6/28/23, 11:16 AM Adam Nash, C.E.O.

of Wealthfront, on the Value of Metrics - The New York Times

https://www.nytimes.com/2014/06/13/business/adam-nash-ceo-of-wealthfront-on-the-value-of-metrics.html

CORNER OFFICE

Teaching All Employees to Keep Score

By Adam Bryant
June 12, 2014

This interview with Adam Nash, chief executive of Wealthfront, an online financial management firm, was conducted and condensed by
Adam Bryant.

Q. Tell me about your early years growing up.

A. I’m the oldest of four, but I was also usually the youngest in my classes because I was born in January. And then I skipped fifth grade, so
I was even younger than everyone else. There was always this funny juxtaposition of both being the oldest and the youngest. It did
influence me quite a bit. Sometimes you’re leading, and sometimes you’re following. As a child, I ended up in all of those situations.

Q. And what about your parents? Do you see their influence in your leadership style?

A. My father is an OB/GYN, and like most doctors of his time, he was in private practice. So there was always that element of running a
business. My mother, who’s a psychologist, always gave me a deep appreciation of differences in what success means and what people
really feel they want in life. I ended up in an industry where thinking like a business owner is incredibly important, and building a company
is about how humans interact with each other.

Q. What did you do outside of classes in high school?

A. I did a lot of speech and debate. I was afraid of public speaking when I was in junior high, so I did that thing where you confront your
fears. I actually did the most nerve-racking event: impromptu speech. I ended up being state-ranked, and going to nationals in
extemporaneous speaking. You’re given two minutes on a topic you’re unprepared for, and then you have to give a five-minute speech. It
turns out I do this a lot now.

When I was in high school, I also did an internship program at NASA Ames Research Center, and I worked there one day a week during my
senior year. I was 15, and I couldn’t drive yet, so my mom would drop me off at NASA, and I worked on simulations. I spent a year basically
writing software — it was Fortran computer programming back then — to see how good the computer was at simulating what the actual
results would be in a wind tunnel. I certainly didn’t fully understand the fluid dynamics that I was modeling, but I could read a math
equation.

Q. And after college?

A. I joined a company called NeXT, which was acquired by Apple before I started. I was a fan of Apple, but it turned out I wasn’t a great fit
for a large company at that time. I was too eager to do more, to get my hands dirty. I ended up going to a start-up after about a year and a
half, and then I went to business school because I wanted to learn more about how other industries work, and how to think about strategy.

Q. And did you have a sense then that you wanted to be a C.E.O. someday?

A. The short answer is yes. I have strong opinions about not just software, but also the way people work together, and the type of
environments that let people build the kind of life that I think they deserve. I always saw the C.E.O. as a very empowered position to make
that kind of difference.

Clay Christensen was one of my advisers in business school at Harvard. He’s known for “The Innovator’s Dilemma” and other insights
about strategy, but he also talked to us about management as an ethical undertaking. The idea is that we spend so much of our adult lives
at work, and work can be a terrible environment or it can be an empowering environment that makes people’s lives phenomenally better.
So his proposition to us was really about, “How can you create an environment where you make people’s lives better in that fundamental
way?” It really stuck with me.

Q. So how do you try to do that now?

A. I think it’s a hard problem at multiple levels, but there’s a simple thing that too many leaders don’t get right. In the software industry,
you’re used to dealing with very smart people. What they really need out of leadership is very simple. They need to know the game we’re
playing and how to keep score.

The first one is about making sure everyone understands the company’s core competency and how we’re going to beat competitors. Most
leaders get that right. But how you keep score is equally, if not more, important. Because if you don’t give people metrics, smart people will
make up their own. In fact, there’s a lot of behavioral psychology around the fact that the smarter you are, the easier it is for you to make
up metrics that make you think you’re doing the right thing. We can rationalize anything; it’s the great human gift.

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6/28/23, 11:16 AM Adam Nash, C.E.O. of Wealthfront, on the Value of Metrics - The New York Times
So if you have a company where everyone has their own ways of keeping score, you’ll get incessant fighting and arguments, and they’re
not even arguing about what to do. They’re arguing about how to keep score. They’re arguing about what game we’re really playing. That’s
all counterproductive.

Most people think that metrics are something you use to control employees. I take the complete opposite view. I think metrics are actually
the way that you can harmonize a large number of people, whether it’s dozens or even thousands, so that when they’re on their own and
making their own decisions, they can be empowered to make those decisions, because they know they’re aligned with the rest of the
company.

I actually see that as a gift. People genuinely hate being micromanaged. They hate being second-guessed. If you, as a leader, can provide
an environment where you can simply explain what your business is about, and give them a handful of measures to know how to evaluate
things, all of a sudden hundreds of conversations will happen without you, with people reaching decisions that are better than the decisions
that you would have come up with, because you don’t have their data and their expertise. I think that’s a great gift that leaders give their
companies and organizations.

Everyone knows at Wealthfront that there are just a couple things that we have to do to make this business successful. I’ve got it down to
two things — we have to acquire clients, and we have to delight them. And there are four metrics that the whole company tracks. They’re
up on the wall, literally on a giant screen. And so you hear people debating different ideas, and they’ll say: “Well, wait, is this an idea to do
A or is it to do B? How do we measure that?”

This interview has been edited and condensed.

A version of this article appears in print on , Section B, Page 2 of the New York edition with the headline: Teaching All Employees to Keep Score

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