Jul 012014

Book Short: Culture is King

Book Short:  Culture is King

Joy, Inc.:  How We Built a Workplace People Love, by Richard Sheridan, CEO of Menlo Innovations, was a really good read. Like Remote  which I reviewed a few weeks ago, Joy, Inc. is ostensibly a book about one thing — culture — but is also full of good general advice for CEOs and senior managers.

Also like Remote, the book was written by the founder and CEO of a relatively small firm that is predominately software engineers, so there are some limitations to its specific lessons unless you adapt them to your own environment. Unlike Remote, though, it’s neither preachy nor ranty, so it’s a more pleasant read.  And I suppose fitting of its title, a more joyful read as well. (Interestingly on this comparison, Sheridan has a simple and elegant argument against working remotely in the middle of the book around innovation and collaboration.)

Some of the people-related practices at Sheridan’s company are fascinating and great to read about. In particular, the way the company interviews candidates for development roles is really interesting — more of an audition than an interview, with candidates actually writing code with a development partner, the way the company writes code. Different teams at Return Path interview in different ways, including me for both the exec team and the Board, but one thing I know is that when an interview includes something that is audition-like, the result is much stronger. There are half a dozen more rich examples in the book.

Some of the other quotable lines or concepts in the book include:

  • the linkage between scalability with human sustainability (you can’t grow by brute force, you can only grow when people are rested and ready to bring their brain to work)
  • “Showcasing your work is accountability in action” (for a million reasons, starting with pride and ending with pride)
  • “Trust, accountability, and results — these get you to joy” (whether or not you are a Myers-Briggs J, people do get a bit of a rush out of a job well done)
  • “…the fun and frivolity of our whimsically irreverent workplace…” (who doesn’t want to work for THAT company?)
  • “When even your vendors want to align with your culture, you know you’re on the right path” (how you treat people is how you treat PEOPLE, not just clients, not just colleagues)
  • “One of the key elements of a joyful culture is having team members who trust one another enough to argue” (if you and I agree on everything, one of us is not needed)
  • “The reward is in the attempt” (do you encourage people to fail fast often enough?)
  • “Good problems are good problems for the first five minutes. Then they just feel like regular problems until you solve them” (Amen, Brother Sheridan)

The benefits of a joyful culture (at Return Path, we call it a People-First culture) have long been clear to me. As Sheridan says, we try to “create a culture where people want to come to work every day.” Cultures like ours look soft and squishy from the outside, or to people who have grown up in tough, more traditional corporate environments. And to be fair, the challenge with a culture like ours is keeping the right balance of freedom and flexibility on one side and high performance and accountability on the other. But the reality is that most companies struggle with most of the same issues — the new hire that isn’t working out or the long-time employee who isn’t cutting it any more, the critical path project that doesn’t get done on time, the missed quarter or lost client.  As Sheridan notes though, one key benefit of working at a joyful company is that problems get surfaced earlier when they are smaller…and they get solved collaboratively, which produces better results. Another key benefit, of course, is that if you’re going to have the same problems as everyone else, you might as well have fun while you’re dealing with them.

If you don’t love where you work and wish you did, read Joy, Inc. If you love where you work but see your company’s faults and want to improve them, read Joy, Inc. If you are not in either of the above camps, go find another job!

May 222014

The 90-Day Reverse Review

The 90-Day Reverse Review

Like a lot of companies, Return Path does a 90-day review on all new employees to make sure they’re performing well, on track, and a good fit.  Sometimes those reviews are one-way from the manager, sometimes they are 360s.

But we have also done something for years now called the 90-Day Reverse Review, which is equally valuable.  Around the same 90-day mark, and unrelated to the regular review process, every new employee gets 30 minutes with a member of the Executive Committee (my direct reports, or me if the person is reporting to someone on my team) where the employee has a chance to give US feedback on how WE are doing.

These meetings are meant to be pretty informal, though the exec running the meeting takes notes and circulates them afterwards.  We have a series of questions we typically ask, and we send them out ahead of time so the employee can prepare.  They are things like:

-Was this a good career move?  Are you happy you’re here?

-How was your onboarding experience?

-How do you explain your job to people outside the company?

-What is the company’s mission, and how does your role contribute to it?

-How do you like your manager?  Your team?

-Do you feel connected to the company?  How is the company’s information flow?

-What has been your proudest moment/accomplishment so far?

-What do you like best about the company?

-If you could wave a wand and change something here, what would it be?

We do these for a few reasons:

-At the 90-day mark, new employees know enough about the company to give good input, and they are still fresh enough to see the company through the lens of other places they’ve worked

-These are a great opportunity for executives to have a “Moment of Truth” with new employees

-They give employees a chance to productively reflect on their time so far and potentially learn something or make some course correction coming out of it

-We always learn things, large or small, that are helpful for us as a management team, whether something needs to be modified with our Onboarding program, or whether we have a problem with a manager or a team or a process, or whether there’s something great we can steal from an employee’s past experiences

This is a great part of our Operating System at Return Path!

Apr 242014

Breaking New Ground on Transparency

Breaking New Ground on Transparency

I’ve written a lot over time about our Live 360 process for senior leaders in the business.  (This post is a good one, and it links to a couple earlier ones that are good, as well.)  We take a lot of pride in feedback and in transparency at Return Path, and after 15 years, even for an innovative business, it’s unusual that we do something big for the first time around people.  But we did today.

This image is of something never seen before at our company.  It’s my own handwritten notes about my own Live 360.

360 notes

It’s never been seen before, because no one has ever been physically present for his or her own review before.  In previous reviews, my Board, my exec team, and a few skip-levels gather in a room for 90 minutes with a facilitator to discuss my performance and behaviors.  Then the facilitator would go away and write up notes, and discuss them with me, then I’d produce a development plan.

Today, we decided to experiment with having me sit in my own review to add to the transparency and directness of the feedback.  My only role was to listen, ask (non-judgmental) clarifying questions, and take notes.  I left the room at the end in case someone wanted to say something without me hearing it directly, but although the conversation about the business continued, it didn’t sound like there was anything material about me that surfaced.

It was a little awkward at first, and it was interesting that some people addressed me directly while others spoke of me in the third person.  But once we got past that, the experience was incredibly powerful for me.  The first part — the “what do you appreciate about Matt” part — was humbling and embarrassing and gratifying all at the same time.

The meat of the review, though — the “how can we coach Matt on areas where he needs development” — was amazing.  I got great insights into a couple of major areas of work that I need to do, and that we need to do as a business.  I’m guessing I would have gotten them out of reading a summary of the review conversation, but hearing the texture of the conversation was much, much richer than reading a sanitized version of it on paper.  As always with reviews, there was the odd comment or two that annoyed me, but I felt like I handled them well without any defensive body language or facial expressions.

I will, as I’ve always done, post my development plan to my blog after I formulate it over the course of the next few weeks.  But for now, I just want to thank my Board and team for their awesomely constructive feedback and for helping us usher in a new era of increased transparency here.

Mar 062014

Open Vacation

At Return Path, we’ve had an “open vacation” policy for years, meaning that we don’t regulate the amount of time off people take, and we don’t accrue for it or pay out “unused” vacation if someone leaves the company.  I get asked about this all the time, so I thought I’d post our policy here and also answer a couple follow-up questions I usually get about it.

First, here’s the language of our policy:

Paid Time Off

You’re encouraged to take as much time off as you can while maintaining high performance and achieving your goals. We don’t count the hours you work, so why should we count the hours you don’t? (Unless you’re a non-exempt employee, and only then because we have to!) Take what you need, when you can, and make sure to arrange coverage with your team. If you haven’t had a vacation in a while, you can expect to get a friendly nudge from your manager to get away from the office!

Use your Paid Time Off (PTO) for planned vacations, days off for appointments, religious, or personal holidays that are not offered in your country, community service days, or if you need an unanticipated, last-minute day off to care for a sick child or family member. Statutory or legally protected leaves of absence, such as medical leave, maternity/parental leave, family medical leave or unpaid leave, are governed by separate regulations that will not be affected by our PTO policy. See the Regional section for a list of statutory leaves of absence in your country.

Paid Time Off scheduling is subject to approval by your manager, who has sole discretion to approve or deny requests under this policy. Requests of greater than two consecutive weeks or more than two weeks in one three-month period require approval of your Executive Committee member.

The first question I always get is, “Wow – does that really work?  What issues have you had with it?  My response:

No issues with it at all, other than it’s a little weird to apply internationally, where we have 50 people across 7 countries, since most of those countries have significantly more generous vacation policies/customs than the US.  But we generally make it work.

The second question I get is whether people abuse it or not:

In all the years we’ve done it, we only ever had one person attempt to abuse the policy, one time.  People do still have to ask their managers if it’s ok to take time off, and they do still have to get their jobs done.

Finally, people ask me for general advice on implementing this kind of policy:

Continue to track days off and generate reports for managers every quarter so they at least know whether their people are taking not enough or too much – generally people will take not enough, and you will need to encourage them to take more.  Also, our managers were *really* worried about launching this, so we had to do some hand-holding along the way. 

The results of this policy for us have generally been great.  People take about the same amount of true vacation they used to take, maybe a little more.  They definitely take more half-days and quarter-days where they probably still get a full day worth of work done, without worrying about counting the hours.  Best of all, there’s a strong signal sent and received with this kind of policy that we trust our team members to do what they need to do in order to live their lives AND get their jobs done.

Feb 132014

HR/People Lessons from Netflix

It feels as if almost everyone in our industry has read the famous Netflix culture deck on Slideshare, and with over 5mm views, that may not be too far off.  If you haven’t looked at it before, and if you care about your organization’s culture and how productive and happy employees are the best kind of employees, then take the time to flip through it.

As part of a benchmarking exercise we did on employers with unique and best HR/People practices a few years ago, a few of us did either site visits or at least live interviews with leaders at four companies, all of whom are pretty well known for progressive People practices that are also in-line with our company’s culture:  Morningstar, Gore, Nucor, and Netflix.  As part of this, we met in person with Patty McCord, Netflix’s long-time head of People.  It was a really informative meeting.

Now Patty has written a longform article in Harvard Business Review that shares a lot of what we learned from her in her office that day. It’s absolutely worth a read.  Netflix does have a pretty distinct culture and gets positive but mixed reviews on Glassdoor, so as with everything, I’m not advocating adopting everything they do lock, stock, and barrel.  But I can guarantee that some of the lessons that Patty shares are valuable no matter what your company is like.

Jan 302014

New New Employee Training

Years ago, my co-founder Jack and I developed a training presentation to give to new employees who were not just new to Return Path but also new to the workforce.  This is another one of those things, like my last post on our sabbatical policy, that people ask me for all the time.

Bringing new people into the workforce is different from just bringing new people into an organization.  I know I got a huge amount of value in my first job in management consulting from just learning how to go to work every day and how to be successful professionally.  The process you need to go through is like Onboarding, but on steroids.

Not everyone has parents or older siblings or role models who work in business — or for that matter, who focus on any kind of workplace mentoring.  It may sound dumb, but even things like showing up on time for work, what to wear, and how to meet with your manager aren’t necessarily obvious even to smart and well-intentioned 21-year olds.

So with the caveats that it’s a little dated as is, and that it’s more relevant to the kind of company we are at Return Path (e.g., we serve business clients), here’s a SlideShare version of the presentation.



Feel free to plagiarize, customize, and share it from here if you’re interested.

Jan 022014

Sabbaticals

I’ve written a few times over the years about our Sabbatical policy at Return Path, including this post and this post about my experience as CEO when one of my direct reports was on his sabbatical, and this post about my own sabbatical.

People ask me this all the time, so I thought I’d write the policy out here.  This is the language in our employee handbook about them:

You have big dreams. We know. This is your chance to cross something off your life list. Whether it’s climbing Mt. Everest, learning Russian or taking your kids across the country in a Winnebago, we believe in rewarding longevity at Return Path and know that a good long break will leave you refreshed and energized!  As such, you are eligible for a sabbatical after your first seven (7) years of employment; then again after every five (5) years incremental employment. The sabbatical provides you with up to six (6) weeks of consecutive time off provided you have that time off approved by your manager at least two months prior to the start of your sabbatical.

You will be requested to sign an Agreement before your sabbatical: if you do not return to work after your sabbatical or if you leave employment within twelve (12) months of returning to work, you will be required to reimburse all amounts received while on sabbatical.  If a holiday occurs on any of of the days of absence, you will not receive holiday pay in addition to your sabbatical pay.  During your sabbatical, your benefits will continue and you will be responsible for making payments for the employee portion of insurance costs if applicable. The period you are on leave will be counted as employment for the purposes of determining your applicable level of benefits.  If you are eligible and have not taken your sabbatical and your employment with Return Path ends (for any reason), you will not be paid out for sabbatical time not taken.

I also wrote an email recently to someone internally that is worth reprinting here, which is How to Prepare for Your Sabbatical, which is aimed at both the person taking the sabbatical, and the person’s manager:

As the employee:

-          Prepare your team

  • Make sure their goals and metrics for your time out are super clear
  • Make sure they know who to go to for what
  • Set their expectations of management coverage (see below). 
  • Remember that your manager has a day job so you should look to see how your team members can take over some of the responsibilities.
  • Give them stretch goals while you’re out

-          Prepare your individual contributor work

  • Hand off all loose ends with extra details. 
  • Make introductions via email if your manager/team member  is going to have to work with external parties
  • Can be to your team, to your manager, to someone else

-          Prepare your manager

  • Brief your manager thoroughly on everything going on with your team, its work, your individual contributor work
  • Good topics to cover with your manager:Discuss specifics of team and 1:1 check-ins and agree on a plan for coverage.
    • What are the big initiatives that you’ll need coverage on
    • Which team members would you like the manager to spend a little extra time with?  Are there any work you would like the manager to help a particular EE with?

-          Prepare yourself

  • Plan any personal travel early so you get good rates!
  • Figure out how to keep your work and personal communications separate – your email (autoresponder, routing, disabling from your smartphone), your voicemail if you use Google Voice or Simulscribe, etc.
  • Block out two full days immediately when you return to catch up on email and catch up with your manager and team

As the manager:

-          Prepare your team

  • Make sure the rest of your team knows your time will be compromised while you’re covering
  • Figure out what kind of coverage you need (either internal or external) while you’re covering

-          Rearrange your calendar/travel

  • Add new team meetings or 1:1s as it makes sense.  You don’t have to do exactly what your employee did, but some portions of it will make sense to pick up
  • If your employee works in another office with members of his/her team, you might want to plan some travel there to cover in person
  • It’s ok to cut back on some other things a bit while you’re covering – just remember to undo everything when the employee’s sabbatical is over

-          While you’re in charge

  • Surprise your employee with how much you were able to keep things running in his/her absence!
  • Learn as much as you can by doing bits and pieces of his/her job.  This is a great opportunity of the employee to get some value from a fresh perspective.

-          Prepare for your employee’s return

  • Keep a running tab of everything that goes on at the company, critical industry news (if appropriate), and with your employee’s function or team and prepare a well-organized briefing document so your employee can hit the ground running when he/she returns
  • Block out an hour or two each of the employee’s first two days back to review your briefing document

 

My main takeaway from this post?  I am overdue my second sabbatical, and it’s time to start thinking about that!

Dec 192013

5 Ways to Get Your Staff on the Same Page

5 Ways to Get Your Staff on the Same Page

[This post first appeared as an article in Entrepreneur Magazine as part of a new series I'm publishing there in conjunction with my book, Startup CEO:  A Field Guide to Scaling Up Your Business]

When a major issue arises, is everybody at your company serving the same interests? Or is one person serving the engineering team, another person serving the sales team, one board member serving the VC fund, another serving the early-stage “angels” and another serving the CEO? If that’s the case, then your team is misaligned. No individual department’s interests are as important as the company’s.

To align everyone behind your company’s interests, you must first define and communicate those goals and needs. This requires five steps:

  1. Define the mission. Be clear to everyone about where you’re going and how you’re going to get there (in keeping with your values).
  2. Set annual priorities, goals, and targets. Turn the broader mission into something more concrete with prioritized goals and unambiguous success metrics.
  3. Encourage bottom-up planning. You and your executive team need to set the major strategic goals for the company, but team members should design their own path to contribution. Just be sure that you or their managers check in with them to assure that they remain in synch with the company’s goals.
  4. Facilitate the transparent flow of information and rigorous debate. To help people calibrate the success, or insufficiency, of their efforts, be transparent about how the organization is doing along the way. Your organization will make better decisions when everyone has what they need to have frank conversations and then make well-informed decisions.
  5. Ensure that compensation supports alignment (or at least doesn’t fight it). As selfless as you want your employees to be, they’ll always prioritize their interests over the company’s. If those interests are aligned – especially when it comes to compensation – this reality of human nature simply won’t be a problem.

Taken in sequence, these steps are the formula for alignment. But if I had to single out one as the most important, it would be number 5: aligning individual incentives with companywide goals.

It’s always great to hear people say that they’d do their jobs even if they weren’t paid to, but the reality of post-lottery-jackpot job retention rates suggests otherwise. You, and every member of your team, “work” for pay. Whatever the details of your compensation plan, it’s crucial that it aligns your entire team behind the company’s best interests.

Don’t reward marketers for hitting marketing milestones while rewarding engineers to hit product milestones and back office personnel to keep the infrastructure humming. Reward everybody when the company hits its milestones.

The results of this system can be extraordinary:

  • Department goals are in alignment with overall company goals. “Hitting product goals” shouldn’t matter unless those goals serve the overall health of your company. When every member of your executive team – including your CTO – is rewarded for the latter, it’s much easier to set goals as a company. There are no competing priorities: the only priority is serving the annual goals.
  • Individual success metrics are in alignment with overall company success metrics. The one place where all companies probably have alignment between corporate and departmental goals is in sales. The success metrics that your sales team uses can’t be that far off from your overall goals for the company. With a unified incentive plan, you can bring every department into the same degree of alignment. Imagine your general counsel asking for less extraneous legal review in order to cut costs
  • Resource allocation serves the company, rather than individual silos. If a department with its own compensation plan hits its (unique) metrics early, members of that team have no incentive to pitch in elsewhere; their bonuses are secure. But if everyone’s incentive depends on the entire company’s performance, get ready to watch product leads offering to share developers, unprompted.

This approach can only be taken so far: I can’t imagine an incentive system that doesn’t reward salespeople for individual performance. And while everyone benefits when things go well, if your company misses its goals, nobody should have occasion to celebrate. Everybody gets dinged if the company doesn’t meet its goals, no matter how well they or their departments performed. It’s a tough pill to swallow, but it also important preventive medicine.

Dec 052013

Onboarding vs. Waterboarding

Onboarding vs. Waterboarding

One of our new senior hires just said to me the other day that he has been enjoying his Onboarding process during his first 90 days at Return Path and that at other companies he’s worked at in the past, the first few months were more like Waterboarding.

At Return Path, we place a lot of emphasis on onboarding – the way we ask employees to spend their first 90 days on the job.  I’ve often said that the hiring process doesn’t end on the employee’s first day.  I think about the employee’s first day as the mid-point of the hiring process. The things that come after the first day — orientation (where’s the bathroom?), context-setting (here’s our mission, here’s how your job furthers it), goal setting (what’s your 90-day plan?), and a formal check-in 90 days later — are all make-or-break in terms of integrating a new employee into the organization, making sure they’re a good hire, and making them as productive as possible.

Nothing has a greater impact on a hire’s long-term viability than a thorough Onboarding. Sure, you have to get the right people in the door. But if you don’t onboard them properly, they may never work out. This is where all companies, big and small, fail most consistently.  Remember your first day of work? Did you (or anyone at the company) know where you were supposed to sit? Did you (or anyone at the company) know if your computer was set up? Did you (or anyone at the company) have a project ready for you to start on? Did you (or anyone at the company) know when you’d be able to meet your manager? Probably not.

Take onboarding much more seriously, and you’ll be astounded by the results. We have a Manager of Onboarding whose only job is to manage the first 90 days of every employee’s experience. You don’t need to go that far (and won’t be able to until you’ve scaled well past 100 employees), but here are some things you can, and must, do to assure a successful onboarding process:

1. Start onboarding before Day 1. Just as recruitment doesn’t end until Day 90, onboarding starts before Day 1. At Return Path, we ask people to create a “Wall Bio” – a one-page collage of words and images that introduces them to the team – before their first day. It’s a quick introduction to our company culture, and something the rest of our team looks forward to seeing as new people join. Your project can be different, but it’s important to get new hires engaged even before their first day.

2. Set up your new hire’s desk in advance. There is nothing more dispiriting than spending your first day at new job chasing down keyboards and trying to figure out your phone extension. We go to the opposite extreme. When a new hire walks in the door at Return Path, their desk is done. Their computer, monitor and telephone are set up. There’s a nameplate on their office or cube. They’ve got a full set of company gear (T-shirt, tote, etc.). To show how excited we are, we even include a bottle of champagne and a handwritten note from me welcoming them to the company. In the early days of the business, we even had the champagne delivered to the employee’s home after they accepted the offer. (That didn’t scale well, particularly outside of New York City.)

3. Prepare an orientation deck for Day 1. There are certain things about your company that new hires will learn as they go along: nuances of culture, pacing, etc. But there are some things that should be made explicit right away. What is the company’s mission? What are its values? How is the organization structured? What is the current strategic plan? These details are common to every employee, and all new hires should hear them—preferably from the CEO. You can present these details one-on-one to your direct reports, or do larger in-office sessions to groups of new hires over breakfast or lunch.

4. Clearly set 90-day objectives and goals. Other details are going to be specific to an employee’s position. What’s their job description (again)? What are the first steps they should take? Resources they should know about? People they should meet? Training courses to enroll in? Materials to read and subscribe to? Finally, and most importantly, what are the major objectives for their first 90 days? They shouldn’t spend their first quarter “feeling around.” They should spend it actively and intentionally working toward a clear goal.

5. Run a review process at the end of 90 days. Whether you do a 360 review or a one-way performance review, the 90-day mark is a really good point to pull up and assess whether the new hire is working out and fitting culturally as well. It’s much easier to admit a mistake at this point and part ways while the recruiting process is still somewhat fresh than it is months down the road after you’ve invested more and more in the new hire.

With that, the hiring process is done. Now, repeat.

[Note:  this post contains some passages excerpted from my book, Startup CEO:  A Field Guide to Scaling Up Your Business, published by Wiley & Sons earlier this fall.]

Nov 212013

Debunking the Myth of Hiring for Domain Expertise vs. Functional Expertise

Debunking the Myth of Hiring for Domain Expertise vs. Functional Expertise

As a CEO scaling your business, you’ll invariably want to hire in new senior people from the outside.  Even if you promote aggressively from within, if you’re growing quickly enough, you’ll just need more bodies.  And if you’re growing really fast, you will be missing experience from your employee base that you’ll need to augment.

For years, I’ve thought and heard that there’s a basic tradeoff in hiring senior people — you can hire someone with great domain expertise, or you can hire someone with great functional expertise, but it’s almost impossible to find both in the same person, so you need to figure out which is more important to you.  Would I rather hire someone who knows the X business, or someone who is a great Head of X?  Over the course of the last year, I’ve added four new senior executives to the team at Return Path, and to some extent, I’ve hired people with deep functional expertise but limited domain expertise.  Part of that has been driven by the fact that we are now one of the larger companies in the email space, so finding people who have “been there, done that” in email is challenging.

But the amount of senior hiring I’ve done recently has mostly shown me that the “domain vs. functional” framework, while probably accurate, is misleading if you think of it as the most important thing you have to consider when hiring in senior people from the outside.

What’s more important is finding people who have experience working at multiple growth stages in their prior jobs, ideally the scaling stage that you’re at as a business.  It makes sense if you stop and think about it.  If your challenge is SCALING YOUR BUSINESS, then find someone who has DONE THAT before, or at least find someone who has worked at both small companies and larger companies before.  I suppose that means you care more about functional expertise than domain expertise, but it’s an important distinction.

Looking for a new industrial-strength CFO for your suddenly large business?  Sure, you can hire someone from a Fortune 500 company.  But if that person has never worked in a startup or growth stage company, you may get someone fluent in Greek when you speak Latin.  He or she will show up on the first day expecting certain processes to be in place, certain spreadsheets to be perfect, certain roles to be filled.  And some of them won’t be.  The big company executive may freeze like a deer caught in the headlights, whereas the stage-versatile executive will invariably roll up his or her sleeves and fix the spreadsheet, rewrite the process, hire the new person.  That’s what scaling needs to feel like.

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