Yes, They Are THAT Important

Our enterprise spam filter has been down for about a day as we reconfigure some servers here.  It has been just this side of crippling, especially travelling and getting spammed to death on my Treo.

Spam filters have become good enough (though still not perfect on the false positive side, of course) and prevalent enough, that I had forgotten just how important a role they play in today’s corporate IT environment.  We’d be in really sorry shape without them!

People talk a lot about Imposter Syndrome — “What am I doing here? I’m not qualified to do X at all” regularly when it comes to women and people of color in the workplace. That is a real thing. It shouldn’t in any way be discounted. It’s painful to go through and painful to watch.

I’d guess that 9 our of 10 founders have Imposter Syndrome at least once during their founder journey. Maybe it’s even more like 99 out of 100. And I bet most of them have it more than once…some regularly. This may be even more true for founders from underrepresented populations, but it happens regardless of demographic.

Being a founder is inherently unnatural. Seeing the world through a different lens, inventing something, and being crazy enough to act on it, quit your job, raise capital, and convince other people to quit their jobs to join you on your journey is a tall order no matter who you are.

No founder’s journey exists without speedbumps and moments where things aren’t working and you feel like your company is going to die a horrible and painful (and worse, public) death – what my former Board member and friend Scott Weiss famously calls the WFIO moment (We’re F’d – It’s Over), popularized by Ben Horowitz in The Hard Thing About Hard Things.

Founders, it’s ok. We’ve all been there. Take a step back. Solve the problem. Change the approach. You’re not in the wrong place. You’re just having a bad moment. And most important, remember, you’re not alone.

As we wrote in Bolster’s Founding Manifesto, one of the reasons we started Bolster was to create a new way; a faster, easier, and more cost-effective way, for startup and scaleup CEOs to grow their boards of directors and make them more diverse.

There’s a lot of research out there that the more independent a board is, the better it performs for companies — and that there’s a high degree of correlation between more independent boards and higher performing companies as well. There’s also a lot of research out there that shows that teams which have diversity of gender and race/ethnicity perform better. And everyone who has ever been on a high-functioning board of directors knows that a board is a team.

These facts are well known, yet it is still the case that most private company boards are overwhelmingly made up of founders and investors who are still largely white and male. I believe that the lack of independence and diversity on boards is a big miss for the whole startup ecosystem, and it’s a part of the startup game that we at Bolster want to help change.

Startup boards are tricky things. One of the very unique aspects of a CEO’s job that sets it apart from other executive positions is building and leading a board of directors. But most startup CEOs have either little or no experience building and leading a board, so that part of the job tends to default to a “because that’s the way I assume it’s always been done” kind of task. Of course, if you’re not intentional about building and managing a board, you’re likely to get lousy results. 

Building, shaping, and leading a world class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders. It’s on par with building and leading an executive team. I’ve seen amazing companies held back by weak and ineffective boards and investor syndicates, and I’ve seen so-so companies succeed because the strategic advice, experience, and accountability coming out of the board room drives the management team in extraordinary ways.

So how is Bolster helping startup CEOs change the game with respect to Boards? We are doing three things. 

First, as you know, what gets measured gets managed. Our first-of-its-kind Board Benchmark application will soon produce an industry standard set of data around private company boards. You can’t find data on private company boards but we’ll soon have important data like size, composition (independents/management/investors), independent director compensation and diversity (gender/race-ethnicity/age). This will help answer questions that I know I have had many times over the years as a CEO such as 

• How big should my board be at this stage? 
• How many independent directors should I have? 
• What is the right profile of an independent director? 
• How many options should I give a board member? 

Starting next week, we’re opening up our Board Benchmark application to any company who creates a free Bolster account. It will tell us a lot about the baseline across the ecosystem, and it will answer a lot of questions startup and scaleup CEOs have but can’t get answers to. Although this is an ongoing real-time benchmark tool, I’ll post some results here when we have enough critical mass to start reporting out.

Second, Bolster is in the talent business, and helping match VC-backed companies with a strong diverse slate of board candidates who are well-matched with their company is at the core of our business. We are already working on many searches for independent board members, and we’ll only be doing more of them as our client base and member base grow.

Finally, this blog post is the beginning of a whole series of posts about startup boards that we hope will demystify them a bit and help change the world’s thinking about how to grow them. Some of the material I will borrow from other blog posts I’ve written, or from the Board of Directors section of Startup CEO. Some will come from other influential VC and CEO bloggers and from Brad Feld and Mahendra Ramsinghani’s book Startup Boards. But much of the content will be new. And because Bolster is a two-sided marketplace, roughly half of the content will be aimed at startup CEOs and the other half at executives who are interested in serving on boards and aren’t sure how to get from where they are today into a board room. We’ll be sending out all the CEO posts as an eBook to CEOs who complete the Board Benchmark study, and all the Member posts as an eBook to Bolster members who fill out their Board profiles. I’ll post both of those eBooks here eventually as well.

For CEOs, the topics we will cover include 

• The purpose of a board
• Size and composition on boards
• Board evolution & turnover
• Diversity in the boardroom and the importance of appointing first-time directors
• What to look for in a director
• How to recruit and interview directors
• How to onboard directors, especially first time directors
• How to compensate directors
• How to build a director bench or Advisory Board
• How to evaluate your board

For executives searching for a board role, the topics we will cover include 

• What startup corporate boards look like
• How to prepare yourself to get on your first board
• Should you serve on an advisory board?
• How to interview for a Board role
• What you need to know about board compensation
• How to approach your first board meeting
• How to think about corporate governance as a board member
• How to be a great board member
• How to give advice or difficult feedback as a board member
• Making sure your voice is heard during a board meeting
• How to know if you’re doing a good job as a board member

We believe that boards can make or break a company and we intend to chart a new course for startup boards. I look forward to sharing thoughts and data with you on that topic in the weeks to come.

I haven’t done a book review yet on this blog because I haven’t found a very relevant one. I will do more as I go here — I’ve actually read a few pretty useful business books lately — but there’s no better book to kick off a new category of postings here than the one I just finished: The MouseDriver Chronicles: The True-Life Adventures of Two First-Time Entrepreneurs.

The book details how two freshly-minted Wharton MBAs skipped the dot com and investment banking job offers to start a two-person company that produced the MouseDriver (a computer mouse shaped like a the head of a golf club) back in 1999-2000. It’s a great, quick read and really captures the spirit of much of what I’m trying to do with this blog, which is talk about first-time CEO issues, or company leadership/management issues in general.

Although it’s not about an internet business, the book also has an interesting side story, which is the powerful impact that email had on the MouseDriver business, with an email newsletter the entrepreneurs started that developed great readership and ultimately some viral marketing. Sort of like a blog, circa 1999.

Thanks to Stephanie Miller at Return Path for giving me the book!

I was having breakfast with the CEO of another SaaS company the other day, as I often do to network.  He was telling me about his experience working with his company’s new Private Equity owner.

There are always a mix of pros and cons that come with any particular shareholder, Board member, or owners, of course.  In his case, my fellow CEO was bemoaning the 29-year old associate who acted like a know-it-all in every Board meeting.  Lots of CEOs have been there.  There’s a lot of value you can get from an associate or VP-level person at an investor who is the Master of the Spreadsheet and who has access to a lot of data about your company.  And there is certainly a lot of value to be gained from investors with large portfolios of similar companies who can identify learnings from experience you haven’t had as a CEO and help you apply that experience thoughtfully to your company in any given situation.  In The Value and Limitations of Pattern Matching, I quoted my father-in-law, who noted once that When you hear hoof beats, it’s probably horses. But you never know when it might be a zebra.  I am still a firm believer that it’s the “thoughtful application” that matters as much as recognizing the pattern.

But this breakfast conversation led me to another conclusion, which is less about pattern matching and more about the pattern matcher.  And that is:

You don’t know how to drive a car because you know how to read a map

Being a Master of the Spreadsheet is a great starting point to coming up with ideas and insights for a business.  Quantitative analysis can tell you a lot of things, including a lot of things that you wouldn’t be able to get on instinct or experience alone, like slow, subtle changes in customer behavior, customer-level profitability, the impact of pricing changes, or compound effects of salary or benefit changes on a cost structure over time.  Think of quantitative analysis a bit like a road map.  It can show you the shortest distance and combination of roads and turns to get from Point A to Point B.

But quantitative analysis stops there.  It is not the same as actually getting yourself from Point A to Point B.  Driving a car in and of itself is a skill that requires a lot of learning and practice.  And it certainly doesn’t forecast traffic or road hazards that require a last minute detour.  Being right about what roads to take is a lot less important than actually getting yourself to the destination safely and in a timely manner.  The value of having experienced executives operating a business is those things – the actual driving of the car.  The knowing of the customers or the employees.  The skill of managing change and emotions.

At the end of the day, there’s value in both ends of the spectrum – the reading of the map and the driving of the car.  As long as the two sides agree that there’s value to both tasks and that the two sides bring different expertise to the table, there’s a great partnership to be struck.  But too often these days I hear about investors who think that reading the map is all that needs to happen for a company to be successful.  Until someone comes up with the self-driving car of management, this metaphor should hold!

The Good, The Board, and The Ugly, Part III

To recap other postings in this series:  my original, Brad Feld’s, Fred Wilson’s first, Fred’s second, Tom Evslin’s, and my lighter-note follow-up.

So speaking of lighter-note takes on this topic, Lary Lazard, Tom Evslin’s fictional CEO who ran Hackoff.com, now has his own tips for effective board management.  You have to read them yourself here, but I think my favorite one is #3, which starts off:

Never number the pages of what you are presenting.  Lots of time can be used constructively figuring out what page everybody is on.

Enjoy.

I’ve gotten to know a number of Bolster members over the last few years, and one who I have come to appreciate quite a bit is Tim Porthouse. I’m on Tim’s email list, and with his permission, I’m reprinting something he wrote in his newsletter this month on the topic of CEO engagement in politics and current events. As you may know, I’ve written a bunch on this topic lately, with two posts with the same title as this one, Should CEOs wade into Politics (part I here, part II here). Thanks to Tim for having such an articulate framework on this important subject.

Your Leadership Game: “No Comment.”

Should you speak up about news events/ politics?

Most of the time, I say, no!

Startup CEOs feel pressure to speak up on news events: Black Lives Matter, Abortion, LBGTQ+ rights, the conflict in Israel/Palestine, Trump vs. Biden. Many tell me they feel pressured to say something, but are deeply conflicted.

Like you, I am deeply distressed by wars, murder, restrictions on human rights, bias, and hate. But if we feel something, should we say something?

Before you speak up, ask the following questions:

1.      Mission relevance. Is your startup’s success or mission on the line? Are customers or employees directly impacted? Example: It makes sense for Airbnb to advocate when a city tries to ban short-term rentals. It makes sense to advocate for your LBGTQ+ employees when a state tries to restrict their rights.

2.      Moving the needle. Will speaking out change anything? If you “denounce” something or “take a stand,” what really happens? Example: If you have employees in a state banning abortion and you tell them your startup will support them as much as the law allows, this could create great peace of mind for employees. But if your startup does not operate in Ukraine or Russia, then denouncing Russia does little (and Russia does not care!)

3.      Expertise. Do you have a deep understanding of the situation? It’s usually more complicated than it appears, especially at first. Once you speak out, you have painted yourself into a corner you will be forced to defend.

4.      Precedence and equivalence. If you issue a statement about today’s news event, will you react to tomorrow’s event? Why not? Where do you draw the line?Someone will be offended that you spoke up about X but not Y.

5.      Backlash. Are you ready to spend significant time engaging with those who disagree with you?It can get ugly quickly, and mistakes can be costly. Plus, the American public is tiring of business leaders commenting on the news.

6.      Vicarious liability. Who are you speaking for? When you say, “Our startup denounces X”?Does the whole company denounce it? You don’t know, and probably not. Does the Leadership Team? They may feel pressured to support you. What you are really saying is, “I denounce X!” OK, great, then say it to your friends and family. Leave your startup to talk about business.

If your answers are “yes,” – then speak out.

If not, I recommend keeping quiet.

In my opinion, our job is to build great companies, not debate current events.

By not speaking out, you can say, “We don’t talk politics here.” You can shut down any two-sided arguments at work and say, “Let’s get back to work,”removing a big distraction. Remember when employees protested because Google was bidding for Pentagon contracts?

I realize that you will be challenged to make a statement, that, “Saying nothing is unacceptable/ complicit.” But whoever challenges you will only be satisfied if you support their view.

If you still want to speak out, I respect your choice. Some of you will be angry with me for writing this, and I accept that. I’m asking you to think carefully before you make a statement.

Come Fly With Me

I do a lot of travel for work.  That means I spend a lot of time on planes, some of which is “wasted” – or at least time that can’t be productive for work in the traditional sense of being connected, or in a lot of cases, of even reading.  One thing I’ve always appreciated in my career but have grown even more attached to of late is traveling with colleagues.  Any time I have an opportunity to do so, I jump on it.

First, I find that I get solid work time in with a colleague in transit.  A check-in meeting that isn’t rushed with a hard stop, interrupted by the phone or visitors, and in-person.

Second, I find that I get more “creative” work time in with a colleague on a flight, especially a long one.  Some of the time that isn’t in a structured meeting invariably turns to brainstorming or more idle work chatter.  Some great ideas have come out of flights I’ve taken in the past 11 years!

Finally, my colleague and I get more social time in than usual on a plane.  Social time is an incredibly important part of managing and developing personal connections with employees.  Time spent next to each other in the air, in an airport security line or lounge, in a rental car, “off hours” always lends itself to learning more about what’s going on in someone’s life.

Don’t get me wrong – even when I travel with someone from Return Path, we each have some “quiet time” to read, work, sleep, and contemplate life.  But the work and work-related aspects of the experience are not to be ignored.

The Best Laid Plans, IV

I have had a bunch of good comments from readers about the three posts in this series about creating strategic plans (input phase, analysis phase, output phase).  Many of them are leading me to write a fourth post in the series, one about how to make sure the result of the plan isn’t shelfware, but flawless execution.

There’s a bit of middleware that has to happen between the completion of the strategic plan and the work getting done, and that is an operating plan.  In my observation over the years, this is where most companies explode.  They have good ideas and capable workers, just no cohesive way to organize and contextualize the work.  There are lots of different formats operating plans can take, and a variety of acronyms to go with the formats, that I’ve heard over the years.  No one of these formats is “right,” but I’ll share the key process steps my own team and I went through just over the past few months to turn our strategic planning into action plans, synchronizing our activities across products and groups.

• Theme:  we picked a theme for the year that generally held the bulk of the key work together – a bit of a rallying cry
• Initiatives:  recognizing that lots of people do lots of routine work, we organized a series of a dozen “move the ball forward” projects into specific initiatives
• Communication:  we unveiled the theme and the initiatives to ALL at our annual business meeting to get everyone’s head around the work to be done in the upcoming year
• Plans:  each of the dozen initiative teams, and then also each team/department in the company (they’re different) worked together to produce a short (1-3 page) plan on a template we created, with a mission statement, a list of direct and indirect participants, important milestones and metrics
• Synchronization:  the senior management team reviewed all the plans at the same time and had a meaningful discussion to synchronize the plans, making edits to both substance and timing
• Scorecard:  we built our company scorecard for the year to reflect “green/yellow/red” grading on each initiative and visually display the most important 5-6 metrics across all initiatives
• Ongoing reporting:  we will publish the scorecard and updated to each initiative plan quarterly to the whole company, when we update them for Board meetings

As I said, there’s no single recipe for success here, but this is a variant on what we’ve done consistently over the years at Return Path, and it seems to be working well for us.  I think that’s the end of this series, and judging from the comments I’ve received on the blog and via email, I’m glad this was useful to so many people.

Fifth in my series on creating the best place to work – Being the best enabler.  As any management guru will tell you, as you have a larger and larger team, your job is much less about getting good work done than it is enabling others to get good work done.  What does that mean?

First, don’t be a bottleneck.  You don’t have to be an Inbox-Zero nut (but feel free if you’d like), but you do need to make sure you don’t have people in the company chronically waiting on you before they can take their next actions on projects.  Otherwise, you lose all the leverage you have in hiring a team.  Don’t let approvals or requests pile up!

Second, run great meetings.  Meetings are a company’s most expensive endeavor.  Sometime in a senior staff meeting, calculate the cost in salary of everyone sitting there for an hour or two!  Run good meetings yourself and don’t enable bad behavior…and in the course of doing that, role model the same for your senior staff members who do their own staff or team meetings.  Make sure your meetings are as short as possible, as actionable as possible, and as interesting as possible.  Don’t hold a meeting when an email or 5-minute recorded message will suffice.  Don’t hold a weekly standing meeting when it can be biweekly.  Cancel meetings if there’s nothing to cover.  End them early if you can’t fill the time productively.  Vary the tempo of your meetings to match their purpose – the same staff group can have a weekly with one agenda, a monthly with a different agenda, and a quarterly with a different agenda.

Finally, don’t run a hub-and-spoke system of communications.  Some managers who are a bit command-and-control like hoarding information or forcing all communication to go through them or surface in staff meetings.  No need for that!  Almost everyone on your team, if you are a senior manager, should have individual bilateral relationships and regular 1:1 meetings without you there.  The same goes for your Board and your staff, if you are the CEO.  They should have individual relationships that don’t go through you.  if you are a choke point for communication, it’s just as bad as being a bottleneck for approvals.

Enabling your team to give it their all is a gift to yourself and your organization as much as it is a gift to your team – give that gift early and often.

Self-Discipline:  Broken Windows Applied to You

Just as my last post about New Shoes was touching a bit of a nerve around, as one friend put it, "mental housecleaning," my colleague Angela pointed me to a great post on a blog I've never seen before ("advice at the intersection of work and life" — I just subscribed), called How to Have More Self-Discipline.  Man, is that article targeted at me, especially about working out. 

I think the author is right — more discipline around the edges does impact happiness.  But it also impacts productivity.  Not just because working out gives you more energy.  Because having your act together in small ways makes you feel like you have your act together in all ways.  As the author notes (without this specific analogy), it's a little like the "broken windows" theory of policing.  You crack down on graffiti and broken windows, you stop more violent crime, in part because the same people commit small and large crimes, in part because you create a more orderly society in visible, if sometimes a bit small and symbolic, ways.

I agree that the best example in the "non work" world is fitness.  But what about the "work world"?  What's relevant around self-discipline for professionals?  Consider these examples:

– A clean inbox at the end of the day.  Yes, it's the David Allen theory of workplace productivity which I espouse, but it does actually work.  A clean mind is free to think, dream, solve problems.  The quickest path to keeping it clean is not having a pile of little things to deal with in front of it, taking up space

– Showing up on time.  It may sound dumb, but people who are chronically late to meetings are constantly behind.  The day is spent rushing around, cutting conversations short — in other words, unhappy and not as productive.  The discipline of ending meetings on time with enough buffer to travel or even just prepare for the next meeting so you can start it on time (and not waste the time of the other people in the meeting) is important.  Have too many meetings that you can't be at all of them on time?  Say no to some — or make them shorter to force efficiency.  There's nothing wrong with a 10-minute meeting

– Dressing for success.  We live in a casual world, especially in our industry.  I admit, once in a while I wear jeans or a Hawaiian shirt to work — even shorts if it's a particularly hot and humid day.  (And even in New York, not just in Boulder.)  But no matter what you wear, you can make sure you look neat and professional, not sloppy.  Skip the ripped jeans or faded/frayed/rock concert t-shirt.  Tuck in the shirt if it's that kind of shirt, and wear a belt.  The discipline of "dressing up" carries productivity a long way.  Want to really test this out at the edges?  Try wearing a suit or tie one day to work.  You feel different, and you sound different

– Doing your expenses.  Honestly, I've never seen an area where more smart and conscientious people fall apart than producing a simple expense report.  Come up with a system for it — do one every week, every trip on the plane home, every time you have an expense — and just take the 5 minutes and finish it off.  Sure, expenses are a pain, but they only really become a pain and a millstone around your brain when you let them sit for months because you "don't have time" to fill them out, then you get accounting all pissed off at you, and the project's size, complexity, and distance from the actual event all mount

– Follow rules of grammar and punctuation.  Writing, whether for external or internal consumption, is still writing.  I'm not sure when everyone became ee cummings and decided that it's ok to forget the basic rules of English grammar and punctuation.  Make sure your emails and even your IMs, at least when they're for business, follow the rules.  You look smarter when you do.  Maybe — maybe — with Twitter or SMS you can excuse some of this and go with abbreviations.  But I wouldn't normally consider a lot of those formal business communications

I could go on and on, but I think you get the idea.  A little self-discipline goes a long way at work (and in life)!