Last week, I blogged a podcast riff I did about the biggest mistakes early stage founders make and what to do about them. Here’s a summary of part 2 of what I said about later stage founders.

1. Misreading Product/Market Fit or a lack of Product/Market Fit. Misread it high, and founders end up dumping money into sales and marketing too soon. Misread it too low, and you can fire a good sales or marketing team when it’s not their fault!
   
   On the high side, Product/Market Fit isn’t just coming from a healthy CAC/LTV ratio or by good early adoption. Early adoption can come from a small group of Visionaries (here I’m channeling Geoffrey Moore’s Technology Adoption Lifecycle curve from Crossing the Chasm), so understanding how extensible your early adopter crowd is — and how easy it will be to reach the next batch of customers and the next batch and the next batch — can be costly to get wrong. The opposite is also true. It’s easy to get caught up in a wave of enthusiasm around early Product/Market Fit and then determine that a slowdown in sales is a sales problem, when in fact, you either didn’t have true Product/Market Fit beyond visionaries in the first place…or maybe you had it, but the market changed over time, and it slipped away. Product could easily be the culprit here, not Sales or Marketing. You have to constantly go back and re-test your assumptions and lean canvas with the market as products mature and more substitutes and competitors are available.
   
2. Throwing people at problems. It’s so easy to do this. Building automation, designing new business processes, and implementing new — or worse, changed over — systems are hard, expensive, and time consuming. So yes, sometimes it makes sense to just hire that extra person or two in something like account management or accounts receivable/collections instead of investing in process. But do too much of that, and you will drown in your cost structure.
   
   Founders have to learn to embrace the tear-down. Remember, you’re an entrepreneur. You’re creative. You like to invent things and disrupt things. That includes things you yourself built! Better to tear down an existing process or system and replace it with something quantum leaps more efficient for scale than to throw people at problems.
   
3. Believing that they and they alone must continue to drive their culture forward. Cultures are truly hard to scale.
   
   But there’s a trick to scaling them. The trick is to stop doing the work yourself, and partner with your HR/People team to build your cultural touchpoints (values, artifacts, etc.) throughout your employee lifecycle so that everyone in the company (NOT just HR/People) becomes a cultural steward. Recruit and interview against your values. Onboard people with founder sessions on values and culture. Bake those things into performance management and compensation.

I’m sure there are so many other top mistakes for later stage CEOs/founders. What are the ones you’ve encountered?

It’s good that my friend Brad Feld‘s new book (co-authored by Dave Jilk, who I’ve also known on and off over the years), is divided into 52 chapters and is designed as a bit of a devotional, to be read one chapter per week.

Each chapter of The Entrepreneur’s Weekly Nietzsche: A Book for Disruptors is, as the authors write in the Introduction, worth “chewing on a while.” The structure of the book is laid out as:

The book contains fifty-two individual chapters (one for each week) and is divided into five major sections (Strategy, Culture, Free Spirits, Leadership, and Tactics). Each chapter begins with a quote from one of Nietzsche’s works, using a public domain translation, followed by our own adaptation of the quote to 21st-century English. Next is a brief essay applying the quote to entrepreneurship. About two-thirds of the chapters include a narrative by or about an entrepreneur we know (or know of), telling a concrete story from their personal experience as it applies to the quote, the essay, or both.

That structure is perfect for me. I did ok in Philosophy classes, but I wouldn’t say it was my preferred subject. So the fact that Brad and Dave turned every Nietzsche quote into plain English before applying it to entrepreneurship and disruption was a welcome tactic to make the book as accessible as possible.

I wrote one of the essays in the book on creating a Company Operating System, which is in the chapter called “Doing is not Leading.” It’s an honor to be included as a contributor alongside a number of awesome CEOs, including Reid Hoffman, Ingrid Alongi, Daniel Benhammou, Sal Carcia, Ben Casnocha, Ralph Clark, David Cohen, Mat Ellis, Tim Enwall, Nicole Glaros, Will Herman, Mike Kail, Luke Kanies, Walter Knapp, Gary LaFever, Tracy Lawrence, Jenny Lawton, Seth Levine, Bart Lorang, David Mandell, Jason Mendelson, Tim Miller, Matt Munson, Ted Myerson, Bre Pettis, Laura Rich, Jacqueline Ros, and Jud Valeski.

In his Foreword, Reid Hoffman connects the dots perfectly:

Returning to Nietzsche, let’s examine why he in particular is such an apt patron philosopher for entrepreneurs. Nietzsche was rebelling against a stultifying philosophical practice that exalted the past—specifically the ideals and images of former thinkers and former leaders. He wanted to refocus on the now, on what humanity was and what it could become. As part of his rebellion, Nietzsche philosophized with a hammer: he wanted to destroy the old mindsets that locked people into the past, and thus better equip them to embrace the possibility of the new. Nietzsche’s desire to shift mindsets is also why he emphasized new styles of argument. Whereas most philosophers would typically open an argument in a classical form or by reviewing a historical great, Nietzsche would lead with an arresting aphorism or a completely new mythological narrative. He was, above all else, a disruptor of pieties and convention, always in search of new and original ways to be contrarian and right, never satisfied with the status quo. This is exactly the kind of mindset entrepreneurs should adopt. This is why a daily practice of philosophy can be the way that an entrepreneur moves from good to great. And, why a daily practice of Nietzsche is a great practice of philosophy for entrepreneurs.

What I love about the book is that you can read any given chapter at any time without having to read it front to back, and the combination of Nietzsche and entrepreneur essays makes the topics come to list. Pick one — they are organized into five sections, Strategy, Culture, Free Spirits, Leadership, and Tactics — and you’re sure to get both something chewy (e.g, thoughtful) and delicious (e.g., practical).

The Tension That Will Come With the Future of Work

A lot has been written about the Work From Anywhere life that knowledge workers are leading right now due to the pandemic, and what will come next.  Fred has a great post on it, and I’m curious to see how his and Joanne’s “Home Office Away From Home” space called FrameWork does when it opens.  In that post, he references a few other posts and articles worth reading:

• Imagine Your Flexible Office Work Future – Anne Helen Petersen
• We’re Never Going Back – Packy McCormick
• The Future of Offices When Workers Have Choice – Dror Poleg

Instead of entering the debate about what the future will look like, which no one really knows other than to say “not like the past,” I want to focus on a tension I’ve been mulling over lately, and that is the tension between a company’s leaders and its employees.  You could also call it a tension between extroverts and introverts.  And in this regard, Packy McCormick is both right and wrong about the debate:  right in the sense that employees will make the decision, not companies; wrong in the sense that the best employees “are not going to work for companies that make them shave, get dressed, hop into a car or a crowded subway, and sit at a desk in an office five days a week with their headphones on trying to avoid distractions and get work done.”  That’s a blanket statement that, as with most blanket statements, misses an incredibly important point.

That some people like, want to, need to, or benefit from working in offices more often than not.

That those people are some of the most talented, creative, and high potential people in an organization.

And that those people are frequently the ones with the least “voice” in an organization — new employees, younger workers, introverts, and people from underrepresented groups.

It will be really easy for senior people who, in many cases, have longer commutes and kids they are now accustomed to seeing a lot more, not to mention really nice and private home offices, to default to working from home.  In many cases, they’ve already done more of that than most employees, well, because they can.  But the problem is that those people are perfectly fine working from home.  Work and decisions come to them.  Their career trajectories are pretty set.  They will seek out anyone in the organization to ask them any question, any time.

But think about the topic from the perspective of an entry level account coordinator, an associate product manager, a graphic designer in marketing, a financial analyst in the FP&A group, or an AR specialist in accounting. .  Less exposure to decision makers can’t possibly help this.  If you’re one of those people, here are the things you miss out on when there’s no office:

• You don’t get to participate in or overhear interesting conversations in the break/lunch room or at the water cooler about something going on in the company that you’re not working on.  This reduces your ability to learn in unstructured ways at work or get thoroughly onboarded into a new company
• You don’t get to see who comes and goes from the office or different meeting rooms.  This may sound silly, but watching a business in, seeing who is in a glass-walled conference room or what slides are up on the wall, helps employees stimulate good ideas about their day to day work.  This limits your ability to connect the dots and better understand the big picture at work 
• You don’t get to have a casual conversation with your department head or CEO in the elevator or hallway or a conference room between meetings.  That “skip level” leader is much less likely to know who you are or what you do.  This can make it harder for you, the next time you have an idea you want to share or feedback you want to give, to approach a leader.  It also makes it a little tougher for you the next time you’re in line for some kind of promotion or development opportunity

Of course all employees CAN in theory make themselves known, can learn, can seek out others in the organization, and can try to re-create hallway serendipity from the comfort of their own Zoom screens.  It just doesn’t come naturally to most; practically speaking for many, it’s impossible; and it’s particularly hard for younger or quieter team members.  There’s a ton of research about how women in particular aren’t as comfortable advocating for themselves when it comes time to ask for a raise or a promotion.  If you’re the CEO of a 100 person organization, you might be inclined to chat with the new entry level AR person at the coffee machine for a few minutes; you’re unlikely to be excited about a 30-minute Zoom with her.  

(By the way, this whole construct may be different for engineering, where engineers are likely more comfortable with remote work AND aren’t held back in their career development as a result.)

I’ll close this post with an anecdote.  As part of our work at Bolster, I was doing something called an Executive Team Scalability Assessment with the CEO of a $75mm SaaS company a month or so ago.  When we were doing a review of how strongly each of his leaders role modeled company values, he paused when he got to one leader and said, “I honestly don’t know.  That person has only been here 10 months, but don’t worry, that’s just because of the pandemic.  I haven’t seen them in action.”  10 months!  People will discover at some point that it was much easier to “lift and shift” an existing organization to the cloud in year 1 of the pandemic than it will be to sustain or build a culture with a lot of new employees in year 2 or 3 of remote-first work.

CEOs who care about their culture, their people, inclusion and belonging, and their people’s professional development will have to really re-think how things work if they are going to steer their companies towards remote-only policies, or even remote-first employees, and still be inclusive workplaces.  That doesn’t mean it can’t be done.  But gravitating to a remote-only way of life, even if it’s personally enticing or if some talented and vocal employees demand it, may not be in the best interest of their overall company and employee population.

Book Short:  Is CX the new UX?

Outside In: The Power of Putting Customers at the Center of Your Business, by Harley Manning and Kerry Bodine from Forrester Research, was a good read that kept crossing back and forth between good on the subject at hand, and good business advice in general.  The Customer Experience (CX) movement is gaining more and more steam these days, especially in B2B companies like Return Path.  The authors define Customer Experience as “how your customers perceive their interactions with your company,” and who doesn’t care about that?

A few years ago, people started talking a lot more about User Experience (UX) as a new crossover discipline between design and engineering, and our experience at Return Path has been that UX is an incredibly powerful tool in our arsenal to build great technical products via lean/agile methods.  The recurring thought I had reading this book, especially for companies like ours, was “Is CX the new UX?”

In other words, should we just be taking the same kind of lean/agile approach to CX that we do with technical product development and UX — but basically do it more holistically across every customer touchpoint, from marketing to invoice?  It’s hard to see the answer being “no” to that question, although as with all things, the devil is in the implementation details.  And that’s true at the high level (the authors talk about making sure you align CX strategy with corporate strategy and brand attributes and values) as well as a more granular level (what metrics get tracked for CX, and how do those align with the rest of the companies KPIs).

The book’s framework for CX is six high-level disciplines: strategy, customer understanding, design, measurement, governance, and culture — but you really have to read the book to get at the specifics.

Some other thoughts and quotes from the book:

• the book contains some good advice on how to handle management of cross-functional project teams in general (which is always difficult), including a good discussion of various governance models
• “to achieve the full potential of customer experience as a business strategy, you have to change the way you run your business. You must manage from the perspective of your customers, and you must do it in a systematic, repeatable, and disciplined way.”
• one suggestion the book had for weaving the customer experience into your culture (if it’s not there already) is to invite customers to speak all-hands meetings
• another suggestion the book had for weaving the customer experience into everyone’s objectives was one company’s tactic of linking compensation (in this case, 401k match) to customer experience metrics
• “Customer Experience is a journey, not a project. It has a beginning but it doesn’t have an end.”

Thanks to my colleague Jeremy Goldsmith for recommending this book.

Most psychologists, and lots of executive coaches, end up talking to their clients about their “Family of Origin” as a means of more deeply understanding the origins of their clients’ motivations, fears, hopes, and dreams.  Presumably they do this in service of helping their clients gain self-awareness around those things to be more effective in their personal or professional lives.

A smattering of highly-ranked search results on the term yields snippets like these for its definition:

• One’s family of origin—the family one grew up in, as opposed to the people one currently lives with—is the place that people typically learn to become who they are
• From the family of origin a person learns how to communicate, process emotions, and get needs met
• People also learn many of their values and beliefs from their families

…and these for its impact:

• As a worker, your experiences in your family of origin are likely to impact on the way you work
• Families always involve negative and positive dynamics, which may lead to members gaining strengths and abilities or experiencing difficulties
• Differentiation from family is a significant concept. Well-differentiated people function better
• Greater awareness of the impact of your family of origin on you will benefit your work

I’m no shrink, nor am I an executive coach, but this makes sense to me, and I’ve seen it in action many times in both my personal and professional life.

The concept I want to introduce today is a related and in some ways parallel one, and one that I think may be equally if not more important to how someone behaves professionally.  That concept is the Company of Origin.  I’ll define one’s Company of Origin is the first place or places one has meaningful work experience.  For most working professionals, that is probably the first full-time job we held for at least a couple of years after college or graduate school.  For others, it may be a couple of long-held part-time jobs during school.  There are probably other cases, but hopefully you get the point.  A couple of my trusted colleagues in the HR/OD profession suggested that this could also be labeled Profession of Origin or Manager of Origin or “When I came into my own as a professional.”  I think the same concepts apply.

Going back to the definition above of Family of Origin and modifying it (only slightly) to define Company of Origin would look something like this:

• One’s Company of Origin – the first place or places one has a meaningful work experience, as opposed to the place one currently works – is the place that people typically learn to become who they are professionally
• From one’s Company of Origin, a person learns how to communicate at work, how to experience success and failure, what accountability means, what reward and recognition mean, what good and bad management and leadership look like, etc. etc.
• People also learn many of their professionals values and beliefs from their Companies of Origin

I know this rings true for me in my own life.  My first job as a management consultant still has a profound influence over my work today.  My first few jobs before I started Return Path all had a profound influence over how I decided to set a culture and make decisions (and still do, though a bit less with each passing year).  Some of those influences were positive – “let’s do more of that!” – and some were negative – “if I ever become the boss, I’ll never…” – but you’d expect that from a Company of Origin, just as you would a Family of Origin.

It also rings true for countless other people I’ve worked with over the years.  Think about people you’ve worked with.  Have you ever said or thought anything like this before?

• Bob used to work at GE.  That’s why he has such strong leadership skills
• Why is Jane so concerned with expenses?  Her first job was at a family-run business where every dollar spent was a dollar out of the CEO’s pocket
• Wow is Harry political at work.  I guess it’s because he used to work at XYZ Corp where people stab each other in the back to get promoted
• Oh, Sally is ex-military.  That’s why she’s so hierarchical
• Doesn’t Doug understand that part of being an employee here is doing XYZ?  That’s not how he was conditioned to think at work when he worked at PDQ Corp.  He’s just hard wired that way
• Frank just loves standing up in front of a room and drawing things on a whiteboard.  I guess that’s because he started his career as a teacher

Of course, unlike a Family of Origin, you don’t have to live in some way with your Company of Origin forever, and unlike family configurations, where the average person will have a few in a lifetime, the average person will have many places of work.  All of those workplaces will shape one’s behaviors in the workplace.  But there’s something about the Company of Origin that sticks with professionals more than other workplaces.

Again, going back to those “impact” comments about Family of Origin and modifying them only slightly for Company of Origin, you get this:

• As a worker, your experiences in your Company of Origin are likely to impact on the way you work
• Companies always involve negative and positive dynamics, which may lead to employees gaining different strengths and abilities or experiencing difficulties or experiencing the workplace differently
• Differentiation from Company of Origin is a significant concept. Well-differentiated people function better as they move from job to job
• Greater awareness of the impact of your Company of Origin on you will benefit your work

As I wrote several years ago, People Should Come with an Instruction Manual.  Understanding your potential employees’ and actual employees’ Companies of Origin would go a LONG way towards fleshing out their strengths, weaknesses, likely behaviors, likely fits with your culture and organization, and on and on.  Whether during the interview process for candidates or the development planning/360 process for employees, I hope this concept is something useful to consider.

(The following post was written by one of Return Path’s long-time senior managers, Chris Borgia, who runs one of our data science teams and has run other support organizations in the past, both at Return Path and at AOL.  I don’t usually run guest posts, but I loved the topic with Chris suggested it, and it’s a topic that I’d only have a limited perspective on!)

Managing Up in a Growing, Global Workplace

For many years, I thought “managing up” was a cheap way of getting ahead. I thought someone who managed up was skilled at deceiving their boss into thinking they were more accomplished than they really were.

I have since learned that managing up, or managing your boss, is not devious, but is actually a valuable discipline. When you learn to manage up successfully, you empower your boss to better represent your interests to influencers in the organization.

If you are a manager, you should realize that in addition to managing your boss, you can help your employees effectively manage you. When our employees help us to be successful, we are further enabled to invest in their success. This symbiosis is seen in any relationship – the more you help the other person, the more they will be able to – and want to – help you. If you are a manager, it’s important to realize that your employees should be managing up, and you can encourage them to do so by being vulnerable, admitting ignorance, and asking for support.

There are many books and articles on managing up or managing one’s boss. The essentials are fairly consistent:

• Understand your boss’s goals, priorities, and needs
• Know your boss’s strengths and weaknesses
• Set mutual expectations to build trust
• Communicate and keep your boss informed

You’ll need to be intentional about the essentials no matter where you work, but there are additional challenges of managing up in a growing, global workplace like Return Path. In a growing company, you’re likely to work for a boss who is new to their role, the company or the industry. In a global company, you may report to a boss who works in another office, or even in another country. The fundamental aspects of managing up are the same, but these situations can require a tailored approach.

When your boss is new to their role, the company, or the industry

In a growing company, you’re likely to report to someone who is new to their role in the company, new to the company itself, or even new to the industry. You can be invaluable to your boss in closing the knowledge gap and enabling them to make the best decisions for you and your team.

• Process Help your boss understand how the department operates. How are goals and priorities determined? How do people communicate? What does the team expect from the boss?
• People If your boss doesn’t know the people, they may lack the appropriate empathy in a given situation. Help them understand your team’s needs and how their decisions impact the people.
• Decision Making Your boss will likely need additional data to help them make decisions. Providing your boss with this data up front, saving them from admitting ignorance, will go a long way to developing a strong relationship.
• Context Sometimes your boss won’t know what they don’t know, so providing your boss the context around issues, decisions, and goals will enable them to make the best decisions for your team.

When your boss works in another office or country

In a global workplace, it’s likely that at some point you will have a boss who works in another office or even in another country. Having a remote boss offers many opportunities for managing up.

• Visibility Your boss doesn’t see you – or possibly others on the team – every day, so you might want to communicate more about the day-to-day operations of the team. At times, it will feel like you are sharing minutia, but it’s likely your boss will find this valuable in developing a complete understanding of what is going on.
• Insight If you work in a core office, you have a tremendous opportunity to be your boss’s eyes and ears.  What are you seeing or hearing locally that might change your boss’s plans or perspective? What are people worried about? Are there any rumors your boss should be aware of?
• Culture If your boss is in a different country, you will need to develop a relationship that considers any cultural differences. Cultural differences are seen in office attire, working hours, email habits, vacation schedules, and more. Bosses in some cultures may expect more deference, while in others they may expect more direct honesty. Understanding your boss’s culture, and helping her understand yours, will develop mutual respect and expectations to make each other successful.

Your relationship with your boss is a symbiotic one. Your boss can’t be successful unless you are, so they are your champion.  Learning to effectively manage up, especially in a growing, global workplace, is not nefarious business. Your boss will represent and support you to the best of their abilities. The more you enable your boss, the better they can support you, and everybody wins.

Onboarding vs. Waterboarding

One of our new senior hires just said to me the other day that he has been enjoying his Onboarding process during his first 90 days at Return Path and that at other companies he’s worked at in the past, the first few months were more like Waterboarding.

At Return Path, we place a lot of emphasis on onboarding – the way we ask employees to spend their first 90 days on the job.  I’ve often said that the hiring process doesn’t end on the employee’s first day.  I think about the employee’s first day as the mid-point of the hiring process. The things that come after the first day — orientation (where’s the bathroom?), context-setting (here’s our mission, here’s how your job furthers it), goal setting (what’s your 90-day plan?), and a formal check-in 90 days later — are all make-or-break in terms of integrating a new employee into the organization, making sure they’re a good hire, and making them as productive as possible.

Nothing has a greater impact on a hire’s long-term viability than a thorough Onboarding. Sure, you have to get the right people in the door. But if you don’t onboard them properly, they may never work out. This is where all companies, big and small, fail most consistently.  Remember your first day of work? Did you (or anyone at the company) know where you were supposed to sit? Did you (or anyone at the company) know if your computer was set up? Did you (or anyone at the company) have a project ready for you to start on? Did you (or anyone at the company) know when you’d be able to meet your manager? Probably not.

Take onboarding much more seriously, and you’ll be astounded by the results. We have a Manager of Onboarding whose only job is to manage the first 90 days of every employee’s experience. You don’t need to go that far (and won’t be able to until you’ve scaled well past 100 employees), but here are some things you can, and must, do to assure a successful onboarding process:

1. Start onboarding before Day 1. Just as recruitment doesn’t end until Day 90, onboarding starts before Day 1. At Return Path, we ask people to create a “Wall Bio” – a one-page collage of words and images that introduces them to the team – before their first day. It’s a quick introduction to our company culture, and something the rest of our team looks forward to seeing as new people join. Your project can be different, but it’s important to get new hires engaged even before their first day.

2. Set up your new hire’s desk in advance. There is nothing more dispiriting than spending your first day at new job chasing down keyboards and trying to figure out your phone extension. We go to the opposite extreme. When a new hire walks in the door at Return Path, their desk is done. Their computer, monitor and telephone are set up. There’s a nameplate on their office or cube. They’ve got a full set of company gear (T-shirt, tote, etc.). To show how excited we are, we even include a bottle of champagne and a handwritten note from me welcoming them to the company. In the early days of the business, we even had the champagne delivered to the employee’s home after they accepted the offer. (That didn’t scale well, particularly outside of New York City.)

3. Prepare an orientation deck for Day 1. There are certain things about your company that new hires will learn as they go along: nuances of culture, pacing, etc. But there are some things that should be made explicit right away. What is the company’s mission? What are its values? How is the organization structured? What is the current strategic plan? These details are common to every employee, and all new hires should hear them—preferably from the CEO. You can present these details one-on-one to your direct reports, or do larger in-office sessions to groups of new hires over breakfast or lunch.

4. Clearly set 90-day objectives and goals. Other details are going to be specific to an employee’s position. What’s their job description (again)? What are the first steps they should take? Resources they should know about? People they should meet? Training courses to enroll in? Materials to read and subscribe to? Finally, and most importantly, what are the major objectives for their first 90 days? They shouldn’t spend their first quarter “feeling around.” They should spend it actively and intentionally working toward a clear goal.

5. Run a review process at the end of 90 days. Whether you do a 360 review or a one-way performance review, the 90-day mark is a really good point to pull up and assess whether the new hire is working out and fitting culturally as well. It’s much easier to admit a mistake at this point and part ways while the recruiting process is still somewhat fresh than it is months down the road after you’ve invested more and more in the new hire.

With that, the hiring process is done. Now, repeat.

[Note:  this post contains some passages excerpted from my book, Startup CEO:  A Field Guide to Scaling Up Your Business, published by Wiley & Sons earlier this fall.]

We run a massive employee survey every year or so called The Loop, which is powered by Culture Amp.  We are big fans of Culture Amp, as they provide not only a great survey tool but benchmarks of relevant peer companies so our results can be placed in external context as well as internal context.

The survey is anonymous and only really rolled up to large employee groups (big teams, departments, offices, etc.), and we take the results very seriously.  Every year we run it, we create an Organization Development Plan out of the results that steers a lot of the work of our Leadership team and People team for the coming year.

I just read every single comment that employees took the time to write out in addition to their checkbox or rating responses.  This year, that amounted to over 1,200 verbatim comments.  I am struggling to process all of them, for a bunch of reasons you’d expect.  Next year we may give employees some examples of comments that are hard to process so they understand what it’s like to read all of them…and we may reduce the number of places where employees can make comments so we try to get only the most important (and more detailed) comments from people to keep the volume a little more manageable.

But I thought it might be useful to give some general advice to people who write comments on anonymous surveys.  Your company may have every good intention of following up on every last comment in an employee survey (we do!), but it’s difficult to do so when:

• The comment is not actionable.  For example, “The best thing about working at Return Path is…’I can afford to live nearby.'”  That doesn’t do much for us!
• The comment is too vague.  For example, “I’m not the engineer I was a year ago” – we have no idea what that means.  Is it a plus or a minus?  What is behind it?
• The comment is likely to be in conflict with other comments and doesn’t give enough detail to help resolve conflicts.  40 positive comments about the lunch program in an office and 40 negative comments about the lunch program in the same office kind of get washed out, but “Lunches are good, but please have more gluten-free options” is super helpful.
• The comment lacks context.  When the answer to the question “What would be the one thing we could do right away to make RP a better place to work?” is “Investing in some systems,” that doesn’t give us a starting point for a next step.
• The commenter disqualifies him or herself.  Things like “Take everything I’m saying with a grain of salt…I’m just an engineer and have no real idea of what I’m doing” that punctuate a comment are challenging to process.
• The commenter forgets that the comments are anonymous.  “I have serious problems with my manager and often think of leaving the company” is a total bummer to hear, but there’s not a lot we can do with it.  I hope with something like this that you are also having a discussion with someone on the People team or your manager’s manager!

We’re doing everything employees would expect us to do – reading the ratings and comments, looking at trends over time, breaking them down by office and department, and creating a solid Organizational Development Plan that we’ll present publicly and follow up on…but hopefully this is useful for our company and others in the future as a guide to more actionable commenting in employee surveys.

Startup CEO (OnlyOnce – the book!), Part III – Pre-Order Now

My book, Startup CEO:  A Field Guide to Scaling Up Your Business, is now available for pre-order on Amazon in multiple formats (Print, Kindle), which is an exciting milestone in this project!  The book is due out right after Labor Day, but Brad Feld tells me that the more pre-orders I have, the better.  Please pardon the self-promotion, but click away if you’re interested!

Here are a few quick thoughts about the book, though I’ll post more about it and the process at some point:

• I’ll be using the hashtag #startupceo more now to encourage discussion of topics related to startup CEOs – please join me!
• The book has been described by a few CEOs who read it and commented early for me along the lines of “The Lean Startup movement is great, but this book starts where most of those books end and takes you through the ‘so you have a product that works in-market – now what?’ questions”
• The book is part of the Startup Revolution series that Brad has been working on for a couple years now, including Do More (Even) Faster, Venture Deals, Startup Communities, and Startup Life (with two more to come, Startup Boards and Startup Metrics)
• Writing a book is a LOT harder than I expected!

At this point, the best thing I can do to encourage you to read/buy is to share the full and final table of contents with you, sections/chapters/headings.  When I get closer in, I may publish some excerpts of new content here on Only Once.  Here’s the outline:

Part I: Storytelling

• Chapter 1: Dream the Possible Dream…Entrepreneurship and Creativity, “A Faster Horse,” Vetting Ideas
• Chapter 2: Defining and Testing the Story…Start Out By Admitting You’re Wrong, A Lean Business Plan Template, Problem, Solution, Key Metrics, Unique Value Proposition and Unfair Advantages, Channels, Customer Segments, Cost Structure and Revenue Streams
• Chapter 3: Telling the Story to Your Investors…The Business Plan is Dead. Long Live the Business Plan, The Investor Presentation, The Elevator Pitch, The Size of the Opportunity, Your Competitive Advantage, Current Status and Roadmap from Today, The Strength of Your Team, Summary Financials, Investor Presentations for Larger Startups
• Chapter 4: Telling the Story to Your Team…Defining Your Mission, Vision and Values, The Top-down Approach, The Bottom-Up Approach, The Hybrid Approach, Design a Lofty Mission Statement
• Chapter 5: Revising the Story…Workshopping, Knowing When It’s Time to Make a Change, Corporate Pivots: Telling the Story Differently, Consolidating, Diversifying, Focusing, Business Pivots: Telling a Different Story
• Chapter 6: Bringing the Story to Life…Building Your Company Purposefully, The Critical Elements of Company-Building, Articulating Purpose:  The Moral of the Story, You Can Be a Force for Helping Others—Even If Indirectly

Part II: Building the Company’s Human Capital

• Chapter 7: Fielding a Great Team…From Protozoa to Pancreas, The Best and the Brightest, What About HR?, What About Sales & Marketing?, Scaling Your Team Over Time
• Chapter 8: The CEO as Functional Supervisor…Rules for General Managers
• Chapter 9: Crafting Your Company’s Culture…, Introducing Fig Wasp #879, Six Legs and a Pair of Wings, Let People Be People, Build an Environment of Trust
• Chapter 10: The Hiring Challenge…Unique Challenges for Startups, Recruiting Outstanding Talent, Staying “In-Market”, Recruitment Tools, The Interview: Filtering Potential Candidates, Two Ears One Mouth, Who Should You Interview?, Onboarding: The First 90 Days
• Chapter 11: Every Day in Every Way, We Get a Little Better…The Feedback Matrix, 1:1 Check-ins, “Hallway” Feedback, Performance Reviews, The 360, Soliciting Feedback on Your Own Performance, Crafting and Meeting Development Plans      
• Chapter 12: Compensation…General Guidelines for Determining Compensation, The Three Elements of Startup Compensation, Base Pay, Incentive Pay, Equity              
• Chapter 13: Promoting                …Recruiting from Within, Applying the “Peter Principle” to Management, Scaling Horizontally, Promoting Responsibilities Rather than Swapping Titles               
• Chapter 14: Rewarding: “It’s the Little Things” That Matter…It Never Goes Without Saying, Building a Culture of Appreciation
• Chapter 15: Managing Remote Offices and Employees…Brick and Mortar Values in a Virtual World, Best Practices for Managing Remote Employees
• Chapter 16: Firing: When It’s Not Working…No One Should Ever Be Surprised to Be Fired, Termination and the Limits of Transparency, Layoffs

Part III: Execution

• Chapter 17: Creating a Company Operating System…Creating Company Rhythms, A Marathon? Or a Sprint?
• Chapter 18: Creating Your Operating Plan and Setting Goals…Turning Strategic Plans into Operating Plans, Financial Planning, Bringing Your Team into Alignment with Your Plans, Guidelines for Setting Goals
• Chapter 19: Making Sure There’s Enough Money in the Bank…Scaling Your Financial Instincts, Boiling the Frog, To Grow or to Profit? That Is the Question, First Perfect the Model, Choosing Growth, Choosing Profits, The Third Way
• Chapter 20: The Good, the Bad, and the Ugly of Financing…Equity Investors, Venture Capitalists, Angel Investors, Strategic Investors, Debt, Convertible Debt, Venture Debt, Bank Loans, Personal Debt, Bootstrapping, Customer Financing, Your Own Cash Flow
• Chapter 21: When and How to Raise Money…When to Start Looking for VC Money, The Top 11 Takeaways for Financing Negotiations
• Chapter 22: Forecasting and Budgeting…Rigorous Financial Modeling, Of Course You’re Wrong—But Wrong How?, Budgeting in a Context of Uncertainty, Forecast, Early and Often
• Chapter 23: Collecting Data…External Data, Learning from Customers, Learning from (Un)Employees, Internal Data, Skip-Level Meetings, Subbing, Productive Eavesdropping
• Chapter 24: Managing in Tough Times…Managing in an Economic Downturn, Hope Is Not a Strategy—But It’s Not a Bad Tactic, Look for Nickels and Dimes under the Sofa, Never Waste a Good Crisis, Managing in a Difficult Business Situation
• Chapter 25: Meeting Routines…Lencioni’s Meeting Framework, Skip-Level Meetings, Running a Productive Offsite
• Chapter 26: Driving Alignment…Five Keys to Startup Alignment, Aligning Individual Incentives with Global Goals
• Chapter 27: Have You Learned Your Lesson?…The Value (and Limitations) of Benchmarking, The Art of the Post-Mortem
• Chapter 28: Going Global…Should Your Business Go Global?, How to Establish a Global Presence, Overcoming the Challenges of Going Global, Best Practices for Managing International Offices and Employees
• Chapter 29: The Role of M&A…Using Acquisitions as a Tool in Your Strategic Arsenal, The Mechanics of Financing and Closing Acquisitions, Stock, Cash, Earn Out, The Flipside of M&A: Divestiture, Odds and Ends, Integration (and Separation)
• Chapter 30: Competition…Playing Hardball, Playing Offense vs. Playing Defense, Good and Bad Competitors
• Chapter 31: Failure…Failure and the Startup Model, Failure Is Not an Orphan

Part IV: Building and Leading a Board of Directors

• Chapter 32: The Value of a Good Board…Why Have a Board?, Everybody Needs a Boss, The Board as Forcing Function, Pattern Matching, Forests, Trees, Honest Discussion and Debate
• Chapter 33: Building Your Board…What Makes a Great Board Member?, Recruiting a Board Member, Compensating Your Board, Boards as Teams, Structuring Your Board, Board Size, Board Committees, Chairing the Board, Running a Board Feedback Process, Building an Advisory Board
• Chapter 34: Board Meeting Materials…“The Board Book”, Sample Return Path Board Book, The Value of Preparing for Board Meetings
• Chapter 35: Running Effective Board Meetings…Scheduling Board Meetings, Building a Forward-Looking Agenda, In-Meeting Materials, Protocol, Attendance and Seating, Device-Free Meetings, Executive and Closed Sessions
• Chapter 36: Non-Board Meeting Time…Ad Hoc Meetings, Pre-Meetings, Social Outings
• Chapter 37: Decision-Making and the Board…The Buck Stops—Where?, Making Difficult Decisions in Concert, Managing Conflict with Your Board
• Chapter 38: Working with the Board on Your Compensation and Review…The CEO’s Performance Review, Your Compensation, Incentive Pay, Equity, Expenses
• Chapter 39: Serving on Other Boards…The Basics of Serving on Other Boards, Substance, or Style?

Part V: Managing Yourself So You Can Manage Others

• Chapter 40: Creating a Personal Operating System…Managing Your Agenda, Managing Your Calendar, Managing Your Time, Feedback Loops
• Chapter 41: Working with an Executive Assistant…Finding an Executive Assistant, What an Executive Assistant Does
• Chapter 42: Working with a Coach…The Value of Executive Coaches, Areas Where an Executive Coach Can Help
• Chapter 43: The Importance of Peer Groups…The Gang of Six, Problem-Solving in Tandem
• Chapter 44: Staying Fresh…Managing the Highs and Lows, Staying Mentally Fresh, At Your Company, Out and About, Staying Healthy, Me Time
• Chapter 45: Your Family…Making Room for Home Life, Involving Family in Work, Bringing Work Principles Home
• Chapter 46: Traveling…Sealing the Deal with a Handshake, Making the Most of Travel Time, Staying Disciplined on the Road
• Chapter 47: Taking Stock of the Year…Celebrating “Yes”; Addressing “No”, Are You Having Fun?, Are You Learning and Growing as a Professional?, Is It Financially Rewarding?, Are You Making an Impact?
• Chapter 48:  A Note on Exits…Five Rules of Thumb for Successfully Selling Your Company

 If you’re still with me and interested, again here are the links to pre-order (Print, Kindle).

Book Short:  Steve Jobs and Lessons for CEOs and Founders

First, if you work in the internet, grew up during the rise of the PC, or are an avid consumer of Apple products, read the Walter Isaacson biography of Steve Jobs (book, kindle).  It’s long but well worth it.

I know much has been written about the subject and the book, so I won’t be long or formal, but here are the things that struck me from my perspective as a founder and CEO, many taken from specific passages from the book:

• In the annals of innovation, new ideas are only part of the equation. Execution is just as important.  Man is that ever true.  I’ve come up with some ideas over the years at Return Path, but hardly a majority or even a plurality of them.  But I think of myself as innovative because I’ve led the organization to execute them.  I also think innovation has as much to do with how work gets done as it does what work gets done.

• There were some upsides to Jobs’s demanding and wounding behavior. People who were not crushed ended up being stronger. They did better work, out of both fear and an eagerness to please.  I guess that’s an upside.  But only in a dysfunctional sort of way.

• When one reporter asked him immediately afterward why the (NeXT) machine was going to be so late, Jobs replied, “It’s not late. It’s five years ahead of its time.”  Amen to that.  Sometimes product deadlines are artificial and silly.  There’s another great related quote (I forget where it’s from) that goes something like “The future is here…it’s just not evenly distributed yet.”  New releases can be about delivering the future for the first time…or about distributing it more broadly.

• People who know what they’re talking about don’t need PowerPoint.”  Amen.  See Powerpointless.

• The mark of an innovative company is not only that it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind.  This is critical.  You can’t always be first in everything.  But ultimately, if you’re a good company, you can figure out how to recover when you’re not first.  Exhibit A:  Microsoft.

• In order to institutionalize the lessons that he and his team were learning, Jobs started an in-house center called Apple University. He hired Joel Podolny, who was dean of the Yale School of Management, to compile a series of case studies analyzing important decisions the company had made, including the switch to the Intel microprocessor and the decision to open the Apple Stores. Top executives spent time teaching the cases to new employees, so that the Apple style of decision making would be embedded in the culture.  This is one of the most emotionally intelligent things Jobs did, if you just read his actions in the book and know nothing else.  Love the style or hate it – teaching it to the company reinforces a strong and consistent culture.

• Some people say, “Give the customers what they want.” But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, “If I’d asked customers what they wanted, they would have told me, ‘A faster horse!’” People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.  There’s always a tension between listening TO customers and innovating FOR them.  Great companies have to do both, and know when to do which.

• What drove me? I think most creative people want to express appreciation for being able to take advantage of the work that’s been done by others before us. I didn’t invent the language or mathematics I use. I make little of my own food, none of my own clothes. Everything I do depends on other members of our species and the shoulders that we stand on. And a lot of us want to contribute something back to our species and to add something to the flow. It’s about trying to express something in the only way that most of us know how—because we can’t write Bob Dylan songs or Tom Stoppard plays. We try to use the talents we do have to express our deep feelings, to show our appreciation of all the contributions that came before us, and to add something to that flow. That’s what has driven me.  This is perhaps one of the best explanations I’ve ever heard of how creativity can be applied to non-creative (e.g., most business) jobs.  I love this.

My board member Scott Weiss wrote a great post about the book as well and drew his own CEO lessons from it – also worth a read here.

Appropos of that, both Scott and I found out about Steve Jobs’ death at a Return Path Board dinner.  Fred broke the news when he saw it on his phone, and we had a moment of silence.  It was about as good a group as you can expect to be with upon hearing the news that an industry pioneer and icon has left us.  Here’s to you, Steve.  You may or may not have been a management role model, but your pursuit of perfection worked out well for your customers, and most important, you certainly had as much of an impact on society as just about anyone in business (or maybe all walks of life) that I can think of.

Scaling the Team

(This post was requested by my long-time Board member Fred Wilson and is also running concurrently on his blog today.  I’ll be back with the third and fourth installments of “The Best Laid Plans” next Thursday and the following Thursday)

When Return Path reached 100 employees a few years back, I had a dinner with my Board one night at which they basically told me, “Management teams never scale intact as you grow the business.  Someone always breaks.”  I’m sure they were right based on their own experience; I, of course, took this as a challenge.  And ever since then, my senior management team and I have become obsessed with scaling ourselves as managers.  So far, so good.  We are over 300 employees now and rapidly headed to 400 in the coming year, and the core senior management team is still in place and doing well.  Below are five reasons why that’s the case.

1. We appreciate the criticality of excellent management and recognize that it is a completely different skill set from everything else we have learned in our careers.  This is like Step 1 in a typical “12-step program.”  First, admit you have a problem.  If you put together (a) management is important, (b) management is a different skill set, and (c) you might not be great at it, with the standard (d) you are an overachiever who likes to excel in everything, then you are setting the stage for yourself to learn and work hard at improving at management as a practice, which is the next item on the list.
2. We consistently work at improving our management skills.  We have a strong culture of 360 feedback, development plans, coaching, and post mortems on major incidents, both as individuals and as a senior team.  Most of us have engaged on and off over the years with an executive coach, for the most part Marc Maltz from Triad Consulting.  In fact, the team holds each other accountable for individual performance against our development plans at our quarterly offsites.  But learning on the inside is only part of the process.
3. We learn from the successes and failures of others whenever possible.  My team regularly engages as individuals in rigorous external benchmarking to understand how peers at other companies – preferably ones either like us or larger – operate.  We methodically pick benchmarking candidates.  We ask for their time and get on their calendars.  We share knowledge and best practices back with them.  We pay this forward to smaller companies when they ask us for help.  And we incorporate the relevant learnings back into our own day to day work.
4. We build the strongest possible second-level management bench we can to make sure we have a broad base of leadership and management in the company that complements our own skills.  A while back I wrote about the Peter Principle, Applied to Management that it’s quite easy to accumulate mediocre managers over the years because you feel like you have to promote your top performers into roles that are viewed as higher profile, are probably higher comp – and for which they may be completely unprepared and unsuited.  Angela Baldonero, my SVP People, and I have done a lot here to ensure that we are preparing people for management and leadership roles, and pushing them as much as we push ourselves.  We have developed and executed comprehensive Management Training and Leadership Development programs in conjunction with Mark Frein at Refinery Leadership Partners.  Make no mistake about it – this is a huge investment of time and money.  But it’s well worth it.  Training someone who knows your business well and knows his job well how to be a great manager is worth 100x the expense of the training relative to having an employee blow up and needing to replace them from the outside.
5. We are hawkish about hiring in from the outside.  Sometimes you have to bolster your team, or your second-level team.  Expanding companies require more executives and managers, even if everyone on the team is scaling well.  But there are significant perils with hiring in from the outside, which I’ve written about twice with the same metaphor (sometimes I forget what I have posted in the past) – Like an Organ Transplant and Rejected by the Body.  You get the idea.  Your culture is important.  Your people are important.  New managers at any level instantly become stewards of both.  If they are failing as managers, then they need to leave.  Now.

I’m sure there are other things we do to scale ourselves as a management team – and more than that, I’m sure there are many things we could and should be doing but aren’t.  But so far, these things have been the mainstays of happily (they would agree) proving our Board wrong and remaining intact as a team as the business grows.