Was anyone else as appalled as I am by the contents of Connie Loizos’s recent article, Coming out of COVID, investors lose their taste for board meetings? The stories and quotes in the article about VCs reducing their interest and participation in Board meetings, not showing up, sending the junior associate to cover, etc. are eye opening and alarming if widespread. 

The reasons cited in the article are logical—overextended VCs, Zoom fatigue, and newbie directors. Connie’s note that “privately, VCs admit they don’t add a lot of value to boards” is pretty funny to read as a CEO who has heard a ton of VCs talk about how much value they add to boards (although the good ones DO add a lot of value!).  

For the most part, everything about the substance of this article just made me angry.  

Disengaged or dysfunctional boards aren’t just bad for CEOs and LPs; they’re bad for everyone. If the world has truly become a place where the board meeting is nothing more than a distraction for CEOs, and investors think it’s a tax they can’t afford, then it’s time to hit the reset button on boards and board meetings. 

Here are four things that need to happen in this reset:

VCs need to do their job well or stop doing it. The argument that investors did too many deals in the pandemic so now they don’t have any time is a particularly silly one, since the pandemic reduced the amount of time VCs needed to spend on individual board meetings as well. I used to have four board meetings each year with directors who were traveling for the meetings, having dinners, spending time with the team and sitting in on committee meetings. 

Today, boards are lucky to have one in-person meeting a year (more on that later). And as everything else takes less time, and there’s little transit, any given VC should have doubled the time they spend on board meetings.

Serving on a board post-investment is a central part of the VC role. They have obligations to the founders they back and to the LPs they represent. The entire role is “find deals, execute deals, manage the portfolio.” 

If they no longer have time for the third job, they need to admit that to both founders and LPs before stepping down. If a VC can’t be bothered to focus on minding their investments and adding value, they should work with the company to find their replacement.  

CEOs need to take their job as leader of the board seriously. Would a good CEO just throw their hands up if they found management team meetings boring or a waste of time? No. They’d fix the structure of the team or meetings. If not, they shouldn’t be the CEO. 

It’s no different with boards. Whether or not the CEO is the board chair, they’re the leader of the organization. So, one of the few “must do” items in their job description is leading the board. The board is part of the CEO’s team, just like the management team. 

CEOs get to call the meetings, run the meetings, and insist on attendance. The CEO’s obligation is to make it easy and meaningful for everyone so the board isn’t a tax but rather a secret weapon for the company’s success. As my long-time independent director Scott Weiss used to tell me, boards consume whatever you put in front of them. Garbage in, garbage out. That means paying careful attention to the board materials, to meeting etiquette, and everything in between.

If the CEO doesn’t know how to do that, they should find a CEO mentor who can teach them, observe some well run boards in action through their network, or read Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, a book I just published along with co-authors and VCs Brad Feld and Mahendra Ramsinghani.

Here’s one tip on making Board prep more efficient: work your Operating System and your Board Book formats so you do one set of reporting for the company and management team that is 95% reusable without any changes for your board.

The format for Board meetings needs to evolve. Board meetings need to evolve in our world of hybrid work just as office work needs to evolve. The format that works for in-person can’t just “lift and shift” to Zoom as is, indefinitely.

Here’s how I’m steering my board:

• I insist on one or two “old school” meetings per year, meaning in-person attendance required, half a day long, and including a meal and even an activity. If I’m only going to see my directors together infrequently, I make it mandatory, but I also make it worthwhile and fun.
  
• Remote meetings that happen between the in-person meetings are becoming shorter and tighter. I still send out a lot reading material beforehand, but I make sure to keep the focus on a fixed number of major topics to keep the discussion engaging.
  
• We need a new set of expectations around Zoom meeting etiquette for long meetings. It’s okay to ask people to close their email, browser, and Slack before the meeting starts. If a meeting is more than two hours long, a 15 minute break in the middle is important. Use breakout rooms to mix up topic discussions and working sessions.
  
• I am trying a new meeting format to maximize director conversation and team development. I start every meeting with a director-only session for half an hour that’s not exactly an Executive Session but is more fun and social—usually including a nonwork discussion topic, as if we were sitting around the dinner table having a cocktail. That gets the conversational juices flowing. Then when my team and observers join the meeting, I ask those people to turn their video off, and I ask directors to adjust their Zoom setting to “hide participants not on video” to keep the number of Zoom squares down to the bare minimum. Any time a team member or observer wants to engage in a particular topic, they turn their video on. Then we follow the meeting with Executive Session and Closed Session and a single-director debrief with me. That is a lot of moving pieces to manage, I find that but doing so keeps the meeting fresh and well paced.
  
• Finally, I’m following Fred Wilson’s advice and running a very short survey post-meeting to ask directors basic questions so they can summarize their thinking for me and the team: What are we doing well? What do we need more work on? And did the meeting meet your expectations?

Companies need to Follow the Rule of 1s

The secret to engaged and diverse boards is to mix up their membership more than most companies do. Our Board Benchmark study at Bolster indicates that the vast majority of private company boards have no independent directors at all—only founders and investors—and every year, the vast majority of the “open independent seats” specified in those companies’ charters go unfilled. 

It’s hard work hiring a new independent board member, and it rarely rises to the top of the CEO’s priority list. But the more independent the board is, and the more diverse the board is in every way (in terms of demographics as well as experience and background), the more robust the conversations around the table become, and the more valuable the board is to the CEO.

My Rule of 1s for building highly effective boards is simple:

• Add independent directors to your board on Day 1
• Try to limit your Board to 1 founder/team member
• Then, for every 1 investor on your board,
• Add 1 independent director

A great board is one of a company’s greatest assets. A weak board can kill a company. A mediocre board is just a waste of time. There’s no question that running an effective board, or serving as an effective director, takes serious time and energy and diligence. But that’s not a reason not to try.

(This post first ran on TechCrunch+ and is also running on the Bolster blog)

Half the Benefit is in the Preparation

This past week, we had what has become an annual tradition for us – a two-day Board meeting that’s Board and senior management (usually offsite, not this year to keep costs down) and geared to recapping the prior year and planning out 2009 together.  Since we are now two companies, we did two of them back-to-back, one for Authentic Response and the other for Return Path.

It’s a little exhausting to do these meetings, and it’s 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 off the high dive for another year.

The most exhausting part is probably the preparation for the meetings.  We probably send out over 400 pages of material in advance – binders, tabs, the works.  It’s the only eco-unfriendly Board packet of the year.  It feels like the old days in management consulting.  It takes days of intense preparation — meetings, spreadsheets, powerpoints, occasionally even some soul searching — to get the books right.  And then, once those are out (the week before the meeting), we spend almost as much time getting the presentations down for the actual meeting, since presenting 400 pages of material that people have already read is completely useless.

By the end of the meetings, we’re in good shape for the next year.  But before the meetings have even started, we’ve gotten a huge percentage of the benefit out of the process.  Pulling materials together is one thing, but figuring out how to craft the overall story (then each piece of it in 10-15 minutes or less) for a semi-external audience is something entirely different.  That’s where the rubber meets the road and where good executives are able to step back; remember what the core drivers and critical success factors are; separate the laundry list of tactics from the kernel that includes strategy, development of competitive advantage, and value creation; and then articulate it quickly, crisply, and convincingly. 

I’m incredibly proud of how both management teams drove the process this year – and I’m charged up for a great 2009 (economy be damned!).

Book short:  Life Isn’t Just a Wiki

One of the best things I can say about Remote: Office Not Required,  by Jason Fried and David Heinemeier Hansson, is that it was short.  That sounds a little harsh – part of what I mean is that business books are usually WAY TOO LONG to make their point, and this one was blessedly short.  But the book was also a little bit of an angry rant against bad management wrapped inside some otherwise good points about remote management.

The book was a particularly interesting read juxtaposed against Simon Sinek’s Leaders Eat Last which I just finished recently and blogged about here, which stressed the importance of face-to-face and in-person contact in order for leaders to most effectively do their jobs and stay in touch with the needs of their organizations.

The authors of Remote, who run a relatively small (and really good) engineering-oriented company, have a bit of an extreme point of view that has worked really well for their company but which, at best, needs to be adapted for companies of other sizes, other employee types, and other cultures.  That said, the flip side of their views, which is the “everyone must be at their cubicle from 9 to 5 each day,” is even dumber for most businesses these days.  As usual with these things, the right answer is probably somewhere in between the extremes, and I was reminded of the African proverb, “If you want to go fast, go alone. If you want to go farm go together” when I read it.  Different target outcomes, different paths.

I totally agree with the authors around their comments about trusting employees and “the work is what matters.”  And we have a ton of flexibility in our work at Return Path.  With 400 people in the company, I personally spend six weeks over the summer working largely remote, and I value that time quite a bit.  But I couldn’t do it all the time.  We humans learn from each other better and treat each other better when we look at each other face to face.  That’s why, with the amount of remote work we do, we strongly encourage the use of any form of video conferencing at all times.  The importance of what the authors dismiss as “the last 1 or 2% of high fidelity” quality to the conversation is critical.  Being in person is not just about firing and hiring and occasional sync up, it’s about managing performance and building relationships.

Remote might have been better if the authors had stressed the value that they get out of their approach more than ranting against the approaches of others.  While there are serious benefits of remote work in terms of cost and individual productivity (particularly in maker roles), there are serious penalties to too much of it as well in terms of travel, communication burden, misunderstandings, and isolation.  It’s not for everyone.

Thanks to my colleague Hoon Park for recommending this to me.  When I asked Hoon what his main takeaway from the book was, he replied:

The importance of open communication that is archived (thus searchable), accessible (transparent and open to others) and asynchronous (doesn’t require people to be in the same place or even the same “timespace”).  I love the asynchronous communication that the teams in Austin have tried: chatrooms, email lists (that anyone can subscribe to or read the archives of), SaaS project management tools. Others I would love to try or take more advantage of include internal blogs (specifically the P2 and upcoming O2 WordPress themes; http://ma.tt/2009/05/how-p2-changed-automattic/), GitHub pull requests (even for non-code) and a simple wiki.

These are great points, and good examples of the kinds of systems and processes you need to have in place to facilitate high quality, high volume remote work.

My long-time friend and former Board member Brad Feld has become a prolific writer on the startup world over the years and is the person (other than me) most responsible for me getting into that scene as well. Startup CEO is part of his Startup Revolution series, which followed me writing an essay for Do More Faster, and then writing a series of sidebars call “The Entrepreneur’s Perspective” in Venture Deals.

All Brad’s books are listed here. If you’re in the startup universe, I’d encourage you to read all of them. I’m excited to dive into his newest book, The Startup Community Way, which comes out this week from our same publisher, John Wiley & Sons. I’ve gotten part of the way through an early copy, and I love it already.

The approach Brad and his co-author Ian Hathaway take is to evolve their Boulder Thesis from the original Startup Communities book. They dive into the topic and examine it from the perspective of a complex system, which of course anything as fragmented as an ecosystem of public, private, and academic organizations is.

The book — and the whole topic, quite frankly — remind me of a great management book I read several years ago by General Stanley McChrystal called Team of Teams. Organizations have gotten more complex and have had to adapt their structures, and the most successful ones are the ones that have shifted from hierarchical structures to node-based structures, or teams of teams, where individual, agile teams operate with loose points of connection to other teams that focus on dependencies and outcomes.

In the same way, startup communities and the broader ecosystems that touch them have changed and adapted, and the successful ones have learned how to stay loosely connected to other startup communities, prioritize collaboration, and remain focused on inclusion and entrepreneurial leadership.

Book Short:  Best Book Ever

The Hard Thing About Hard Things, by Ben Horowitz, is the best business book I’ve ever read.  Or at least the best book on management and leadership that I’ve ever read.  Period.

It’s certainly the best CEO book on the market.  It’s about 1000 times better than my book although my book is intended to be different in several ways.  I suppose they’re complementary, but if you only had time left on this planet for one book, read Ben’s first.

I’m not even going to get into specifics on it, other than that Ben does a great job of telling the LoudCloud/Opsware story in a way that shows the grit, psychology, and pain of being an entrepreneur in a way that, for me, has previously only existed in my head.

Just go buy and read the book.

Book Short:  The Little Engine that Could

Authors Steven Woods and Alex Shootman would make Watty Piper proud.  Instead of bringing toys to the children on the other side of the mountain, though, this engine brings revenue into your company.  If you run a SaaS business, or really if you run any B2B business, Revenue Engine:  Why Revenue Performance Management is the Next Frontier of Competitive Advantage, will change the way you think about Sales and Marketing. The authors, who were CTO and CRO of Eloqua (the largest SaaS player in the demand management software space that recently got acquired by Oracle), are thought leaders in the field, and the wisdom of the book reflects that.

The book chronicles the contemporary corporate buying process and shows that it has become increasingly like the consumer buying process in recent years.  The Consumer Decision Journey, first published by McKinsey in 2009, chronicles this process and talks about how the traditional funnel has been transformed by the availability of information and social media on the Internet.  Revenue Engine moves this concept to a B2B setting and examines how Marketing and Sales are no longer two separate departments, but stewards of a combined process that requires holistic analysis, investment decisions, and management attention.

In particular, the book does a good job of highlighting new stages in the buying process and the imperatives and metrics associated with getting this “new funnel” right.  One that resonated particularly strongly with me was the importance of consistent and clean data, which is hard but critical!  As my colleague Matt Spielman pointed out when we were discussing the book, the one area of the consumer journey that Revenue Engine leaves is out is Advocacy, which is essential for influencing the purchase process in a B2B environment as well.

One thing I didn’t love about the book is that it’s a little more theoretical than practical. There aren’t nearly enough detailed examples.  In fact, the book itself says it’s “a framework, not an answer.”  So you’ll be left wanting a bit more and needing to do a bit more work on your own to translate the wisdom to your reality, but you’ll have a great jumping off point.

Book Short: Not About Going With The…

Flow: The Psychology of Optimal Experience, by Mihaly Csikszentmihalyi (book, Kindle), was a great read and a nice change from either strictly business books or my regular fiction/non-fiction reading. It’s basically about the process of achieving happiness through control over one’s inner life, but it’s far from a self-help book. It’s almost more of practical psychology deep dive into what brings about happiness and peak performance – a state the author calls Flow but others have called other things over time, like being “in the zone.”

The author talks about achieving this control as synonymous with the enviable ability to persevere despite obstacles and setbacks and transform hopeless situations into challenges to be overcome, just through the force of personality. This ability comes directly from ways to order consciousness so as to be in control of feelings and thoughts. The normal entropy/chaos of the mind is the enemy. There were a few key moments or takeaways in the book for me.

1. When one’s experience is most positive – when one is achieving Flow – people cite the following conditions in this order of importance:

– Confront tasks we have a chance of completing

– Able to concentrate

– Concentration is possible because the task has clear goals and…

– …provides immediate feedback

– Act with a deep but effortless involvement that removes from awareness the worries and frustrations of everyday life

– Exercise a sense of control over actions

– Concern for the self disappears, yet paradoxically the sense of self emerges stronger after the experience is over

2. Becoming more Autotelic – learning how to make experiences ends in and of themselves – coming from the Greek words for “self” and “goal,” this concept is savoring a given activity for its own sake, NOT for its consequences and is a key to achieving Flow. Whether you create a mental construct around beating a personal record, doing math or pattern matching in your head, or something else, being able to focus enough energy on the task at hand and not be distracted by the world around (present or future) is key. It’s a little like what I wrote a few months ago about how achieving mental discipline in the small areas of one’s life can lead to much greater things by building confidence and clearing mental clutter.

3. The concept of the “Flow channel” – as skill increases, challenges must also increase proportionally in order for us to continue learning, growing, and excelling – and achieving Flow.

4. Transformational coping is the ability to cheat chaos – transforming a hopeless situation into a new flow activity that can be controlled and enjoyed and emerge stronger from…

– Unselfconscious self-assurance – ego absent but confident, not at odds with environment but part of it

– Focusing attention on the world – looking outward, not inward

– The discovery of new solutions – being able to perceive unexpected opportunities as a result

5. How to develop the autotelic self

– Set clear goals

– Become immersed in the activity

– Pay attention to what’s happening

– Learn to enjoy immediate experience

The book reminded me of a couple other things I’ve read, in case any of these resonate with you. First, Tim Gallwey’s “Inner Game” books where he talks about “relaxed concentration,” basically the Flow state, and the inner conflict between focus on the event and focus on the consequences, between mental chaos and mental discipline, personified as Self 1 and Self 2. If you haven’t read these, any are good and give you the general idea, depending on which piques your interest the most: The Inner Game of Golf (book, Kindle), The Inner Game of Tennis (book only), and The Inner Game of Work (book, Kindle). Second, David Allen’s Getting Things Done theory about how a clear, uncluttered mind can do its best work. As Flow says, achieving an ordered mental condition is difficult – unless a person knows how to give order to his or her thoughts, attention will be attracted to whatever is most problematic at the moment.

I’m not sure this book short does the book justice. It’s pretty complex and is rich with examples, but Flow (book, Kindle) is well worth a read if you’re into the theory of self control leading to better results and more happiness in life. Thanks to my friend Jonathan Shapiro for this book.

Book Short:  Way, Way Beyond Books

The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, was a great read.  Amazon is a fascinating, and phenomenally successful company, and Jeff is a legendary technology leader.  The Everything Store is a company and personal biography and totally delivers.

Forget about the fact that Amazon is now almost $100B in revenues and still growing like mad.  I find it even more amazing that a single company could be the largest ecommerce site on the planet while successfully pioneering both cloud computing services and e-readers.  The stories of all these things are in the book.

As a CEO, I enjoyed reading more of the vignettes behind the things that Amazon is reputationally known for in the tech world – doors as desks, their unique meeting formats, the toughness of the culture, the extensive risk taking of growth over profits, and what works and does not work about Bezos’ authoritative and domineering style.  And it’s always great to be reminded that even the biggest and best companies had to cheat death 10 times over before “arriving.”

This is good fun and learning for anyone in the business world.  It reminded me most of Walter Isaacson’s biography of Steve Jobs ,which I wrote about here, although it’s more of a company history and less of a biography than the Jobs book.

Book Short:  Alignment Well Defined, Part II

Getting the Right Things Done:  A Leader’s Guide to Planning and Execution, by Pascal Dennis, is an excellent and extraordinarily practical book to read if you’re trying to create or reengineer your company’s planning, goal setting, and accountability processes. It’s very similar to the framework that we have generally adapted our planning and goals process off of at Return Path for the last few years, Patrick Lencioni’s The Advantage (book, post/Part I of this series).  My guess is that we will borrow from this and adapt our process even further for 2014.

The book’s history is in Toyota’s Lean Manufacturing system, and given the Lean meme floating around the land of tech startups these days, my guess is that its concepts will resonate with most of the readers of this blog.  The book’s language — True North and Mother Strategies and A3s and Baby A3s — is a little funky, but the principles of simplicity, having a clear target, building a few major initiatives to drive to the target, linking all the plans, and measuring progress are universal.  The “Plan-Do-Check-Adjust” cycle is smart and one of those things that is, to quote an old friend of mine, “common sense that turns out is not so common.”

One interesting thing that the book touches on a bit is the connection between planning/goals and performance management/reviews.  This is something we’ve done fairly well but somewhat piecemeal over the years that we’re increasingly trying to link together more formally.

All in, this is a good read.  It’s not a great fable like Lencioni’s books or Goldratt’s classic The Goal (reminiscent since its example is a manufacturing company).  But it’s approachable, and it comes with a slew of sample processes and reports that make the theory come to life.  If you’re in plan-to-plan mode, I’d recommend Getting the Right Things Done as well as The Advantage.

I love innovation, and process is no different than product or business model in that regard. I’ve run and attended several hundred board meetings over the years, both those of companies where I’ve been CEO or Chairman, and those where I’m a director. I’ve written a lot about how I like running board meetings in Startup CEO, and as I mentioned the other day, I’m a co-author of a Second Edition of Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, which is coming out in June and is available to pre-order now, along with Brad Feld and Mahendra Ramsinghani.

There are two adaptations I’ve made to my standard board routines in the last year or so, one driven by the pandemic and one not.

In olden times (that makes me sound like I’m 400 years old, but “pre-covid” sounds so clinical), I used to have a board dinner the night before or after every board meeting, and of course, everything was in person. That was a really important ritual in my mind towards the end of building the board as an effective team, where people on the team know each other as people, share things going on in their lives, share vulnerabilities, and develop bonds of trust. Without regular in-person meetings and dinners or social events, that gets a lot harder. Even when we get back to “normal,” I imagine the most we’ll do in-person board meetings is 1-2x/year.

What’s the zoom version of this?

We now do two 30-minute Executive Sessions (directors only) one before the board meeting officially starts and observers and team join, as well as the traditional one after the meeting ends. The purposes of the two sessions are different. The standard post-meeting Executive Session follows up on the meeting and has me talk about business or team issues that I don’t want to talk about with the full group present or get feedback from the board. But the one before the meeting is almost entirely social. I try to come up with a different question or topic to get all of us talking that is not about Bolster. Last week’s meeting was a simple “what’s the best thing that’s happened to you so far in 2022, and what’s the worse?” One time I asked everyone to show a picture from their phone photo roll and talk about it. You get the idea. It’s not the same as a dinner, but it seems like an effective substitute given the medium.

The second adaptation, and full credit to Fred for suggesting this one a while back, is the post-meeting survey. Now immediately after every Board meeting, I send a simple Google form to each director with the following questions:

• What are 1-3 areas/specifics where we are doing well?
• What are 1-3 areas/specifics you’re concerned about or where we could do better?
• Did the board book have the right level of detail and commentary?  Is there anything you’d like to see change about the format or the content?
• Did the meeting meet your objectives for learning and discussion? 
• If not, why not?
• Do you have any other feedback for Matt at this time?

I get great feedback, almost immediately and always from all board members, while things are still fresh in everyone’s mind. I’m planning to do this whether or not the meeting is remote…although it’s definitely good when the meeting is remote, and things like Executive Session, Closed Session, and debrief with me after Closed Session are quick or sometimes rushed.

There’s always room for innovation, even in standard and time-tested processes like board meetings.

Book Short: The Anti-Level-5 Leader

The Five Temptations of a CEO, another short leadership fable in a series by Patrick Lencioni, wasn’t as meaningful to me as the last one I read, The Four Obsessions of an Extraordinary Executive (post, link), but it wasn’t bad and was also a quick read.

The book to me was the 30 minute version of all the Level-5 Leadership stuff that Collins wrote about in Good to Great and Built to Last. All that said, it was a good quick read and a reminder of what not to do. The temptations are things that most CEOs I’ve ever known (present company very much included) have at least succumbed to at one point or another in their career. That said, you as a CEO should quit or be fired if you have them in earnest, so hopefully if you do have them, you recognize it and have them in diminishing quantities with experience, and hopefully not all at once:

– The temptation to be concerned about his or her image above company results

– The temptation to want to be popular with his or her direct reports above holding them accountable for results

– The temptation to ensure that decisions are correct, even if that means not making a decision on limited information when one is needed

– The temptation to find harmony on one’s staff rather than have productive conflict, discussion, and debate

– The temptation to avoid vulnerability and trust in one’s staff

I’m still going to read the others in Lencioni’s series as well. They may not be the best business books ever written, but they’re solid B/B+s, and they’re short and simple, which few business books are and all should be!