Learn and help out before making changes

Expa nailed it with this tweet yesterday:

It’s natural to want to impress people when you start a new role. The quicker people know they made the right choice in hiring you, the quicker everything settles down and feels more normal.

The same goes for those involved in hiring someone new, particularly the hiring manager. There are a lot of unknowns when hiring and you won’t always get it right. Hiring managers are just as keen to see their decision validated ASAP.

That said, pushing to make changes and trying to get results too early can backfire on you.

When coming into something new, you need to set aside time for soaking up what’s going on. The company, it’s history, the culture, the people, its products or services etc.

Even if you think you know most of the answers on the first day, I can guarantee your views will shift once you start to poke about.

Take the time to properly understand what has happened before you. Start getting opinions from people on what the future should look like. Often the root cause of what needs to change lies in these conversations.

You need to have people on your side to make significant changes. For that to happen, your team and the people around you need to trust and respect you. This takes a bit of time to do. They need to feel you are with them, not against them.

You also need to understand the company’s culture, so you know the right way to make changes. It’s amazing how differently change needs to be managed in different companies.

Lastly, sometimes people just need a bit of time to get used to you, and to the notion that changes are coming. Taking the time to learn, help out and get to know people allows you to do exactly that.

Some advice on starting a new role

I’ve been asked for my advice a few times when someone is joining a new company in a senior role. I always say the same. THE most important thing to do is set and agree expectations for what you will spend your time doing in the first 60 days with your hiring manager. Make sure you’re on the same page for how important it is to learn, help out and get to know people in the first 30 days. Make sure you’re on the same page for when results are expected.

When I hire senior people, I tend to make sure this is the first discussion we have. I make it clear, I expect NO impact or results in the first 30 days — perhaps even the first 60 days.

What I expect is for them to get to know the company, their team, their colleagues and the product. Let things sink in a bit. I would even go as far as providing a list of suggested people they might want to meet with.

The first 30 days are JUST for that, nothing else. They should make good notes on everything they observe and we will chat about them at the end of each week. At the end of the first 30 days, I would want to see all notes pulled together so we can dive deeper into everything. Observations, insights, ideas for how to move forward etc.

I’d then allow roughly another 15 days for that to come together into a plan for the next 90 days that we agree on. There will be a bit of back and forth and getting approval on stuff, so a couple of weeks to get it done should do it.

At the end of 45 days you will have a well thought out plan that outlines what to focus on and what to get done. At that point, things can move more quickly and you can still end up with someone making a significant impact in their first 6 months.

Compare that with jumping in, rushing to conclusions and making changes too soon. You can end up in a real mess early on. Sometimes it’s even too hard to undo.

So, it’s worth thinking about this if you’re a hiring manager or starting a new role. Take your time and make sure expectations are set early for getting up to speed and making an impact. Genuinely take the time to learn, help out and get to know people first.


Net worth and building wealth

I’ve kept track of my net worth for a few years now. It’s an old habit from when I cared about building wealth over mostly everything else.

Even though my priorities have changed, I still think knowing and tracking your net worth is important. Money isn’t the most important thing there is, but it does give you freedom — and that is important.

If you are in debt or have little savings, you will certainly have fewer options available to you. It becomes more difficult to do things like take time off work, change your career, help someone, start a business or live your life how you want to as you grow older.

Building wealth pretty much comes down to three things.

  • Income
  • Being frugal (spending less than you earn)
  • Saving / investing as much as you can.

The earlier you start, the better. If you start early enough and have a frugal lifestyle, it’s quite possible to retire in your 30’s or 40’s. Most people underestimate how compound interest allows small and regular savings to grow in the long-term. Play about with this compound interest calculator to see what I mean.

You can find a bunch of people who are doing this and are transparent about the numbers. 1500 days (retired already) and thinksaveretire (retiring this year) are two examples. A common theme amongst them is their frugality, high savings percentage and a long term view to investing.

Calculating your net worth

Calculating your net worth is quite simple. There are many ways to do it and I tend to keep things simple.

I have 4 main buckets — property, investments, cash and assets.

Property is equity in house(s). This can be a bit tricky to know exactly, due to house price fluctuations. I just make a conservative guess and tend to update it every few years based on house prices in the area.

Investments is anything which generates interest and you are unlikely to sell anytime soon. They will likely to fluctuate up and down. Stocks, funds, bonds etc.

Cash is anything in the current account.

Assets is anything you own that can turned into a reasonable amount of cash — say, anything over £5K. A car is a good example. I just use a conservative guess and update it every year or so. Again, these might go up or down (most assets tend to depreciate).

Tracking your net worth

I take a monthly snapshot of each of the above. Only the investment / cash buckets change on a monthly basis as explained above. The total gives me my net worth at that time.

You could do it less frequently than monthly. It only takes me 5 mins to do, so I just do it it monthly.

If you’ve never done this, I would encourage you to have a go at it. I think you’ll find it insightful to do.

Some personal reflection

For me, it highlighted the level at which my recent low income and over-spending was eroding my net-worth. It pushed me to set some budgets and cut back on silly things like eating out and impulse purchases. It also highlighted the need to focus on fixing the lack of income.

I knew where my problems were before I started to track my net worth more closely. But, looking at the actual numbers really drove things home for me.


The One Pager

Below is a memo Winston Churchill sent to his War Cabinet, stressing the need for brevity. I absolutely love it.

brev

A good way to encourage people to be concise, is to ask for them to outline their idea on one page.

This does two things. Firstly, it forces you to think about how to structure what you’re saying. How you should start and finish it. Exactly what to include and in what order.

When you can’t get away with a stream of consciousness, you have no choice but to do this. If you don’t, you risk leaving out something critical.

Secondly, because you don’t have the space, you’re forced to include only what counts. In doing so, you may realise some parts of your idea are unnecessary and you often end up with a simpler idea.

It’s one of the reasons I like OGSP for strategic plans. It brings together goals, strategies and plans onto one page.

Sure, you have to work harder to make ideas fit on one page. But, when you do, its so much easier for others to digest. And that gives you a better chance of your ideas being understood and making an impact.

This can work for lots of things — ideas, policies, feedback, agreements etc.

So, the next time there is a need to put something down on paper, ask people for a ‘one pager’. They may squirm a bit at first, but you’ll be amazed how people adjust and get into the habit of being to the point about things.

P.S here are a few resources that help with writing brevity:

Hemingway Editor
The Day You Became a Better Writer
Writing, briefly
Write like you talk

A story about change management

Change management has been on my mind for the last few days.

The reason for that is I’ve been having to talk about my background quite a bit lately. When I do so, I often remark on how lucky I was to be given a lot of responsibility, early on in my career.

That often meant I was figuring things out as I went along. I made lots of mistakes and had to quickly learn from them.

One story always comes to mind. I was running the Customer Support team for Jagex and we’d quickly gone from a handful of people doing 9am–6pm, to 20 or so people doing close to 24 x 7 coverage.

We were noticing that office space was getting tight. Often desks would sit unused because the team was split across three different shifts.

There seemed an obvious way to fix it — hot-desking.

It would immediately increase our capacity by a third. If we re-jigged the shift system a bit, we might even be able to double our capacity. There was no reason why is was necessary for people to have their own desk. I just couldn’t see a downside.

So, I went about implementing that change. I wrote a couple of pages that explained the why, the what and when it would start. We even created some space for people to store their belongings etc.

It didn’t go down well at all. People were pissed. There was a downside after all.

Turns out people actually liked having their own desks and computers. They liked to customise and have control over their computer and they liked to store stuff on their desk. They didn’t like having to adjust their seat each time they sat down. They liked having their own space. Some even liked where they were positioned in the office. It helped make them feel like part of the company.

I felt like a bit of a dick for not having seen things from their perspective. I only saw the numbers. We quickly backtracked and decided it wasn’t worth upsetting everyone.

Ever since that, I’ve treated change far more delicately. It should be seen as a project, often with several phases. Consider things like timelines, project plan, stakeholder groups, accountability and regular reviews.

Since that day, I’ve gone on to lead and be involved with some reasonable sized changes. Implementing bonus programmes, closing studios (inc. making people redundant), controversial changes in direction, restructuring teams, large scale process change etc.

Of course, most changes will have their bumps. But, when you dedicate time up front to thinking everything through and planning it like a project, the end result is always better.

If you’re in a leadership role, it’s worth thinking about and getting good at managing change. A badly managed change can be very costly. It can ultimately lead to grinding to a halt and losing great people.

I had intended to get into the guts of how to manage change with this post. But I realised it was quite an in-depth topic and I’m not in the mood for a long one. Perhaps another time.

I would love to hear other peoples experiences of managing change. Both what worked well and what you cocked up 😉

Stocks vs. index investing

I just read Twitter Inc and LinkedIn Corp Won’t Survive and it reminded me why I prefer index investing over individual companies.

The article makes two key points.

  • Twitter and LinkedIn won’t survive
  • It’s only a matter of time before a very dangerous domino effect comes into play

Taking the first, I think it does a pretty decent job of summarising the woe’s of Twitter and Linkedin. They both have growth and product issues, combined with scaringly large headcounts. Facebook looks fantastically robust in contrast.

I have no idea if they will survive or not, but they are both in deep trouble and their stock price is taking a hammering (both have shed more than 60% of their value in the last year – see graph below).

Stocks vs. index investing - TWTR & LNKD stock price over past 12 months

TWTR & LNKD stock price over past 12 months

Taking the second, I agree, there will be other fatalities. No doubt, there are other tech companies out there with similiar problems and overvalued positions.

That said, this isn’t new. Every year this happens to many companies. And in some years this happens to a larger number of companies as part of an overall market trend / correction. It’s incredibly hard to predict. Many try. Most fail.

But at the same time, we also see new companies going public and their valuations will climb. They replace some of what is lost by the declining companies, in some cases adding more. The market is self-cleansing in that way.

And that’s where the value of index investing comes in.  You’re not trying to predict winners and losers. You own a % of every company in the index and you take the highs and lows of each. You won’t experience a 10 bagger, but you will experience slow and consistent growth over the long-term.

Take a look at Twitters and LinkedIn’s stock price over the last 12 months, when compared with the S&P 500.

Stocks vs. index investing - TWTR & LNKD stock price compared to the S&P 500 over past 12 months

TWTR & LNKD stock price compared to the S&P 500 over past 12 months

Yes, the S&P 500 also declined, but at a sixth of the rate compared to Twitter and LinkedIn.

They key to investing in indexes is taking a long term view. Evidence shows that the market always goes up in the long term and this graph shows it nicely:

Stocks vs. index investing - History of S&P 500

History of S&P 500

My investment strategy is index investing, two specifically – The FTSE All Share and S&P500. I feel it gives the best probability of return and I love the passive nature of it. I don’t need to think about or keep an eye on anything. I just contribute to it regularly like I would a savings account and get on with life.