Thursday, March 5, 2009

Junk Food (first published in 2005)

In an eye-opening survey conducted several months ago by the Boston Consulting Group, a leading business think tank, three out of four top executives from 68 countries said they planned to increase research and development spending this year. Fewer than half of the 940 respondents, however, thought the increases would produce the necessary profit or competitive advantage to justify the expenditures.
Why such a disconnect? Perhaps it’s because they’re spending too much of their money on the wrong things: technology, rather than Twinkies.
My experience tells me that the rapidity with which an enterprise creates value is directly related to how well it stocks the company kitchen. The lower the nutritional value of the food choices, the greater the intellectual property produced.
I have spent time in a variety of industries: software, hardware, compression technology, storage technology, outsourced manufacturing and digital media. What they all have in common is this: They all run on junk food.
During my career, I have spent hundreds of all-night sessions alongside my entrepreneurial colleagues as we prepared for market launches, product launches, term sheets, due diligence reviews, tape outs, quarterly results, auditors and IPOs. I don’t remember ever ordering in anything nutritious when the heat was on.
When engineers, scientists and technologists have to stay up all night, they don’t reach for No-Doz they reach for Cheetos.
It’s always a sign of decline when a company slows down on junk food purchases. Many CEOs and CFOs deny the value of the kitchen. It is an easy expense to control or cut when money gets tight. It seems like no big deal. People can bring food in or buy their drinks from a vending machine. They will understand that investors don’t want the company “wasting” its limited resources buying snacks for the staff.
But the purpose of junk food is not just to give the team a little blood sugar bump at 3:00 pm. When you stop supplying fun food, morale and productivity decline.
As soon as your supply of Twizzlers and Diet Coke runs out, so do your people. They leave the office to go home or go out to eat. And when people leave, even for a short lunch break, you can lose the rhythm … the hum of execution … to say nothing of that esprit d’corps that comes with foraging for Pop Tarts at 2:00 am or the creativity that accompanies your third Red Bull and fourth bag of Nacho flavored Doritos in an hour.
I once worked for a start-up computing company that grew to $7 billion in annual revenue during my stint. In the early years we brought in doughnuts every morning. As time went on the doughnut bill got to be pretty outrageous. So we cut back to doughnuts only on Wednesday mornings. Funny thing, our product launches began to stretch out. We were not moving as fast as we once had.
When I asked the vice president of engineering what had happened, he said, “You cut back the doughnuts! My guys used to get in here by 8:00 am every day to get their favorite doughnut before it was gone. Now they come in around 9:00. I have 600 engineers in this organization and I lost about 600 man hours per day because you stopped the doughnuts!”
Why should junk food have this effect? Can a doughnut really motivate folks to come to work earlier? Sure. It’s simple: People eat stuff at work they would never be caught dead buying and never allow themselves at home. It is compensation for long hours. And wholesome food really doesn’t cut it.
No one goes to the community kitchen to fix themselves a salad and then go back to work. People do not bond over broccoli spears and cottage cheese. When you go to the kitchen at work it’s to find something fat or fun or naughty and a colleague to share it with. Forget fresh fruit; it is the forbidden fruit that cranks up the volume among entrepreneurial enterprises.
Junk food in the kitchen is designed to keep your most important asset at work.
Do I really promote enticing employees to spend too many hours at work and eat junk food to boot? You bet. Junk food is the enabler of an unbalanced lifestyle and an unbalanced lifestyle is crucial to success, especially at start-up companies.
Maybe we can seek balance and nutrition after the company starts producing $500 million in annual revenues. Until then, pass the Pork Rinds and Beef Jerky (I’m on Atkins).