Exit Interviews, Done Right, Are Golden
In the early days of a company, the team is small. One person leaving the company can be a big blow to the team. To an early founder not anticipating the departure, it’s frustrating. Usually, team members opt to leave when things aren’t going well, so the departure combined with challenges in the business can feel like a double whammy and cause founders to question themselves as leaders.
Departures happen at start-ups. The first leaver likely won’t be the last. You want to do all you can to build a great environment and have everyone aligned on the mission, but however hard you try, people will leave. It’s a setback—but also an opportunity to get candid feedback on the business, how leaders are perceived, and the mood of the rest of the team.
I’m a big fan of doing exit interviews when team members choose to depart. Along with thanking them for their service and letting them know they’re always welcome to come back (if they were a good team member), it’s important to ask them for candid feedback. When someone is departing, they’ll usually give more direct feedback because they don’t have anything to lose.
Listening to feedback from someone leaving a hole in your team is hard to do. But it’s super important to look past how you feel about the situation and the extra workload caused by the departure. Listen to understand the why behind the person’s decision to depart, what’s going well, and what can be improved. You may not agree with everything they say, but this opportunity to learn and improve in various areas doesn’t come often. It often leads to valuable golden nuggets.
If you’re an early founder and a team member exits, don’t dwell on the fact that they quit. Instead, focus on what you can learn from the situation to minimize the chances of it happening again and to make your business better.
Founders, Your People Are Vital to Business Success
I’ve connected with numerous founders who have a big vision but don’t value how vital other people are to its success. They understand they’ll need help, but how they see other people is always telling. They may view others as necessary to execute specific tasks but replaceable. They treat them as an expense line item, with the compensation, equity, and responsibility they offer reflecting that mindset.
The classic example I see is a nontechnical founder building a software company. He wants to use offshore development or hire a junior developer whom he’ll manage. He thinks he needs someone to just build a product and tries to get it done as cheaply as possible. What this founder doesn’t grasp is that the software is the company. The software is a living thing that will evolve and become more complex over time. The people building it are not just an expense. They’re critical to building and maintaining a product customers will pay to use, and they should be treated as such. And there needs to be someone at the leadership level—other than the nontechnical founder—who’s responsible for this critical part of the business and incentivized by cash and equity.
When I was a founder, I learned (the hard way) that you can go further, faster with a solid team that shares in the upside.
If you’re trying to do something great, think about how you can get the best people possible around the table to help you, not how you can spend the least amount possible. That shift in mindset could be the difference maker.
I’ve been following the recent news about Nikola Corp. founder and former chairman Trevor Milton. He’s been charged with misleading investors. I have no views on his guilt or innocence, but his situation reminded me of conversations I’ve had with founders.
Many early founders are optimistic about their companies. To survive, they have to be. The chips are stacked against them. If founders focus on the million things that could go wrong, it’s hard to motivate teams to run through walls. So, many of them see the glass as half full and focus on what could go right. I like this approach. It’s what teams need to do the impossible.
But . . . though optimism is great, there’s a line that founders shouldn’t cross. They should be clear about what has happened versus what they’re planning for. Saying you’ve hired a rock star CTO is different than saying a CTO will come on board shortly when you conclude final negotiations. One’s a done deal. The other’s an expectation. Founders can get themselves in hot water if they position something as having already been concluded when it hasn’t. Even if it’s highly likely it will happen soon. Maybe it won’t. Maybe Murphy’s Law will kick in. Or maybe the founder’s view of what’s “highly likely” is skewed by his rose-colored glasses.
Founders should be optimistic but also clear with all stakeholders. Optimism without transparency will erode trust over time. If a team doesn’t trust its leader, it’s doomed.
The Rise of the Retreat
With more companies working remotely, I’ve been hearing more founders searching for ways to keep their teams connected on a deeper level. Some of them are putting more thought into their retreat planning. Retreats are usually meetings outside the office where everyone gets together to bond and discuss the business. Some last one day; others are multiday. Many include team-building activities to allow team members to overcome a challenge together.
I’m a big fan of retreats and attended two a year before the pandemic. Most were for two to four days and attended by other entrepreneurs. Without a doubt, these have been some of the most transformative and enlightening experiences I’ve ever had. I’ve always left more focused and excited about what lies ahead.
Retreats were helpful before the pandemic, but I think they will be a critical tool for leaders going forward. Can’t wait to see all the creative ways people find to get teams to bond.
A Picture—or a Clear Summary—Is Worth a Thousand Words
A friend does real estate projects, which I love hearing about. As we walk his sites, he tries to describe the end product. It’s hard to grasp what it will look like as I listen and look at the incomplete construction. He recently began getting renders, and he showed me one of the final version of his current project. I got it right away. The rendering brought his words to life and filled in all the gaps in two seconds. We discussed how helpful that rendering was for someone like me, and he shared an insight: it’s also been helpful for his workers and vendors. They understand what he’s aiming for now, and they make better decisions on their own that align with that vision rather than constantly ask him questions.
This past week I had a conversation with an early founder who’s building a software company. We’ve been working on his one-page strategic plan for the last few weeks. It includes his vision, mission, values, target market, three-year-goal, annual goals, quarterly goals, and quarterly projects. It’s essentially a roadmap that measures progress. It details where the founder wants to go, how he’ll get there, and what he needs to be working on this quarter and this year. The founder rolled out the plan to his team and got an interesting response from a team member: “I don’t feel like an employee anymore. I feel like an owner now, and I know exactly where we’re going and what I need to be doing.”
The founder was surprised that a simple one-page document was so illuminating. Having been a founder, I knew exactly what he meant. I also knew what he was missing. I reminded him that founders have more background knowledge about their market and where the company is heading than anyone else on the team. It’s all in the founder’s head. He’s been thinking about it nonstop. It’s clear to him. It makes sense to him. Other team members’ knowledge is full of gaps. Laying it all out in a simple way fills the gaps, making clear to everyone what’s so clear to the founder. It can be a rendering, a one-page strategic plan, or something else. If it connects the dots for other people, the outcome should be the same.
These two conversations were independent and about different industries, but the founders’ conclusions were the same. It’s important for founders to empower teams by painting a clear picture of where they’re going and how they plan to get there!
Teams Will Have Their Ups and Downs
Yesterday I watched an MLS game and noticed something interesting. The game was overshadowed by an unfortunate dynamic on the home team. The star player and the coach weren’t seeing eye to eye, so the player sat out the game. His team lost. There’s no guarantee the home team would’ve won if their star had been on the field, but naturally the fans, including me, wondered.
As in most relationships in life, teams go through their ups and downs. There will be wins and losses. Good days and bad. It’s normal—part of the journey. The teams that achieve greatness find a way to ride it out when things go wrong and stay united in their goal. They continue to operate as a team.
Building a big company requires a team. Founders should be mindful that keeping their team united and motivated to move toward the goal is one of their main responsibilities as the leader. Compromise will be required. People will have to put their egos aside at some point. At the end of the day, it’ll be worth it if the team wins together!
Owning Your Shortcomings: A Superpower
Today I had independent conversations with two entrepreneurs at different stages of their journeys. One just exited his second company and is beginning to think about what problem he wants to solve next. The other is still building his first company. Both of them mentioned that they’d spent considerable time identifying what they need in an early core team and recruiting people who fit those criteria.
I went a bit deeper, and both revealed gaps in their abilities or experiences that could prevent them from being successful. They’re both smart, super talented, and successful—and very self-aware and upfront about their limitations.
No one is good at everything. We all have shortcomings. But not everyone will admit to them. That’s too bad because being transparent about shortcomings can actually help founders. Sounds counterintuitive, I know. Many founders think they have to be great at everything—superhuman, practically—but that’s not realistic or sustainable. Acknowledging their shortcomings can help them understand what gaps they need to fill to round out their team. Recruiting efforts can be more focused and attract candidates who know what they’re good at. And it supports a culture of teamwork—people pay attention to what the leader does and follow suit.
Founders who want to build great businesses should consider being transparent about their shortcomings. It’s a great way to turn something that could be perceived as a negative into a superpower that can propel you to new heights.
Office Politics Will Undermine Company Culture
I listened to a founder discuss the dynamics of his company recently. He raised capital and the business is growing aggressively. He’s adding to the team and giving more responsibility to legacy team members. There’s more hierarchy (a good thing) but also more politics, which the founder hates. Decision-making has slowed, and receiving individual credit is prioritized over teamwork. They’re playing the Game of Thrones.
I haven’t worked in a large organization in many years, but I remember that when I did, the politics were apparent. I didn’t like navigating that environment. It felt like a popularity contest. I ended up leaving for a variety of reasons (not just that), but the experience stuck with me. When I started my company, I wanted to avoid politics. I think we accomplished that.
Culture is a key ingredient in success. I think this founder is right to be concerned about office politics eroding the culture of his company. I hope he can get his team thinking with a “we” mindset again.
Build a Company, Not Just a Product
I recently spoke with a founder who’s had some turnover on his team. He’s an early founder and doesn’t have a working MVP yet. He said that his highest priority is finishing the MVP, which he’s considering doing himself. He isn’t worried about trying to replace his team.
This founder has hit a rough patch on the people side of the business, and he’s understandably frustrated. I’ve been there as a founder, so I get it. But it’s part of the journey —most founders experience it at some point.
This founder wants to forgo replenishing his team and focus intently on building a great product by himself. He’s very smart and will likely build something impressive. The problem is that building a product isn’t the goal. The goal is to solve a problem extremely well and get customers to pay for the solution. To achieve it, product development isn’t enough—you also need to develop other functions, including marketing and sales. To put it another way, you need to build a company.
Early-stage founders should keep in mind that their goal is to build a company. And that requires a team.
Never Be Above Getting into the Weeds
Founders usually start off doing everything. They’re the glue that holds the company together in the beginning. They’re in the weeds executing to move the company forward. As the company grows, that’s not scalable, and founders begin delegating (or they should). This usually means they’re managing the executors or managing the managers. If done correctly, this allows founders to look at things from 50,000 feet, metaphorically speaking, and think more strategically about the business.
Having to think only high-level about the business is a great thing. I remember when I was able to do this. It felt like I was lifting my head above the clouds and seeing the horizon clearly. Once you’re above the clouds, it can be hard to go back.
Today I spoke with a founder who has removed himself from the weeds of his business, but it isn’t going well. The business isn’t performing as it should, and he knows he needs to replace the people who are executing (or failing to execute). The problem is that he doesn’t want to go back to executing. He can’t wrap his mind around doing that type of work again.
I lived this situation myself in the early days of CCAW, so I can relate. I delayed making changes because I didn’t want to get back in the weeds of a specific area of the company. That delay proved costly and the business suffered. The business lost so much traction that I was ultimately forced to go deep into the weeds to identify the issue and reverse the damage. I had waited so long that we had a razor-thin margin of error. With the support of others team members, I dug in and figured things out. We reversed the trajectory, and I was ultimately able to get back out of the weeds. With the problem solved, the team thanked me for jumping in alongside them. They hadn’t expected it (neither had I!), and they appreciated it.
My lesson from this was that I should’ve always been ready to jump in and do what was needed. I was the founder and it was my company, but I wasn’t above getting into the weeds. Founders do what needs to be done, even when they don’t want to.