For the leader of any fast-growing company, every day brings a new challenge. A CEO has to manage issues of strategy, culture, talent, customer service and reputation – often all at once.
At VivaTech last week, we got an insight into the first-hand experience of John Chambers who was CEO and Chairman of Cisco from 1995-2017, and who now invests in early-stage tech start-ups around the world, with a particular focus on mentoring emerging leaders. John was joined in a roundtable discussion by Joe Schoendorf, a former Accel partner who has held senior roles at companies from Hewlett Packard to Apple, and who served on the board of the World Economic Forum.
In this first extract from our roundtable, they share their experiences in shaping company culture and handling negotiations with top talent.
What is the secret to building a robust company culture?
Joe: A leader plays such an important role in setting the culture of a
company and communicating it. Jack Welch used to say, “culture is nothing more
than the length of the shadow of the CEO”.
In my time at HP, new recruits had a week’s
training that concluded with a speech from David Packard. He would always say
that, if your business gets into trouble financially, we will give you eight
quarters to fix it. If you have people problems, we will give you eight
seconds. That is culture from the top.
John: As a CEO (and/or founder), you have four areas of responsibility;
Strategy and vision, management team, culture and the communication of all of
the above. Culture is the one area the CEO must own in its entirety and
constantly drive through the entire organization. The CEO also needs to manage
the evolution of culture as the company scales. With a small team, culture
happens naturally and is mutually understood. But at scale, it gets diluted and
you have to codify it, writing down what matters and making it memorable.
If you’re unconvinced of the merits of
this, try testing your management team. Without any advance warning, ask each
member to summarise the company’s culture and values at your next management meeting.
I can guarantee you the results will not be tight. But it needs to be super
tight to be effective. And if your management team is struggling to express the
culture and values, so will every other employee.
Tech
talent is always on the move. What do you do when an important employee says
they have received a better offer and want to leave? Can you change someone’s
mind at this point?
John:
The first thing is to be magnanimous. Congratulate
them on having received a great offer. Then it is time to collect your
thoughts, get some water, and think carefully about what to say next.
The first thing I always do is to try to understand
the reasons. There are usually several, and they will likely go deeper than
money and title. Ask what they are. Most often it is their manager not making
them feel appreciated enough but it may be something more fundamental as them not
liking the direction the company is going in, or it could be as simple as the
person having been in the job for too long.
Then, buy more time. I might say something
like: “You’ve been with me for three years, give me three weeks to talk you out
of it.” You should treat a significant
leaver as you would a recruitment prospect. Make sure you have the time to run
a proper process, leveraging all the resources at your disposal.
Finally, engage the troops. You need to use
your team, getting a core group of people to work on the potential leaver and
advocate the upsides of staying. This is something you should script carefully
– for instance have one person to talk about the company’s future, another
about how valued that person is in the company, and someone else to stress career
and financial opportunities.
If all that fails, and it becomes clear that
it’s right for someone to leave, treat them fairly and with respect. Equally,
only expend your energy on this sort of process with talent you really value.
If someone wants to leave after a week in the job, then let them go. They were
likely not the right hire, and you should both move on quickly.
What
do you mean by people being in the job for too long?
John: The
point about people being in a job for too long is important. As a leader, you
should be proactive about moving talent around the organization so that people
can learn new skills from different sets of people. It is important never to demote
someone title-wise but being flexible and finding new opportunities for people
to grow is an important way of helping people to reinvent themselves. During my
time, I reinvented myself dozens of times, while also reinventing the company
several times to stay ahead of changing market transitions. I also had eight different
CFOs, who over time all took on different roles in the business.
Joe: When
it comes to headquarters, sometimes it’s right for people to move on. At a
start-up, speed of execution is your biggest advantage, and if someone has lost
that appetite to constantly push forward, then it’s time for them to go. But
work hard to retain your sales people, because they are expensive to replace
and can take half their pipeline with them out of the door.
In
Part 2, we get insights from John and Joe on approaching M&A and handling
crisis situations.
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