Posts from management

Reviewing The CEO'S Performance

The CEO is an interesting case when it comes to performance reviews. They manage an entire company and they specifically manage the senior leadership team. They do not have a single reporting supervisor. They report to a Board. And that Board may, like the team they manage, have differing views on their performance.

Also, some executives are strong at managing down but weak at managing up. And the reverse is often true, where an exec is great at managing up but weak at managing down.

A failure mode I have seen in CEO reviews is when a Board thinks a CEO is doing well but they are not and that CEO gets a strong review. I’ve seen the opposite when a CEO manages up poorly but down well and they receive a weak review from the Board.

Given all of that, this is what I have learned to do.

1/ Schedule a CEO review cycle with a regular frequency and stick to it.

2/ Review compensation at the same time that performance is reviewed. If performance is reviewed more than once a year it is fine to only review compensation on the annual review cycle. Do not review compensation without doing a performance review at the same time.

3/ Have a third party (a CEO coach or some other skilled facilitator) interview all of the CEO’s direct reports and all of the Board members.

4/ I like to have the facilitator interview the direct reports first and provide that data to the Board prior to interviewing the Board members. This ensures that the CEO’s performance inside the Company informs and colors the Board members’ feedback. This is the best way I have learned to mitigate the “manage up well, manage down poorly” issue.

5/ The third-party facilitator compiles a review report and shares it with one or more Board members. If there is a Board Chair, she should be part of this part of the process.

6/ The Chair and possibly one other Board member (the Comp Chair if there is one) meet with the CEO, go over the performance review in detail, and then address compensation in light of the review.

This is a time intensive process and must be done thoroughly and with care. The stronger and more experienced the third party facilitator is, the better. You cannot skimp on this work. It might be the single most important thing a Board does on an annual basis.

Feedback is so important to ensure that a leader develops in the role and functions at a high level. In my experience, CEO feedback is often an afterthought because no single person owns the responsibility. If there is a Board Chair, she owns this. But otherwise, it can be a shared responsibility that falls through the cracks.

As Board members, we can’t let that happen. We owe it to the CEOs we work with to give them clear, regular, and accurate feedback. And this process (above) works well to do that.

#management

Working Virtually

Many of us have been working from home or some other remote location for over three months now. We have learned a fair bit about this approach to work and we have more to learn in the coming months. I don’t think we will be done with remote work until the pandemic is over.

It has taught me three conflicting things:

1/ I can be a lot more productive working remotely than many of us believed before the pandemic

2/ Those with kids at home don’t experience the same productivity boost

3/ I can’t wait to be back working together in person

On the first point, I am able to get a lot more done in a day working remotely than I am able to do in the office. I now regularly do days with ten to twelve meetings/calls/videos. I don’t think I was able to do that in the office.

I have also found it easier to find time for work that requires a lot of focus (writing/modeling/analyzing/etc).

And I’ve been much better at keeping my inbox and other communications up to date and current.

And I can do all of that while making time to go biking, do yoga, meditate, etc.

It is a revelation to me how productive I can be working remotely, particularly when our entire team is doing the same.

All of that said, my friends and colleagues with kids at home have not experienced the same productivity boost. They get some of the benefits of working from home, but they also face distractions, double duty, and more. If we cannot reopen schools in the fall, it is going to be a very challenging time for parents.

It is also the case that I miss the feeling of being together with my colleagues. Today we will spend four to five hours on Zoom in our weekly team meeting. It is way more enjoyable doing it in person around our conference table.

Reconciling these conflicting realizations will be the key to what happens when the pandemic ends. I am certain that we will all want to retain some of the convenience and productivity that comes with working remotely. But I am equally certain that we will want to work together again.

#Current Affairs#management

Board Diversity

This is a topic of great importance and one that we in the tech/startup sector have not done a good job with. We wait until a company is ready to go public and then address it. While that is better than nothing, it is not good enough.

The board diversity problem is a symptom of a much broader problem around lack of diversity in founders that get funded and lack of diversity in VC firms. Most startup boards are made up of a few founders and a few VCs. No wonder you have no diversity on the board.

Here are some suggestions for addressing this situation. I am working on this in my portfolio and USV is working on this in our broader portfolio. We are not control investors so this is a process of advocacy and persistence. This post is a part of that effort.

1/ When a startup board is created, there should be two independent seats on it. Day one. I know that will mean that founders will be unable to control their boards early on but these “independent seats” can be nominated by the founders to allay those concerns. And founders should put diverse people (gender, race, life experience, etc) into these independent seats.

2/ VCs should accept observer seats instead of board seats when they invest in companies. Boards don’t need three or four VCs on them. One is often enough. Two maximum. Instead VCs should negotiate for an observer right and the ability to nominate an independent director. And they should nominate diverse people for those seats.

3/ There should be term limits on board seats. Nobody and no investor should have the right to sit on a board forever. I could argue that in some situations, the founder might be the exception to this statement. That does not mean a valued board member should step down. That valued board member can always be asked to serve another term. What term limits do is raise the question about whether a person is the ideal board member for the company for the next few years. Often the answer is no.

4/ We need more resources like The Board List, Athena Alliance, and ELC to surface great board candidates. One of the many problems with boards that aren’t diverse is that they are not well connected to diverse candidates.

5/ We must commit to addressing this issue and make it a priority. Board development in general is not a high priority for founders. They are rightly focused on their company, their products, their customers, and enormous challenges of building a business from scratch. But boards are important. They need to be a priority and a diverse board is a better board for everyone. So we need to increase our efforts here.

Ten years ago the the tech/startup/venture industries started to make gender balance a priority in management teams, boards, and the venture capital industry. While we are not where we need to be, we have made good progress. We can do the same with diversity across the board. We can use the same approaches and the same persistent approach to the issue.

I am committed to making this a priority with the founders and companies I work with and I hope that all of you will too.

#entrepreneurship#management#VC & Technology

Leading Virtually

Most (all?) of our portfolio companies have been working remotely for over three months now. So have we at USV.

The initial experience with remote work has been mostly positive. The typical comment has been “we are doing a lot better than I expected.” Productivity is up in some places, down in some places, but overall our portfolio companies have adapted to the remote work model quickly and well.

But three months in with no end in sight is starting to wear on companies and I am sensing that the challenges are mounting. The trio of crises we are experiencing; a public health crisis, an economic crisis, and a racial injustice crisis, has everyone on edge and overwhelmed.

Leading a company in this time is very hard. My job mostly entails talking to our portfolio company leaders and I am hearing that they are yearning to be able to walk the halls, look people in the eyes, stand in front of the team, and talk to them face to face. But that is not happening any time soon.

So leadership in this moment means giving everyone a sense of belonging, letting them know they are being heard and that they are valued, and doing that via Zoom, Slack, email, and other software tools. This is uncharted territory for most leaders.

Here are a few things I am hearing that are working for some:

  • More frequent short checkins with the entire team
  • One on ones with people you don’t normally do one on ones with (skip one or two or three levels)
  • Leaning harder on the leadership team to help lead the company
  • Giving more time off to the team (shorter days, shorter weeks)
  • Celebrating more (birthdays, anniversaries, accomplishments, ship dates, etc)
  • Being yourself

I am curious to hear from all of you on what else is working in this challenging time. Please reply below with the “Discuss On Twitter” button and share with me and everyone else. And if you’d like to see everyone’s suggestions, you can click on the “View Discussions” button.

#Current Affairs#management

Leadership Has A Price

We’ve been watching the ESPN series The Last Dance along with something like 6mm other fans who are watching it right now. It is a reminder of how dominant Michael Jordan was in the 90s and what a special player he was.

I woke up thinking about the last three minutes of episode 7 which dropped last night.

Michael is asked if his intensity has come at the expense of being perceived as a
“nice guy.”

He gets pretty emotional and says “Winning has a price and leadership has a price. I pulled people along when they didn’t want to be pulled, I challenged people when they didn’t want to be challenged. I earned that right.” … “Once you joined the team, you lived at a certain standard that I played the game. I would not take anything less.” … “One thing about Michael Jordan is that he never asked anyone to do anything that he didn’t do.”

It’s a great piece of television and captures the essence of the man, how competitive he is, and how emotional he is about it all.

It also captures the burden of leadership and what is required to get everyone to commit to each other and be the best that they can be. Leadership is not being liked. Leadership is being respected and followed.

And the last three minutes of episode 7 capture that so well.

#management

Growth

One of the great joys of the work I do is I get to watch the leaders of our portfolio companies grow over time.

I’ve had a number of moments over the last few months where I got off a call or a meeting and thought to myself “wow, she’s a new person.”

Growing as a leader takes time, mistakes, failure, feedback, and a lot of work. You don’t magically show up as the CEO and you are good to go. It’s not like that at all. The authority to make the final call doesn’t mean that you are good at it and that people will line up behind your decisions.

It is a process and like all processes, it requires time and patience. But for those who are committed to personal growth, there is a path.

Two syndromes I see quite frequently are “deer in the headlights” and “I’ve got this.” They are both tell tale signs of a leader who isn’t there yet.

Deer in the headlights is pretty obvious to everyone. The leader just doesn’t seem steady and solid. You can see it in their eyes. I like to provide a leader with deer in the headlights syndrome a lot of support, advice, and constructive feedback. I have seen people go from deers in a headlight to strong decisive leaders in less than a year. It helps to have a gauntlet or two to have to run through. The greater the challenges the deer in the headlight faces, the more quickly they can emerge as a strong leader.

“I’ve got this” is more problematic. The leader acts like they know what they are doing, but they don’t. And everyone around them knows it except them. I like to provide a leader with “I’ve got this” syndrome with a lot of tough love but that is usually not enough. The answer to “I’ve got this” is usually failure of some sort, often a very significant one. The key is to be there for the failing leader in that moment and help them get through the failure and come out of it with self awareness and a desire to address the issues that have gotten in the way.

These are just two of the immature leader syndromes, but they are two very common ones I have seen.

I believe that most people have the capacity to be leaders if they want that for themselves. I also believe that leadership is a skill that you never stop learning. And I believe that it requires self awareness, courage, and deep empathy.

Sitting at a table and watching a skilled leader work is quite a sight to see. And watching someone grow into that person is one of the great joys of my work.

#entrepreneurship#life lessons#management

Event Driven Growth

I realize that most businesses are suffering greatly in this pandemic. Many have been shut completely.

But there are some that are experiencing the opposite situation. They have a growth spurt as a result of this moment. Businesses in food delivery, e-commerce, online education, telehealth, remote work, and cloud infrastructure are examples of such situations.

I’ve seen event driven growth spurts over the years. A plane lands in the Hudson and everyone heads to Twitter to see it. A competitor is shut down and everyone shows up on your door. Crypto gets hot and everyone wants in on the action. That sort of thing.

And I’ve been talking to leaders who are experiencing this and wondering how to model out what happens when and if things return to normal.

Each situation is different but a framework I like is to take your pre-event baseline, your event driven peak, and assume you will give up half of the delta when things return to normal and that will be your new baseline.

That won’t be right of course. It’s a model. You can revise as real data comes in.

But what it suggests is that not all of your new customers will stick around. But some will. And you will have a new and higher baseline. That has been true of almost every event driven growth spurt I have seen in my career.

#entrepreneurship#life lessons#management

Marketing During A Crisis

One of the most fascinating things I’ve been watching is how the 80 something USV portfolio companies are adjusting their marketing strategies during this pandemic.

It is all over the map, based on the unique situations of each and every company, with some pulling back on marketing, some accelerating it, and some keeping it more or less the same. Even the ones who are not changing marketing spend are changing their marketing mix a lot.

Digital/performance marketing, whether online or on TV (where there is a lot of targeted performance inventory now – talk to our portfolio company Simulmedia if you want to see for yourself) is really showing its stuff in this downturn as it is responsive to changing demand. Keywords/search is a great example of that. If there are fewer people searching for what you are selling, there is less spend. There are many digital/performance channels that work similarly.

Marketing costs have come down dramatically in some channels and companies are taking advantage of that to grow their customer bases and market share. But some channels have gone the other way with increased marketing costs. If you are selling something that everyone wants right now, it may cost you more to reach customers right now.

Making sense of all of this is not easy but important. You may have big opportunities that you are missing. Or you may have big problems you aren’t seeing.

Which is why I’m going to tune into this webinar by my friend David Steinberg and his friend John Sculley on Thursday at noon eastern. Full disclosure, USV is an investor in Zeta Global where David Steinberg is the CEO. I’m curious to hear about how their customers are operating in this environment and what is working and what is not.

#management

Tech Jobs For All Who Want Them

The tech sector is the fastest growing sector of the economy in NYC and around the US and around the world. The tech sector offers high paying jobs and a growing number of them.

But, as we all know, the tech sector lacks the gender and racial diversity that would allow everyone to benefit from this growing sector of the economy. Most of the studies that have looked at the lack of diversity point to a skills gap standing in the way.

So last year Tech:NYC (where I am co-chair) and a few large employers (Google, Verizon, Bloomberg LP) and the Robin Hood Learning and Technology Fund commissioned a study of the skills training programs in NYC to see where there are gaps and what must be done to close them so that tech jobs are available to everyone in NYC who wants one.

This report was done by the Center for an Urban Future and was released yesterday. You can read it here.

What the report reveals is that NYC has a rich and expanding ecosystem of tech skills training opportunities, including K-12 and adult education. But, as we all know, the quality is uneven and so are the outcomes.

The report makes twelve recommendations which are detailed here. They are:

1. Make a significant new public investment in expanding and improving New York City’s tech education and training ecosystem. 

2. Set clear and ambitious goals to greatly expand the pipeline of New Yorkers into technology careers. 

3. Prioritize long-term investments in K–12 computing education. 

4. Scale up tech training with a focus on programs that develop in-depth, career-ready skills. 

5. Build the pipeline of educators and facilitators serving both K–12 and career readiness efforts. 

6. Close the geographic gaps in tech education and skills-building programs. 

7. New York City’s tech sector should play a larger role in developing, recruiting, and retaining diverse talent. 

8. Increase access to tech apprenticeships and paid STEM internships through industry partnerships, CS4All, and the city’s current Summer Youth Employment Program. 

9. Expand efforts to market STEM programs to underrepresented students and their families. 

10. Develop and fund links from the numerous computer literacy and basic digital skills-building programs to the in-depth programs that can lead to employment. 

11. Expand the number of bridge programs to provide crucial new on-ramps to further tech education and training for New Yorkers with fundamental skills needs. 

12. Develop major new supports for the non-tuition costs of adult workforce training. 

I participated on the advisory board of this study and support all of these recommendations. Elected officials and policy makers in NYC (and really everywhere) should read and heed these recommendations.

The tech sector faces many headwinds in society right now for a host of reasons. Not all of them can be solved by an employee base that mirrors the planet. But many of them can be and we need to work to get there.

I want to thank the Center For An Urban Future, Tech:NYC, Robin Hood Learning and Technology Fund, Google, Verizon, and Bloomberg LP for giving us a roadmap on how to get there.

#economics#employment#enterprise#entrepreneurship#hacking education#hacking government#management#NYC#policy#Politics