Myriad: What can we learn?
I was sad to read in the article by Yolanda Redrup in Australian Financial Review that Myriad is no longer. You can read the article here.
Firstly, I am Brisbane based, and I saw great outcomes for the ecosystem. Secondly, I was unable to fly on the Myriad Air last year, but, by all accounts, it was a great flight. I lament not getting a chance to do so.
Martin Talvari and Murray Galbraith built a great event. But it is no longer. It is an interesting case study of what I see time and time again, all over the world.
In the long term, it is never the greatness of the product, or what past success you have achieved. Your ability to be successful in the long term will be a function of other ingredients. But these other ingredients are rarely spoken about.
The purpose of this article is to break down the story shared, give some ideas on why this situation is often predicable, and what you can do instead. It is to shine a light on some of the other “ingredients” I mentioned above, and to provide a roadmap for founders to build great companies.
Start at the beginning
So, we know that Martin & Murray had a good product that was supported by the market, and by all accounts, there were growth opportunities. Great.
But what is the article really talking about that lead to issues? Change.
“When Mr Galbraith returned, he said, “the dynamic” between the pair had changed and they no longer agreed about how to run the event.”
“He wanted to take things in another direction”
“Advance Queensland had been the major sponsor of the festival, and the co-founders had underestimated how disruptive the election could be”
“It resulted in a new innovation minister and a new chief entrepreneur for the state – two changes that were destabilising for the festival organisers.”
“We’d previously had Mark Sowerby as the chief entrepreneur, who was a huge supporter of ours, and he had a solid relationship with the CEO of Qantas and helped us pull together a deal for Myriad Air, but when he was no longer the chief entrepreneur it made things really complicated.”
“When Martin took over as CEO, it never occurred to me that we’d have a difference of opinion because we’d always believed in the same things for so long.
Like all of us, they lived in a world of constant change, but why did these changes lead to a company imploding, while other changes lead to success? It’s not like they didn’t have change when they first started?
Ok we get it. Lots of change. Stop wasting my time!
What does change create? Problems and opportunities. Life is about reacting to the problems and opportunities caused by change.
In light of problems and opportunities, we need to manage. Managing is just deciding what to do, and implementing that decision. Of course, if it was this easy, everyone would just do it all the time.
Not only that, when you implement a decision, it causes more change. So, the change loop is driven both externally and internally.
When you read the AFR article, they lived in a world of change that was constantly throwing up problems and opportunities. Clearly, some problems were not able to be turned into opportunities, and some problems undressed become crises. Crises unaddressed lead to the death of a company.
The core message is here. Once you get your business off the ground, your long-term success will be determined on your ability to traverse this change loop. Not just the next software release. Not the next person you hire. Not the product enhancements. Not the next event you’ll throw. If you have a good product, good capital, good people at a point in time, don’t worry, it all will change. If you can’t traverse this loop, your days are numbered.
So, you must become great at creating an organisation that can traverse this change loop. Please read my words carefully. I am not just saying YOU need to be able to traverse this change loop only; you need to build an organisation that can do it as a whole. This means you have to be systemic in your approach, not individualistic.
If it is reliant on you, your organisation will reach a ceiling because an individual can only process so many “change loop transactions”. You become a bottleneck, fall behind and end up in a place we call “the founders trap”.
Why, why, why, Delilah?
Ok, so what? Change creates problems and opportunities. Big deal. And yeah, I’m not an idiot. I need to make a decision and then go and implement it. What’s your point?
My point is, if it was easy, then technology, products, people and money would be enough to achieve long term success. But good companies, with good products and historical success, time and time again, fail to traverse this loop.
Something gets in the way. Something stops you traversing the change loop. That something is conflict.
Conflict in inevitable
When making a decision, there is uncertainty of what the future will bring. I know exactly where I should have invested my money 5 years ago, but the next 5 years is uncertain. This uncertainty creates risk, and this risk can lead to conflict between people. We look at a situation through a series of our own lenses, and these lenses can often conflict with others.
There are seven broad categories of conflict we find in organisations from one person to 1,000,000. The conflicts are;
- Conflicts of definition: words can mean different things to different people.
- Conflicts of style: people have different styles on how they communicate, tackle problems and opportunities, and interact with others.
- Conflicts of roles: the roles of efficiency and effectiveness in the short or long term are in conflict.
- Conflicts of perceptions: people perceive what is, what they want and what should be differently.
- Conflicts of interest: what is in someone else’s best interest, might not be in yours
- Conflicts of values: behaviours may or may not be acceptable to you
- Conflicts of “Democraship”: healthy cultures have democracy in decision making, but dictatorship in implementation. Ying and yang. These can be in conflict.
Look at a company, team, relationship or even country that is falling/ has fallen a part, and at the core you will see these conflicts. I was not present during the back-room issues with Murray and Martin, but I bet you there would have been interwoven conflicts all over the place. Have a look at the USA. A once great country is disintegrating before our eyes as these conflicts slow down their ability to react to change (Example: firearms have changed since the Second Amendment was ratified in 1791. Because of these conflicts, they still can’t deal with muskets changing to assault rifles).
When a problem or opportunity presents itself, you must make a decision and implement it. I bet Martin and Murray have different styles, roles, perceptions, values etc, and this conflict can turn destructive. As an example, Martin lists himself as the Founder of Myriad on LinkedIn. Murray lists himself as the Co-Founder. Often a tell-tale of different styles.
Also, if a Co-founder allows Forbes to do an article claiming he is the sole founder and a genius, that type of behaviour is often common with “geniuses” but doesn’t bode well for long term relationships.
Take a look at a situation in your life where you are in conflict with one or more people. If you were to hit pause and analyse the situation, I bet that you will find a range of these conflicts. Their style in dealing with you causes you issues, their perception of the issue is different to yours, their solution drives a different interest to your own. There are lots of options.
So if these conflicts are the issue, we can just get rid of the conflicts, right?
You can’t remove these conflicts. You will never remove these conflicts. It is in fact undesirable to remove these conflicts. If everyone is the same, not only is life boring, you won’t be as successful as you could be.
Destructive vs constructive conflict
Conflict can be destructive, but it can also be constructive. Clearly the conflict between Martin and Murray ended up being destructive, and this sowed the seeds of future problems. It is constructive conflict that we want. It is constructive conflict we must strive for. We must accept conflict is going to happen, and create the culture and climate where conflict is embraced and turned constructive.
How to ensure inevitable conflict is constructive? Three words. Mutual. Trust. Respect.
We can start to build out more of a map at this point. Change loop into conflicts, and conflicts either being constructive or destructive based on the level of mutual trust and respect.
Mutual Trust and Respect
Look at any successful company, relationship or even country and what do you find at the core? Mutual trust and respect. As Dr Adizes points out in this video, two couples can have the same fight, but one couple files for divorce, and the other has the best makeup sex ever.
What’s the difference? Mutual trust and respect in each other.
Have a look at the table of countries with the highest GDP per capita. What do you find? Countries with very little arable land or natural resources, dominate the top. What does Switzerland have? Cookoo clocks and snow? But it is a highly trusted, respected and wealthy country. In fact, if you look at their industries, they are in fact exporting mutual trust and respect. They are exporting their culture. It is why they are so strong in banking and pharmaceuticals- things that require high levels of mutual trust and respect.
And what is Switzerland made up of historically? French, Italians and Germans. What!? They have been at each other’s throats at every world war? The swiss culture of M T & R has allowed them to over come these differences.
What am I saying? It is not resources that determines success, but the mutual trust and respect. Product development, technologies, capital, product market fit etc etc. These are required for success but not sufficient. What will make you successful long term? Who you are as an organisation, not what you have.
Once you have a good product with sufficient product market fit, you’ll find money. Money is searching for opportunity. But once over this hump, your organisational culture, and the trust and respect between people is what will be most important.
What you do and what you sell will come and go, but who you are will determine if you can traverse the challenges of change. For whatever reason this doesn’t sell really well, and start-up hubs and “accelerators”, (or decelerators is the outcome some achieve) are not incentivised to shine a light on this.
Key point. You need a good product. You need people. You need some money. Yes. But you also need to put effort into building a culture of mutual trust and respect, where conflict is constructive rather than destructive. And this culture isn’t about having a table tennis table and Friday afternoon work drives provided. This is far deeper than this bullshit.
There’s a problem…
Unfortunately, you cannot buy M T & R. You cannot demand it. It is actually the outcome of other ingredients, in the right sequence at your phase of the lifecycle.
Input vs output: The how.
Lots of people can tell you what to do. It is usually good stuff too, but often the how is lacking. When I listed one of my companies I was lucky enough to be part of a number of CEO groups, and I have been to all sorts of events, all over the world. I have consumed a lot of content. If you have gotten to this point in this diatribe, you’re probably a content digester as well. I hope to differentiate by giving a tangible HOW to do it.
There are four umbrella ingredients that need to be in the right sequence and intensity for your phase of the lifecycle. If you have the right ingredients, it will lead to mutual trust and respect. If you lack them, or don’t apply them correctly for your phase of the lifecycle, you’ll experience failure.
This means you can use it as a bit of a map, that when you are feeling there is destructive conflict, you can be better placed to work this out. Is it a managerial processes issue? Vision and Mission issue? Structural Issue? Or People issue? Hint- if everything is a people issue, something else is really the issue.
In the article, Murray was partly right describing two ingredients in order to not suffer the same fate.
He said the “biggest mistake the pair had made was not having a third party intervene and provide an independent perspective, which came down to needing better governance structures.”
I partly disagree, but it could also be a conflict of definition. You do need a 3rd party (at the right time- not too early, not too late), but you don’t need them to intervene and provide independent perspective in all situations. What you need is a 3rd party to help you stay integrated together, and bring processes and an approach for you to build mutual trust and respect in the face of inevitable conflict.
I find founders don’t need to be told what to do. They know their product and know their market. But how they go about managing the change loop needs to change as the business evolves.
Murray hits the nail on the head with one word in the next sentence;
“The processes we put in place were not strong enough to withhold the pressures we placed on ourselves,” he said.
I would define the processes as not the operating processes. Young businesses have very few of those for good reason. It is the managerial processes. Decisions and implementation processes. Woops! Back to the change loop!
This is where I start with the people I work with. Whether it is a small high growth company, through to a couple of billionaires I have had the pleasure of working with recently, or large family companies and large corporate institutions like banks and telco’s (insert big noting high fluting wankery here. If you’ve gotten this far- suck it up).
How are you and your cofounder/s, team, divisions, organisation or even family identifying the problems and opportunities that come from change? How are you making the decisions? And, how are they implementing them? Have you updated these processes since you started?
I often say I am the laziest consultant on the planet. I contribute zero problems and opportunities when we run the half or full day workshops. I just bring processes to help them identify, decide and implement decisions, and ensure any conflict is constructive. And then leave these processes behind to imbed into the organisation.
Murray says it quite well in a few different parts of the article, but this strikes me the most.
“When Martin took over as CEO, it never occurred to me that we’d have a difference of opinion because we’d always believed in the same things for so long.”
Beforehand, they were always aligned, but they fell out of alignment, drifted apart- whatever works. It sounds like they made structural changes (Martin was now a defined CEO), but they didn’t update/ upgrade the managerial processes required for their phase of the lifecycle, their vision and mission, and their organisational structure.
Sequence is everything
There is a sequence. Do the right thing, but at the wrong time and you’ll still get into trouble.
Before going to people, structure, or even mission and vision, we start with the managerial process of how problems/ opportunities will be identified, decided upon and implemented. With a strong managerial process to harness conflict, the two founders can work on updating the mission and vision for the year/ three years/ decade ahead. Any updates to the vision and mission will likely require a change to structure, and with the changes in structure, we can make good people decisions.
What normally happens? In Murray’s own words “it never occurred to me that we’d have a difference of opinion” so they didn’t plan for the inevitable (yes inevitable) conflicts and differences that will occur with the changes.
Here is the whole map for you on one page;
If the analysis of Myriad in the context of Mutual Trust and Respect resonates with you, and you would like to see how to apply it to your own organisation, feel free to reach out. Hopefully this article shares some ideas on why there is an issue in the first place (conflict), what to do about it (create constructive conflict through Mutual Trust and Respect), how to do it (four ingredients in a sequence) and when to do it (matched with your phase in the organisational lifecycle).
What’s this lifecycle?
For those interested, here is the organisational lifecycle picture from Adizes. “If you know the road ahead, you can drive faster”. You can take the Organisational Lifecycle test to see where your organisation is.
In Adizes terminology, unfortunately Myriad succumbed to the “Founder’s Trap”. This is a stage that 99% of businesses, even ones that have been very successful for a period of time, end up at. Interestingly, the article also mentions the founder of another Queensland company I have written extensively about – Blue Sky Alternate Asset Management (ASX:BLA) which succumbed to the same fate as did my own Stream Group (ASX:SGO). In the final throws of entering this stage are other Queensland based ASX listed businesses of Silver Chef (ASX:SIV), and Retail Food Group (ASX:RFG). Check out the share price charts for the last 5 years on each of these and see if you think they managed the change loop well or not.
We need a shift in consciousness
Without sounding too silly like the Founder of WeWork, Adam Neumann (who will himself soon find himself and WeWork in the founder’s trap), we need a shift in conscious in the ecosystem. We need to get to a point where the ecosystem is not driving founders to have rapid and arbitrary growth, but rather healthy development. Rapid growth often leads to unhealthy development. But if you develop healthily, you will be better placed to grow rapidly, and sustainably reduce the risk of crashing into the founder’s trap.
Here is an interview I did with Dr Adizes in Serbia a couple of months ago talking about the difference between growth and development https://www.youtube.com/watch?v=dqQLAOuKQ_E
It is easy to pick apart a situation in hindsight, and probably comes across a bit arrogant to try and do so. But the purpose is to not pick apart the past, but provide some new ideas for the future. In addition to all the normal things you need to do as founder/co-founder, just also ensure you allocate the time, energy and expertise for building mutual trust and respect so you can manage the change loop constructively.
But one point I think is also important to mention. It takes two to tango. In my experience working with many co-founders and entrepreneurial teams, if someone is not able to share even a small insight into why their partner has left, and describes themselves as “I’m really tolerable…” (people that describe themselves as tolerable sometimes aren’t…) there could be some emotional and empathetic development required on their part to be capable in doing what is required to build mutual trust and respect. I certainly lacked it, and sometimes you have to walk through the ashes of your screw ups before you truly get it. I still have some soot hanging around from my previous behaviours.
My request to founders: if you are in conflict with people and you don’t know why, and it seems in your mind to always be the other person’s fault, could there be something you are contributing to the situation that you are not seeing? You’ve been told you need to be great at everything and you’ve probably had some great success. But you can’t be great at everything, and it is ok to get some assistance.
Find someone you trust and respect, check to see if they have a process to help you institutionalise trust and respect, and you’ll not only be much more successful, you’ll be much happier.