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.

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.  🙂

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!

(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.

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.

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!

The Gift of Feedback, Part II

I’ve written a few times over the years about our 360 feedback process at Return Path.  In Part I of this series in early 2008, I spelled out my development plan coming out of that year’s 360 live review process. I have my new plan now after this year’s process, and I thought I’d share it once again.  This year I have four items to work on:

1. Continue to develop the executive team.  Manage the team more aggressively and intentionally.  Upgrade existing people, push hard on next-level team development, and critically evaluate the organization every 3-6 months to see if the execs are scaling well enough or if they need to replaced or augmented
2. Formalize junior staff interaction.  Create more intentional feedback loops before/after meetings, including with the staff member if needed, and cultivate acceptance of transparency; get managers to do the same.  Be extra skeptical about the feedback I’m getting, realizing that I may not get an accurate or complete picture
3. Foster deeper engagement across the entire organization.  Simplify/streamline company mission and balanced scorecard through a combination of deeper level maps/scorecards, maybe a higher level scorecard, and constant reinforcing communication.  Drive multi-year planning process to be fun, touching the entire company, and culminating in a renewed enthusiasm
4. Disrupt early and often, the right way.  Introduce an element of productive disruption/creative destruction into the way I lead, noting item 2 around feedback loops

Thanks to everyone internally who contributed to this review.  I appreciate your time and input.  Onward!

New People Electrify the Organization

We had a good year in 2009, but it was tough.  Whose wasn’t?  Sales were harder to come by, more existing customers left or asked for price relief than usual, and bills were hard to collect.  Worse than that, internally a lot of people were in a funk all year.  Someone on our team started calling it “corporate ennui.”  Even though our business was strong overall and we didn’t do any layoffs or salary cuts, I think people had a hard time looking around them, seeing friends and relatives losing their jobs en masse, and feeling happy and secure.  And as a company, we were doing well and growing the top line, but we froze a lot of new projects and were in a bit of a defensive posture all year.

What a difference a year makes.  This year, still not perfect, is going much better for us.  Business conditions are loosening up, and many of our clients have turned the corner.  Financially, we’re stronger than ever.  And most important, the mood in the company is great.  I think there are a bunch of reasons for that – we’re investing more, we’re doing a ton of new innovation, people have travel budgets again, and people see our clients and their own friends in better financial positions.

But by far, I think the most impactful change to the organizational mood we’re seeing is a direct result of one thing:  hiring.  We are adding a lot of new people this year – probably 60 over the course of the year on top of the 150 we had at the beginning of the year.  And my observation, no matter which office of ours I visit, is that the new people are electrifying the organization.  Part of that is that new people come in fresh and excited (perhaps particularly excited to have a new job in this environment).  Part of it is that new people are often pleasantly surprised by our culture and working environment.  Part of it is that new people come in and add capacity to the team, which enables everyone to work on more new things.  And part of it is that every new person that comes in needs mentoring by the old timers, which gives the existing staff reminders and extra reason to be psyched about what they’re doing, and what the company’s all about.

Whether it’s one of these things or all of them, I’m not sure I care.  I’m just happy the last 18 months are over.  The world is a brighter place, and so is Return Path.  And to all of our new people (recent and future), welcome…thanks for reinvigorating the organization!

A Perfect Ten

Return Path turns 10 years old today.  We are in the midst of a fun week of internal celebrations, combined with our holiday parties in each office as well as year-end all-hands meetings.  I thought I would share some of my reflections on being 10 in the blog as I’ve shared them with our team. What being 10 means to me – and what’s enabled us to make it this long:

• It means we’ve beaten the odds.  Two major global economic meltdowns.  The fact that 90% of new small businesses fail before they get to this point.  Probably a higher percentage of venture backed startups fail before they get to 10 as well
• We’ve gotten here because we’ve been nimble and flexible.  Over our 10 years, we’ve seen lots of companies come and go, clinging to a model that doesn’t work.  We may have taken a while and a few iterations to get to this point, but as one of my Board members says, “we’re an overnight success, ten years in the making!”
• We’ve also made it this long because we have had an amazing track record with our three core constituencies – employees, clients, and investors – including navigating the sometimes difficult boundaries or conflicts between the three

What I’m most proud of from our first decade:

• We’ve built a great culture.  Yes, it’s still a job.  But for most of our team members most of the time, they like work, they like their colleagues, and they have a fun and engaging time at work.  That’s worth its weight in gold to me
• We’ve built a great brand and have been hawkish about protecting our reputation in the marketplace.  That’s also the kind of thing that can’t be bought
• We haven’t sacrificed our core principles.  We’ve always, going back to our founding and the ECOA business, had a consumer-first philosophy that runs deep.  This core principle continues to serve us well in deliverability (a non-consumer-facing business) and is clearly the right thing to do in the email ecosystem

What I most regret or would do differently if given the chance:

• We have not raised capital as efficiently as possible – mostly because our company has shifted business models a couple of times.  Investors who participated in multiple rounds of financing will do very well with their investments.  First or second round angel investors who didn’t or couldn’t invest in later rounds will lose money in the end
• I wish we were in one location, not five.  We are embracing our geographic diversity and using it to our advantage in the marketplace, but we pay a penalty for that in terms of travel and communication overhead
• We have at times spread ourselves a little too thin in pursuit of a fairly complex agenda out of a relatively small company.  I think we’re doing a good job of reigning that in now (or growing into it), but our eyes have historically been bigger than our stomachs

Thanks to all our investors and Board members, especially Greg Sands from Sutter Hill Ventures, Fred Wilson from Flatiron Partners and Union Square Ventures, Brad Feld from Mobius Venture Capital, and Scott Weiss for their unwavering support and for constantly challenging us to do better all these years.  Thanks to our many customers and partners for making our business work and for driving us to innovate and solve their problems.  Thanks to our many alumni for their past efforts, often with nothing more to show for it than a line item on their resume.  And most of all, thanks to our hardworking and loyal team of nearly 200 for a great 2009 and many more exciting years ahead!  

Why I joined the DMA Board, and what you can expect of me in that role

I don’t normally think of myself as a rebel. But one outcome of the DMA’s recent proxy fight with Board member Gerry Pike is that I’ve been appointed to the DMA’s Board and its Executive Committee and have been labeled “part of the reform movement” in the trade press. While I wasn’t actively leading the charge on DMA reform with Gerry, I am very enthusiastic about taking up my new role.

I gave Gerry my proxy and support for a number of reasons, and those reasons will form the basis of my agenda as a DMA Board member. As a DMA member, and one who used to be fairly active, I have grown increasingly frustrated with the DMA over the past few years.

1. The DMA could be stronger in fighting for consumers’ interests. Why? Because what’s good for consumers is great for direct marketers. Marketing is not what it used to be, the lines between good and bad actors have been blurred, and the consumer is now in charge. The DMA needs to more emphatically embrace that and lead change among its membership to do the same. The DMA’s ethics operation seems to work well, but the DMA can’t and shouldn’t become a police state and catch every violation of every member company. Its best practices and guidelines take too long to produce and usually end up too watered down to be meaningful in a world where the organization is promoting industry self-regulation. By aggressively fighting for consumers, the DMA can show the world that a real direct marketer is an honest marketer that consumers want to hear from and buy from.

2. Despite a number of very good ideas, the DMA’s execution around interactive marketing has been lacking. The DMA needs to accept that interactive marketing IS direct marketing – not a subset, not a weird little niche. It’s the heart and soul of the direct marketing industry. It’s our future. The acquisition of the EEC has been one bright spot, but the DMA could do much more to make the EEC more impactful, grow its membership, and replicate it to extend the DMA’s reach into other areas of interactive marketing, from search to display advertising to lead generation. The DMA’s staff still has extremely limited experience in interactive marketing, they haven’t had a thought leader around interactive on staff for several years, and their own interactive marketing efforts are far from best practice. Finally, the DMA’s government affairs group, perhaps its greatest strength, still seems disproportionately focused on direct mail issues. The DMA should maintain its staunch support of traditional direct marketers while investing in the future, making interactive marketing an equal or larger priority than traditional direct marketing. We have to invest in the future.

3. Finally, I think the DMA suffers from a lack of transparency that doesn’t serve it well in the hyper-connected world we live in here in 2009 – that’s a nice way of saying the organization has a big PR problem. The organization does a lot of great work that never gets adequately publicized. This whole proxy fight episode is another example, both in the weak response from the DMA and also in a lot of the complaints Gerry lodged against the organization, many of which the organization says are untrue or misleading. Senior DMA execs or Board members should be blogging. They should be active thought leaders in the community. They should be much more engaged with their members to both understand member needs and requirements and more aggressively promote their agenda.

In short, I will be an independent voice who advocates for progress and change in the areas that I consider to be most important, and I will be transparent and open about expressing my views. I’ve already been clear with the existing DMA Board and management that I do have this agenda, and that I hope the organization will embrace it. If they do, even if only in part, I think it will be to the DMA’s benefit as well as the benefit of its members. If they reject it wholesale, my interest in long-term involvement will be fairly low.

That’s the story. As I said up front, I am taking up this new role with enthusiasm and with the belief that the DMA is open to change and progress. We’ll see how it goes, and I will blog about it as often as I can.

Do you have thoughts on the future of the DMA? I’d love to hear from you. You can leave a comment below or email me directly at matt at returnpath dot net.