The Management Team - Guest Post From Matt Blumberg

Now that I've completed three posts on The Management Team over the last three MBA Mondays, it's time for four or five guest posts on this topic. The first one is from Matt Blumberg, CEO of our portfolio company Return Path. I've been on Matt's board for over a decade and I've watched him develop into one of the finest managers I've had the pleasure to work with. Here are Matt's thoughts on this topic.


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.

#MBA Mondays

Comments (Archived):

  1. David Noël

    That’s a fantastic post and very timely. Thanks a lot for sharing your insights, Matt.

  2. Rohan

    Very nice, Matt. Thank you… :)Regd pt 4 – Do star developers expect to graduate into management if they do well? Your point seems to say that they can continue as star individual contributors. But, are the incentive systems aligned? Are they taking the proverbial step down if they don’t make the managerial cut? How do you manage that?

    1. mattb2518

      Our engineering team has a bit of a different management structure, and it’s a work in process.  There are lots of opportunities to lead on that team — some by being managers, some by being project managers on individual projects, and some by being technical mentors.

      1. Rohan

        Very nice. All the best, Matt! And thanks for taking the time to reply! 🙂 

  3. Anne Libby

    Matt, how many people did you have on board before adding Angela’s role?   And what changed once you had an “SVP People”?Great post.

    1. Dan Storms

      This is a good question. Hints at something I think about a lot:What are the threshold points in a company’s growth that indicate need for more “bureaucracy”?  (in the most positive sense of the word!)One suggestion:  when you get to 10 people, hire a firm to handle payroll, benefits, etc. Employees 11-25 will get less equity, and so will value that type of compensation more than 1-10.

      1. Anne Libby

        Repeatable events call for structure and process.   (Some people — it doesn’t sound like you — might call this bureaucracy.   It doesn’t have to be:  process can be used to free energy and attention to higher value/more creative pursuits.)

    2. mattb2518

      Anne, we probably hired Angela around 100-125 people – but I was looking to fill that role forever, probably going back to when we had 50.  Before Angela came, I filled the role myself with a more junior and transactional head of HR.  What changed when I had someone on board to do the Vulcan Mind Meld with was more of the same — more programs, more “employee first” in the culture, more people on the People team carrying out the mission — and also more time for me to do the rest of my job.

      1. Anne Libby

        Thanks so much, Matt. – posted via Engagio

  4. Bala

    Like the 12 step approach, the biggest challenge is to first acknowledge that there is a problem. Moving from technical/business development skill to Managerial skill set is a big transition and should not be taken lightly. I think you are doing the hard things and spending the right quality/quantity of resources to manage the transition which in itself show maturity. Good job. Fred should be luck to have you guys on his Portfolio… you know what they say about Luck! You work your behind for couple of decades, you become successful and then everyone says you were lucky 🙂 Good post, great timing.

    1. fredwilson

      i am very fortunate to be able to work with Matt and his team

  5. John Best

    There is best practice, and there is this. Awesome stuff. What a great template for growth!I’m particularly keen on 2 and 3. 360 degree feedback is (IMHO) invaluable, a mirror held up from the inside is just as important as one that shows external measures. For all the external metrics you get, without knowing how well you’re managing inside, how do you determine the potential you’re missing?I love the idea of paying back the benchmarking too. If these sort of behaviours are passed down and ingrained on the up-and-coming, then in addition to raising a new generation of savvy entrepreneurs, you’re creating a ready-made business community and centre of excellence.

    1. fredwilson

      i’ve already received a few emails asking for intros to matt so he can pay back the benchmarking. and its only 7:30am eastern time, a few hours after this was posted

      1. Rayhan Rafiq Omar

        It would be interesting to see how much time is allocated to the tasks of ‘management’ and keeping management on-track and focused on the right problems. Seems like it could be all-consuming and distracting…

        1. Eric Page

          If the alternative to a full time effort to staying on track is to run down the wrong road, I’m in favor of the full time effort.

      2. Lee Blaylock

        Fred, Perhaps once you get enough data from companies both in your portfolio and out so that the data is not attributable to 1 company or VC portfolio, you could use that data as a mini series on benchmarking and how to improve operational metrics (or just best practices on benchmarking in general)? I assume other readers would appreciate and find that data and perspective highly educational. I know I would.  Keep up the great work!

        1. fredwilson

          we like to do that by getting the people in the companies togetherwe had about 30 employees of various portfolio companies in our event space yesterday for the whole day sharing learnings, best practices, and showing each other their tools and tips

    2. mattb2518

      Paying it forward is key.  Life is long, and you never know where people end up.  I also find, selfishly, that teaching/mentoring helps me crystallize my own thinking about issues and topics, just as blogging does.

  6. jason wright

    If everyone in a company was paid the same salary would they naturally gravitate to the role best suited to their talents and skills, in contrast to a traditional hierarchy where employees fight and fake their way to the senior positions where the money is to be found, and in doing so damage the company’s internal effectiveness and external performance?

    1. fredwilson

      i think it is about more than money for many people. responsibility and control are other motivating factors for promotion

      1. jason wright

        If money as salary as an issue is taken out of the mix then the ethos of ‘team’ ought to work better. I’m interested in the creation of culture, the zeitgeist of the company, before management, and a culture that evolves management organically from within.A flat hierarchy is an oxy and as an idea no doubt mocked and misunderstood. 

    2. Kasi Viswanathan Agilandam

      IMHO 50-500 is too small for that to happen.If someone fighting and faking his way up in 100-500 people company. Then the DNA of the company has already transformed and eventually lead to cancer (DNA-mutation) and Ultimately will die.I understand it happens in large corporation like having employees 50K and above. And the Good system in place takes care of removing those bad mutation.One of the greatest examples of a superb process oriented company is GE … they have more than 300,000 or 400,000. Here i am talking about product company not services … where easy measure is money spent/money collected /employee.

    3. LE

      “If everyone in a company was paid the same salary”Even in organizations where people volunteer, or there is no financial remuneration, you will find people play games to get ahead and gain power.

      1. jason wright

        Why do you think that is?Every position should come with ‘power’, the power of self empowerment. A position without ‘power’ is the reason for games.

  7. Jeremy Berman

    Great post Matt!  I particularlyagree with #2.  Accountability is a hugepart of scaling a management team.  Theexecutive team needs to recognize that growing a company is a learning processfor everyone and what worked for a 50 person company may not work for a 300person company.  The best way to do thatis to receive 360 feedback and ultimately hold one another accountable. 

    1. mattb2518

      My head of sales always says “Feedback is a gift, whether you want it or not!”

      1. fredwilson

        Awesome quote from Anita

  8. tgodin

    Terrific post and a cool story.  My guess is that Return Path is a great place to work.  A couple of questions come to mind:1.  Of the senior management team in place now, how many are “home grown?”  Matt mentioned that the core senior mgmt team is intact, but what percent of the entire mgmt team resulted from this process of evaluation and training?2.  Have the results here changed the minds of skeptical board members (assuming there were some as the post suggests)?

    1. fredwilson

      i was one of the skeptical board members and consider my mind changed!

      1. Lee Blaylock

        True, to go from 10-250 is a rare feat, but the chasms to cross at 1,000 and 5,000 are much more challenging as < 1,000 employee companies are still very small.  I was employee #244 at Dell before we went public in 1988 after we’d finished $59mm in sales.  I left 7 years later and the company had $4.5b in sales and 10,000 employees. And i had 17 bosses in those 7 years!  It was a true case of “career compression.”  Every day was a learning experience.

    2. mattb2518

      Sorry for the delay in responding.1. More than half home grown.  One acquired, two hired in.  Everyone else around for 9+ years.2. Yes (see Fred’s comment below)

  9. Trish Burgess-Curran

    Absolutely fantastic post and, most important, great place to work!This is the best way to grow a company:  Incentivising and supporting your own talent first, then filling out from the outside as needed.  I am sure that trust and loyalty are sky-high and that is a must for great teams!

    1. mattb2518

      It is, Trish.  Our metrics around recruiting and retention are very strong.

  10. William Mougayar

    These 5 points are ones you’d expect to see in larger organizations and take for granted. It’s great to see a once-startup to have grown and reached this stage where they have all this in place, and a strong people culture to back it up. What’s also interesting is that except for #5, these are lower priorities for an emerging start-up, although the CEO knows that they’ll have to address them one day. Great model for how a “mature” startup has become a real company!

    1. mattb2518

      William – I wrote a post that addresses the criticality of doing this early in the company’s existence:

      1. William Mougayar

        Thanks Matt. I will read it. – posted via Engagio

  11. John Revay

    Fred & MattReturn Path seems to be a very well managed and mature portfolio company, can either of you share any thoughts on the company’s exit/liquidity strategy?I will plan to take some time to read up on Matt’s Blog – Looks like some great topics that he talks about.edited: added Matt to the comment

    1. fredwilson

      i suspect they will go public at some point

      1. John Revay

        It sounds like you really enjoy working w/ Matt and the team @ Return Path. I recall you referenced Matt & Jack Sinclair when you did the MBA series on budgeting a ways back Circa MBA post 16 to 18. They sound like wonderful people to be associated w/.- posted via

        1. mattb2518

          John, we are building to be an independent company for the long haul.  We think our solutions have a really large addressable market, and we are having a great time doing what we do!

  12. awaldstein

    Great post Matt.This is I’m sure an exception more than a rule. It takes a great leadership to make that happen.You can share leadership but it’s inspiration has to come from the CEO. Kudos to you Matt! And to the team for this exceptional success.

    1. John Revay

      Top down

      1. awaldstein

        That captures it. The more I think about this post the more unusual and noteworthy it is to me.I believe that smart motivated people can learn new things of course. But in my experience, not everyone has that management DNA. Remarkable leadership and a unique team to start with. 

        1. Kevin Friedman

          Speaking of DNA… It still amazes me how 10+ years after an organization is started… you can see how ORGANIZATIONAL faults/limitations are a direct result of the leader’s/founder’s PERSONAL faults/limitations. The leader’s personal DNA becomes inextricably linked with organization’s DNA. What a good reminder to be aware, learn from, and compensate for our faults and limitations.

          1. Donna Brewington White

            This is so very true.  I have learned the hard way not to ignore the CEO’s personality in understanding an organization’s culture no matter how large.   

        2. mattb2518

          Thanks…I’m not sure it’s remarkable, but it does take focus and an orientation around getting this stuff right to make it happen.

  13. Kevin Friedman

    I just finished reading Matt’s post on Return Path’s Core Values. They are great.It got be wondering… has anyone observed a correlation between the success of a start-up and the early development/communication of their values?I guess the “values statement” of a start-up is not as sexy as their shiny mobile app or an impressive list of investors… but I wonder if it’s actually more important in the long run…

    1. Cynthia Schames

      I think it’s more important in the long run. Not only to have a values statement, but to actually eat, breathe, and sleep that values statement.As @Kevin:disqus says downthread, the core values of a company tend to be inextricably linked to and reflective of the true personality of the founder(s).  That can be a double-edged sword, as I can fully attest. 

      1. Donna Brewington White

        Word.  Everything you said.

      2. Tom Labus

        And to maintain those values when things don’t go as planned.

        1. Cynthia Schames

          Oh, AMEN!!

    2. jason wright

      I like Core Value 5.11 – hackneyed.

      1. Kevin Friedman

        Did you see his expansion of #11:…It can be hard not to sound hackneyed when writing these value statements  since there is often a lot of overlap. I guess the important thing is whether you REALLY believe and are “one” with the value.

        1. jason wright

          I have now. Thanks for the link.The word ‘work’ should be eradicated from the world and replaced with something more inspiring. I’m thinking about what word I would choose.What word would other people here at AVC choose?

          1. Kevin Friedman

            Haha! I love the idea of getting rid of the word “work.” Let’s start a movement! Actually, one of the values of the company I am starting is “Follow fun and aliveness.” I’m willing to risk telling our employees, partners, vendors… whoever… that we should let “fun” help guide our decisions.

          2. jason wright

            My brother from another mother.I’m editing my previous comment to add a footnote.

          3. Donna Brewington White

            I happen to think that “work” is a wonderful word.  But then I am strange that way. ;)cc: @Kevin:disqus 

          4. jason wright

            ‘kworky’? 🙂

          5. Donna Brewington White

            That’s good!Sent via mobile

        2. mattb2518

          A lot of these sound like “motherhood and apple pie.”  It’s about how they actually play out in the real world.

      2. mattb2518

        I like all my children…but running a learning organization is awesome.  As we like to say, when we point fingers, we point them at ourselves, not others.

    3. mattb2518

      YES YES YES.  NO question about it.  Good values withstand the test of time. A good app is dead inside of 12 months.

  14. Mark Essel

    Appreciating the difference between “I can build a product” to “we can build a company” is a prize well earned. Thanks for the guest post Matt, bookmarking this gem for safe keeping.

    1. karen_e

      The only thing wrong with this post is the end came too abruptly. It could have been longer! Great stuff.

      1. mattb2518

        I need to write short posts so I can spend time managing the company!  :-)Seriously, thanks for this, and I write about related topics all the time on my blog if you’re interested (

    2. Cynthia Schames

      @VictusFate:disqus  you have such a great point. This is one of my biggest frustrations as I work with and inside startups. They pretty much all understand that a great idea is a foundation, great execution of the idea is imperative, but running a company often seems to be an afterthought. Far too many young companies believe “if we build it, they will come”, and that’s only true of a very few things in life.  The idea of actually setting out to manage the company in the best way possible never crosses many founding teams’ minds, and when it does, it’s often met with scorn because that’s the way “old school” companies do it.  Well, there’s a reason many old school companies are still around. Because they grow their management team and run their business thoughtfully, not based on who’s the most popular at happy hour. Thank you Fred and Matt for bringing up this issue and showing that good business can be cool too.  MBA Mondays indeed. 

      1. John Revay

        I work w/ a guy (he is also one of my mentors in life) – we often talk about new products/ services.  He breaks a start ups into three phases;ConceptProductCompany

        1. Cynthia Schames

          So simple, yet so profound. 

    3. mattb2518

      You’re welcome, Mark…there is definitely a difference.  Remember also that this post was written after 12 years of experience and a lot of errors along the way!

  15. JLM

    Fabulous post and invaluable coming from the “real world” warts and all.  It speaks to your ability to condense your learnings into digestible bite sized nuggets of real wisdom.What rings through is that the word “management” is being used to characterize things which are really “leadership”.  There is a good leader amongst all those managers.Continued good luck and well played!

    1. Tom Labus

      It’s good to see management not getting whacked.

    2. Donna Brewington White

      I was thinking the same thing about there being a lot of leadership coming through in their management. Important to be able to distinguish between the two. Both are valuable in and of themselves but mistaking one for the other can be a dangerous thing; powerful when combined whether in one person or in a cohesive team.

      1. JLM

        There is a quiet leadership style which does not require ruffles and flourishes to celebrate itself — it is the kind of leadership which insists on the development of specific, measureable, attainable, realistic, temporally constrained goals while ensuring that there is a empathetic and sympathetic framework in which to work together.There is a style of leadership which challenges one while sending the team out to conquer but waiting at the aid station w/ bandages when sometimes it does not go so good.This company seems to have that.

        1. mattb2518

          Wow thanks again.  I think that’s our style – we try to cultivate that kind of leadership, for sure.  And to the earlier point about the distinction between leadership and management, the kind of leadership style JLM describes above is most closely aligned with good management.  The “ruffles and flourishes” style is usually the type that “needs a good COO” to manage the details and can often, as a result, be divorced from operational realities too much.

    3. mattb2518

      Thanks, JLM.  Great post from you today as well.  There’s always a fine line between leadership and management.  The best of the best do both well.

  16. Dale Allyn

    Great post. Thanks for taking the time to share your process here, Matt. 

    1. mattb2518

      Thanks, Dale…absolutely!

  17. Tom Labus

    Thanks, Matt. Great post.It’s wonderful to see “management” spoken about in such a positive and insightful way.  It’s the core of every business whether two employees or 10,000.  And without it no company is going to move forward.How is your internal selection process for candidates done?  A star in one job, like a great salesperson, can be a total bomb in a management position. I’ve always found that those employees that can put ego aside and think team are the best candidates. 

    1. mattb2518

      100% agree.  Ego has to be set aside.  Internal candidates are VERY tough, especially the ones who raise their hands for management jobs “because they’re supposed to,” even though they don’t have any aptitude or interest in management.  Ultimately, we work hard to give those candidates good and actionable feedback when they don’t get a role.  We also invite non-managers to join management training sessions from time to time so they can practice skills in advance of needing them.

  18. Aruni S. Gunasegaram

    This is well written.  I have had a couple of experiences recently of e-teams not appreciating how much time & dedication it takes to effectively manage people.  I just did a post called Leadership, Management and Unicorns about some of my observations.  To me, one of the key skills of being a great manager is the ability to listen and interpret what your peers and co-workers are trying to say.  We all communicate things differently and getting people to move in the same direction on a consistent basis is not and easy thing to do.

  19. Alex Murphy

    Great post Matt.  I think point #1 is the key to growth.  It really comes down to being humble about the fact that we don’t know everything, and that we require coaching, and we need to seek out those coaches that can help us.  Then the hard part … we have to actually listen.

    1. mattb2518

      You certainly can’t do the rest of it without #1, that’s for sure.

  20. James Ferguson @kWIQly

    I find it really helps thinking to invert the “management pyramid” …At the top is the sales funnel – representing your clients.One tier down is your front-line staff – supporting your clients.Below that is back office, HR, IT finace – pretty much everyone you would swap out before you would swap out your client base.Then there is the management team – sole role to support the rest.Finally there are the founders – their role is to demote themselves further.Interesting that Demote sounds like demut (german for humility) and humility like humus comes from earthliness.Bottom line – if management have their heads in the clouds rather than being well grounded  they aren’t in touch with the roots that feed nourishment.Of course I say this from a team of three – but I may as well be ready 🙂

    1. Donna Brewington White

      “Of course I say this from a team of three…”Oh, but what a GREAT time to be saying this!

      1. James Ferguson @kWIQly

        I just “liked your comment” – then I realise I really liked your comment, so here I stand before you bowing deeply from the waist.THANK YOU

        1. Donna Brewington White

          You are very welcome.  Thank YOU for the inspiring example.

    2. fredwilson

      jerry colonna taught me to think of management that way

      1. Kevin Friedman

        Me too. :-)http://www.themonsterinyour…

  21. ShanaC

    Do you think you could scale back outside hires using the same process you use on yourselves as senior management?

    1. mattb2518

      ShanaC – not sure I follow the question…

      1. ShanaC

        Hi mattYou mentioned in your post that you are very rigorous about getting outside hires rather than promoting from the inside as seen from point 5 “We are hawkish about hiring in from the outside.”Is there a way to implement what you say without leaning on outside hires so much by using the same techniques described in 1- posted via Engagio

  22. jason wright

    Matt, how often does your senior management team meet together as a complete group in a real room?

    1. mattb2518

      Not often enough.  Our geographic diversity is a strength AND a weakness; in this case, a weakness. Four times a year, we do a 2-3 day offsite with my whole senior team.  Once a year, we all spend a week together traveling to all offices to do an annual meeting/holiday party roadshow.Other than that, there are times where we get a lot of us together (Board meetings, monthly strategic meetings), but probably not 100%.

  23. LE

    Returnpath doesn’t appear to have anyone in charge of marketing. This seems to be handled by the SVP of sales (who from a quick check comes from a sales and not a marketing background (see linkedin))…Why no CMO or VP of Marketing?

      1. LE

        From looking at the linkedin profile it almost seems as if Chuck Drake is a consultant and not an employee.Even though the job of “VP of Product Marketing” that you gave a link to says “Reporting to the SVP of Marketing” indicating there is one, if that is a current need of course.The “team” page on returnpath doesn’t list Chuck. Why not?But according to his linkedin profile he’s been there 1 year, if that is correct.He also operates a side consulting practice and shows a public email address Some people do that to build contacts but somehow I don’t think that’s the case here.On linkedin, this person is listed as “VP of Product Management” btw:…I’m wondering whether Chuck is still there and if so why he doesn’t appear on the “team” page if he is a SVP.

        1. Donna Brewington White

          LE & DBW Detective Service for hire.  Anyone?

          1. LE

            Actually, one of my specialties. If I had more time I would have picked up the phone and put the issue to rest for good. I’m hoping for an explanation or correction from the company.

          2. LE

            By the way Donna the link to your site/blog isn’t working.”Sorry, the blog at has been removed”

          3. Donna Brewington White

            I am very proud of that. I inserted a script to blackout for the SOPA protest and they shut it down. Supposedly it is under review and should go live again. Guess I should follow up.Sent via mobile

        2. fredwilson

          he’s a recent hire

        3. mattb2518

          Sorry to be late to the thread.  Chuck is here, full time, and kicking ass.  Just relatively new, and we don’t have a new round of headshots done yet. Anyone who can come up with a good VP Product Marketing for us is a hero in my book.

    1. fredwilson

      the have a strong VP Marketingbut it was the most difficult spot for matt to fillhe’s got it filled very well now

  24. Reddy_s

    Great Post.I see comments from members wondering how does the Management Model described by author works in big companies like GE  etc..In this day and age of ‘Lean Product Development’ I would argue there is NO 30,000 employee company. A big company is like Google with 30,000 employee can be viewed as combination of these SUB-Companies each with 2,000 to 5,000 employees.1) Search2) Google Appps3) Local/Maps4) Mobile/Android 5) …..   …..All these sub-companies/divisions were given much autonomy to operate like independent companies from Product/Management point of view. They all can pretty much can apply what was mentioned in Matt. post .My understanding is matured companies like Google/Amazon/Apple/FaceBook are applying these Management principle mentioned in the Article to a larger extent ( may not be as best as small 500 people company )That is why these agile companies Google/Amazon/Apple/Face Book are successful beyond their INITIAL Success ( as opposed to Yahoo a one time Trick )

  25. Esayas Gebremedhin

    avc is turning into a wiki for entrepreneurs. interesting guest post.

    1. Donna Brewington White

      AVC as “wiki for entrepreneurs” — love it!Have you checked out ?  

  26. EDM Machines

    What happens when a management team is soooo stuck in their ways that the company is suffering? What is a good way to present new ways of doing things without jeopardizing your job?

  27. Donna Brewington White

    You are turning Mondays into a favorite day.  I love this series and this post!

    1. fredwilson

      its even better when i don’t have to write the post!

  28. Donna Brewington White

    The phrase “War for Talent” bothers me so much because it generally refers to recruiting.  That is NOT where the war is fought — a skirmish at best.    What Matt describes here is exactly the way to attract the best people and more importantly to KEEP them.  This is where the real “war” is fought — in strategically building a culture and building the type of smart leadership and management team that high performers trust, respect, and want to work with.  I cannot remember the last time I recruited someone away from a company with the promise of a higher salary. Matt, this is a really exciting and inspiring post.  You are making your recruiters’ jobs much too easy.  

    1. William Mougayar

      Totally agreed with you Donna, but I do think War for Talent has a valid connotation. When all things are equal, i.e. when you have great companies all around, and you’re recruiting from one into another, then there is a War for Talent. You have to go beyond selling/exposing your culture.

      1. Donna Brewington White

        Thanks for the check, William. I didn’t make my point well.  I believe the true war for talent involves retaining talent rather than merely acquiring it.I admit my “point” is somewhat idiosyncratic.  You cannot retain what you have not acquired.

        1. William Mougayar

          “You cannot retain what you have not acquired”…or what you once acquired, then lost. That can happen. As you well know, employees leave mentally first, physically second. – posted via

          1. Donna Brewington White

            Insightful, William.  

    2. LE

      “I cannot remember the last time I recruited someone away from a company with the promise of a higher salary.”I have some theories on why that is the case but I’m wondering if there are any formal studies, analysis, or articles that examine that in terms of human behavior or psychology. While I’m sure much of that relates to the individual and the company, by the way you made the statement it seems like once people are in orbit it takes quite a force (either a very large salary increase/promotion or moderate to considerable discontent) to get them to want to make a change. Then it seems to snowball.

      1. Donna Brewington White

        What I meant by that statement is that when people are motivated to leave a company, it is often because of discontent with the culture and/or management — at least in my experience — rather than because of something like compensation.  I imagine it would be difficult to recruit from a company like Return Path given their management culture, regardless of their compensation structure unless it was incredibly low.  I recently had a client with candidates willing to take a cut in pay to work there because of the culture — coming from companies with well-known and enviable brands.  You would probably be shocked if I told you the name of the client versus the names of the companies we had candidates from.  My client was also surprised, but this client has taken great pains to create a great culture and this is paying off in their recruiting and employment marketing.  The main reason that the top three candidates for this (VP) role were willing to talk to me is that they felt undervalued in terms of their contribution and limited in their impact in their current companies.       I am impressed that Return Path’s SVP of People is now also head of Client Success because in the case referenced above, a mantra I repeated during the search was that the company’s customer experience and their employee experience were intertwined (the company is known for its customer experience.)  Caveats: (1) I must be careful of oversimplifying something that is generally complicated — a person’s motivations for leaving one company and joining another.(2) I’m referring to executive level recruiting in most of the comments that I make and motivations change at different phases of “career actualization.”  (Yes, I made up that phrase — just now.)

        1. mattb2518

          That’s exactly why we put Angela in charge of both functions.  Hospitality is at the root of doing both things well – making employees feel welcome and engaged…and doing the same for clients.

    3. fredwilson

      retention is a high return investment. great point donna

    4. Anne Libby

      Great points, Donna.   And from a manager’s perspective, I don’t think I’ve ever seen a current employee asking to be paid more who wasn’t asking for more than just money.  (And by the time someone says, “Pay me more money or I’ll leave,” they’re generally already gone.)

      1. Donna Brewington White

        This is a really interesting observation about the motivations behind asking for “more money” — do you find that this is general knowledge among managers?  As a recruiter, I have learned to quickly assess how recruitable someone is in terms of their current satisfaction level, but companies would be smart to have someone on the inside determining this before someone like me figures it out. As you have said and has @wmoug:disqus  has said in different words “employees leave mentally first, physically second.” This is important for managers to know.

        1. Anne Libby

          That’s a hard question to answer, because individual variation is huge in the management population. It comes up in a lot of my conversations with leaders — and to be honest, I’m not entirely sure how I learned it myself. The required competencies are a combination of inquiry and listening. It takes a spirit of curiosity to consider what someone might really want when they ask for something.- posted via

    5. mattb2518

      Donna, our recruiters are awesome…but I do think this makes their jobs easier.  Last year, when we had one recruiter company wide for the bulk of the year, we filled over 150 jobs and brought over 120 new people into the organization!

      1. William Mougayar

        That’s an amazing achievement. You have probably honed-in your On-boarding process to a T?- posted via Engagio

  29. panterosa,

    Connecting with people, with ease, grace and effectiveness is a deeply important skill in making things work. I admire those who have this skill for the combination of acute seeing, hearing, feeling and how they reach in and touch, guide and connect with the doing and the doers. Being with those who keep consistently calibrated to that level is to enter a new type of comfort zone. The zone is where the best work gets done, and where people can shine.

  30. William Mougayar

    In light of this post, it is fitting to remind ourselves of the HP Way, in my opinion as the mother of all such corporate principles that stand the test of times. As a 14-year HP veteran having been schooled in these principles, it is my goal to carry them forward into my startup. Here they are: We have trust and respect for individuals. We focus on a high level of achievement and contribution.We conduct our business with uncompromising integrity. We achieve our common objectives through teamwork. We encourage flexibility and innovation. And they were tacked on by HP’s Corporate Objectives:1. Profit2. Customers3. Field of Interest4. Growth5. Employees6. Organization7. Citizenship

    1. LE

      “We focus on a high level of achievement and contribution”I’ve consistently bought HP since the first inkjet or calculator whenever I could. I was sorry to hear the negative press about them over the last few years. It’s also sad when a company that builds quality products such as HP has to compete on price with others selling cheaper imitations to those who don’t know or care about the difference. 

      1. William Mougayar

        I worked there during 1982-1995, some of HP’s best years. HP started to go downhill with Carly’s arrival and when they spun off Agilent. – posted via

    2. Tom Labus

      Does those rules apply to the Board too??

      1. William Mougayar

        They used to 🙂 As I said, it all went downhill after Lew Platt left.- posted via

      2. mattb2518

        It should.  A good board is run with the same kind of culture and leadership as the company.

  31. Jen Berrent

    Great post.  From what I have seen, step 1 – admitting you have a problem – is the hardest step.  Not only because high achievers do not like to admit “weakness” but frequently because “management” is not seen as a skill.  Many entrepreneurs (and bankers, lawyers, consultants, etc.) think that managing people is just something everyone can do and does not require attention and effort.  Once talented people decide to focus on managing and gaining skills, the likelihood of success increases tremendously (even if steps 2-5 may vary).

    1. Anne Libby

      Learning to manage is like learning any other complex skill — playing the piano, mastery of a sport, a martial art — you’ve got to practice.   And I agree, one who has the will to learn will do so.

  32. Brent M

    Excellent post and great series.Could anyone recommend any of their favorite management books?Thanks in advance.

    1. Tom Labus

      I re read “Into Thin Air” every few years.Although, this is a climbing book (96 Everest climb) the core story is how people deal with unexpected events and chaos which for me is what business is all about-sustained chaos.

  33. narikannan

    Great post, agree with everything Matt says – except for one thing about promoting only from within! As you grow, unless you get some fresh blood from other companies every now and then at senior levels, you may start instituitionalizing your own Kool Aid, everybody starts drinking it and that will be the only Kool Aid you know. Unfortunately, that’s the kind of thing that may prevent companies from reinventing themselves when disruptive innovation shows up – DEC when SUN showed up, Kodak when electronic imaging showed up, Yahoo when Google and facebook showed up. With smaller companies the effect can be devastating, at least larger companies are like huge ships that have some time to make corrective actions!

    1. mattb2518

      Sorry if you got the impression that we only promote from within.  It’s not possible or desirable to do that.  But we do have a “promote from within” culture, meaning that when there’s a new job open, we almost always look to the inside *first* before going to the outside.  But in a rapidly growing business, there’s no way to meet all management hiring needs internally, and yes, new blood (if you’re careful in interviewing/hiring) can be essential to scaling as well.

  34. Michael Diamant

    Wow what an amazing post and quite humbling as well.  Matt and team really seem to walk the talk and take such a disciplined and strategic approach… finding that role for yourself in your own company where you still bring appropriate value to a team in the hundreds is something you lose sleep over.  Actually it’s being able transform yourself again and again to become the right manager at 25 people, than 50 than 100 etc that creates so much doubt (yet provides so much excitement and variety)…

    1. mattb2518

      Thanks so much, Michael.  The ability to reinvent is completely central to scaling.

  35. paramendra

    Excellent post! Fred should not have to do all the heavy lifting. 

  36. Arvid

    Why such an inflammatory comment?

  37. Morgan Johanson

    Looking at how successful companies structure their management, so basically learn by example.