"Some say that I'm they favorite
But I aint hearing none of that
I'm about my team ho
Young money running back"
"Stay in your place
While I sit here and rule
I'm king of a cow
And I'm king of a mule"
--Yertle the Turtle
In my last post, I mentioned that you should strive to hire people with the right kind of ambition. Surprisingly to me, I received a large number of responses from readers questioning whether or not this was good advice. Here's how one commenter phrased it:
I agree with much of this post but I disagree with the following:
"As defined by Andy Grove, the right kind of ambition is ambition for the company's success with the executive's own success only coming as a by-product of the company's victory."
That may have worked in the past but I believe today, the company's success and the executive's success should go hand in hand, not one coming as a by-product of the other, particularly as described above.
Curious why should an employee be motivated first by a company's success? Would this work in all departments--i.e. sales?
In addition to comments like the one above, my business partner Marc Andreessen suggested that I write a post on how to screen for the right kind of ambition. In response, this post aims to clarify why you should care about senior managers having the right kind of ambition and give some tips on how to screen for them in an interview.
Why should senior managers have the right kind of ambition?
At a macro level, a company will be most successful if the senior managers optimize for the company's success (think of this as a global optimization) as opposed to their own personal success (local optimization). No matter how well the CEO designs the personal incentive programs, they will never be perfect. In addition, career incentives like promotions and territory ownership fall outside the scope of bonus plans and other a priori management tools. In an equity-based compensation structure, optimizing for the company's success should yield better results for individuals as well. As my Opsware head of sales Mark Cranney used to say, "2% of 0 is 0."
It is particularly important that managers have the right kind of ambition, because anything else will be exceptionally de-motivating for their employees. As an employee, why would I want to work long hours to advance the career of my manager? If the manager cares about his career more than the company, then that's what I'd be doing. Nothing motivates a great employee more than a mission that's so important that it supersedes everyone's personal ambition. As a result, managers with the right kind of ambition tend to be radically more valuable than those with the wrong kind. For a complete explanation of the dangers of managers with the wrong kind of ambition, I strongly recommend Dr. Suess's management masterpiece Yertle the Turtle.
Screening for the right kind of ambition
As with any complex character trait, there is no way to perfectly screen for the right kind of ambition in an interview, but hopefully some of these thoughts will prove useful.
At a macro-level, everybody views the world through her own personal prism. When interviewing candidates, it's helpful to watch for small distinctions that indicate whether they view the world through the "me" prism or the "team" prism.
People who view the world through the me prism might describe a prior company's failure in an interview as follows: "My last job was my e-commerce play. I felt that it was important to round out my resume." Note the use of "my" to personalize the company in a way that it's unlikely that anyone else at the company would agree with. In fact, the other employees in the company might even be offended by this usage. People with the right kind of ambition would not likely use the word "play" to describe their effort to work as a team to build something substantial. Finally, people who use the "me" prism find it natural and obvious to speak in terms of "building out my resume" while people who use the "team" prism find such phrases to be somewhat uncomfortable and awkward, because they clearly indicate an individual goal which is separate from the team goal.
On the other hand, people who view the world purely through the team prism will very seldom use the words "I" or "me" even when answering questions about their accomplishments. Even in an interview, they will deflect credit to others on their previous team. They will tend to be far more interested in how your company will win than how they will be compensated or what their career path will be. When asked about a previously failed company, they will generally feel such great responsibility that they will describe in detail their own misjudgments and bad decisions.
When we hired the head of worldwide sales for Opsware, using this screen proved to be quite valuable. We interviewed over 20 candidates for the position before hiring the aforementioned Mark Cranney. Since this was a sales position, I should mention (in reference to the commenter above) that ambition for the company above ones own goals is particularly important for the head of sales. The reasons are many:
- The local incentives in sales are particularly strong and difficult to balance without the right kind of leadership
- The sales organization is the face of the company to the outside world. If that group optimizes for itself, your company will have a major problem
- In hi-tech companies, fraud generally starts in sales due to managers attempting to perfect the ultimate local optimization
Throughout our interview process, candidates would take sole credit for landing extremely large deals, achieving impressive goals, and generating company success. Invariably, the candidates who claimed the most credit for deals would have the most difficult time describing the details of how the deal was actually won and orchestrated. During reference checks, others involved in the deals would tell a much different story.
When I spoke to Mark, on the other hand, it was difficult to get him to discuss his personal accomplishments. In fact, some of the other interviewers felt that Mark was standoffish and even obnoxious in the way he bristled at certain questions. One interviewer complained: "Ben, I know that he increased the size of the Nike deal from $1M to $5M, because our contact at Nike told me that, but Mark wouldn't go into any detail on it." When I interviewed Mark, he really only wanted to discuss how his old company PTC won. He went into great detail about how his team diagnosed weaknesses vs. the competition and how he worked with the CTO Hugh Hempleman to advance the product. He then talked about how he worked with the CEO Dick Harrison to revise the way the sales force was trained and organized.
When the conversation turned to Opsware, Mark had already interviewed sales reps at our number 1 competitor's company and knew what deals they were in. He relentlessly questioned me on how we were going to win the deals that they were in and how we planned to get into the deals that we weren't in. He wanted to know the strengths and weaknesses of everyone else on the team. He wanted to know the game plan for winning. The topics of his potential compensation and career advancement didn't come up until the very end of the process. And then he only wanted assurances that compensation was performance and not politically based. It was clear that Mark was all about the team.
During Mark's tenure, sales increased more than tenfold and our market capitalization increased twentyfold. More to the point, voluntary attrition in the sales organization was extremely low, customers were managed fairly and honestly, and our legal and finance teams often commented that first and foremost, Mark protected the company.
While it may work to have individual employees who optimize for their own careers, counting on senior managers to do all the right things for all the wrong reasons is a dangerous idea.
Reprinted from Ben's Blog
Ben Horowitz is the cofounder and General Partner (along with Marc Andreessen) of the venture capital firm Andreessen Horowitz based in Menlo Park. Follow him at @bhorowitz, or get updates on his venture capital firm @a16z.