What do you need?

Sometimes the most effective tools are the simplest ones.

Years ago, Fred Wilson, shared a story that taught me a lot about the role of a CEO. Last year, he wrote a post about the same story:

I started in the venture capital business just as the PC hardware bubble of the early 80s was busting. Our portfolio was a mess. It was a great time to enter the business. I cleaned up messes for my first few years. I learned a lot.

Anyway back to the CEO search. One of the board members was a very experienced VC who had been in the business around 25 years by then. I asked him “what exactly does a CEO do?”

He answered without thinking:

A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.

I asked, “Is that it?”

He replied that the CEO should delegate all other tasks.

In the years since Fred first shared that story with me, I’ve come to see that articulating the role in that way is incredibly powerful; it’s simple and elegant.

More important, it’s flexible. These days, I expand on each of those functions. For example, I’ll share with a client that maintaining the culture, understanding what is the “right” way for the company to do things, is as much a part of the vision as the original eureka moment that gave birth to the whole shindig.

I also tend to point out that recruiting, hiring and retaining the best talent also means making certain everyone knows what’s expected of them and they each play their position—more like the ’98 Yankees than a five-year old’s soccer team (with each kid chasing the ball and nobody playing position).

I also expand the interpretation of the notion of making sure there’s enough cash to meaning making sure that everyone has the resources they need to succeed.

And that’s where the simple magic comes in. Most people think an organization works like this::


…when the best organizations look like this:

 

The difference is more than visual; it goes to the heart of the last, and arguably most important, function of the CEO.

What I’ve learned (from Warren Bennis) is that when the takes this posture, they are in the best position to ask those above them in the upside-down pyramid the best question any manager can ask: What do you need?

Call it Needs-based governance. It’s an incredibly clarifying and empowering tool. It expands the notion of the CEO making certain the company has enough cash (an important task) to include the notion of the CEO making certain that the great people they’ve hired (and put into the right positions) have what they need to succeed.

Even more, it turns on it’s head the employee-infantilization that typically occurs in a top-down, command-and-control structure and makes everyone ultimately responsible for asking the single most important question facing any company: What does the customer need?

Too often each of us abdicates responsibility for our success, our lives, and puts the focus on those whom we assume have more power, more capability. It’s understandable; withstanding the daily pressure of work—especially work in a startup—creates distress. And when we’re distressed, we regress and just want to be told what to do (and then cooperate or not, depending on whether we’ve regressed to being a teenager). But when the company is organized around this central question—What do you need to hit that impossible deadline? What do you need to double your market penetration? What do you need to recruit that top engineer or salesperson?—the regression ends and adults take the field.

Needs-based governance (and I suppose I should apply for trademark on that) doesn’t create miracles; very often needs will go unmet. But stretching your partner, your co-founder, your colleague, yourself to struggle with that question drives for a greater sense of mission, purpose.

And, I suppose, that’s a need we all share: to be a part of something just slightly better than ourselves alone.

Ah, but a man’s reach should exceed his grasp, Or what’s a heaven for?—Robert Browning

 

 

Enhanced by Zemanta
  • http://www.twitter.com/stevenkane Steven Kane

    Bravo!

  • http://www.twitter.com/stevenkane Steven Kane

    Bravo!

    • Anonymous

      Grazi.

  • http://reecepacheco.com reecepacheco

    i’ve been around the AVC community long enough to remember those posts from Fred

    it’s something that took me a little while to learn, but i’m lucky to have learned it early on in my career as a founder/ceo and am doing everything i can do give our team what they need. it’s not easy, and it comes with plenty of sacrifice (of your own time particularly) but that’s exactly what you should be doing

    a great read along this topic is Peopleware. amazing book on building a team, project management etc. http://www.amazon.com/Peopleware-Productive-Projects-Teams-Second/dp/0932633439

    nice one, Jerry

    • Anonymous

      Thanks for the pointer Reece.

  • http://terezan.tumblr.com/ Tereza

    For me, being a parent has exercised these muscles more, every day, than years in the fire.

    Every day they’re going out there and hopefully they’re making good decisions based on the goals you gave them and values you’ve instilled.  They’ll only grow by doing it.  If they’re empowered, then when the surprise shit comes up that you never anticipated (which is guaranteed), then if they’ve flexed those judgment muscles, there’s a chance they’ll handle it very well.

    What the pyramid is missing, though, are the notions of ‘manage by walking around’.  This includes “catching” them doing great things.  I learned that in a book on ‘playful parenting’ and boy does it work with real live people, too!

    Also keeping the finger on the pulse of customers.  In a rapidly changing environment, the only way I know to assess the change and the way to take it is to have some element of you inside the customer’s product/service experience at an atomic level.  Maybe it’s maintaining oversight of a single account, or have ad hoc lunches w key clients.  There are different ways to time-box that. But to ensure your vision doesn’t get moldy and dusty you need to get some of that direct, and not just through your people.

  • http://terezan.tumblr.com/ Tereza

    For me, being a parent has exercised these muscles more, every day, than years in the fire.

    Every day they’re going out there and hopefully they’re making good decisions based on the goals you gave them and values you’ve instilled.  They’ll only grow by doing it.  If they’re empowered, then when the surprise shit comes up that you never anticipated (which is guaranteed), then if they’ve flexed those judgment muscles, there’s a chance they’ll handle it very well.

    What the pyramid is missing, though, are the notions of ‘manage by walking around’.  This includes “catching” them doing great things.  I learned that in a book on ‘playful parenting’ and boy does it work with real live people, too!

    Also keeping the finger on the pulse of customers.  In a rapidly changing environment, the only way I know to assess the change and the way to take it is to have some element of you inside the customer’s product/service experience at an atomic level.  Maybe it’s maintaining oversight of a single account, or have ad hoc lunches w key clients.  There are different ways to time-box that. But to ensure your vision doesn’t get moldy and dusty you need to get some of that direct, and not just through your people.

    • Anonymous

      I love your point, Tereza, about making certain you stay close to the customer.

  • http://avc.com fredwilson

    i love the visual of the upside down pyramid. 

    • Anonymous

      Yeah. That was given to me by the first CEO of CMP, the first company I worked for in my long career. :-)
      Gerry Leeds actually led like this and, oddly enough, we had 27 straight years of profitability and growth. Funny coincidence.

  • Anonymous

    I love the reverse triangle diagram! I have found that the more I listen as a CEO to my team and our customers, and the less I micro manage, the better results I get. As my martial arts instructor, has always emphasized in weapons training, the general is the handle of the sword and it’s never supposed to move very much.

    • Anonymous

      I love that quote, Ben. It’s brilliant.

  • http://twitter.com/GregHertzke Greg Hertzke

    I’ve seen and love Fred’s post on this subject but this just drives home the role of the CEO for me. Completely agree with the other comments – the upside down pyramid is a powerful visual tool. 

    • Anonymous

      Thanks Greg. The whole concept of using the “needs” question to drive the organization can be profound.

  • http://www.bigbags.tumblr.com Bags

    “The best question any manager can ask: What do you need?”

    I’ve been amazed in my short career at the number of people who hire “the right person for the job” then squelch their passion and creativity by micro-managing, and boxing their newly hired “all star” in.  As a leader (manager or executive), I assume that it’s very easy to become very possessive and protective of your ideas or your role.

    Being an enabler – which is what any good leader is – tends to contradict the selfish fear that surrounds the “do it my way, or don’t do it at all” mentality that seems to prevail in business. Too many leaders add obstacles to the lives of those they lead, rather than removing them.

    I really hope that one day I get to develop my career into the role of an enabler and someone who can inspire rather than the alternative.

    Thanks for another inspiring post, Jerry. Your blog is quickly becoming a mentor handbook for me.

    • Anonymous

      I have a feeling you’re already on your way there. The process feels like policing…it’s never really over, you never really get there and then stop and say, phew, I’m done. I’m a great CEO. But, in fact, you’re always, always learning and growing.

      • http://www.bigbags.tumblr.com Bags

        Thanks, Jerry. I really hope so. I’m learning that the true greats are the ones who are never done learning, improving or changing. There is no such thing as holding still. You’re either moving forward or you’re falling behind.

  • Anonymous

    Diagrams work. I love that you used one here Jerry, (especially since you outed me as a closet diagrammer).
    “Sometimes the most effective tools are the simplest ones.” Right on. 

    I have been reading a lot about emergence, about self-organizing systems in biology and zoology, and about complexity. Down to how nature designs via DNA. I have more to go but this much I have gleaned so far.

    The complexity of a self-organizing system comes from simple sets of rules. Masses of cells in organisms, people in cities, and birds in a flock follow the simple rules, and from it come powerful movements/trends which are bottom up led, not top-down led. Environmental factors affect the system, which continually evolves as a whole in response to those factors via the resources available and DNA evolution.

    What if you saw customers/users as the self organized system who ‘build’ your product/service. The staff/company are the messengers who deliver the info of what the customer/user needs to the CEO. The CEO is responsible for evolving the DNA of the company (the vision) by making sure the simple rules needed (strategies) to evolve the product/service to enable it to survive and thrive. Upon hearing needs, the CEO sends the resources back up to the staff and thru the staff to the customer/user so they can continue building the product/service. The staff have a set of simple rules to complete their tasks, which change as well, and which are constantly evaluated by the customers and CEO, since their evolution is crucial as well. 

    If a product or service is now an ‘experience’, it is not the success of the experience which the user derives which runs the organism and determines its survival? 

  • Kevin Friedman

    Great post, Jerry! I’ve been thinking about it the past couple of days and even applied it with great success to some family issues. :)

    While it makes great business sense for CEOs to ensure employees have what they need to succeed… I also love the sentiment behind this principle. The CEOs primary job is empower his/her employees and, in a sense, to ensure that they “look good”. I’ve seen (and worked for) organizations where it seemed like management’s primary concern was ensuring that THEY looked good and enabling/empowering their employees was, at best, at afterthought. And, come review time, they are quick to let you know where you came up short! It’s hard for me to imagine an organization where management is consistently asking… how can I help my employees to succeed? to excel? to look great? to grow? That’s helping a man’s reach to exceed his grasp… and that’s something I aspire to embody.