Chris:

I mean, how good must I be?

Loree:

I know, exactly.

Chris:

Watch out Bezos.

Loree:

Well, I think there’s this common fallacy that startups that do succeed or companies that do succeed are doing everything right. And they’re, you know, making the perfect decisions all the time. And that’s why they’re successful. And so, since you have grown two successful companies, I’d love to hear more about what your experience was like. Were any mistakes made? What did you learn from them? Tell us more about what it was you might have observed.

Chris:

Well, I’m now 52, and I started Military.com just a little over 20 years ago, and it’s amazing how quickly that time has gone by. There are not a lot advantages to getting older, but one of them is that you can reflect over your experiences. And I think about my background. So I have an unusual background. I, like you actually, you and I have similar backgrounds, right? So we were both in the military, and we both left and went to business school and were exposed to a whole new world. So I was never interested in business. But you could sort of argue that with my military training and my time at Harvard business school that I had a pretty classical leadership education. And, you know, when I was 30, and I started Military.com, I was considered young as a CEO. So I started this company, and lots of things happened, but things got really hard when the bubble burst. And we basically had to do many rounds of layoffs. And eventually, I got fired as the CEO. I didn’t get fired only because of all of the external factors. Part of it was I wasn’t a great CEO and the right CEO at the time for the company.

When I got fired, I remember the new CEO coming in and telling me basically not to show up in the office. And it’s funny when you’re sitting in the guest chair in your own office, and you’re being told not to come back, that’s a kind of focusing moment in your life. So then I went swimming basically every day for about three hours for the next six months, thinking about the mistakes that I made in the company. And that was the single best sort of business education I ever had in my life, which is to reflect over why I found myself in this situation. And we don’t want to spend forever on this, I’m going to talk about those leadership lessons… but eventually, I got to come back as the CEO, and then we turned the company around.

Then when I did my second company, I didn’t make the same mistakes that I made the first time. So I was lucky enough to basically make mistakes, learn from those mistakes, and then have a chance to do it two more times. So you know, at the end of the day, I mean, I can boil it all down to my own instinct, as a human and as a leader, lead to not creating the right culture in the company. So I don’t think the culture of military was bad, but it really wasn’t everything that it could have been in the beginning.

So when you’re an insecure person, you sometimes overcompensate. So how might you overcompensate? You might overcompensate by always having to be right, always having to win every argument, right? Maybe through dominance. And, you know, that’s not, that’s not a great way to build a very good culture. So, at the end of the day, what I was wasn’t doing that was critical, was to build a culture of trust and excellence. And so my big reflection over that time period was that I hadn’t done that and that that’s a critical part of the very, very best companies. Companies can be successful with bad CEOs… if they have good product or the right tailwinds, or if they’re lucky… but if you have a culture of excellence and high trust, your likelihood of success is way higher. And I think we saw that in the Navy. One of the interesting things about the Navy is if you take two or three S3 squadrons, they’re theoretically the same thing. They source the same people. They have the same culture. So you would think the performance of these units would be pretty much the same. But are they the same Loree? No. What’s the difference between a great S3 Squadron a bad S3 Squadron?

Loree:

It’s absolutely the leadership, the skipper, the commanding officer.

Chris:

Yeah, same product right, but who is in charge is definitely that makes or breaks a squadron.

And when you talk about who’s in charge, what we’re really getting at is kind of the culture. Right? Is it a culture of excellence? So my squadron, we won a lot of awards. We had a culture where we were the best squadron and you know, it’s funny when that cultural group permeates the enterprise, then everyone starts operating at kind of higher level because you believe you can operate at it. That’s the expectation. So expectations are really, really high. I’ve been humbled through that experience. I came back, and I was a different person. I was a different person because I’ve been through this traumatic experience. And what I’ve tried to do in the 20 years since then, is to build a strong culture of trust in any organization I’ve been in. And to me, there’s a great book called The Thin Book of Trust by this guy, Felton, and I couldn’t recommend it more highly. But basically, when you talk about trust, when you meet with your boss, you know, if you believe that they have your best interest in mind, that they can give you all the feedback in the world and you think that they’re trying to help you. They’re coaching you, right? If you don’t trust them and they give you feedback, you may not listen in the same way… you may just perceive a threat. Great leaders have figured this out. And that doesn’t mean that people that aren’t performing well should still be in the organization now, but it does mean that if you’re curating the right team, with the right kind of culture, you can build that environment. And that was the single greatest mistake that I made. I mean, there are others that related to outcomes versus activities. And you’ve heard me talk. I love that saying yes. And I wrote an article for proceedings magazine about that, which is, you know, sometimes in an unconstrained world you can spend money on lots of things or do lots of things that are reasonably good ideas, but really don’t move the needle for the organization. But, you know, all of that aside, creating the right kind of culture is, I think, the single most important thing, other than product, probably, yeah. And it’s something that’s inside of our control, and that starts with who you hire.

The Old World of hiring is you look at someone’s resume, you see that they’ve gone to great schools, you bring them in, and then you try to trip them up with interview questions, right to see if you can uncover that they’re really not a good person. Yeah, I used to do that.

The new world is you’re way more open-minded around the kind of person you’re hiring, not necessarily credentials. You bring them in, and you talk about your experiences and the kind of culture that you’re trying to build. And they need to understand during that interview that if they don’t want this job, if it’s not going to be the right job for them, the worst thing that happens isn’t that they don’t get the job, it’s that they get the job, and it’s a bad job for them because they won’t get to stay around.

It’s bad for everyone. It’s kind of like being on a dating app. You know, at some point in that dating dance, it’s better that both parties understand who they’re dealing with, rather than try to mislead someone because eventually it’s all going to come out right. So better it comes out early. And I used to tell people that I said, My primary job is not to be screening you, it’s to help you figure out whether this is the right job for you. So then I start getting people into the company that kind of buy into this idea. Then we go to new hire orientation, which I think is one of the most important things, and that’s where we talk about passion in the company. I think passion is critical in a company. I would always tell people, you know, one day you won’t be passionate about what we’re doing. And there are two flavors of that: One is addressable. And one is not addressable. So addressable might be you have a bad boss, you’re working on something you’re not interested in, if you don’t like the direction of the company, or whatever, you know. So maybe if you come talk to me about it, we can solve that problem together. Another one is just eventually you should go off and do something else because this isn’t your thing anymore. And that’s okay, too. And, you know, the thing I learned about being in Silicon Valley is these aren’t one-off transactions. It isn’t just about your experience. It’s about my being invested in you as a human being. And if you have that view, then you know, you help them get another job. And you’re gonna have a chance to work with them again.

So if you take a longer view, a kind of holistic view of deeply caring about your employees, and holding them to high standards, because people actually want to be excellent, I think, many, many, many good things happen. So when I came back as the CEO of Military.com we went down to like 10 people, and we built the company back up with that kind of approach. Then when I did Affinty, I had the chance to do a de novo and it worked great. I won’t say everyone had perfect experience, but I think we had an experience where we really loved and admired each other. And we were all on the same team. And the friendships that have come out of that have been lifelong friendships.

But what is interesting about that is I thought that I was a well-trained leader… but I had some real blind spots, and that only surfaced during periods of difficulty. So what I really hope for a lot of people is they can get to where I was without having to go through the pain.