You’d be hard-pressed to find someone with a tougher executive position than Carol Bartz.  As the CEO of Yahoo, she had to step into the shoes of the Founder, fix the mess he caused with the board, figure out what her company actually “does” these days, and then decide how to compete in ecosystems dominated by Google, Microsoft and the sports and entertainment giants.  So when I heard the UW Foster School of Business was bringing her into town for their “Redefining Leadership” series, it was a can’t miss opportunity.

First impression – I was shocked and pleased by how personable and affable she is.  It was a fairly conservative environment – a large auditorium and a moderator doing Q+A – but she was candid and downright funny.  The moderator did not take us through much of a story arc in his line of questions, so rather than recap the event in paragraph form, here are a few bullets that stood out.

On teamwork:

(paraphrase) Business schools put too much emphasis on “teamwork.”  Individuals have different goals, even within a team.  It’s unnatural to think that in a team setting, you can all be motivated by the same thing.  Learn teamwork on a sports field instead.

On Corporate Strategy vs Executing on Tactics:

It’s tempting to go into a firestorm and put your head down, and ignore what the road looks like outside the fire.  3,4, or 5 year plans never work.  In fact, any plan that you had in December is now wrong.  But there are always people in a company who love thinking long term about what the company should be doing down the road.

You need to build your business so that 70-80% is stable and going to be consistent, but that 20-30% can change and be changed to adapt quickly to what is happening around you.

Thinking is a skill.  Understand when you have someone who is good at it.

On Joining Yahoo:

Yahoo had been working with tons of data, but hadn’t actually made any real decisions for a while.  She needed to make a couple of decisions quickly to shake people up.  She also found that people were hungry for interaction, or even communication, from the executive level.

In her first 5 weeks, Bartz held 45 minute conversations with staff members, and always ended the conversation with, “Who else should I be talking to?”  From this, a clear pattern of thought leaders and key influencers developed, which didn’t necessarily map to an org chart.  The standout members at Yahoo were recognized by multiple people she talked to.

The Yahoo Ad campaign was meant as much for the staff as more the consumers.  She needed to show the staff that Yahoo was relevant, and being on national TV helped that.

On Change:

If you look at life, the biggest mistakes are always the things you didn’t do.

Change is a muscle.  If you don’t exercise it, you lose the ability to do it, or do it well.

You need to have a good understanding about what in your business needs to stay stable, and what parts can change.  Know that your people need to be able to handle that.  

You need people who can be interrupted without negative effects.

On Culture:

You have to pick your battles and understand what is really important.  Your culture is secondary to having a company that a) Makes Decisions, b) Moves Forward and c) Gets Things Done. You can’t sacrifice any of these things for “company culture.” 

On Identying Strong Performers, and Career Development:

Think of a bell curve.  It’s really easy to spot the folks on either extreme.  Your top performers easily stand out.  They volunteer for projects, they are the ones you think of first to solve a problem for you, and they tend to self-select and join in a pack together.  So, they are pretty recognizable.  

But the harder thing is to find the people with that same potential, and stretch them to turn them into top performers.  They may be quieter, or not on the projects that get as much recognition.  So it’s important to find these folks and put them in positions where they can become stars.  They aren’t the average employees making the most noise – so you need to look hard for the hidden talents and figure out ways to cultivate these quiet ones with potential.

On the other end, you need to be direct and clear with the ones who slow you down.  They’ll perform well somewhere, it’s just not necessarily in your company.  The worst thing is that the rest of the team knows when an employee is a bad fit.  and it makes management look bad when they don’t help them move on to a place where they can be more successful.  You do everyone a favor when you cut them loose and help them find a better fit.

Every employee should be involved with sales.  Sales is not a dirty world.  You simply can never really understand what your company does until you actually try to sell it to someone.  Understanding why someone says “no” to you will help you figure out what your company can do better.

On Personal Life vs A Business Life

Yahoo delivers 100 Billion emails a day, and filters out another 600 Billion spam messages.  When their servers go down, it’s a big deal.  But, Yahoo doesn’t cure cancer.  It’s a web site.  Your job is probably not curing cancer either.  Enjoy yourself, experiment, laugh – don’t pretend you are more important than you are just because you have a boss or client who wants something.  Chances are pretty good the world will go on without you completing that one task you are stressing out about.  

Don’t add pressure to yourself by thinking about the “would haves, should have or could haves.”

On Developing Employees:

Annual reviews are a waste of time.  Yahoo quit doing them.  Instead employees and managers are tasked with making sure they have a substantive conversation at least once a quarter.

An annual review is useless because you have an opportunity for feedback, and have to sit on it for 6 months.  You wouldn’t wait 6 months to reprimand your puppy for going to the bathroom in the house, why treat a human that way?

Difference Between Succeeding in Technology vs Other Industries:

At the end of the day, business fundamentals are the same no matter what.  a) Understand what your customer wants, and deliver it.  b) Measure your success and failures.  c) Recruit and cultivate talented employees. 

I was going to resist sharing any public thoughts on the end of Rob Glaser’s 16 year reign at the head of RealNetworks.  But as I read through some of the comment boards, trolls and scrubs who have never started anything in their life have taken some cheap shots, so I’m going to give my take.

In 1994, we had 14.4 modems and something called Mozilla to surf the web.  Microsoft was finally rethinking their now infamous decision that the Internet wasn’t a place where they should concentrate. And Glaser looked into his crystal ball and said, “You know what, I bet some day we’re going to use our computers to watch programming more than we use our TV’s.” You have to remember, that back in 1994 that idea was akin to someone today saying, “I’m going to be able to take this IP signal from my watch and make it a holographic projector that plays HD signals against blank walls at 1080i.” 

Now, not every decision was right.  And plenty of smart people were under-utilized.  I was just a young Marketing Manager, and never in the inner circle of decision making, so I have little insight, and sometimes fell victim, to some head scratching decisions.

But at the end of the day, Rob built an industry from scratch, weathered recessions of 2001 and 2009, had to battle the full force of Microsoft’s vengeance when they realized it was a space they needed to be in, distributed more than a billion RealPlayers without much of a marketing budget, took his company public, changed his business model on the fly from software to subscription, and had to balance the public’s desire for free media vs the music industry’s desire to extort money from all of us.  That’s a pretty complex game of Lemonade Stand he had going.  Go through and name all the companies that you’ve seen in your lifetime that started before (or around) Real and have been more successful while staying independent.  Microsoft, Apple, Google, ebay, Amazon, Yahoo.  You can’t say AOL – they sold out.  Skype – sell out.  YouTube – sell out.  Netscape – gone.  Napster – gone.  Maybe Adobe and Oracle? Sidewalk – gone.  Expedia came out of Microsoft and sold out to IAB, so they don’t count.  I’m sure there are a few more, but the list is pretty small.

It would have been easy for Rob to sell to Microsoft in the late 90′s for a few billion.  We all probably would have made a few more short-term bucks.  And Microsoft would have had to spend way less money than they did over the next decade systematically trying to destroy Real.  But he didn’t sell, so we all took our sticks and bows to fight against the machine guns – and we did pretty well.

I have a lot of anecdotes about Rob that don’t need to be shared here, but I’ll sum it all up with this.  If you have the pleasure to run into him at an event, introduce yourself and say hi.  He’ll grill you on your business and ask 100 questions abut what you’re working on.  The conversation will move so fast that it will be hard to keep up.  But you’ll understand how smart the guy really is, and you’ll see that he simply wanted to win.  

My guess is that around the halls of RealNetworks this week, people are looking forward to change.  They see a happier, more corporate, less politically incorrect place where they won’t get yelled at for mistakes.  But the problem is that most of those people weren’t there in the 90′s.  To them, there’s always been audio and video on the Internet, and they simply don’t get why Real was such a big deal.  They don’t understand that they worked for the Web’s very own Marconi, they just want to complain about his flaws.  But around the city, you see Real Alumni collectively tipping our caps.  And I know a lot of people say this, but I still have more friends than I can count from my days at Real.  The people were there (with some notable exceptions) were fantastic.  Smart, gifted, ridiculously focused and cool.  There was something about that company, especially back in the 1990′s, that drew great people who were glutton for punishment.  I remember telling my dad when I first started there, “It’s pretty scary.  Every meeting I feel like I’m the dumbest guy in the room.” 

No one is perfect, and like everyone Rob has his flaws, but it was a real professional privilege to work down the food chain from someone who built an entire industry.  

I’m not normally in the business of simply forwarding links.  But this FastCompany interview with Costco CEO Jim Senegal is full of common sense wisdom.  Read the interview and you’ll wonder why more companies don’t think like him.