Walt Roloson

June 15, 2014 at 12:12pm

External factors to becoming a great operator

A lot of leadership and professional discussion deals with what a person has to do. It’s like an extension of the self help literature. It focuses on what we can control directly through our actions.

I’ll readily argue that there isn’t enough conversation about the external factors that are necessary for leadership and greatness to develop.

Without the right environment, the leader can’t grow into his or her potential. No amount of personal action can overcome the limiting factors of one’s position in the world.

In fact, if one inverts this idea, I think it’s quite possible that great operators are made without any proactive focus by the individual. One can become a great - despite not desiring it - by being exposed to the three factors below.

I think the three most important exogenous factors are:

  1. A high growth company (or organization of any sort)
  2. Mentors
  3. A resource-rich role

Growth

Regarding a high growth company, a leader needs to be given opportunity early. He or she can’t wait for their promotion to come when their boss retires or moves on. You need an opportunity where the company grows beneath you. If you have to work you way up a company to get leadership opportunities, you’ll be too old by the time you’ve had the necessary experiences. High growth environments can multiple the rate of one’s development.

Since most jobs aren’t in high growth environments, most people never have the opportunity to reach their potential.

Mentors

The importance of having mentors is simple. One can’t spend their career reinventing the wheel. Instead of spending your day solving a problem that others already know, you get to be at the frontier of thought and innovation. It shortcuts your learning process. This often means that you need to be exposed to people who have already had #1, #2, and #3. This might be the most rare variable in the equation of becoming a great operator.

Resources

A “resource-rich role” is potentially the least discussed factor. There are plenty of blog posts about working at high growth companies - eg, ¬†Eric Schmidt’s “find a rocket ship” advice to Sheryl Sandberg. And, I wouldn’t be surprised if mentorship institutions are intrinsic to civilization. But, the idea of focusing on a resource-rich role seems to be less appreciated.¬†

In a high margin business, one can invest in ideas and make mistakes that a lower margin business could not stomach. At a big hedge fund, you can spend tens of thousands of dollars surveying the market for an idea that never receives investment. Or, in a high margin business like LinkedIn, the business can support an unusually large team of analysts and an unusually large data infrastructure to derive insights. From surveying friends, I don’t see this sort of analytical horsepower in other industries.

Resource-rich businesses also let you explore more ideas. You can easily justify investing in an initiative that only generates $1M in revenue if that revenue has a 90% gross margin. That means you can explore and derive more insights across a much larger team - a team that you help grow.

Additionally, data-based internet businesses and market-based investing offer real time insights and feedback. An analyst can be getting weekly insights that might take a retail business months to develop.

This all reminds me somewhat of the Lean Startup’s “innovation accounting”. How does one measure the relative amount of insights between roles? It’s very real yet certainly more qualitative.

Hindsight

Reflecting up on this personally, I was incredibly lucky to ride the financial bubble and web 2.0 wave. At a macro level, those were the single highest growth trends of those time periods.

In terms of mentors, LinkedIn pre-IPO had some amazing product leadership and an amazing CEO, and they accelerated my learning and insights. They had learned the ropes by rising through the ranks of web 1.0 companies.

And similarly, an analyst at a mega hedge fund and a biz ops manager at LinkedIn both represent the utmost limits of resource rich roles. They were both incredibly high margin businesses (ie, high ROI on time) with teams of researchers and analysts to help squeeze the juiciest of insights.

If you’re looking to reach your potential, I’d heartily suggest ensuring you’re given growth, mentors, and resources.

PS, I don’t intend to blog regularly. This is an often-repeated discussion of mine. And, it felt worth documenting after a recent rehash with a friend.

May 15, 2014 at 4:52pm

Experiment Engine Test

April 27, 2014 at 8:40pm

August 20, 2013 at 11:45am

Mike Moritz’s Investing Rules

  1. Avoid capital-intensive businesses
  2. Take measured steps
  3. Never underestimate the difficulty of changing consumer behavior
  4. Don’t begin a rollout until you’re sure the recipe is working
  5. Any business Wall Street is prepared to throw hundreds of millions of dollars at is not one we should be in

http://money.cnn.com/magazines/fortune/fortune_archive/2004/05/03/368560/

February 27, 2012 at 12:06pm
The economics of Storage, Processing, and Networks over time

The economics of Storage, Processing, and Networks over time

February 25, 2012 at 8:06pm

Worth Reading Once a Year

[Still in progress]

Yes, they’re that good

  1. How to Win Friends …
  2. Getting Things Done
  3. 7 Habits…
  4. Power: Why Some People Have It…
  5. Never Eat Alone - The modern “How to win friends…”
  6. Lean Startup…
  7. Warren Buffett and Charlie Munger’s essays on investing
  8. Paul Graham’s essays on startups
  9. Jeff Bezos letter in Amazon’s annual reports

7:45pm
Think about it

Think about it