June 19, 2009
Never Make it Personal
Being successful at business requires a thick skin, a “killer” instinct, and often times personality traits that in other settings would be described as anti-social, and maybe even sociopathic. We all remember the great quote from Andy Grove (Intel’s CEO from 1987-1998):
“Only the paranoid survive!”
This week I was reminded on a valuable lesson I learned years ago about walking that line between having a healthy competitive instinct and taking those behaviors a step too far and creating an unhealthy corporate culture. I read with great interst Matt Hulett’s recent blog post “Focus On Your Competitor’s Tail Lights“. The basic gist of his post is that it is important in business, particularly growth businesses to have an obvious adversary.
First of all, let me say, I totally agree with Matt. Having an adversary can provide a much more tanglible rallying point for a team than dry (boring) metrics. And, since I worked with Matt for years in the early days of RealNetworks, I know that Matt is the kind of leader that can take this sort of a team motivator and make it exciting and fun for the team.
But, I’ve also seen this approach go wildly wrong in the hands of leaders that forget the human side of the equation. Here’s the thing: people love an enemy. It seems there’s something hardwired in human beings to rally around fighting against a common foe. But as a leader you need to make sure you don’t take this “they are our enemy” attitude too far.
Why not? Well, we must remember that it’s a very small world. Particularly in business, and even more so in the software industry. Many of the “enemies” Matt and I rallied against in the early days of RealNetworks have become our co-workers, partners, customers, and potential aquireres today.
If those battles become too personal the business implications can be quite devistating.
Here’s a classic example: In the early days of RealNetworks, one of our chief competitors was a company called Xing. When RealNetworks was focused on delivering streaming audio over the internet (then most access was only 14.4kbps modems), Xing was building MPEG Video on demand solutions. Of course Real was always planning to get into video, and we thought we had a better strategy to get to mass market, but they were “ahead” in video. They were the tail lights we focused on.
Xing was so much of a focus for us, that the name of the internal competitive marketing email group was “Xing”. If you had any intel or competitive feedback from the market for any customer or competitor, you sent it to the “Xing” internal mailing list. It was a giant bullseye for us. We were all focused on it. And frankly, we often got pretty blood thirsty on that list.
Fast forward 4 years later, and RealNetworks had IPO’d had a market cap of over $10 Billion (yes, those were the days)… and Xing had been crushed. But they were still alive, and they had some key patents and intellectual property around MPEG recording and playback. The natural thing to do was to aquire this former competitor. You can imagine the tension that existed between the “old timers” from these companies. And things got even dicier when one of the top engineers discovered this old email list from back in the day.
In our effort to rally around a common enemy, we let it get personal… and it eventually came back to bite us. Competition is great, but don’t let it get personal!
I’ve seen similar behavior that had even worse outcomes. Teams who did great work, built great technologies, and generally dominated their industry, but who got there leveraging a war-like mantra focused on destroying their number one competitor. It worked great until their number one competitor (who really had been beaten) ran for the safety of a much larger company in the industry. Unfortunately that larger company was the number one customer of this killer team. You can imagine how those war wounds impacted the long term business prospects. It wasn’t a pretty sight.
To walk that line without crossing it, I like to visualize two Marshal Arts Masters. They bow to each other before and after each battle. They respect each other as warriors. While in the ring they are 100% focused on defeating their adversary. But they keep the level of respect, and never make it personal.
Filed by Brad Hefta-Gaub at 10:42 am under Entrepreneurship
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A thoughtful post. great leader can help individuals on their team rise to places beyond what the individual thought they were capable of, but the team cannot prevail over competitors without a shared sense of purpose. A great leader helps the team understand how to play their best to beat the competition by looking at them as a motivator, an inspiration, something to be feared perhaps, but not something to “kill.” When Rodman and Laimbeer were throwing elbows, thrusting hips, charging to hurt, MJ didn’t let his team hit back or play dirty. They got motivated; they got smart. They learned to think like one against a competitor that was as good as they were, but that ultimately be beatable by the team that best understood their vulnerabilities and could parry against them.
An important distinction in businesses with customers. When you become obsessed with your competitor, you can lose sight of the reason you’re there - the customer. If you ask what’s best for the customer, you may find your strategy vis-a-vis your competitor is quite different, and you’ll be better equipped to to compete, even if your competitor commits hard flagrant fouls. Wish we’d have done that a few times when we were instead trying to outrun the competition to the next milepost.
P.S. When Real announced it’s acquisition of Xing and MP3 licenses, its stock rose $30 in one day, which hopefully allowed each team to benefit from the years of competition which raised both of their games and created more value for them together than apart.