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!

Half the Benefit is in the Preparation

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

It’s a little exhausting to do these meetings, and it’s exhausting to attend them, but they’re well worth it.  The intensity of the sessions, discussion, and even social time in between meetings is great for everyone to get on the same page and remember what’s working, what’s not, and what the world around us looks like as we dive off the high dive for another year.

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

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

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

I’ve posted a lot over the years about feedback in all forms, but in particular how much I benefit from my 360 reviews and any form of “upward” feedback.  I’ve also posted about running a 360 process for/with your Board, modeled on Bill Campbell’s formula from Intuit.

I have a lot of institutional investors in our cap table at Return Path.  I was struck this week by two emails that landed in my inbox literally adjacent to each other.  One was from one of our institutional investors, sharing guidelines and timetables for doing CEO reviews across its portfolio.  The other was from one of our other institutional investors, and it invited me to participate in a feedback process to evaluate how well our investor performs for us as a Board member and strategic advisor.  It even had the Net Promoter Score question of would I recommend this investor to another entrepreneur!

The juxtaposition gave me a minute to reflect on the fact that over the 18 years of Return Path’s life, I’ve been asked to participate in feedback processes for Board members a few times, but not often.  Then I went to the thought that all of my reviews over the years have been self-initiated as well.  Just as it can be easy for a CEO to skip his or her review even when the rest of the company is going through a review cycle, it can be easy for investors to never even think about getting a review unless they get one internally at their firms.  I suspect many CEOs are reviewed by their Board, if not formally, then informally at every quarterly Board meeting.

It’s unfortunately a rare best practice for a venture capitalist or any other institutional investor to ask for CEO feedback.  I bet the ones who ask for it are probably the best ones in the first place, even though they probably still benefit from the feedback.  But regardless, it is good to set the tone for a portfolio that feedback is a gift, in all directions.

What a View, Part III

We are in the middle of our not-quite-annual senior team 360 review process this week at Return Path.  It’s particularly grueling for me and Angela, our SVP of People, to sit in, facilitate, and participate in 15 of them in such a short period of time, but boy is it worth it!  I’ve written about this process before — here are two of the main posts (overall process, process for my review in particular, and a later year’s update on a process change and unintended consequences of that process change). I’ve also posted my development plans publicly, which I’ll do next month when I finalize it.

This year, I’ve noticed two consistent themes in my direct reports’ review sessions (we do the live 360 format for any VP, not just people who report directly to me), which I think both speak very well of our team overall, and the culture we have here at Return Path.

First, almost every review of an executive had multiple people saying the phrase, “Person X is not your typical head of X department, she really is as much of a general business person and great business partner and leader as she is a great head of X.”  To me, that’s the hallmark of a great executive team.  You want people who are functional experts, but you also need to field the best overall team and a team that puts the business first with understandings of people, the market, internal dependencies, and the broader implications of any and all decisions.  Go Team!

Second, almost every review featured one or more of my staff member’s direct reports saying something like “Maybe this should be in my own development plan, but…”  This mentality of “It’s not you, it’s me,” or in the language of Jim Collins, looking into the mirror and not out the window to solve a problem, is a great part of any company’s operating system.  Love that as well.

Ok.  Ten down, five to go.  Off to the next one…

What a View, Part II

In Part I, I talked about how Return Path’s 360 reviews have become a central part of our company’s human capital strategy over the past five years.  While most staff members’ reviews have been done for weeks or months now, I just finished up the final portion of my own review, which I think is worth sharing.

I always include my Board in my own 360.  My process is as follows:

1. I send the Board all the raw (and summarized) data from the staff reviews of me, both quantitative and qualitative.

2. I send the Board a list of questions to think about in terms of their view of my performance (see below).

3. I have a third party moderator, in my case a great OD consultant/executive coach that I work with, Marc Maltz from Triad Consulting, meet with the Board (without me present) for 1-2 hours to moderate a discussion of these questions.

4. The moderator summarizes the conversation and helps me marry the feedback from the Board with the feedback from my team.

The questions I ask them to consider are different from the question my staff answers about me, because the relationship and perspective are different.  For each question, I also summarize what their collective response was the prior year to refresh their memory.

1. Staff management/leadership:  How effective am I at building and maintaining a strong, focused, cohesive team?  Do I have the right people in the right roles at the senior staff level?

2. Resource allocation:  Do I do a good enough job balancing among competing priorities internally?  Are costs adequately managed?

3. Strategy:  Did you feel like last year’s strategy session was thorough enough?  Do you think we’re on target with what we’re doing?  Am I doing a good enough job managing to it while being nimble enough to respond to the market?

4. Execution:  How do I and the team execute vs. plan?  What do you think I could be doing to make sure the organization executes better?

5. Board management/investor relations:  Do you think our board is effective and engaged?  Have I played enough of a role in leading the group?  Do you as a director feel like you’re contributing all you can contribute?  Do I strike the right balance between asking and telling?  Are communications clear enough and regular enough?

6. Please comment on how I have handled some of the major issues in the past 12 months (with a listing of critical incidents).

The feedback I got is incredibly valuable, and once I marry it with the feedback I got from my staff, I will have my own killer development plan for the next 12-24 months.

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.  🙂

(This is the third in a series of three posts on this topic.)

In previous posts (here, here) , I talked about the difference between Mentors and Coaches and also how to select the right ones for you. Once you’ve selected a Mentor or Coach, here are some tips to get the most out of your engagement.

Starting to work with a CEO Mentor is fairly easy. Give them some materials to help understand your business, and then come prepared to every session with a list of 1-2 topics that are keeping you up at night where you want to benefit from the person’s experience.

Kicking off a CEO Coach engagement is more in-depth. I always recommend starting to work with a CEO Coach by doing a DEEP 360.  Not one that’s a bland anonymous survey instrument, but one that involves the Coach doing 15-20 in-depth interviews with a wide range of people from team to Board to others in the organization to people you’ve worked with outside the organization, including some non-professional contacts.  Let the Coach really learn about you from others.  The reason for this is that, although you may have an area of development that you want to focus on (like I did when I met Marc), you may actually need help in other areas a lot more acutely.

In general,  I’d say these are a few good rules of thumb for getting the most out of your Coach or Mentor relationship and sessions of work together:

• Do your homework.  If you have an assignment to read an article, take a survey, or just write something up, either do it or cancel the next meeting or it will be a waste of everyone’s time
• Be present.  Step away from your desk. Turn off email.  Silence your phone.  These are some of the most valuable times for your own personal development and growth, and they are few and far between when you get to be a CEO.  Treasure them
• Bring your whole self.  Even if your coach is a full 5 on the Shrink-to-Management Consultant scale I mentioned above, people are people, and you’re no exception.  You have a bad day at home — it will show through at work and it will impact your Coach conversations (maybe less so your Mentor ones).  Don’t ignore it.  Mention it up front
• Don’t bullshit.  You know when you’re wrong about something or have made a mistake.  You may or may not be great about admitting it publicly, or even admitting it to yourself.  ADMIT IT TO YOUR COACH.  Otherwise, why bother having one?
• Encourage primary data collection.  The biggest place I’ve seen coaching relationships fail is when the Coach or Mentor only has access to a single point of information about what’s happening in the organization — you.  Even if you’re not in full-on 360 mode, encourage your Coach or Mentor to spend time with others in the organization or on your board here and there and have a direct line of communication with them.  If they don’t and all they’re working off is your perspective on situations, their output will be severely limited or subject to their own conjecture.  Especially if you can’t get the prior bullet point right (garbage in, garbage out!)
• Make it your agenda even if it means changing on the fly.  You may be working on an analysis of your team’s Myers-Briggs profile with your Coach – and that’s the topic of your next meeting – but right before the meeting, you learn that one of your CXOs is resigning.  Change the agenda.  It’s ok.  It’s your time, make it work for you
• Learn to fish.  At the end of the day, a good CEO Coach should offer you ways of thinking about things, ways of being, ways of learning in your organization, processes to give you the ability to do some elements of this by yourself – not just answering questions for you.  Sports trainers are useful for an athlete’s entire career to push them harder in workouts, but they also teach athletes how to work out on their own
• Reality check the advice.  Make sure to test the strategies that Coaches or Mentors are giving you against your organization.  All strategies won’t work in all organizations.  These conversations should offer a variety of strategies – you can pick one or pick none and do something totally different.  The value isn’t in being told what to do, it is in going through the process of deciding what to do for YOUR organization with some expert inputs and reflections on other experiences
• Close the loop.  I’ve written before about how to solicit feedback as a CEO.  To make sure your coaching work is effective, be sure to include feedback loops with your key stakeholders (team and board) on the things you’re working on with your CEO Coach

It’s worth the money.  CEO Coaches can be really expensive.  Like really, really expensive.  $500-1,500/hour expensive.  CEO Mentors can be free and informal, but sometimes they charge as well or ask for advisor equity grants.  Even if you have a thin balance sheet, don’t be shy about adding the expense, and you shouldn’t pay for this personally.  Adding 10-20% to the cost of your compensation will potentially make you twice as effective a CEO.  If your board doesn’t support the expense…well, then you may have a different problem.

There’s a lot written publicly about this topic.  Jason Lemkin at SaaStr has a particularly good post that really puts a fine point on it.  And the coaching team at Beyond CEO Coaching a new boutique coaching firm specializing in coaching black CEOs, writes in “Who are you not to be great?”, “You can play it safe and reduce your risks and likely the rewards, or you can go big.  We at Beyond CEO Coaching want to help you to go big.”

By the way, this entire framework applies to non-CEOs as well.  Every professional would benefit from having a Coach and a Mentor in their life, even if those aren’t paid consultants but more senior colleagues or members of the company’s People Team.  Sometimes a Mentor and a Coach are one and the same…sometimes they are not.

Thanks to a large number of Bolster members I know personally who are CEO Coaches and Mentors for reviewing these posts — Chad Dickerson, Bob Cramer, Tim Porthouse, Marc Maltz, Lynne Waldera, Dave Karnstedt, and Mariquita Blumberg.

The Gift of Feedback

My colleague Anita Absey always says that “feedback is a gift.”  I’ve written in the past about our extensive 360 review process at Return Path, and also about how I handle my review and bring the Board in on it.  But this past week, I finished delivering all of our senior staff 360 reviews, and I received the write-up and analysis of my own review.  And once again, I have to say, the process is incredibly valuable. 

For the first time in a long time this year, I got a resounding “much improved” on all of my prior year’s development items from my team and from the Board.  This was great to hear.  As usual, this year’s development items are similarly thoughtful and build on the prior ones, in the context of where the business is going.  Since one of my prior year’s items was “be as transparent as possible,” I thought I’d share my development plan for the coming 12-18 months here on my blog.  If you’re reading this and you report to me, you’ll get a longer form debrief at our next offsite.

1. Continue making the organization more of a Hedgehog, lending more focus to our mission and removing distractions wherever possible.

2. Move the organization’s leadership team from “pacesetting” to “authoritative” management styles by focusing more on :

    a. standards of excellence around employee behavior and performance: develop a more clear performance management system, raise the bar on accountability around leadership and management issues, shift management training from tools to values-based coaching

    b. clear communication loops: balance open door policy with manager empowerment by getting the executive in charge to fix issues (instead of fixing them myself) and/or facilitating stronger manager-employee communication

    c. constant translation of vision into execution: foster clearer context and deeper employee engagement by not just communicating vision, but communicating HOW the vision becomes reality at every opportunity

3. Sharpen elbows further around leadership team: identify key attributes of success, weed out underperformers, re-scope other roles, and clarify “partner for success” opportunities as part of core responsibilities. Make each individual’s development needs public in the senior team (I guess this is the first step towards that!)

4. Make the organization more nimble, inspiring a bias for action through shifts in priorities and cross-functional swat teams where required

So there you go.  If you work at Return Path, please feel free to hold my feet to the fire in the coming months on these points!

Breaking New Ground on Transparency

I’ve written a lot over time about our Live 360 process for senior leaders in the business.  (This post is a good one, and it links to a couple earlier ones that are good, as well.)  We take a lot of pride in feedback and in transparency at Return Path, and after 15 years, even for an innovative business, it’s unusual that we do something big for the first time around people.  But we did today.

This image is of something never seen before at our company.  It’s my own handwritten notes about my own Live 360.

It’s never been seen before, because no one has ever been physically present for his or her own review before.  In previous reviews, my Board, my exec team, and a few skip-levels gather in a room for 90 minutes with a facilitator to discuss my performance and behaviors.  Then the facilitator would go away and write up notes, and discuss them with me, then I’d produce a development plan.

Today, we decided to experiment with having me sit in my own review to add to the transparency and directness of the feedback.  My only role was to listen, ask (non-judgmental) clarifying questions, and take notes.  I left the room at the end in case someone wanted to say something without me hearing it directly, but although the conversation about the business continued, it didn’t sound like there was anything material about me that surfaced.

It was a little awkward at first, and it was interesting that some people addressed me directly while others spoke of me in the third person.  But once we got past that, the experience was incredibly powerful for me.  The first part — the “what do you appreciate about Matt” part — was humbling and embarrassing and gratifying all at the same time.

The meat of the review, though — the “how can we coach Matt on areas where he needs development” — was amazing.  I got great insights into a couple of major areas of work that I need to do, and that we need to do as a business.  I’m guessing I would have gotten them out of reading a summary of the review conversation, but hearing the texture of the conversation was much, much richer than reading a sanitized version of it on paper.  As always with reviews, there was the odd comment or two that annoyed me, but I felt like I handled them well without any defensive body language or facial expressions.

I will, as I’ve always done, post my development plan to my blog after I formulate it over the course of the next few weeks.  But for now, I just want to thank my Board and team for their awesomely constructive feedback and for helping us usher in a new era of increased transparency here.

People Should Come with an Instruction Manual

Almost any time we humans buy or rent a big-ticket item, the item comes with an instruction manual.  Why are people any different?

No one is perfect.  We all have faults and issues.  We all have personal and professional development plans.  And most of those things are LONG-TERM and surface in one form or another in every single performance review or 360 we receive over the years.  So shouldn’t we, when we enter into a long-term personal or professional employment relationship, just present our development plans as instruction manuals on how to best work with, live with, manage, us?

The traditional interview process, and even reference check questions around weaknesses tend to be focused on the wrong things, and asked in the wrong ways.  They usually lead to lame answers like “my greatest weakness is that I work too hard and care too much,” or “No comment.”

The traditional onboarding process also doesn’t get into this.  It’s much more about orientation — here’s a pile of stuff you need to know to be successful here — as opposed to true onboarding — here’s how we’re going to get you ramped up, productive, integrated, and successful working here.

It’s quite disarming to insist that a candidate, or even a new employee, write out their instruction manual, but I can’t recommend it highly enough as part of one or both of the above two processes.  Since everyone at Return Path has a 360/Development Plan, I ask candidates in final interviews what theirs looks like in that context (so it’s clear that I’m not trying to pull a gotcha on them).  Failure to give an intellectually honest answer is a HUGE RED FLAG that this person either lacks self-confidence or self-awareness.  And in the onboarding process, I literally make new employees write out a development plan in the format we use and present it to the rest of my staff, while the rest of my staff shares their plans with the new employee.

As I’ve written in the past, hiring  new senior people into an organization is a little like doing an organ transplant.  Sometimes you just have to wait a while to see if the body rejects the organ or not.  As we get better at asking this “where’s your instruction manual?” question in the interview process, we are mitigating this risk considerably.  I’m sure there’s a whole parallel track on this same topic about personal relationships as opposed to professional ones, but I’ll leave that to someone else to write up!

Post Traumatic Job Disorder.

As we have been scaling up Return Path, we have been increasingly hiring senior people in from the outside. We believe in promoting from within and do it all the time, but sometimes you need an experienced leader who has operated at or ahead of the scale you’re at.  Someone with deep functional expertise and a “been there, done that” playbook. When you get a hire like this right, it’s amazing how much that kind of person gets done, how quickly.

One of the pitfalls of those hires, though, is cultural fit. Many of the larger organizations in the world don’t have the kind of supportive, employee-centric cultures that we have here, or that startups tend to have in general. They tend to be much more hierarchical, political, command-and-control. There is a real risk that hiring a senior person who has been trained in environments like that will blow up on you — that, as I’ve written before, the body will reject the organ transplant.

I’ve taken to calling the problem PTJD, or Post-Traumatic Job Disorder. Some of the stories I’ve heard from senior people about their experiences with their bosses or even CEOs at prior companies include such things as:  being screamed at regularly, having had a gun pulled on you, having had a knife pulled on you, having been ignored and only spoken to once or twice a year, being the victim of sexual harassment. Nice.

Just like PTSD, many people can recover from PTJD by being placed in a different environment with some up-front reprogramming and ongoing coaching. But also like PTSD, there are times where people can’t recover from PTJD. The bad habits are too engrained. They are (virtually) shell shocked.

Assuming you do the same reprogramming and coaching work on any PTJD employee, the difference between an employee who recovers and one who does not recover is really hard to smoke out in an interview process. Almost all candidates like this (a) are very polished and now how to interview well, and (b) genuinely think they want to work in a more relaxed, contemporary environment.

Here are five things I’ve learned over the years that can help identify a PTJD candidate who is unlikely to recover, before you make the hire:

1. Look for candidates who have bigger company experience, but who also have startup and growth/scaling experience.  As I’ve written before, stage experience is important because the person is more likely to really understand what he or she is getting into — and what their playbook of action is.
2. Try to understand, if a candidate has been in a workplace that breeds PTJD, whether that person was just in the machine, or if the person actually ran the machine. In other words, a senior manager might be a better fit to recover from PTJD than a senior executive.
3. Note that not all big companies are dysfunctional or lead to PTJD, so try to understand the reputation of the person’s employer. For example, in New York, it’s a pretty safe bet that someone coming from American Express has not only been well trained, but well cared for.
4. Do reference checks differently. Do them yourself. Do them as if you were doing a 360 on the person (manager, peer, subordinate, even a junior person from another department). Do reference checks on the references (seriously – ask the references about each other) so you understand the biases each of them brings to the conversation with you.
5. Focus on the first 90 days. Be relentless about how you onboard a potential PTJD victim. Give them more care, structure, praise, guidance, and criticism than you might otherwise give. Use an outside coach to augment your work, and assign a good executive buddy internally. And listen carefully to the feedback from the organization about the person, doing a deep 360 after a few months to see if the person is recovering, can recover, or can’t recover. If the latter, time to cut your losses early.

Thanks to some of my new executive colleagues here for inspiring this post, and I hope none of my friends who have served in the military take offense at this post. I am drawing an analogy, but I’m not truly suggesting that PTJD compares in any way, shape, or form to the horrors of war.