New School Management

By Wade Lee Hudson

When it comes to understanding Wall Street, my favorite blog is The Baseline Scenario by Simon Johnson and James Kwak. When they recommend something, I usually check it out.

One reason I like their blog is that they sometimes go far afield to look at an issue from a fresh perspective. Like Kwak did when he posted “Gut Instinct Doesn’t Matter.”  and commented:

I’m no fan of the genre of CEO interviews published in the Sunday Times. But this past Sunday’s CEO-of-the-week column featured Marcus Ryu, a good friend and someone I’ve worked with at three different companies. 

Marcus is not only very smart and someone who really knows what it’s like to build a company from the ground up, but he’s also someone who has thought very hard about what it takes to succeed as a company and what a company needs in its CEO. Unlike many CEOs, he doesn’t believe in gut instinct or the magical ability to judge character. He believes that success in business is hard and, as I’ve heard him say many times, there never is a day when suddenly everything becomes easy. If you are or want to be a CEO someday, I recommend it.

I don’t want to be a CEO, but I have been very interested in “democratic management” for a long time. If those of us who want to foster lasting social change are to become more effective, we need to improve how we relate to one another. So I clicked on the link.

When I saw the title of the interview is “Finding Purpose in Tunneling Through Granite,”  I knew I wanted to read it. Deep into my second reading of The Myth of Sisyphus by Albert Camus, I relate to the ideal of pushing the boulder up the hill repeatedly with a smile of my face
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But little did I know that I would discover some new gems of remarkably eloquent inspiration.

Ryu, a maker of software for the insurance industry, says, “We wanted to create an enduring business with a very strong set of values. We chose integrity, rationality and collegiality.”

That got my full attention. A unique and powerful blend of core values, somewhat similar to the three that I’ve defined as the foundation of my worldview: compassion, humility, and collaboration.

Rya said, “Integrity is: simply tell the truth….  There’s never any ambiguity. We’re either going to win honestly or we’re going to not win at all, and that’s the way it’s going to be.”

In a world that is filled with lies, misleading information, and people who are afraid (often with good reason) to be honest, it’s heartening to see this affirmation in the Times. Fortunately, young people seem to be more transparent these days. A hopeful sign.

Ryu’s second key value is rationality. He wants to “make decisions based on facts and logic.” Given that commitment, “titles don’t matter, and gut instinct doesn’t matter. Even experience is of very limited value. The facts have to speak.” Consequently, one of his “mantras” is “no wishful thinking.”

As one who has only recently acknowledged my tendency toward wishful thinking, or relating to illusions, I was encouraged by Ryu’s mantra.

Ryu’s third value is “collegiality, which means minimum hierarchy.” He says, “We’re going to create a community of equal professionals.”

Wow! This is not the corporate world I know.

The history of Ryu’s latest company, Guidewire Software, is also interesting. He says that the six founders “spent the first week just pondering these longer-term questions. We said we have to consecrate our principles in a document that we will refer to over and over.”

This report also resonated with my own conclusion that it’s important for collaborators to really discuss and agree on core values, and put that agreement in writing! Just like marriage vows. Or the creed for a spiritual community.

In the past, I’ve moved too quickly and assumed common ground without first having a full discussion and reaching an explicit commitment. Never again.

My bond with Ryu deepened when he said:

The thing I most dislike in an employee is two-facedness, where they manage up in a very diplomatic and collegial fashion, but they’re a tyrant down. That’s a very common duality that you see in the business world, and it’s pernicious because you may not realize the problem for a long time. One of the great dangers for people in my kind of role is that people are always so deferential to you. They’re always so solicitous and careful about your needs that you may get the false impression that this is just the way they are, when in fact they may be just doing that only in this very narrow context, and they are different elsewhere.

Hypocrisy is hard to handle. As is being deferential to some and domineering toward others. Unfortunately, these characteristics are common in our society. If we are to grow compassionate communities that can make lasting change, we must overcome these tendencies.

Ryu’s comments on how he facilitates meetings are also interesting. He says:

We have people make a commitment to their colleagues by saying, ‘In the next day, I will achieve this.’ That is all the motivation you need. You don’t actually need any other kind of managerial layer on top of that. Just the simple fact that I have spoken in front of my colleagues and said I was going to do something, and then the next day I’m going to have to come back and say whether it was done or not, is all the enforcement and motivation you need…. 

There’s just an implicit pressure that you have to say something reasonably ambitious and substantial…. It’s just another example of trying to maximize the transparency and use this incredible power of a combination of self-imposed and peer pressure. If you have the right people, it’s actually infinitely more powerful than a command or a dictate.

The concept of a combination of self-imposed and peer pressure was new to me. It seems that with a good balance, the two can reinforce each other in an upward spiral. Another example of balance!

And no more will I be reluctant, or forget, to ask for a review of individual commitments at the end of meetings. Accountability is critical.

When asked “Do you have certain expressions you repeat often?” Ryu answers:

Another is this idea of embracing adversity. It’s been very hard to get here, and we should take pleasure in how hard it has been…. My expression for it is “tunneling through granite.” I say that we have tunneled through granite to get to this point, and there’s an infinite amount of granite left. We’ll never get through it all. So you have to decide: do you actually enjoy tunneling and want to be part of this, because I’ve got nothing to promise you besides an infinite amount more of granite. People have said it’s a little gloomy. It’s like you’re just saying it’s nothing but blood, sweat and tears forever, for all of eternity. And so I’ve tried to lighten up about that.

Well, yes. Lighten up. Keep that smile on your face. Don’t forget to love the universe. But face the facts nevertheless. Progress is never-ending and it requires discipline.

Ryu then makes it clear that he keeps his rationality in balance too. He says he has “a lot of faith in the power of words and the power of ideas.” But at the same time, “Rationality plays a very limited role in persuasion, [which is] mostly about emotion. It’s mostly about empathy, authenticity and commitment. These kinds of things are what persuade and it’s the reason that people make big decisions.”

Closing the interview, Ryu says:

One of the main things people want to hear from their leaders is optimism about the future. They want to hear truth, but when you’re talking about the future, they want to hear optimism, like: “I stand before you. I’m here for the duration. We’ve got some challenges. We’re equal to them. Nothing we have to do is harder than what we’ve had to do to get here. And we’re going to join arms and be shoulder-to-shoulder and we’re going to succeed as we never have before.” And that, in some form, is the message that you have to give every time.

Yes, we are going to succeed as we never have before. It may be slow and bit by bit. Or it may be sudden and dramatic. No one knows. All we can do is to keep on pushing and spread contagious happiness.

I’ve long had many problems with corporate America. But in recent years, I’ve discovered that the corporate world can be a source of valuable information. That was the case with this wonderful interview. I picked up on one or two new concepts, but its main value is that it reinforces the direction I’m headed. And it reassures me that I am not alone.