(Post 4 of 4 in the series on Scaling CMOs – other posts are, When to Hire your First Chief Marketing Officer, What Does Great Look like in a Chief Marketing Officer and Signs your Chief Marketing Officer isn’t Scaling)

Similar to interactions with all CXOs, you’ll have to capitalize on your moments but there are a few ways I’ve typically spent the most time or gotten the most value out of CMOs over the years.

 One of the key ways to engage with the CMO is to include them in meetings with the rest of the go-to-market (GTM) executives as a group, not in a silo.  While of course I have always had 1:1 meetings with my CMO, I find that the most valuable conversations are the ones with the GTM group as a group, talking about shared objectives and the underlying drivers and coordination points to get there. You might say, “Well, Matt, that’s true of all the GTM executives,” but I disagree. It’s even more important to have the CMO in the same room as the other GTM roles like Sales, Account Management, and Partnerships because marketing needs to be on the leading edge of GTM, not just a function working in a silo at the direction of the other GTM leaders. A lot of what happens in the GTM meetings is nuanced and since Marketing has to somehow make everything tangible, the earlier they hear about it and can start thinking about it the better off the whole company is.

On the other end of the spectrum, I find it very useful to create a thinking session with the CMO, where we take time away from the day-to-day to do deep dives on strategic topics like the company’s positioning, voice, or brand.  Sometimes I like to do these in the context of reading a relevant marketing book or business journal article, or after reading something I ran across on the internet, or something I learned at a conference—something that piqued my interest. Sometimes I don’t have a perspective or an idea, but the thinking session is valuable either way.  I find that the most creative thinking and ideas happen in some of these longer form, unstructured conversations. These sessions are not limited to ideas, positioning, or branding because even the quantitative part of marketing involves a lot of creativity. So, the thinking session can be wide open in terms of agenda, but it needs to be scheduled and done, otherwise all these ideas just ramble around and we don’t make as much progress.

Finally, a lot of my engagement with the CMO is actually a continuation of a longer relationship, before they become the CMO.  Let me explain what I mean. For years, we went through CMOs at Return Path at the same clip as other companies: every 1-2 years we’d make a change and bring in the new flavor-of-the-month CMO and we had a pattern of hiring them from the outside.  Over time, though, we realized that we would be much better served by having more continuity in marketing by investing in our own people and promoting them from within.  The last few CMOs we had at Return Path were all promoted into the role — so I got to know them pretty extensively ahead of time. I was not only thrilled to give them a shot at the top job, but I was in a great place to understand their strengths and weaknesses coming into the role so I could most effectively mentor them.  Of course, you can say the same thing for the other functional departments, but marketing is more acute based on the average tenure of CMOs.

(You can find this post on the Bolster blog here).

Closer to the Front Lines

When we started Return Path, we added a little clause to our employee handbook that entitled people to a sabbatical after 7 years of service (and then after every 5 incremental years).  Six weeks off, 3/4 pay.  Full pay if you do something “work related.”  Sure, we thought.  That’s an easy thing to give.  We’ll never be 7 years old as a company. 

Now, 8 1/2 years later, of course, the first wave of people are reaching their sabbatical date.  A couple have already gone (one trip around the world, one quality time with the kids).  A couple others are pending.  Four of us at the exec level are overdue to take ours, and we all committed to take them this year, planning them out so we can back each other up.  My colleague George Bilbrey is in the middle of his 6 weeks off now, and I’m his backup.  And wow – is it a great experience.  Busy, but great.

The reason it’s great is that I am one step closer to the action.  Usually when someone on my team goes on vacation, we just let things run for that week or two.  The people who report into that exec know I’m around if they need something, but I don’t take over actively working with them.  Not so this time.  Six weeks is too long for that.  I’m actively subbing for George.  I’m sitting in his office in Colorado every other week for the sabbatical.  I have weekly meetings with his staff.  I’m working with them on their Q2 goals (for added fun, we’re even working on George’s Q2 goals!).  I’m attending meetings that George usually attends but that I’m not invited to.

The insight I’m getting into things in George’s area of the business is great.  I’m learning more about the ins and outs of everyone’s work, more about the team dynamic, and more about how the team works with other groups in the company.  Most important, I’m learning more about how George and I interact, and how I can manage that interaction better in the future.  And I’m making or suggesting some small changes here and there on the margin.  Hopefully I’m not messing things up too badly.  Otherwise, I will hear about it in 3 1/2 weeks!

I strongly encourage everyone who is a Manager of Managers or higher in their company (especially if that company’s name rhymes with Geturn Fath) to use any vacation of someone on their team as an excuse to really substitute and get closer to the front lines.

The Limits of Perseverance

My Dad has a great saying, which is that

It’s ok to chip away at a brick wall, but not if you’re using a toothpick

Entrepreneurs are famous for persevering in the face of adversity, a trait more commonly known as stubbornness.  And generally, that’s a good thing.  Breakthrough ideas aren’t easy to come by, nor is leading the market.  If those things were common, they wouldn’t be breakthrough.

But perseverance doesn’t go anywhere without amassing the proper resources to do the job at hand.  Just as you’d never chip away at a brick wall with a toothpick, you’d never willingly go up against a fierce competitor without a great product or sales effort, or you’d never hire an entry level person to do the job of an executive.

The key word here is “willingly,” and I think the business lesson you can derive from this great saying is that while you can easily identify the resources you’re WILLING to put against a particular problem, it’s much harder to correctly estimate the size of the problem, or the resources REQUIRED to get the job done well.  And even harder than that is recognizing when the resources you’re putting against a particular problem are INSUFFICIENT to get the job done.

The ancillary problem, once you’ve determined that you’re bailing out a cruise ship with a thimble (another colorful metaphor for the same issue), is to figure out whether the right next action is to beef up the resources, redefine the problem, or abandon ship altogether.  That can be an agonizing call to make, and maybe not a clear-cut one either, but at least it advances the cause in a more productive way.

In my mind, being able to slog your way through a problem like this is one of the many hallmarks of a great entrepreneurial leader.

A friend of mine just left his job as CEO of a growth stage company to become CFO of a Fortune 500 company.  That’s a big deal…and also a big change.  When I was talking to him about the move, he said the following to me:

Some executive teams are like baseball teams.  You play shortstop, and you bat 8th.  That’s just what you do.  The team needs one of those because the sport is structured that way.  The CEO of my new company likes to run his executive team as a basketball team.  Everyone has a position, but everyone also has to be capable of doing everything on the court well – shooting, blocking, rebounding, passing – and is expected to go after the ball any time it’s nearby.

It’s one thing to say that of a Fortune 200 company, because you have the luxury of doing anything you want in terms of staffing at those levels.  My friend, who is financially oriented for sure, can be CFO of a company of that size because they probably have a strong Chief Accounting Officer.  But how does that dialog apply to startups?  Should you run a baseball team?  A basketball team?  Does it matter?  Can you switch between the two?

My take is that early stage startups need to be more like basketball teams.  You just don’t have enough people to get everything done unless you all take things off each others’ plates.  And you certainly don’t want to be siloed early on in a company’s life as you’re trying to find product-market fit and get those first customers on board.  Your CTO needs to be in front of customers in sales pitches.  Your CFO needs to run customer service and other staff functions.  Everyone needs to pitch in on strategy.

As companies grow, I think they need to become more like baseball teams because larger organizations require levels of specialized knowledge that you don’t often find in startup leaders (though you certainly can, especially as the world becomes more startup-oriented) if they are to survive and scale.  You need a CFO capable of putting in place more complex systems and controls.  You need a head of Sales who knows how to manage a more disciplined pipeline and sales power-driven machine, not just someone who is a fantastic closer of big deals.

At the larger sizes (well below the Fortune 500 level), you can afford to have more of a basketball team again.  You want people with areas of specialization, but you also just want great athletes, and you can have some of the more technical expertise working at the next couple levels down.

There are two challenges this metaphor raises for scaling businesses.  The first one is making your baseball team AS MUCH LIKE A BASKETBALL TEAM AS POSSIBLE when you’re in that mode.  Why?  I love baseball more than most as a sport, but executive teams of companies at any size need strategic thinkers and interdisciplinary, cross-functional work as much as possible.

And that leads to my second challenge with the metaphor, which is that you don’t want to swap out your executive team multiple times in a rapidly scaling business if you don’t have to.  So this begs the question – can you turn a great specialist into a great generalist and vice versa?  We have gone through transitions this past few years at Return Path from a functional structure to a business unit structure and back (sort of).  My take in the end is that it’s easier to turn a specialist into a generalist than to turn a generalist into a specialist.  You can interview for this.  There are great specialists in every discipline who are capable of being generalist thinkers.  But it’s really tough to take someone without proper training and experience in some disciplines and make them a specialist.  Not impossible (although in some disciplines it actually is impossible – think about General Counsel), but difficult.

Silly, Silly Patent Nonsense

Some news floated around the email marketing world yesterday that is potentially disturbing and destructive but highlights some lunacy at the same time.  I hope I’m getting enough of the details right here (and quite frankly that isn’t a joke, which it feels like).

Tom DiStefano of Boca-based PerfectWeb Technologies is suing direct marketing behemoth InfoUSA for patent infringement of a business process patent for bulk email distribution that he received in 2003.

I will first issue my disclaimers that I’m not a patent lawyer (nor do I even play one on TV) and that I have only quickly read both the legal complaint and the patent.  But my general take on this is that it’s more silly than anything else — but has the potential to be destructive at the same time.

Silly reason #1.  I’d like to go patent the process of blowing my nose with facial tissue predominantly using my left hand after a sneeze — will you pay me a royalty every time you do that, please?  That’s a short way of saying that I am increasingly finding that the patent system is deeply flawed, or at least very ill-suited to the way technology and Internet innovation work today.  For centuries, patents have been put in place to provide inventors adequate incentive to invest in innovation.  That made sense in a world where innovation was expensive.  It took a long time and a lot of capital to invent, say, the cotton gin or the steam engine.  It takes a long time and a lot of capital to invent a new life-saving drug.  But Internet-oriented business process patents are just silly.  It can take a guy with a piece of paper a few minutes to sketch out a business process for some niche part of the Internet ecosystem.  No real time, no real capital.  And worst of all, it’s generally easy to “design around.”  Disclaimers and all, this seems to be just such a patent.

Silly reason #2.  The patent was issued in 2003.  Really?  I’m not sure when the patent holder claims he invented the bulk email distribution process, but unless it was in the early 90s before the likes of Mercury Mail, First Virtual, Email Publishing, etc., then it’s highly likely to be “non-novel,” “obvious,” and conflicting with lots of “prior art.”

Silly reason #3.  Why wait four years to prosecute a patent that the inventor believes has been violated so obviously by so many (hundreds, maybe thousands) companies for so many years?  I don’t quite get that.

I’m not exactly seeing the David vs. Goliath here.

So here we go.  It will likely take months and millions before this thing gets resolved.  If our legal system doesn’t come through as it should, or worse, if InfoUSA punts and settles, this is going to cause big problems for many, many companies in the industry.

I hope our friends at InfoUSA are happy to dig in and fight to have the patent invalidated, although that’s expensive and time consuming.  And assuming that the patent holder is likely to go on a rampage of legal complaints against every other player in the industry — someone should tell Vin Gupta that we can all band together to fight this silliness.  We’re happy to help here at Return Path.

Shifting Gears

My Grandma Hazel has a Yiddish saying that she uses to describe me from time to time — "gor oder gornisht" — which means "all or nothing."  My Dad has a Greek saying that he uses to describe me from time to time — "meden agan" — which means "everything in moderation."  These two approaches to life seem diametrically opposed.  Which is right?

Being a successful entrepreneur requires BOTH approaches, each at different times, and more important, the ability to shift gears between the two and be clear about the shift to yourself and to others.

There are periods of time when you need to be in "all or nothing mode."  Push extremes.  Demand more from your team.  Drop lots of the items on your to-do list and grow a singular focus on The One Big Thing.  Don’t go for a light jog — train for a marathon.

Then there are periods of time when you’re in execution mode.  The path has been defined.  Things are working.  Put the "life" back in your "work-life" balance.  A marathon?  Are you nuts?  Just run 3 miles a day and stay in shape.

You — and your organization — need to be able to shift gears between the two modes.  An organization that never goes through extreme periods is in grave danger of stagnating.  No one in an exciting company ever has "business as usual" emblazoned on their to-do list 365 days a year.  Organizations tend to take their biggest leaps forward when there’s an extreme situation, an all-hands on deck, a crisis.

But an organization that ONLY knows how to exist in crisis mode can be miserable.  Trust me, I’ve worked in one before.  There’s a shiny new object every week that everyone has to drop everything to pursue.  Everything gets started, but nothing gets finished.  People are frustrated.  They burn out. 

Companies and people (most mortals, anywway) have to go through periods of time where they thrive on the routine and celebrate their everyday achievements.

The trick to getting this duality right is to make sure you are clear to yourself, and when necessary to others, about when you’re shifting gears.  For yourself:  when you go into "gor oder gornisht" mode, clear that calendar and set aside the time to do the job right.  For others:  don’t make them guess where you’re coming from.  If you’re hitting an extreme patch, let them know by meeting or email/memo.  And make sure you’re fair to them as well.  If you’re forcing people in the organization to focus on The One Big Thing, make sure you recognize the changes that forces in their goals, their deliverables, and their external commitments and give them the flexibility they need to succeed.  Going back into "meden agan" mode is easier, but still requires a note of closure to your team, celebrating the success of the big push.

Fortunately, I can tell both Dad or Grandma that they’re right (how would I ever pick?).  I just hope the ancient Greek philosophers and bubbies everywhere aren’t spinning in their graves over the mixing of metaphors.

Another Only Once Moment, Sort Of

I’ve never handed over the reins of a company before (no, I’m not leaving, and we aren’t selling Return Path).  But I did the other day, for the first time.  As many people know, last year we reorganized the company to focus entirely on deliverability and whitelisting and spun out Authentic Response, a company in the online market research business, into a completely separate entity. 

Since then, I have been CEO of both companies.  Although Return Path has had more of my focus — Authentic Response had excellent day-to-day leadership under Co-Presidents Jeff Mattes and Rob Mattes — I’ve still been working in both businesses.

Today, we officially announced the hiring of my replacement, Jim Follett.  Jim was formerly CEO of Survey Sampling, a larger company in the online market research business, and has over 20 years of prior experience as a senior executive in market research and information services companies.  While we still share the office in New York and I will stay on as Chairman, the percentage of time I can now devote to Return Path is now 100% — the first time it’s ever been that way (for the deliverability business).

I didn’t start Authentic Response, and I’ve never been deep in the bones of the business the way I am Return Path.  Even so, I definitely experienced a range of emotions at our all-hands meeting where we introduced Jim to the company that I don’t regularly experience at the same time:  mainly a mix of pride in the work the team has done on my watch, excitement for the business, and sadness at not working quite as closely with the nearly 100 people in Authentic Response going forward.

I’m sure someday, I will hand over the reins to Return Path.  No time soon, but that day eventually comes for every entrepreneur.  If this was a preview, it will be an emotional day.

But for now, I’m mainly happy to welcome Jim to the family, and I’m excited for the entire Authentic Response business as it embarks on the next chapter in the company’s journey.

Last week, I wrote about surrounding yourself with the best and brightest.  Next in this series of posts  is all about Creating an environment of trust.  This is closely related to the blog post I wrote a while back in my series on Return Path’s Core Values on Transparency.  At the end of the day, transparency, authenticity, and caring create an environment of trust.

Some examples of that?

• Go over the real board slides after every board meeting – let everyone in the company know what was discussed (no matter how large you are, but of course within reason)
• Give bad news early and often internally.  People will be less freaked out, and the rumor mill won’t take over
• Manage like a hawk – get rid of poor performers or cultural misfits early, even if it’s painful – you can never fire someone too soon
• Follow the rules yourself – for example, fly coach if that’s the policy, park in the back lot and not in a “reserved for the big cheese” space if you’re not in Manhattan, have a relatively modest office, constantly demonstrate that no task or chore is beneath you like filling the coke machine, changing the water bottle, cleaning up after a group lunch, packing a box, carrying something heavy
• When a team has to work a weekend , be there too (in person or virtually) – even if it’s just to show your appreciation
• When something really goes wrong, you need to take all the blame
• When something really goes right, you need to give all the credit away

Perhaps a bit more than the other posts in this series, this one needs to apply to all your senior managers, not just you.  Your job?  Manage everyone to these standards.

Like all CEOs and VCs, I’m a big believer in the power of pattern matching. I just wrote a whole blog post about the limits of pattern matching after hearing the quote above at a board meeting recently. But then a little alarm rang in the back of my head, and realized that I wrote about the value and limitations of pattern matching here years ago with an even better quote from my father-in-law:

When you hear hoof beats, it’s probably horses. But you never know when it might be a zebra.

So rather that rewrite that entire post, I thought I’d just add onto it a bit here with a current example in my head about executive recruiting and hiring executives. But then I realized I wrote that as well – the myth of the playbook. Think I’ve been blogging too long now, or what?

So let’s focus on these two angles instead: first, how do you know when you’re in a situation where You’ve Seen One, You’ve Seen Them All, or if you’re in a situation where You’ve Seen One, You’ve Seen One? And second, how can you protect yourself from a “seen one, seen one” situation when you are approaching the situation as “seen one, seen them all”?

Here are three ways to think about the decode – is this a pattern or is it a one off?

1. The list is long. It’s not actually Seen One… so much as it’s Seen X. The longer the list, the more likely you’re seeing a link in a chain instead of a one-off
2. The item is more everyday/less bespoke. Back to my example in the playbook post I referenced above, hiring a late-stage CFO is bespoke. Hiring an entry level collections person for your AR team is a lot more everyday
3. The item is more specialized. No two companies are exactly alike. No two SaaS companies are alike, but they’re more alike than two random companies. No two B2B SaaS companies are alike, but they’re even more alike than two SaaS companies. B2B SaaS companies with email marketing platforms. B2B SaaS companies with email marketing platforms serving SMBs. You get the idea

And here are a couple tactics to mitigate against calling a pattern where a pattern doesn’t exist:

1. Do a premortem (I wrote about this concept in this post) and ask yourself “If this turns out to be wrong, what are the possible reasons it was wrong?”
2. Build a very small bullet-point level mitigation plan against the top three reasons you come up with

There’s no guarantee that the sound you hear is horses and not zebras. But these indicators may help raise the odds that your pattern match is on point or protect against an unexpected herd of zebras.

One of my top 10 scaling tips for CEOs as they take a business from startup to scaleup keys in on communication patterns. As your company grows from 0-25 employees to a place where you no longer work hands-on with most of the team, which is really >25 but gets more and more true at every step beyond that, you need to rethink how you handle employee conversations in many ways. My tip sounds confusing, but let me break it down.

Spend less time talking. The less you know about the day to day details of everyone’s job and experience, the more time you need to spend learning and keeping in touch with those details from others. The only way to do that is by asking questions, listening to responses and watching body language, and then asking follow-up questions. As I mentioned here in Inquiry vs. Advocacy, you know what you have to say…what you don’t know is what the other person has to say! The more you listen and learn as your company scales, the more effective you can be at steering the ship.

And yet…Spend more time talking. This isn’t as contradictory as it sounds. What I mean by this is that the further away you are from the front lines and the smaller the percentage of the team who really know you and have casual interactions with you, the more time you need to spend repeating key messages – things like what the goal is, critical metrics and progress, how each team and person’s work rolls up to the big picture. I always appreciate the “rule of three” around things like this, which is simply that people need to hear the same message three times before they start to internalize it. What that means for you is that just as soon as you get tired of saying the same thing over and over in various groups internally…it’s finally starting to hit home, and you need to keep doing more of the same.

How and when you communicate with the company may also change – the mix and frequency of 1:1 meetings, small group meeting, large group meetings, and email/written communications will need to evolve. But that evolution of the “what” is secondary to the above principles of the “how.”

One of the CEOs I mentor asked me the other day asked me this question:

I need to start making my organization think differently – more like a startup that needs to scale and less like a project. People need to start doing more specific jobs and not swarm all over everything. How do I get people to “get” this without freaking out?

Every CEO faces dilemmas like this all the time.

One of my management mantras over the years has been, “You have to bring people along for the ride.” Fundamentally, that means two things. I’ll write about one of them here today and save the other for next week.

First, bringing people along for the ride means you have to involve the people in the organization in the origins and design of the change you’re seeking to drive.

Let’s face it. No one really likes change. But what people really don’t like is change being IMPOSED ON THEM, especially where THEY DON’T UNDERSTAND WHY.

Without being disingenuous, you as a leader can set the stage for others in your organization helping you with changes — even if you generally know the changes you want to drive. Bring people together. Talk about the challenges you see that are related to the solution you’re contemplating. Get people talking, brainstorming, grabbing post-its and whiteboard pens. Talk a little bit – bring in your perspective and help shape the discussion. But also listen closely and be open to people’s ideas and let those shape the outcome as well.

Then, bring people back for a second and third meeting to then react to some of your idea distillation and even straw man plans. You’ll find that process not only produces a better solution but also makes people comfortable with the solution, because you’ve added more transparency to the equation and brought people along for the ride. Nothing done in the vacuum of the CEO’s mind achieves this same level of impact.

More thoughts on this to come in some related posts over the next couple of weeks around some geeky sounding terms like The Ladder of Inference, Inquiry vs. Advocacy, and Double Loop Learning. Next week’s post will be about how to think about transitions and the way to lead people through them once you’ve involved them in creating the transition. Its link won’t be live until April 20, but it’s here for future reference.