Radical candor vs. Kind Candor

Podcast Summary

• The importance of empathy and compassion in delivering difficult news or practicing candor: Empathy and compassion are essential when practicing candor in business. Identifying a problem and finding a solution through innovation and technology can lead to success.

  Empathy and compassion are crucial elements when delivering difficult news or practicing candor in a business setting. Gary Vaynerchuk shared his personal struggle with delivering bad news due to his love for his employees and people in general. He emphasized that radical candor without enough empathy, compassion, sympathy, and context can be harmful. Henry Ward, the co-founder and CEO of Carta, shared how they started by addressing the problem of physically mailing paper stock certificates and dematerializing stocks through the cloud, which led to an explosion of option value and the creation of an entire ecosystem for cap table management, option management, portfolio management, liquidity, and fund administration. The success of Carta serves as an example of the importance of identifying a problem and finding a solution through innovation and technology.

• The excitement of making the first sale: Making the first sale is a significant milestone, but getting there requires passion, perseverance, and a belief in the product and entrepreneurial journey.

  The first sale or payment for a product or service is a significant milestone for any entrepreneur, no matter the size of the business or number of employees. This was emphasized by the speaker, who recalled the excitement of making their first $800 in sales for their CapTable software in January 2014. However, getting to that point was not easy. The speaker noted that CapTable software was a new concept and convincing people to buy something they had never needed before was a challenge. Despite the initial struggles, the speaker's passion for the product and the game of entrepreneurship drove them to keep going, leading to future successes. The speaker also highlighted the importance of remembering the early days and the first milestones, as they serve as a reminder of the journey and the hard work that went into building the business.

• Thriving despite mistakes: Even with technology limitations or under-delivering on promises, successful startups can thrive by focusing on positive customer experiences and word-of-mouth referrals.

  Even in the midst of seemingly catastrophic mistakes, such as a broken phone system that hung up on potential sales calls, successful startups can still thrive. The speaker's company, Carta, experienced this firsthand in 2014 when they sold more than ever before despite the phone system issue. However, it's important to note that not all businesses have the luxury of figuring it out as they go along. Technology limitations or under-delivering on promises can be major roadblocks. For those currently facing such challenges, the speaker suggests a drastic approach like putting a sales team on hold to focus on onboarding, or a more gradual approach of fixing issues while continuing to operate. Ultimately, the most crucial factor is ensuring positive customer experiences, as word-of-mouth referrals can make or break a business.

• Effectively Communicating with the Board: Assign specific roles and responsibilities to keep board informed and engaged, be transparent and honest to build trust and productive relationship.

  Having a board can be incredibly beneficial for a company, but it's important for founders to effectively communicate with and involve their board members. The speaker shared two strategies that have worked well for him: first, keeping the board informed and engaged by assigning them specific roles and responsibilities within the company, and second, being transparent and honest with the board, even if the news isn't positive. By applying pressure or feeling it, and avoiding surprises, founders can build trust and a productive relationship with their board.

• Communicating Effectively with a Board: Underpromise and overdeliver, communicate openly and regularly, and tailor communication to the audience to build and maintain trust with the board. Regularly check in with individual board members to address issues before they become major problems, and be candid while considering the audience's unique needs.

  Effective communication with a board is crucial for maintaining trust and preventing unexpected issues. If a leader waits too long to address an issue, they risk losing the board's trust and potentially facing the question of whether they are the right person to run the company. To build and maintain trust, it's essential to underpromise and overdeliver, as well as communicate openly and regularly with board members. This can involve texting or calling each board member individually before bringing up controversial topics in group settings. When the board is bored during meetings, it means the leader has overcommunicated and has done their job well. As for personal growth as a leader, Hadley shared that she struggled with delivering bad news due to her love for her employees, but she has become better at candor in recent years. She also noted that the one-size-fits-all approach to radical candor doesn't work for everyone, and it's essential to tailor communication to the audience.

• Understanding the Employee's Perspective: Effective feedback involves asking employees for their perspective and collaborating on solutions if in agreement, or approaching the conversation with curiosity if they believe they're doing well, to avoid defensiveness and ensure productive discussions.

  Effective feedback in the workplace depends on understanding the perspective of the employee. Instead of insisting on your own viewpoint, start by asking the employee for their perspective. If they agree with your assessment, you can collaborate on finding solutions. However, if they believe they're doing well, it's important to approach the conversation with curiosity rather than insisting on your perspective. This approach can help avoid defensiveness and lead to a productive discussion. Additionally, it's crucial to recognize and avoid idiosyncratic manager bias, which can negatively impact an organization. Carta, the company mentioned in the conversation, aims to help entrepreneurs and fund managers manage their businesses and investments by providing tools for understanding capital structures and stakeholder management.

• Entrepreneurship in America: Achieving Success Despite Academic Performance: America's entrepreneurial spirit allows for success despite academic backgrounds, but the education system doesn't effectively teach or encourage entrepreneurship, and focusing on strengths and growth can help middle managers advance.

  Despite having a poor academic performance, it's possible to become a successful entrepreneur in America due to the country's entrepreneurial spirit and culture. However, the education system does not effectively teach or encourage entrepreneurship, often discouraging those with the potential from pursuing it. The ladder-like progression in traditional education contrasts with the unbounded nature of entrepreneurship. To help middle managers grow and reach higher positions, it's essential to focus on their strengths and achievements rather than their mistakes. Encouraging a growth mindset and providing opportunities for learning and development can help them advance in their careers.

• Supporting Middle Managers in a Growing Organization: Encouraging and supporting middle managers is crucial for a growing organization's success. Identifying trusted employees as 'family members' and fostering a supportive culture can help CEOs make informed decisions and retain top talent.

  Effective middle management is crucial for a growing organization, but it comes with challenges. Middle managers are often judged based on their successes rather than their failures, and they may fear the consequences of shining too brightly. However, it's essential to encourage and support middle managers, as they have the potential to make a significant impact on the company. The CEO's role evolves as the company grows, and they may feel overwhelmed by the increasing complexity. Identifying trusted "family members" or key employees within the organization can help CEOs stay informed and make effective decisions. While having a few dozen such individuals is a good start, aiming for more would be ideal. At Carta, the focus is on recognizing and celebrating the impactful contributions of middle managers, even if they come after a few setbacks. Encouraging a supportive and growth-oriented culture can help attract and retain top talent, ultimately benefiting the organization as a whole.

• The importance of strong relationships in business success: Building a successful business involves more than just capital; it requires a strong network of trusted family members and colleagues for valuable insights and support. The departure of a founder-CEO can lead to significant culture shifts, and the future of work may involve more ownership and stake in companies.

  Building a successful business requires more than just capital; it necessitates building a strong network of trusted family members and colleagues who can provide valuable insights and support. The founder-CEO's departure is a pivotal moment in a company's history, and the culture shift can be significant. Furthermore, the future of labor may be shifting towards an ownership era, where people own a stake in the companies they work for, rather than just selling their time for money. This trend is already visible in industries like tech, sports, and entertainment.

• Blockchain and Employee Ownership: A New Compensation Frontier: Blockchain technology could lead to more companies adopting employee ownership as a form of compensation, saving time through efficient meetings, and revolutionizing labor markets beyond tech industry.

  The future of labor compensation could shift towards employee ownership, enabled by the underlying technology of blockchain. Jerry from Carta emphasized this point, explaining that the blockchain is not just about NFTs and cryptocurrencies hype but a technology that ensures guaranteed truth. This shift could lead to more companies considering employee ownership as a form of compensation, broadening the audience beyond the tech industry. Furthermore, the conversation highlighted the importance of managing time efficiently, as shorter meetings and fewer attendees can lead to significant time savings. Overall, the discussion underscored the potential of blockchain technology to revolutionize labor compensation and the importance of making the most of our time. To learn more about Carta and its services, visit carta.com.