The Potential of Those Around Us
Carly Fiorina is out with a new book and I heard her say something like this during an interview. This is a grand statement that is intended to be very positive. I know how to draw conclusion about my potential, but for those around me the best I can do is assume the best. The question is whether that is a wise thing to do or a not.
I certainly don’t like to assume the worst of people. Many people think it is smart to do that since it tends to prevent you from being disappointed or from heading off in directions that are ill-considered. I think you never get to see the best of people when you assume the worst. Few can break through that barrier of negativism. If you support people and give them a chance to find their groove, you have the opportunity to find some amazing abilities that often lie hidden deep within. The risk is that lazy and under-achieving people tend to coast along longer and waste more time and money. That certainly does happen. One risks being charged to be a person who thinks they can turn dross into gold. By the way, dross means rubbish and turning rubbish into gold seems like a very modern recycling-like thing to do.
The question really becomes whether we can afford to be so selective as to discard many with potential in favor of avoiding those without potential. If we had a vast array of talent available to us, that might be a perfectly fine modus operandi. But talent is quickly becoming the shortest supply commodity in the world. Indeed, it is less a commodity and more a scarce resource. Human resources are the only answer we have to a quickly changing and perhaps deteriorating world. It is that very human resource that gives us the innovation and potential to overcome the problems of the day. And God knows we do not lack for problems to solve.
My venture capital mentor would always say that the only thing that matters in picking a successful venture investment is the people. Ideas are sterile in the absence of strong people that can execute on them. Money is wasted if not entrusted to people with the drive and vision to get somewhere good. Throw any good idea and a few bucks at the right person and voila!
In some ways there are three types of optimism: the optimism that money can be found, the optimism that an idea has potential and the optimism that one can extract potential from people that may or may not possess it. If I were ranking those risks I would place the highest risk value on ideas. There are simply so many ideas in the world. They are limitless because they are intangible and they are even more limitless (is that even possible?) because they are ephemeral or fleeting.
That very fleeting nature makes them even riskier because a good idea in one moment is not necessarily a good idea in another moment. Things happen, competitors enter, competing ideas prevail and circumstances change. Optimism about funding is the next riskiest because macroeconomic events can alter the funding capability of venture investing in a heartbeat. Since venture investing lays at the riskiest end of the investment spectrum, as soon as uncertainty enters the mindset, horns get pulled in and venture money dries up. Even good ideas and good people find funding difficult at breathlessly inconvenient and often random times.
But people are always there but always in short supply with the “right stuff.” They are the least risky component while being the most critical component of the venture equation. They are most critical and rare because so few people have the opportunity to realize on their potential. It is the classic case that you need experience to gain experience. You need success to be given the opportunity to succeed. That lack of benefit of the doubt makes the scarcity that much more acute.
The rarest and most important quality is the managerial ability to not just spot and engage talent, but the willingness and belief to allow talent to emerge from people. Talent is like a hidden little chipmunk inside of many people. It needs to be coaxed out with patience and belief. It also needs the flexibility to take on a wider range of attributes than we normally see in a standard job description.
Seeing the potential in those around us is not the same as extracting the potential from those around us. It is true that seeing the potential is a non-trivial trait, without which there is little potential for getting at the potential. The real trick, however, is knowing how to allow people the confidence to play out their potential and then knowing how best to organize that potential into a cohesive and collective operation that brings the idea and mission to fruition.
When I think about the people I have worked with in the start-up world I tend to put them in two major buckets. There are those that are good journeymen who have skills that can do the basic wrenching to get a job done. They tend to be technical skills that range from computer programming to engineering to financial modeling. Those are critical skills and they are sometimes obvious and on the surface but there is a difference between mundane wrenching skills and inspired wrenching skills. It would be a mistake to assume that just any old technical skills can make do. The more disruptive and transformative the task or mission, the more you need the inspired sort of skills. Those tend to be more hidden and require more coaxing to bring out. The key to this process, as strange as it may seem, is probably to encourage people to make mistakes. Failure is what leads to disruptive success more often than not and failure is not something most people think is acceptable in their work. Thus, in a strange way, encouraging failure may be a critical managerial trait.
The other type of person is the visionary that can conceive of business models that don’t exist and can convince others that such a business model is possible. This skill is less technical and far more creative. The managerial trait that encourages this skill is that ill-fated dreamer instinct that everyone likes to dread. Believing in the possibilities is hard to do. It is even harder if there have been a few set-backs. Nonetheless, unflinching belief is necessary for any great new business model to emerge. The trait that makes this work is more often persistence.
So, encouragement of failure and persistence of belief sounds to many like a recipe for disaster. But here’s the thing, the potential around us may be the only thing that our species has in its favor as time moves on. That potential is what will overcome the inexorable centripetal force that makes species implode eventually due to slowed growth and expanded mass (population). To counteract it one must apply the centrifugal force of trying what has not been tried before. In physics, it is the balance that these two forces exert on one another that keeps a body in orbit and prevents implosion and explosion. The potential of those around us is what keeps us from becoming the next black hole in space.