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“Always put people first.” With Charlie Katz & Drew Falkman

Always put people first. During the pandemic, we have seen how the people on the front lines — nurses, like doctors, Instacart shoppers, restaurant workers — are the ones who are taking the risk, and keeping their companies (as well as sick people) alive. Good cultures foster sacrifice, community and culture. No matter what industry, it […]

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Always put people first. During the pandemic, we have seen how the people on the front lines — nurses, like doctors, Instacart shoppers, restaurant workers — are the ones who are taking the risk, and keeping their companies (as well as sick people) alive. Good cultures foster sacrifice, community and culture. No matter what industry, it is the sales team, support team and those that deliver the goods and services who keep our reputation, feed up ideas to make things work better, and ultimately make our company successful or not — no amount of automation will change that. Foster gratitude, support risk, encourage community — people make or break companies.

Aspart of my series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times”, I had the pleasure of interviewing Drew Falkman.

Drew is an experienced leader in digital innovation and transformation. Drew founded his first web agency in 1995. He has been leading tech companies and innovation initiatives for companies like HP and Adobe, and has been advising and co-founding startups in media, commerce and even wine. Drew’s passion and work in product won him the Best Product Consultant in 2019 from The Product Group. Drew currently leads the strategy practice at Modus Create, a digital transformation agency that focuses on design thinking, lean innovation and agile development.

Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

Igraduated from the University of Wisconsin — Madison with a journalism degree, which was just about worthless at the time, as the web was just starting to take off. Out of curiosity, I taught myself HTML and Photoshop, and that was it for me — I knew this was going to change the world and I wanted to be a part of it. I started my own web agency, and soon joined teams with a couple other guys, we basically became the place to go with “dot-com” ideas in Portland, Oregon. There was nothing I loved more than starting with a blank slate and turning long-held industry assumptions upside-down.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

When you look back, you can really see how the Dunning-Kruger effect gets us all. This curve shows that as you start out on the learning curve, there is a point where you don’t know how much you really don’t know — and so you think you know it all, but then eventually learn that you don’t know %$#&. The stuff we used to do at Project Alpha was absolutely crazy from a business perspective. We would literally just copy-paste proposals into our contracts. This was before agile methodology, so it often had all kinds of scope listed and in flowery language. Of course, we ended up taking a serious bath on some projects, averaging something like $8/hr for our work. It wasn’t funny then when I was working long weekends and 12-hour days. But funny to look back at now.

Of course, there are the ridiculous sites I designed in the early days: really bad GIF animations of ducks, scrolling marquees — just the whole gamut of awful user experience…

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

You know, I hear all these great stories about people who have had amazing mentors, but that just never happened to me. I certainly learned some anti-patterns about leadership from some people whose names I won’t mention. To a certain extent and only recently in my long career, Pat Sheridan, the co-founder of Modus Create, has really helped me have a greater understanding of the mechanics of growing a company from a strategic perspective. Working for Modus, where I am now, is the first time I have ever worked for anyone else, and we are growing so quickly — and he’s really helped me to understand the importance that culture has on growth, and, more specifically, how you can create and perpetuate a culture of quality — even with a fully remote company like Modus.

Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?

At Modus, where I run our strategy consulting practice and oversee our product and UX teams, we really focus on being a platform for everyone who works for us. Modus was modeled after open source projects with distributed teams who all had a passion to make stuff. So, with Modus, this passion extends into everything we do here and we have ended up with this amazingly diverse team of people who all just love to make things — and we help each other to get better in the process. I can’t take credit for starting that — that’s up to Pat and Jay, the co-founders — but I do everything I can to foment and scale it as we grow in leaps and bounds.

Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?

Anyone who has worked on a startup is familiar with uncertainty — you never know when you will need to pivot or if you will make it to the next round of funding. I think one of the most difficult periods I went through was when our web agency moved from a consulting company to a venture-backed product company. Everyone was uncertain about everything, our product, what to do with our existing clients, funding, even who would stay on with coming rounds of funding — but here’s the funny thing about uncertainty: when it is perceived as negative it causes stress, but if it is perceived as positive people will choose it over certainty — and it can even be a motivating force. So really, leading in this way is about reminding everyone of the exciting possibilities, and in our case, this was the fun ride we were going to have building this product and all the cash and glory we would have. And we had an extremely engaged team in spite of the fact no one knew what was going to happen from week-to-week. (Spoiler: turns out glory was NOT our destiny in that go around.)

Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?

Yeah, after that product initiative failed, I was really disheartened. The worst part was that it didn’t fail through my own doing — our existing CEO, who was going to exit, blew up the relationship with our VC and they pulled our funding. I was enraged because we had personal guarantees on maxed-out lines of credit and loans from our service company days, so not only did this mean that we were done, this meant I was going to have a financial battle personally. All because of someone else. I really lost faith in other people. I ended up going out on my own, which worked for me, and was able to make more money and have more time. Time that I used to focus on non-technical things — of which starting a winery became a chief concern for a couple years. It was exciting to take my passion for building companies from scratch to something completely different from web startups. The contrast of hosing grape skins off a bladder press in the cold Oregon rain (we wore a wetsuit because it was so cold and wet) compared to sitting in front of a workstation all day really helped shift my perspective.

What would you say is the most critical role of a leader during challenging times?

One of the amazing things about consulting — and how this makes me a better entrepreneur — is that I get to see what happens in all kinds of organizations. And by the nature of the work, things are usually not working when I get there, though there is usually something they are doing right. Patterns invariable emerge. There are two key things I’ve found in good leaders and absent in dysfunctional ones:

  1. Always reminding your team of the opportunity and the possibility that uncertainty brings. You can’t have innovation without uncertainty, they go hand-in-hand. This means that good leaders have to cultivate a comfortability with ambiguity and uncertainty.
  2. Leaders need to be communicative. There is nothing worse than being on a team in a uncertain times and feel like your boss or the CEO is hiding things from you. This just creates stress, anticipation and fear. And none of those things boost morale or inspire teams. Being honest about revenue and plans is way more important in these times than waiting for things to be fully baked.

When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?

There are different types of uncertainty. With this pandemic, we have to handle things extra carefully. We have to be sympathetic to the fact that everyone has a lot going on: often, kids are doing school at home where we are also working, spouses may have lost their work, we are worried about our parents, the list goes on. These are not normal times. The best thing we can do is give people the freedom to not have to hide this but embrace that we are all going through this, and on top of that, we can provide and outlet to be inspired in our work and provide opportunities for them to innovate, try new things, or do their jobs better. I know for me I look forward to logging on to my work — it is something I can focus on and I can feel like I’m still growing even though the world around me is (literally in California) bursting into flames.

What is the best way to communicate difficult news to one’s team and customers?

Being honest and transparent is always a good policy with these hard things — this is not the time to show your strength by putting on a front, people want to see you are affected by this, so showing some emotion is a good thing. I think a lot of the reason Trump has received a bad reaction about the pandemic is because he never shows any emotion around it. If he were to simply show the nation that he is mourning for these deaths and that he is sad, I think people would forgive him. I realize these kinds of political analogies are difficult in these divided times, but it illustrates this well.

How can a leader make plans when the future is so unpredictable?

In my experience, making plans in uncertainty is really at the heart of “digital transformation”, pandemic or not. People tend to get hung up on automation and new technology, but the reality is that because of technology, environmental change, regulations and more, the future is less predictable — even without COVID-19. And here is where less agile corporations can learn from startups. Always be testing new ideas in the marketplace. Don’t invest hugely in new initiatives until you have validated the ROI or at least potential. Projects should be on an iterative cycle where you experiment, test, then review and refine. Just make sure to give them long enough and execute them well enough to get an accurate test.

Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?

Embrace uncertainty. In today’s VUCA (Volatile, Uncertain, Chaotic and Ambiguous) world things often change quickly. This pandemic has taught us all that major change can happen out of nowhere. The key is to embrace that and learn to welcome it — it is in this VUCA environment that the Apple’s and Googles and Amazons of tomorrow are born.

Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?

  1. Being indecisive. Not doing anything is making a choice, and in many ways will make the future choices harder and bigger.
  2. Getting sucked into tactical. Too many organizations don’t value strategy and resort to it only in slow times and in emergencies. Someone needs to be thinking ahead and the higher up the chain of command, the farther out the horizon they should be looking.
  3. Being closed to radical ideas. In times like these, anything goes. Solicit opinions from everyone — we all see different aspects of the company and know the customers in different ways. Then take the ideas that float to the top and investigate so you find the great ideas that hide behind the good ones.
  4. Not defining OKRs. Goals are great. Even better are OKRs: Objectives and Key Results — the objectives are key business drivers, the the key results are the measurable actions of team members. Using OKRs ensures everyone is moving in the right direction *provided you have done the strategy to be clear on goals (see above).

Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?

Modus has seen tremendous growth this year and that is because we went back to the basics. We recognized what our key value was: delivering outcomes on every project through good people, and then nurturing our relationships for more work. We doubled down on that — by re-focusing on delivery, spending the time to talk about it, and re-connecting with our networks and our clients. Going back to your core values is never a bad idea. It will help you better see wasted spending as well as where you have strayed.

Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.

  1. Remember that uncertainty is a superpower. I recently had a conversation with James Mayes who is the CEO of Mind The Product (mindtheproduct.com), probably the largest and most active events organization for product managers. They made virtually all of the income from conferences — conferences that couldn’t be held during a pandemic. They pivoted to a subscription content model and are almost back to full strength — and when they can have events again, they will be even stronger due to this.They leaned into the uncertainty, looked for new opportunity and emerged stronger.
  2. Always put people first. During the pandemic, we have seen how the people on the front lines — nurses, like doctors, Instacart shoppers, restaurant workers — are the ones who are taking the risk, and keeping their companies (as well as sick people) alive. Good cultures foster sacrifice, community and culture. No matter what industry, it is the sales team, support team and those that deliver the goods and services who keep our reputation, feed up ideas to make things work better, and ultimately make our company successful or not — no amount of automation will change that. Foster gratitude, support risk, encourage community — people make or break companies.
  3. Experiment. AARP is a good client of Modus Create, and they are well down the path of digital transformation. For one digital initiative, they wanted to create something to help people struggling financially not just in their demographic (50+), but down to ages 40+. To their credit, they were open to experimentation: trying radical ideas, testing things with users, and putting out a minimal product to see how it would work in the marketplace. This has paid off. They have now helped thousands of people in financial predicaments at https://moneymap.aarp.org.
  4. Measure and learn. Testing new ideas is great but you need to be able to know what is and isn’t working — and to do that it requires data and analytics. You analyze the data, then you decide: pivot or persevere. You learn and you proceed to the next step. One of our clients in the education space thought this was a good time to test a community feature in their application — so they built it, and now they are tracking the analytics to decide if this is an initiative that works and makes things better. They set clear goals in terms of what they want to see — and now they watch and decide.
  5. Act fast. The difference between acting in March and acting in June this year was massive. Companies that saw things shifting and furloughed their employees — as difficult a decision as that was — were likely able to figure out new revenue models, or new ways to move forward. Those that didn’t faced layoffs and worse. Acting quickly and being decisive gives you more options. You can’t see the future, but you still have to make hard choices. It’s always a risk, but if you are open and transparent, people understand.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Don’t spend time beating on a wall, hoping to transform it into a door.” — Coco Chanel. I honestly don’t know much about Coco Chanel beyond this quote, but things are what they are — it is important to embrace that. I think probably the biggest mistake I made career-wise was pivoting from a service company to a product company. That’s not to say that I couldn’t have built the product company, but changing that company required a lot of energy, a lot of wasted momentum and in the end didn’t work. Know what you do and do it well.

How can our readers further follow your work?

I do a lot of writing, webinars and have a book in the works on this topic. I share all this stuff on twitter @drewfalkman and have an active presence on LinkedIn.

Thank you so much for sharing these important insights. We wish you continued success and good health!

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