Leadership & Business Lessons From Eric Schmidt
The following content is from some of the interviews of Eric Schmidt(former CEO &Chairman, Google) —
FAKE IT TILL YOU MAKE IT
Eric Schmidt, “You develop a fake charm if you don’t have any. Don’t say nice hairdo —Tell that you love the hair and the combination with that jewelry is sublime. That’s the fake charm. Works every time.”
- I’m not comfortable with faking things. Radical transparency is a critical requirement for a workplace. It is better to be authentic and be of ourselves. But I have seen that the concept(Fake It Till You Make It) works in several scenarios. Amy Cuddy writes that your body language can change how you feel on a physiological level. Unfortunately, in the real world, several people make unconscious snap decisions based on the person’s body language and how he talks. So, at times, we might need to fake courage, confidence, and other things.
- Praising is an essential factor in building relationships and motivating people. You need to accentuate positives at the workplace. If you aren’t familiar with praising people, it would be better to follow Eric’s advice. He says that saying “nice job” or “good work” doesn’t work. Being specific adds impact and be helpful — Add the reasons while praising someone. By searching for a reason to praise, you’d soon become a person capable of finding positives in every activity and in everyone. You become an optimist. Your attention to detail skills would improve dramatically.
THE WORD IMAGINE
Eric Schmidt says, “Use the word ‘Imagine’ in your conversations with others. If I say imagine to you, that means I’m talking to you — I’m getting you to think — I’m getting you to be curious that you’re hopeful.”
The ‘Imagine’ word allows the listener to enter your world. Your conversation becomes sensorial — It could be visual or auditory or any other feeling. When the person starts imagining, your conversation has shifted from a rational mind to an emotional mind of the listener. Remember, most decisions are taken by our emotional mind and not the rational mind.
John Kotter and Dan Cohen in The Heart Of Change say that most successful managers spoke to people’s feelings than talking about strategy, structure, culture, or systems for convincing people. They advise us to find ways to help others see the problems or solutions in ways that influence emotions. ‘Imagine’ word, when rightly used, can influence emotions.
LONG-TERM THINKING
Eric Schmidt says, “Best strategies have longer timeframe horizons. We tend to overestimate what can be done in 18 months and underestimate what can be done in ten years. Watch a movie that came ten years ago or you watch an interview in the technology space ten years ago and see how much has changed. Almost all of the strategies fail within a five-year period.”
He adds, “We have to keep asking questions like — What people would be doing in next years? What will customers want in five years? Where will the costs be in five years? In our case, what will networks look like? What will the apps look like? So, have a five-year plan and not just for your business but also for yourself personally.”
Long-term planning plays a pivotal role in your or your business’ long-term sustainable success. It is not that planning will always help you to succeed. But without planning, you are sure to be doomed. Planning gives an initial direction. When you start travelling in the chosen direction, keep your mind open and watch out. On the way, if you don’t see any new opportunities or serious obstacles, then your initial plan would ensure you reach the destination comfortably. However, if you come across any opportunities or obstacles, your initial plan would guide you to change the course of your ship and move towards a new direction. You would also find several common elements between your old and the new path. Your earlier plan would come in handy in simplifying the planning for the new direction/path.
CURIOSITY AND GRIT
Eric Schmidt says, “Success is determined by the combination of curiosity and grit. And you should be willing to do both. Surround yourself with many new things, new ideas.”
GRIT — Angela Duckworth defines Grit as perseverance and passion for long-term goals.
In the movie “Pursuit Of Happyness”, a struggling Chris Gardener would choose an internship in a new field(Stockbroking), a very unfamiliar path for him, where challenges would exceed his current skills and knowledge. Moreover, there would be no salary for the next six months — an additional burden to his already debt-ridden life. He was moving from a salesman to an intern — it was an abrupt transition in life. Yet, he had an attitude of not giving up and was ready to learn the skills and the knowledge.
Throughout the internship, Chris faces challenging situations — His wife leaves him, he can not pay the house rent, he and his son have to spend nights in shelters for homeless people. He endures several other hardships. It was the most physically, emotionally demanding part of life for him. Chris desperately needs money, but he resists the temptation to quit the internship. That’s the GRIT.
Like Chris Gardner, many of us would have started something new with full of excitement, good intentions, and then… when we encounter… first obstacle… second obstacle… third obstacle… Most of us would have quit, unlike Chris.
QUESTION DEFAULTS
Eric Schmidt says, “Be extraordinarily curious and don’t assume the status quo is unchangeable.”
Adam Grant writes, “The hallmark of originality is rejecting the default and exploring whether a better option exists. It is the starting point for curiosity. Question the familiar things. Ponder why the default exists in the first place. See them with a fresh perspective.”
Tesla questioned the DC(the default) system and invented AC. Richard Feynman questioned the default mathematics and invented Feynman Diagrams. Einstein questioned the presence of ether medium.
SAY ‘YES’ MORE OFTEN
Eric Schmidt says, “The one piece of advice I give to everyone — I tell them to say ‘Yes’. Say Yes to things. Figure out a way to say Yes. Say Yes to invitations to a new country, say Yes to meet new friends, say Yes to learn something new, Yes is how you get your first job, your next job, your spouse, even your kids. Even if it’s a bit edgy, out of your comfort zone, saying Yes means that you’ll do something new, meet something new, and make a difference. ‘Yes” lets you stand out of the crowd, be the optimist, see the glass full, be the one that everyone comes to. Yes is what keeps us all young.”
Shonda Rhimes in a TED Talk, says, “Some time ago, I tried an experiment. For one year, I would say Yes to all the things that scared me. Anything that made me nervous, that took me out of my comfort zone. I forced myself to say Yes. Did I want to speak in public? No, but Yes. Did you want to be on Live TV? No, but yes. Did I want to try acting? No, but yes. And the crazy thing happened. The very act of doing the thing that scared me undid the fear. My fear of public speaking, my social anxiety gone. “Yes” changed my life. “Yes” changed me.”
Saying Yes opens up your mind — your curiosity improves. It is the easiest, quickest way to learn new things. Saying Yes reveals new challenges and opportunities. Saying Yes develops a growth mindset. Amy Blaschka writes in Forbes that Saying Yes invites collaboration, empowers and affirms others, creates an environment where it’s safe to try, fail, learn, and innovate.
“If somebody offers you an amazing opportunity, but you are not sure you can do it, say yes — then learn how to do it later.” — Richard Branson.
However, we also have to learn to say ‘No’ in a few specific scenarios/situations. A product cannot be for everybody. So, we need ‘Focus’ in our life or business. We have to say ‘No’ to activities/things that don’t align with our(or business’) core values, mission, and vision.
SEEK MEANING vs NOVELTY
Eric Schmidt says, “It’s fun to have novelty. But the ‘meaning’ is really how you make your life happen. As you create accomplishments, it is the ‘meaning’ and the impact that you have in the people that you work with which will provide this incredible satisfaction. To have ‘meaning’ in your life is to serve others in what you do.”
Novelty is a short-term gain. Meaning is for long-term impact.
FEARLESS ENVIRONMENT
Eric Schmidt says, “Two years after joining Google as CEO, we were preparing for an IPO. Right before the IPO, some executives did an interview for Playboy magazine. It turns out that the interview came out at the wrong time. It put our IPO in jeopardy. When I sat with those colleagues who gave the interview, they asked me with long faces, “Did we screw up?”. And, the correct answer is, “Yes, you really screwed up.” But the even more correct answer is, “No problem. Easy mistake to make. I would have made this mistake.” Later, we thought about ways to solve the problem.”
Eric did not show anger or any other emotion. He showed them that mistakes are inevitable but successful people learn from them and never repeat them. He helped them self-reflect on the problem and worked with them to find solutions.
Importance Of Fearless Environment — Eric could have easily scolded them for that interview. However, it would have encouraged other employees to hide their mistakes and led to the proliferation of dishonest culture. It would have further paralyzed the ability of employees to learn from mistakes and grow. It would have further stifled innovation.
Eric’s way of responding to mistakes creates a fearless environment where innovation and entrepreneurship would flourish.
CONSTRUCTIVE FEEDBACK
One Google engineer invented free wi-fi and launched it in San Francisco. In the subsequent product strategy meeting, one of the telecom business executives started asking reasonable business questions to the inventor. Unfortunately, the inventor couldn’t answer any of the questions. The project review was getting worse and worse. At some point, Eric and others felt that they had to stop the review process to avoid further battering of the engineer.
Eric says, “At that point, you have a choice. You can say to the inventor, “You are an idiot for having brought such a terrible idea without thinking through all the scenarios. You’ve clearly embarrassed yourself and the company.” That would be the wrong thing at Google. The right thing at Google, in a situation like that, is to say, “I think this is the most incredible idea I ever heard. You need to come up with a better approach. The objective of free wi-fi is incredibly strategic to the company.” When we said that, the inventor became excited and ran out of the room. Six months later, we re-introduced the idea and got a huge benefit from it.”
A few lessons from above —
- In meetings, people have to focus only on the problem/idea and not on the abilities or personalities of a person.
- Instead of saying that he/she is wrong, talk about the wrong things in the solution/idea.
- Everybody has to believe that everyone intends to do good for the company, employees, and customers.
- People should firmly believe that every individual in the organization is inherently valuable.
- Everyone has to believe that there are some elements of truth in everyone’s ideas/opinions.
- Whatever criticism we give should be useful/helpful to the other person. The best thing is to provide an alternate solution, if possible. And, one more thing, instead of saying the whole thing as wrong, point out only specifics.
- Before giving feedback on an idea to anyone is to step back and think about Mutual Purpose. Kerry Patterson writes that to succeed in criticisms, we must care about the interests of others — not just our own. He adds, “Before you begin criticizing, examine your motives. Ask yourself the following questions.” — What do I want for myself?, What do I want for the other person?, What do I want for the relationship?. It would help you see the idea/problem from another person’s perspective. It would change your tone of criticism.
EXPERIENCE vs INTELLECTUAL FLEXIBILITY
A few years back, Saul, a young biology undergraduate engineer at Google, met Eric Schmidt, Larry, Sergey, and announced that he would like to switch Google’s entire revenue stream from an as-sold model by the sales force to an auction-based system. Eric was shocked. He had his reservations about the idea. However, Larry and Sergey were excited about it and supported Saul in implementing it. Eric worried that the auction-based system would push the company to bankruptcy. To safeguard the company’s future, Eric introduced a Cash Restriction Program(CRP) — Where people could spend money only at 10 AM on Fridays. He thought that through CRP, he could control the spending of money for the new idea. Eric was not comfortable relying on a young man implementing his auction idea.
One fine day, Saul activated the auction-based revenue model. At the end of the first day, Eric had a look at the results and was horrified. The revenues had tripled.
Eric Schmidt writes, “From the above incident I learned that industry over-values experience and under-values strategic and intellectual flexibility. Larry and Sergey always focused on hiring incredibly intelligent people who can get the job done.”
Thinking critically and clarity of thought are primary skills needed for a manager or a business leader. Studies show that intelligence plays a pivotal role in that.
GROWTH MINDSET
One day, Larry and Sergey told Eric Schmidt that they wanted to do an operating system and a browser. Eric replied, “We are not strong enough to take on Microsoft. There’s no scenario where we’ll ever do an operating system and a browser. Because Microsoft will kill us and I don’t want to get killed. We are a small company. I got myself killed several times in my previous jobs.”
After a few days, Larry and Sergey informed Eric that they would be hiring an engineer to improve the performance of Firefox. Eric gave his assent.
One day, Larry and Sergey called Eric to an office room and told him that the person who was supposed to improve the performance of Firefox has managed to invent Chrome. Eric was shocked.
After some time, Eric repeated again, “Guys, we can’t do an operating system. We do not want to fight against Microsoft.”
After a few days, Larry and Sergey brought the company called Android and they said, “It’s just software for smartphones. Don’t worry Eric.”
Today, Android has more than 2.5 billion users. It has become the largest operating system in the world. And, Chrome is the largest and most successful browser.
We have to understand that most of the newly formed ideas will be vague, poorly defined, ugly, might seem wrong or not practicable, and may not have all the details. If somebody sees the concept at that stage, they might conclude that the idea is not worth pursuing. The new concepts need time to grow.
Carol Dweck writes, “Growth Mindset is a mindset where people believe that their most basic abilities can be developed through dedication and hard work.” Similarly, we have to believe that an idea’s true potential is unknown. It’s impossible to predict how working with passion, extensive analysis, iterations, and hard work could transform a concept.
A SUCCESSFUL PRODUCT
Eric Schmidt says, “If you think about the greatest products, they‘ve almost always been designed for the benefit of the people who are actually building them. You are one of the customers for your product. It means that you are well aware of the customers’ pain points, desires, attitudes, needs, habits, and so on. Lary and Sergey built Google for Stanford and particularly for themselves. When Google Wave came, not many people inside Google were using it. So, it failed. Same scenario with Google Glass.”
A product’s success primarily depends on how well a company/brand has understood the customers’ needs. To understand their needs, we need to observe prospective users in their natural environment, collect insights, and think from their perspectives.
We can go a step ahead — As Eric says, rather than passively observing them, how about, we become customers of our proposed product? — Living like one of your customers is the best way to understand their needs.
Most of the employees in Harley-Davidson’s company are riders. The organization believes that being riders help the company to design a better product for its customers.
When you are the customer, you are designing the product for yourself — you would go the extra distance and make the product as convenient/exciting as possible.
One of Joe Gebbia’s roommates suddenly moved out of the three-bedroom apartment after their landlord raised the rent. He and the other roommate Brian Chesky could not cover rent for all three bedrooms. To cover the cost of the extra empty room, they began to brainstorm for ideas. After generating and reviewing several ideas, they zeroed on one idea — Short term renting out a part of their homes. And, Airbnb was born.
HIRING DIVAS
Eric Schmidt says, “Most management books tell us not to hire divas. I agree that they are a pain in the ass. But the people who are the divas — They are the ones that will drive the culture of excellence and they will drive you to that excellence. Steve Jobs is a diva. They expect a lot, they drive people hard. They’re controversial, but they care passionately.”
As Eric says, divas are needed to push projects to stay on track, within scope, and be inside the budget. They are sometimes visionary. They have quick insights. They can build great products and high-performing teams. So, the divas have to be tolerated and protected to a possible extent. However, it is a leader’s job to manage that person in a way that doesn’t disrupt the company.
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