Risky Business — Building Teams and Taking Risk as the Leader
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RISKY BUSINESS – BUILDING TEAMS AND TAKING RISK AS THE LEADER
Location: Crestone Peak II - IV Invited Speaker : Penny Herscher, CEO FirstRain
What does it take to lead a team? What makes a good leader? Leaders have different personalities but good leaders have characteristics in common when it comes to vision, people and taking risk. Penny’s talk will share her beliefs on the essentials of leadership, peppered with examples from the two very different companies she has led. She’ll describe why the team is so important, how to build it to be world class, and how she thinks about risk as she faces company defining decisions. The talk will be interactive with Q&A at the end.
These notes are a little scattered as I was late arriving.
Core Principle for leading a team: Full transparency:
Everybody from top to bottom has to know the strategy. Can't give employees partial information. They need to know the real, true strategy so that they can make the day-to-day decisions correctly).
Eg: at her company, they have a primary target and secondary target (Wall Street investers and ?). Simple? But every day potential to dilute that focus comes up . . . clients might have something that is close, but not exact fit. If every sales person and engineer knows the strategy completely clearly they can maintain the focus in the face of tempting contracts.
No hierarchy. Team, all peers with different jobs. This also means that you can go to anyone for help. Q: Really? No career paths? A: No, we have an org chart, from the outside it looks ordinary. A culture thing. People can't pull rank to win arguments. Have meetings (every quarter?) where any and all questions are allowed.
Core principle: Uncompromising quality of team:
Cannot have a weak link. Hard to do, because people that might not be in the right job while being great people. No room for them in a small company. Interview everybody personally (the CEO takes responsibility for culture). "Pretty much everybody who we're going to meet in our professional lives are really good at something." The trick is that you need the people who are really good at the job you need done. (This is about taking big risks . . . you absolutely need the right person in the right job.) Hiring manager makes the final decision after everyone on the interview team has a say, hiring manager in charge of post mortem, hiring manager responsible for letting go if it doesn't work out.
This includes moving people on who have been from the beginning when their job has grown beyond them.
Even when a position takes a while to be filled, you have to wait for the right person. "You will regret it" if you hire someone who is not the right fit.
Believer in training, so it's not just cutting people lose. When there is a skill that can be learned quickly, will invest in that.
Keeps stressing the difference between a start-up and a large company. Start-up cannot afford mismatches. In a large company there might be ways of moving them, finding a better fit.
Q: Ethical issues for individuals? Needs to provide for the family, etc. A: Yes, eg, have dealt with a lot of visa issues. Then will find a solution, like keeping someone on at a low rate until green card processed. Yes, expensive, but important for the culture.
Q: Diversity? A: Yes, important for the team! Not in race or gender, necessarily, but need diversity in the way people think. "The more you can get diversity in the room and have an open culture" the more you have to work with. Not as much diversity at First Rain as she would like (both heads women with Math degrees, the rest of the team white males).
Core Principle: One you have your A-team, "you cannot tolerate politics". It will undermine the transparency and honesty. Without strict refusal to indulge in backstabbing or politics, the honesty and transparency can be undermined.
"Trust is incredibly efficient." If you're taking risks and you can't trust your team you waste time "working a decision." "The way you get trust is transparency. . . don't have any secrets, don't pull your punches."
Q: Does this level of transparency make you vulnerable? A: Not from an IP perspective. "I do feel incredibly personally vulnerable . . . it takes a lot of energy." Coping strategies---work from home when overwhelmed by the rawness and honesty. "I don't think you can lead smart people by acting like you're invulnerable. Because smart people aren't going to buy that story anyway."
"You're being watched." The leader of the team is watched. "Can't be self-indulgent." Take the tears and self-doubt into private. Have to be honest, but can't be fearful. Condition self and therefore company that taking risk is fun. Making the adrenaline a source of energy . . . "then [you can] translate the most fearful parts of the job into fun." This has been truly tested in the last few weeks. But we need to know that we have the freedom to do something else . . . so if you don't enjoy it, don't do it! Especially as a leader, "if you're not happy and joyful in what you're doing, who is going to follow you?" To lead people into risk, you have to have fun.
Caspian's day speech in Henry V as a source of inspiration for this. [[1]]
Use that speech.
Had to engage in both personal risk, professional risk.
Q: How do you respond to failure? A: First, "shut-up" to avoid ripping into them. Do a post-mortem process "before you say you're a bunch of idiots for this mistake." Find out what went well, what didn't go well. Get everything out in the open.
Q: Would you do your own start-up? A: Not the idea guy. "Need to be teamed with really good technical people who see what's coming next." Example of her position on needing to match jobs to people.
[missed one]
Q: One-to-ones with members of the team if their performance is suffering? A: Yup, over drinks or coffee. Q: Does it help? A: "It's interesting but not really relevant unfortunately." You can find out if it's short-term or not. If it's systemic, put the company first "Respect the individual, but you have to put the company first."
Q: Being a super manager of everything, do you find showing the human frailty helps perhaps other team members? A: I never pretend to do it all. "I don't hold myself up as a role model of balance." "I don't think you can achieve it, especially not as a CEO. If you want balance, you have to chose a job that is conducive to that." [[2]] Eg: Last day of the quarter, really busy, got a call from the nurse that her son broke his arm. First thought: Nanny's supposed to be called first. She didn't answer. Okay, husband supposed to be next. He didn't answer. Fine. Left her team to go deal with this. Son had been holding up well, but when he saw her, burst into tears. "Mom, I didn't think you'd come! It's the last day of the quarter!"
Q: Can someone coming from a math degree without business background get started, take the risk? A: "I don't have an MBA, I don't think they're very good for you." Find a mentor. "Math is all about first principles." If you're good at math, you can do anything in the company. But luck, too, in her case someone coached her through finding better positions.
Q: Any difference in leading men and women? A: Not a lot. "Men are just as emotional as women, they're just taught not to show it." Luckily, very rarely had a man who was uncomfortable working for a woman. "This generation of men no problem at all."
Q: If you have transparency and call a meeting whenever there's a big decision, do you deadlock? A: "I don't believe in consensus." About getting all the info, not getting agreement. "Consensus is incredibly inefficient." Someone has to be on the line. Sure, if everyone disagrees with you and you have your A-team that you trust, listen. But the buck stops with a person.
Q: Anything to take away? Books, resources? A: Not a big reader of books. Vision problem. Read her blog. But "Built to Last" about building a good company. "The Five Disfunctions of a Team" recommended by someone in the audience and seconded.
