“There was never any trust there. He was constantly conspiring behind my back with the other board members. At the board meetings, it was clear that he was leading a bunch of side conversations…”

I heard this quote from a CEO I had called for a backdoor reference on a potential board member for IronPort. It instantly made me realize the importance of transparency between a CEO and his board. If I were to totally suck at being a CEO, I wanted someone who would have the hard conversation with me. How else does someone learn and improve?

As a first time CEO, I wasn’t sure if I would scale to run IronPort long-term. But I wanted a legitimate shot at it. And I wanted a board member that considered the company’s interest first, but was also committed to helping me become a better CEO.

I will never forget that backdoor reference because it made me think twice about the fundamental skills and characteristics I wanted in a board member. Early on it became clear that transparency and the ability to provide honest feedback were paramount. I learned this through receiving instant and honest feedback following every board meeting (a healthy board practice). When this was coupled with annual 360 performance evaluations I always knew where I stood. The feedback was crucial for my growth.

In addition to transparency and feedback, through my own personal CEO journey, I came to realize that the following represents table stakes for the best board members:

Experience: I wanted someone that had been there, done that. In addition to the investors, I went out of my way to recruit three CEOs to the IronPort board because I wanted to surround myself with people that could help steer me around common potholes and would be unflappable as things were going haywire. Diversity of experience was also very helpful. Some of my board members had been on 50 boards while others had run large direct sales organizations; both contributed in completely different ways. If given a choice, I don’t see why any entrepreneur would take a term sheet from a VC with little or no board or operating experience.

Sharp opinion: Quiet is not helpful. A Melvin Milquetoast who sits there nodding his head all meeting is not helpful. I wanted someone who consistently contributed meaningfully and constructively to the conversation, however wide ranging it became. Every board member slot is an opportunity to find someone truly amazing who will speak up and help you build your business. The traditional “financial expert” as a board member essentially compromises a valuable seat with a former CFO or accountant that rarely contributes outside of their domain. It’s worth working hard to find a CFO that later became a CEO or interviewing hard for a financial expert who really contributes. The thorniest business problems will surface at the board meetings and the different, sharp, opinions help to to better explore the poles of the arguments to make better decisions.

Responsive: Board members need to respond to texts within hours and emails or phone calls within 24 hours – no excuses. Things move fast at startups and when I needed help with a lawsuit, contract, employee situation or financing, I wanted to have a damn batphone with my board members. Yes, I realize that I was not in the business of saving lives, but the difference between landing a rock star candidate or closing a round often depended on the timeliness of a board member’s response.

Does real shit: Being on a board is not just about showing up for the meetings. A board member needs to materially contribute to the success of the business. This includes making numerous introductions to potential customers, partners and employee candidates. This is in addition to being available to interview/sell employee candidates, coach management team members, speak at sales kickoffs or just about anything reasonable that a CEO asks you to do to help the business.

I once had a venture capitalist explain to me that a board doesn’t have many options when it comes to affecting the direction of the company. That if you don’t agree with where the CEO is leading the company, you basically have two levers: 1) threaten to fire the CEO, or 2) fire the CEO. He also added that the former gets pulled much more often than the latter. This describes well the authoritarian and adversarial nature of many CEO-to-board relationships. Given the makeup of most boards, where most of the members lack the practical experience to help coach the CEO, the lever approach is not all that surprising. But like any bad relationship, it’s something to avoid.

The best board members aren’t elected by default. CEO’s that set themselves up with their choice of board member – which means getting more than one term sheet and doing extensive reference checking – are better off. You want to find a coach, not a lever puller.

It took almost six months for my former company IronPort’s acquisition by Cisco to close and it seemed like forever. Although I was still the CEO by name, I was essentially running a “puppet” government with every hire, major expense and strategic shift needing explicit approval from my soon-to-be-overlords. Since Cisco was a functionally organized company, I would soon be losing half of my direct reports as sales, HR, and finance would report into their respective groups. My job was becoming smaller and it had considerably fewer degrees of freedom. So here was the big dilemma: I had signed up for 24 months of re-vesting my founder’s shares that wouldn’t begin until the deal was closed and it already seemed like a paint-drying eternity. I was pretty sure that I wasn’t cut out for a big company but I just couldn’t spend the next two years watching the clock or I’d spiral into insanity. What to do?

An analogy hit me as I watched my son at recent team practice: Water polo. Despite growing up on Florida beaches, I’m not that great of a swimmer. I’ve never even put on a Speedo. I didn’t think that I would like anything about water polo. However, if I was locked in a sports complex every day for two years and everyone else was playing water polo — how long could I sit on the edge of the pool before I gave it a go? Should I just go through the motions? Splash water on my face and feign participation? No, I came to believe there was only one way forward: shave all the hair off my body, put on the Speedo, start throwing elbows, making shots and playing with vigor…

Seriously and specifically, after six months in, I strongly advocated to be put in charge of all Security products at Cisco — a business that was three times larger than IronPort. I believe if the leaders of a newly acquired company are locked up for a significant period of time (>18 months), they should strongly advocate for bigger jobs within the acquiring company. This is especially true if the leader isn’t planning on staying around after the vesting period. This may seem like odd advice, but here’s the rationale:

It’s not about you, it’s about your team. If you’re a disaffected leader, moping around, “doing time” and talking smack, your team will disintegrate and the acquisition will fail. On the other hand, if you land a larger role, you are in a unique position to help them out. You owe it to the people who ate Ramen noodles while you paid them in potentially worthless stock to work at your company in the beginning. In addition to promoting some of them to larger roles within your new org, you will be much more connected to the cross-company opportunities and can advocate for your top performers. When your team sees you engaging, they are more likely to pull harder, too. Most of the mid-level managers at IronPort had a significant increase in their responsibilities at Cisco and it prepared them to take on even larger roles both in and outside the company. There is a myth that employees that come from a startup aren’t cut out for large companies — in fact, many may be ready for a change. Over the eight years we built IronPort, many of our single employees got married, had kids and wanted the current income, benefits, lighter work hours, and increased stability of a larger company.

You need to “sew in the organ” to make the acquisition successful. Most acquisitions fail. If something isn’t big enough to stand on it’s own or doesn’t logically snap into an existing business line, it will usually wither and die. This is especially true if the acquired leaders leave or become disaffected. Employees mimic leaders’ behavior or get shifted to new leaders when the previous ones exit and have no connection or trust with their new reporting chain. If the leaders take larger and different roles within the acquiring company they form beachheads of trust and points of navigation. It becomes less “them” vs. “us” and a more collective “we.” Look, I’m not saying it’s ever going to be Kumbaya over s’mores, but it’s a helluva lot easier to accept the bullshit you get at a large company if you have someone you trust explaining the rationale to you.

You will meet amazing great people as you get closer to the inner circle. If your head isn’t in the game, you’ll never spend any meaningful time with the best people. After my promotion, I got to spend a ton of time with the senior team, went through their version of VP leadership training, and tackled many tough strategic issues. I believe it’s only by really getting to know the key people that you can make an informed decision about making a career at the new company. Yes, I met my share of climbers, passive-aggressive assholes, and C-players but that didn’t really matter long term. The rockstars I came across have become lifelong colleagues — some of whom have stayed — but many have moved on to bigger, more interesting jobs in hot Silicon Valley companies. Don’t overlook the importance of this opportunity.

If you decided to take my advice and push for a larger role, I have a few more suggestions once you’re there:

Don’t play favorites with your old team. If you’ve run a successful startup, you’ve likely attracted first-rate talent to join you. Invariably, the close relationships, trust from working together, and familiarity with their great work will lead you to promote them first and fast. However, it’s important for them to earn some credibility with the new organization first. In retrospect, I moved too quickly and put my old team in charge too fast. We suffered from a perception of an “IronPort takeover” that was hard to reverse. I should have taken more time to evaluate my inherited Cisco team and let the cream of the crop rise naturally.

Mix up the talent. When we announced the reorg, I shuffled the leadership decks completely. The IronPort SVP of Engineering took over the firewall group and the Cisco VP running firewalls took over IronPort. Each had a fresh set of eyes and legs to apply to their new areas and attacked getting up to speed with vigor. In addition, we flew in all the director-level leaders and above from all the product groups to do group brainstorming and come up with new roadmaps for every product. Because the plans were argued and debated out in the open with everyone involved, there was much more buy-in with the employees working on the products.

Speak your mind. I was constantly pointing out inconsistencies, stupid directives, red tape, and anything that got in the way of doing the right thing. The fact that I wasn’t nursing a 10-year career trajectory and was on the fence about staying long term was incredibly freeing in terms of getting things done. In general, large companies get caught up in their processes so much that the leaders forget how to push to do the right thing. In addition to making the experience more entertaining, I met a bunch of other, like-minded leaders and made progress on important projects.

Negotiate for more compensation. Although this is starting to change at companies like Facebook and Google, most large companies are not prepared to be competitive with hot startups for compensating executives. As the leader, you can create a business case of what a comparable compensation plan would look like for a CEO of a private company. The main benefit here, again, is for your team versus you. If you can set up a compensation umbrella for you, it will apply directly to the rest of your executive team and top engineers.

Put together a succession plan. (Especially, if you’ve definitively decided it’s not for you.) In today’s world, 18-month stints are the norm at well-run large companies so there’s no need to feel bad leaving at the end of your vesting period. If you’ve integrated the team, someone would have likely distinguished his or herself and can be promoted into your role. If you’ve addressed your compensation and met all the best people, you’ll have all the data in place to make an informed decision to stay or move on.

In the end, for a variety of reasons, I left Cisco two years to the day when my vesting period was over. My former SVP of marketing at IronPort took over my role as head of all security products at Cisco. Many of the best people at IronPort stayed at Cisco for many years after their IronPort vesting was over. I believe the main reason the acquisition was a success was because the team engaged and meaningfully integrated into Cisco.

     “There are a bunch of aggressive, ivy-league educated, high IQ people working in Bentonville whose careers are going nowhere because they never learned how to connect with other people.” ­­­— Lee Scott, (now former) CEO of Walmart, circa 2008.

During my short tenure at Cisco, I attended a leadership offsite where Lee Scott was the featured speaker. I certainly knew of Walmart but had never heard of Lee Scott before this meeting. He humbly delivered a powerful hour-long speech on leadership ­­­— without notes or slides, as he paced the stage, hands in pockets. While I’ve heard a lot of leaders speak, I’ve never come away more impressed with how the delivery matched the content.

What struck me the most? That authenticity and humility lead to trust. Trust leads to approachability and open communications. And after listening to Lee for just an hour, he felt familiar and approachable.

Honest and fallible.

Lee definitely knew how to be authentic. For others, this may not come so easily.

At the core, coaching authenticity is complicated ­— some might say impossible. Telling someone to be authentic sounds pretty low calorie. Especially to a founder plowing through a list of product and operational goals. But it’s important. An approachable and authentic CEO is essential to fostering a high-performance, open communications culture.

About the clearest discussion I’ve seen on authenticity is a paragraph in Jack Welch’s book, “Winning”:

     “A person cannot make hard decisions, hold unpopular positions, or stand tall for what he believes unless he knows who he is and feels comfortable in his own skin. I am talking about self-confidence and conviction. These traits make a leader bold and decisive, which is absolutely critical in times where you must act quickly, often without complete information. Just as important, authenticity makes a leader likeable, for lack of a better word. Their realness comes across in the way they communicate and reach people on emotional level. Their words move them; their message touches something inside. When I was at GE, we would occasionally encounter a very successful executive who just could not be promoted to the next level. In the early days, we would struggle with our reasoning. The person demonstrated the right values and made the numbers, but usually his people did not connect with him. What was wrong? Finally, we figured out that these people always had a certain phoniness about them. They pretended to be something they were not ­­­— more in control, more upbeat, more savvy than they really were. They didn’t sweat. They didn’t cry. They squirmed in their own skin, playing a role of their own inventing. A leader in times of crisis can’t have an iota of fakeness in him. He has to know himself­­ ­— and like himself ­­­— so that he can be straight with the world, energize followers, and lead with the authority born of authenticity.”

He absolutely nails it.

The quote clearly illuminates the issue, though stops short of giving practical advice. I am often asked by founders and CEOs how to be more approachable or make a personal connection. And of course, while being authentic means something different to everyone — here are a few ways one could start:

Get self-aware. As I mentioned in a previous post (Treating the Dysfunctional CEO), all leaders need feedback. Having an understanding of how others perceive you — through a solid 360-review process — is the crucial first step towards being real. Learn and accept your foibles and faults. Poke fun and work on them out in the open. “I’ll try to keep this short, I know I can be long winded…” etc.

Talk about failures. Nothing helps make a leader more approachable than admitting your struggles, screw-ups and behind-the-scenes thinking on hard calls. If the leader makes this a priority, the whole company will be more open and methodical learning from failure. At IronPort, we used to go through exhaustive post-mortems: customer losses, engineering slips, and misplaced strategies.

Show up to socialize. Have a beer bust on Friday afternoons. Take a team to lunch. Drop in on a late-night networked video game war. (As a newbie, I was slaughtered pretty quickly). Especially if you are naturally an introvert, you must go out of your way to socialize with your team.

Embrace “professional intimacy.” I love this phrase. It describes a leader’s willingness to get personal and talk about life at home or their own career struggles. E.g. “My wife once threw my blackberry in the toilet… It’s essential to be able to balance home and work before it blows up.”

Nix multi-task listening. It’s one thing to ask someone what they are working on and another to really tune in, give them your full attention and ask follow up questions. I constantly see bad behavior with executives checking their watch or texts, or looking over a shoulder to see who else is in the room. That’s just phony crap.

Loosen up! This is really about speaking to others as though you really trust them with your thoughts vs. reverting to canned responses or the “company line.” Leaders that can explore the poles of an issue, in their own words and off the cuff with employees will gain real trust. This is especially true during all hands/company meetings.

Get good at speaking. As a CEO, if you are a nervous public speaker, you need to practice. Find a coach, do some videotaping and/or try Toastmasters. The goal is to have a marathoner’s heartbeat when speaking to a crowd so as to be natural and comfortable.

And finally: embrace different views.  Encourage employees to challenge your decisions and approach. Let everyone know that you are not perfect, you don’t always have the best answer, and sometimes they have better answers.  In some cases, you will get good ideas too. You are obviously the decision maker but embracing different views will improve openness. (Thanks to Yoram at Maxta for this suggestion!)

I leave you with two examples:

Alec Baldwin’s parody of a GE exec on “30 Rock” comes to mind. Yet for all that’s been said, good and bad, about GE…the company does actually have an enduring, high-performing culture for a reason.

And secondly, from what I understand, Herb Kelleher of Southwest Airlines, is the embodiment of an authentic leader. He would fly around and hold informal meetings with groups of employees that would yield all kinds of new innovations.

It’s leaders like Herb and the execs at GE, whom employees actually trust – that inspire ideas, pushback, and foster tremendous loyalty.

A few weeks ago, I was browsing non-fiction titles on the Kindle and came across Randy Pausch’s “The Last Lecture”. I guess I’d been avoiding it for a while as it sounded like it could get pretty morose or preachy real quick. But then I read in the summary that he had a Ph.D. in computer science and taught virtual reality at Carnegie Mellon. These are serious nerd credentials, so I decided to give it a try. I downloaded it and didn’t put it down until I was finished.

In its totality, it carried a specific message to a very specific audience. Amongst all the stories, pictures of his family, doctor interactions and discussion of his dreams and his illness, Randy said very clearly to all computer science engineers: The key to innovation is that teams beat individuals.

Randy knew that learning to play in the sandbox with others—especially really smart people with different skill sets—drives innovation faster than someone trying to figure it out on their own, no matter how smart they are. But Randy also knew this wasn’t easy because many great engineers have serious deficiencies when it comes to working well with others. He knew because he was one of these people. He was a top engineer and had firsthand experience in both working through his interpersonal issues and working successfully in a team environment.

I’ve had the privilege of spending my entire career in technology surrounded by wicked smart engineers. I’ve always been drawn to their raw intelligence, Spock-like rationality, sincere honesty, dry humor and quirkiness. With the immense popularity of the sitcom, “The Big Bang Theory”, I suppose I’m not alone in my appreciation of them. That said, as a CEO, I’ve observed that many of the very best technical minds often have a hard time overcoming major Achilles’ heels associated with working in a team or leading others. Specifically, and stereotypically, they often:

  • Have little appreciation/respect for the other skill sets necessary for building a product or company
  • Can come off as arrogant jerks
  • Don’t take or give feedback particularly well
  • Have a hard time delegating

I was stunned to find every one of these observations called out specifically by Randy in his lecture. As a non-engineer, I’ve had mixed results in my attempts to reach and coach engineers through these issues so I was thrilled to see so many great points explained by Randy in his unique, nerd-to-nerd style. Although I encourage everyone (especially engineers) to see or read “The Last Lecture” (video here), the best tribute I can give to him is to include a few of Randy’s insightful excerpts below for people trying to overcome the aforementioned limitations:

Like countless American nerds born in 1960, I spent part of my childhood dreaming of being Captain James T. Kirk… I seriously believe that I became a better teacher and colleague by watching Kirk run the Enterprise. Kirk was not the smartest guy on the ship. Mr. Spock, his first officer, was the always-logical intellect on board. Dr. McCoy had all the medical knowledge available to mankind in the 2260s.  Scotty was the chief engineer, who had the technical know-how to keep the ship running… So what was Kirk’s skill set? Why did he get to run the Enterprise?

The answer: there is this skill set called “leadership”. I learned so much by watching this guy in action. He was the distilled essence of the dynamic manager, a guy who knew how to delegate, had the passion to inspire, and looked good in what he wore to work. He never professed to have skills greater than his subordinates. He acknowledged that they knew what they were doing in their domains. But he established the vision, the tone. He was in charge of morale.

Andy Van Dam, the school’s [Brown University] legendary computer science professor, made me his teaching assistant. One day Andy took me for a walk. He put his arm around my shoulders and said, “Randy, it’s a shame that people perceive you as being so arrogant, because it’s going to limit what you’re going to accomplish in life.” Looking back, his wording was so perfect. He was actually saying, “Randy, you’re being a jerk.” But he said it in a way that made me open to his criticisms, to listening to my hero telling me something I needed to hear. There is an old expression, “a Dutch uncle”, which refers to a person who gives you honest feedback. Few people bother doing that nowadays…

Delegate. As a professor, I learned early on that I could trust bright, nineteen-year-old students with the keys to my kingdom, and most of the time they were responsible and impressive.

I’ve tried hard to come up with mechanical ways to get people to listen to feedback. I was constantly helping my students develop their own feedback loops. It was not easy. Getting people to welcome feedback was the hardest thing I ever had to do as an educator. (It hasn’t been easy in my personal life, either). When I taught my class at Carnegie Mellon, we’d do peer feedback every two weeks…which gave specific suggestions for improvement, such as “Let other people finish their sentences when they’re talking.” I told one student, “Out of fifty students in the class, your peers ranked you dead last. You are number fifty. You have a serious issue. They say you’re not listening. You’re hard to get along with. It’s not going well.” The student was shocked. (They’re always shocked). He had had all of these rationalizations, and now here I was, giving him the hard data. And then I told him the truth about myself… “I’m a recovering jerk.”

Over the years, improving group dynamics became a bit of an obsession for me. I’d give out a one-page handout I’d written titled, “Tips for Working Successfully in a Group.” We’d go over it, line by line. Some students found my tips beneath them. They rolled their eyes. But the most self-aware students embraced my advice. Among my tips: Meet people properly, find things you have in common, try for the optimal meeting conditions, let everyone talk, check egos at the door, praise each other and phrase alternatives as questions.

There are many, many other great quotes in the book. In retrospect, the phenomenon that Randy describes is not limited to the field of engineering. It exists in any environment (but most apparent in team sports) where high performing individuals are pursuing a shared goal with teammates.

For instance, it took years of coaching (and losing) to get extraordinary professional basketball players Kobe Bryant, LeBron James and Michael Jordan to exhibit the necessary teamwork to win their first championships. In “The Book of Basketball”, the author, Bill Simmons, describes Michael Jordan’s struggle:

For years and years, Jordan couldn’t rein himself in. He cared about winning, but only on his terms—he also wanted to win scoring titles, drop 50 whenever he pleased and treat his teammates like the biggest bully in the prison block—which led Phil Jackson to adopt the triangle offense in a last-ditch effort to prevent Jordan from hogging the ball…

I believe building a technology company is essentially a team sport. And every wildly successful company I know is built around a core group of ridiculously smart engineering rock stars (you can read my post on hiring them here). When they can be successfully coached into working as part of a team, magic happens.

Thank you, Randy Pausch, for communicating this critical message so clearly.

As a first time CEO, there were times when I would sit at my desk and think, “What should I be doing today?” This feeling was especially strong after every financing round closed. After our seed round, we had defined the product and the engineers were coding it. I didn’t code. After I hired the executive team and started delegating, most of the bases were covered.

Of course, there is always plenty to do at a startup and the CEO is usually the head cook and dishwasher, but the question of where I should be productively spending my time continued to nag at me.

I was pretty aggressive about reaching out to other CEOs and mentors and this question was my biggest area of inquiry: “Hey, when you think back to when your company was my size, how did you spend your time?”

There were a number of suggestions that were specific to the company lifecycle stage like, “Get some alpha customers teed up” or “Get together a launch plan for Europe.” However, there were also some core, evergreen pieces of everyday advice that applied throughout the company’s growth:

Push the team

After you’ve hired rockstars in every essential VP role, it’s the CEO’s job to challenge them to do extraordinary things. Here are a few things I used to do:

  • Set aggressive goals. As a company we would set three goals every quarter and then I would individually negotiate three specific and measureable goals (such as “Hire a director of X” or “Meet with 20 customers”) for each of my direct reports that supported the company goals. Everybody needed to accomplish something more than just doing his or her job.
  • Give frequent feedback. In addition to giving extensive bi-annual performance reviews (see my previous post on the dysfunctional CEO), I would constantly pull VPs aside after meetings—“I like the way you handled that” or “Dude, that was a bit harsh”.  I’d keep in mind the “shit sandwich”, a piece of constructive feedback in between two specific, positive comments.
  • Hold weekly staff meetings. This was not a rote set of updates but a place where arguments were had and decisions made. After every meeting we’d send out a list of decisions and discussion points to all managers.
  • Schedule bi-monthly 1:1s. I’d usually spend an hour (no interruptions and paying attention!) going through progress on goals, how I could help, what’s going on within their teams, etc. The tone was positive, but I would constantly challenge them to do more with less.

Sell the vision

Shortly after our first round of funding, my co-founder, Scott Banister, turned to me and said, “I’ve heard you tell 100 different people a slightly different version of the same story. I had no idea you spend so much time selling!” He was right, I was constantly selling: soliciting investors and advisors, signing recruiters and PR firms, hiring employees, securing first customers, conducting company meetings, convincing reporters and sparring with industry analysts. They all demanded a compelling story, told with enthusiasm, and the CEO needs to be on the front line with these critical meetings that might turn into the tipping point between success and failure.

When I think about all the important things CEOs must do, succinctly and convincingly articulating “the story” is right up there. But there’s a catch: it must be told with both authenticity and passion—like it’s literally pouring out of them. We refer to the best of these entrepreneurs as “glow in the dark”.

Arbitrate disagreements founder and CEO Josh Kopelman once told me that the thing he hated most about being CEO was when two of his smartest people would disagree and he would have to come down on one side: “These decisions were usually 51/49% and I was left having to console the ‘loser’.” He’s right. Arbitrating these disagreements is one of the hardest and most emotionally draining parts of the job, but many CEOs just avoid it and nothing breeds a horrible culture like a CEO who puts offs decisions or, worse yet, makes too many compromises.

I firmly believe that if the VPs aren’t periodically at odds with one another, then the company isn’t being nearly aggressive enough. Why can’t we get the customer feature in the next release? We should pre-announce new functionality and run under the ball! Great sales and marketing VPs constantly push the envelope with engineering, operations, finance and product.

Management By Walking Around (MBWA)

This is one of the few acronyms I retained from my undergraduate finance studies. I vividly remember reading it in some Management 101 textbook and thinking how simple and silly it seemed. Years later, I’ve come to believe that it’s a really important part of being a CEO. I probably spent three to five hours a week on MBWA and would put hour-long blocks in the calendar specifically for this purpose. Just a simple plopping down in an employee’s cube with a “Whatcha working on?” would yield so much valuable information. As the final decision-maker on so many difficult calls in a fast moving business, the CEO’s connection to the people that are actually writing code or talking to customers is critical. And you don’t get it from sitting in your office.

Talk to customers

A CEO should probably be spending about 30% of his or her time with customers, and this is especially true for an enterprise CEO. But this doesn’t mean talking with just the CIO or SVP, who most likely barely remembers signing the purchase order. However uncomfortable, I would insist on talking to the person actually using our product. I want to speak with the guy in the bowels of the datacenter, the one who probably comes into work without having showered and with bedhead. With just a slight prompting of, “Hey, I know you like the product but how can we improve it?”, he would unroll his manifesto of feature requests, bugs and other stuff to think about. Some of our best product ideas came on the plane ride home stitching together all the feedback.

Now, there are certainly a ton of other important activities—like raising money, setting a culture and hiring executives—that fall primarily on the CEO’s shoulders, but the aforementioned list includes the “responsibilities” I would hold myself to every single week.

My father, Alfred “Bud” Weiss, owned a car dealership—“Bud’s Cadillacs” of Miami, Florida. When I’d drop by the office, he would usually pepper me with bits of business wisdom, but as a kid, I wasn’t very receptive. My father and I are pictured here:

My head was usually buried in a comic book, only half listening. However, there was one story that stuck with me and I have struggled to make sense out of it throughout my business career:

Son, you never, ever promote your best salesperson to be the sales manager. This is a classic mistake that other car dealers make. A bunch of my top producers came from their failed attempts as sales managers at other places. You commit two wrongs with these promotions: First, you take your top producer—someone raking in two to five times the average salesperson—off the sales floor. Second, you put them in a new job that they are totally unqualified to do successfully. This usually ends in disaster for everyone involved.

His advice seemed to make sense until later in my career when I was actually faced with the problem. Some of our best salespeople and engineers at IronPort wanted to move into management and if we didn’t give them the opportunity, then it was clear they would go elsewhere. Of course, there’s not much of a dilemma when the high performer is a natural leader and people-person. Promoting great people from within is preferable on so many dimensions: there’s context, history, relationships and it all leads to a much better chance of success than hiring from the outside. The difficult corner case is the high-performing individual contributor that you can tell will likely fail in a leadership position. I’m talking about the sharp-elbowed, passive aggressive salesperson with little self-awareness. Or the my-way-or-the-highway, smartest-guy-in-the-room, workaholic engineer with horrific personal hygiene. How do you deal with that?

If they were really that good and were hell-bent on being a manager, then I came to believe that you had to give them a shot. That said, in my own experience, only about 25% of these experiments succeed in leadership. However, if managed carefully, the majority of the failures can ultimately be coached back into individual contributor roles, which is still a win. The key to all of it is making sure that there’s a sponsoring executive that is willing to spend a boatload of time coaching the budding leader. Here are some specific suggestions:

  • It all starts out with hard, raw conversation about the shortcomings you’ve observed and how they need to be grinded off for them to be a successful manager. E.g. “You can’t keep answering all the questions; leading is getting others to contribute.”
  • The coach needs to meet weekly and do frequent check-ins with peers and subordinates in almost a constant 360 degree-feedback loop. Even if it isn’t working out, the constant coaching and feedback will ensure a soft landing back into their old role.
  • It helps to have some great leadership training. In my experience, most leadership training courses suck. You get two hours of useful information spread out over two weeks of mind-numbing presentations. We put together a rapid fire, two-day course and had our leadership team teach it. Interviewing, performance reviews, 1:1s, career planning, holding staff meetings, etc. We all got together and boiled down the best practices for all the important areas into short, punchy presentations/role plays. Every new manager went through it to give them some tools that were culturally consistent with what we were doing.
  • Develop a legit dual-career track. Bestowing a new title like Principal Engineer or Fellow along with a commensurate bump in salary and equity can help take the sting out of being removed from a leadership role.

I know this all sounds like a ton of work but some people are just that special and totally worth it. Some of our best managers came out on the other side of these experiments and we had at least a handful of failures that we were able to retain as employees. My father built his business with castoffs from these experiments gone wrong at competitors. Perhaps because they had already failed elsewhere, his top performers didn’t aspire to try management again. Only in this context can I make sense of his guidance, as my experience has been quite the opposite.

When I was a kid, I read tons of superhero comic books. I fantasized about superpowers, but the storylines about heroes with massive Achilles’ heels really held my attention the most. They saved the world but had screwed up personal lives, made lots of mistakes, and often acted like complete assholes. In retrospect, l related to their flaws. And, probably not coincidentally, my favorite characters exhibited core weaknesses I had experienced: Spider-Man (immaturity), Iron Man (overconfidence/hubris), and Wolverine (rage).  Ironically, it was often when the character’s weakness would comingle with the superpower that would spur them to succeed against impossible odds.

It was in this context that I was riveted reading Steve Jobs’ biography by Walter Isaacson. Given the number of different interviews and unfettered access granted to Isaacson, it felt like an incredibly authentic account of Jobs’ life. His greatest accomplishments, mistakes, superpowers, and flaws were laid out about as raw as I’ve ever read.  Steve’s superpowers were many: He was wickedly brilliant, could see around corners, and had unparalleled understanding of how people interact with technology, to name just a few.

Did Steve have an Achilles’ heel?  From the book, one could conclude that he was an extremely demanding boss.  Like a beacon, superstars from every function (e.g. engineering, design, marketing, etc.) were drawn to work for Steve. They described his aura as absolutely overwhelming. And Steve pushed these A+ players to extraordinary, impossible achievements.  Steve’s drive for speed and perfection often resulted in harsh, public criticism—usually directed at his very best people.  Steve would constantly look over their work and declare, “This is shit!” or “This really sucks!”  On my Kindle, I searched the words “shit” and “sucks” and counted 24 instances where he used one of those phrases referring to someone’s work/product.

I’ve had a number of entrepreneurs suggest that this persona isn’t unique to Steve Jobs but a common trait among some of the most successful founder/CEOs in the world. Larry Ellison, Bill Gates, Larry Page, and Jeff Bezos have all been reported as similarly caustic at times. Is this something to be emulated?

As I was reading the book, something struck me like a hammer: Despite Steve Jobs’ choice of words, lack of empathy, and sometimes prickly demeanor, he spent a huge amount of time giving his most talented employees constant, hard, critical feedback.  Thinking about how most companies dole out feedback—if they do at all—it’s usually directed at the bottom quartile of performers versus the top. A typical manager at review time spends 80% of their time preparing detailed reviews on the bottom 25%. The top quartile gets lame, short reviews—the equivalent of “You’re doing great, keep up the good work!” So, a manager takes all that time and effort to get someone doing the work of half of a full-time employee (FTE) to do the work of .75 or 1 FTE. In contrast, Steve Jobs—with his feedback energy directed at the top—manages to motivate people already doing the work of 2 or 3 FTEs to do the work of 10, maybe 20 FTEs. Now that’s serious leverage! Could this be a superpower comingling with a weakness?

I’ve found that the A players are comparably lazy with regards to their potential. Without serious motivation, they will never reach it—or even try.  Despite his delivery, I believe Steve’s critical energy was directionally correct.

Here are a few other suggestions for motivating top talent:

  • Flip the feedback equation to 80% of your energy spent on the top quartile.  This is really hard in practice as the feedback is usually more nuanced. And the top performers are usually defensive. 😉
  • Infuse some damn passion.  The best people don’t just want money, they want to go on a crusade and make a difference.  An entrepreneur needs to constantly re-enroll the troops with a compelling, authentic story of how and why we will do the impossible.
  • Set stretch goals and push like hell to meet them.  It’s great if these goals have meaning as well—e.g. we need the software release out before a major industry conference.
  • Find a bogeyman competitor to hate.  (Preferably a company bigger than yours—Microsoft!)  At IronPort, we called out our competitors to the entire company and rallied the team to play catch-up.  We also gave bonuses to the sales teams for rip-outs of a competitor’s appliance and then mounted them like trophies on the wall…
  • Work your ass off by example.  A leader who is always present, ridiculously responsive and contributes real, hard work sets the right pace and tone.

A constant challenge for leaders is to find effective AND positive ways to motivate… The very best companies have inspirational founders who have found a way to coax the superpowers out of their top employees.  When the top quartile contributes at 5x to 10x, it makes a serious difference.

When I went away to college, my father was home alone.  He didn’t have many close friends and spent most of his time reading and in front of the TV.  As my visits stretched from every few months to a couple times a year, I began to notice him developing some strange behaviors.  He had always been a bit of a creature of habit, but these routines developed into Groundhog Day rituals over time.  Same cup, same spoon, same plate—always arranged in the exact same way.  Every day of the week had its own meal, prepared exactly the same way at the same time.  We had a great relationship and when I’d visit, I was constantly calling him on it: “Dude, you’re turning into Howard Hughes!”

I also took great pleasure in derailing his procedures: I hid his special cereal spoon one morning and remember hearing him slowly come unglued as he banged around the kitchen. He eventually shouted out, “Hey, where’s my spoon?!” I choked back the laughter and replied, “Your spoon? I don’t know but there’s a whole drawer full of them in there!”  In spite of his idiosyncrasies, he was remarkably self-reflective and would actually change his behavior.  My aunt commented, “You should visit more often, he actually started wearing clothes that matched for a change…”

I’ve come to believe that the main driver of my dad’s eccentricities was a lack of feedback.  There was nobody close enough to him that was willing to call out the strange behavior.  So, left to his own devices, it just got progressively worse.

This dynamic is especially relevant to CEOs.  Most companies don’t have a good mechanism to give the CEO real, honest feedback.  Sometimes the board gives feedback, but it’s often based on impressions at board meetings, perceived success of management hires and overall results of the company; no specifics on how to lead and inspire people, conduct better meetings, or deal with conflicts, to name a few.

Some of the most dysfunctional organizations I’ve observed have evolved from dealing with a leader’s idiosyncrasies: He’s stereotypically passive aggressive, erratic, a bully, or plays favorites.  Whatever the weird behavior, it drives massive turmoil as the company adapts a workaround to the “Emperor’s New Clothes” syndrome.  The frequent resolution is the CEO is fired because dysfunctional organizations underperform their peers and the board finally reacts.  The sad fact is that the vast majority of these CEOs are likely great leaders who had poor role models and lacked frequent, candid feedback to know how to change.

After experimenting with a number of different approaches, I believe there’s an unassuming process to solicit feedback for just about any leader:

  • Present it as a private “for your eyes only” gift that has no other purpose than to make the recipient a better leader.  It has to be separate from any other evaluation for advancement or compensation.
  • The interviews should be conducted and delivered by a truly independent and unusually competent third-party—typically an external consultant.
  • A critical mass of 360-degree feedback should be gathered from 10 to 20 different people. For a CEO: the entire board, direct reports, customers, partners, admins—the more the better.
  • The interviewees need to be prepped as follows: 1) this is to make the recipient a better leader, not for compensation evaluation purposes; and 2) everything is kept extremely confidential (e.g. quotes are anonymized and intermingled with a critical mass of other interviewees).
  • The questions are short and simple: What are the leader’s three greatest strengths?  Three biggest areas for improvement?
  • The interviewer must create a comfortable, trusting environment and press hard for examples.  Ideally, he should read back the quotes to the interviewee to ensure clarity and anonymity.
  • The feedback should then be summarized and the raw quotes attached as backup and presented to the leader.

Feedback for leaders is often nuanced and difficult to deliver.  That said, hearing you are passive aggressive from 10 different people described 10 different ways becomes hard to ignore.  And this shouldn’t be a one-time thing.  It’s important for a leader to hear about his blind spots on a regular basis so working on them is periodically top of mind.  For example, I’m not a particularly good listener.  I don’t like sweating the details and I’m pretty disorganized.  To be a better leader, I need to stay on top of these shortcomings and being reminded really helps.

Lastly, the leverage from feedback can be powerful: not only can it grind off a leader’s ingrained dysfunctional behavior, but it can also convince him of the value of a strong feedback process for the entire organization.

In 1950, my Uncle Ed Kalin opened a small designer furniture store. After years of hard work, he saved up and opened a larger one. Growing up working there, I’d observe him doing things that, at first, were hard for me to understand.

First of all, when he walked around the store, he was constantly picking up trash. Little wrappers, paperclips, cigarette butts and the squashed paper cup that didn’t quite hit the trash can. When I first noticed it, I thought he was trying to drive home a point to me personally—after all, I was the assistant janitor—but it became clear he wasn’t just picking up trash in front of me, he did it all the time, naturally and quietly. You never heard him say, “Can’t they make it into the wastebasket?” He just picked it up and put it in. He was also always straightening: fluffing pillows, righting picture frames, sliding back barstools and getting down on his knees to level a rickety table. One day, the intercom rang out in the back of the warehouse, “Scott Weiss, to the front for a carry out.” Recalling my work ethic in junior high school, I certainly didn’t sprint to get there; I arrived just in time to see my uncle following a lady out with an end table in his hands. “Doh!” He never mentioned it—just did it.

Although this was a high-end furniture store, Uncle Ed was also unusually thrifty. He didn’t cut corners on quality but abhorred waste. “Scott, you don’t need to use that much bubble wrap for a lamp. Here, let me show you.” At home, he would set paper towels on the counter to dry after washing his hands: “They’re not dirty, just wet.” OK, thrifty was an understatement.

There were 80 employees at the furniture store and Ed knew every one of them by name. He knew their families. And whenever he passed anyone, anywhere, he’d have an authentic interaction with them—not a glad-handling schmooze. “When does your son graduate?” “How were you able to fix that scratch? Wow, looks perfect.”  Always with a smile and interested eyes that communicated, “You matter to me.”

In a competitive, low-margin, high-hustle retail business, Ed wanted to project Bloomingdales with a Wal-Mart budget. The showroom had to be beautiful, spotless—just perfect to look the part. Customer service was paramount. In order to be successful, every employee had to have this mentality.

Although we didn’t call it that then, I’ve come to believe that Ed was creating a company culture. We often get wrapped up in Silicon Valley with the “new-new” way that we can forget many times we’re simply rediscovering well worn lessons that date back to the beginnings of commerce.

Like it or not, everyone watches the leader. What does he do? What does he say? What does he not say? How does he react? His behavior is mimicked and amplified throughout the organization. The CEO and the leadership team ultimately set the company culture with their behaviors verses a set of policies rolled out by the HR department. Inspired by Ed, here are a few takeaways that I believe apply to all startup CEOs:

  • Naturally and quietly demonstrate, on a regular basis, that no chore is beneath you: clean up after a conference room lunch, carry the heavy crap to a trade show, replace the water cooler, wipe up the spill. When everyone pitches in a little, you can strip out 5% in overhead.
  • Do your own calendaring and wait as long as possible to hire an assistant because once you do, everybody suddenly needs one. One great office manager can scale to ~50 employees if everyone calendars themselves.
  • Write thorough, thoughtful, candid reviews and be on time with the process. If you don’t take it seriously, nobody will.
  • Get to know everyone by name and something about them—no excuses up to 500 people. This was really hard for me because I have a terrible memory, always have. Get creative: we printed out flashcards from the badge database when I inherited 900 employees at Cisco.
  • Prepare ahead and interview candidates hard—don’t wing it.
  • Be noticeably thrifty: fly coach, stay in cheap hotels, eat in diners.
  • Be unbelievably responsive, available and punctual.

Some of the suggestions above are simply about making a CEO more approachable—one of the hardest and most important attributes for a leader to exude. Are people comfortable disagreeing with him? Will they tell him when something is wrong? In my experience, the more formal the CEO is, the more formal the leadership team is and thus they all become less approachable. And it’s not just about wearing jeans—it’s about behavior. My uncle’s store was a very formal environment: he wore a tie and everyone addressed him as “Mr. Kalin”. That said, he was able to overcome this outward formality with fanatic friendliness, a familiarity with everyone and a willingness to get his hands dirty. Approachability, however you create it, is absolutely critical to creating an innovation environment where employees speak up and challenge the status quo.

I had a real struggle preparing to be a public company CEO. And it had little to do with having scalable internal systems or making the quarterly numbers… I just couldn’t keep secrets from my employees.

As CEO of IronPort, I wanted to be completely transparent with my entire team but my board of seasoned industry veterans was sharply opposed… They raised several serious issues: do you want to leak critical weaknesses to your competitors? Do you want to panic your employees? Do you want to completely reconstruct your culture when you go public? It was just a bad idea. However, the more that I thought about it, the more I believed that sharing absolutely everything would create massive advantages and that we should live with whatever consequences resulted.

So, after board meetings, we would assemble the company and go through every board slide… How much cash in the bank? What’s our burn rate? What are the biggest problems we are facing? Did we decide to build, buy or acquire a critical component? The first couple of go rounds, there was dead silence. No questions—just head nodding and a couple of blank stares. After some probing, we realized that people needed to feel comfortable speaking up, that it didn’t just come naturally. We brainstormed a bunch of different ways to get over this hurdle and here were some experiments that ultimately worked:

  • We amped up the frequency of communication to all employees. Different members of the leadership team would send out weekly emails to all about customer trips, conferences attended, schedules slips and customer issues. These were written very off-the-cuff, informal and in the voice of the different leaders. I suppose we’d be all be tweeting or blogging today…
  • When an employee would reply to an email with a comment or question, we treated it like it came from a customer who deserved an immediate, detailed and thoughtful response.
  • After the weekly staff meetings, we’d send out a summary of the decisions and issues to all of the directors/managers who would then share it with their teams.
  • We emphasized “speaking up” as a core value at every opportunity. Our employee orientation, performance reviews and leadership training all emphasized everyone having an obligation to dissent…
  • We would leave 30 minutes for questions after every all-hands meeting and then press, often uncomfortably, for no fewer than five questions from the group.

Over time, the benefits of transparency coupled with an emerging cultural norm of speaking up became more apparent:

I thought we would surface creative answers faster. When everyone had a clear understanding of the hard problems, their collective brains were on the table for parallel processing. The best information rarely sat with the senior executives but with the employees that were closest to the product and closest to the customers. And the best answers would often come from the most unlikely of places. For example, some of our most innovative features came from customer support reps identifying customers trying to use the product in ways it wasn’t intended.

Initially, it worked better than we expected. IronPort experienced zero voluntary turnover for the first three years. Because we let everyone’s head under the tent, we implicitly trusted them and it worked both ways. For instance, it wasn’t a shocker when we stopped hiring as we were raising money. Everyone knew exactly what was going on: we were running low on cash and had no idea how long the process would last.

Lastly, nobody was confused about what was important and people would point out any inconsistencies and solve them in the background. I remember standing up at a company meeting talking about how excited I was that IronPort anti-spam was working and we’d finally be able to drop our partner Brightmail. After the meeting, the accounts receivable clerk knocked on my door and said, “I thought you should know that two customers are withholding payment because IronPort anti-spam isn’t performing.” Oh crap. But much better to know about it and fix it than go on believing there wasn’t a problem.

As we were preparing to file our S-1, we hired a CFO with public company experience that insisted that we start “practicing” as a public company. Hmm—I knew that our level of transparency would have to change but what did that mean exactly? “You can’t tell everyone how we did this quarter at midnight quarter-end” and “You can’t go through all the board slides like that—too much sensitive information.” So, we started editing, putting shrouds on issues because we were afraid that the information would leak. I remember our first all-hands during the “practice” time. I felt muzzled and cautious, trying to strike a balance between our wonderful transparent culture and an intricate set of Sarbanes-Oxley rules. As it turned out, the practice was critical in working out the kinks. Here are a few things we did:

  • Our CFO and I listened to dozens of public company earnings calls to get a sense for the dynamic and what information was typically shared. The best duos had the CFO as the play-by-play man and the CEO as the color commentator.
  • We then staged mock earnings calls with the employees as the analysts asking the questions. This proved to be a very useful format for reining in my over-sharing and was instructive to the employees as they saw us struggle with what we could and couldn’t reveal.
  • We prepared a mock earnings press release a few weeks after the quarter closed. This helped us practice keeping the numbers quiet, which was difficult because everyone wanted to know how we did at quarter-end.

Although we eventually opted for an acquisition by Cisco versus an IPO, I came to believe that our type of total transparency was a competitive weapon that applied primarily to private companies. In the end, my board members were right—we did have to limit what we shared with employees on the way to going public. That said, I believe it was much healthier to set the default to full disclosure while we were private. When you prepare for an IPO, it’s definitely a high-class problem to have to work backwards with concrete reasons to withhold information from the employees. And when that time comes, they totally understand.