Eric Ries: evaluation

Transcript context

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Learn more at vanta.com/lenny. And as a listener of this podcast, you get $1,000 off Vanta. That's vanta.com/lenny. I want to talk through just like, what do you do? So there's write a mission statement. Values, is that a part of this? Just define your values. Talk about the bullet points. Well, yeah. So again, no. Writing this statement is not valuable. Okay? The statement is not what it is. The reason I use the old-fashioned word ethos. I tried to write this whole book without using any trendy consulting language at all. So I try not to use the word stakeholder. I try not to use the word culture. I tried to really go old-fashioned. That's why I started with Stall Price. Rather than talk about stakeholders and mission statement and values, I want to know who are your fiduciaries? It's like a real old-fashioned word, fiduciary. But to me, the question every leader has to answer, and this is every product has to answer this question. What is its purpose? Who would you rather die than betray? Okay? So if you tell me, I want to have a high quality product. I would rather die than ship slot. Think about how Steve Jobs was. This is a guy who would fight with people over the layout of the wires inside a computer he didn't want customers to be allowed to open and ever see. That's so classic, harder is easier, right? Just it has to be a certain way. If you know stories about Yvon Chouinard, the founder of Patagonia. Today he's more famous for his environmental activism, but he was a quality zealot. He believed that quality was an objective function and that every product had a quality level that it deserved. Most people think that's insane. That's why Patagonia is such a success. That idea is powerful. So whatever that thing is, that purpose. We have to find ways to encode it in our management system so that there's no way for us to make money by betraying the principle, whatever it is. So this can happen both at the operational level and at the governance level. Both are really important. People hearing this, I know some people are going to be like, "Purpose? Is this some ESG nonsense?" Okay. There's a very funny quote in the book, Unilever, the big food giant. We went through a phase a couple years ago where they were going to infuse purpose into all of their products. And a Wall Street investor was just like, "I've had it with this." Wrote them a nasty letter, it was like, "Look at the point that we're debating the purpose of Hellman's mayonnaise, I think you've lost the plot." And I love that quick because it's funny, but actually what's so funny about it to me is humble though it is, Hellman's mayonnaise is food. Its purpose is super clear. And again, if you think it doesn't matter what the product manager who runs Hellman's mayonnaise thinks the purpose is, going back to our vital farms question, think how easy it would be when an efficiency consultant shows up and says, "I think we could save three cents on the bill of materials if you just make the thing carcinogenic. " And you're like, "Oh, wouldn't that come back to bite us?" "Yeah, but long after your stock options are vested, buddy, what do you care?" If the product manager thinks their purpose is quality, that matters. 're like, "Oh, wouldn't that come back to bite us?" "Yeah, but long after your stock options are vested, buddy, what do you care?" If the product manager thinks their purpose is quality, that matters. If they think their purpose is extraction and exploitation, it matters. Again, if you think I'm exaggerating, the product managers at Johnson & Johnson put asbestos in the baby powder and covered it up. Because although they said their purpose, their mission statement was patient health. Their actual mission had become growth, optimization, quarterly targets. So what we want to do is that's the first most important technique is like, what is the purpose? Who would we rather die than betray? You got to write it down. You got to say, as Saul Price did, customers first, employees second, shareholders last. Or the great Peter Drucker said it with actually, he said that that's backwards. It should be employees first, customer second, shareholders last. I don't care. You tell me what you believe, you got to write it down. And then we have to do a thing I call mission drive. Companies that claim to be mission driven, most of them are just mission hopeful. Okay? It's bullshit. It's just like candy coating on top of an extractive engine. Sorry, I don't buy it. If you're serious about being mission driven, you have to show me that you cannot profit except by achieving the mission. That's the audit we have to do. We have to look at, if someone in the company got tempted to cut quality, to cut corners, to decrease performance, to deal with ... The things that tend to get cut first, safety, performance, quality, design, those are always the most vulnerable. Innovation, I guess is fifth. So that's like the five horsemen of the apocalypse is like, you can get rid of those things and nothing bad happens right away. Because the whole point of trust is I can betray you and you wouldn't even notice. ...point of trust is I can betray you and you wouldn't even notice. So those are like the canary in the coal mine. Is anyone's bonus target? Is our OKR system? Is there anyone in this team? And again, you could do this at the company level, of course, but you're just a team, a team of five. Is there anyone on this team who could profit by portraying one of our principles? Is it possible? And it's really possible. And this is actually why automated testing is so good. Think about how many people can just break the design no one even notices. Well, it's a test notice. With AI, we have so many new capabilities for auditing, for preventing, for making sure, but we have to choose to use the tools for that. That's one. So that's the general category of things that we can build.…

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