W = Wharton     T = Rick Thompson

W:   Three ways the leadership in e-businesses differ from from leadership in traditional bricks and mortar businesses.

T:    First, leadership requires the ability to operate in a very ambiguous environment in which the rules change very frequently and often cases where the rules are not very well defined.  Second, the shoot in the traditional bricks and mortar model is really ready, aim, fire, and in the internet space it’s fire, ready, aim.  Third, I would say that leadership in the internet space requires the ability to articulate and create a vision. 

V:    What are the necessary individual qualities of a successful leader in the internet economy?

T:    Ability to recruit people that are smarter than you are.  The ability to get people united and behind a concept or an idea that is often times fairly abstract.  The ability to really persevere and press through the problems that inevitably arise.

W:   Let’s expand on a couple of those.  First of all, when you mention motivating people, what tools do you find useful when you’re motivating people to follow your vision?

T:    It’s not so much creating a vision for other people but providing a framework through which they create their own vision.  People get most excited about what they’re doing when it’s really their own vision their executing against.  I think in the internet space the effective leader is not the person who sets the direction so much as somebody who can set a platform through which the key people and the people who are actually going to be doing the heavy lifting define their own vision.

W:   Can you give an example of how you implemented that in your company?

T:    The process by which decisions are made in the Internet company really needs to be very open.  A company that I co-founded, Flycast, had regular open meetings by which all the information was shared and the problems were put on the table and everyone was invited to participate in addressing those problems and deciding what needed to be done and what was really important.

W:   How have you built leadership teams? 

T:    It depends upon the stage that we’ve been at.  In the early stages of starting a company we focused on bringing in people who were not necessarily very experienced because experience was very thin.  Instead we brought people on board who were extremely bright and self-motivating, and capable of dealing with complex ambiguous situations and seeing their way through it.  Those tended to be very young, bright minds for the first stage.  For the second stage..

W:   At what point does that second stage begin, would you say?

T:    It begins when you’re trying to deal with a predictable revenue model and need to have corporate metrics, accountability, and tend to organize world wide functional lines.  The second stage we would bring on professional management that had been there, done that, proven that they could do it before, and execute according to a plan. 

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

T:    We start by making sure that the new people are welcome.  As much as possible we have a very wide interviewing of perspective candidates.  It’s not just the hiring manager, but the senior management team as well as peers and subordinates are brought into the interviewing process.  So everyone has been brought in to the candidate, and they've also all been involved in selling to the candidate, to communicate why this is such an exciting place to be and why they have to be here.  So it starts in the interviewing process.  The first day of work involves making sure that they know everybody’s name.  They’re walked around, introduced to everyone.  We have our company meetings once a week and the person’s introduced.  We usually embarrass them by putting them on the spot and asking them to tell a joke.  Then they feel like part of the family.  It’s a company tradition.

W:   How do you motivate and retain talent?

T:    You retain them by making their work the most important thing that’s in their life.  You keep them challenged, excited and thrilled to be able to have the opportunity to come to work.  To give you an example of a bright recent college grad that I brought in early on at Flycast.  He had no relevant experience so we started him somewhere.  We had him working in our QA lab.  After three or four months he’d proven that he could do that job and wanted to move on to something else so we moved him into our network operations.  That lasted for three months and he was[inaudible] and then a few months after that he was in sales.  So it’s not so much a matter of giving somebody a specific job to do and then considering it done.  It’s a matter of having everyone within the company look for opportunities to solve problems, to establish a process, and a procedure for getting that problem solved and moving onto new ones.  And so if you are always alert to opportunities to let people move on to new challenges I find that they tend to be pretty excited about what they’re doing.

W:   How do you compensate your employees?

T:    We compensate them over market in terms of salary, and in equity.  We acquire the best.  It’s been my experience that one great employee is worth ten mediocre ones.

W:   What kind of culture exists at your company?

T:    The companies that I have been a part of have made it a point of creating a very action oriented, can do, results focused company.  It’s not enough to think and worry about strictly processes, but it’s very important to come up with objectives and results by which we can measure each other and hold each other accountable.

W:   So these are organizational wide as well as individual?

T:    We’ve had, at different points in the company’s growth you need to institute various ways of measuring yourself as well as each other.  Some very simple tricks early on include weekly reports by which each employee will identify what they’ve accomplished this week and what they expect to accomplish next week.  It can make all the difference in the world.  In addition to focusing on what they’ve accomplished and what they’re going to accomplish, we have them identify anything that is getting in their way at all, who they should give kudos to, who been doing an exceptional job with the company so that we can call out that individual and give them appropriate recognition.  So these weekly reports take five minutes to complete, bullet items that everybody does, and it gets distributed and consolidated and returned back to all the employees in a form that is visible to everyone.

W:   As a leader, what have been your top priorities?

T:    My top priorities have been to recruit great people, to create a culture by which everyone is fairly treated and rewarded, and to create a sense of urgency and a vision that just can’t be held back.

W:   Given the capabilities that you’ve described, how have you been able to develop your leadership skills?

T:    I think what’s been most helpful to me is to be in a position of regularly communicating with people that I work with, people that may be reporting to me or are my peers and to regularly get feedback about what effect I’m having on them, how they’re perceiving..  What they’re perceiving of the company, views that they have, things that they’re frustrated by so that we can quickly correct things and move forward.

W:   Going forward, what criteria do you use to measure leadership success?

T:    First, results.  Effective leaders are going to be able to pull together great teams that get results and get things done.  They’re going to not only be able to attract the best but they’re going to be able to retain the best, and they’re going to be able to set clear objectives and be able to meet those.

W:   If you could give advice to an incumbent in developing their internet strategy, what would it be?

T:    I would think it would be to listen very carefully to our customers as well as employees.  If you listen they’ll likely be providing you with the right answers.  Then to be prepared to move very quickly and to adjust if necessary.  The biggest mistake one can make in the Internet space is to delay and wait to see how the market is moving, because by the time it’s moved it’s too late.