Business
This series is all about making things easier for ourselves. I’m going to make the non-controversial case that collaborating with others is a great way to do this. Then I’ll talk about some tactics that can help us perform better. First, let’s take a page out of Charlie Munger’s book and approach the problem backwards. Let’s look at the opposite of working together—isolation. This is particularly relevant during COVID-19. A quick google search for solitary confinement will show the effects of being alone. Yes—this is a very specific population, and some of the more vivid examples might not be relevant for most of us. But there are some important takeaways. https://www.psychologytoday.com/us/blog/brain-chemistry/201902/the-effects-solitary-confinement-the-brain In Psychology Today, Elena Blanco Suarez, a biochemistry PhD, reported that “solitary confinement as a punishment is closer to a form of torture, with serious consequences for neurological health.” The brain literally changes, with the zones that contribute to learning, memory, and spatial awareness shrinking and those that contribute to fear and anxiety growing. I’ve even seen a TED talk by Johann Hari (link https://www.ted.com/talks/johann_hari_everything_you_think_you_know_about_addiction_is_wrong/transcript?language=en in the show notes) about how the famous rats on heroin model doesn’t result in overdose when the rats have other rat friends, food, and fun things to do. As the saying goes, no man is an island! From an economic viewpoint, isolation also hurts us. If Dan can sew and cook better than Tim, Dan can still benefit from trading with Tim because Dan is likely to be “better-er,” so to speak, at one of the two activities. So the opportunity cost drives a collaboration benefit. This isn’t groundbreaking—the overwhelming majority of people benefit from trade. Virtually no one produces even her own food and shelter. Doing this would require massive downgrades in both. We’re a society of middle-men, and I don’t say that pejoratively—we’re benefitting from comparative advantage, and it’s completely natural and logical. Everyone has a boss, even if it’s ultimately the consumer of our products, even if we live off investment earnings, we’re ultimately beholden to the people who buy our investments’ products and services. We’re all in this together. So now let’s talk about how we can be together better. Co-Founders Paul Graham of Y Combinator notes that startups that work tend to have multiple co-founders. There are tons of reasons why. As Calvin Hawkes mentioned in our interview, a big role of the co-founding team is to be emotionally strong when the other co-founder is struggling. As you increase the number of engines on an airplane, you reduce the likelihood that they all fail. On top of that, there’s a wide spectrum of skills required to nail product development and marketing of products and services, and any one person is unlikely to have an expertise in all the skills. And there’s virtually no chance that there wouldn’t be comparative advantage stemming from opportunity cost (remember—there’s a cost associated with doing what you’re not “better-er” at). Corporate Boards Another feature of the startup ecosystem is the board of directors. Mature companies also feature corporate boards, but I’d argue that their impact is relatively muted when compared to the green-ness you’d see in startups and the siloed nature of the co-founders’ experience. The C-Suite exists to manage the day-to-day operations of the company, and the board of directors exists to manage and counsel the company’s managers on behalf of the company’s owners (shareholders). The best corporate board members provide incisive, experienced, and nuanced takes on complex, critical issues. For up-and-coming companies, board members offer a fresh perspective from a different background that is grounded in years of experience. To me, this sounds a lot like mentorship, and I think many startup co-founders would agree. Why Should You Care? There’s a possibility that I’m living in a bubble, but I think most people are lucky to have even one lifelong mentor. This is a far cry from accepted best practices in the startup ecosystem, and I think it’s a screaming opportunity for us to improve our internal processes by leaps and bounds. Each of us is the CEO of our own life. Those in the know recommend building a co-founding team and a strong board of directors. We should follow suit—here’s how: Think about the advisors you need (based on weaknesses and blind spots) Populate your advisory board Real contacts (consider teachers, coaches, parents, bosses, friends, and family members) Your favorite in-thinkers (dead or alive) Your favorite cross-functional thinkers (dead or alive) Invite them (in real life or virtually) Build your process Choose a reporting period (weekly, monthly, quarterly) Choose a reporting template (more frequent = shorter report, aim for 1 page) Divide the page into Past Performance KPIs, MD&A, Future Objectives, and Open Questions Iterate Periodically write the report Distribute it to real-life contacts & record the feedback Imagine what your non-contacts would say to you & record the feedback The questions of the week: Who do you want on your team? What processes can you build to improve your results? So that does it for this episode. I hope it shows some threads to pull. If you’re interested in show notes or supporting the podcast, check out strategychainpodcast.com. If you want to get in touch with me, you can find me on social media @strategychain. So until next time—thank you. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)