Structured and organized tech management teams lead to profit and valuation

 Full on alignment required

The way high-performing organizations operate today is radically different from how they operated 10 years ago. Yet many other organizations continue to operate according to industrial-age models that are 100 years old or more, weighed down by legacy practices, systems, and behaviors that must be confronted and discarded before true change can take hold.

In any extremely successful management team, or any team at all, that I’ve been a part of or led, there has been one common theme; unwavering #alignment.

65% of organizations have an agreed-upon set of #objectives and/or strategy.

14% of employees understand the organization’s strategy.

Less than 10% of all organizations successfully execute the strategy.

It’s not a surprise that when all managers of a #company are pointed in the same direction, with the same types of incentives (and are thus fully aligned) you get wonderful #results.  What is a surprise to me, is that more people are not maniacal about this key ingredient in management and often don’t put the processes in place to make the best results possible.

I, myself am incredibly organized, thorough and love the ideas of frameworks, both in processes and development.  I feel that if I am able to defer a lot of my tedious thinking to a framework and/or a process, I then allow my brain to keep all its processing power for much higher thinking, the kind of stuff that really matters to success rather than the minutiae of day-to-day.

As such, I want to propose that all readers today understand that I am at one extreme of being organized and it works really well for me.

Get (an) aspirational benchmark

In a conversation with a mentor and close friend of mine recently, we were discussing how to best affect change in management teams and he suggested that I pick a super productive team or company that I knew a lot about (their process and people) and use them as the reference point.

Today’s best teams are actually no longer organized solely hierarchically, they are self-forming, self-adjusting and to be successful, a bit self-policing.  If you look at great teams such as Amazon, Google, Shopify and Netflix, they often believe in frameworks called squads, tribes, chapters and guilds.

Copy someone else’s best practices

The above sounds a bit like D&D, right?  Well, tech folk are generally the types to borrow concepts and not re-invent the wheel, so it makes sense.

A squad (scrum team) will have a dedicated product owner who will feed them user stories to build. This is the pretty standard set up for any organisation doing scrum. These squads sit together and have one long term mission. They have all the skills and tools needed to design, develop, test and release to production, being an autonomous, self-organising team who are experts in their product area. They are kind of like mini start ups.

These squads are grouped together in what is called ‘Tribes’. These are a collection of squads within the same business area, for example there might be a tribe focusing on mobile. The squads within a tribe sit in the same area, and there are usually 100 or less per tribe. I have seen places such as Spotify implement such things as shared lounges to create inter-squad interaction, and regular informal team events and get together where the squads share what they are working on. There is a role of Tribe Leader who is responsible for providing the right environment for all the squads.

Chapters are another way to promote team collaboration and innovation. Chapters are a group or team members working within a special area. So for example a squad might be made up of front office developers, back office developers, database administrator and testers. So a chapter could be a ‘front office chapter’, where front office developers get together and exchange ideas, get help on challenges and discuss new technologies. For example one developer might start using ReactJS on a new feature, and will relay to the rest of the chapter his experience and discuss on how other squads can use it. This is a great way to promote innovation and ‘cross pollination’ of ideas across teams. There is a role of Chapter Lead who is the line manager for chapter members, they are responsible for developing people and setting salaries, but they remain part of a squad and still do day-to-day work.

Finally, there is the concept of a guild. A guild is a community of members with shared interests. These are a group of people across the organization who want to share knowledge, tools code and practices. Each guild has a co-coordinator, and such guilds include: web #technology guild, test automation guild or even an agile coaching guild. There can also be guilds on such things as load testing, design or any other common interest.

Document a strategy in tiers

It is crucially important that the organization’s overall strategy is documented in a manner that makes sense for its org-chart. There will always be a (or set of) founders, other management team personnel, then specific teams (under each manager) and the individual. Based on the squad, tribe, guild, chapter model above, the team level could be as low as a Chapter, but in most startups, a manager is in charge of full novels (many chapters) rather than a single one.

Consent over consensus

A quick side bar prior to really getting into it. The term “consensus” refers to the general agreement on a topic. Consensus to me is solely for CAP-theorem and family life, it just does not belong in the tech organization. Consensus can make meetings inefficient if the aim is to have everybody agree on the same decision. Often individuals see roadblocks that might occur or tend to disagree for reasons that might not even affect them directly. In contrast, “consent” means the permission for something to happen. The latter can be achieved, even if not every individual agrees, as long as nobody can present a convincing objection that affects one of their roles.

This turns the democratic model around into a “why the hell not?” mindset.

If a something is safe enough to try, it should be pursued.

Founder level

At the founder level, the management needs to be setting cultural norms, vision and roadmap.  If they are not the ones in charge of this (the foundation) the whole house (of cards) comes tumbling down.

80% of your company’s culture will be defined by its core leaders.

These are the people who sat down and said this is such a good idea that I want to devote my entire life to it. Companies tend to reflect everything about them; their personality, strengths, weaknesses. So when you start defining culture in an intentional way, first look at yourselves founders.

The most successful tech #startup founders are selling more than a product. For instance, Facebook doesn’t just sell ads. Rather, they sold us all on a universal way to reach out to people from past encounters, reconnect and drive down memory lane. Similarly, Elon Musk doesn’t just build cars. Instead, he’s reducing our dependency on fossil fuels. Put simply, vision matters, and it isn’t something you can fake, you either have it or you don’t.

Long-term aspirational Vision and Mission

If you were to work for this company, do you think you’d love going into work?

— was founded under the belief that a future where humanity is out exploring the stars is fundamentally more exciting than one where we are not. Today, — is actively developing the technologies to make this possible, with the ultimate goal of enabling human life on Mars.

It’s very possible you all know which company this is and just reading it myself, I’m enrolled in their mission. This is so much bigger than me and will take a crazy amount of effort and great people to get there.

There are a few common rules that pretty much all good Vision Statements should follow:

1. They should be short – two sentences at an absolute maximum.  It’s fine to expand on your vision statement with more detail, but you need a version that is punchy and easily memorable.
2. They need to be specific to your business and describe a unique outcome that only you can provide. Generic vision statements that could apply to any organisation won’t cut it.
3. Do not use words that are open to interpretation.  For example, saying you will ‘maximise shareholder return’ doesn’t actually mean anything unless you specify what it actually looks like.
4. Keep it simple enough for people both inside and outside your organisation to understand.  No technical jargon, no metaphors and no business buzz-words if at all possible!
5. It should be ambitious enough to be exciting but not too ambitious that it seems unachievable.  It’s not really a matter of time-framing your vision, because that will vary by organisation, but certainly anything that has a timeframe outside of 3 to 10 years should be challenged as to whether it’s appropriate.
6. It needs to align to the Values that you want your people to exhibit as they perform their work.

If you want to hear an amazing speech on someone’s vision, here you are:

Tie into visual in the office (and swag) to reinforce

Guess what, you’re in tech!  So tech folk like swag, especially developers.  Get some, get lots and give it ALL of them.  This reinforces the message (i.e. the vision, mission and culture).

Management level

The next level down is where rubber hits the road.  Many founders have not led businesses in the past and are not attune to what it actually requires to take the vision and culture to a tactical level and very likely do not know how to put the processes in place to rally (large swaths) of troops.

Effective managers align their teams to the company #goals, vision and mission and protect the company culture as if it were their own.  This is where I have lived a lot of my professional life, getting buy-in of vision, ideas, ideals and mission for a platitude of founders.

Break down by functions and then assign to individuals

Having these goals in upper management is great, however something needs to be done with them. These plans need to be put to use in (at least) a framework that measure objectives and results (although you can get much more granular if you need to).

Objectives. You start by defining 3-5 key objectives on company, team or personal levels. Objectives should be ambitious, qualitative, time bound and actionable by the person or team.

Results. Under each objective, define 3-4 measurable results, not more. Key results should be quantifiable, achievable, lead to objective grading and be difficult, but not impossible. Key results can be based on #growth, performance, revenue or engagement. Often they are numerical, but they can also show if something is done or undone, so a binary 0 or 1, or even time-bound for the delivery of a specific item (on-time).

Depending on who the hired guns (management) are, here is a small breakdown of what I believe is the role of each of them.

Chief #Executive Officer (CEO)

The fact of the matter is, the CEO is the boss of everyone and is responsible for everything. They determine the company’s strategy. They hire and build the senior team. They make the final call on how resources (read: money) get divvied up and they’re the face of the company.

The CEO’s skills must include strategic thinking, the ability to rise above the daily details and decide where the industry and business are headed. They must then be able to decide the company’s best route for navigating the future market conditions. They have to be able to make good bets. The CEO’s key skill is in hiring and firing; a CEO may be able to set strategy, predict the future and control the budget, but if they don’t hire the right team, they have to master it all themselves. So they need to be able to identify and hire the best, fire the ones who don’t work out, and run the show in between.

Chief Financial Officer (CFO)

Plain and simple, your CFO handles the money. They create budgets and financing strategies. They figure out if it’s better for your business to lease or buy. Then they build the control systems that monitor your company’s financial health. The CFO is the “bad guy” who won’t let you buy that really cool videoconferencing equipment and makes you pay down a commercial loan instead. While you mope about it in your office, the CFO will be busy figuring out which customers, business lines and products are profitable, so next year you can afford the really cool videoconferencing equipment.

Chief Marketing Officer (CMO)

It used to be the norm to have a VP-level marketing executive, but I have seen, more and more companies employ a CMO. Many current business battles are battles of marketing, so corporate strategy often hinges on marketing strategy.

The CMO owns the marketing strategy-and that often includes the sales strategy-and oversees its implementation. The CMO will know (or learn) your industry inside out and helps you position your product, differentiate it from your competitors’ products, enlist channel partners, resellers, affiliates, and make sure customers learn to crave your product.

Make management accountable to report on progress of goals

Seeing that I am not only an executive, I am an executive advisor, a coach, a mentor and also an angel investor, I know the need for reporting and consistent reporting toward a goal.  Here is a very high-level overview of what this report should look like (and it should be distributed across all management team members).

1. Lead with your team’s OKRs, and how much confidence you have that you are going to hit them this quarter. You list #OKR’s to remind everyone (and sometimes yourself) WHY are you doing the things you did. Your confidence is your guess of how likely you feel you will meet your key results, on a scale from 1 to 10. 1 is never going to happen and 10 is in the bag. Mark your confidence red when it falls below 5, green as it heads toward ten. Color makes it scannable, making the CEO and the rest of management happy (listing confidence helps you and your teammates track progress, and correct early if needed).
2. List last week’s prioritized tasks, and if they were achieved. If they were not, a few words to explain why. The goal here is to learn what keeps the organization from accomplishing what it needs to accomplish. See below for format.
3. Next list next week’s priorities. Only list three P1’s, and make them meaty accomplishments that encompass multiple steps. “Finalize spec for project zeus” is a good P1. It probably encompasses writing, reviews with multiple groups and sign off. It also gives a heads up to other teams that you’ll be coming by. “Talk to sales” is a bad P1. This priority takes about half hour, has no clear outcome, feels like a subtask and not only that, you didn’t even tell us what you were talking about! You can add a couple P2’s, but they should also be meaty, worthy of being next week’s P2’s. You want fewer, bigger items.
4. List any risks or blockers. Just as in an Agile stand-up, note anything you could use help on that you can’t solve yourself. Do NOT play the blame game. No one wants to be in a position (or meeting) listening to you and a fellow executive say “it’s his fault.” As well, list anything you know of that could keep your from accomplishing what you set out to do— a business partner playing hard-to-schedule, or a tricky bit of technology that might take longer than planned to sort out.
5. Notes. Finally, if you have anything that doesn’t fit in these categories, but you absolutely want to include, add a note. “Hired that fantastic guy from Zynga that Francine sent over. Thanks, Francine!” is a decent note, as is “Reminder: team out Friday for #offsite to Blue Jays’ game.” Make them short, timely and useful. Do not use notes for excuses, therapy or novel writing practice.

Revise plan or strategy as needed

As per the above, if you are submitting these type of reports on a weekly basis, you will know way ahead of time that you will (or will not) hit your quarterly goals.  This is a natural point at which you can definitely negotiate to adjust some of these objectives.  Often times, especially in early days of a startup, you are likely to make incorrect bets (no one’s perfect) and will have to adjust.  Don’t worry, just make sure that your next bet is better than your first and learn from it.  Your CEO should understand and be thankful that you caught it early rather than letting it get out of control.

Make quarterly offsite to review the larger plan and adjust

Successful off sites build employee loyalty and camaraderie. When I think back on my positive business experiences, they cluster around positive team interactions happening during off site sessions. Also, much greater work happens when employees are unencumbered by both in-the-business and personal obligations.

Pick somewhere that conveys the seriousness of the event. This will subconsciously reinforce the importance of the meeting and lead people to better prepare ahead of time.

To give your team enough time to do this, block out the entire day. This will keep the daily commotion from intruding and bringing you back down.

Give one another your full attention. Treat your phone like a coat and check it at the door on your way in.

Your team is going to be making big decisions during this quarterly meeting, so you want their internal battery to be as charged as possible. That means taking care of all the small decisions they might have to deal with ahead of time. Get a healthy catered lunch so they don’t have to think about what they’ll eat. Use the same special location again and again so they know exactly how to get there. Set the same date so people can plan around it. Even take care of how to get there and back so your team doesn’t have to worry about transportation.

It’s important to break down quarterly objectives into things that you need to have vs. things that would be nice to have. This will allow your team to #focus on what’s most important to the business.

Although quarterly off-site meetings can seem like an intrusion on what’s most pressing right now, it’s vital to your team’s success to set aside dedicated time and space to evaluate what’s working and what isn’t. This gives you time to see where you’ve been and plan where you want to go.

Team level

Now that we are down to the team level, your team leads or managers need to all align to what the management team (and especially the founders) have set out as the vision, mission, culture, etc…

Talk to them early and often

Effective alignment requires a consultative approach, early on. It means launching discussions that take place as a given strategy is created. That often means you need to do some upfront work, by getting more people involved. You will end up saving time and effort, by inspiring more internal buy-in and deeper emotional investment, with your long-term strategic goals.

Alignment is inclusive, meaning, it allows input. People are far more likely to engage positively with a set of new goals for the year when they feel that their perspective has been taken into consideration and their concerns have been given a fair hearing. By including team members in planning discussions that will affect them, before a strategy is finalized, you will increase the team’s emotional investment in the strategy’s success. When your team members are included, it’s more likely that they will develop a sense of ownership of strategically important initiatives. That’s preferable to your strategy being seen as some upper management “directive” that comes out of nowhere.

Transparency and timely communication

One of the biggest sources of delay and confusion in executing strategies is team members and leaders who aren’t kept up to date with the latest information. Team members need not only transparency – meaning access to relevant information – but also regular contact from someone who will share with them, on a personal level, what’s going on in relation to the big, new idea. People want to be kept in the loop about what affects them. They need to be reassured that they are being given all the relevant information, and that the deliverables for which they will be held responsible are going to be reasonable and within their power to complete. If you don’t communicate with them, they begin to fill in the blanks with their own reality… fantasy.

Keeping team members up to date falls under the heading of Ongoing Goal Communications. Other elements of good goal communication that support the “Up to Date” duty include:

• Personal support from organizational management ideally, with a clear understanding of the personal aspirations of each team member. Yes, these aspirations take a little time to uncover, but the time investment is almost always worth it. Look for ways to connect what the person wants to your strategic initiative!
• Concise written expression of the goals that are simple and effective, and do not rely on technical language or acronyms.
• Making sure everyone sees the same versions of goals, not a second- or third-hand summary.
• Identification of roles and responsibilities for each individual team member.
• Involvement and accountability at both the team and individual level.
• A means for submitting feedback and updating the team’s status going forward.

Measure and reward performance

Team leaders need to identify metrics by which the team’s behavior and outcomes can be measured over time against the goals and timelines that everyone has agreed on.

On a tech team, I often have a set of table stakes that all staff must achieve and then I take management goals, reduce them to how the team (or department) can most readily affect our goals, then have the team reduce these to each tribe, squad and/or chapter (depending on how you organize) and tie it to personal performance goals. All of the goals are tracked on a monthly basis and we meet with each and every staff member on a weekly basis to see if everything is still onside. The same approach can be adapted to other teams in other departments.

If you reach out to the team, keep them up to date, and create and track the right metrics, you can make the company’s mission personal and keep each team in your organization on track.

An executive’s role (progression) in startup management

I recently learned about the “four stages” of an executive’s role via the High-Growth CEO Forum.

While I’ve always held similar views around how the executive team’s responsibilities should evolve as a company grows, this was the first time I really saw these ideas codified (and presented in a classroom type setting).

Here are the four stages:

1. Startup Stage: sole focus is developing product
2. Initial Growth Stage: shift focus to driving sales
3. Rapid Growth Stage: shift focus to leading the market
4. Continuous Growth Stage: shift focus to dominating the industry

As your company moves through these four stages of growth, and your executives shift what they’re focusing on, the skillsets of those executives also need to shift.

In the startup stage, you need those doers/decision-makers (i.e. generally the founders who have had a great idea and are executing on creating it). They’re people who can lead and operate on the front-lines.

When you reach the initial growth stage, however, you need executives who are a little more hands-off, and who are masters at delegating tasks and giving direction to their teams.

In the rapid growth stage, executive responsibilities expand beyond coordinating a team’s efforts to include building out the team and planning for long-term growth. Executives at this stage need to be expert communicators and they need to take a more active role in coaching employees.

Finally, in the continuous growth stage, executives move from being team-builders and planners to organization-builders and strategic innovators. They affect changes across hundreds if not thousands of employees and are the chief stewards of a company’s culture.

 Strategic Planning should focus on solutions, not financial forecasts

After co-founding, managing and coaching several successful companies, I realized that strategic planning –when the management team sits down to figure out where the company should be going – is often a major waste of time when done incorrectly and takes the focus away from where your energy should be spent; building a great product. You should be strategically thinking about what problems to solve, not about revenue projections, profits or other forecasts. If you build a great product that solves a big problem and have properly aligned sales and marketing teams, the numbers will follow.

Don’t Let customers dictate the solution

Let your customers dictate the problem, but never the solution.

When you organize around your market, hence your customer, you’ll be in a better position to see their pain points. Let your customers dictate the problem, but never the solution. Customers sometimes see problems that you don’t because you’re oftentimes too ingrained in the product. When it comes to the solution, however, there’s nobody better (or at least there shouldn’t be anyone better) than your own team to come up with the best answer.

The most obvious solution is often overlooked (or don’t be too smart for your own good)

It’s the obvious answers that are frequently overlooked. Too often, people aren’t satisfied with obvious solutions, or think that simple solutions can’t be good ones, when in fact they can be the least costly and most effective. When you’re part and parcel of a team that is very smart, the thinking heads will often try to make really elegant and obscure solutions to things that have been solved many times in the past, by people with way more experience.  Resist this; it’s fruitless and huge waste of time (in most respects); opt for the obvious solution and think KISS – Keep it Simple Stupid.

Continuous, feedback-based performance management

Regular feedback empowers people to reset goals continuously, change projects, and feel rewarded for their “work,” not just their “job.” Employee survey tools give managers immediate input on their own performance, boosting transparency.

One on ones are key to our survival these days. All of the managers that I lead must have one one ones set in their calendar and I track the fact that they are indeed holding them and getting results (and minutes) from them. Should there every be any issue, I need my managers to attend to them immediately and I empower all of them to do so, I do not want any issue festering and leading to poor employee (or worse; team) morale. I then task one of them per quarter to amass the results, aggregate them and report back to me on a quarterly basis.

Conclusion

Just as everything, other than death and taxes, there is no certainty in life (and in business).  Luckily, setting your organization (and management team) to be aligned, measured, reporting and performance driven is a good way to set yourself up for success.  Nothing can beat the right product at the right time (i.e. Instagram and SnapChat), but barring lucking into one of those, the slow, methodical, daily grind associated with real business is required.

Do most of these things with your team and you’re well on your way to have a very engaged, aligned, focused team who will go to battle for you.