More investors need to watch Any Given Sunday

You know that moment in every sports movie where the hero, who has achieved success through ability but not personality, has to be reminded of the importance of effort? Whether it is going back to the ghetto to watch kids play in an empty lot or a raging girlfriend who finds him in bed with someone else or a coach who gives him the speech, there is always some pivotal scene where the hero realizes it isn’t just about being able to do something, it is having the will to do it better and in a way that doesn’t suck for the world.

More big companies need that moment.

I spent the day watching investors and large private and public companies interact, and while there were many lovely moments (how often are you going to be in a room with Tim Armstrong and 20 people?), one reoccurring, frustrating theme was the degree to which investors were pushing companies to forget all the things that they learned from fighting hard on the way up. I heard one investor gripe that a presentation was “mostly bullshit” and I wanted to yell that even if that was true, it was because they demanded bullshit. They don’t want to hear the vision of the CEO, the part of the business that is heart and sweat and staying up way too late at night. They want to hear the business EBIDTA and why next quarter will be better than this quarter.

Clearly, I’ll never be the CEO of a major company. But if I ever am, I hope I have the courage to stand up to investors and talk back about why business is worth doing in the first place. Tim Armstrong fielded a question from an investor who essentially implied that without the need to appease the public market, AOL would have “wastefully” used the money derived from the recent patent business to acquire companies.

Good! AOL is adept at getting eyeballs, which they then sell to advertisers. But they could just as easily be advertising their own properties and there are many smart startups that are adept at turning users into cash, either through ecommerce or direct services. AOL should be spending cash on those sorts of deals and investors should count their lucky stars whenever those deals go through, especially with early-stage startups at low valuations. In a time where there are thousands of open jobs at the top internet companies and everyone is fighting for talent, it is hard to lose on a small dollar acquisition of a smart team; even if their product fails, you can find other great things for them to do.

In the Any Given Sunday of business, investors are the owner’s daughter, looking for pure profit as quickly as possible. And that is unlikely to change anytime soon. So it is up to companies and CEOs to be finding their way back to the reasons that they started doing this in the first place. Which probably didn’t have much to do with profit.

Playing with heart still matters.

I could end it there, but I want to say a little more about why playing with heart is so important. If your company becomes just about investors, you will never keep the employees you want. Because you want employees that are playing with heart and that’s a pervasive culture: it only works if everyone tacitly agrees to be part of it. You can’t have just your quarterback playing with heart – he’ll get sacked, receivers will shrug off their mistakes, and he’ll implode trying to get the ball down the field. Good teams require heart and heart only works when everyone has it. Which is why firing heartless people (or benching them somewhere to recharge) is so important: it keeps trouble from spreading.

Also, customers can tell. I’d love to do the experiment asking customers to rate how much they think Company A’s employees care about what they do, versus Company A’s employees own ratings. People respond, time and time again, to companies who are playing with heart. We consume companies in the way we consume sports teams, and honestly, you can find everyday people like my parents cheering for companies as they do battle with their competitors. It isn’t just the technorati that know when a company gives up and settles.  That is the whole point of corporate branding.

And finally, heart matters because without it, what the fuck is the point? The reason that you see satisfaction leveling off with pay increases is precisely the fact that money is not heartening. It may enable you to do some heartening things. But going to work everyday to blah just sounds terrible. You wouldn’t expect your employees to do it, so why should you?