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How one company burns fast and what we can learn from it.
Welcome to People vs Algorithms #75.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses.
Sometimes it’s nice to read in the browser.
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More than a hacker ethos
I’ve been thinking about a company I’m involved with. Its a digital media company of sorts. One with stellar performance. There’s something special about it. While its name is not important, many of the principles by which it operates are.
I call it a High Metabolism company.
This company is not remarkable in the way we might think of classically well run companies. In fact, one might consider it a little sloppy and undisciplined.
Meetings lack structure. Reporting lines are often blurred. Its HR and financial processes are immature. Formalized company communications are shabby. Recruiting is fast and highly opportunistic. Its operations are entirely virtual. The tools on which it manages itself are pretty standard, Slack and the Google Suite and standard dev tools. It doesn’t talk about itself much.
Amid a very difficult macro backdrop across almost all media, this company is fast growing, taking share and nicely profitable. Why?
Superficially, I might chalk its success up to its deep hacker ethos, a shared spirit of finding a solution to a business problem, by any means necessary, as the highest order value in the company. It has this. It comes from the top and is undoubtedly effective. But there’s something more.
I wanted to put my finger on other lessons, mostly to apply them to a second digital media company that I have been looking at that which, in stark contrast, is faltering badly.
In comparing the two, my mind kept returning to the idea of metabolism. The first is what I think of as High Metabolism, the second is not. How might we go from one to another?
What makes a company burn?
High Metabolism refers to a state where the body is burning calories at a faster rate than is typical. The same idea holds in a company. In my estimation, a High Metabolism company looks something like this:
Which I suppose places my observations in the realm of the “Lean Startup”, a book I have never read but I asked ChatGPT about it and it responded with good, sensible ideas like rapid “build-measure-learn” cycles, “minimum viable products”, decisive pivots and so on. All relevant to what I was observing so… yes.
“Lean” principles apply to everybody. All businesses are a collection of distinct value chains, some nascent, some raising or falling, others mature and profitable. Managing growth and change amounts to the orchestral coordination of a unique collection these customer-connected processes usually inside of matrixed supporting structures.
As an aside, the hardest thing to manage in a legacy company is the peaceful coexistence of the old and new. This is especially true in media, where navigating the cultural clash between old and new can create massive tension. The new needs the old’s systems, distribution and cash flow but without legacy encumbrances. The old wants to preserve relevance.
I thought about the idea of metabolism a bit more. Was there something interesting here? How might I apply lessons from the High Metabolism company to the older Low Metabolism turn around? Could I develop something of a playbook?
Again, a company is just an amalgamation of people of processes designed to create value for a customer. Breaking the business down into these pieces of singular input / output creates necessary clarity, manifested as discrete teams of people working against a clear set of customer and financial metrics. The clearer, the more transparent, the more accountable the connection, the better. Bringing this mindset to a change agenda is a good way to think about breaking down the problem.
This particular fast growing company I admire seems to do this naturally. But all good businesses should. So, duh…right?
A few other observations struck me as useful:
It moves alarmingly fast to capture an opportunity. It doesn't get lost in endless analysis cycles. It’s just more effective at turning a business development opportunity into product and then money because it always sees new opportunities on a achievable-possibility-frontier, the pursuit a short-cycle effort from which to validate their potential;
It is extremely open minded about adding new opportunities to the top of the funnel, so much so that it can feel reckless at times. It always has multiple prototype initiatives in play and is constantly engaged in a dialog about where the next innovation opportunity will emerge;
It uses less time, energy and people than most. Why? Because everyone up to the CEO always gets their hands dirty. Action is the culture;
Monetization aligns with content creation in a clear, singular way. I’ve written about having clear “majors and minors” in media before. This company is clear about its major;
It takes the energy from yesterday’s wins and turns it to new muscle by aggressively adding people with new skill sets, experiences and competencies. The company is completely undeterred by what it does not know and is always looking for new people who bring new tricks;
It does these things in the course of everyday business. The behavior is reinforced by a leader who constantly pushes simple alignment to short term goals, short-cycle innovation and no-bullshit, measurable progress;
When the process above risks missing expectations, it addresses the issue immediately. It’s goals are often hugely ambitious and sometimes naive, but it is unashamed of the misses;
It pays people well. Especially killers that run profitable things.
A few other characteristics worth noting that drive the business daily, some-counter intuitive:
Hierarchies to special ops teams
The idea is pretty simple. If you want speed and results you need an empowered group of people tied to a clear outcome. I think of these as special ops. Many of these teams can sit side by side as long as remits and targets are clear. Enabling teams (like a product or editorial org) may need to provide horizontal competencies and prioritize them across the org. This can create tension and in some cases you will need to fragment efforts to support the specific needs of a team. This is ok. A little tension is fine.
Your special ops team needs the obvious… a leader, ownership of customer need and distribution channel, dedicated functional support, constant feedback and an ability to iterate.
Break your org down into groups with these characteristics. Define and divide the company in High Metabolism teams with clear connection to customer value.
Short-termism has a bad name. It’s part of this company’s DNA. Sometimes its a weakness but more often than not, they turn short-term thinking into long term advantage. Figuring out the best way to do this is ultimately the job of the CEO. I consider short-term-ism a virtue particularly in digital realms where responsiveness aligns activity with data in ways that make even imperfect efforts a rich source of insight. Obviously this is not the case if you are building the next iPhone.
But, it's been my observation that detailed product roadmaps are mostly bullshit. You almost always have to be thinking about 8-12 week development cycles to get a test in market. In many cases less. Roadmaps should be evaluated on very short run impact versus an illusory “platform” promise. This is a sickness in many product orgs, particularly in media.
Embrace non-core competencies
Challenge your ideas of core competencies, particularly when they limit growth. This thinking is profoundly needed inside media now, where resistance to change is not an option. The media company half-life has never been shorter.
Say you are a old fashioned media company, and you see opportunity in developing a tangential leads, vertical, commerce, product or event competency. It’s pretty easy to say we don’t do that. Resist.
Hire someone from the company you want to be. Partner. Suck their brains. Deconstruct the new value chain. In twelve months you will be shocked at what you can achieve organically. Its much easier to evolve now.
CEO as CPO or CRO
CEOs and executive management need to live at the level of the product. Or at the level of revenue. Without a deep, connection to the product or customer and everything that enables it, what good are you?
Ozempic seems like a good idea if you are looking for a short cut to high metabolism outcomes. If you are working on turning around a company, some of these thoughts might be helpful… / Troy
Two podcast recommendations.
“Acquired” is a popular podcast at my daughter’s hedge fund. She encouraged me to listen to the Costco episode. It's torturously long at 3 hours but a tremendously insightful history of the legendary company. Try it at 1.25-1.5x speed. The Complete History & Strategy of Costco.
Devo founder Mark Mothersbaugh is a multifaceted creative legend with tons of stories to tell. Producer guru Rick Rubin unearths a lot of good ones in this Broken Record podcast episode. Highly recommended.
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