When Joel Ronning isn’t at Digital River Inc., the e-commerce company in Eden Prairie he founded and grew to more than 1,100 employees, he likes to skipper a sailboat. That includes the 2007 National A-Scow Championships June 20-23 on Lake Minnetonka, where he also raced against America’s Cup champion Buddy Melges. Ronning mused on the similarities between skippering a sailboat crew and operating a company.
“The things you learn running a company and what motivates a team, on the water and in a competitive environment and vice versa, you ask, how can you bring that back?
For me, what’s exciting is the caliber of racers I’m with. The level of talent is enormous.
I have two boats. I’ll race in 40 races this year. It’s great camaraderie, very competitive, a big group. Sailing’s a very complicated sport. It’s a little bit like chess on the water, because conditions change so rapidly.
One of the things I’ve tried to do at Digital River is I’ve always hired people smarter than me. We were the top-performing company in 2006 in the state, 30 percent compounded annual growth in the last 8 years. We’re No. 15 on the new Forbes list.
That comes from the ability to attract and retain the best people. You have to make it fun. You have to give them something they can own, and that’s the same on the water.
You kind of blunder into the similarities, but over the years you become more aware of the importance of getting someone into a role where you can trust them.
The interdependence of the team like at a recent race, we could have been first, but we had a new guy who made a series of errors and we ended up fourth. So you bite your tongue and train him up to be competent.
With the Class A-Scow, it has a lot of complex controls and a lot of people, seven vs. five [in his other boat.] Each person, if they fail in their role, it’s a tremendously coordinated effort the boat stops. We went from first to fifth and then back up to first again, in another race.
It’s different at a company, in that it unfolds over the course of months. With a company you’ve got to run on lots of small signals, which can be described as instinct. If you see a lot of small decisions going wrong. I put a lot of onus on people’s small decisions. I think that has tremendous weight. This is how this person thinks, and I need to coach them in this or that direction.
You can see the same thing on a boat. You listen carefully to how they look at the world. People who have judgment on the water have it off the water, although there’s a lot of drinking on the water, so maybe only early on in the race is that true. [laughs]
Definitely I’ve forced myself to grow. One of the great things when you get great people is, they’re better than you. The down side is you have to keep up with them. I want to be as smart as the guy with a Ph.D. Well, we have a dozen Ph.D.s here.
Taking the company from five people to 1,100, the company has evolved processes, procedures, risk aversion. We have $2 billion market cap, you have to protect that. It’s a completely different way of thinking, from when you start a company.
I have an absolute willingness to grow. I’m inherently lazy. I want to get things delegated to the right person as quickly as possible.
We’ve bought 26 companies, so we’ve had a lot of entrepreneurs work for us. It’s difficult for entrepreneurs to give up control. We had to meter it out, the change in the company. We were able to hire people and get them in the right place, although we’ve made mistakes. It’s like on a boat, giving tactics to people who don’t know what to do.
It’s a matter of measuring, constantly measuring, the ability of people to handle things.
When I’m on the boat I tend to ask for a lot of information. You end up with debates going on, and then I have to make a decision.
My job is to recognize the talent and meter out the jobs. We try to get the group mind going. I encourage and drive the competitive side. If you make a mistake or we had screw-ups, I say, remember, let’s not do that one again.
So it’s coaching, and encouraging, and at some point just driving, and other times settling down because things are getting out of control.
I’ve had people who’ve gotten more responsibility than they had the capability to manage, and shame on me for allowing that to happen. Picking your talent is so important.
We spent a lot of time measuring things here. We’ve used a fair amount of Six Sigma processes. We’re always striving for perfection, because you’ll never reach that, but improvement.
In 1990 I had laid out a number of goals, and one was to run an international public company. I knew I didn’t have the capacity to do that. I laid out my coursework. I’d have to delegate. I’d have to learn.
I have seven patents. I’ve a pretty good understanding of legal. I understand GAAP accounting very well. I understand HR, global taxation. I’m now pretty familiar with global banking processes.
I determined a long time ago that I’d have to hire people better than me. The people around here have trained me. I bring in worries. You don’t want to get too confident. We just worry.
Would I rather be here or on the water? Depends on what day it is. If there’s no wind, I’d much rather be here. This is a fun place.”
-As told to Beth Ewen
[contact]
Joel Ronning is chairman and CEO of Digital River Inc. in Eden Prairie:
952.253.1234; www.digitalriver.com.
His crew placed 11th of 30 at the National A-Scow Championships,
according to Minnetonka Yacht Club spokesman Tim Browne: www.mycsailing.org.
