January 22, 2013
Last week we hosted our first ever formal CEO Summit for our portfolio companies. We’ve done a number of less formal gatherings over the years, but this was the first time we had ever gathered everyone for a focused session with a structured agenda. Based on this one experience we’re all kicking ourselves for not having done it previously.
We spent a decent amount of time talking internally about what the right sort of content for this session was. We wanted to make sure that the group got a chance to both get to know each other better while also learning something valuable that would help them in their day-to-day lives back at the office. The concept that ultimately emerged, in keeping with the spirit of the times in which we live, was to crowd-source both agenda and content, and ask the group to teach each other something.
So we gathered last week in a room at the NYU business school – the High Peaks team plus 14 CEOs – for a few hours of startup management wisdom. We hear all the time from the teams we work with about the ingenious management tools that they have either created or picked up along the way – secrets to recruiting, running the hyper-efficient management team meeting, driving on-time product development, keeping a team focused on a truly shared vision, etc. We asked each CEO to come to the session with one pearl of wisdom that they had picked up along the way and “teach” a 10 minute lesson on it.
Based on the feedback we got from the group it worked spectacularly well. Not only did I get off the hook on having to come up with any content, but the CEOs got the benefit of a veritable buffet of startup management wisdom. There was some remarkable content, and I’ll be sharing the most valuable gems in the weeks to come (we videoed everything and are working on editing now, so you’ll get much of it direct from the CEOs).
As I reflected on the discussion at the end of the day, however, I was struck by an overarching theme that had wound its way through many of the talks. That theme, which I was slightly surprised (but delighted) to see coming through so strongly, was openness. And when I say openness, I mean openness of just about everything in the organization.
Maybe it’s a sign of my ever-advancing age, but the degree to which this group of hyper-talented managers had embraced full transparency and inclusiveness within their organizations was remarkable to see. I’ve spent a lot of time as a board member over the years trying to convince CEOs to open up. And when I was in the CEO seat myself I know I didn’t play it as openly as I should have. But here, with a collection of New York’s best and brightest, openness carried the day.
Not surprisingly, we heard a lot about creating a culture that expects direct, open, and honest feedback. This is a group that pulls no punches in that regard. They are creating open cultures of accountability, and they expect all players to contribute.
For many of the smaller companies, they start each and every day with a team huddle where everyone in the company reports quickly on what they’re working on, what their goals are, and what they’ve achieved in recent days (many of the larger co’s do this in groups). Be it a daily or weekly huddle, you can’t hide from the accountability that structure drives. And that kind of clarity on what the entire organization is focused on helps individual contributors understand where their work fits into the larger picture. It also exposes people to weaknesses in the organization and creates space for them to try to impact areas beyond their immediate responsibilities.
We also heard about full transparency around corporate goals and performance. In fact, for most of these CEOs, nearly everything they discuss with their boards is then freely shared with the entire company. By and large, they find full transparency around financial performance and success or failure in meeting their goals creates a more engaged and motivated team. The standard seems to be that the only numbers kept private are individual compensation details.
The fundraising process has been opened up and demystified by this bunch. These CEOs are talking to their teams about what’s working and what’s not when they’re out in the market talking to prospective investors. Not surprisingly, some good ideas come from that, and people like to know where the organization stands.
Recruitment is a complete team sport. The most progressive of the bunch are not only engaging the whole employee base to source talent but also seeking each team member’s input on every hire. A couple of the companies are so relentlessly focused on creating exceptional cultures that are driven by A+ players at every position that each new hire must be approved by the entire existing team. If any one person is not excited about a candidate (and the burden of proof is indeed excitement), they don’t get the job. Of course that’s a practice that will have to evolve as the company scales from a 15 to a 100 person company, but there will be ways to do that.
Many of these tools and techniques, like the collaborative hiring decisions, will not scale in their current form as these companies scale. There will no doubt be growing pains. But given the monumental nature of the challenges that these companies face – each is an under-resourced David slinging rocks at the Goliath of their market – I was quite proud to see this theme of openness emerge through nearly every discussion.
As has been written by many people before, being a startup CEO is an unbelievably lonely endeavor. So why make it any lonelier than it needs to be? I’m glad to see that the CEOs of our portfolio companies are opening things up and working with their teams to make it all a little bit easier, and a lot more successful.