High Growth Handbook

by Elad Gil

  In ways big and small, you need to remember to take time for yourself. If you have a significant other, make sure at least one night a week is held for date night—and really do something together that night. Similarly, schedule exercise in the morning at least three times a week. One way to enforce this is to hire a personal trainer or schedule workouts or runs with a friend. That peer pressure will ensure that you actually make it happen.

  Work on things you care about

  A common trigger of founder burnout is finding yourself working on things that you hate. Some product-centric founders end up having to spend endless hours on managing people, sitting in meetings discussing sales compensation plans, sales pipelines, marketing plans, HR issues, and other items that bore them to tears. Mark Zuckerberg famously delegated big swaths of Facebook to Sheryl Sandberg in order to free up more time to focus on product and strategy.

  If you end up working long hours on things you fundamentally couldn’t care less about, you should consider hiring one or more executives (or a COO) to do all those things on behalf of the company. As a founder and CEO, you do not need to be excellent at everything or enjoy everything. Rather, you need to build the competency within the company so that the company collectively is excellent at these other functions.

  When you take care of yourself, you’ll be much better equipped to tackle the next key leadership tasks of a CEO: managing your reports (next section) and managing your board of directors.

  The role of the CEO: Managing your reports

  There are a few key elements to managing your team of reports. A lot has been written about this topic already, so rather than write something for the sake of writing, here are some relevant links and brief suggestions.

  1. You should hold regular 1:1s with your team. Ben Horowitz has great advice on how to hold 1:1 meetings in a pair of posts.6

  2. Once you are at about 30 people, you should hold a weekly staff meeting.

  Schedule a regular weekly time.

  Review key metrics.

  Be ready with a set of key topics for discussion on broader company or product strategy or key issues a functional area faces. Different members of the staff can present on a specific key topics or issue each week. Note: this is not meant to be an opportunity for team members to give an in-depth update once a week—it is a forum for discussion of metrics and strategy.

  Remember the purpose of the meeting may be more for your reports then for you. While you have context on what every executive is doing, the other executives will not otherwise have clarity into their peers’ organizations. The weekly staff meetings are meant to create a forum for knowledge sharing and issue raising, relationship building, collaboration, and strategy.

  3. You should start to add skip-level meetings as one way to stay in touch with the broader organization. As companies scale, the CEO often starts to lose touch with what is happening in the company. Information starts to get filtered by middle managers or hires from big companies, who view their job in part as shielding the CEO from “unimportant” information. The problem is that they may wind up shielding you from ideas that you consider quite important to know.

  In a skip-level meeting, you meet with employees who work for your reports or are further down in the organizational chart. Often extremely bright junior people may have their fingers on the pulse of the market, or may be alert to key new ideas or information. You’ll benefit from hearing from them, and these promising people will also benefit from learning how you think about your company, product, market, and culture.

  Skip-level meetings help you:

  Create open lines of communication.

  Identify and nurture new talent.

  Get new ideas from people at the front lines of the company.

  One key is to hold skip-level meetings without your reports feeling threatened. If a person’s manager shows up to what is explicitly a skip-level meeting, there is likely something wrong with that manager or their management style. It is also up to you to clearly articulate to your report that you hold skip-level meetings with numerous people at the company so that they do not feel threatened or concerned.

  * * *

  3 One way to find a good executive coach is to ask other entrepreneurs who they have used. Alternatively, you can find a semi-retired executive, one who has successfully driven large teams, to mentor and coach you.

  4 I still occasionally tidy up around the office and encourage others to do so. People should feel ownership of their own environment. But there comes a point when the CEO shouldn’t be doing this all the time.

  5 Read the original post on entrepreneurial seductions and distractions at eladgil.com. [http://blog.eladgil.com/2013/05/entrepreneurial-seductions-and.html]

  6 See links on eladgil.com. [https://a16z.com/2012/08/18/a-good-place-to-work/ and https://a16z.com/2012/08/30/one-on-one/]

  DECISION-MAKING AND MANAGING EXECUTIVES

  An interview with

  Claire Hughes Johnson

  Claire Hughes Johnson is the Chief Operating Officer of Stripe and a board member at Hallmark Cards. Previously, she was a Director of Online Sales and Operations and Vice President of Google Offers and Google X, where she led operations for that company’s self-driving-car initiative. Johnson holds a bachelor’s degree in English literature from Brown University and master’s degree in strategy and marketing from Yale School of Management.

  When Claire Hughes Johnson joined Stripe as COO in 2014, the company had 165 employees. Now that number has grown to over 1,000. Along the way, the technology startup has entered into partnerships with giants like Amazon and launched next-generation products like Atlas, which guides internet companies through incorporation.

  In our interview, we talk about how to manage your reports, how the org chart should be structured, and how to build functional processes that will help your company scale. We also address strategic planning and how founders should be allocating their time as the company grows.

  Elad Gil:

  Urs Holzle, who was an early SVP at Google, literally wrote, “A Guide To Urs” about the interaction approaches that work best for him. So if you needed to interact with him or you wanted things from him, you knew what to do. And apparently that really helped streamline how people worked with him. Do you think every founder or exec should write such a guide, or is that only for specific instances?

  Claire Hughes Johnson:

  I think it’s a best practice. When I came into Stripe, I had a similar document. I wrote a document back when I was at Google called, “Working with Claire.” And when I first got to Stripe, I adapted it slightly, but it was pretty relevant. I shared it with everyone who was working with me closely, but I made it an open document. It spread quite quickly through the organization. It made sense, because I was new, I was in a leadership role, people wanted to understand me. And then people started asking, “Well, why don’t we have more of these?”

  It’s been a little bit of a viral, organic adoption, and now a lot of people at Stripe have written their own guides to themselves. I’ve even had folks who are not managers but are on my team write me these guides to them. And it’s been super insightful. So I’m a huge fan.

  I think that founders should write a guide to working with them. It would be one of the pieces I’m describing, to clarify the founder’s role: “What do I want to be involved in? When do I want to hear from you? What are my preferred communication modes? What makes me impatient? Don’t surprise me with X.” That’s super powerful. Because the problem is, people learn it in the moment, and by then it’s too late.

  Elad: Another thing that I’ve seen a lot of companies do as they scale is implement more day-to-day processes. Because there’s a huge difference between running a 100-person company and a 1,000-person company, particularly if you have a large product and engineering org. Are there two or three things like that that you view as the most crucial processes as a company starts to grow, and that help free up executive time?

  Clai
re: Yes. I would say that it’s a combination of what I would call “operating structures,” which are things like documenting your operating principles and processes. Operating structures are not tied to any one particular process, but instead explain, “This is what we expect of ourselves, in terms of how we work.” And when you document things like that, new leaders, new managers, new people in the organization can say, “Ah, this is what’s important. Let me adapt my behavior as we scale to follow along in this structure.”

  And then you have things like launch processes or what-have-you. One thing I’ve observed is that you can’t make too many things at a company mandatory. You really have to be judicious about the things that you’re going to require, because there just can’t be that many. There’s probably something related to performance and feedback. There’s probably something related to whatever your planning process is. And then there’s a few day-to-day tactical things, like a launch review. But you can’t have that many and you can only have one at each level.

  As you scale, you realize, “Huh, I really need more of these.” And the danger is getting too process-y instead of outlining the objectives so people understand, “Okay, we’re doing this for this reason.” It’s almost like you want to provide more context versus trying to exert more control. Because maybe in a very autocratic, hierarchical, bureaucratic structure you can exert control and you can micromanage. But most successful, high-growth, fast-moving companies are instead an environment of smart people who are all trying to optimize and do the right thing. They need some structural boundaries, but you can’t over-constrain them. And that’s why you want to have some high-level metrics that everyone’s steering toward, operating principles, a documentation of plans, and then a set of processes that you follow.

  So for us, yes, if your launch is not on the product launch calendar, that means it’s not going to happen. You better get it on the calendar. And in order to get it on the calendar, you have to follow some steps. But you can only have a few of those.

  As your company grows, how you communicate information has to evolve, too. Don’t forget as you build these structures and establish a few processes that you need to have new communication approaches. Because not everyone is in the room anymore. What does everyone have to read? Where is all the documentation? Where is the source of truth? How do you use your all-hands meetings? How do you use emails from the leadership team? You have to think about all of that.

  “I think that founders should write a guide to working with them.”

  —Claire Hughes Johnson

  Elad: Yeah, that actually happened really early on at Color. We started asking that everybody send out meeting notes as part of every meeting, so there was transparency in terms of who attended, what was discussed, etc. And one early person pushed back. It was an example where literally a week into it he was saying, “Oh my god, you were right. We should have been doing this all along.” There was a lot of resistance and a perception that it was micromanagement or it was us trying to track everybody in a nefarious way. But it was really just trying to open up communication.

  Claire: Right, and just saying, “This is about context and communication, not about control” is so important. You literally have to state the obvious and make sure people know that.

  Elad: How do you think the org structure maps to decision-making?

  Claire: That’s a great question. For starters, I think that there’s no such thing as an optimal org structure. If you’re searching for one, yeah, good luck. There are certain sets of things that can be very functionally related to certain org leaders, so you can use org structure as a decision-making proxy to a point. But you really have to be careful that people don’t make false assumptions about who is responsible for a given decision.

  At Stripe, for example, we make a lot of decisions jointly as a group. You’re just not going to find one person you can go to, which I think can be frustrating internally. But in fact, if you believe in the wisdom of crowds or the fact that a smart group of people is going to make a better decision than one person alone, it’s a good thing. But that means you have to set expectations within the organization that they’re going to have to take the time to make sure that smart group of people is informed.

  My answer would be that you can map decision-making to org structure to a point. Then it goes back to being explicit about how certain types of decisions are going to be made. “Hey, if we’re making a major pricing change, everyone on the leadership team needs to agree.” Be transparent to the org about whose role and responsibility it is to make those calls.

  Otherwise, it just starts defaulting to the founder, which is not healthy for scale. I do know some executive teams who write up “roles and responsibilities” docs that they share internally. One part of those documents could be clarifying the things for which each person is the primary decision-maker. And if they’re not the primary decision-maker, where do you go? That helps organizations know how to adapt as things scale.

  Elad: What decisions do you think should not be made by a group? There are a variety of different models; some orgs are very consensus driven, and some are almost dictatorial depending on who’s in charge. Are there specific things that you think should always just be owned by an individual? Or do you think it really depends on the context? What should the CEO not delegate, in other words?

  Claire: I would say that there’s a difference between a CEO or founder facilitating a group discussion to get opinions from people and making a group decision. And they might need to say, “Okay, ultimately, I’m the one who’s going to make this decision.”

  Sometimes that gets confused, though, because the group thinks they’re the decision-maker and that the goal is consensus. When really the goal is, “Let’s hash it out together. We may not all agree. One person will be the decision-maker, and then we will all commit to it.” If you don’t clarify what kind of decision this is, then groups really struggle because their expectations are not set correctly.

  When I’m leading through a tough decision, I try to say, at the outset, “I want all of your opinions, but I’m going to be the one who ultimately makes the decision.” Or in some cases, I will say, “I don’t know if I’m the right decision-maker. I need help exploring what the decision vectors are, and I need all of your help. And then I will let you know how we’re going to make the decision once we’ve talked about it.” If you don’t give people that guidance, which is I think a common mistake, you’re likely to run into trouble.

  Ultimately, there will always be decisions that the CEO and the founder have to own, with a lot of input from the process and the system. Hiring a significant new leader for the company, for example.

  One thing I’ve been talking a lot about with our engineering team is that usually your company’s plans and incentives and metrics structures aren’t built to stop things, or to stop and redo things. So if there is a need to pay down some technical debt or make a really hard call on stopping a project, you need a leadership voice, or even a CEO, to say, “Hey, we’re just not doing this anymore.” Because the org is always oriented toward making it work. I think decisions to stop or to retrench or to rebuild usually have to come from a leader if not a leadership team.

  Elad: That makes a lot of sense. The one other failure mode that I’ve seen, which is in some sense maybe unexpected, is when a founder or CEO hires a more experienced senior exec—a COO or a CFO, for example—and they’re so impressed by that individual’s expertise that they effectively abdicate. They step back from the things that they’re really good at or the decisions that they’re actually uniquely geared for.

  Claire: And that’s not a great signal to the org, because they think, “Wait, do they not care about some of these things anymore?” I think you’re absolutely right. That balancing is really important and it goes back to the beginning of this conversation, which was about having a clear understanding of who’s doing what and how you’re going to work together.

  Elad: Do you have
any thoughts or advice for founders who are navigating growing orgs and new demands for strategic planning?

  Claire: It’s easy to say these things and it’s hard to take the time to do them. I would just recommend that people make the time to do these things, because it’s really valuable time. As a leadership team at Stripe, we spend a lot of time just with ourselves, talking about what we need to do and getting aligned.

  And one last thing: Don’t get too comfortable. Because if you are succeeding in scaling, you’re not going to be able to use everything you came up with for the next phase. Getting your organization used to the fact that it’s an iterative process and that you’re a learning organism and actually celebrating that is much better than resisting. You can almost start viewing yourself as a failure if you have to change these things, and that’s not true. It means you’re succeeding and you need a new thing. Sometimes companies are afraid to reinvent for their next stage, and I really hope people know that it’s a very reasonable thing to do.

  “As your company grows, how you communicate information has to evolve, too.”

  —Claire Hughes Johnson

  Elad: It’s interesting because on the employee side of that, getting re-orged every three to six months because the company is growing so quickly can feel very chaotic and uncertain.