Going back a quarter-century, it's hard to say for certain what I was thinking when I started DMC. I can selectively choose pieces of our background to illustrate how we got where we are today, but going back to the roots, I don’t think there was anything all that sophisticated. One principle that I've had since starting DMC is I wanted to create a company I would want to work for even if I didn’t own it.
I'm not exaggerating to say I've been working since I was no older than ten. From being a gopher on construction sites with my dad, to delivering newspapers, to cutting grass, I've been doing something for over 40 years. I've been able to see a vast spectrum of jobs, companies, and bosses. I saw what worked, what didn’t, what I liked, and what I would want to avoid.
While not perfect, I couldn't be prouder of how far DMC has come and what type of company we've created. Without a doubt, I have more than reached my initial goal of creating a company I'd want to work for even if I didn’t own it.
With a bit of self-indulgence and some R&D from Bill Gross of Idealab, I decided to create a list of 25 business lessons to coincide with DMC's 25th anniversary.
1. Focus on Hiring the Best People
Straight-up, the best decision I've made in the past 25 years was reaching out to a friend I met while doing research in grad school and asking him if he wanted to join me at DMC. That person is DMC's CTO and my partner Ken Brey. Ken didn't have much directly applicable experience but he is a brilliant problem solver who likes to learn new things. He set the foundation for the type of people we look for at DMC.
Hiring the right people has been the absolute key to DMC's success. While we were doing a good job of it for the first decade of our existence, seeing Dr. Geoff Smart, the author of Who, speak in 2007 solidified and vastly improved our hiring processes. Having a focus on getting the best people at DMC and figuring out how to best allow them to reach their potential is our single best competitive advantage.
2. Culture Beats Strategy
Or, as Peter Drucker said, "culture eats strategy for breakfast." A company's culture is the prime driver for success, regardless of how effective its strategy may be.
From the Harvard Business Review article that I took the title of this lesson from: "Culture's all that invisible stuff that glues organizations together." It is hard to define a company's culture without platitudes, generalities, and vagueness but I'll try.
Our culture starts with our people. DMC is exceptionally great at hiring exceptionally great people, and we do lots of things to facilitate relationships. I say, only half-joking, that we are going to manipulate people to become friends with their colleagues. There are so many benefits to being friends with your co-workers, including that life is just that much better.
Our core values exemplify our culture.
3. Learn from Other People's Successes
I have been a part of peer groups for over 20 years, ranging from informal groups to formal groups like EO, YPO, and my CSIA Executive Roundtable. I also attend conferences, visit other companies, host visitors from other companies, and more. Those who have been part of my journey (too many to list)—you know who you are—thank you!
4. Consider the Cobra Effect
I first learned about the Cobra Effect from a Freakonomics Podcast in 2012. Also known as a perverse incentive, it's defined as "an incentive that has an unintended and undesirable result that is contrary to the intentions of its designers."
So, whenever we are considering policy changes at DMC, we actively discuss possible unintended consequences and how people may (naturally) try to optimize the system to their benefit while possibly defeating the goal of the policy.
A personal example from a few months ago. To help us both get into better shape, I made a wager with a DMC colleague that I could outride him on my Peloton Bike. The data collection and metrics Peloton has are a great way to gamify exercise. During the contest, the two of us pushed each other hard and certainly did get into better shape. However, not only did I not prevail in the end, but I had also pushed myself so hard that I was too worn out for several weeks after to regularly workout and my fitness level actually declined.
5. Learn What Motivates People
Early on at DMC, I discovered MBOs—management by objectives. Besides the potential Cobra Effects, where people game the system to optimize results, I've learned is that knowledge workers aren't best motivated by MBOs.
When I read Drive, by Dan Pink (good Ted Talk here), my approach to management significantly changed. The gist of Drive is that knowledge workers (e.g. engineers, programmers, scientists, etc.) thrive in environments that offer autonomy, mastery, and purpose. It's not always easy to follow, but it has changed how we operate for the better.
6. Be Nice
Anyone who has visited our Chicago office knows there's a life-sized cutout of Patrick Swayze. Now, Mr. Swayze starred in many iconic movies, from Dirty Dancing (no one puts Baby in a corner) to Ghost (the only cinematic pottery scene I can recall) to Point Break ("Fear causes hesitation, and hesitation will cause your worst fears to come true"). This cutout came from the 1989 classic Roadhouse, where Patrick plays a "cooler" at a Missouri bar named Dalton. Dalton has three rules for the bouncers under his charge:
- Expect the unexpected.
- Always take fights outside
- Be Nice
We use this scene from the movie as part of our customer service training (warning—it's a bit coarse). The point of the scene related to DMC is that sometimes situations at work can get emotionally charged, and it's somewhat natural to mirror someone who is upset. Yet, it is almost always best to remain calm, focus on the problem, and, whenever possible, be nice.
7. Will it Make the Boat Go Faster?
In 1998, the Great Britain Men's Eight Rowing was underachieving, having not won an Olympic Medal since 1980 nor a Gold Olympic Medal since 1912. The team set an improbable goal of winning the Olympic Gold in two years.
They created an entirely new way of training, challenging everything they did, from diet, to sleep, to exercise, to even recreation. Everything they did they answered the question "Will it make the boat go faster?" If the answer was yes, they kept doing it, if not, they'd adapt.
Their results continued to improve and, on September 25th, 2000, they won Gold at the Sydney Olympics.
At DMC, we have begun to apply the philosophy of the GB rowing team across the company. Some examples:
- At an individual level - Will it help with a person's career development?
- For a project - Will it make the system perform better? Or will it help the project meet specifications and stay on budget?
- Company-wide - Will it make us more profitable? Will it help with retention? Will it help us maintain our core values?
On the flip side, some sage advice from Dwight Schrute, via Michael Scott.
8. Quality is Remembered Long After Price is Forgotten
This is something I remember reading as a young child in my parents' Reader's Digest magazine—probably in the quotable quotes section. It resonated, and it has stuck with me for decades. Until I started writing this, I didn’t know who the saying was attributed to.
So, while I absolutely extoll the virtues of frugality, I strongly believe that paying for quality products and services pays off in the long run.
9. Don't Be Afraid to Fail
In May 2011, DMC moved to our current office location in Chicago. There was room for expansion and we invested a fair amount of money on construction and furnishings, including installing a great rooftop deck. In January 2012, our landlord gave us the option of expanding to the second half of the floor. This would require another large investment as well as a pretty big increase in our monthly rent. We hadn't even come close to filling out our existing space, so it seemed like a big risk. I spoke with a mentor of mine who reminded me of our goal to aggressively grow and asked if we were serious about growing. This made the expansion decision easy.
Over the years, many decisions go back to that conversation I had with Curtis. Should we open an office in Boston? Should we hire 20+ people in a single year? Should we expand our service offerings? While we've not always been 100% successful, I've never regretted trying something. And we've succeeded far more than not.
10. Validating Your Business Idea - Can You Make Your Friends Laugh?
While I like to think I'm pretty funny, I know in the scheme of things that my comedy level is somewhere between making friends laugh and making strangers laugh. I'm inconsistent at best, especially when quoting movies made before most DMC employees were born ("A hospital, what is it? It's a big building with patients but that's not important right now.").
What does this have to do with business? When trying to sell new products or services, it's one thing to have people you know tell you that your idea is good. It's another to get them to buy what you're selling. Going all the way is where there's more demand for your products than you can supply.
When I see companies trying to introduce something new, one piece of advice I give is to see if they can make their friends laugh. This means go out and get some key customers to pilot their offerings for free (or damn close to it). From there, they can determine if their offering might fit a market need and then go to the next stage. If they can't make their friends laugh, it's pretty unlikely they will be able to get strangers to pay to laugh.
11. Study to Learn vs. Study for the Grade
There are two paths to success in school—study for the grade or study to learn for the material. Like most things that put people in one of two camps, this is a false dichotomy (don't get me started on Myers-Briggs). Yet, it does remind me of the joke: There are 10 types of people in this world, those who understand binary and those who don't.
I like to apply the concept of studying for the grade or studying to learn to business. Some companies have specific growth/profitability/monetization goals. Others focus more on delivering great value/creating a great culture/having sustainable processes. Obviously, you can't run a profitable company without delivering value and can't have a great culture if you're not profitable, but the company's focus can markedly change how the company operates. Just as the student who studies for the high mark may learn the material, the company focused on maximizing profit may end up with a great culture (or vice versa).
In college, I was more of a study to get the grade type of student (see Tim Jager's comments about "college Frank" not being able to get a job here), at DMC we run things to create a great company and deliver great value to our clients (but don't get me wrong—see our Core Value number 4!)
12. What Gets Measured Gets Done
Dashboarding of company metrics has become much more ubiquitous since we started tracking our Key Performance Indicators (KPIs) on a weekly basis around 2007. Dashboards that refresh automatically allow us to make process changes, both small and large, and quickly determine the impact and effectiveness of such changes. I can honestly say that having up-to-date and historical data on both individual and company performance has made our company more profitable, nimble, and easier to run.
A few tips:
- Measuring progress towards a specific target/goal is a very strong incentive to drive people to succeed.
- Whatever you decide to measure should align with the achievement of company goals.
- Adding outlier thresholds (Red/Yellow/Green) will save you a lot of time analyzing what you decide to measure.
- Consider defining a playbook of steps to take when a KPI starts to trend in the wrong direction or turns Red.
- For ongoing activities that you measure, don’t be afraid to raise the target to foster a culture of continuous improvement.
13. Write Things Down
For an individual, writing things down is important. For an organization, it's essential. At DMC, we put a ton of effort into documenting our SOPs (Standard Operating Procedures), keeping our knowledge base current and searchable, and automating routine processes with an eye on how to improve them.
Leveraging the power of tribal knowledge with tools like SharePoint, Monday, Confluence, and others turns knowledge into wisdom, which can allow a company to become worth far more than the sum of its parts.
14. Sit on Your Hands When Teaching Someone to Do Something
The best way of learning to do something is to, you know, actually do it. But the easiest way to show someone how to do something is to demonstrate it. Here's a simple one—teach a child how to tie their shoes. It's something most people do all the time without thinking (though I prefer slip ons). If you're trying to teach someone how to do it by showing them, it's unlikely they will be successful.
Extend that to trying to show someone how to use new software. For the seasoned person, all the menus are second nature and they can click through them quickly without thinking about it. For the person following along, it may make sense to watch. But after they're actually using the software themselves, they won't usually "get it." While it's easier to teach by showing, the hands-on-labs approach is much better for the learner.
15. Think About the Future When Designing a System
When I was growing up in Massachusetts, a bottle bill was instituted where there was a $0.05 deposit on every beer and soda bottle and can. Now, never mind that lawmakers didn't anticipate the tremendous rise of bottled waters and other non-carbonated beverages which aren't covered by the "forced" recycling law, they also didn't implement an inflation index to the bill. In 1982 prices, the deposit is only worth $0.018, which is why it seems many people don't return their empties nowadays. Whereas when I was in college in the late '80s/early '90s, we treated the empties like gold and used them to subsidize our beer money.
I don't know if the Massachusetts lawmakers considered the long-term effects of their law or not (they probably figured it would become someone else's problem) but there's no way a well-thought-out plan would ignore inflation.
In programming, hard coding values requires a program's source code to be changed anytime input or configuration variables need to be changed. While there are numbers that won't change, they are called constants, and should be explicitly defined as such. Anytime I interact with software that is inflexible, I have to question whether the programmer was lazy, ignorant, or both.
16. Life is Easier When You Assume Positive Intent
While most people have been burned by unscrupulous individuals, assuming everyone you meet is out to get you can make for a difficult life both personally and professionally. Starting with the assumption that people aren't nefarious and validating that everyone's expectations are understood and being met, is a much easier approach to life than being skeptical of every person you meet.
There will always be exceptions, but an interesting study I read shows that crime and corruption are lower in societies with high trust.
17. Prioritize Sleep
When my wife and I were expecting our first daughter, some friends bought us the book Healthy Sleep Habits, Happy Child by Marc Weissbluth, M.D. In the book, Dr. Weissbluth talks about how many behavioral problems that babies have (irritability, short temper, lack of focus, etc.) are rooted in lack of sleep and/or poor sleep habits. As I was reading that, I reflected on my own sleep habits and behaviors and realized when I was emotionally at my worst, I could almost always attribute it to poor sleep. I used to believe that I could go for days with minimal sleep and make it up on the weekend (if I was lucky) but that didn’t always work out so well.
Since then, I have tried to prioritize sleep. While it's not always been easy, with raising two daughters, opening eight offices around the country, and general life, I find that having a good day begins with a good night's sleep. Although I occasionally still burn the candle at both ends, I try to avoid it as it's not very healthy for me. Maybe Dr. Weissbluth can write a new book—Healthy Sleep Habits, Happy Entrepreneur.
18. Carefully Choose Your Peers
When people are interviewing at DMC, particularly entry-level candidates, I recommend that they assess their potential peers and ask themselves if they would aspire to become like them. I also ask them to apply the same lens to their other career options. Someone can impart their own personality onto groups, but it's more likely people will become like the group they join than vice versa. Fortunately, DMC is full of great people so candidates who apply this lens generally choose DMC.
19. WRAP
A great book from the Heath brothers is Decisive. I have a natural tendency to make quick decisions, which can serve me well but can also backfire, especially if I've got decision fatigue or actual fatigue. Dan & Chip came up with a very effective decision-making model:
Widen Options - Choices don't have to be binary. When we began our geographic expansion plans, rather than pick one target city, we evaluated many options before choosing Boston for our first regional office. In doing so, we were able to hone in on what criteria were the most important and make a more informed decision.
Reality Test Your Assumptions - When we focused on Boston for our first expansion city, we took many scouting trips there. We had countless meetings and calls with existing and potential customers, partners, and employees to assess viability.
Attain Some Distance - This is a double-edged sword. The saying, "more is lost from indecision than bad decisions" certainly has merit, but not making a snap decision is certainly not the same as being indecisive.
Prepare to Be Wrong - When making big decisions at DMC, one tool we really like to use is the pre-mortem. We assess all the things that could go wrong and what could be done to prevent them. We also assess the impact of what the impact of failure would be. Contrary to some popular wisdom, most successful entrepreneurs aren't huge risk-takers
20. Has This Problem Been Solved Before?
We work on new systems and products all the time and while much of what we do is truly novel, many of the pieces of problems we're solving have already been solved. It's our job to not only understand the problem and create a novel solution but also to leverage the existing knowledge of DMC and the rest of the world.
Credit: Mahesh Paolini-Subramanya
21. Nothing Can Take the Place of Persistence
This quote was on my father's desk growing up and it has always stuck with me:
22. A Customer is the Most Important Person in Any Business
Another printout my father had framed on his desk was about the customer being the most important person in any business.
We created a modified version of the above to match our customer service. This is from a blog I posted in 2009 but is still relevant today:
A Customer Is...
- A Customer is the most important person in any business.
- A Customer is not dependent upon us. We are dependent upon the customer.
- A Customer does us a favor by doing business with us.
- A Customer is the sole purpose of our work, not an interruption.
- A Customer is a human being with feelings and deserves to be treated with respect.
- Our Customer's success is the key to our success.
23. It is Better to Ask Forgiveness Than Permission
We empower people to try things that may or may not work, to experiment and see if it fails fast or sticks. Another term from Decisive that we use all the time is "ooch." To ooch an idea means conducting small experiments to test one’s hypothesis rather than leaping all the way in. This has worked out for us in a lot of ways including our use of Slack, GitLab, Monday, Confluence, creating a custom timer application, our Yearly Office Events, and more.
24. Follow the 80/20 Rule
The 80/20 rule suggests that you get 80% of your results from 20% of your efforts. Don't waste your energy on the long-tail efforts. Instead, prioritize the top 10% or 20% of items that are the most vital rather than busying yourself with the least important 80%. Setting SMART goals will help!
25. Start With Why
In his book Start With Why, Simon Sinek discusses how great leaders inspire action (check out his Ted Talk too). He uses a model called the Golden Circle to explain the framework for the Why, aka your purpose.
What's my Why? I want to make sure that everyone at DMC has the opportunity to reach their potential.
Thanks for reading or perhaps just skipping to the end. With my last lesson, if you're not sure where to start, figuring out your Why will help guide you through the rest.
Learn more about DMC's company culture and contact us for your next project.