Archive for the ‘Management’ Category

It’s time to get away

beachAs we approach August, and having recently taken some time off myself (some real time off this time – more on that experience in a different post) I thought it might be a good time to talk about the importance of vacation.

No – this isn’t going to be a post that waxes poetic about the importance of recharging and how the startup culture is totally fucked up in its crazy work ethic. All true, but I’d actually like to approach the question here from a purely business perspective.

For years I’ve encouraged startup execs (especially CEOs but this advice flows down the chain as well) to take time away. Completely away. No checking in once a day on email. No calling into the management standup. Just gone. If that’s a week, great. If you feel you can’t get away for that long, try a long weekend (but seriously – you can’t take a week off?). Just make yourself unavailable for a bit.

You’ll get some nice down time. But just as importantly, you’ll learn a lot about what isn’t working at your business and specifically where you’ve set yourself up as a bottleneck. What decisions don’t get made in your absence? What projects grind to a halt? Which managers step up and which are hand-tied without you around to bounce questions off?

Every CEO I know who has tried this has come back and made changes to how they manage their business based on what they learned through the experience. My guess is that you will as well.

July 31st, 2014     Categories: Management     Tags: , ,

Act Like A Leader

Act like the leader. Simple advice but I see companies not do this all the time. You’re the leader in this space – act like it. Don’t be ashamed, bashful or defensive about it. This doesn’t mean beat the “we’re the biggest player in town” drumbeat all the time. It means leverage that fact and all that goes along with it to do things that the industry leader does – highlight customers, talk use cases, get more press, hold a user conference.

Act big. You define the game. You are the leader, you set the rules, you define how the game is played.

Don’t react. Smaller (ankle biters) can sometimes bate you into being reactive. Avoid this temptation. Stay above the fray, stay on course (that doesn’t mean be blind to what you’re learning in the market or what others are doing, but don’t fall into the trap of chasing your smaller competitors around).

Stay innovative. You want to keep your competitors scrambling to keep up. You’re already ahead in the market so you can do this effectively. But only if you keep innovating and pushing the industry. Don’t give anyone else the chance to catch up.

Leverage your leading position. This isn’t always possible, but if there are things that you can do from a product perspective that leverage the much larger data set and broader use cases you have access to do them.

January 23rd, 2014     Categories: Management     Tags: ,

John Mack on the inside of the financial crisis

A friend recently sent me a link to a talk John Mack gave at Wharton that I think is absolutely fascinating. I’ve read a number of books and articles about the key events surrounding the financial crisis but I find these sorts of first person accounts so much more interesting. And I think Mack is an extremely engaging person.

I started my career at Morgan Stanley as an analyst in 1994 and actually had a great personal encounter with Mack that was probably my most memorable moment working in the banking industry. I was just starting my 2nd year at MS and was holed up in an empty office editing a draft of an offering document. Having undoubtably slept only a few hours the night before, I’m sure I was hardly the picture of professionalism with my slightly long hair, undone tie and stocking feet up on a chair, when in walks the head of my group, the head of the Investment Banking Division and John Mack. Mack says to me: “Do you mind if we use this conference room for a few minutes?” Startled, I respond something to the effect of: “Of course. I was just using this for a quiet place to review this document,” and started to gather my things. Walking out of the office, Mack calls to me and says: “I know a quiet place for you to read up on the 42nd floor.” (that’s the executive floor). I sort of chuckle but quickly realize that he’s serious. He introduces himself and picks up the conference phone: “Barbara [I'm making that up - I can't remember his assistant's name], Seth Levine is on his way up – can you please make him comfortable in my office.” Five minutes later I’m sitting in John Mack’s office. Alone. Reading (or trying to read, at least) and mark up a prospectus. And for context, at the time my apartment in NY was maybe 300 sq ft. Mack’s office was probably 8 times that size. I was sitting at a small round conference table, but the room also contained a sofa and chairs seating area, at least two desks and plenty of other things I was likely too nervous to notice. About 30 minutes later Mack comes back and proceeds to sit down and talk with me for probably 20 minutes. What did I study in school? how did I come to work at Morgan Stanley? how has my experience been? etc. The man is as engaging as he appears on this video. I can see why so many people are incredibly loyal to him.

July 6th, 2011     Categories: General Business, Management     Tags: ,

HR as a core competency

In the world of start-ups, HR is at the bottom of the bottom of the heap of priorities most companies are working on. The vast majority of companies think about HR as a process and compliance function, outsource it to 3rd party providers (payroll, benefits, etc.) and doing their best to forget about it. If there’s any focus on HR as a function it is around recruiting (also typically outsourced and generally treated as very episodic). Sure – there’s plenty of talk about "culture" – of success, of working hard, of some other superlative that’s not particularly interesting or differentiating ("we want to hire great people and expect them to be hard working and successful!" duh) – but little real work done to actually execute against that and almost never someone made responsible for achieving success in people management.

I have to admit that I hadn’t spent much (any?) time thinking about this for most of my career. Companies figured out how to make sure that everyone got paid and for the most part HR was completely forgotten about. But more recently Ive been realizing that HR is an important competency for start-up businesses. The proper sourcing, onboarding, continued training, assessment and in particular the management and retention of employees can set your company apart from your competitors and put you on a course for success vs. failure.

We’ve had a number of companies in our portfolio take the HR function extremely seriously with great results. They key is the elevating HR to an executive function, hiring someone outstanding to take on the roll, and empowering that person to make real changes in your organization. This shouldn’t be a process person. They need to be the go-to person for people facing organizational challenges, having issues working with other managers or problems getting resources for the projects that the company has prioritized. They should report to the CEO (not the CFO) and be included in all senior management meetings, etc. Finding this person isn’t easy, since many HR people have been trained to be nothing more than mere paper shufflers (sorry to the competent HR professionals out there, but you all know what I’m talking about). Empowering this person won’t be easy either – most of us have been trained to marginalize HR and not view HR professionals as peers (this relates to the last problem of finding great HR pros – most of us have never worked with one and don’t know how impactfull they can be).

Most companies pay lip service to how important their people are and how their team sets them apart. It’s worth thinking about how you prioritize this part of your business and who you have managing it.

November 18th, 2010     Categories: Company Creation, Management    

hiring as a core competency

Most startups spend plenty of time working on things like their product plans, requirements docs, market studies and the like. They are important aspects of running their companies and the kind of things that improve with collaboration and varied input from as well as from the iterative and inclusive process they typically require. You’d expect to find documents related to these sorts of activities on an intranet or company wiki and you’d expect that they’d be included in the occasional board package and discussed with advisors.

I’d suggest companies add something else to this list: a detailed overview of how they conduct hiring.

Most start-ups will tell you that hiring great people is one of the most important determinants of a company’s success. Why then is the process of hiring generally treated as a completely ad hoc exercise? In my view this leaves to chance and happenstance something that is much too critical to the successful operation of a business.  Here are some ideas I was recently kicking around with one of the companies I work with that takes the hiring process extremely seriously (and as a result has been extraordinarily picky about who they’ve brought on board).

  • Have a job description. I get it. You’re an early stage company and "people wear a lot of hats" around your shop.  Whatever. Get over that and write up a description of what you’re looking for.
  • There’s more to the job than the "to do" list. A good job description should include more than the daily task list for the job at hand. What kind of individual are you looking for? What kind of company culture are you trying to create? What personality traits are necessary for people to be successful at your business?
  • It’s not just the hiring manager’s job. I’m a big believer in having potential job candidates meet with people from across a company. This holds whether you’re in a 5 person start-up or a 10,000 person organization. I strongly believe the companies make better hiring decisions when more people are involved.
  • Try before you buy. While not everyone is open to a 30 day consulting gig before they come on full time, your interview process should include some kind of working session so you can get a good sense for how your job candidate works. This could be a product requirements meeting, a UI/UX discussion or building a sample financial model. It’s a great way to involve other people from the company even if they are not a part of the direct interview process and a well designed session should give you a good sense for how your candidate can contribute to the business.
  • Aim high. In the fast paced world of start-ups there’s a natural tendency to need to get everything done yesterday – including that latest hire.  As a result, it’s pretty easy to convince yourself that someone is "good enough" or "better than not having anyone".  Not true. Don’t settle in your hiring. It’s better to delay a product/release/market launch to find the right person for the job than to hire low and suffer the consequences. A bad team member brings the productivity of the entire team down.
  • Trust your gut. Isn’t this true of most things in life? It’s definitely true of hiring. If you have a bad feeling about someone, move on.
  • If it’s not working, call it. This is such a cliche, I almost didn’t include it. But it’s too important not to mention. It’s part of the old adage "Hire slow and fire fast" but if it’s not working out, it’s time to move on (see "Aim High").

Much of this post stemmed from a conversation that I had with one of the companies that I work with. At this company we had a long discussion with the entire company (at the time only 7 people but we’ve repeated this company wide conversation as we’ve grown) about how to avoid hiring mistakes and the stake that everyone around the table has in making sure that we bring only great people on board.

So talk openly at your company about your hiring practices and work as a group to come up with your own plan for how you’ll make hiring a core competency . . . and then put all that on your wiki so you don’t forget it.

 

  • January 29th, 2009     Categories: General Business, Management    

    Management

    It’s a VC cliche that great management trumps a great idea.  In this case there’s a lot of truth to the cliche. Over the course of my venture career I’ve been exposed to all combinations of teams and ideas and am constantly reminded of not only the power of great teams, but also of the pitfalls of poor ones.  We’ve thought about this a lot at Foundry and have pushed each other hard on investing only in people we’re ecstatic about as entrepreneurs (and resisting the temptation to "fix" management teams that are not A+ or fool ourselves into believing that an outstanding idea is more important than the people who implement it).  This last point is often missed on our industry – I think there’s an incorrect belief that a mediocre team can push their way through a great idea. While certainly there are cases where a company manages to a great outcome with a sub-par team, my own experience has been unequivocal.  While I’ve had a handful of cases where – with the benefit of 20/20 hindsight – the idea we were pursuing was only fair but where a fantastic management team has managed to guide a company to a good outcome, I’ve had almost no cases where we’ve placed a company in the hands of sub-par managers and reached a happy ending (as I mention above there are some edge cases where mediocre teams manage to a happy place, but to me these are just lucky exceptions). 

    It’s tempting at times as a VC to get behind an idea you’re really excited about with a team that you take on as a "project", just as it is easy to fall into the "here and now" trap when hiring a replacement CEO (or deciding not to replace an existing one who has grown a company as far as they can realistically take it).  Doing so is a mistake.  Bad management = bad outcome.  Not to mention that life is too short to work with people who aren’t great…

    November 11th, 2008     Categories: Management