Brad Szollose Stop Running Your Business Like Its 1969

Thumbnail image for Connecting with Bill Sobel

Brad Szollose is a lot of things: a serial entrepreneur, former C-Level executive of a public company, a business adviser, millennial expert and an award-winning business author. So he knows a few things about which he speaks — and this is what he wants businesses to know.

Flatten your hierarchies, embrace innovation and stop expecting your employees to follow the rules, keep their mouths shut and listen. Those days are over, and they aren't coming back.

"The digital age requires a smarter worker. In today’s world, we make very sophisticated stuff that does not conform to simple rules. Responsibility, troubleshooting and decision-making have all moved to the frontline. This requires open-source style communication," he said.

Bridging the Generational Chasm

2014-17-November-Brad-szollese-headshot.jpg

As a web pioneer, Szollose co-founded K2 Design, one of the first online advertising shops and the first dot-com agency to go public on NASDAQ.

You may remember the company: it picked up its first major assignment in March 1994 for Sierra Magazine‘s online edition. In August 1994, it was hired by NetMarket, which claimed to be the first company to conduct a secure transaction on the Internet. It also staged the first IBM versus Kasparov chess match, a landmark event in the then novel world of cybercasting.

Szollose's management model received the Arthur Andersen Enterprise Award for Best Practices for Fostering Innovation.

Szollose is the author of Liquid Leadership: From Woodstock to Wikipedia, which explores the subject of new leadership styles, specifically how to get the tech-savvy Generation Y and analog driven Baby Boomers working together.

He's also senior managing director of Liquid Leadership Worldwide, which was formed to help companies like Dell and MasterCard gain a better understanding of the ways technology has transformed corporate culture and behavior.

CMSWire caught up with Szollose recently to discuss leadership, creativity and strategies for success in the digital workplace.

Sobel: You started your first business at age 16. Can you tell us about that?

Szollose: Don't be impressed that I started my first business at 16. My father made it so hard to ask for a $20 that it was easier to start a business. But it put me on the path to understanding the basics of business and the keys to motivating your workforce as well as understanding customers.

Sobel: You graduated from the Art Institute of Pittsburgh with a concentration in graphic design. When I asked you about the connection between your work as a graphic designer and creative director and your current work as a speaker and consultant, you said it’s all about behavior and the importance of working with teams. Can you share your thoughts here?

Szollose: After I graduated from college and moved to New York City in the early 1980s, I accidentally discovered a niche part of the graphic design field: large-scale, big-budget corporate sales meetings and events. These are like rock concerts for CEO’s and sales professionals. As a creative director my job was first and foremost to get a team of highly diverse professionals working together. I’m talking about production artists, special effects photographers, a staging and lighting crew, set builders, sound engineers, videographers and programmers, all working in unison to create an amazing show for corporate clients.

So working in teams to create the very best product time and again was part of the job. If it appeared impossible to do, I would find a way to make it happen.

I did this for 10 years. Some people have trouble understanding how an advertising and design art major could understand behavior, but it's part of the job. You can’t design a thing unless you do a deep study of your customer … how they act, what they expect and that elusive je ne sais quoi that makes your customer go gaga. We are trained to understand what drives people to buy.

Fast-forward and you realize today’s designers coming out of college must first do an analysis of customers or end users. What are their expectations? Why do they like the product? What will be their take-away from this? What are their psychological makeup, demographics and psychographics? Everybody thinks graphic designers choose colors but it far more than that. It’s about understanding people’s mindset.

Sobel: One of your first successes was K2 Design, which was founded as a traditional design firm in 1993 and repositioned as an interactive agency in 1994. Can you share a bit of history, including how it got started and why you decided to leave?

Szollose: After almost a decade of designing printed collateral material for banks, international hotel chains and high-level financial institutions, Doug Cleek asked me to start a company with him. Doug and I had known each other since our college days at The Art Institute of Pittsburgh. I had been in his wedding party. We had skied and mountain climbed together and understood each other’s professional frustrations. At the time I was a creative consultant for the production of large-scale corporate events mentioned above and wanted a change of pace.

So in 1993 we started K2 Design, named after the mountain in the Karakoram region of the Himalayas. For more than a year we did nothing but customized sales kits, printed collateral, posters brochure and such for various clients. Our first big clients were American Express Departures magazine and Banco Popular. Not bad for our first year of bootstrapping, but not enough to pay us the big salaries.

One morning Doug bursts into our one room office in Manhattan and exclaimed, “We have to become an Internet company!”

At first I was reluctant. Remember, this is 1994. It was email and static pages. That was it. People who knew about the Internet used 28K modems and the browser wars hadn’t really begun yet. So I wasn’t sure this would pay off. But we forged ahead and designed a postcard mailer and bought a list.

Now direct mail, if it does well, has about a 4 percent return. Well, we had a 25 percent return and realized people were desperate to get on the Internet. They just couldn’t find any companies to help them. And that’s when we realized there were only 10 companies in the entire United States that built websites.

David Centner met us through his wife, who happened to work across the hall. When he saw us designing our first GUI (Graphical User Interface) he said, “I can sell that.” And he did. David sold $1.5 million in websites in nine months, $4.3 million the following year and $7.3 mil after that.

We grew exponentially. We went from me and Doug to 60 plus employees with offices worldwide, 425 percent growth for five straight years and an IPO on NASDAQ. Our valuation was $26 million at one point.

So how do you manage people when you are in hyper-growth?

Remember the dot-com boom of the 90s was like the Wild West. There were no rules. For the first time in history graphic designers and IT professionals were sitting in the same room. Imagine that for a second. You had people on one side of the room with tattoos and earrings, shaved heads and motorcycle jackets sitting with MIT grads who knew dozens of high level programming languages and wore cardigan sweaters and glasses. The common ground was that they both worked on computers. That’s it! Now, because of the Internet, they were forced to work together. Seemingly opposites, they actually were very suited for each other.

And it was exhilarating. It took a while for the geeks and the artists to understand they were working for the same cause, but I got em to make the work flow smoothly.

To do that, all I did was take the same production management model I used when managing corporate meetings and mashed it up for the Internet space. No hierarchy. Instead I treated each job like a mission. We’d white board to set up the parameters of project just like a quest in a video game and then let everyone go to town getting the best out of everyone. Each person, no matter what his discipline was, became an equal contributor to the project. Each skill set celebrated. And since we had very high criteria for hiring people, they were very creative and very bright.

The only thing wedged between them once in a while was a production manager or executive creative director guiding the workflow or brought in to check on and enforce deadlines.

But it was really about understanding people and understanding how to get the very best out of them by creating a dynamic work environment and giving them the room to be creative.

K2 became the agency of record for the IBM Deep Blue versus Garry Kasparov Chess Challenge, one of the first live events to use the Internet. Other clients were AOL PrimeHost, Waterhouse Securities, Chase CD ROM Hybrid annual report, IBM, Public Theater, Audi Netrider site, Toys“R”Us, several musicals — Rent's touring website, Bring In ‘Da Noise, Bring In ‘Da Funk live cast party, etc.

I didn’t realize it at the time, but I was managing that first wave of Generation X and later Y employees. And that management mash-up I developed is now called a Results Only Work Environment. We won the Arthur Andersen NY Enterprise Award for Best Practices for Fostering Innovation in 1996 because of that ROWE environment. It made people want to do the best work possible.

Sobel: In your book "Liquid Leadership," you say “Today’s generation gap is permanent and unlike any gap we’ve seen before; it’s a chasm. We cannot return to the past any more than Dorothy Gale could go back to her black-and-white world unchanged. But we can bridge the gap to make it work under and new paradigm starting with an understanding of how each of us approaches work. The integration of Boomers and Netizens is paramount to our success.” Can you explain?

Szollose: I'm a Baby Boomer and most of us were raised on a traditional path to success. We were taught to sit down, shut up and listen. Obey the rules laid down by our teachers. We studied hard and didn’t share what we learned until we took a test. Once we passed the test, then and only then, we moved forward.

We applied this linear method to our careers. We worked hard. Hoped our boss noticed us and gave us a raise and a promotion. Hard work, long hours and knowledge accumulation was how we advanced in our careers. It was linear. It was about sacrifice, and it took years to climb the ladder to get the corner office … a status symbol of achievement. And we knew our place in the organization. It never crossed our mind that we had the right to talk to the CEO at 26 years of age.

And we had career milestones. At 20 we just were glad to have a job. By 30, we’d buy a house and settle down. In our 40s we’d move into upper management and by 50 we might be running a division. So the Baby Boomer career path was built on a mathematical formula: Age + Time + Experience = Status and Salary.

Suddenly in the 1990s, as my company was exploding with hyper-growth, I noticed my employees — although they weren’t that much younger than me — were behaving quite differently. At first I fired a few people for what I thought was insubordination, but then I realized they all acted like this. Even our CEO made me stop and ask, “What's going on?”

Here is what 15 years of research has revealed. Millennials grew up with child-centric parenting, where parents began to treat their children like friends and colleagues instead of children. This flattened the hierarchy inside the home. Parents became peers and included their progeny in conversations that were beforehand privy only to adults.

This approach spread to schools and sports, and millennials were encouraged to call their teachers by their first names. Once again, hierarchy was flattened and teachers became peers. Approachable and encouraging of collaboration so we can all discover the answers together.

As a result, they see their older workplace superiors not as authority figures, but as peers — approachable and easily available to hang out with, learn from, run new ideas past. This lack of intimidation is not a lack of respect. Millennials simply don’t recognize traditional boundaries.

We now wonder why a 20-something believes he should be able to have access to the CEO or have their parents storming into HR departments demanding to know why their adult son or daughter didn’t get that raise last month.

Where Boomers knew their place in an organization and would never dream of demanding a meeting with the CEO, Gen Y sees the CEO as a peer. See the difference?

Second, technology changes behavior. Millennials were raised to multitask, which is just imitating the dual processing of a computer. How much can you get done in a hyper-stimulated world?

Millennials are thought workers and picked up digital devices before they could read and write and in some cases, before they could speak. While Boomers played outside at the same age, Gen Y was manipulating digital information. Imagine receiving hundreds of software upgrades, new cheats for a video game and a new version of your favorite game every few months or years. This is the world of Millennials. They grew up in a world where change was constant. Nothing is ever “finished” because of this. Constant change is normal.

If you think they are going to change, good luck with that. This is how they have been trained for more than 20 years of their lives. It is innate. And imagine what is happening to the next generation. Anything that isn’t interactive, engaging them, or puts their skill set to absolute use, is boring to them.

Sobel: In your recent blog, you wrote, “Unlike other generations, Digital Natives believe that expertise comes directly from doing, not from position or education. This is not hubris. It’s a reflection of both their computer experience and dramatic improvements in technology usability.” Can you explore this a bit?

Szollose: Rob Hirschfeld, formerly of Dell, and I teamed up on a blog series that addressed this very subject. This is a quote from part four of our eight part series entitled Cloud Culture 4: No Spacesuits! Authority Comes From Doing, not Altitude:

To a Digital Native, the vice presidents of most organizations are business astronauts floating too high above the world to see what’s really going on but feeling like they have perfect clarity. Who really knows the truth? Mission Control or Major Tom? This is especially true with the acceleration of business that we are experiencing. While the Astronaut in Chief is busy ordering the VPs to move the mountains out of the way, the engineers at ground control have already collaborated on a solution to leverage an existing coal mine and sell coal as a byproduct. The business hierarchy of yesterday worked for a specific reason: workers needed to just follow rules, keep their mouth shut, and obey. Input, no matter how small, was seen as intrusive and insubordinate … and could get one fired. Henry Ford wanted an obedient worker to mass manufacture goods. The digital age requires smarter workers because, in today’s world, we make very sophisticated stuff that does not conform to simple rules. Responsibility, troubleshooting and decision-making have moved to the frontline. This requires open-source style communication.”

Cisco CEO John Chambers realized back in the early 2000s that he was the bottleneck that was slowing Cisco down. Imagine hundreds and hundreds of decisions awaiting one person’s approval and you get the picture. So John built a more democratic structure within Cisco, giving several divisions the autonomy to make decisions and purchases without him.

Speed is paramount to success in the 21st Century.

In the past, as I pointed out, Boomers took years to learn a subject or a skill. As they rose within the careers, then they gained status. And with Millennials, I pointed out that they see everyone as a peer. Today, decisions are made on the frontline, in real time. Awaiting your boss’s approval could mean the difference in being first to market or last in line. Just think of any Palm device and you get the picture. You have to keep up in the Information Age.

That means today’s frontline workforce needs to be smarter, trained in the company expectations and given the autonomy to work independently. This requires trust

Unlike previous generations, Digital Natives believe that expertise comes directly from doing, not from position or education. The latest skill set gives you your leadership position, and that also means, leadership is rotational.

Someone sitting high up in an organization doesn’t understand the complexity of what is getting done, and since they may not know the shifts that are coming at us at light speed, what seems like a logical decision from the C-Suit could destroy the entire company. Think Borders, Blockbuster, Spiegel’s Catalogs. They didn’t keep up with change.

Sobel: You say it’s important to “take the multigenerational gap that’s splitting your workforce and transform it into an engine of performance and innovation.” Can you give our readers some suggestions how to get started and things they should be thinking about as we enter 2015?

Szollose: First, start by taking hierarchy and age out of the picture. Advancement requires contribution. To a Baby Boomer who suddenly has a 30-year-old boss, that can feel like failure. It is not. We have to retrain our criteria for success.

Second, create an environment that places people first and encourages them to tell the truth. Let your people make suggestions and come up with implementation steps that suit them. Encourage collaboration that works within your corporate culture.

Third, reward and encourage a creative culture. When anxiety is high in a company, creativity and enthusiasm is low. When anxiety is low, productivity and creativity go up. And without creativity there is no innovation.

And lastly, up your organization with Gamification. The reward-advancement paradigm, where one waits years for a position or a raise is no longer valid. Want people to stay? Kick it up a notch.