Don’t Ever Do a Conference Call from an Airport

Ever.  Just say no thank you, you’re not available.  Airports are terrible places to be on a phone call.  You can’t hear the call, the call is barraged with P.A. system announcements.  It’s disjointed and difficult. 

Better to force the call to happen at another time or send a delegate from your team or company on your behalf.  If you *must* do a call from an airport, I’d say best practices are:

1. Let the meeting organizer know ahead of time that you have no choice (if the meeting must be scheduled at that time)

2. Remind all participants up front that you’re in an airport

3. Make liberal use of the mute and unmute functions.  Phones all have different ways of doing this, but most conference call platforms have universal *6 mute and *7 unmute commands

4. If you can’t hear everything you need to hear on the call, ask one meeting participant at the end of the call if they can recap key items and next steps for you after the fact

Who Said VCs Don’t Add Value?

In case there’s anyone out there who reads my blog but not Brad Feld’s — if you’re a Firefox user, you have to read this posting about pipelining and take the two minutes to implement it.  It’s phenomenal.

Thanks, Brad!

(This is the second post in the series… the first one When to Hire your first Chief Customer Officer is here)

I mentioned in an earlier post that few startups begin with a full-time Chief Customer Officer and the likely scenario is to promote someone from within the service organization to that role. It’s possible that the person who takes on the CCO role will be ideal for the job, but often startups end up searching for someone outside the organization to lead the customer success team. Either way, promoting from within or hiring from outside, there are several telltale characteristics that great Chief Customer Officers share, and there are three things they do particularly well.

First, the CCO is the primary evangelist across your executive team and entire organization and this message should be so constant and consistent that everyone in your organization will be able to finish the sentence of the CCO. At Return Path our CCO, George Bilbrey, was constantly reminding everyone that the purpose of Return Path was to do the job the customer hired us to do.  In non-professional service businesses, where the bulk of the organization is not face-to-face with customers on a regular basis, it can be very easy for employees, teams, and projects to quickly become internally focused.  They focus on projects, milestones, internal metrics—all the things that customers don’t care about. The great CCO is the one who brings the Outside In, every day.

 A great CCO is equal parts quantitative and qualitative.  Almost all high-level work that the CCO and their team does includes quantitative measures: math, metrics, analytics, and statistics.  Net Promoter Score analysis.  Customer segmentation.  Customer profitability. Anything worth knowing has usually got a measurement behind it and the CCO must nail these or, if partnering with the CFO or someone else, at least be fluent in them.  And the greatest CCOs are also the ones with the most customer empathy, something that comes by listening carefully to customers, and I mean really listening. Once they understand customers on an emotional level the great CCOs have the ability to relate that feeling to others in the company, and to other customers.  They can recite customer and experience stories like a politician giving a stump speech.

The final characteristic or skill of a great CCO is that they like designing processes.  Account Management, Customer Success, Support, Onboarding, Professional Services, Knowledge Management — all the different teams reporting to a CCO — must work together in a seamless way to apply their specific areas of expertise to bring general solutions to the customer.  The head of the team, the CCO, must be a rock star at process envisioning and design, and at engaging teams in the process.  Otherwise, the teams will be inefficient, hand-offs will be missed, there will be no single source of truth, and customers will not be well served.

Whether your CCO is promoted from within your organization or hired from the outside, the great ones all have the same traits: evangelists for the customer, quantitative and qualitative skills, and a passion for processes that connect disparate parts of the organization into a seamless, functioning team.

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

(This is the second post in the series….the first one When to hire your first CBDO is here)

One of the tricky things about finding a great CBDO is that the role is fairly nuanced and there’s not a degree a person can get in “business development.” So you’re left with searching for someone based partially on experience, reputation, and alignment with your company culture and goals. But over the course of my career I have figured our what “great” looks like for the CBDO and I’m confident that what worked for us at Return Path and Bolster will work for any startup.

First, a great CBDO should have a good balance of the three core components Ken Takahashi outlined in his section of Startup CXO.  Those three components include partnerships, M&A, and strategy.  Even if a person started their careers out as an investment banker or a management consultant, or some other specialized field, they should still be able to bring all three competencies to bear to help further the goals of their team – to optimize the company’s place in the ecosystem. A one-trick pony will get you nowhere in the ecosystem and the CBDO needs to be a competent generalist in a wide range of skills.

Second, a great CBDO will look at business strategy first before trying to solve a problem because a solution that doesn’t advance the strategy will fail. It’s not enough to be able to develop a strategy, the great CBDOs will return to that strategy constantly. If a CBDO is highly skilled at one of the components, say M&A, they are likely to risk becoming the the proverbial hammer in search of a nail and they will put a primacy on M&A deals. The strategy acts as a safeguard to pursuing something because the CBDO wants it amd instead helps them pursue something that fits with the overal strategic drivers of the business. So, strategy is king in the CBDO world.

Third, a great CBDO will see the whole system at a company, not just one thing. They’ll see product (and all of its components) as well as go-to-market (and all of its components). Like the CEO, CFO, and Chief People Officer, the CBDO needs to have a holistic approach to everything and not only be closely aligned with the market-facing organizations. 

You can find this post on the Bolster Blog here.

New Daily Read

If you haven’t seen it or heard about it yet, run – don’t walk – to sign up for either the RSS feed or daily email digest from Silicon Alley Insider, a new publication that’s a sort of NYC based version of ValleyWag.  SAI is run by famed analyst Henry Blodget and was started by former DoubleClick CEO and CTO Kevin Ryan and Dwight Merriman, now serial Silicon Alley entrepreneurs (at an epic pace, no less).

The writing is easy and has a bit of that tabloid feel to it, but that’s a nice change.  The fact that the publication fills a void that’s been open for years since the disappearance of Jason Calacanis’ Silicon Alley Reporter is somewhat unexplainable, but I’m glad to see the void filled.  It’s still early days for the publication (the site says "beta" on it), but it’s a must-read if you’re in the Internet business…even if you’re on the west coast!

Keeping Commitments

Today’s post is another in the series about our 13 core values at Return Path, about making commitments.  The language of our value specifically is:

We believe in keeping the commitments we make, and we communicate obsessively when we can’t

Making and keeping commitments is not a new value – it’s one of Covey’s core principles if nothing else.  I’m sure it has deeper roots throughout the history of mankind.  But for us, this is one of those things that is hard wired into the social contract of working here.  The value is more complicated than some of the other ones we have, and although it is short, it has three components that worth breaking down:

• Making commitments:  Goal setting, whether big company-wide goals, or smaller “I’ll have it to you by Tuesday” goals, is the foundation for a well-run, aligned, and fast-paced organization
  
• Keeping commitments:  If you can’t keep the overwhelming majority of your commitments, you erode the trust of your clients or colleagues and ultimately are unable to succeed
  
• Communicating when commitments can’t be met:  Nobody is perfect.  Sometimes circumstances change, and sometimes external dependencies prevent meeting a goal.  The prior two parts of this value statement are, in my mind, pay to play.  What separates the good from the great is this third piece — owning up loud and clear when you’re in danger of blowing a goal so that those who are counting on you know how to reset their own work and expectations accordingly
  

It’s worth noting on this one that the goal is as relevant EXTERNALLY as it is INTERNALLY.  Internal commitments are key around building an organization that knows how to collaborate and hand work off from group to group.  External commitments — from meeting investor expectations to client deliverables — keep the wheels of commerce flowing.

I’m enjoying articulating these values and hope they’re helpful for both my Return Path audience and my much larger non-Return Path audience.  More to come over time.

Across 22 years and two companies now, our system of giving performance feedback has evolved significantly. I thought I’d take a pass at chronicling it here and seeing if I had any learnings from looking at the evolution. Here’s how things evolved over the years:

• Written performance reviews. The first year of Return Path, we had a pretty standard process for reviews. They were more or less “one-way” (meaning managers wrote reviews for their direct reports), and they only happened annually.
• Written 360 reviews. We pretty quickly moved from one-way reviews to 360s. I wrote about this here, but we always felt that being able to give/receive feedback in all directions was critical to getting a full picture of your strengths and weaknesses.
• Live 360 reviews. In addition to the above post/link, I wrote about this a bit further here and here. The short of it is that we evolved written 360s for senior leaders into facilitated live conversations among all the reviewers in order to resolve conflicting feedback and prioritize action items.
• Live 360 reviews with the subject in the room. I wrote about this here…the addition of the subject of the review into an observer/clarifying role present for the facilitated live conversation.
• Peer feedback. At some point, we started doing team-based reviews on a regular cadence (usually quarterly) where everyone on a team reviews everyone on a team round-robin style in a live meeting.

The evolution follows an interesting pattern of increasing utility combined with increasing transparency. The more data that is available to more people, the more actionable the feedback has gotten.

The pluses of this model are clear. A steady diet of feedback is much better than getting something once a year. Having the opportunity to prioritize and clarify conflicts in feedback is key. Hearing it firsthand is better than having it filtered.

The biggest minuses of this model are less clear. One could be that in round robin feedback, unless you spend several hours at it, it’s possible that some detail and nuance get lost in the name of prioritization. Another could be that so much transparency means that important feedback is hidden because the people giving the feedback are nervous to give it. One thing to note as a mitigating factor on this last point is that the feedback we’re talking about coming in a peer feedback session is all what I’d call “in bounds” feedback. When there is very serious feedback (e.g., performance or behavioral issues that could lead to a PIP or termination), it doesn’t always surface in peer feedback sessions – it takes a direct back channel line to the person’s manager or to HR.

The main conclusion I draw from studying this evolution is that feedback processes by design vary with culture. The more our culture at Return Path got deeper and deeper into transparency and into training people on giving/receiving feedback and training on the Difficult Conversations and Action/Design methodologies, the more we were able to make it safe to give tough feedback directly to someone’s face, even in a group setting. That does not mean that all companies could handle that kind of radical transparency, especially without a journey that includes increasing the level of transparency of feedback one step at a time. At Bolster, where the culture is rooted in transparency from the get go, we have been able to start the feedback journey at the Peer Feedback level, although now that I lay it out, I’m worried we may not be doing enough to make sure that the peer feedback format is meaningful enough especially around depth of feedback!

A Great American Experience

President Obama signed into law today a bill called the JOBS Act.  I haven’t read the full text of the law, but based on abstracts, my opinion of the JOBS Act is that it’s great for the startup community, but even greater for growth companies. I am less familiar with the Crowdsourcing components of the bill, but certainly that will make it easier for pure startups to attract micro capital.

The Sarbanes-Oxley reforms that make it easier and less costly to go through an IPO and be a public company will really enable growth companies like Return Path and many others in the Internet industry to go public a little earlier and with less difficulty. Tapping the public markets like that will enable the thriving Internet sector, which is one of the few truly high-growth segments of the economy, to grow even faster and create even more jobs.

Even better — George, Jack, and I were invited to attend the bill signing ceremony and speech in the Rose Garden at the White House!  Below are three pictures, one of the signing, one of the three of us, and one of me and Scott Dorsey, our friend and CEO of Exact Target, who we ran into there.

It was a great experience for the three of us overall.  Seeing the White House, the President, and a positive product of the legislative process up close and personal was great.  Hearing the President’s speech, which was a complete pep talk about the virtues of entrepreneurship and small businesses as the growth engines of the economy, was very inspirational.  And overall, the whole thing made all three of us so proud of everything that all 300+ of us, and our very strategic and patient investors and Board members, have accomplished at Return Path these past dozen years.  We ARE part of the global growth story.  And we should all be excited about that!

What a View

We’ve done 360-degree reviews for five years now at Return Path.  Rather than the traditional one-way, manager-written performance review, we instituted 360s to give us a “full view” of an employee’s performance.  Reviews are contributed by the person being reviewed (a self assessment), the person’s manager, any of the person’s subordinates, and a handful of peers or other people in the company who work with the person.  They’re done anonymously, and they’re used to craft employees’ development plans for the next 12 months.

The results of 360 are a wonderful management tool.  Mine in particular have always been far more enlightening than the one-way reviews of the past.  The commonality in the feedback from different people is a little bit of what one former manager of mine used to say — when three doctors tell you you’re sick, go lie down.

I know a lot of companies do 360s, but we had two great learnings this year that I thought were worth noting.  First, we automated the process (used to manual in Excel and Word) by using an ASP solution called e360 Reviews from Halogen Software.  It was GREAT.  The tool must have saved us 75% of the administrative time in managing the process, and it made the process of doing the reviews much easier and more convenient as well.  I strongly recommend it.

Second, we started a new tradition of doing Live 360s for the senior staff here.  All people who filled out a review for a senior staff member were invited into an hour-long meeting that was moderated by a great organizational development consultancy we work with, Marc Maltz and Nancy Penner from Triad Consulting.  The purpose of each meeting was to resolve any conflicting comments in the reviews and prioritize strengths as well as development objectives.  We also did a very quick session where the senior staff did “speed reviews” in person of the rest of the company’s leadership team that tried to accomplish similar objectives in a much more compressed time frame and format.

So far (we’re in the middle of them — actually, the team is doing my review as I write this), the results are wonderful.  We’re going to end up producing MUCH crisper and more actionable development plans for our senior staff this year than we ever have in the past.  And the tone of the meetings has been incredibly supportive and constructive.  Having an outside moderator made a huge difference.

And yes, just in case you’re wondering, it is a little bit unnerving to know that a room full of 15 people is discussing you.  Especially when you can hear them all laughing through the wall.  🙂

How to Quit Your Job

I sent an email out to ALL at Return Path a few years ago with that as the subject line.  A couple people suggested it would make a good blog post in and of itself.  So here’s the full text of it:

ALL –

This may be one of the weirdest emails you’ll see me (or any CEO write)…but it’s an important message that I want to make sure everyone hears consistently.  If nothing else, the subject line will probably generate a high open rate.  🙂

First off, I hope no one here wants to leave Return Path.  I am realistic enough to know that’s not possible, but as you know, employee engagement, retention, and growth & development are incredibly important to us.

But alas, there will be times when for whatever reason, some of you may decide it’s time to move on.  I have always maintained that there’s more than a Right Way and a Wrong Way to leave a job.  For me, there’s a Return Path Way.

I suppose the Right Way is the standard out there in the world of two weeks’ notice and an orderly documentation and transition of responsibilities.  The Wrong Way is anything less.

So what’s the Return Path Way?

It starts with open dialog.  If you are contemplating looking around for something else, you should let someone know at the thinking stage.  Ideally that would be your manager, but if you’re not comfortable starting the conversation there, find someone else — your department head, someone in HR, me.  Let someone who is in a position to do something about it know that you’re considering other options and why.  The worst thing that will happen is that the company isn’t able to come up with a solution to whatever issues you have.  I PROMISE you that no one here in any management position will ever think less of you or treat you differently or serve up any kind of retribution for this kind of conversation.

After the open dialog and any next steps that come out of it, if you are still convinced that leaving is the right thing for you, tell your manager and whoever you spoke to at the beginning of your search process, not at the end of it.  That hopefully gives the company enough lead time to find a replacement and provide for enough overlap between you and the new hire so that you can train your replacement and hand things off.

Why do we feel so strongly about this?

We invest heavily in our people.  I know we’re not perfect — no company is — but we do our best to take good care with everyone who works here.  Hopefully you know that.  And hiring great people is difficult, as you also know.  Losing a well trained employee is VERY PAINFUL for the company.  It slows our momentum and causes at least a minor level of chaos in the system.  And as shareholders or future shareholders (even if you leave – you can exercise your vested stock options), I’d hope that’s something none of you want to do.

I realize the Return Path Way that I am outlining here is unconventional (and potentially uncomfortable).  But Return Path is an unconventional place to work in a lot of ways.

As I said up front, I hope none of you wants to leave…but if you do, please take this request and advice to heart.

Thank you!

-Matt

Now…I sent this out when the company was a lot smaller, when losing a single employee was losing a real percentage of our workforce!  But I stand by every word in the email, even at a larger size.  This kind of dialog is, as I note in the email, both unconventional and uncomfortable.  But just as one of my management mantras here is “no one should ever be surprised to be fired,” another is “we should never be surprised when someone resigns.”  Ultimately, it’s up to each individual manager to set the right tone with his or her team, and also be in tune enough with each of his or her team members, to foster this.

A New VC Ready to Go!

One of the interesting things about being in business for 13 years (as of last week!) at Return Path is that we have been around longer than two of our Venture Capital funds.  Fortunately for us, Fred led an investment in the company with his new fund, Union Square Ventures, even though his initial investment was via his first fund, Flatiron Partners.  And even though Brad hasn’t invested out of his new fund, Foundry Group, he remains a really active member of our group as a Board Advisory through his Mobius Venture Capital investment.

Although our third and largest VC shareholder, Sutter Hill Ventures, is very much still in business, our Board member Greg Sands just announced today that he has left Sutter and started his own firm, Costanoa Venture Capital, sponsored in part by Sutter.  The firm was able to buy portions of some of Greg’s portfolio companies from Sutter as part of its founding capital commitment, so Return Path is now part of both funds, and Greg, like Fred, will continue to serve as a director for us and manage both firms’ stakes in Return Path.

The descriptions of the firm in Greg’s first blog post are great – and they point to companies like Return Path being in his sweet spot:  cloud-based services solving real world problems for businesses, Applied Big Data, consumer interfaces and distribution strategies for Enterprise companies.

I give Greg a lot of credit for going out on his own with a strong vision, something that’s unusual in the VC world.  We’re proud to be part of his new portfolio, and I’m sure he’ll be incredibly successful.  Like Fred and Brad and their new firms, Greg understands the value of being able to write smaller initial checks and back them up over time, he is a disciplined investor, and he is a fantastic Board member and mentor.