This is the seventh in a series of 11 videos produced by the Smeal College of Business at The Pennsylvania State University. This one focuses on team recruiting, growth, and culture.

The last big position we had to fill was someone to lead our engineering organization...

Doing what’s good is not always what’s best.

At first, I didn’t see much of Bob...

Here's the rest of The Star. Things get a bit surreal and intense...

Here's part two about our quest for a new CEO...

Jeff and I had started Neoforma.

We had provided its first monetary food. We had reared the company, nurtured it, guided it, imposed our will and ingrained our personal ethics. But we did not control Neoforma...

Motivation and intelligence in the absence of experience yields dazzling inertia.

I hadn’t thought about Sharon for more than a decade...

I am not one who can live in a stereotype without subconsciously fighting it.

Trapped as I was in the role of an aggressive, dotcom entrepreneur, I lacked many, if not most, of the habits of the natives...

Letting go felt very good—until I lost my grip.

Jeff and I were getting tired. Tired of wearing so many hats to work each day. I fantasized what it would be like to focus on only a few jobs at a time...

Independent middle managers, that’s what we needed. Just a few talented people who could relieve our burden in several areas. We were much too picky to ignore the little things. There were many parts of the company neither Jeff nor I had time to run as well as we believed they should be run—like managing the software development process.

I had been searching for someone to run a programming group. Most of the dozens of people I interviewed had high expectations, but showed little promise. Most of them had nowhere near the management experience that I had. Yet they expected salaries that were half again or double mine. I wanted someone more experienced than me at managing technology personnel, not someone just out of school.

The headhunters sympathized, “That’s just the way the market is right now. These are the most sought-after people in the Valley. Most of the good ones have already been hired by the consumer-oriented Internet start-ups. And we can’t get their attention because they’re vesting their options that are worth a small fortune. When they cash out, they’ll probably retire. If you change your mind and decide you’re willing to pay a quarter to a half million, we might be able to find some candidates with more than a couple of years of experience.”

I had this momentary vision of putting my own résumé out there, getting a job making so much money without the daily fear of going broke, or the constant worry over what was not getting done. It hadn’t really occurred to me how much experience I had gained in the last two years. I was a veritable veteran of the Internet boom. Scary thought, because I felt that I knew so little about the frontier I was heading into.

I was trying to hire guides, only to find that they didn’t know much more about the territory than I. I didn’t want to become a technologist. I wanted to hire one. Candidates with just a moderate knowledge of the Internet and people management skills would do fine, but I couldn’t even find those.

Typically, I tended to gravitate toward unconventional résumés. So, when I saw on Larry’s résumé that he had experience as a software team manager and was a part-time Olympic gymnastics coach, I was intrigued. Really, that was what I was looking for—a coach—someone to guide a bunch of smart, quirky programmers with social skills even worse than mine and egos as large as the Valley.

When I interviewed Larry, a tall, matter-of-fact man with a large smile, I thought he would fit the task nicely. He seemed to have many of the characteristics I was looking for. So I hired him.

In addition to the priority I set on hiring someone to run our programming group, I was looking for someone to improve and expand the use of words on our website. The challenge was to find someone who had both the skills of a liberal arts major and the ability to understand and thrive in the wake of the collision between technology, healthcare, business and investment.

Emma was one of the most promising candidates for the job. One reason that Emma said she wanted to leave her middle management job as an editor of the Oracle website was the ruthless nature of the corporate culture. Yet, I could see that she was clearly a product of that environment too. She was aggressive and opinionated. She talked fast and conveyed a desire to take control of something new. I couldn’t help but think of the dire warnings by Denis about the heartless management style at Oracle. But I needed managers who were willing to take control of key parts of this evolving company.

It looked like Larry and Emma would be able to take complete control of their areas. And it was a welcome relief to me. At last I could get further down my endless list of things to do.

But as the months went by, I became concerned about how infrequently they consulted with me for direction. Eventually, I realized that they had taken it quite literally when I said I wanted to hire people who would come into the company and take control. They had been treating the assorted requests and directions I sent them on an almost hourly basis as if they were simply “suggestions.”

I was confident that I could easily clarify things by discussing it with them. They both said they knew I was very busy and were simply following my request to get things done, but said they’d consult with me more often in the future.

This eased my mind — until I found out from Jeff that Larry and Emma had immediately gone to his office and complained that I was meddling in their affairs. If I had really hired them to run their parts of the company, I should give them the authority to do so. If not, then maybe they should go somewhere else.

Jeff did not like to get involved in conflicts between me and other employees. He told them what they wanted to hear—that I had been running these parts of the company for years, so it was only natural for me to want to continue to influence the direction of the website and that he’d have a talk with me.

Jeff encouraged me to give them a bit more room to do their jobs. I told him it was a bad sign that they had smiled in my face, then run to him to complain about me. They seemed to have decided that I was simply an obstruction to be worked around.

It reminded me of my days at Varian, where battles between middle managers inundated the company with inefficiency and mediocrity. I sensed that they cared more about their power than their product. Jeff disagreed. Since nobody else was complaining about them, I hesitantly ascribed my concerns to my need for control. The last thing I wanted to do was to let my personal insecurities affect the company.

At first Todd, who was still in charge of the look and feel of the website, liked the idea of having allies at a management level. He was emboldened by their increasing agreement with him on some of the issues he and I had disagreed on over the last year and a half. I noticed a change in him too. He included me in fewer decisions and instead chose to run things by Jeff. Jeff was focused primarily on investors and key business partners. He was used to me handling detail-oriented issues and assumed that I would work these conflicts out on my own. Todd, and others, considered the absence of negative feedback an endorsement for whatever they wanted to do.

This was working great for Todd, until Larry and Emma turned on him and began to dispute some of his decisions. Suddenly, he was the incensed one. He had taken the Neoforma website from an obscure, rather plain destination and turned it into an international attraction, and a thing of beauty. Who were they to question his judgment?

Seeking an ally, Todd came to me complaining about their underhandedness and lack of respect. He said that when he’d told them I had already directed him on a major design issue, they’d said, “Wayne doesn’t run the company, Jeff does.” It created the desired effect. I was very upset.

I ranted at Jeff, “I hired these two. How could they be so disrespectful, so disloyal? They’re both competent, but they’re sneaky and under- handed. They constantly whisper behind closed doors. We are not a culture of closed doors. These aren’t the kind of people we want to build out our company. They are creating a culture of division. We have never tolerated that before. Why should we put up with it now?”

Jeff listened respectfully to my tirade, then responded gently. He knew that I was overworked and he knew I was a control freak. “Come on Wayne. They are just trying to do the job you hired them to do. Let’s give them time to prove themselves. Right now there is too much work to do.”

In all matters except money, Jeff and I had always been able to agree to disagree. Many of our arguments had been heated, to say the least. But we had always been able to make difficult decisions, one way or another.

And over the years, we’d developed a fallback plan. Whenever we couldn’t resolve an issue by talking it out, we referred to the last disagreement. Whoever had conceded on that one got the right to decide on this one. I don’t remember what the last disagreement had been, but I must have won that one because I gave in on this one.

We would keep Larry and Emma, at least until the new website was released. I would be nice to them and exert my influence less directly. Jeff had always been able to depend on me in the past and assumed that this crisis was no different than previous ones. Unfortunately, his confidence in me would prove to be overly optimistic.

On movie sets, they have a great word to describe the indecipherable background conversation over which the main characters are communicating. They call this necessary, but empty, noise, walla.

Sometimes the walla distracts us from the main story.

When I finished the first draft of Starting Something, the book was too long. Going into the process, I had thought that I would struggle to come up with enough words to fill a book, so this was quite a surprise. Thanks to two great editors, most of the pruning was quite painless, making the book better with each omission. However, there was one overlong chapter that I was very reluctant to trim.

The Casting chapter is about hiring. The book’s core message is that a company’s ultimate product is its culture. How could I exclude some of our most important experiences – successes and failures? But this chapter was contrary to my objective to keep each chapter as short as possible. So I ripped the following section out of that chapter, telling myself that I’d likely release it separately at some point.

Over the years, many people have asked me to expand upon my hiring process. After much procrastination, here goes. 

This section covers a period in 1998, just after our first large funding round. The market for talent was very hot, making it essential to work with recruiters. This picks up near the end of the Casting chapter. As it was extracted from the book, this prose is told in the past tense, but I still apply the same principals and practices today…

A company’s ultimate product is its culture.

We weren’t rolling in dough, but for a time we were making more money than we were spending. And the work was piling up...