Interview with H.S. Hamadeh, Founder, Vault.com, January 17, 2000

W = Wharton   SH = Sam Hamadeh

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

SH: General business models and strategies apply to all businesses, but leadership in a hyper-growth environment like the Internet industry poses special challenges:

·         More gut, less analysis: Decisions often precede detailed analysis and careful planning. The industry and competition moves so quickly that I typically do not have the luxury of extensive analysis before making decisions.

·         Recruiting talent and empowering all team members to make decisions becomes critical. In the Internet industry, front line employees (even junior ones) will be making quick decisions. Because of the pace of the industry, a company simply cannot survive if all decisions must float to the top of organization.

·         Vision in the midst of chaos: Markets change so quickly that strategy needs to be focused enough to provide direction to the troops yet flexible enough to adjust to new competitors and technologies that enter on an almost weekly basis.

·        Co-opetition: Partnering/cooperating with your competitors for mutual benefit is often a must, and far more common than in a more traditional industry.

W: What are the necessary qualities of a successful leader in the Internet economy?

SH: General Individual qualities: technical competence at the top is critical, partnering skills needed to develop networks of complex relationships, willingness to take risks and "bet the farm", and ability to inspire employees and empower them to make decisions.

W: Given the capabilities that you've described as being so essential for leading an e-business, how or where have you yourself been able to develop and acquire them?

SH: As an entrepreneur, I have had to develop many of these qualities myself. However, it is also critical that I acquire these qualities and expertise in various areas by bringing in experienced managers into the business. This includes hiring experienced managers as employees, involving experienced professionals in an advisory-board capacity (and incentivizing them through stock options and other programs), and in some cases acquiring companies with experienced management.

W: In the past leadership has been defined in the context of classic business environments. Going forward what criterion would you use to measure leadership success?

SH: The Internet industry will eventually be subject to inevitable rules of "classic business environments": shareholder value, employee retention, customer service, profits. The medium may present different ways to reach the classic measures but the measures themselves don’t change. For example, customer service will increasingly be measured by how well a company can leverage the unique features of the Internet to provide a customized user experience.

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

SH: (1) Execution, execution, execution: great strategies abound in the wild west of the Internet. What counts is execution (with a healthy dose of hype). (2) Hiring talent and keeping talent motivated, productive, and happy. (3) Marketing and capturing "mindshare" in our space before others do so.

W: What tools do you find necessary or useful when seeking to motivate individuals to follow ("catch") your vision?

SH: You yourself must feel passionate about vision. Many Internet businesses today require leaps of faith and the leader needs to project unwavering confidence in the business model. While industry requires frequent tactical changes, the strategic vision needs to remain clear and consistent to all within and outside the company (employers, investors, media, etc.)

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?

SH: We value results above all else. We back it up with recognition, rewards and incentives for those who produce results.

W: How does a leader convince management to go along with the new ideas required to implement e-business in an established company?

SH: Moving online is a "damned if you do, damned if you don’t" position for most established companies today. But the risk of doing nothing is much greater than the interim disruption involved in transitioning all or part of the company online.

W: What skills are necessary to gain buy-in from those not involved in the process?

SH: In such major changes in an organization the "soft side" of management requires more attention and the leader needs to understand just how disruptive such a transition is to most employees’ professional (and personal) lives. In the case of moving online the leader shouldn’t do anything until s/he has a clear strategy. To develop this, a leader needs to form a SWAT team of internal old-timers who understand the business and industry fundamentals and external experts who understand technology and rules of the e-business.