Choose Voice, Part II

One reader writes to me: 

I am a vice president at a startup that isn’t in great shape.  We have some customers and a product that is meeting some market needs, but we’re way off our plan and don’t show signs of changing our trajectory in a material way.  I disagree with the direction our CEO is taking things, which is ok, but more important, our CEO refuses to listen to me when I try to discuss and debate strategy with her.  One of our board members has asked me what I thought we should do.  I don’t want to be disloyal to our CEO, and I want to seem like a team player who rallies behind the decision even if I don’t agree with it, but at the same time, I feel strongly that we’re going the wrong way and don’t want to be associated with a failed strategy or failed company.  What do I do?

My response:

Honesty really and truly is the best policy.  Always.  It just depends how you go about expressing it.

I talked about this a little bit a few weeks back in my post on Exit, Voice, and Loyalty.  Here are your options when you disagree with the system:  quit your job in protest (exit), express your opinions (voice), or suck it up and follow (loyalty).  I always say — choice voice.

If you and the CEO are at odds about the issues but she is being rational about it, you should try to encourage a broader, open debate with others.  Maybe not the whole board, maybe not the whole senior management team, but a smaller group.  Tell her that you are just concerned for the company’s future and feel like more rigorous conversation is required.  Do it in such a way that it’s her idea to call the meeting and lay out the options.  If the company is truly going sideways and she’s a rational being, she must be thinking about multiple options, even if she has an opinion about one of them.

Now, if the CEO isn’t being rational, you have a different challenge.  If that’s the case, and if you think she’s wrong, and if the company is going sideways, I’d say the likelihood of you staying as a long-term employee of that company with that CEO is low anyway, so it’s worth taking a little more risk. 

But I think you can do it in ways that mitigate your personal risk with the CEO.  One thing you could do is go to one board member and express your concern confidentially, tell the board member that he should force the CEO to call the same kind of open forum I described above.  Another thing you could do is to send an anonymous email to one or more board members expressing the same.  Another is to see how like-minded other senior managers are — and if lots of people agree with you, gang up and either stage an intervention with the CEO, or go as a group to the board.  And if the board just blindly backs the CEO without rigorous debate and laying out options, that should cause you to rethink where you work anyway.

UPDATED:  one executive coach who reads my blog just wrote in his $0.02:  The answer in my view is simple, which I should think you would prefer if it were your organization, you tell the CEO that you are going to the Board with your concerns and then if that does not trigger some more favorable process you do so, albeit, with the CEO’s knowledge.

More Good Inc.

Last year I was pleased and proud to write about our debut on the Inc. 500 list of America’s fastest growing companies.  At that time I wrote that “Now our challenge, of course, is STAYING on the list, and hopefully upping our ranking next year!”  Well, I am again please and proud to announce that we, in fact, stayed on the list.  (You can read all the Inc. coverage here and see our press release about the ranking here.)

Unfortunately, we didn’t make the second part of our goal to up our rank.  But, we did up our growth – our three-year revenue growth rate was 18% higher than last year.  This is a testament to the hard work of our team (now 150 strong!) and wouldn’t be possible without the support of our many great clients (now 1,500 strong!).  Most importantly, we see no end in sight.  In fact, 2008 promises to be an even bigger year for us as we poise for continued growth.  By the way, would you like to be part of a team that has now ranked as one of America’s fastest growing companies two years in a row?  Check out our Careers page and join the team that is advancing email marketing, one company at a time.

The Gift of Feedback, Part II

I’ve written a few times over the years about our 360 feedback process at Return Path.  In Part I of this series in early 2008, I spelled out my development plan coming out of that year’s 360 live review process. I have my new plan now after this year’s process, and I thought I’d share it once again.  This year I have four items to work on:

1. Continue to develop the executive team.  Manage the team more aggressively and intentionally.  Upgrade existing people, push hard on next-level team development, and critically evaluate the organization every 3-6 months to see if the execs are scaling well enough or if they need to replaced or augmented
2. Formalize junior staff interaction.  Create more intentional feedback loops before/after meetings, including with the staff member if needed, and cultivate acceptance of transparency; get managers to do the same.  Be extra skeptical about the feedback I’m getting, realizing that I may not get an accurate or complete picture
3. Foster deeper engagement across the entire organization.  Simplify/streamline company mission and balanced scorecard through a combination of deeper level maps/scorecards, maybe a higher level scorecard, and constant reinforcing communication.  Drive multi-year planning process to be fun, touching the entire company, and culminating in a renewed enthusiasm
4. Disrupt early and often, the right way.  Introduce an element of productive disruption/creative destruction into the way I lead, noting item 2 around feedback loops

Thanks to everyone internally who contributed to this review.  I appreciate your time and input.  Onward!

It’s Copyright Time

Brad must be off his game this year, so…time to update all those copyrights to say 2008.  Or as Brad gently suggested last year, make that field variable so you never have to worry about it again!  (Thanks to our CTO Andy Sautins for the reminder here.)

Welcome to the new Return Path.

For a tech company to grow and thrive in the 21st century it must be in a state of constant adaptation. We have been the global market leaders in email deliverability since my co-founder George Bilbrey coined that term back in 2002. In fact, back in 2008 we announced a major corporate reorganization, divesting ourselves of some legacy businesses in order to focus on deliverability as our core business.  

 Since then Return Path has grown tremendously thanks to that focus, but we have grown to the point where it’s time for us to redefine ourselves once again.  Now we’re launching a new chapter in the company’s history to meet evolving needs in our marketplace. We’re establishing ourselves as the global market leaders in email intelligence. Read on and I’ll explain what that means and why it’s important.

What Return Path Released Today

We launched three new products today to improve inbox placement rate (the new Inbox Monitor,  now including subscriber-level data), identify phishing attacks (Email Brand Monitor), and make it easier to understand subscriber engagement and benchmark your program against your competition (Inbox Insight, a groundbreaking new solution). We’ve also released an important research study conducted by David Daniels at The Relevancy Group.

The report’s findings parallel what we’ve been hearing more and more recently. Email marketers are struggling with two core problems that complicate their decision making: They have access to so much data, they can’t possibly analyze it fast enough or thoroughly enough to benefit from it; and too often they don’t have access to the data they really need.

Meanwhile they face new challenges in addition to the ones email marketers have been battling for years. It’s still hard to get to the inbox, and even to monitor how much mail isn’t getting there. It’s still hard to protect brands and their customers from phishing and spoofing, and even to see when mail streams are under attack. And it’s still hard to see engagement measurements, even as they become more important to marketing performance.

Email Intelligence is the Answer

Our solution to these problems is Email Intelligence. Email intelligence is the combination of data from across the email ecosystem, analytics that make it accessible and manageable, and insight that makes it actionable. Marketers need all of these to understand their email performance beyond deliverability. They need it to benchmark themselves against competitors, to gain a complete understanding of their subscribers’ experience, and to accurately track and report the full impact of their email programs.  In fact, we have redefined our company’s mission statement to align with our shift from being the global leader in Email Deliverability to being the global leader in Email Intelligence:

We analyze email data and build solutions that generate insights for senders, mailbox providers, and users to ensure that inboxes contain only messages that users want

The products we are launching today, in combination with the rest of our Email Intelligence Solution for Marketers that’s been serving clients for a decade, will help meet these market needs, but we continue to look ahead to find solutions to bigger problems. I see our evolution into an Email Intelligence company as an opportunity to change the entire ecosystem, to make email better, more welcome, more effective, and more secure.

David’s researchoffers a unique view of marketers’ place in the ecosystem, where they want to get to, how much progress they’ve made, and how big a lead the top competitors have opened up against the rest. (It can also give you a sense of where your efforts stack up vs. the rest of the industry.) There are definitely some surprises, but for me the biggest takeaway was no surprise at all: The factors that separate the leaders are essentially the core components of what we define as Email Intelligence.

Return Path Core Values, Part II

As I said at the beginning of this series, I was excited to share the values that have made us successful with the world and to also articulate more for the company some of the thinking behind the statements.

You can click on the tag for all the posts on the 13 Return Path’s core values, but the full list of the values is below, with links to each individual post, for reference:

1. We believe that people come first
2. We believe in doing the right thing
3. We solve problems together and always present problems with potential solutions or paths to solutions
4. We believe in keeping the commitments we make, and communicate obsessively when we can’t
5. We don’t want you to be embarrassed if you make a mistake; communicate about it and learn from it
6. We believe in being transparent and direct
7. We challenge complacency, mediocrity, and decisions that don’t make sense
8. We believe that results and effort are both critical components of execution
9. We are serious and passionate about our job and positive and light-hearted about our day
10. We are obsessively kind to and respectful of each other
11. We realize that people work to live, not live to work
12. We are all owners in the business and think of our employment at the company as a two-way street
13. We believe inboxes should only contain messages that are relevant, trusted, and safe

As I noted in my initial post, every employee as of August 2008 was involved in the drafting of these statements.  That’s a long post for another time, but it’s an important part of the equation here.  These were not top-down statements written by me or other executives or by our People team.  Some are more aspirational than others, but they are the aspirations of the company, not of management!

New People Electrify the Organization

We had a good year in 2009, but it was tough.  Whose wasn’t?  Sales were harder to come by, more existing customers left or asked for price relief than usual, and bills were hard to collect.  Worse than that, internally a lot of people were in a funk all year.  Someone on our team started calling it “corporate ennui.”  Even though our business was strong overall and we didn’t do any layoffs or salary cuts, I think people had a hard time looking around them, seeing friends and relatives losing their jobs en masse, and feeling happy and secure.  And as a company, we were doing well and growing the top line, but we froze a lot of new projects and were in a bit of a defensive posture all year.

What a difference a year makes.  This year, still not perfect, is going much better for us.  Business conditions are loosening up, and many of our clients have turned the corner.  Financially, we’re stronger than ever.  And most important, the mood in the company is great.  I think there are a bunch of reasons for that – we’re investing more, we’re doing a ton of new innovation, people have travel budgets again, and people see our clients and their own friends in better financial positions.

But by far, I think the most impactful change to the organizational mood we’re seeing is a direct result of one thing:  hiring.  We are adding a lot of new people this year – probably 60 over the course of the year on top of the 150 we had at the beginning of the year.  And my observation, no matter which office of ours I visit, is that the new people are electrifying the organization.  Part of that is that new people come in fresh and excited (perhaps particularly excited to have a new job in this environment).  Part of it is that new people are often pleasantly surprised by our culture and working environment.  Part of it is that new people come in and add capacity to the team, which enables everyone to work on more new things.  And part of it is that every new person that comes in needs mentoring by the old timers, which gives the existing staff reminders and extra reason to be psyched about what they’re doing, and what the company’s all about.

Whether it’s one of these things or all of them, I’m not sure I care.  I’m just happy the last 18 months are over.  The world is a brighter place, and so is Return Path.  And to all of our new people (recent and future), welcome…thanks for reinvigorating the organization!

Less is More

I have a challenge for the email marketing community in 2009. Let’s make this the Year of “Less is More.”

Marketers are turning to email more and more in this down economy. There’s no question about that. My great fear is that just means they’re sending more and more and more emails out without being smart about their programs. That will have positive short term effects and drive revenues, but long term it will have a negative long term impact on inboxes everywhere. And these same marketers will find their short term positive results turning into poor deliverability faster than you can say “complaint rate spike.”

I heard a wonderful case study this week from Chip House at ExactTarget at the EEC Conference. One of his clients, a non-profit, took the bold and yet painful step of permissioning an opt-out list. Yikes. That word sends shivers down the spine of marketers everywhere. What are you saying? You want me to reduce the size of my prime asset? The results of a campaign done before and after the permission pass are very telling and should be a lesson to all of us. The list shrank from 34,000 to 4,500. Bounce rate decreased from 9% to under 1%. Spam complaints went from 27 to 0 (ZERO). Open rate spiked from 25% to 53%. Click-through from 7% to 22%. And clicks? 509 before the permissioning, 510 after. This client generated the same results, with better metrics along the way, by sending out 87% LESS EMAIL. Why? Because they only sent it to people who cared to receive it.

This is a great time for email. But marketers will kill the channel by just dumping more and more and more volume into it. Let’s all make Less Is More our mantra for the year together. Is everyone in? Repeat after me…Less Is More! Less Is More!

I’ve written a lot over the years about Return Path’s Core Values (summary post with lots of links to other posts here).  And I’ve also written and believe strongly that there’s a big difference between values, which are pretty unchanging, and culture, which can evolve a lot over time.  But I had a couple conversations recently that led me to think more philosophically about a company’s values.

The first conversation was at a recent dinner for a group of us working on fundraising for my upcoming 25th reunion from Princeton.  Our guest speaker was a fellow alumnus who I’ve gotten to know and respect tremendously over the years as one of the school’s most senior and influential volunteer leaders.  He was speaking about the touchstones in his life and in all people’s lives — things like their families, their faith, the causes they’re passionate about, and the institutions they’ve been a part of.  I remember this speaker giving a similar set of remarks right after the financial crisis hit in early 2009.  And it got me thinking about the origins of Return Path’s values, which I didn’t create on my own, but which I obviously had a tremendous amount of influence over as founder.  Where did they come from?  Certainly, some came from my parents and grandparents.  Some came from my primary and secondary education and teachers.  Some came from other influences like coaches, mentors, and favorite books.  Although I’m not overly observant, some certainly came from Hebrew school and even more so from a deep reading of the Bible that I undertook about 15 years ago for fun (it was much more fun than I expected!).  Some came from other professional experiences before I started Return Path.  But many of them either came from, or were strongly reinforced by my experience at Princeton.  Of the 15 values we currently articulate, I can directly tie at least seven to Princeton:  helpful, thankful, data-driven, collaborative, results-oriented, people first, and equal in opportunity.  I can also tie some other principles that aren’t stated values at Return Path, but which are clearly part of our culture, such as intellectually curious, appreciative of other people’s points of view, and valuing an interdisciplinary approach to work.

As part of my professional Reboot project, this was a good reminder of some of the values I know I’ve gotten from my college experience as a student and as an alumni, which was helpful both to reinforce their importance in my mind but also to remember some of the specifics around their origins – when and why they became important to me.  I could make a similar list and trade and antecedents of all or at least most of our Company’s values back to one of those primary influences in my life.  Part of Reboot will be thinking through all of these and renewing and refreshing their importance to me.

The second conversation was with a former employee who has gone on to lead another organization.  It led me to the observation I’ve never really thought through before, that as a company, we ourselves have become one of those institutions that imprints its values into the minds of at least some of its employees…and that those values will continue to be perpetuated, incorporated, and improved upon over time in any organization that our employees go on to join, manage part of, or lead.

That’s a powerful construct to keep in mind if you’re a new CEO working on designing and articulating your company’s values for the first time.  You’re not just creating a framework to guide your own organization.  You’re creating the beginning of a legacy that could potentially influence hundreds or thousands of other organizations in the future.

I was trading emails a few weeks ago Elliot Noss from Tucows about the current state of the economy after being on a panel together about it, and he wrote:

The market is fascinating right now. Heated competition AND layoffs and hiring freezes. It feel like an old European hotel where there are two faucets, one is too hot and the other too cold.

While a quick rant about European hotel bathrooms could be fun…we’ll just stick to the sink analogy. As anyone who has ever tried to use one of these sinks that Elliot describes knows, they’re hard to use and illogical. Sure, sometimes you want freezing water and sometimes you want scalding water (I guess), but often, you want something in between. And the only way to achieve that is to turn on both freezing and scalding at the same time? That’s weird.

Then I was on another email thread recently with a group of CEOs, when John Henry from Ride With Loop said this:

Whatever the climate, we all surely agree there is no bad time to build a good business.

How true that is!

But here’s the worrisome part. It’s impossible to predict what’s going to happen next. We are in uncharted territory here with a land war in Europe, a partial global oil embargo of a top tier oil producer, a pandemic, supply chain problems, etc. etc. There are days and circumstances where everything feels normal. Plenty of businesses, especially in the tech sector, are kicking ass. And yet there are days and circumstances that feel like 2001 or 2009. It’s tough to navigate as a startup CEO. Yes, it’s obvious you should try to have a couple years of cash on hand, and that you should be smart about investments and not get too far ahead of revenue if you’re in certain sectors (presumably if you’re in an R&D intensive field and weren’t planning to have revenue for years on end, life isn’t all that different?). But beyond that, there’s no clear playbook.

And that’s where the worrisome line comes in. I saw Larry Summers on Meet the Press last weekend, who predicted that

a recession would come in late 2023.

Wait, what? Aren’t things messed up now? Yes, inflation is high, the stock market is down, and interest rates are creeping up. But the economy is still GROWING. Unemployment is still LOW. Summers’ point is a reminder that contraction is likely, but it may still be a ways off, it depends how the Fed handles interest rate hikes (and about a zillion other things), and it’s impossible to predict. That was more worrisome to me. If we’re navigating choppy waters now, it may not just be for a couple of quarters. It may be that 4-6 quarters from now, we are in for 2-3 quarters of contraction. That is a more than most companies are able to plan for from a cash perspective.

Frothy macro environments lead to bad businesses getting created, too many lookalike businesses popping up, or weak teams getting funded. When the tide goes out, as they say, you can see who is swimming naked. But if you’re building a good business, one that has staying power and a clear value proposition, with real people or clients paying real money for a real product or service, and if you’re serious about building a good company, keep on keeping on. Be smart about key decisions, especially investment decisions, but don’t despair or give up.

We’ll all get through this.

It’s been a big break between posts – as many of you probably know, I moved to Board Chair and left the CEO role at Bolster last summer (it’s now in the very capable hands of my friend and co-founder Cathy Hawley), and I’m now CEO of a super cool AI company called Acrolinx.  So yes, that means I went through a job search – and I found my ultimate job as a result of an inbound cold email from a headhunter!  The rich irony in that as someone who founded an executive search platform is not lost on me.

So when a good friend of mine who is also between CEO gigs and looking at several opportunities asked me the other day “why is this process so slow, and what can I do about it?” I riffed with him on the theme for a bit and thought I’d share my thinking here. 

Why Executive Searches are Slow

My top three reasons on this are pretty varied – there’s no specific theme.

1. Boards aren’t efficient hiring managers. When hiring a CEO, even the best intentioned boards can be slow to move. Frequently they operate with a search committee, and even if there’s a lead director on the search committee or even no actual search committee, by design they need to operate with a high degree of consensus. Organizing five calendars to meet with or debrief on a candidate can take weeks. And a single loud voice saying “no” or “not sure” can paralyze a board. All this is true for a CEO search but can also be true when a less experienced CEO is trying to hire a CXO and needs a lot of Board involvement in the process. At Bolster, we’ve worked on mitigating this by getting the key decision-makers aligned on search criteria at the beginning of the search, prepping interviewers, and creating a scorecard for each candidate that is visible to all decision-makers, but sometimes that doesn’t matter.
   
2. Boards and CEOs often don’t know what they want.  Whether a company is hiring a role for the first time or replacing an executive, they often get to a generic job spec but don’t actually know what they’re looking for. Not all CEOs are created equal. Not all CROs have the same core competencies. At Bolster, we developed a description of role archetypes for each C-suite or Head-or role that helps with this process (eg for a CFO, do you want an Accounting type, a Finance/Ops type, or a Deal type?). But even if a Board or hiring CEO has this level of detail down, it can still be a murky picture, trapped between the company’s past successes and failures on one side and its future needs on the other. Processes move slowly because it take a while for the picture to become less murky – circumstances around the company evolve, or people see how the company operates without this role as others pick up the slack, and therefore the needs of the role shift or come into focus. Sometimes meeting a series of candidates is the only thing that can help drive this focus, and per the first bullet above, this just takes time. If a company has a strong search partner, that may speed things up via quick presentation of calibration candidates.
   
3. There’s no precipitating crisis.  Most companies and departments, most of the time, are not in crisis. A lot of companies can operate without a given executive, even a CEO, for quite some time. Some things done (don’t) get done. Other people rise to the occasion and pick up the most important items. Or the company has hired an interim or fractional executive as a stop gap measure. Without a specific and clear sense of urgency, searches often don’t have a driving force. Sometimes there’s a precipitating crisis like a system outage or massive customer churn or the company running out of cash that can provide that driving force, but that is not the norm.

What Can You as a Candidate Do About It?

The answer is probably “not much.”  But if my own search was any indicator, I’d give you the same advice I give people internally at my company when they ask me how to get a promotion.  My answer is “start doing the job today, don’t wait to actually get the job.”  Obviously a candidate for a CEO role or any other executive role can’t actually start doing the job as an existing employee could start taking on additional pieces of work.  But there are a lot of things you can do to “act as it” and get the hiring Board or hiring CEO’s attention.  For example:

• As a CEO candidate, be a management consultant.  Work on designing a strategy for the company you want to work for.  Do a tremendous amount of homework you can do from the outside – read analyst reports, get stealth demos, do market and customer interviews.  You don’t have to explain what you’re up to in terms of identifying the company.  You can say you’re interviewing for a CEO role in the sector.  Or even that you’re doing market research.  But proactively sending the hiring board a strategy deck and asking for the next meeting is a good way of differentiating yourself as a candidate and potentially accelerating a process.
  
• As a CRO candidate, go try to sell the company’s product.  Do it to a couple “friendlies” (e.g, people who are friends of yours, not active customers or prospects of the company you’re interviewing with) so you don’t tread on the actual business.  But create your own deck.  Get meetings.  Write up your experience.  Sending the CEO or board an email that says “Hey, I have a prospect already in the final stage of the funnel for you, can we work together to close her?” is a sure way to differentiate yourself as a candidate and potentially accelerate a process.

There may be a macro answer here as well.  The market is still choppy, and boards and CEOs are more conservative in most sectors and subsectors than they are in go-go times.  So that may be slowing things down in general and may even make it harder to act as-if.  But that doesn’t mean you can’t try.