Secrets to Yawn-Free Board Meetings

[This post first appeared as an article in Entrepreneur Magazine as part of a new series I’m publishing there in conjunction with my book, Startup CEO:  A Field Guide to Scaling Up Your Business]

The objective of board meetings should always be to have great conversations that help you and your executive team think clearly about the issues in front of you, as well as making sure your directors have a clear and transparent view of the state of the business. These conversations come from a team dynamic that encourages productive conflict. There’s no sure-fire formula for achieving this level of engagement, but here are three few guidelines you can follow to increase your chances.

Schedule board meetings in advance, and forge a schedule that works. Nothing is more disruptive – or more likely to drive low turnout – than last minute scheduling. Make sure you, or your executive assistant, knows board members’ general schedules and travel requirements, and whether they manage their own calendar or have their own executive assistant. Set your board meeting schedule for the year in the early fall, which is typically when people are mapping out most of their year’s major activities. If you know that one of your board members has to travel for your meetings, work with the CEOs of the other companies to coordinate meeting dates. Vary the location of meetings if you have directors in multiple geographies so travel is a shared sacrifice.

In the startup stage of our business at Return Path, we ran monthly meetings for an hour, mostly call-in. In the revenue stage, we moved to six to eight meetings per year, two hours in length, perhaps supplemented with two longer-form and in-person meetings. As a growth stage company, we run quarterly meetings. They’re all in-person, meaning every director is expected to travel to every meeting. We probably lose one director each time to a call-in or a no-show for some unavoidable conflict, but, for the most part, everyone is present. We leave four hours for every meeting (it’s almost impossible to get everything done in less time than that) and sometimes we need longer.

Many years, we also hold a board offsite, which is a meeting that runs across 24 hours, usually an afternoon, a dinner, and a morning, and is geared to recapping the prior year and planning out the next year together. It’s especially exhausting to do these meetings, and I’m sure it’s especially exhausting to attend them, but they’re well worth it. The intensity of the sessions, discussion, and even social time in between meetings is great for everyone to get on the same page and remember what’s working, what’s not, and what the world around us looks like as we dive into the deep end for another year.

Build a forward-looking agenda. The second step in having great board meetings is to set an agenda that will prompt the discussion that you want to have. With our current four-hour meetings, our time allocation is the following:

I. Welcomes and framing (5 minutes)

II. Official Business (no more than 15 minutes unless something big is going on)

III. Retrospective (45 minutes)

a. Target a short discussion on highlighted issues

b. Leave some time for Q&A

IV. On My Mind (2 hours)

a. You can spend this entire time on one topic, more than one, or all, as needed.

b. Format for discussions can vary—this is a good opportunity for breakout sessions, for example.

V. Executive Session (30 minutes)

This is your time with directors only, no observers or members of the management team (even if they are board members).

VI. Closed Session (30 minutes)

This is director-only time, without you or anyone else from the management team.

This agenda format focuses your meeting on the future, not the past. In the early years of the business, our board meetings were probably 75 percent “looking backwards” and 25 percent “looking forwards.” They were reporting meetings—reports which were largely in the hands of board members before the meetings anyway. They were dull as anything, and they were redundant: all of our board members were capable of processing historical information on their own. Today, our meetings are probably ten percent “looking backwards” and 90 percent “looking forwards”—and much more interesting as a result.

Separate background reading and presentation materials. Finally, focus on creating a more engaging dialogue during the meeting by separating background reading from presentation materials. In our early days, we created a huge Powerpoint deck as both a handout the week before the meeting and as the in-meeting deck. That didn’t create an engaging meeting.

There’s nothing more mind-numbing than a board meeting where the advance reading materials are lengthy Powerpoint presentations, than when the meeting itself is a series of team members standing up and going through the same slides, bullet by excruciating bullet—that attendees could read on their own.

When we separated the background and presentation materials, people were engaged by the Powerpoint—because it delivered fresh content. We started making the decks fun and engaging and colorful, as opposed to simple text and bullet slides. That was a step in the right direction, but the preparation consumed twice as much time for the management team, and we certainly didn’t get twice the value from it.

Now we send out a great set of comprehensive reading materials and reports ahead of the meeting, and then we have a completely Powerpoint-free meeting. No slides on the wall. This changes the paradigm away from a presentation—the whole concept of “management presenting to the board”—to an actual discussion. No checking email. No yawns. Nobody nodding off. Everyone—management and board—is highly engaged

As part of the new section on Exits in the Second Edition of the book (order here), there’s a specific chapter around handling the post-sale transition and integration process.  

No two transitions are exactly the same.  If the buyer is a financial sponsor, you may have the same job the day after the deal closes that you had the day before, just with a new owner and new rules for you.  Sometimes you’ll stay on with a strategic buyer as the head of a division, or the head of your product.  Sometimes you leave on Day 1.  Sometimes you leave later.  

But the most important thing you can do is remember that once the deal is over, it’s over.  That’s why an honest answer to the question, “Are you ready to let go?” that I posed in an early post is so important. You may or may not be the CEO, but now you definitely have a new boss, and in many cases, a boss for the first time in years. And you are no longer in charge.

“Even though the deal was called a merger,” I once heard Ted Leonsis tell the Moviefone founders a while after AOL acquired Moviefone, “please remember that you have been acquired.” Your job is to figure out how best to set your team and products up for success in the new environment, regardless of how long or short you plan to stay at the new company. 

We tried to focus our transition at Return Path to Validity in a few ways:

• For employees, we spent most of our energy and our capital setting things up in the deal documents before closing, recognizing we’d have no control of things after the deal was signed.  Things like how much severance people would get if they were let go, and for how long post-deal, how much their comp could change, whether they could be required to move – those are all things you can negotiate into a deal
• For ourselves as leaders and me as CEO, knowing most of us would leave almost immediately post-deal, I wanted to have as elegant an exit as possible after 20 years.  Fortunately, I had a good partner in this dialog in Mark Briggs, the acquiring CEO.  Mark and I worked out rules of engagement and expenses associated with “the baton pass,” as we called it, that let our execs have the opportunity to say a proper goodbye and thank you to our teams, with a series of in-person events and a final RP gift pack.  This was a really important way we all got closure on this chapter in our lives
• For the new owners of the business, our objective was to be of service to them, knowing they’d want to run it differently.  So, for example, every time our new owners from Validity asked me a question (“Should we do X or Y,” or “Should we keep person A or person B?”), my answer was never simple. It was always, “What’s your strategy with regard to Z?” and then my advice could be in context, as opposed to thinking about what I would do in the prior context.

There are more details on this in the new section on exits in Startup CEO:  A Field Guide to Scaling Up Your Business.

Building the Company vs. Building the Business

I was being interviewed recently for a book someone is writing on entrepreneurship, which focused on identifying the elements of my “playbook” for entrepreneurial success at Return Path.  I’m not sure I’ve ever had a full playbook, though I’ve certainly documented pieces of it in this blog over the years.  One of the conversations we had in the interview was around the topic of building the company vs. building the business.

The classic entrepreneur builds the business — quite frankly, he or she probably just builds the product for a long time first, then the business.  In the course of the interview, I realized that I’ve spent at least as much energy over the years building the company concurrently with the product/business.  In fact, in many ways, I probably spent more time building the company in the early years than the business warranted given its size and stage.  This is probably related to my theme from a few months ago about building Return Path “Backwards.”

What do I mean by building the company as opposed to building the business?

• Building the business means obsessing over things like product features, getting traction with early clients, competition, and generating buzz
• Building the company means obsessing over things like HR policies, company values and culture, long-term strategy, and investor reporting

In the early years, I did some things that now seem crazy for a brand new, 25-person company, like designing a sabbatical policy that wouldn’t kick in until an employee’s 7th anniversary.  But I don’t regret doing them, and I don’t think they were wasted effort in the long run, even if they were a little wasted in the short run.  I think working on company-building early on paid benefits in two ways for us:

1. They helped lay the groundwork for scaling – what we’re finding now as we are trying to rapidly scale up the business, and even over the last few years since we’ve been scaling at a moderate pace, is that we are doing so on a very solid foundation
2. The company didn’t die when the product and business died – because we had built a good company, when our original ECOA business basically proved to be a loser back in 2002, it was a fairly obvious decision (on the part of both the management team and the venture syndicate) to keep the business going but pivot the business, more than once

Starting about four years ago, for the first time, I felt like we had a great business to match our great company.  Now that those two things are in sync, we are zooming forward at an amazing pace, and we’re doing it perhaps more gracefully than we would be doing it if we hadn’t focused on building the company along the way.

I’m not saying that there’s a right path or a wrong path here when you compare business building with company building, although as I wrote this post, my #2 conclusion above is a particularly poignant one, that without a strong company, we wouldn’t be here 12 years later.  Of course, you could always argue that if I’d spent more time building the business and less time building the company, we might have succeeded sooner.  In the end, a good CEO and management team must be concerned about getting both elements right if they want to build an enduring stand-alone company.

I am now a big fan of my new Treo 600. It’s not so new, I’ve had it for a couple of months, but I figured out a couple of things on it today that really throw it over the top in my book.

In general, it’s a very good convergence device. The combination of phone, Palm apps, and email is very well done. It needs a longer battery life, but it lasts for a full day with pretty heavy usage, which is acceptable. I love not carrying around both a phone and a blackberry any more.

The first thing that took it from being a good device to being a great one was our installation of the GoodLink Exchange server software. It is instantaneous, two-way wireless synch between the device and my Outlook profile. That means no docking, never being out of step with changes made to my profile in my office, and full access to all my Outlook folders, not just the inbox.

But what really made the difference for me was that I figured out how to rig the device to also be an MP3 player today. So now, on short business trips anyway, I am down to one device and one battery charger from three and three.

It’s a combination of Pocket-Tunes software on the device, an SD chip, which you can now get up to 1GB of storage (about 300 MP3 files), and an adaptor that connects my computer to the SD chip via USB to load the MP3 files. The sound quality is much better than I expected, although I do miss my ipod, and it plays both through headphones (you need an adaptor for that, too), and outloud using the phone’s speaker capabilities. So you have to do a little work to make it an MP3 player, but it’s worth it!

Now the only thing that has to happen is that Verizon needs to offer service on this device. T-Mobile’s coverage in NYC is awful.

Today marks Return Path’s 16^th anniversary.  I am incredibly proud of so many things we have accomplished here and am brimming with optimism about the road ahead. While we are still a bit of an awkward teenager as a company continuing to scale, 16 is much less of an awkward teen year than 13, both metaphorically and actually. Hey – we are going to head off for college in two short years!

In honor of 16 Candles, one of my favorite movies that came out when I was a teenager, I thought I’d mark this occasion by drawing the more obvious comparisons between us and some of the main characters from the movie.  My apologies to those who may have missed this movie along the way.

Why we are like Samantha (Molly Ringwald):  No, no one borrowed our underpants. But we can’t believe that people forgot our birthday either.

Why we are like Farmer Ted / The Geek (Anthony Michael Hall):  Meet my co-founder, George Bilbrey. I mean that with love.

Why we are like Jake (Michael Schoeffling):  Meet my other co-founder, Jack Sinclair. The shy, good looking one.

Why we are like Long Duk Dong (Gedde Watanabe):  We have only been in our newest business, Consumer Insight, for five minutes, but we already have a whole bunch of dates.

Why we are like Grandpa Fred (Max Showalter):  We’ve been around long enough to know the ways of the world, not to mention all the good wisecracks in the book.

There you have it. Year 17, here we come!

• BuzzMachine » Blog Archive » They’re meltinggggg
  Jeff Jarvis on Why We’re Glad We’re New Media…good stats on all the troubles facing “old media” nowadays (box office, newspapers, music, radio, books)
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• Our Customer Is The Entrepreneur | Union Square Ventures
  Fred Wilson on how VCs relate to entrepreneurs vs. their limited partners. They should think of entrepreneurs as their customers, and think of LPs as shareholders.
  (tags: VC Technology Entrepreneur)

Stamina

A couple years ago I had breakfast with Nick Mehta, my friend who runs the incredibly exciting Gainsight.  I think at the time I had been running Return Path for 15 years, and he was probably 5 years into his journey.  He said he wanted to run his company forever, and he asked me how I had developed the stamina to keep running Return Path as long as I had.  My off the cuff answer had three points, although writing them down afterwards yielded a couple more.  For entrepreneurs who love what they do, love running and building companies for the long haul, this is an important topic.  CEOs have to change their thinking as their businesses scale, or they will self implode!  What are five things you need to get comfortable with as your business scales in order to be in it for the long haul?

Get more comfortable with not every employee being a rock star.  When you have 5, 10, or even 100 employees, you need everyone to be firing on all cylinders at all times.  More than that, you want to hire “rock stars,” people you can see growing rapidly with their jobs.  As organizations get larger, though, not only is it impossible to staff them that way, it’s not desirable either.  One of the most influential books I’ve read on hiring over the years, Topgrading (review, buy), talks about only hiring A players, but hiring three kinds of A players:  people who are excellent at the job you’re hiring them for and may never grow into a new role; people who are excellent at the job you’re hiring them for and who are likely promotable over time; and people who are excellent at the job you’re hiring them for and are executive material.  Startup CEOs tend to focus on the third kind of hire for everyone.  Scaling CEOs recognize that you need a balance of all three once you stop growing 100% year over year, or even 50%.

Get more comfortable with people quitting.  This has been a tough one for me over the years, although I developed it out of necessity first (there’s only so much you can take personally!), with a philosophy to follow.  I used to take every single employee departure personally.  You are leaving MY company?  What’s wrong with you?  What’s wrong with me or the company?  Can I make a diving catch to save you from leaving?  The reality here about why people leave companies may be 10% about how competitive the war for talent has gotten in technology.  But it’s also 40% from each of two other factors.  First, it’s 40% that, as your organization grows and scales, it may not be the right environment for any given employee any more. Our first employee resigned because we had “gotten too big” when we had about 25 employees.  That happens a bit more these days!  But different people find a sweet spot in different sizes of company.  Second, it’s 40% that sometimes the right next step for someone to take in their career isn’t on offer at your company.  You may not have the right job for the person’s career trajectory if it’s already filled, with the incumbent unlikely to leave.  You may not have the right job for the person’s career trajectory at all if it’s highly specialized.  Or for employees earlier in their careers, it may just be valuable for them to work at another company so they can see the differences between two different types of workplace.

Get more comfortable with a whole bunch of entry level, younger employees who may be great people but won’t necessarily be your friends.  I started Return Path in my late 20s, and I was right at our average age.  It felt like everyone in the company was a peer in that sense, and that I could be friends with all of them.  Now I’m in my (still) mid-40s and am well beyond our average age, despite my high level of energy and of course my youthful appearance.  There was a time several years ago where I’d say things to myself or to someone on my team like “how come no one wants to hang out with me after work any more,” or “wow do I feel out of place at this happy hour – it’s really loud here.”  That’s all ok and normal.  Participate in office social events whenever you want to and as much as you can, but don’t expect to be the last man or woman standing at the end of the evening, and don’t expect that everyone in the room will want to have a drink with you.  No matter how approachable and informal you are, you’re still the CEO, and that office and title are bound to intimidate some people.

Get more comfortable with shifts in culture and differentiate them in your mind from shifts in values.  I wrote a lot about this a couple years ago in The Difference Between Culture and Values . To paraphrase from that post, an organization’s values shouldn’t change over time, but its culture – the expression of those values – necessarily changes with the passage of time and the growth of the company.  The most clear example I can come up with is about the value of transparency and the use case of firing someone.  When you have 10 employees, you can probably just explain to everyone why you fired Joe.  When you have 100 employees, it’s not a great idea to tell everyone why you fired Joe, although you might be ok if everyone finds out.  When you have 1,000 employees, telling everyone why you fired Joe invites a lawsuit from Joe and an expensive settlement on your part, although it’s probably ok and important if Joe’s team or key stakeholders comes to understand what happened.  Does that evolution mean you aren’t being true to your value of transparency?  No.  It just means that WHERE and HOW you are transparent needs to evolve as the company evolves.

• Get more comfortable with process.  This doesn’t mean you have to turn your nimble startup into a bureaucracy.  But a certain amount of process (more over time as the company scales) is a critical enabler of larger groups of people not only getting things done but getting the right things done, and it’s a critical enabler of the company’s financial health.  At some point, you and your CFO can’t go into a room for a day and do the annual budget by yourselves any more.  But you also can’t let each executive set a budget and just add them together.  At some point, you can’t approve every hire yourself.  But you also can’t let people hire whoever they want, and you can’t let some other single person approve all new hires either, since no one really has the cross-company view that you and maybe a couple of other senior executives has.  At some point, the expense policy of “use your best judgment and spend the company’s money as if it was your own” has to fit inside department T&E budgets, or it’s possible that everyone’s individual best judgments won’t be globally optimal and will cause you to miss your numbers.  Allow process to develop organically.  Be appropriately skeptical of things that smell like bureaucracy and challenge them, but don’t disallow them categorically.  Hire people who understand more sophisticated business process, but don’t let them run amok and make sure they are thoughtful about how and where they introduce process to the organization.

I bet there are 50 things that should be on this list, not 5.  Any others out there to share?

Back to…

I’m not in school any more, and as far as I can tell now, schools start before Labor Day for the most part, but it still feels like tomorrow is “back to school” for the working world. Business still hums along in August, and we’ve certainly had our hands full with one of the busiest months ever at Return Path, but somehow, the traditional end of the summer season still manages to have the trappings of a European August, with lots of people on vacation or doing more “work from home” days than usual.

As all that draws to a close today, at least for me personally, it’s Back to…lots of things:

– Back to New York! After a few weeks out of the city at our house in the mountains, it’s great to be back in Metropolis

– Back to shorter and more varied workouts! Training for my recent half marathon meant a lot of long runs and not much else. Now back to weights, pilates, elliptical, and swimming

– Back to more serious reading! I’ve read a bunch of trash over the summer. I was way overdue. My brain was starting to hurt. So I tuned out of almost all news, business books, and non-fiction for a month, and I plowed through enough murder mysteries to wallpaper a library (no doubt one populated by Colonel Mustard and Mrs. Peacock)

– Back to business! A few days and half days off and some working from home behind me, it’s time to gear up for a very busy September and October. Always busy months with industry events and pre-holiday retail client frenzy, this year will be even busier as we work to integrate our recent acquisition of Habeas as well as complete a number of other big initiatives

So happy Labor Day, which Wikipedia notes was created in 1882 and federalized in 1894 as “a day off for its working citizens.”

My marketing team has been asking me to write more about Markup AI — what we do, why it matters, where we’re headed. And I will. I’m the CEO of a company that builds Content Guardian Agents to help enterprises scale AI-generated content smartly and safely. I love what we’re building. I believe in it deeply. And I’ll reference it when it’s relevant. I also love how we’re building things, since we are hardcore practitioners using AI to build our business at decent scale.

But if you’ve read this blog over the years — through my two decades at Return Path, my time building Bolster, and three books on startup leadership — you know that’s never been what this space is about. This blog has always been about the craft of being a CEO. The stuff that should be in a handbook somewhere but isn’t.

So no, I’m not going to turn StartupCEO.com into a company blog. What I am going to do is write a series of posts about how CEOs should be thinking about AI — because I don’t think enough of us are, and I don’t think anyone else is writing about it from the operator’s chair.

What I’ll Cover

I plan to write about the practical side of AI for leaders: how I’m using AI tools to run my company and my executive team. How AI changes board dynamics and governance. What I’m reading and what’s worth your time (consider me your AI curator-in-chief). How AI is reshaping go-to-market, product development, hiring, and decision-making. And yes, where Markup AI fits into the picture — because our work on content governance is one of the most interesting AI problems out there, and I’d be leaving out a big part of the story if I didn’t talk about it.

But this isn’t a product blog. It’s a leadership blog. That’s on brand for me.

Why This Matters: Three Kinds of CEOs

Here’s what I’ve observed over the past year. There are three kinds of CEOs right now:

1. CEOs who are actively using AI — experimenting, building workflows, changing how their teams operate, pushing the boundaries.
2. CEOs who are telling their people to use AI — they get it conceptually, they’ve mandated adoption, but they’re not in the weeds themselves.
3. CEOs who don’t get it — they think this is someone else’s problem, or that it will sort itself out, or that it’s overhyped.

If you’re in category one, I want to compare notes with you. If you’re in category two, I want to pull you forward. If you’re in category three…I probably can’t help you.

Why Now

I was at a Gartner CEO conference on AI not long ago, and one line keeps rattling around in my brain: “There is such a rapid pace of development that we are regularly seeing ‘obsolescence before maturity.'” In other words, by the time AI products reach early adoption, they’re already being replaced by something better.

That’s the pace we’re dealing with. And it feels familiar. I started my first company in 1999, right at the dawn of the commercial internet. This moment feels like 1995 — except everything is moving faster, the stakes are higher, and the potential impact is broader. We are living through a golden age of technology transformation, and the CEOs who lean into it are going to build the defining companies of the next decade.

I don’t say that lightly. I’ve seen hype cycles come and go. This isn’t one of them.

More to Come

So that’s what’s ahead: a series of posts, coming regularly, about AI through the lens of a CEO who’s building an AI company, running a team with AI tools, sitting on boards that are grappling with AI governance, and trying to make sense of it all in real time.

I hope you’ll come along for the ride.

Your Goal:  Professional Nirvana

Brad wrote a delightful post the other day entitled "My Work is Play to Me."  His theory about how to achieve it is worth reading.  I, too believe that my work is play (under this definition), and that has been one of the things that’s kept me going as an entrepreneur for nearly seven years now.  And you don’t have to be a VC, or a CEO, or be working remotely to achieve the state.

This is reminiscent of the Fish books (here, here, and here), although in a more fundamental, philosophical, internally-generated way.  Those are good, quick "airport" reads — at least get the first one, which is the story about the famous Pike Place fish market in Seattle, which is a great place and experience.

This is easy.  Repeat after me:

If you have a job, your goal should be to make your work play.

If you manage other people, your goal should be to make work play for anyone on your team.

Amazon:  Icky Slippage Business Model

I never signed up for Amazon Prime, Amazon’s “pay a bunch up front then get free fast shipping all the time” deal, mostly because I usually buy more than $25 worth of books at a time, so shipping is free anyway.  But today, they hit me on the checkout with a free three-month trial of Prime, so I clicked yes – what the heck?

My bad for thinking they were just being nice to me as a VERY GOOD CUSTOMER.  The confirmation email they sent had buried in the fine print that my subscription would auto-renew after three months for the usual $80 if I didn’t proactively opt-out on their web site.

That’s a business model based on slippage or breakage like so many others out there (they assume I’ll just forget about it and let the charges go through).  I don’t have a problem with that model, but WHY WOULD YOU DO THAT TO YOUR OWN LONG-TERM CUSTOMER?  Ick.