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Sep 28 2023

How I Engage With The Chief People Officer

Post 4 of 4 in the series of Scaling CPO’s- the other posts are, When to Hire your First Chief People Officer, What does Great Look like in a Chief Privacy Officer and Signs your Chief Privacy Officer isn’t Scaling.

You won’t have a ton of time to engage with the Chief People Officer but there are a few ways where I’ve typically spent the most time, or gotten the most value out or my interactions with them. So, you’ll need to capitalize during those few moments when you do get a chance to engage with the Chief People Officer.

I ALWAYS work with the CPO as a direct report.  No matter who my HR leader is, no matter how big my executive team is, no matter how junior that person is compared to the other executives. I will always have that person report directly to me and be part of the senior most operating group in the company.  That sends the signal to everybody in the company that the People function (and quite frankly, diversity, culture, and a whole host of other things) are just as important to me as sales or product. I guess that’s walking the walk, not just talking. If I’m not serious about diversity, about our core values, and about the people in the company, no one else will be either. So, I always have the CPO as a direct report.

A second way to engage with the CPO is to insist on hearing about ALL people issues. First, I am a very “retail-oriented” CEO, and I like to engage with people in the business—at all levels, in all departments, and in all locations.  So I like know what’s going on with people — who is doing particularly well and about to be promoted, who is struggling, who is a flight risk, who is going through some personal issue (good or bad) that we should know about. This isn’t prying into people’s lives, but a real way to engage with people beyond business and a way to show that you care about them as a person. Even more than just me wanting to be in the know, I want others in the company to have a deep level of awareness of our contributors. For example, in our Weekly Sales Forecast meeting at Return Path, because our head of People knew that I wanted to know about all these details on our employees, they insisted that all the other People Business Partners roll those issues up as well. That means everybody in the room was in the know as well.  It’s not just to have a better understanding of people, there’s a business case for knowing what’s going on at a very detailed level and the number of issues we nipped in the bud, the number of opportunities we were able to jump on to help employees over the years because of this retail focus, has been immense.

I also engage with the CPO as an informal coach for myself and with my external coach.  In an earlier post I mentioned that a great Chief People Officer can—and should—call a CEO out when a CEO needs to be called out.  And that also means that great Chief People Officers engage with CEOs deeply about how they are doing, they help CEOs process difficult situations, and help them see things they might not otherwise see.  Being a CEO is a lonely job sometimes, and it’s good to have a People partner to be able to collaborate with on some of the most personal and sensitive issues.

Finally, I engage with the CPO to design and execute Leadership/Management training.  This is an important skill that a great CPO brings to the company and I have found that it is the best way to create a multiplier effect of employee engagement and productivity. The CPO in your organization needs to teach all leaders and managers how to be excellent at those crafts — and how to do them in ways that are consistent with your company’s values.  This is a tall order for one person to put together so I always took a lot of time, in large blocks of hours or days, to either co-create leadership training materials and workshops with my head of People, or to lead sessions at those workshops and engage with the company’s managers and leaders in a very personal way.  That always felt to me like a very high ROI use of time.

(You can find this post on the Bolster Blog here)

Sep 14 2023

Signs Your Chief People Officer Isn’t Scaling

This is the third post in the series. The first one When to hire your first CPO is here and What does Great Look Like in a CPO is here)

If you’ve been following my previous blog posts on the Chief People Officer you have figured out when to hire one and what to look for in getting a great one but even so, you can’t just assume that your Chief People Officer is going to be able to scale with your company. I have found that Chief People Officers who aren’t scaling well past the startup stage are the ones who typically operate in the following ways.

First, a CPO might not be able to scale if they are overly focused on the transactional aspects of the job.  Don’t get me wrong, there are many transactional elements to HR – payroll, benefits, systems, process, etc. – and they all have to go well or employees freak out.  But the Chief People Officer who spends all their time on these issues isn’t delegating well, isn’t building a machine, isn’t building scalable people and processes to flawlessly and efficiently handle the details. This inability to delegate may be a lack of self-confidence or a lack of trust that others can step up, but either way it’s a telltale red flag if a CPO is mostly focused on the transactional aspects of the role and not the strategic aspects.

Another sign is if the CPO won’t speak up in executive team meetings.  Chief People Officers have every right and entitlement to hold opinions about the company’s strategy, products, operations, and financials.  The good ones do – and they’re not shy about speaking up publicly about them.  The weaker ones, or the ones who are in a bit over their heads, don’t speak up, don’t challenge others, because they either haven’t taken the time to learn and formulate those opinions, or because they don’t have enough confidence among their peers to voice them. The CPO needs to be a leader among leaders and any hesitancy to fully participate with their peers is a sign to me that maybe they’re not scaling, not developing their own personal and executive skills.

Another sign I’ve seen that the CPO isn’t scaling is if they have trouble managing/leading their own team.  Since a good Chief People Officer is one who spends time coaching all the other leaders in your business on how to be effective leaders, it’s particularly worrisome when they themselves are not an effective leader, especially with what is usually a relatively small function.  This is a classic case of the cobbler’s children walking around barefoot, and it’s a sign of trouble for your HR leader.

None of these signs by themselves is particularly worrisome to me, but if you have a Chief People Officer who is transactional, doesn’t speak up, and has morale or turnover issues in their own team, you’ve got big problems. The CPO is critical to the entire organization so if you find that your CPO is exhibiting several of these traits you’ll need to address it quickly—either through coaching, by bringing on a fractional executive to mentor, or by replacing the CPO. Often, coaching and fractional approaches are more cost-effective, less disruptive to the company, and lead to great results. Ignoring it is the worst approach for this important position.

(You can find this post on the Bolster Blog here)

Jan 25 2024

Signs your CBDO isn’t scaling

(This is the third post in the series
 The first one When to Hire your first CBDO is here, and What does Great Look Like in a CBDO is here).

The metrics for understanding whether or not your CBDO is scaling differs from other functions like Sales, People Ops, Customer Service, and Finance because throughout the scaling process the CBDO team is likely to be small. So how do you know if your CBDO is scaling if they’re essentially the same size regardless of what the rest of your company is doing? I have found that CBDOs who aren’t scaling well past the startup stage are the ones who typically operate in the following ways.

First, a CBDO who isn’t scaling is throwing everything over the wall internally. Some people in this role, especially ones who have been long-time bankers or consultants and who are used to having armies of junior resources at their disposal, don’t like or don’t know how to roll up their sleeves and handle execution. The reality is that in-house BD teams are very small, frequently only one or two people, and the person leading the team needs to do a lot of the work, not just the planning and external meetings.

Second, if your CBDO has an over-reliance on outside advisors like bankers and lawyers, that’s a sign that they’re not scaling. The whole reason companies in-source this role is that they expect to have a fair amount of activity — developing partnerships, executing a roll-up strategy, building out the channel.  While external advisors are critical for a number of those activities, knowing when, and when not to hand things off, especially when the advisor bills by the hour, is critical.

A third sign is if your CBDO is focused on quantity rather than on quality.  I have found that there are times when it’s important to be able to show a large number of partners, for example if you’re trying to run an industry-wide coalition or program. And also there are times when it’s important to show a lot of deals in the pipeline, for example if you’re pitching an M&A roll-up strategy to a potential financial sponsor.  But you know your CBDO is in trouble when the focus becomes the number of deals in the pipeline as opposed to making sure there are a few larger ones with deeper, multi-faceted relationships that will move the needle on the business objectives. Your CBDO should be helping to develop the ecosystem and this is done a lot easier by finding and working with the gems rather than developing all sorts of channel partnerships or deals that look good on paper, or get good PR, but don’t actually move the business forward. 

( You can find this post on the Bolster Blog here)

Jan 18 2022

The Blackjack Table

I lived one of my favorite metaphors last week as we announced the closing of Bolster’s Series B financing and had our first post-round Board meeting, and I realized I’ve never blogged about it before: that raising rounds of financing is like having a good night at the blackjack table.

When I go to Vegas or AC — and admittedly I haven’t done that in several years — I usually start playing Blackjack at the $5 table. It’s lightweight entertainment, low stakes, good way to warm up and remind myself how to play. If I start winning and accumulating a bigger pile of chips, I move to the $10 table. Rinse and repeat, to the $25 table and the $50 table. I’m not sure I’ve ever been to a $100 table, and I assume there’s a somewhat tense and scary back room somewhere with higher stakes tables. As I progress through an evening, it’s more fun, but it’s also more stressful.

Raising successive rounds of financing has the same feel to it.

You’re playing the same game as you progress from Series A to Series B to Series C. You’re still CEO of your company. You may be playing with different strategies, more or less aggressive. But it feels different. It’s a little more stressful. Every bet is a higher percentage of your net worth, upside as well as downside. Expectations are higher, and external expectations are more noticeable.

What if blackjack isn’t going so well? If I am doing so-so, I just stay at the $2 table, and ultimately get bored with treading water. That’s probably the equivalent of running a company that’s just going sideways. I won’t go deep on extending the metaphor to a bad night of blackjack, but I’m sure it has a lot in common with down rounds and ultimately things like Chapter 11. Those loom large in lots of situations, too, but they’re not where my head is today!

Dec 16 2021

Top 3 Mistakes Later Stage Founders Make

Last week, I blogged a podcast riff I did about the biggest mistakes early stage founders make and what to do about them. Here’s a summary of part 2 of what I said about later stage founders.

  1. Misreading Product/Market Fit or a lack of Product/Market Fit. Misread it high, and founders end up dumping money into sales and marketing too soon. Misread it too low, and you can fire a good sales or marketing team when it’s not their fault!

    On the high side, Product/Market Fit isn’t just coming from a healthy CAC/LTV ratio or by good early adoption. Early adoption can come from a small group of Visionaries (here I’m channeling Geoffrey Moore’s Technology Adoption Lifecycle curve from Crossing the Chasm), so understanding how extensible your early adopter crowd is — and how easy it will be to reach the next batch of customers and the next batch and the next batch — can be costly to get wrong. The opposite is also true. It’s easy to get caught up in a wave of enthusiasm around early Product/Market Fit and then determine that a slowdown in sales is a sales problem, when in fact, you either didn’t have true Product/Market Fit beyond visionaries in the first place…or maybe you had it, but the market changed over time, and it slipped away. Product could easily be the culprit here, not Sales or Marketing. You have to constantly go back and re-test your assumptions and lean canvas with the market as products mature and more substitutes and competitors are available.
  2. Throwing people at problems. It’s so easy to do this. Building automation, designing new business processes, and implementing new — or worse, changed over — systems are hard, expensive, and time consuming. So yes, sometimes it makes sense to just hire that extra person or two in something like account management or accounts receivable/collections instead of investing in process. But do too much of that, and you will drown in your cost structure.

    Founders have to learn to embrace the tear-down. Remember, you’re an entrepreneur. You’re creative. You like to invent things and disrupt things. That includes things you yourself built! Better to tear down an existing process or system and replace it with something quantum leaps more efficient for scale than to throw people at problems.
  3. Believing that they and they alone must continue to drive their culture forward. Cultures are truly hard to scale.

    But there’s a trick to scaling them. The trick is to stop doing the work yourself, and partner with your HR/People team to build your cultural touchpoints (values, artifacts, etc.) throughout your employee lifecycle so that everyone in the company (NOT just HR/People) becomes a cultural steward. Recruit and interview against your values. Onboard people with founder sessions on values and culture. Bake those things into performance management and compensation.

I’m sure there are so many other top mistakes for later stage CEOs/founders. What are the ones you’ve encountered?

Aug 5 2021

Lessons from the Pandemic: a Mid-Mortem

It feels like it may be a bit premature to write a post with this title here in the summer of 2021. Even as vaccines are rolling out fairly quickly, the combination of the Delta mutation of the COVID-19 virus and a bizarrely large anti-vaccine movement in the US, plus slower vaccine roll-outs in other parts of the world, are causing yet another spike in infections. 

However, I read Michael Lewis’s The Premonition last week, a bit of a “mid-mortem” on the Pandemic, and it got me thinking about what lessons we as a society have learned in these past 18 months, and how they can be applied to entrepreneurs and startups. I am particularly drawing on the few weeks I was deeply engaged with the State of Colorado’s COVID response effort, which I blogged about here (this is the 7th post in the series, but it has links to all the prior posts in order).

Here are a few top of mind thoughts. 

First, entrepreneurial skills can be applied to a wide range of society’s challenges.  The core skills of founders and entrepreneurs are vision, leadership/inspiration/mobilization of teams, and a fearlessness about trying things and then seizing on the ones that work and rapidly discarding the ones that don’t, quickly absorbing learnings along the way. If you look broadly at the world’s response to the Pandemic, and at Colorado’s response as a microcosm, you can see that the jurisdictions and organizations that employed those types of skills were the ones that did the best job with their response. The ones that flailed around — unclear vision, lurching from plan to plan and message to message, pandering to people instead of following the science, sticking with things that didn’t make sense — those folks got it wrong and saw more infections, hospitalizations, and deaths. 

Second, parachuting in and out of leadership roles really works but is a little bit unsatisfying. I think that, even in a short period of time, I got a lot of good work done helping organize and stand up the IRT in Colorado. It was very much an “interim CEO” job, not unlike a lot of the roles we place at Bolster. Without a ton of context around the organization I was joining, I still had an impact. The unsatisfying part is more about me as the exec than it is about the organization, though. I’m so used to being around for the long haul to see the impact of my work that I found myself pinging Sarah, who took over the leadership of the group after I left, Brad, and Kacey and Kyle on the teamfor a few weeks just to find out what was going on and what had become of Plan X or Idea Y. 

Third, I came to appreciate something that I used to rail against in the business world, or at least came to appreciate an alternative to it. I frequently will say something like “don’t solve the same problem four different ways,” almost always in response to people facing a big hole in the organization and trying to hire four different people to fill the hole, when likely one hire will do (or at least one for starters). But what Michael Lewis calls the “Swiss cheese defense” or Targeted Layered Containment (TLC) that worked pretty well as defense and mitigation against the virus while there was no vaccine totally worked. He calls it the Swiss cheese defense because, like a slice of Swiss cheese, each layer of defense has holes in it, but if you line up several slices of Swiss cheese just right, you can’t see any of the holes. Some masking here, some quarantining there, couple closures over there, a lot of rapid testing, some working from home where possible, some therapeutics – and voila – you can blunt the impact of a pandemic without a vaccine. The same must be true for complex problems in business. I am going to amend my approach to consider that alternative next time I have a relevant situation. 

Fourth, blunt instruments and one size fits all solutions to complex problems (especially in this situation, with multiple population types in multiple geographies) — even those with good intentions — can’t work, drive all sorts of unintended consequences, with a lack of feedback loops can make situations worse or at least frustrating. Nationwide or even statewide rules, quite frankly even county-wide rules, don’t necessarily make sense in a world of hot spots and cool spots. Statewide regulations for schools when districts are hyper local and funded and physically structured completely differently, don’t always make sense. There are definitely some comparables in the business world here – you’d never want, for example, to compensate people across all geographies globally on the identical scale, since different markets have different standards, norms, and costs of living. 

Finally, I am left with the difficult question of why all the preparation and forethought put into pandemic response seemed to fail so miserably in the US, when several nations who were far worse equipped to handle it in theory did so much better in reality. I am struggling to come up with an answer other than the combination of the general American theme of personal choice and liberty meeting the insanely toxic and polarizing swirl of politics and media that has made everything in our country go haywire lately. Big government incompetence in general, and failures of national leadership on this issue, also factor in heavily.  I also gather from Michael Lewis that the transition from one administration to another frequently involves a massive loss of institutional knowledge which can’t help. Of all these, failure of strong leadership stands out in my mind. 

The lesson for startups from this last point is important. Leadership matters. Eisenhower once said something to the effect that “plans are nothing but planning is everything.”  The thoughtfulness, thorough planning, communication and inspiration, and institutional knowledge that come from effective leadership matter a lot in executing and growing a startup, because you literally never know what COVID-analog crisis is lurking quietly around the corner waiting to pounce on your startup and threaten its very existence.

May 25 2021

Chewy and Delicious

It’s good that my friend Brad Feld‘s new book (co-authored by Dave Jilk, who I’ve also known on and off over the years), is divided into 52 chapters and is designed as a bit of a devotional, to be read one chapter per week.

Each chapter of The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors is, as the authors write in the Introduction, worth “chewing on a while.” The structure of the book is laid out as:

The book contains fifty-two individual chapters (one for each week) and is divided into five major sections (Strategy, Culture, Free Spirits, Leadership, and Tactics). Each chapter begins with a quote from one of Nietzsche’s works, using a public domain translation, followed by our own adaptation of the quote to 21st-century English. Next is a brief essay applying the quote to entrepreneurship. About two-thirds of the chapters include a narrative by or about an entrepreneur we know (or know of), telling a concrete story from their personal experience as it applies to the quote, the essay, or both.

That structure is perfect for me. I did ok in Philosophy classes, but I wouldn’t say it was my preferred subject. So the fact that Brad and Dave turned every Nietzsche quote into plain English before applying it to entrepreneurship and disruption was a welcome tactic to make the book as accessible as possible.

I wrote one of the essays in the book on creating a Company Operating System, which is in the chapter called “Doing is not Leading.” It’s an honor to be included as a contributor alongside a number of awesome CEOs, including Reid Hoffman, Ingrid Alongi, Daniel Benhammou, Sal Carcia, Ben Casnocha, Ralph Clark, David Cohen, Mat Ellis, Tim Enwall, Nicole Glaros, Will Herman, Mike Kail, Luke Kanies, Walter Knapp, Gary LaFever, Tracy Lawrence, Jenny Lawton, Seth Levine, Bart Lorang, David Mandell, Jason Mendelson, Tim Miller, Matt Munson, Ted Myerson, Bre Pettis, Laura Rich, Jacqueline Ros, and Jud Valeski.

In his Foreword, Reid Hoffman connects the dots perfectly:

Returning to Nietzsche, let’s examine why he in particular is such an apt patron philosopher for entrepreneurs. Nietzsche was rebelling against a stultifying philosophical practice that exalted the past—specifically the ideals and images of former thinkers and former leaders. He wanted to refocus on the now, on what humanity was and what it could become. As part of his rebellion, Nietzsche philosophized with a hammer: he wanted to destroy the old mindsets that locked people into the past, and thus better equip them to embrace the possibility of the new. Nietzsche’s desire to shift mindsets is also why he emphasized new styles of argument. Whereas most philosophers would typically open an argument in a classical form or by reviewing a historical great, Nietzsche would lead with an arresting aphorism or a completely new mythological narrative. He was, above all else, a disruptor of pieties and convention, always in search of new and original ways to be contrarian and right, never satisfied with the status quo. This is exactly the kind of mindset entrepreneurs should adopt. This is why a daily practice of philosophy can be the way that an entrepreneur moves from good to great. And, why a daily practice of Nietzsche is a great practice of philosophy for entrepreneurs.

What I love about the book is that you can read any given chapter at any time without having to read it front to back, and the combination of Nietzsche and entrepreneur essays makes the topics come to list. Pick one — they are organized into five sections, Strategy, Culture, Free Spirits, Leadership, and Tactics — and you’re sure to get both something chewy (e.g, thoughtful) and delicious (e.g., practical).

Dec 8 2020

Introducing the Bolster Board Benchmarking Survey

Over the years,  I’ve had a list of nagging questions every time I’ve contemplated my board, but didn’t have anyone I could turn to who had deep, broad advice on this topic. Those questions were:

  • How big should my board be at this stage?  
  • How many independent directors should I have? 
  • What is the right profile of an independent director? 
  • How many options should I give a board member? 
  • How do I find the best, diverse, talent for my board openings?

That’s why Bolster is excited to announce the launch of our first CEO tool: Board Benchmarking. This application (which is free!) is the first of a series of tools that we’re designing to help CEOs understand the performance, design, and impact of themselves, their executive teams, and their boards. The results of this first application will shed light on the independence, diversity, and compensation of private company boards that’s never been available on a broad basis before.

Why are we starting with Board Benchmarking?

  1. Increasing Board Diversity is top of mind right now…
    …and that means CEOs need to have a handle on three things at the same time to get it right:  appropriate board size/number of independent seats, a talent pipeline that is diverse and well vetted, and clear compensation guidelines for independent directors.  Diverse employee populations and customer bases start with having a diverse board and a CEO (you!) who is attuned to the benefits of diversity at the top.  The longer you wait to prioritize diversity in the boardroom, the harder it becomes to change the makeup of your board. Culture becomes entrenched, recruiting becomes driven by referrals, and before you know it, everyone in an organization looks and thinks a little bit the same way. By capturing data on the diversity and composition of startup boards, we hope to offer an industry-wide snapshot to help CEOs start to have what can often be tricky conversations with their VCs about board size and composition as early as possible. And by pairing that with Bolster’s unique marketplace for diverse and vetted Board-ready talent, we hope to help CEOs slay all three dragons (number of independent seats, talent pipeline, and comp guidelines) at the same time.
  1. Private company board composition is notoriously tricky to benchmark.
    Unlike public companies, which are required to disclose the identities and compensation packages for their boards of directors, private board structure tends to remain…well, private! While this makes sense from a regulatory perspective, it often means private companies CEOs are taking a shot in the dark when it comes to things like when to add independent directors and how much to pay them. By aggregating and anonymizing thousands of data points across hundreds of private companies, we hope to (for the first time ever) provide CEOs with a very real, in-the-moment look at how their board today stacks up against others in similar cohorts.
  1. Filling an open board seat is a high-priority item for a CEO, and a tough one to get right.
    It’s said that good choices come from good options.  Early benchmarking results show that half of startup CEOs expect to fill an open board position within the next 12 months. Just as it’s critically important to get the right executives around your (well, now virtual) table, it’s equally, if not even more  important to build a board that effectively supports you, your company, and your customers. Every month that goes by with a board vacancy is another month where you’re potentially leaving valuable introductions and perspectives on the table. We hope that by exposing these board searches across such a broad subset of companies, we’ll also empower CEOs to take immediate next steps to fill those vacancies — including help recruiting multiple board candidates directly from the Bolster network.

As we conduct this survey over the next month, we’ll provide greater visibility into the size, composition, diversity, and director compensation of private company boards. We’re also establishing robust pipeline partnerships to amplify board-ready talent from organizations with diverse membership of African American, Hispanic/Latinx, and women orgs. So for anyone interested in adding qualified diverse talent to their boards, we’ll be ready.

Participants who complete the survey will receive early access to your benchmark results and a comprehensive guide to building and managing your Board of Directors. 

In early Q1, we’ll invite all participants of our Board Benchmarking survey to log in to Bolster and view their results interactively. CEOs will be able to see how their own boards stack up compared to others in the VC portfolio network or other cohorts. VC partners will be able to see patterns across the entire portfolio. 

Watch this space in the coming days and weeks for CEO-specific content about hiring Board members. 

We invite you to register as a Bolster client to participate in our Board Benchmarking survey today.

Oct 23 2020

Zoomsites

(Written by both my Bolster co-founder Cathy Hawley and me)

I’ve attended two remote conferences, which Cathy dubbed “Zoomsites” — one here at Bolster and the Foundry Group CEO Summit.  Both hold interesting lessons for how these kinds of events can work well.

We founded Bolster two months into the COVID-19 pandemic, and our founding team had not met in person after 6 months of working together. Now, luckily, we’ve all worked together for many years, so we have a lot of trust built up, and have a very strong operating system which includes full team daily standups. Still, nothing beats face-to-face interaction. If you’ve ever founded a startup, you know how impactful it can be to work side by side, bounce ideas off each other, and collaborate as you learn more about opportunities and challenges in your market. 

We also have a strong belief in the power of the team, and the need to work together to ensure that we are aligned on all aspects of the business. And, we had a successful launch, with more interest in our marketplace than we had anticipated, so we knew we needed to step back to have a planning and strategy session.

We’ve done many executive offsites, and couldn’t imagine having an impactful offsite remotely, and we all agreed that we would be comfortable meeting up in person. So we started planning a 2-day offsite together in New York. Unfortunately, it turned out visitors to NY from Colorado and Indiana, the two states we were traveling from, needed to quarantine for 10 days when they got to NY. While technically we could get around this because we weren’t staying for 10 days, we decided to follow the spirit of the rules, and cancel our travel.

Since we really needed to have the planning and strategy session, and we’d blocked the two full days on our calendars, we decided to test out a ‘zoomsite’ – an all-remote video call. We modified the agenda a little – some things good in person fall flat on video. We knew we wanted to have really engaging conversations, and keep the agenda moving along, so that all eight of us could fully participate and complete the necessary work. I’m happy to say that we came out of the offsite with a revised strategic plan, new six-month goals set, and owners for each of the different workstreams. And, we had fun. Success!

The Foundry Group CEO Summit has been a different animal — it’s wrapping up today, but there’s been enough of it so far this week to comment on.  Foundry took a regular annual event with a large group (50-75) and moved it online.  They did a great job of adapting to the medium, spreading the event out with a few hours a day over multiple days to avoid Zoom fatigue and optimize attendance; scheduling content in shorter bursts than usual; making good use of breakout room technology; and encouraging heavy use of Zoom’s chat feature during sessions to make it as interactive as possible.  Like the Bolster event, there were some elements missing — all the great “hallway conversations” you have at in-person conferences where people are staying in the same hotel and seeing each other at meals, in the gym, between sessions, etc.  But it has also been a big success with enough community elements to make it worthwhile. 

Want to have a Zoomsite? Here are some tips:

  • Make sure you have the tools needed for each activity. When you are brainstorming in person, you may use sticky notes or flip charts to write on. Remotely, you can use Google Docs or Sheets or tools like Note.ly or Miro
  • Prep the sheets or docs ahead of time, so that people can engage in the activities easily. At our Zoomsite, we modified our blue-sky brainstorm session so that we each answered a few questions in a Google Sheet. We had a separate section for each person, and the exercise was easy to understand and engage in, and people got straight to work.
  • Schedule in more breaks, shorter sessions, or less than full-day meetings. We had a couple of hour-long breaks during the day, which helped people to focus.  Foundry did a great job of getting everyone’s attention for a few hours every day, for more days than a normal in-person conference
  • Plan your technology. At the Bolster meeting, we learned this the hard way. We tested out the idea of doing a “walk and talk” session where we’d each walk in our neighborhoods, and have a couple of strategic conversations just on the phone. Unfortunately, the technology didn’t work for everyone, as they hadn’t all used Zoom on their phones before, it was windy in some locations, and cell service dropped people from time to time.  Probably not the best idea we had!
  • Include a social component. We were a little skeptical about this at the Bolster Zoomsite, but we’d always incorporated social time into offsites, and we really value connecting as people, not just as professionals, so we gave it a try. On the second day of our Zoomsite, we took a 2 hour break at the end of the day, and came back for drinks and dinner together. We had personal conversations, including sharing our favorite tv shows. Eight people on video eating together might sound odd, and we weren’t sure if it would work, but we all agreed that it was fun, and we’d do it again.  I missed the Foundry “Virtual Fun” session, but they did a virtual game show run by our sister portfolio company, Two-Bit Circus (and also had investigated Jack Box Games as another option for virtual games via Zoom screen share plus real-time voting and other engagement via phone).  I heard that session was great and engaging from people who attended

We all hope life returns to some kind of normal in 2021, though it’s unclear when that will be.  And there’s definitely value to doing meetings like this in person, but at least we now know that we can have a successful remote offsite or larger conference event.  As with everything, it will be interesting to see how the world is changed by COVID.  Maybe events like this will figure out how to mix remote and in-person participation, or alternate between event formats to keep travel costs down.

Aug 13 2020

Startup CEO Second Edition Teaser: The Sale Process

As part of the new section on Exits in the Second Edition of the book (order here), there’s a specific chapter around the sale process itself.  There are some interesting things in it — the arc and timeline of a deal, working with and through advisors vs. principals dealing with each other directly, optimizing for different stakeholders, and a wonderful long sidebar by my friends and advisors Brian Andersen and Mark Greenbaum from Luma Partners on how to think strategically about an exit and how buyers think.  It’s probably worth buying the whole book just for that.

But what I want to write about here is coping with a failed deal – something my team and I unfortunately had to do a couple years before we actually sold the company and something I’ve never written about or discussed publicly.

In 2017, we almost sold Return Path.  You hear people talk about that from time to time, and frequently it just means “we had a good offer but decided not to take it.”  But in this case, I meant it.  We had a good offer.  We talked to a couple other potential buyers in the industry and ended up getting a great offer.  From a great buyer.  We decided to pull the trigger.  It was time.  We got through the entire deal process, I mean EVERYTHING.  Diligence was painful, thorough – and completed.  Both sides had signed off on things many times along the way.  Documents were done, lawyers had signed off on them, our Board had signed off on them, they had been posted to DocuSign, and our signatures were in escrow.  The press release was written and scheduled to go out in less than 48 hours.  Our all-hands meeting was scheduled.  The acquirer had already sent us their swag to hand out.  About 80 people out of 400+ employees at the company knew about it.  In the football analogy, we weren’t inside the red zone.  We were on the 1-yard line.  

Then the call came.  “I can’t believe we have to tell you this, but our CEO just decided to pull the plug on this at the last minute.”  Buh.  Bye.  To say this was a disappointment is the understatement of a career.  

That evening, I was staying over at a friend’s apartment in Manhattan while Mariquita and the kids were away at the beach with her parents.  After the call came in, I grabbed the two other execs who were still in the office, and we went immediately to a bar.  That calmed me down a little bit.  Then I wandered through Central Park up to the apartment and spent about 4 hours on the phone in a series of cathartic phone calls with the rest of the executive team, some of my closest friends and advisors, and Board members.  

The next couple of days were awful.  We had to tell a huge number of employees “Uh sorry, just kidding.  You know all those stock options that were just about to turn into cash?  Sorry.  The new company we were all excited to join?  Psych!”  The worst part was scrambling to turn the already-scheduled all-hands meeting to announce the deal into just another quarterly update.  Everyone in the room for that meeting who knew about the failed deal just looked at each other with disbelief. We were still in shock.

Eventually of course, we bounced back.  I am now an even more ardent believer in the expression, “What doesn’t kill you makes you stronger.”  The company ended up recovering from this and doing a number of things to make us even better in the years that followed, leading to our eventual sale.  But I will say, it was just terrible, and nothing about the recovery was easy.  I talk about some of the specific steps we took in the book.  But mostly, I hope no one ever has to go through anything like this again.  This was too big, too close to the end, and too well known.  Our team will have deep scar tissue from it for a long time.

Jul 23 2020

Startup CEO, Second Edition Teaser: The Importance of Authentic Leadership in Changing Times

As I mentioned the other day, the second edition of Startup CEO is out.  This post is a teaser for the content in one of the new chapters in this edition on Authentic Leadership.

As I mentioned last week, the book went to press early in the COVID-19 pandemic and prior to all the protests around racial injustice surrounding the George Floyd killing, so nothing in it specifically addresses any of those issues.  In some ways, though, that may be better at the moment since the book is more about frameworks and principles than about specific responses to current events. Two of those principles, which are timeless and transcend turmoil, uncertainty, time and place, are creating space to think and reflect and being intentional in your actions. In a world in which CEOs are increasingly called upon to deal with more than traditional business (pricing, strategy, go-to market approaches, team building, etc.) it’s imperative to approach and solve challenging situations from a foundation that doesn’t waver. 

At Return Path our values were the foundation that provided a lens through which we made every decision. Well, not every decision, only the good ones. When we strayed from our core values, that got us into trouble. The other principle, outlined in Chapter 1 of the Second Edition, is leading an organization authentically.

Let me provide a couple concrete examples of what I mean by “Authentic Leadership” since the term can be interpreted many ways.

One example is to avoid what I call the “Say-Do” gap.  This is obviously a very different thread than talking about how the company relates to the outside world and current events.  But in some ways, it’s even more important.  A leader can’t truly be trusted and followed by their team without being very cognizant of, and hopefully avoiding close to 100%, any gap between the things they say or policies they create, and the things they do.  There is no faster way to generate muscle-pulling eyerolls on your team than to create a policy or a value and promptly not follow it. 

I’ll give you an example that just drove me nuts early in my career here, though there are others in the book.  I worked for a company that had an expense policy – one of those old school policies that included things like “you can spend up to $10 on a taxi home if you work past 8 pm unless it’s summer when it’s still light out at 8 pm” (or something like that).  Anyway, the policy stipulated a max an employee could spend on a hotel for a business trip, but the CEO  (who was an employee) didn’t follow that policy 100% of the time.  When called out on it, did the CEO apologize and say they would follow the policy just like everyone else? No, the CEO changed the policy in the employee handbook so that it read “blah blah blah, other than the CEO, President, or CFO, who may spend a higher dollar amount at his discretion.”

What does that say about the CEO? How engaged are employees likely to be, how much effort are they willing to devote to the company if there are special rules for the executives? You can make any rule you want — as you probably know if you have read a bunch of my posts or my book over the years, I’m a proponent of rule-light environments — but you can’t make rules for everyone else that you aren’t willing to follow yourself unless you own the whole company and don’t care what anyone thinks about you or says about you behind your back.

Beyond avoiding the Say-Do Gap, this new chapter of the book on Authentic Leadership also talks about how CEOs respond to current events in today’s increasingly politicized and polarized world.  This has always felt to me like a losing proposition for most CEOs, which I talk about quite a bit in the book.  When the world is polarized, whatever you do as CEO, whatever position you take on things, is bound to upset, alienate, or infuriate some nontrivial percentage of your workforce.  I even give some examples in the book of how I focused on using the company’s best interests and the company’s values as guideposts for reacting (or not reacting) to politically divisive or charged issues like guns or “religious liberty” laws.  I say this noting that there are some people who *believe* that their side of an issue like this is right, and the other side is wrong, but the issues have some element of nuance to them.

Today’s world feels a bit different, and I’m not sure what I would be doing if I was leading a known, scaled enterprise at this stage in the game.  The largely peaceful protests around all aspects of racial injustice in America in the wake of the murder of George Floyd — and the brutality and senselessness of that murder itself — have caused a tidal wave of dialog reaching all corners of the country and the world.  The root of this issue doesn’t feel to me like one that has a lot of nuance or a second side to the argument.  After all, what reasonable person is out there arguing that George Floyd’s death was called for, or even that black Americans don’t have a deep-seeded and widespread reasonable claim to inequality…even if their view of what to do about it differs?

I *think* what I would be doing in a broader leadership role today is figuring out what my organization could be doing to help reduce or eliminate structural racial inequality where we could based on our business, as opposed to driving my organization to take a specific political stand. I know for sure that I wouldn’t solicit feedback from a select group of people only, but I would create a space where voices from across the organization (and stakeholders outside of it as well) could be heard. That’s not a solution, but a start, and in challenging times making a little bit of headway can lead to a cascading effect. It can, if you keep the momentum.

And, in line with “authentic leadership,” it’s okay to admit that you don’t have the answers, that you might not even know the questions to ask. But doing nothing, or operating in a “business as usual” way won’t make your company stronger, won’t open up new opportunities, won’t generate new ideas, and won’t sit well with your employees, who are very much thinking about these issues. 

So, in today’s challenging times I would follow my own advice, be thoughtful and reflective, and intentional in searching for common solutions.  I’d try to avoid “mob mentality” pressure — but I would also be listening carefully to my stakeholders and to my own conscience.

In the coming weeks, I’ll write posts that get into some of the other topics I cover in the book, but none of them will be as good as reading the full thing!