(This is a bonus quick 5th post, inspired by long time StartupCEO.com reader Daniel Clough, to the series that ended last week about Scaling CPO’s- the other posts are: When to Hire your First Chief People Officer, What does Great Look like in a Chief Privacy Officer, Signs your Chief Privacy Officer isn’t Scaling, and How I Engage With The Chief People Officer.)

As I’ve noted over the years, the Chief People Officer role is a tough one to get right and a tough one to scale with the organization if what you’re really looking for is a strategic business partner who can lead not just the important blocking and tackling in HR but innovates the people part of your organization, building new systems and programs, approaches recruiting as building great teams instead of filling seats, helps manage your company operating system, and developing and coaching leaders.

A number of later stage CEOs I mentor have come to me over the years when they have a sub-par Chief People Officer and said something like “I’m going to put HR under my CFO.” To me, that’s a bit of a cop-out – it’s acknowledging that the person in the role isn’t strong enough to be a full-throated executive, but the CEO doesn’t want to go through the hassle or expense of replacing them.

Here’s my answer when I hear that from a CEO: “Ok, then your CFO will actually now become your Chief People Officer.  You must have a Chief People Officer on the exec team reporting to you.”

There are few things about which I have a stronger point of view. Someone in your organization must have strategic oversight for human capital. If it’s not your head of HR and you can’t bear recruiting/replacing that person, then it needs to be whoever your put that person under. Or it’s you. But at even mid-scale companies, why would you take that responsibility on yourself?

A Model for Transparency

Rob Kalin from Etsy (a marketplace for handmade goods) wrote an outstanding blog post today that Fred describes as a transparent window into what makes the company tick.

I’d like to riff off of two themes from the post.

First, the post itself and the fact that Rob, as CEO of the business, is comfortable with this degree of transparency and openness in his public writing.

I still think that far few CEOs blog today.  There is probably no better window into the way a company works or the way a management team thinks than open and honest blogging.  One member of our team at Return Path described my blogging once as “getting a peek inside my brain.”  The handful of CEOs that I’ve spoken to about why they don’t blog have all had a consistent set of responses.  They’re too busy.  They don’t know how.  They want to delegate it to Marketing but someone told them they can’t.  They’re concerned about what “legal” will say.  They’re public and are worried about running afoul of SEC communication rules (perhaps Whole Foods’ CEO notwithstanding).

I’m not sure I buy any of that.  CEOs who see the value of blogging will find a way to have the time and courage to do it.  And any blogger is entitled to say some things and not say others, as competitive needs or regulations (or common sense!) dictate.

But today’s reality is that running a successful company means spending more time communicating to all constituents — both internal and external.  And with the democratization of information on the Internet, it’s even more important to be accurate, open, honest, and consistent in that communication.  Blogging is an easy and powerful way of accomplishing that end.  Between my personal blog here and Return Path’s blog, I have a reach of something like 25,000 people when I write something.  Talk about a platform for influence in my company and industry.  So while CEOs don’t have to blog…in the end the CEO who doesn’t blog will find him or herself (and his or her company) at a competitive disadvantage versus those who do.

One important note on this as well is that the willingness of a CEO to blog seems to vary inversely with the size of the company.  The bigger the company, the more risk-averse the CEO seems to be.  That’s not surprising.

Second, Rob’s point around the company’s challenge with communications:

Having a consistent message vs. letting humans be human…large corporations try to sanitize all their outgoing messages for the sake of keeping face…I want Etsy to stay human. This means allowing each person’s voice to be heard, even if it’s squeaky or loud or soft. I will not put a glossy layer of PR over what we do. If we trip, let us learn from it instead of trying to hide it; when we leap, let’s show others how to leap.

Rob’s right, this is a tough one.  And I think in the end it comes back to the market again.  Just as CEOs who don’t blog will ultimately find themselves at a competitive disadvantage, companies that complete whitewash all their messaging will also find themselves at a competitive disadvantage because the companies’ personalities won’t come through as strongly, and the company’s message won’t seem as genuine.  And to the same point as above, the more the Internet takes over communications and information, the more critical it is that companies are open and honest and transparent.

That doesn’t mean that a good contemporary Marketing effort can’t include providing guidance to a team on key message points or even specific language here and there, but it does mean that letting people inside a company speak freely on the outside, and with their own voices, is key.  We do that on the Return Path blog — most of us, most of the time, write our own posts.  Sometimes we have someone in marketing take a quick pass through a post to edit it for grammar, but that’s usually about it.

Thanks to  Rob for the great thoughts.  It would be great to see more CEOs out there doing the same!

Advisory Boards

This is a topic that’s come up a fair amount lately here. Advisory Boards can be great sources of help for entrepreneurs. They can also be great things to participate in. Here are a handful of quick tips for both sides of the equation.

If you are building an advisory board:

– Figure out what kind of Advisory Board you want to build — is it one that functions as a group, or is it one that’s a collection of individual advisers, and a Board in name only?

– Clarify the mission, role, and expected time required from advisers on paper, both for yourself and for people you ask

– Be prepared to pay for people’s time somehow (see below)

– Figure out the types of people you want on your Advisory Board up front, as well as a couple candidates for each “slot.” For example, you may want one financial adviser, one industry adviser, one seasoned CEO to act as a mentor or coach, and one technical adviser

– Aim high. Ask the absolute best person you can get introduced to for each slot. People will be flattered to be asked. Many will say yes. The worst they will do is say no and refer you to others who might be similarly helpful (if you ask for it)

– Work your Advisory Board up to the expectation you set for them.  Make sure you include them enough in company communications and documents so they are up to speed and can be helpful when you need them.  Treat them as much like a Board of Directors as you can

If you are asked to serve on an advisory board:

– Make sure you are interested in the subject matter of the company, or

– That you have a good reason to want to spend time with the entrepreneur or the other Advisory Board members for other reasons, and

– Don’t be afraid to say no if these conditions aren’t met (it’s your time, no reason to be too altruistic)

– Clarify up front the time commitment

– Try to get some form of compensation for your effort, whether a modest option grant (size totally depends on the time commitment), or the ability to invest in the company

– Be sure to let your employer know. Ask for permission if the business you’re advising is at all related to your company, and get the permission in writing for your HR file

– Follow through on your commitment to the entrepreneur, and resign from the Advisory Board if you can’t

Those are some initial thoughts — any others out there?

A Network of Teams, Not an Integrated System

We were in and out of the hospital a lot back in March/April for the last few weeks with one of our kids (she’s ok now).  One of us was with her 24 hours a day for the 10-11 days she was hospitalized, with lots of down time, which gave me lots of time to observe health care in action.  While she ultimately got very good care at a very good hospital, it was incredibly clear to me that the hospital functioned as a network of teams, not as an integrated system.

The nurses were great.  Followed their routine practices and responded to doctors’ orders on cue.  Same with the nursing assistants.  Same with the docs.  Same with the phlebotomists and labs.  Same with the hospital support staff.  But the hand-offs from one team to the next, and from one shift to the next within a team, were seriously lacking.

What was wrong with this?  Nothing was optimized around the patient.  I mentioned this to my father-in-law, who is an HMO executive, and he noted that the concept of “patient-centric care” was a hot topic in managed care right now — but that it had also been a hot topic 10-15 years ago, to no apparent end (and not just in this one hospital that we were at).  Seems like customer relationship management became a persistent priority in the rest of the business world years ago.  Why hasn’t this stuck in health care?

This was a great exercise for me in thinking about the customer-centric view of a business.  We talk here at Return Path about “stapling yourself to a customer” to see what they see.  Every business should go through that exercise at some level regularly to make sure they’re functioning as an integrated system as far as the outside world is concerned.

RSS and Email’s Demise, Continued

Thanks to my colleague Tom Bartel, I discovered two good postings this week that I thought I’d pass on.

The first one by Ed Brill talks about Email vs. RSS and is a great contribution to the debate. It has some similar thoughts to my original posting about Prepping RSS for Prime Time.

The second one by Christopher Knight is entitled 22 Reasons Why Email Is Not Dead and is a great contribution to the dialog I contributed to in my Rumors of Email’s Demise posting a while back.

One of the most common things early stage CEOs say to me once they find product-market fit and make a few sales is “I need a CRO.” The answer is almost always, “no, you don’t.” A couple years ago I wrote about the evolution of enterprise selling organizations in this post. Reading that is a good place to start this topic. Go ahead…I’ll still be here when you come back.

Welcome back!

So in the early days of a company, it’s all “selling on whiteboard.” The need that early stage CEOs have that prompts them to tell me they need a CRO is simple the need to have help selling.

What the CEO really needs is a couple of very good early stage sales reps. People who are senior enough and clever enough to hold clients’ attention. People who are junior enough to accompany the CEO or other founders on dozens of “selling on whiteboard” sessions with clients to be able to start doing that work on their own. And People who can help the transition from “selling on whiteboard” to “selling on Powerpoint” by doing some very basic documentation of the selling process, buying centers, influencers, and value proposition.

It may also be true that the CEO doesn’t really know much about sales — maybe it’s a technical founder, or even a founder who came up through marketing or product management — and that part of the “I need a CRO” comment is really just an admission that the CEO doesn’t really know how to structure and manage a sales effort. In that case, my first suggestion is that the CEO read the excellent Startup Sales section within Startup CXO. And if that’s not enough, then there are over 1,200 fractional CROs in the Bolster marketplace who can give you anything from an hour of consulting to a couple days per week as a fractional executive to help you put some structure in place for your new sales reps. Once you have a repeatable sales motion, you can hire more reps and a Sales Manager/Director or VP.

So no, you don’t need a CRO. But there are lots of things you can do to get the help you need in the early days of selling that are less expensive, less risky, and a better fit for early stage companies.

• Fractals of Change: Are You an Entrepreneur?
  Tom Evslin’s entertaining Top 10 Ways You Know You’re an Entrepreneur. Some may dovetail nicely if I ever write up my read of The Fountainhead through entrepreneurial lens!
  (tags: Entrepreneur VC)

Scaling Me

Two things have come up over the last couple years for me that are frustrations for me as a CEO of a high growth company.  These are both people related — an area that’s always been the cornerstone of my leadership patterns.  That probably makes them even more frustrating.

Frustration 1:  Not knowing if I can completely trust the feedback I get from deep in the organization.  I’ve always relied on direct interactions with junior staff and personal observation and data collection in order to get a feel for what’s going on.  But a couple times lately, people had been admonishing me (for the first time) when I’ve relayed feedback with comments like, “of course you heard that — you’re the CEO.”

So now the paranoid Matt kicks in a bit.  Can I actually trust the feedback I’m getting?  I think I can.  I think I’m a good judge of character and am able to read between the lines and filter comments and input and responses to questions I ask.  But maybe this gets harder as the organization grows and as personal connections to me are necessarily fewer and farther between.

Frustration 2:  Needing to be increasingly careful with what I say and how I say it.  This comes up in two different ways.  First, I want to make sure that while I’m still providing as transparent leadership as I can, that I’m not saying something that’s going to freak out a more junior staff member because they’re missing context or might misinterpret what I’m saying.  Ok, this one I can manage.

But the tougher angle on this is having unintended impact on people.  Throwing out a casual idea in a conversation with someone in the company can easily lead to a chain reaction of “Matt said” and “I need to redo my goals” conversations that aren’t what I meant.  So I’ve done some work to formalize feedback and communication loops when I have skip-level check-ins, but it’s creating more process and thought overhead for me than I’m used to.

Nothing is bad here – just signs of a growing organization – but some definite changes in how I need to behave in order to keep being a strong and successful leader.

Investment in the Email Ecosystem

Last week, my colleague George Bilbrey posted about how (turns out – shocking!) email still isn’t dead yet.

Not only is he right, but the whole premise of defending email from the attackers who call it “legacy” or “uninteresting” is backwards.  The inbox is getting more and more interesting these days, not less.  At Return Path, we’ve seen a tremendous amount of startup activitiy and investment (these two things can go together but don’t have to) in in front end of email in the past couple years.  I’d point to three sub-trends of this theme of “the inbox getting more interesting.”

First, major ISPs and mailbox operators are starting to experiment with more interesting applications inside their inboxes.  As the postmaster of one of the major ISPs said to me recently, “we’ve spent years stripping functionality out of email in the name of security – now that we have security more under control, we would like to start adding functionality back in.”  Google’s recent announcement about allowing third-party developers to access your email with your permission is one example, as is their well-documented experiment with NetFlix’s branded favicon showing up in the inbox starting a few months back.  And Hotmail’s most recent release, which has been well covered online (including this article which George wrote in Mediapost a couple months ago) also includes some trials of web-like functionality in the inbox, as well as other easy ways for users to view and experience their inboxes other than the age-old “last message in on top” method.  Yahoo has done a couple things along these lines as well of late, and one can assume they have other things in the works as well.

I wouldn’t be surprised if many ISPs roll out a variety of enhanced functionality over the next couple of years, although these systems can take a lot of time to change.  Although some of these changes present challenges for marketers and publishers, these are generally major plusses for end users as well as the companies who send them email – email is probably the only Internet application people spend tons of time in that’s missing most state of the art web functionality.

Second, although Google Wave got a lot of publicity about reinventing the inbox experience before Google shut it down a couple weeks ago, there are probably a dozen startups that are working on richer inboxes as well, either through plug-ins or what I’d call a “web email client overlay” – you can still use your Yahoo!, Hotmail, Gmail, or other address (your own domain, or a POP or IMAP account), but read the mail through one of these new clients.  Regardless of the technology, these companies are all trying, with different angles here or there, to make the inbox experience more interesting, relevant, productive, and in many cases, tied into your “social graph” and/or third-party web content.

The two big ones here in terms of active user base are Xobni, an Outlook plugin that matches social graph to inbox and produces a lot of interesting stats for its users; and Xoopit, which recently got acquired by Yahoo and wraps content indexing and discovery into its mail client.

Gist matches social graph data and third-party content like feeds and blogs into something that’s a hybrid of plugin and stand-alone web application.  That sounds a little like Threadsy, although that’s still in closed beta, so it’s hard to tell exactly what’s going to surface out of it.  There’s also Zenbe and Kwaga, and Xiant, which focus on creating a more productive inbox experience for power users.

Furthermore, services like OtherInbox and Boxbe aim to help users cut through the clutter of their inboxes and simultaneously create a more effective means for marketers to reach customers (say what you will about that concept, but at least it has a clear revenue model, which some of the other services listed above don’t have).

Finally, a number of services are popping up which give marketers and publishers easy-to-use advanced tools to improve their conversion or add other enhanced functionality to email.  For example, RPost, a company we announced a partnership with a couple months back, provides legal proof of delivery for email with some cool underlying technology.  LiveClicker (also a Return Path partner) provides hosted analytics-enabled email video in lightweight and easy-to-use ways that work in the majority of inboxes.

Sympact (another Return Path partner) dynamically renders content in an email based on factors like time of day and geolocation – so the same email, in the same inbox, will render, for example, Friday’s showtimes for New York when I open it in my office on Friday afternoon but Saturday’s showtimes for San Francisco after I fly out west for the weekend.  And a Belgian company called 8Seconds (you guessed it, another Return Path partner) does on-the-fly multivariate testing of email content in a way that blows away traditional A/B methods.  While these tools require some basic things to be in place to work optimally, like having images on by default or links working, they don’t by and large require special deals with ISPs to make the services function.

While these tools are aimed at marketers, they will also make end users’ email experiences much better by improving relevance or by adding value in other ways.

Some of this makes me wonder whether there’s a trend that will lead to disaggregation of the value chain in consumer email – splitting the front end (what consumers see) from the back end (who runs the mail server).  But that’s probably another topic for another day.  In the meantime, I’ll say three cheers for innovation in the email space.  It’s long overdue and will greatly enrich the environment in the coming years as these services gain adoption.

Scaling Frustrations

Two things have come up in spades lately for me that are frustrations for me as a CEO of a high growth company.  These are both people related — an area that's always been the cornerstone of my leadership patterns.  That probably makes them even more frustrating.

Frustration 1:  Worrying that I don't get completely candid feedback from deep in the organization.  I've always relied on direct interactions with junior staff and personal observation and data collection in order to get a feel for what's going on.  But a couple times lately, people had been warning me (for the first time) when I've relayed feedback with comments like, "Of course you heard that — you're the CEO.  People will tell you what they think you want to hear." 

So now the paranoid Matt kicks in a bit.  Can I actually trust the feedback I'm getting?  I think I can.  I always have.  I think I'm a good judge of character and am able to read between the lines and filter comments and input and responses to questions I ask.  But maybe this gets harder as the organization grows and as personal connections to me are necessarily fewer and farther between. I probably need to start recognizing that as the CEO, people may feel uncomfortable being totally open…and it is my job to figure out how to be sure people understand that I do want to hear their voices…unplugged and constructive.

Frustration 2:  Needing to be increasingly careful with what I say and how I say it.  This comes up in two different ways.  First, I want to make sure that while I'm still providing as transparent leadership as I can, that I'm not saying something that's going to freak out a more junior staff member because they're missing context or might misinterpret what I'm saying.  Ok, this one I can manage.

But the tougher angle on this is having unintended impact on people.  Throwing out a casual idea in a conversation with someone in the company can easily lead to a chain reaction of "Matt said" and "I need to redo my goals" conversations that aren't what I meant.  So I'm doing some work to formalize feedback and communication loops when I have skip-level check-ins, but it's creating more process and thought overhead for me than I'm used to.

Nothing is bad here – just signs of a growing organization – but some definite changes in how I need to behave in order to keep being a strong and successful leader.

Pendulum Swinging Back?

The TechCrunch news du jour is that Jason Calacanis has stopped blogging and is instead using email to communicate with his circle. 

It’s interesting to note that after months (years?) of “email is dead” stories specifically around blogging, RSS feeds, and social media in general, the pendulum seems to be swinging back to email.  You should read Jason’s words yourself, but his notes are mainly that there’s too much noise and self-promotion in the blogosphere, while email promotes intimacy and efficiency.

Not surprisingly, TechCrunch is a doubter, but we’ll have to see.