Working with over 50 growth stage Boards since 1996, I’ve been reflecting more and more on the most overused phrase in the Venture industry; ‘Management is most important’. Yes, it is if you’re building a sustainable business. But when you’re a CEO or a Board member, what tangible ideas and tools can help whilst you put out fires and try and deliver to the customer expectations you’ve set? Here’s a collection I hope will be useful, right now, today.
No 1 issue for scale-up software companies; Making sure you have the right people in place at the right time for scalable growth.
Five tips for CEOs, investors, chairmen and advisors of growth stage technology businesses.
1. Hire right first time
Read ‘Who‘ by Geoff Smart and Randy Street. This gives clear, concise recommendations on improving your scoping process, your interviewing approach and getting the right investment into references.
Don’t rush C-Suite recruitment. Realise that everyone around you (including yourself) wants to fill the role (fast). Inject someone external into the process. Someone who has the long term business’ health at heart, but is not in a rush. You need a challenger who can and will say ‘nope, none of these candidates are good enough for you’. This will minimise what Ben Horowitz calls Management Debt in one of my favourite business books, ‘The Hard Thing about Hard Things.’
2. Measure your management scalability
Do have measures in place to quantify success. If you are doubling your team each year, then ensuring your management layers are scaling is absolutely critical. If you double and don’t change any of your managers, something is likely to be wrong. And your broader team will know it before you.
Read Hubspot CEOs great piece (Link) around how he used the Net Promoter (NPS) principals to measure how his junior managers were managing. This helped him get regular measureable feedback on when his team leaders started to struggle with the rising scale of their teams. His conclusion are that the junior and senior leaders have sweet spots where they thrive and then don’t thrive, and that most CEOs invest too much time in leadership support. Seeing and reacting to mid level leadership issues quickly is critical for a rapidly scaling business.
3 .Value your values
Create authentic values that are true to you, not aspirations, be very clear on them and stick to them. Review and refresh them with the team every year.
Values should frame your hiring. Interestingly, Google moved from a competency and experience led model to the attributes of Courage, Humility, Conscientiousness, Comfort with ambiguity and Persistence to not finish until the job is done.
4. Performance reviews and employee feedback process
Step up or Set-up a proper, appropriate performance review process. In his book ‘The Hard Things about Hard Things’, Ben Horowitz is very clear. At 25 people and growing fast, a company is not in danger of suddenly feeling like a ‘big company’ if it takes employee performance and feedback seriously. ‘People rarely improve weakness they are unaware of’, Horowitz says.
Read HBR’s blog on The Performance Management Revolution to see that Reviews can be effective old style (half yearly) or on much more regular bases.
5. Minimise the Politics
Reward people based on merit and contribution. It sounds simple but is not. Ensure there is a robust, fair process for promotion, bonuses and equity, otherwise you may fall into the trap of giving people rewards just because they asked for them. And this will lead to more office politics than you see on the surface.