for a while. Corporate governance by a representative board is a reflection of political practices dating back to the late Middle Ages. The board’s role is to protect the rights of the shareholders. Its long history has created many different ways of running a board (which isn’t a bad thing) but led to an overly important sense of decorum. The main issues I’ve seen are: 

• Not talking about the important stuff: Many boards resemble sales pitches from the management team. Akin to a business development meeting where everything is hunky dory and there are no storm clouds at all. 
• Onerous documentation: Documents are also too long to follow. A plethora of financials, strategic plans and other paperwork fill up the board’s members inboxes and often mix up what the real priorities are.
• Lack of strategic insight: The role of the board should be to help with important decisions (M&A, strategy, exec team hiring/firing, fund raising, etc). Oftentimes, the issues debated are minor in importance. At the same time, board members can be disconnected from the reality of the business. They are selected because of their track record and network but often fail to grasp core fundamentals of the business they are trying to help. Advice can be too theoretical and impractical. This isn’t a knock on board members but rather the ones that don’t do the work to properly understand what’s going on. 
• Lack of diversity: The challenge of diversity has been well documented. Older white men make up the majority of boards and diverse opinions are not heard.

What is the job to be done?

The board’s ultimate responsibility to increase *shareholder value* and these days stakeholder value (which is an entirely different post). Boards are elected by the people that own the company and are meant to look after their interests. They provide help in two big ways. 

The ability  to hire and fire the CEO as well as provide strong governance on important decisions. I’ll focus on the latter; making better decisions. 

An important question is why are the meetings only once a quarter? Why not monthly? Why not every two years? If a board is to help with key decisions, I believe that sticking to a quarterly structure is incongruent where a company needs to be constantly adapting to the market. In the old world of waterfall development, this made sense. In today’s, companies are responding much quicker to the market. Increasingly, strategic decisions are being made every week or month rather than at the solemn quarterly meeting. In order for a board to be able to accelerate the velocity of an organization, there needs to be a faster pace. Engaging with the board needs to be done on a continuous basis.  

A key aspect of helping with important decisions is also taking advantage of the board member’s network. Senior board members don’t have answers to every single problem a company is facing but most likely know people that have gone through a similar experience. Using this pattern recognition can be very helpful for an executive team facing a big decision. 

Caring and getting along

Ultimately, a board member is there to help and their own self-image is reflected in the success of the organization. A board should be comprised of people that care about the company and that get along with each other. Getting along sounds a bit quaint but is actually super important. When there are tough calls to make, there needs to be an underlying level of trust and camaraderie. It’s much easier for the right decision to be made when people get along, especially during tough times. 

Resources: 

Here are some great resources I found while researching this post

Managing your startup board by Mark Suster

The art of board leadership by Mike Volpi

Designing the Ideal Board Meeting Series by Seth Levine

If you believe that software is eating the world, then you don’t need to look much further than the advertising space for evidence of its existence. The ad industry has transformed from a world of gut feeling and intuition to one of data science and engineering. It has not been an overnight affair and we’re still in the transitory phase. What is clear though is that the endgame is near. 

The previous paradigm

I worked for 10 years in the ad agency world at the beginning of this shift where digital advertising accounted for less than 2% of the market. It’s now over 50% and it will not slow down. That world was relatively simple. An advertiser gave money to a creative agency to come up with a campaign for its brand. A media agency then came in, prepared a media plan by talking to publishers and then ran the ads across different channels. 

The skill set that translated into a successful campaign were threefold: 1) being able to pitch & win companies with large marketing budgets, 2) have strong creative talent that can create remarkable campaigns and 3) tough negotiation skills to obtain good deals from publishers. 

The immediate feedback loop for a brand was almost non-existent. The publishers would share data on the reach & frequency of the campaign (god, I hated GRPs) and post-campaign surveys would calculate brand lift. Of course marketers would measure sales lift of their campaigns but the causation was often tenuous. 

Sadly, most campaigns didn’t work. Across the industry, it was very rare that a campaign moved the needle for a brand. What made this era special is that once in a while, there were home runs and they succeeded in spectacular fashion. Some campaigns legitimately were huge wins for the customer. Most of the time though, a marketer had to use soft metrics to prove the value of their work. Thus the outsized importance of awards and recognition. The entire edifice rested on suspending disbelief. 

This has obviously all shifted towards what we see today. The duopoly of online advertising is here to stay and looking increasingly solid.  

The end game

With the inevitable decline of traditional media, all forms of media are being connected. There are some pockets of resistance, notably with live sports but most people’s attention is already being eaten by their phones. It’s pretty clear to say that when people spend their time on a connected device, their behavior can be measured. I know this sounds like Big Brother but it’s what is happening today. With the disappearance of the cookie in the name of user privacy,  the large tech giants are being entrenched. 

So what does this mean for capital allocation in marketing? It starts with getting good at data and software. 

You need to embed software engineers in your marketing department. Most mature startups are already doing this. Some companies benefit from direct API access on Google and Facebook (past a certain amount of investment). 

Second, you need to have data scientists to run cohorts analyses et al. and help the team with their investment decisions. 

Creativity absolutely has a seat at the marketing table. When it comes to advertising though, the business decisions are increasingly based on metrics tied to financial outcomes. Only a small percentage of spend will be tied to a non-measurable outcome. 

Implications for competitive advantage 

I used to believe that the overall level of maturity in digital advertising will increase. That a rising tide lifts all boats. This isn’t the case though. Most companies I’ve worked with haven’t been able to develop their marketing engine and hone this skill set. 

I really believe that there is still room to build a strong customer acquisition team which in turn can create a competitive advantage. This is obviously a blanket statement and there are many variables (market, business model, etc.) which come into play. 

It’s now about the bottom line

Marketing used to be an expense. The people running the company would allocate a percentage to marketing every year and it would not be tied to a financial outcome. The model has completely flipped. Marketing can now be measured as a revenue driver and as such has a seat at the table.