I didn’t know it at the time. In fact, when I took it, I thought it was a complete farce.
Maslow’s “Hierarchy of Needs”? Are you kidding me?
I was majoring in Engineering and taking calculus, physics, chemistry…you know, the serious stuff meant for serious students. But, to graduate within some reasonable amount of time (where “reasonable” was defined by my parents), I needed some additional elective units. So, I decided to take one of the only classes that wasn’t already filled and would satisfy the requirements for me to graduate; this turned out to be a class called, “Organizational Behavior”.
I looked up the description of Organizational Behavior which read something like this:
“The study of the way people interact within groups. Normally this study is applied in an attempt to create more efficient business organizations. The central idea of the study of organizational behavior is that a scientific approach can be applied to the management of workers. Organizational behavior theories are used for human resource purposes to maximize the output from individual group members.” Source: Investopedia.com
“Oh my god!”, I thought. “Is there any way I can get out of this boring, irrelevant class? Is this a legitimate/real subject?”.
When the course was finally over, I was ecstatic and turned my textbook in as fast as I could for 25% of the amount I originally paid – grateful that someone would buy back such a useless piece of $hi%.
What I didn’t realize then, as a college student with no real world work experience, is that I was a complete moron – at least temporarily.
At the time, I believed that the success of my career was going to be tied to my individual work effort and results. And, while that was certainly true for the first few years, I was offered a managerial position fairly quickly since I didn’t seem to screw things up too badly — and I accepted because this is where I believed more stock options and a better salary awaited me.
But, I quickly realized I needed to figure out a way to get things done through others or I was going to fail, and fail badly. Suddenly, I became highly motivated to highly motivate a team of people. I started reading a lot of books about teamwork, etc. which I recognized as essentially more modern treatises of my old college textbook and coursework on organizational behavior.
Fortunately, while I may have been a moron in college, I seemed to acquire a few more IQ points as I got older. The framework of Maslow’s Hierarchy of Needs became my “religion”. I tried to determine where different members of my team were according to Maslow. Survival? Self-actualization? Somewhere in between? I would then use these insights to try and motivate different people based upon those insights.
This turned out to be a successful strategy and served me well throughout my operational career. I absolutely wasn’t perfect, but using this approach, my organizations and teams were usually some of the highest performing at Oracle, Apple, and Siebel Systems. And, I had a lot of wonderful people who seemed to enjoy working in them.
However, when I joined InterWest as a budding venture capitalist, my impression was that this was an “individual contributor” business. Now, it turns out that I was wrong, but that is how I viewed the business as a “newbie”. Once again, proving you are never too old to learn.
While successful venture investing has a lot to do with things you do personally (your network, your intuition, your judgment), unless your firm also does well overall, it will not be supported through ongoing investments by Limited Partners and therefore you can not raise a new fund.
This may generate a resounding “duh” from many of you and sound obvious but, in fact, it can be rather subtle.
The problem is that most of the time you spend and the work you do as a venture investor is, in fact, done on your own. And, compounding that, Limited Partners and your own firm’s partners keep a laser-like focus on your personal metrics – IRR%, multiples on $ invested, capital put to work, etc.. All of this contributes to the feeling that venture investing is an “individual sport.”
However, as stated previously, it is insufficient for you as an investor alone to succeed, you also need each of your partners to be successful. So, helping them think through their investments, perform due diligence, etc. — even if it’s not in a company/area you are particularly interested in – becomes a critical part of the firm’s success and a team exercise. This is something I have only recently begun to really internalize and appreciate after 8 years of venture experience.
The place where I believe that venture firm teamwork is identical to startup teamwork is when raising capital for a new fund. The partners must come together and each play a part in the development of the private placement memorandum, strategy, investor deck, Limited Partner meetings, etc. Organizational behavior is clearly at work. The firm realizes it is in “Survival” mode – it will either raise the fund together or the firm will no longer exist.
So, whether it is a company or venture capital firm, I have discovered that those principles in organizational behavior I scoffed at so long ago in college, are in fact some of the most important lessons I ever learned. I don’t use my knowledge of calculus, physics, or chemistry any longer but the lessons of organizational behavior play a role each and every day for me – even in venture capital.
So, if you have kids in college or entering college – no matter what they are studying – I would encourage you to encourage them to take a course on Organizational Behavior. It might turn out to be one of the most important courses they can take and the best advice you can give to your child to help them in their career – even if they don’t recognize it at the time.
PS. And, in case you’re wondering, while I grumbled a lot, I did get an “A” in Organizational Behavior and graduated before my parents threw in the towel….but it was close.