W = Wharton     F = Richard Forman

W:   What are three ways that leadership in e-businesses differs from leadership in traditional bricks and mortar businesses?

F:    The number one way that leadership in e-business differs from leadership in traditional brick and mortar business is speed.  I believe that the e-business requires a much faster implementation time than traditional businesses.  Number two, I believe that there needs to be a simultaneous analysis and implementation, which means that you can’t always be analyzing for months and then say, “We’re going to implement.”  Sometimes you need to do both concurrently.  Third, I think there needs to be an emphasis on recruiting personnel. Because a lot of these e-businesses are very fast growth environments, there needs to be an emphasis on making sure you can attract people.

W:   How do you  build a leadership team?

F:    It’s similar to the way we are building the company.  We have a plan but we also are incredibly opportunistic about building the team.  As we find people that can help complement and enhance our organization we pursue them.

W:   How do you integrate new people into your organization?

F:    We’ve become much more formalized in the integration process over time.  It used to be “Welcome on board.  Find a desk.  Maybe we’ll get you a computer.”  It’s gotten much more formalized where there actually is an organization that helps people get business cards, a desk, a computer.  We’re introducing formal training where different department heads are going to spend an two hours with each group of new hires.  All new employees are scheduled to spend their first week in customer service training so that they can become sensitized to some of the major issues that exist in this firm.  So we’ve definitely formalized it over time, but we make sure that people get a broad, yet intense introduction to the firm during their first few weeks.

W:   Could you describe a little bit of that process, what happens?

F:    After someone’s been hired, they meet with our manager of HR who goes through the paperwork and benefits of the firm.  Then we make sure that the employee gets an introduction to the different aspects of the firm whether it be technology or marketing or policy.  Lunch with their manager for the first day.  Then spend the first week in customer service training and simultaneously development a set goals and responsibilities, which is sort of the covenant or the agreement that exists between the employee and the company.  It’s a mutual contract in that it allows employees to understand what their mission is and what their role in the larger organization is.

W:   How many people did you have to have on board before you made the process more formal?”

F:    It was probably around the 120 employee range when that came about.

W:   How do you compensate your employees?

F:    We compensate them, we feel, competitively.  As an entrepreneur, I have made sure people have the interest of shareholders closely aligned with their own best interest and therefore we have compensated people with stock options.  I’m pleased to report that the company has, at least on paper, made many employees very wealthy, obviously subject to vesting and subject to exercise.  We’ve made many employees very wealthy based on the increase of our share price.  So I think as you look at most employees in the firm who’ve been here for over 9 months, their assets or the value of their stock far exceeds their current income by five or ten.

W:   What kind of culture exists at your company?  How did you establish this tone and why did you institute this particular type of culture?

F:    Iit is an intense culture where people appreciate and recognize the vision of what we’re trying to do here.  They respect their co-workers as some of the finest group of individuals they’ve ever worked with.  How did we create that culture?  I’d say we created that culture through trying to push people to a level that we think they can operate at.  Make sure you hire the best people you can.  I know that sounds banal, but it really is true.  You hire bad people or if you hire people that can’t excel, you can’t have a company that excels.  It’s like if you buy bad concrete you can’t have a good sidewalk.  People are really what make the difference and so you have to hire the best people you can find, challenge them and motivate them. 

W:   How do you lead in this fast growth environment?

F:    I’d say that my leadership style has evolved from one of intense micro-managing to one of less intense micro-managing [chuckles].  As the company has grown and as I recognize that we have all these things to accomplish, it’s moved more to a delegatory style.  The transition has occurred over a period of about six months where I now feel comfortable assigning people responsibility.  In addition to that, I hope that the culture of mandating or requiring performance against people’s  goals and responsibilities is institutionalized.  Yes we’re going to delegate, we’re going to set out a broad range of goals and responsibilities, and we’re going to hold you to them.  We’re not going to micro-manage you but every three or six months we’re going to see how you’re doing, and frankly you should know how you’re doing because your goals and responsibilities have been laid out for you in advance.  If there’s a disconnect, you the employee should know about that disconnect before the manager does.  It’s the manager’s responsibility to try to help the employee get back on track if they are off track, try to create a mentoring type situation where they can continue to grow and learn, and make sure that they get rewarded for performance.

W:   Are there any other necessary qualities that a leader must have to be successful in the Internet economy?

F:     Leadership requires is unblinking faith and confidence in yourself and those around you, and an incredibly high energy level.  Just going back to the first point, great leaders either have to have the foresight to see how things are going to turn out or have to be so myopic that they don’t know how it’s going to turn out but they will it to happen.  Willpower is an incredible thing.  It all revolves around those two things.  In terms of other qualities of a leader that I think are important, a lot of it is very similar to what Useem [in his book] highlighted.  Things that struck a chord within me is communication and that you really build up this bank of trust over time.  Not that everyone’s always going to agree with it but at least people understand where you’re heading with it and then..  I try to take more away from the failed leaders than I do from the successful leaders.  There are many reasons you get to success, but you can always learn from failure. 

W:   Given some of those qualities and capabilities that you've described as being essential for leading in this environment, how or where have you been able to develop and acquire them?

F:    On the job.  I'd say it's here doing it, making sure that I'm in a continual process of learning.  I think everyone needs to be in the position of always saying, "What don't I know, how can I make myself better?"  I think that I aspire to do that as a leader, but you don't always do it even though you want to do it.  So I've hired an organizational consultant to try and help out with different things.  I try to read a lot of biographies of what other leaders have done.  I guess I study.

V:    Do you have a leader that you look at as someone to learn from?

F:    Theodore Roosevelt.  He's just incredibly admirable in the fact that he took risks throughout his entire life.  He stood for principles and he adhered to those principles regardless of if the times were good or bad.  Very intelligent, very dynamic, very motivational.  He was someone that everyone in the US, for sure, maybe in the world, respected.  He was born from a wealthy Dutch family in York.  He was a taxidermist when he was young, like in his teens, between eight years old and what not.  He led a very privileged life.  His father was wealthy and they spent six months cruising the Nile, traveling around Europe.  Then he went to Harvard.  After Harvard he became a New York State politician.  He wanted to become a politician and politics in those days was pretty dicey.  It was all pretty much set up.  So for a year he went to the New York political houses and everyone was drinking and smoking and playing cards, and he was there really trying to push the issues.  He was at Colombia Law School.  Then he became speaker for the New York State Assembly when he was 23 or 24 years old.  After two years doing that, on the same night his mother died and his wife died.  His wife died in childbirth and his mother died of old age.  He quit the New York State Assembly soon thereafter and moved out west.  Then he became a frontiersman for years.  The point is -- he was always taking control of his life.  He wouldn't let other people run it for him.

W:   Okay, now how do you measure success?

F:    I think success is an amalgam of different things.  I think it's enjoying life.  I define success by how you treat other people.  Am I treating other people the way that I expect to be treated or the way I want to be treated?  Am I enriching people's lives?  Am I making people's lives better?  One thing I take a lot of pride in is the fact, I'm making a lot of people wealthy through the process, at least on paper and hopefully in reality.  Making people wealthy through the process is just incredibly rewarding. 

W:   As a leader, what are your top three priorities in order of importance and why? 

F:    As a leader my top three priorities are consistency, communication, and setting high standards.  Those all revolve around the same thing, establishing and trying to ensure high standards for myself as well as for other employees in the company.

W:   What tools do you find necessary when seeking to motivate individuals to follow your vision? 

F:    There's obviously compensation, but compensation only takes you so far.  There's being enthusiastic myself, and making sure that I sell that enthusiasm to other people.  Ideally a good leader has an infectious enthusiasm while being able to maintain discipline.  For example, when we got accredited back in April, I found out from this group called I-Canada in the middle of the day.  It was pretty awkward.  I had to tell them.  I was shaking with excitement and just communicating that to the firm and I think everyone in the firm felt my enthusiasm and my excitement for it and it rubbed off on them.  It was a unique event and it's one that you should share with everybody.