leadership

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3 tips to align your values with your startup’s culture

You’ve heard the phrase “leading by example,” but what about “leading with values”?

I’ve always led by example by using my values as my guide. Still, it wasn’t until I founded my first company that I fully understood the importance of embedding those values into the company, too.

Integrity, individuals, impact and innovation are the “4 I values” that drive my decisions and the actions of those at my company each day. These are not just words on a wall at our HQ or on a mousepad for our remote crew, but values that everyone in the company lives and breathes. Over the last two years, these four values became even more important and continued to guide me, my family and the leaders at our company.

As organizations map out their “return to the workplace” (NOT “return to work,” because we never stopped working) plans, we should not simply go back to how things were before. Instead, let’s all take a moment to redesign something that sets everyone up for success, with values as the compass. I think you’ll find this approach helps people not only survive, but thrive in the workplace.

Leading with values is, in my experience, the best leadership position to take, and there are three ways to accomplish this goal.

Leave behind old-school mentalities on workplace hierarchy

The tone of the company’s culture comes from the top. The culture you envision for your company will only come about if your employees believe in the practices that you are asking them to implement.

At some point in your career — probably right out of school, a few years in or somewhere in the middle — you experienced a company where treating lower-level employees with less respect is just “a part of the job.” Companies with this type of “paying your dues” mentality tend to work these lower-level employees like grunts until they burn out and leave.

Or they eventually crawl their way up into management-level positions, and the cycle perpetuates itself as they deride the newer crop of employees, eroding any semblance of a healthy culture.

This is not the way.

As a leader, if you want your work environment to indicate inclusivity, support, collaboration and have the essence of a team mentality, you must set the precedent right away. This means stripping away the hierarchy that accompanies work titles and making it clear that your company values contribution based on merit, regardless of position. You are one team, united in your purpose to deliver on your mission, based on your values. This level setting ensures that everyone has skin in the game, and no one has the leeway to treat people poorly.

Don’t get caught in an ivory tower mindset

Early on in my career, I began sharing an office when I could. Those office spaces were purposely not what anyone would consider cool or nice “digs” — not the furniture and certainly not the view. Even as CEO now, I’ve had someone on the team describe my current office as a closet. But it gets the job done.

Simple signals like this send a powerful message, and the signal must remain consistent. Don’t take a limo; rent a cheap car. Don’t fly first class; fly coach. These may seem like minor details, but one of the biggest pitfalls any CEO can encounter is falling victim to an ivory tower mindset — when you become so out of touch with the people you manage, your employees start to notice.

Make a cognizant effort to know your people. Implement a “management by walking around” strategy. Don’t sit in your office all day; get out on the floor among your people. Drop by their desks and ask them how their day is going. Eat lunch in the break room. Put in the effort to attend new hire onboarding.

Not physically back in the office? Drop into Slack channels and Zoom meetings. I once “Zoom bombed” a baby shower for one of our crew members just to hear all the well wishes, and it made my day and theirs. Overall, just be present and humanize your workspace. It pays off in spades.

Be thoughtful and consistent with workplace practices

The tone of the company’s culture comes from the top. The culture you envision for your company will only come about if your employees believe in the practices that you are asking them to implement. More importantly, you will not grow a solid culture if you don’t give these initiatives and practices 100% of your own effort.

For example, one new initiative we rolled out last year is a campaign we call “Free2Focus.” Twice a week, the SailPoint crew is asked to avoid booking meetings for a couple of hours during Free2Focus time. Not only does this address Zoom fatigue, it also gives our crew the chance to catch their breath whichever way suits them best — whether that’s taking a walk, helping with their children’s schooling or just turning off the camera for a bit.

If I want my team to show themselves some grace during the week, I’ve found that I need to apply the same practice. This means not setting up meetings during Free2Focus, not sending emails all hours of the day and night and not judging people for taking breaks when they need them. I trust my team to get the job done largely on their own time and own their own terms. I promise, your employees’ performance will be better because of it.

Being a CEO is more than building on a vision, a product or an idea. It’s about leading your people with values to accomplish mutual goals in a way that doesn’t zap them of their morale or dignity. It’s easy to get caught up in all the things that come with a job, but if you don’t put in the effort to immerse yourself and your values into the entire company, you’ll end up too big for your own good — and certainly too big for your company’s good.

It won’t happen overnight, but remember, the smallest things are often the ones that have the biggest impact. If you’re the leader, lead by example. It’s the only way to build teams that stand the test of time.

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A blueprint for building a great startup founding team

In a company’s early days, the difference between C-level executives and the rest of the organization is simple — employees can walk away from a failure, but the leaders cannot. Under these conditions, certain kinds of people thrive in leadership roles and can take a company from ideation to production.

While there’s no magic formula for what works and what doesn’t, successful startups share common traits in terms of the way their foundational leadership teams are built.

We’ve all experienced what it looks like on the negative end of the spectrum — people making points simply to hear their own voice, leaders competing for credit and clashing agendas. When people would rather be heard than contribute, the output suffers. Members of a healthy leadership team are unafraid to let others have the limelight, because they trust the mission and the culture they’ve built together.

An honest self-assessment is necessary and this is something that only exceptional and selfless founders are capable of.

We are all imperfect human beings, founders included. There are always going to be moments that leaders can’t predict, and mistakes come with the territory. The right leadership team should be able to mitigate the unexpected, and sometimes make the future easier to predict. Putting the right people in the right roles early on can be the difference between success and failure — and that starts at the top.

Start by determining who will lead as CEO

Investors love founder-CEOs, and founders are often fantastic candidates for this role. But not everyone can do it well, and more importantly, not everyone wants to.

Startup founders should ask themselves a few questions before they lose sleep over the prospect of handing over the reigns:

  • Do I even want to be CEO? If yes, for how long?
  • Can I maximize the potential of the company if I’m not the CEO?
  • Am I really the best person for this job at this stage?

An honest self-assessment is necessary and this is something that only exceptional and selfless founders are capable of. In many cases, founders decide they need outside help to fill the role. While a CEO may not be your first hire — or even one of the first five — the person you choose will ultimately occupy your organization’s most critical leadership role, so choose wisely.

What to look for: Ambitious vision grounded in execution reality. Your CEO should have hands-on experience that allows them to see around corners, predict pitfalls and identify opportunities.

What to watch out for: Leaders who lack respect for the founding vision or the ability to hire and balance an executive team quickly. A good CEO should be able to manage short-term cash flow and go-to-market needs without compromising the true north, while building a foundation and culture for the long term.

Then, hire a leader for your engineering team

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2 CEOs are better than 1

Netflix has two CEOs: Co-founder Reed Hastings oversees the streaming side of the company, while Ted Sarandos guides Netflix’s content.

Warby Parker has co-CEOs as well — its co-founders went to college together. Other companies like the tech giant Oracle and luggage maker Away have shifted from having co-CEOs in recent years, sparking a wave of headlines suggesting that the model is broken.

It’s impossible to be in two places at once or clone yourself. With co-CEOs, you can effectively do just that.

While there isn’t a lot of research on companies with multiple CEOs, the data is more promising than the headlines would suggest. One study on public companies with co-CEOs revealed that the average tenure for co-CEOs, about 4.5 years, was comparable to solitary CEOs, “suggesting that this arrangement is more stable than previously believed.”

The study’s authors also found that co-CEOs were spread across industry types and that splitting the role can “complement each other in terms of educational background or executive responsibilities.”

I serve as co-CEO of an organic meal delivery company with my sister Laureen. Having two CEOs has helped us take Fresh n’ Lean to new heights. We closed 2020 with $87 million in revenue, more than double from the year before, and project similar growth this year.

We complement each other well, and the results bear that out. During the decade that we’ve served as co-CEOs, the company has grown from a very small team to 475 full-time employees and 40 part-time employees. We’ve delivered more than 17 million meals, launched four different meal lines, expanded our retail offerings, partnered with some great names in sports and fitness, and saw our annual revenues climb exponentially.

The leadership structure isn’t for every company, but it’s been a great fit for Fresh n’ Lean. Here’s why.

Divide and conquer to shorten your learning curve by 50%

Laureen launched the company in 2010 out of her one-bedroom apartment.

“Those early years were especially tough,” she said. “I consistently worked 20-hour days as I performed just about every role — cooking dishes, preparing labels, making deliveries and performing customer service duties. I was devoting so much energy into product, packaging and logistics, but in order for the company to grow, I needed help with marketing, tech and finance.”

Those areas happened to be my strengths. There was too much for one person to oversee as CEO and not enough hours in the day. But given the equal challenges that both sides of the company presented and the trust we shared, it made sense for us to be side by side on the organizational chart.

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Torch & Everwise merge into affordable exec coaching for all

While companies might pay for a CEO coach, lower level employees often get stuck with lame skill-building worksheets or no mentorship at all. Not only does that limit their potential productivity, but it also makes them feel stagnated and undervalued, leading them to jump ship.

Therapy… err… executive coaching is finally becoming destigmatized as entrepreneurs and their teams realize that everyone can’t be crushing it all the time. Building a business is hard. It’s okay to cry sometimes. But the best thing you can do is be vulnerable and seek help.

Torch emerged from stealth last year with $18 million in funding to teach empathy to founders and C-suite execs. Since 2013, Everwise has raised $26 million from Sequoia and others for its peer-to-peer mentorship marketplace that makes workplace guidance accessible to rank-and-file staffers. Tomorrow they’ll official announce their merger under the Torch name to become a full-stack career coach for every level of employee.

“As human beings, we face huge existential challenges in the form of pandemics, climate change, the threats coming down the pipe from automation and AI” says Torch co-founder and CEO Cameron Yarbrough. “We need to create leaders at every single level of an organization and ignite these people with tools and human support in order to level up in the world.”

Startup acquisitions and mergers can often be train wrecks because companies with different values but overlapping products are jammed together. But apparently it’s gone quite smoothly since the products are so complementary, with all 70 employees across the two companies keeping their jobs. “Everwise is much more bottom up whereas Torch is about the upper levels, and it just sort of made sense” says Garry Tan, partner and co-founder of Initialized Capital that funded Torch’s Series A and is also a client of its coaching.

How does each work? Torch goes deep, conducting extensive 360-interviews with an executive as well as their reports, employees, and peers to assess their empathy, communication, vision, conflict resolution, and collaboration. Clients’ executives do extensive 360-interviews. It establishes quantifiable goals that executives work towards through video call sessions with Torch’s coaches. They learn about setting healthy workplace boundaries, staying calm amidst arguments, motivating staff without seeming preachy, and managing their own ego.

This coaching can be exceedingly valuable for the leaders setting a company’s strategy and tone. But the one-on-one sessions are typically too expensive to buy for all levels of employees. That’s where Everwise comes in.

Everwise goes wide, offering a marketplace with 6,000 mentors across different job levels and roles that can provide more affordable personal guidance or group sessions with 10 employees all learning from each other. It also provides a mentorship platform where bigger companies can let their more senior staffers teach junior employees exactly what it takes to succeed. That’s all stitched together with a curated and personalized curriculum of online learning materials. Meanwhile, a company’s HR team can track everyone’s progress and performance through its Academy Builder dashboard.

“We know Gen Z has grown up with mentors by their side from SAT prep” says Torch CMO Cari Jacobs. Everwise lets them stay mentored, even at early stages of their professional life. “As they advance through their career, they might notch up to more executive private coaching.” Post-merger, Torch can keep them sane and ambitious throughout the journey. 

“It really allows us to move up market without sacrificing all the traction we’ve built working with startups and mid-market companies,” Yarbrough tells me. Clients have included Reddit and ZenDesk, but also giants like Best Buy, Genentech, and T-Mobile.

The question is whether Everwise’s materials are engaging enough to not become just another employee handbook buried on an HR site that no one ever reads. Otherwise, it could just feel like bloat tacked onto Torch. Meanwhile, scaling up to bigger clients pits Torch against long-standing pillars of the executive coaching industry like Aon and Korn Ferry that have been around for decades and have billions in revenue. Meanwhile, new mental health and coaching platforms are emerging like BetterUp and Sounding Board.

But the market is massive since so few people get great coaching right now. “No one goes to work and is like, ‘Man, I wish my boss was less mindful,’” Tan jokes. When Yarbrough was his coach, the Torch CEO taught the investor that while many startup employees might think they thrive on flexibility, “people really want high love and high structure.” In essence, that’s what Torch is trying to deliver — a sense of emotional camaraderie mixed with a prod in the direction of fulfilling their destiny.

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How even the best marketplace startups get paralyzed

Josh Breinlinger
Contributor

Josh is a Managing Director at Jackson Square Ventures, an early stage venture capital firm with $245 million under management, where he focuses his investments in early stage marketplaces.

Over the past 15 years, I’ve seen a pernicious disease infect a number of marketplace startups. I call it Marketplace Paralysis. The root cause of the disease is quite innocent and seemingly harmless. Smart people with good intentions fall victim to it all the time. It starts when a platform has sufficient scale — such that there is a good amount of data on things like performance, quality rankings, purchase rates, and fill ratios. What a platform implements as a result of that data, and how it’s received by their user base, is what can lead to marketplace paralysis.

In this post, I will detail what Marketplace Paralysis is and what startups can do to avoid it. Before I get into the nitty-gritty, here’s a snapshot of the lessons you’ll learn by reading this post:

  1. Segment and focus on high-value users
  2. Remember the silent majority
  3. Modify company goals to include quality components
  4. Empower small, autonomous teams

The easiest way to explain Marketplace Paralysis is with a hypothetical example. So allow me to introduce you to Labor Marketplace X (LMX).

Equipped with the aforementioned data, the well-intentioned product managers at LMX will think about policies or features to try and improve a KPI, like fill ratio or job success rate. They might craft a policy that would separate users into two tiers.

Tier 1 gets a shiny gold star next to their name, along with extra pay, bonuses, and preferred job access. Tier 2 gets standard pay and standard job access. They’ve done their homework and feel this will benefit the marketplace.

So, they build the feature. They launch it and make an announcement to their users. And then… a revolt!

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