Dan Rosensweig provides a textbook lesson in management–and that’s not hyperbole because he actually runs a textbook company. Rosensweig is president and CEO of Chegg, a textbook rental service for students. He previously practiced his management chops as CEO of Guitar Hero and chief operating officer at Yahoo! Based in Silicon Valley, Chegg has nearly 200 employees; the company does not disclose financials but TechCrunch estimated 2010 revenues at $130 million and Rosensweig calls that a conservative estimate. At Chegg (whose name derives from chicken and egg), he has tried to build a cohesive culture where managers set priorities and employees are empowered to execute. But that doesn’t mean he can’t learn a few lessons from Bruce Springsteen about being The Boss.
Kermit Pattison: When you started in management, what were some things that you thought would be important that turned out not to be so important?
Dan Rosensweig: When you’re young and just starting, you assume that the boss needs to be the smartest and most important person in the room. As you get more experienced and work for amazing people like I have, you realize that you don’t have to be the smartest person in the room. You have to be smart enough to figure out who is the smartest person on that subject and take greater counsel from them.
You learn that you don’t have to have an answer when you’re an executive. You have to learn to ask the right questions so that we can find the right answer. Not everything has an immediate answer, one correct answer or one way of doing anything. Rather, it’s a process of identifying what we’re trying to solve for and identifying what the real definition of success is.
I cannot tell you how many times as a young executive, people would sit in a room debating a point and when you stepped back it was insignificant. You had to win that argument to be seen as a leader–as opposed to arriving at the right conclusion with as little friction as possible.
You often repeat that question “what’s the problem we have to solve for?” Why is that so important?
If you don’t know what you’re solving for, then you spent a lot of time working on something and you don’t know if you ever get there. People get locked into small components of the debate and it takes unbelievable amount of time and sometimes it becomes highly personal.
I’ll give you a small example. When I was at Yahoo, people would come in and say, “Dan, we need to make the logo purple because it will make us look younger, hipper and cooler.” I said, “Okay, if we do that, what gets better for us as a business and service to our users?” There was no definition of success, so how do you know if changing it did anything for anybody? It was just an individual’s opinion. Without a desired outcome, how do you know if what you’re doing makes sense and if it’s big enough to matter?
To me, knowing what you’re solving for is always a North Star. Define what solving means–not prescribe how to solve it–put a lot of smart people on it and open yourself to lots and lots of creativity and new ideas. Any time you get into a debate, say, “Okay, but does that solve for this?” And if it doesn’t, stop talking about it.
What kinds of culture are you trying to build at Chegg and why?
I grew up on the East Coast and moved to Silicon Valley at 40 when I joined Yahoo! I got very intrigued by the cultural differences between the two coasts. When I moved to the Silicon Valley, it really became evident to me what a great culture you could build around a complete meritocracy. Anybody with a good idea who could convince somebody to back them has a chance to change the world. With that in mind, we began to think about the kind of values and cultures that we want to create. Some of them will seem like mom and apple pie, but we really try to live them
The most important thing for us is we want to have an environment of transparency and integrity. Rather than be prescriptive, be descriptive and let the individuals and groups figure out the best way to accomplish that.
You make a distinction between descriptive and prescriptive management. Do you see getting to much into prescriptive side as a common pitfall of managers?
I do. I used to be this way. It becomes obvious over the years when you watch other people accomplish things that there isn’t one way to do something. There are multiple ways to achieve the same end.
I can take a sports analogy. There are teams that win it with running, teams that win it with defense, teams that win it with passing, teams that win it with a system and teams that win it with individual efforts. There is not one way.
Terry Semel [former Yahoo CEO] was very clear. He’s said, “Look, your job is to make the right decision, not figure out the right way to do everything. Nobody has the ability to do that.” So get the best people on that subject and have them take you through the best ways to do it.
So how do you communicate priorities and hold yourselves accountable?
As I was coming up through the ranks, I learned that managers hold employees accountable–and they should and we do. But what do we hold them accountable to? Should we hold them accountable to the things we say we want to do but don’t actually prioritize? Most people want to go home at the end of every day and feel like they made a contribution towards the things that the company feels is most important. It’s hard to know that you’ve made any contribution if everything keeps changing all the time. We should be in a culture that can put together priorities. The way to do that is to be crystal clear to about what is important–and not have a company that lives every day in a fire drill.
We share the top 10 priorities so that employees know what they should be working on and what they shouldn’t. Employees have them posted on their desk and they set their goals around those priorities. We say to the employees, “If you are not working on one of these priorities, go see your manager because you should be.” Now, we don’t lock the priorities in for 12 months because we’re startup. We’re a growth company, so we lock them in by quarter. If we adjust the priorities, we can adjust people’s goals to match the new priorities.
It’s a way for employees to hold us accountable and for us to hold ourselves accountable. Frankly, it means much better execution.
What have you learned about how to effectively manage people who are smarter or know a lot more about the matter at hand than you do?
I’ve had many of them in my career, so I was forced to learn it. I have to have the confidence to turn to really talented people who do things very differently than me. You learn after a period of time that the group success is much more important than an individual. I recognize that anything I’ve achieved in my career has been a result of the working for or around some of the greatest people that I ever could meet. Over time, you realize there are only a few people that can do it all by themselves. To quote the great philosopher Clint Eastwood, “a man got to know his limitations.”
What do you look for when you interview job candidates?
I spend a lot of time interviewing them for the cultural fit because we like people to be happy here. I asked open-ended questions like, What makes you happy? How would define success for yourself? What kinds of things make you unhappy at work? How do you like to be managed? If you had my job, how would you run the company? What kind of people do you want to be surrounded by?
When I got here, 26 percent of the people hired were being let go very quickly, and now 11 months later, we have such teeny turnover. It’s because we’re helping people understand how to hire people better. We build an orientation program so people actually feel welcomed into the company and understand what success means at Chegg. The more we invest in our people, the more those people will invest in our customers.
Who’s the most influential person in your career and what did you learn from that person?
I’ve been married now, 22 years to the same woman. And I think her insight had been the best, which is be who you are, trust other people and be satisfied with the successes you’ve been able to create. You can get caught up in ego in lots of places in your career. Having somebody who’s your equal keep you honest is a very important thing.
You’re notorious for being a big Bruce Springsteen fan. What leadership lessons can we learn from The Boss?
The essence of Springsteen’s music is life is not easy, it’s not fair but you control your own destiny and no matter how difficult it is now, there is always hope. Just keep working, keep your head up, keep doing what you believe in, follow your passions, think about the greater good. No matter where you are today, there is a better place that you can get to. You’re actually in more control than most people are willing to step up and take control over. I always tell employees here “You’re in control of more of the things than you’re taking control over. Stop bitching and start fixing.”
There’s also his work ethic and commitment to his craft. Springsteen and his band mates assume that it’s for the audience and it ought to be fun and uplifting. If you ever see his concert, he tells you it’s a spiritual revival. As a fan, it feels like he comes into that arena recognizing that tonight is an important night to you and therefore it’s going to be the most important night to him. Just like we try to do here at Chegg–we never take the student for granted. We assume the student is right and not wrong if they have a problem. If it’s important to our employees, our investors, or, most importantly, our students, it compels us every day to work harder on their behalf. It doesn’t mean we always get it right but it means we always have a North Star to come back to.