Lenny Rachitsky: evaluation

Transcript context

…What we do have is an annual planning cycle basically, we call investment plans and it's for fairly large SWOTs to the organization. I'm talking like 20% chunks of all of Shopify consolidated under a VP here and there to put forward a vision for what that team's going to accomplish that year, whether that is a directional change or even specific outcomes in some cases. And we spend time aligning with both Tobi, the rest of the C level exec team, even sometimes the board on what that is and what headcount may go with that and what not. But that's sort of the main arc of planning. What happens after that is just chaos, all the teams underneath and like I said, one fifth of Shopify may be moving towards one investment plan, that's at this scale almost 2500 people. Right? So they're all now chaotically moving towards those end goals and iterating through ideas good and bad. And so this is actually where Shopify is a really hard place too, because we do this because we recognize a couple things. One is it's important that we set broad direction, so everyone can put their energy towards the right place. But we also want a place where we're hiring smart people so that they can figure out what to do. And we also know that in software and in tech and in this world, things change so rapidly. So don't even kid yourself that we're going to plan out everything we're going to have to do for the next year to get there. And so we set this directional kind of outcome and vision based kind of north star for where we want to go. Then product directors start to basically shoot their shot and say, "This is how my group can contribute to those things. Here's what we're going to try to commit to in the next quarter basically." And it's through that almost back and forth, the trust battery thing that I was talking about plays in. Again, they're selling it to their peers, the engineering directors. They're selling it to the VPs. They're selling it to the broad team as well to get momentum behind it and to say, "You know what? This feels right. Let's start doing that." But what's really amazing and also difficult about Shopify though is we're pretty good at never falling into sunk-cost fallacy. So we'll throw it all away anytime if the world changes. Right? And so that's why it's actually a really tricky place for a lot of folks because there are cases and it's happened to me many times where it's just like you're building three, six months into something and it's just not important anymore or the world changed. And so that's kind of how the sausage gets made. And it really comes down to giving teams the agency, giving product folks at certain levels the responsibility to make a bet, and then having the humility to understand that soccer's hard, the world changes and that we always have to ask ourselves this is the most important thing that we can do right now. It's so important. A lot of companies just want to avoid upsetting people, want to avoid creating chaos. And it's so important to always be rethinking even if it's like we just put a plan together, maybe we should change it because things have changed. And so I'm not surprised Shopify is really good at this. To give an example, during COVID, this cultural resilience we had to change was so vital because all of a sudden, these grandiose ideas and visions we had for 2020 didn't matter and what mattered was like, "Oh, shit. Retail businesses are going from a hundred percent to zero." It's like 0% revenue overnight. And how do we help a brick and mortar store across the street now do order online and pick up it in store? How do we do that? How do we throw away everything? This is what matters now. Let's try to ship three things in the next month that matter." And that's very jarring, I think, unless you have a culture that just understands that can happen any day and it kind of gets excited by those.…

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