Impact of hiring Game Changers by Notion Capital

Dec 23, 2018 | Publisher: Techcelerate Ventures | Category: Business & Jobs |  | Collection: Startups | Views: 5 | Likes: 1

NOTION INSIGHTS Build. Scale. Succeed. GAME CHANGERS THE IMPACT OF HIRING AMAZING PEOPLE AND HOW TO HIRE THEM No4 _ Notion Insights is published by Notion, 91 Wimpole Street, London W1G 0EF. Registered address: Third Floor, 1 New Fetter Lane, London EC4A 1AN. For opportunities to contribute to future editions of Notion Insights please contact info@notion.vc Design, Layout & Production SunnySideUp, contact paul.jason@pauljason.co.uk Notion (OC364955) is Authorised and Regulated by the Financial Conduct Authority. _ Reproduction in whole or in part without written permission is strictly prohibited. 2018 Notion. All rights reserved. Game Changers is proudly brought to you by: 58 Interview guidelines for Game Changers Maddy Cross, Notion 88 Industry viewpoint: The Theatre of Hiring Chris Tottman, Notion 94 Industry Perspective: Hiring and developing the best Jonno Southam, Amazon Web Services 100 The cost of hiring Game Changers and what you should offer them Maddy Cross, Notion 102 Top 5 cost considerations when putting together an offer Maddy Cross, Notion 114 Industry Perspective Finding Game Changers at every stage of the business Tien Tzuo, Zuora 120 The Game Changer Point of View Mns Hultman, QlikTech 8 Game Changers: The impact of hiring amazing people - and how to hire them Maddy Cross, Notion 12 How do we define a 'Game Changer'? Maddy Cross, Notion 22 Industry viewpoint: 5 things that changed at Marketo after hiring Game Changers Phil Fernandez, Marketo 26 Why is it hard to hire a Game Changer? Maddy Cross, Notion 38 Industry viewpoint: Building relationships between Founders and Game Changers Maureen Taylor & Renn Vara, SNP 42 How to hire a Game Changer Maddy Cross, Notion 50 Industry viewpoint: The Search Perspective Andrew Banks, True Search GAME CHANGERS THE IMPACT OF HIRING AMAZING PEOPLE - AND HOW TO HIRE THEM Maddy Cross Head of Talent, Notion At Notion we invest in early stage B2B technology businesses in Europe. Fundamentally, our focus is on putting our money with Founders who have a technical edge, or who are pushing the boundaries of nascent technologies. But we also look at other factors, including the leadership abilities of the Founders and many other 'soft skills' factors that can be tricky to quantify. 9 8 Notion Insights Game Changers CONSISTENTLY THOUGH, WE KNOW TWO THINGS ABOUT OUR FOUNDERS: 1. We only invest in them if we think they have what it takes to go on the ten-year journey from $1m$100m ARR. 2. We know that they will rarely, if ever, be able to do this alone. Notion has made more than 55 investments in software businesses, and today has more than 45 companies in the portfolio. In each case, we invested very early and we have made some exceptional investment decisions. But we also pride ourselves in investing far more than just money. From day one, a key area of focus is how we can support our Founders in hiring highly experienced and knowledgeable people to go on their extraordinary journey with them. When Founders make a C-Level hire, they're not just looking for employees but for business partners who'll drop everything to help, travel frequently and when it's inconvenient, who'll relocate from San Francisco to Spain and who'll - more often than not - have made the same journey with other Founders on a number of occasions before. Founders are not looking for an employee, they are looking for a "Game Changer"; someone who will give them the headspace to be CEO without distraction, someone who will not be phased by significant setbacks, someone who will drive 10x the revenue in their first year on the job and someone who, ultimately, will be a huge contributing factor to the success of the business. "You're not looking for someone to work for you You're looking for someone you'll be sitting on a beach with in 20 years' time, laughing about some of the ludicrous things you did to get a deal done" - Chris Tottman In our experience, it's a consistent factor that every Founder needs great people at the helm with them, and every Founder experiences struggles in hiring those people. THIS ISN'T A PLAYBOOK ON 'HOW TO FIND A GAME CHANGER' - IT'S MORE A COLLECTION OF LEARNT WISDOM FROM THE EXPERIENCES OF THE FOUNDERS WE'RE INVESTED IN AND THE PEOPLE IN OUR NETWORK. It's an overview of the things we've learnt that will, with luck, help Founders learn what to look for and what to expect from their first big hire; it should provide reassurance that pretty much everyone finds it hard to hire a Game Changer. Hiring a Game Changer is an endeavour that, while challenging, can ultimately prove invaluable. 'YOU'RE NOT LOOKING FOR SOMEONE TO WORK FOR YOU YOU'RE LOOKING FOR SOMEONE YOU'LL BE SITTING ON A BEACH WITH IN 20 YEARS' TIME, LAUGHING ABOUT SOME OF THE LUDICROUS THINGS YOU DID TO GET A DEAL DONE' - CHRIS TOTTMAN, NOTION 11 Game Changers 10 Notion Insights HOW DO WE DEFINE A 'GAME CHANGER'? Google tells us that the definition of a 'Game Changer' is "an event, idea, or procedure that affects a significant shift in the current way of doing or thinking about something". We're inclined to agree, except we think it should read "an event, idea, procedure or person that effects a significant shift in the current way of doing or thinking about something". Game Changers are people who have an overwhelmingly positive impact on your business. They're people with years of functional and sector expertise who help you through tough situations without panic and who play an imperative role in the journey. You cannot get from $0-$100m without them. They are people who - when you look back on the business in ten years' time - will make you think "I could not have achieved what I achieved if they had not been there". an event, idea, or procedure that effects a significant shift in the current way of doing or thinking about something. "a potential Game Changer that could revitalize the entire US aerospace industry" noun Dictionary About 2,530,000 results (0.44 seconds) game changer GAME CHANGERS ARE PEOPLE WHO HAVE AN OVERWHELMINGLY POSITIVE IMPACT ON YOUR BUSINESS define: game changer All Images News Books Videos More 13 Game Changers 12 Notion Insights WHY YOU SHOULD HIRE A GAME CHANGER There's a natural inclination from most Founders to think "we don't need external help". You might not need it, but it can certainly be very positive to bring Game Changers on-board for both tangible and intangible reasons. THE TANGIBLE BENEFITS OF HIRING A GAME CHANGER When Game Changers join businesses there is invariably an almost immediate step change in one or more of the key metrics of performance. Whether it's revenues increasing dramatically, staff churn decreasing suddenly, measures of staff contentment and productivity hitting the ceiling, customer satisfaction going green, or product delivery speeding up dramatically, there will be a noticeable improvement in a significant proportion of the business. Across the Notion portfolio, there are a number of instances of this that confirmed the 'game changing' status of new exec hires THERE IS INVARIABLY AN ALMOST IMMEDIATE STEP CHANGE IN ONE OR MORE OF THE KEY METRICS OF PERFORMANCE 15 Game Changers 14 Notion Insights THE TANGIBLE BENEFITS OF HIRING A GAME CHANGER WHAT ARE THE MEASURABLE INDICATIONS THAT A GAME CHANGER HAS JOINED YOUR BUSINESS? OCT Q3 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 JUNE NOV JULY FEB AUG MAR SEPT APR OCT MAY NOV DEC US$0 US$0 US$750,000 US$7,500 US$1,500,000 US$15,000 US$2,250,000 US$22,500 US$3,000,000 US$30,000 1,000% GROWTH Annual Recurring Revenue vs Time Average Contract Value 700% GROWTH GAME CHANGER JOINED GAME CHANGER JOINED DEC JAN Q4 2016 All of the following graphs show real data that has been anonymised. 17 Game Changers 16 Notion Insights -87 -40 -52 2016 2017 96 97 96 I'm happy on my team I work well with my manager *All data is real, anonymised data from Notion-backed businesses 2017 2016 0% 25% 50% 75% 100% Staff churn reducing profoundly following two senior hires: Culture Amp statistics that measure different dimensions of staff contentment STAFF CHURN ON TEAM 'A' STAFF CONTENTMENT SURVEY I would recommend this company as a great place to work GAME CHANGER JOINED GAME CHANGERS DON'T ONLY IMPROVE THE FINANCIAL METRICS... THEY ALSO HAVE A MEASURABLE, POSITIVE AFFECT ON THE TEAM DYNAMICS... 19 Game Changers 18 Notion Insights The intangible benefits are, naturally, harder to define. They include a sense of confidence in the ability to exit for a huge valuation, a greater sense of enjoyment in the day-to-day and a learning experience like no other. Thoughts from the Founders who've made Game Changing hires summarise most accurately the intangible benefits "I feel really lucky to have found such great people to work with." - Nino d'Adhemar, Apperio "Game Changers are helpful in early-stage businesses when they're collaborators rather than leaders. And to collaborate, the ability to discuss the most pressing issues is absolutely key." - Renn Vara and Maureen Taylor, SNP Communications "Until Series A we were a band of pirates. Then a Game Changer came aboard and we started to become a Navy." - Vasco Pedro, Unbabel "A real Game Changer is someone who can change the attitude of the Founder." - Mike Laven, Currencycloud "Was there a step change in my ambition, when I brought in a Game Changer? No. But there was a definite step change in my confidence that we'd succeed." - Phil Fernandez, Marketo THE INTANGIBLE BENEFITS OF HIRING A GAME CHANGER GAME CHANGERS ARE PEOPLE WHO HAVE AN OVERWHELMINGLY POSITIVE IMPACT ON YOUR BUSINESS 21 Game Changers 20 Notion Insights _ 1 I WASN'T ALWAYS ON CALL ANYMORE Hiring the first Game Changing CXO was a big change for me, and for Marketo. For the first time at Marketo, I wasn't always on call. Within about a week I'd let go of every part of the function that the Game Changer was running; he just had this amazing ability to say 'I've got this' and then immediately talk about his strategy and start the execution part of it. Suddenly I wasn't the 'go to' guy for everything, because the Game Changer knew far more about his area of expertise than I did, and he had the general management skills to help me out across the whole company. If something major came up, there was someone else who could handle it. Phil founded Marketo in 2006 with Jon Miller and David Morandi. They set out with the aim of building a new kind of application to let marketing professionals contribute to revenue and measure their success. Marketo went public in May 2013 at a valuation in excess of $700m before being acquired by Vista Equity Partners for $1.8 billion in 2016. INDUSTRY VIEWPOINT 5 THINGS THAT CHANGED AT MARKETO AFTER HIRING GAME CHANGERS Phil Fernandez - Founder Marketo 23 Game Changers 22 Notion Insights _ 3 I HAD TO LEARN HOW TO BE A CEO A founding tech CEO has the opportunity to engage in every area in the business, and in the early stages of Marketo, I did just that. But in reality, that just means that you're spread like peanut butter which isn't ideal for the company or the culture as the business grows. We were growing at a significant rate, so there was always plenty to do and I enjoyed being in the detail of it all. I'm naturally curious so I wanted to understand all elements of the business. But once the company reaches any meaningful size, the CEO needs to be setting strategy and not wading into every detail. Bringing a Game Changer into the business meant that I could let go of a large proportion of the detail and really be the CEO. But it wasn't easy - it took me months to learn how to step back and start to be a strategic CEO. I had to learn how to delegate more and more, and how to get the information I needed without going into every detail. When I hired a Game Changer, they took care of much of this detail so I had to learn how to make strategic decisions from a higher level. There was a very natural tension between needing to know everything and really not needing to know everything. The Game Changer certainly helped me reach the right balance of detailed knowledge, which allowed me to step up into being a 'true' CEO. _ 4 THE CULTURE HAD TO BE REWIRED _ 5 OUR AMBITION DIDN'T CHANGE, BUT OUR BELIEF IN GETTING THERE DID Until we hired a Game Changer, there was an idea that all roads led to me. A kind of culture that 'if there's something big happening, then you go to Phil'. When we hired a Game Changer, not all roads led to me anymore and as a result, the culture had to relearn itself. We had to be really explicit about the change - we had to make sure everyone knew that there were more leaders in the business than just me. One of the really positive things to come from it was that there was a drastic rethink for everyone in terms of how independent they could be. I've always thought it was incredibly important to devolve power as a way of empowering people and making them feel confident that they can make their own decisions. Before we hired a Game Changer there was an over reliance on getting my opinion; the notion of 'how do you really devolve power as the business goes from 10 to 100 people' is really very hard and also very important. When we hired a Game Changer and all roads stopped leading to me, it opened up a way of thinking independently; it was reassurance that my opinion wasn't the only one and that people could make decisions and get advice from many other people in the business. We'd always set out to build a huge business, even in spite of the massive challenge and the frequency with which early stage businesses don't succeed. You have to think like this, or you won't survive. So, when we started hiring Game Changers this ambition didn't really change. We'd set out to build a multi-billion dollar company and that idea never wavered, because we'd set our sights very high. There was, however, a huge step change in the belief that we would have a chance of getting there. We hired a CXO from a major international public company. He'd had startup experience and a drive to build something from the beginning, but he was leaving behind a global team and millions of dollars of budget to join us. So when he arrived at Marketo there was a rippling effect around the business of 'This guy wants to leave all of that behind and join us? He must really think we're on to something'. Seeing an executive of that profile choose to come to Marketo when it was still at a very early stage gave inspiration to the whole company that the vision was real, and that what we wanted to achieve was entirely possible. _ 2 I HAD COMPLETE TRUST IN SOMEONE ELSE The first time I knew I could completely trust a Game Changer was when I was interviewing a candidate for a senior role at Marketo. Everyone at the company knew that when I was interviewing someone I didn't want to be interrupted; the interview process should be seamless and it's not fair to the candidate to be de-prioritised, even for a short period. The Game Changer interrupted an interview I was conducting, but his judgment was good and I knew the reason for the interruption would be warranted. In short, he wanted to let me know that there was a possibility of a major security breach but that he was handling it, and I should go back to the interview. In that moment I realised that I trusted him completely (NB it later transpired that there had been no breach). His ability to interrupt me without undue disturbance, get my attention onto something else for a brief moment, and then let me get back to the interview knowing that the issue was being handled was amazing. It was incredible to see how he was able to exercise perfect judgement of the situation. For me, it was a whole new level of relationship. I trusted him completely to be calm under fire and make the right kind of judgement calls, even in moments of company-defining crisis. 25 24 Notion Insights Game Changers IF IT'S POSSIBLE TO HIRE SOMEONE WHO'LL MAKE THE JOURNEY FROM $0-$100M SIGNIFICANTLY EASIER, WHY ISN'T EVERYONE DOING IT ALL OF THE TIME? A big part of what we do at Notion is working with Founders to guide them through the process of making their first external Game Changing hire. Usually this is a Chief Revenue Officer, but sometimes it's a CTO, COO or CFO. We're not experts in psychology or academics who've extensively studied the difficulties in hiring but, from a number of conversations with Founders who're on the brink of adding the first non-Founder to the senior team, we've accumulated some knowledge around the theme "why making the first big hire is so hard". There are the usual concerns including "what will this person actually be doing?" and "can we afford such a senior person?". But alongside those difficulties, there are a number of common themes that crop up that aren't widely spoken about, so Founders often think they're alone in their quandaries. The common concerns are: What if I hire a Game Changer and they figure out that I don't know what I'm doing? What if I relocate a Game Changer from San Francisco to London, they bring their spouse and kids and pets and thenI can't provide a great work environment for them? How much will I need to pay this person, and why do Search Firms cost so much? What if I straight-up just make a bad decision and hire someone who can't do the job? What if I hire this person and they change everything for the worse? To be concise, these concerns are: Imposter Syndrome Pre-emptive guilt Cost versus investment Hiring the wrong person Culture and values WHY IS IT HARD TO HIRE A GAME CHANGER? Maddy Cross Head of Talent, Notion 27 26 Notion Insights Game Changers IM PO ST E R S Y N D RO M E IMPOSTER SYNDROME There's a worry, before even starting the hiring process, that a new C-Level hire will join the business and very quickly notice that the Founder is mashing their way through the scaling process without being totally sure of what they're doing. Every Founder feels like this at some point - even the ones who had never felt it in their lives before. It's called Imposter Syndrome. "I thought Imposter Syndrome was a made-up thing - I'd never felt it before and I didn't think it was real. And then we hired someone amazing and I spent a few weeks thinking 'this guy is doing in one day what would've taken me months... why am I so rubbish?' After a few weeks though, I realised that that was exactly why we'd hired him." - CEO/Founder of a Notion-backed business IMPOSTER SYNDROME IN THIS CONTEXT IS A DOUBLE-EDGED SWORD On the one hand, Founders don't want to experience Imposter Syndrome because it feels uncomfortable on a number of levels. "What if I get found out?", "What if they notice a terrible mistake I've made that they might expose before I can fix it?", "What if my direct reports see the new person do an amazing job and think I'm just a con artist?" and so on. Founders often haven't experienced this so they don't really know what to 'do' with it, or how to get past it, and it doesn't feel nice to be in the midst of it. On the other hand, experiencing Imposter Syndrome is the one of the key indicators of hiring a Game Changer. Game Changers are people with deep sector expertise and - more often than not - a significant number of years of experience under their belts. They actively should know more than the Founder who's hiring them in at least one area of the business. That's why they're expensive, it's how they'll shift the dial on your business, and it absolutely does not mean that they'll pick holes in the prior mistakes of the Founder (if they find holes, they'll help to fix them). If a Founder isn't worried about being "found out" by a Game Changer that they're going to hire, then it's likely that they aren't setting their sights high enough, and experiencing it shows an active interest in the ability to learn and grow as a Founder. EXPERIENCING IMPOSTER SYNDROME IS THE ONE OF THE KEY INDICATORS OF HIRING A GAME CHANGER. "THE WHOLE PROBLEM WITH THE WORLD IS THAT FOOLS AND FANATICS ARE ALWAYS SO CERTAIN OF THEMSELVES, AND WISER PEOPLE SO FULL OF DOUBTS." - BERTRAND RUSSELL 29 Game Changers 28 Notion Insights The real Game Changers don't take career decisions lightly: making considered decisions is usually what got them where they are in the first place. They'll want to carry out due diligence, consider their options (of which there will likely be many) and, often, they will have moved internationally in the past for their careers so they'll be 100% aware of the pros and cons before they even start thinking about it. "Pay a lot of attention to the questions that candidates ask at interview. If they're asking strategic, probing questions like 'What is the number one challenge facing the business right now' or 'What does the Founder struggle with the most' then they'll be carefully considering the negative and positives aspects of the role' - Andrew Banks, True Search In the interview process it's absolutely OK to be upfront about the negative aspects of the job and the company. Letting the candidate know that the runway is only six months, or that they're likely to be superseded by someone in a year or two (and that they'll be involved in the hiring process) is really the only way to navigate around this. And if they decide the job isn't for them, then they weren't the right person in the first place. FOR ANY GAME CHANGER WHO'S GOING TO TAKE A ROLE IN YOUR BUSINESS IT ISN'T A RISK FOR THEM, IT'S A LEAP OF FAITH BECAUSE THEY'LL BACK THEMSELVES TO BE PIVOTAL IN MAKING THE WHOLE BUSINESS SUCCEED. SOME OF THE THINGS THAT WE'VE HEARD FROM FOUNDERS... "Relocating this guy from San Francisco is going to be a pretty big dealHe's got kids and a wife who has a career that she doesn't want to give up" "We're a super early-stage business and the candidates we're looking at have run massive corporates Will there be enough for them to do?" "I'm not sure why this guy would want to come and work for a business like ours, with limited Product-Market Fit and really not much revenue" "I'm worried about hiring this person because - in a year or two - I'll need to supersede them with someone who has a US network and they might feel like they don't have a place in the business any more" Broadly, this kind of sentiment can be summarised as guilt. It's pre-emptive guilt, rather than current guilt. Founders are worried that they'll oversell the opportunity or that, once the hire has been made and the person has relocated, they'll run out of money and won't be able to fulfil the role, or the remit won't be big enough or any number of other things. The main thing to note here is that it's the responsibility of the Game Changer to address these concerns, it's not the responsibility of the Founder. The responsibility of the Founder is to be entirely honest about all of the immediate concerns and challenges in the business. PREEMPTIVE GUILT FOR ANY GAME CHANGER WHO'S GOING TO TAKE A ROLE IN YOUR BUSINESS... IT ISN'T A RISK FOR THEM, IT'S A LEAP OF FAITH 31 Game Changers 30 Notion Insights We invest money with the expectation and hope of achieving a massive multiple. We are minority investors, so the responsibility of building and growing the business sits with the Founder; we have regular engagement, typically a board seat and a strong relationship, and we trust that they will spend the money we invest wisely; after all, Founders are often the largest shareholders so our goals are aligned. Because the businesses we invest in spend the majority of their money on people (in terms of salaries), the 'ROI' decisions are - in the majority - focused on hiring. The decision to spend money on a Game Changer and an accompanying search firm is an ROI decision, not a liability as per standard accounting process and balance sheets. IT SHOULD THEREFORE BE ASSESSED AS ANY INVESTMENT: If you spend 50k+ with a search firm, precisely what services will they provide, how much of your time will it save (i.e. what's the opportunity cost), who will they find that you are unlikely to find, and will they do a better job of persuading amazing candidates to speak to you than you can do yourself? If you spend 150k+ on the basic salary of a CXO, what is your expectation for their performance based on their previous roles and how can they provide evidence that they will achieve better results in your business? Cost is the most obvious of all of the concerns, largely because it's very unemotional, entirely measurable and something that's usually at the front of the mind of the Founder at all times because of a general business need to be mindful of expenditure. Founders need to consider the compensation package for the Game Changer as well as the cost of the search firm involved in finding them. The mechanics of the costs are covered later, so for the moment we're going to focus on the higher level concerns about the cost. Notion is in the rare position as a VC that we do not invest in any businesses with value tied up in physical goods, stock or real estate. The businesses we invest in are software businesses, so the most significant cost is people. CO$T NOTION IS IN THE RARE POSITION AS A VC THAT WE DO NOT INVEST IN ANY BUSINESSES WITH VALUE TIED UP IN PHYSICAL GOODS, STOCK OR REAL ESTATE 22.6% Other costs INVESTORS IN NOTION Decides which VC funds to invest in NOTION Decides which startups to invest in FOUNDERS Decides which people to hire Returns to Investors in Notion 77.4% Staff costs AVERAGE % OF STAFF COSTS VS OTHER COSTS IN NOTION PORTFOLIO COMPANIES THE MOVEMENT OF ROI RESPONSIBILITY WITHIN VC 33 Game Changers 32 Notion Insights Broadly, this concern can be split into two parts: poor interview techniques and bad luck. INTERVIEW TECHNIQUES There's a good reason that Amazon, McKinsey, Goldman Sachs and Google (the list goes on) have had great performance - they really, really test their interview candidates to make sure they're the right fit. They don't substitute a series of informal meetings and coffees for a structured interview process, and neither should startups. This isn't to say that you should find the time and the resource to run a ten-round interview process with a full-day assessment centre, but you should think about how you can structure the process so that it's measurable and aligned with interests of the business you're hiring for. There's a chapter in this Notion Insight piece - Guide to Interviewing Game Changers - that's a step-by-step guide to interviewing C-Level candidates, which will take a lot of the thought process out of how to approach it. BAD LUCK Pretty much all Executive Search firms will rerun searches if the person who took the job leaves within a year. This is largely because bad luck can play a part in hiring a candidate. The candidate's spouse may decide to take a job elsewhere that requires them to relocate and leave the role at your business, they may be offered an opportunity elsewhere that you can't match, or they might just decide they want something different out of their career. Some of the best search firms that are known to Notion have - anecdotally - put a number of about 20% of searches being redone after the candidate has started the job. In other words, even if you do everything right, the candidate has a 20% chance of leaving the role in the first year because of circumstances that are likely to be outside of your control. Plenty of - if not all - very successful businesses have fallen into that 20% at some point. There's often nothing you can do about it if you fall into that category except to be aware that it happens to everyone, you should restart the search as soon as possible and there are far worse things that can happen in business (and in life, too). HIRING THE WRONG PERSON "A CHAT OVER TEA AND BISCUITS IS NOT AN INTERVIEW PROCESS" - JONNO SOUTHAM SENIOR BUSINESS DEVELOPMENT, VENTURE CAPITAL AT AMAZON WEB SERVICES 35 Game Changers 34 Notion Insights First of all What is the culture of your business? What are your values? It should be reasonably easy to come to general consensus among the Founders on the overall culture and values, but the act of writing it down and getting everyone to agree on it can be a lot more arduous, both in a time-consuming and emotional way. It can also be tricky to align the culture and values with the outputs, and what you want the company to be rather than what it actually is at present. BUT IT'S VITAL TO DO THIS WORK BEFORE YOU START LOOKING FOR THE FIRST BIG HIRE. HOW CAN YOU MEASURE THEM AGAINST AN UNKNOWN? The founding team should be clear on three to five values that are agreed and implemented, and the interviewing of C-Level candidates should use these values to align everyone in the process. Exactly how to land on what your values are is another topic for another time because it's lengthy, nuanced and tricky to get right but once you've decided what the values are, finding a Game Changer who has a very similar outlook should form part of the interview process as outlined in the Guide to Interviewing Game Changers in this Insight piece. CULTURAL FIT HOW DO WE KNOW IF THEY'LL FIT WITH OUR CULTURE? WHAT IS THE CULTURE OF YOUR BUSINESS? WHAT ARE YOUR VALUES? 37 Game Changers 36 Notion Insights INDUSTRY VIEWPOINT: BUILDING RE- LATIONSHIPS BETWEEN FOUNDERS AND GAME CHANGERS Maureen Taylor & Renn Vara Founders, SNP Communications Renn and Maureen are the co-founders of SNP Communications. The company provides content, coaching and creative services to the leaders of some of the world's most successful businesses including Airbnb, Spotify and Transferwise. 39 Game Changers 38 Notion Insights _ They started SNP in 1992, so they've seen multiple incarnations of the global tech industry, positive and negative, and apply this knowledge to new Founders and early stage ventures as well as more established tech companies. One of the areas they've had a load of experience with, and exposure to, is keeping the positive dynamic of founding teams together when new execs are hired. AN EARLY-STAGE BUSINESS ISN'T JUST A BUSINESS, IT'S A PERSONAL CHALLENGE As a result, an early-stage business is usually an all-encompassing affair for the Founders and often comes with great sacrifice. So it's understandable that when a Founder brings a Game Changer into the fold, it can be tricky to adjust and make the most of the upside: someone with raw enthusiasm and exceptional levels of intrinsic motivation, alongside someone with extensive experience, sector knowledge and drive to succeed. The first thing that Renn and Maureen noted is that, as a Founder, you have a responsibility towards self-care. No one else is going to take care of you, and you can't take care of your team if you're not taking care of yourself first. This is the most fundamental of all Founder/Game Changer relationships: each person needs to be kind to themselves first and make decisions that serve them. In practical terms this translates to a number of things, including being honest with yourself and the people around you about what you want, understanding your intrinsic motivations and drivers and trying to service them wherever possible and, perhaps most importantly, being kind to yourself when you can't figure out what to do - no one can know everything, and no one can see clearly over the horizon. Once this part is taken care of, it's about finding the balance between the Founder and Game Changer that allows the qualities of each to flourish. BEING A FOUNDER OF A COMPANY IS A FACT. BEING AN EMPLOYEE OF A COMPANY IS A POSITION The Game Changer needs to respect the commitment that has been made by the Founder, and navigate around that. One of the clearest examples of this is the ability to give choices rather than saying no. If a Founder wants to take a direction or build a product that the Game Changer thinks is high-risk, it's the Game Changer's responsibility to use their experience and knowledge to guide the Founder through the potential outcomes rather than saying 'no' and risking damaging the enthusiasm, drive and vision of the Founder. For example, a Founder wants to include "Deliver product feature A" that the Game Changer doesn't agree with. The Game Changers responds with "OK, sure, but I think it's worth considering the risks of taking that decision". DISCUSSION RATHER THAN DIRECTION IS KEY Game Changers and Founders work best together when they're great at communicating with one another. It can be a tendency of very experienced business leaders to be directive - they've spent the majority of their careers in corporates, learning how to direct other people, so it makes sense. But the relationship between Founders and Game Changers isn't directive. Game Changers are helpful in early-stage businesses when they're collaborators rather than leaders. And to collaborate, the ability to discuss the most pressing issues is absolutely key. 41 40 Notion Insights Game Changers Now that we're at the point of understanding the huge impact that a Game Changer can have on your business and how to get around the barriers to hiring one, we need to look at how to hire one. _ 1 WHERE ARE THE GAPS IN YOUR EXISTING LEADERSHIP TEAM? _ 2 BRING IN A SEARCH FIRM TO FIND CANDIDATES WHO CAN FILL IN THOSE GAPS _ 3 INTERVIEW CANDIDATES TO DECIDE ON WHO YOUR GAME CHANGER IS... HOW TO HIRE A GAME CHANGER THE FIRST STEP IN THE PROCESS IS TO UNDERSTAND WHERE THE DEBTS AND THE GAPS ARE IN YOUR EXISTING LEADERSHIP TEAM Maddy Cross Head of Talent, Notion 43 Game Changers 42 Notion Insights HOW DO YOU, AS A FOUNDER, KNOW WHERE TO START WITH YOUR FIRST SIGNIFICANT GAME CHANGING HIRE? START WITH LOOKING AT THE LEADERSHIP DEBT AND GAP, TO SEE WHERE THE WEAK SPOTS ARE 1 LEADERSHIP THE DEBT AND THE GAP LEADERSHIP DEBT Leadership Debt is a measure of the ability to execute. It's the debt between getting things done competently and getting things done at a speed and quality that'll take you from $10 to $100m ARR in six to ten years. The Leadership Debt is largely about the stretch of the individual: is your CMO able to amp up their activity to capture a billion-dollar category while keeping the plates of sales leads and digital marketing campaigns (and everything else) spinning? When the Founder tells you she's hiring a CRO and pushing the Go-To-Market, does she do it? Debt can be measured in the style of NPS: "What do you score this person from 0 to 10?", within the context of the challenges facing the firm for the next two years. How well do you rate each of your team in terms of their ability to deliver on the current plan? What about the following 2-3 years? Debt: Ability to execute Founder CPO CEO COO CFO Chair Gap: Spaces in the skill set Debt CRO CTO CMO 45 Game Changers 44 Notion Insights "THE INCREASINGLY FAST-MOVING AND COMPETITIVE ENVIRONMENT WE [FACE] IN THE 21ST CENTURY DEMANDS MORE LEADERSHIP FROM MORE PEOPLE TO MAKE ENTERPRISES PROSPER" - JOHN P KOTTER, EMERITUS PROFESSOR, HARVARD BUSINESS SCHOOL LEADERSHIP GAP Leadership Gap is a measure of competency blind spots. Which elements of the org chart have world-class talent, and which don't? Does your CPO have amazing abilities to understand customer needs but struggles with prioritisation? Even more obviously, are you simply missing a CPO and your CTO/CEO/COO can't cover the product needs? Should we bring in a chairperson? The gap is a question of the individual and the team combined, which makes it harder to measure than debt, but if you can spend some time reviewing both dimensions of the debt vs gap structure you'll end up with a highly functioning C-Level team that - ultimately - allows you to get on and do the job of the CEO without the distraction of specific functional issues. CRO Gap Founder CTO CEO COO CMO CFO Chair Debt: Ability to execute Gap: Spaces in the skill set 47 Game Changers 46 Notion Insights THREE REASONS THAT IT'S WORTH WORKING WITH AN EXECUTIVE SEARCH FIRM _ 1 OPPORTUNITY COST It's easy to lose hours in LinkedIn looking for candidates, if you haven't done it before and you don't know the process for mapping the market. Search firms spend hundreds of hours looking for, vetting and short- listing candidates, not to mention negotiating the offer and dealing with a potential candidate relocation. Spend that time doing your job as Founder/CEO, rather than trying your hand at Executive Search. _ 2 FULL MARKET SEARCH Really great search firms have a global view of the talent market; they don't tend to miss great candidates who are hidden out of view, so you can ensure that the short-list includes everyone who's in the market for a new role and who - more importantly - will add great value to your business. You'll be sure that the candidate you hire was the best in market, rather than "someone we found on LinkedIn who looked OK". _ 3 CANDIDATE ATTRACTION If you approach a candidate directly, they'll have the conversation on the basis that they'll only be looking at one role at one company. If a search firm approaches them, it can be a more interesting proposition; the search firm can sell your business from an unbiased point of view as well as giving the candidate a full overview of the suitability of the role in comparison to other open roles. 2 BRING IN AN EXECUTIVE SEARCH FIRM TO HELP YOU FIND GAME CHANGING CANDIDATES WE'VE WORKED WITH SOME WORLD-CLASS EXECUTIVE SEARCH FIRMS AND KNOW THAT FINDING THE RIGHT ONE WILL NOT ONLY TAKE THE PAIN OUT OF THE SEARCH PROCESS, BUT WILL GIVE YOU A NEW OUTLOOK ON THE CALIBRE OF CANDIDATES THAT ARE IN-MARKET 49 Game Changers 48 Notion Insights THE SEARCH PERSPECTIVE Andrew is the Managing Director of True Search for their International business, outside of the US. Having worked with clients from early stage to pre-IPO appointments, his knowledge with private companies of what it takes to hire a Game Changer is detailed and nuanced. His 15 years of search experience have given him not only a clear idea of what Game Changers should bring to the table but, more so, an understanding of what it takes for Founders to get the most out of the search process, resulting in a hire than can truly meet the growth expectations set by the business at hand. Interview with Andrew Banks Managing Director, True Search 51 Game Changers 50 Notion Insights GAME CHANGERS ALWAYS DELIVER They have a responsibility to the Board, to the internal stakeholders, to their direct reports and to their investors, and the common theme amongst Game Changing people is that their ability to deliver is second to none. If you think about the behaviour of Founders as being akin to the leader of a family unit, or the leader of a tribe, they need support and reliability. Game Changers can reinforce this and, in doing so, reinforce the confidence of the founder. ...BUT THERE CAN BE INITIAL DIFFICULTIES On the negative side, Founders often experience concerns with making their first very senior, CXO hire: 'How will I handle this person?', 'Can I manage someone of that gravitas?' To the founder, it can feel like they're going to pay for a resource that they aren't yet ready for. CXO hires come with a cost that is usually significant to the early stage business, so Founders want to optimise that investment which can be tricky when work flows are uncertain and when they feel that they don't have enough functional expertise to get the most out of the new hire. They may have a vision for where they want to go, but it's difficult to know what to expect with a new hire, what is realistic to achieve and within what period, without having that functional background themselves. ALIGNING CONTEXTS IS ESSENTIAL TO AVOID FRICTION Before you make a decision on a Game Changing hire, you need to be clear on where your business is in the growth cycle. If you meet an impressive candidate with years of experience at a corporate, their skills won't necessarily align with an early stage, high growth business, no matter how talented they are at running global teams or solving complex, high value problems. You have to be clear about aligning contexts - if someone is a 'big budget' person, don't put them in a startup, and vice versa. People who're in the '$0-10m ARR' category are as impressive - if not more so - than people who've come from a big name corporate, but in a different way. Try to avoid vanity hires - people who've got impressive brand names on their CV, but who don't necessarily have the skill sets & attributes for getting from $0 to $10m. HIRING A GAME CHANGER IS A COMPLEX BUSINESS DECISION THAT SHOULD BE QUANTIFIABLE AND MEASURABLE There's a school of thought around hiring that it's an art rather than a science, and that it should be led by a gut feeling rather than data. We advise strongly against this because it leaves a lot to chance; hiring a Game Changer inevitably means deploying a large amount of cash so it should be viewed as an ROI decision in the same way that tech, marketing or product decisions are. With Founders who haven't made significant CXO hires in the past, we try to work through the outcomes with them before we do anything else. We'll quantify the opportunity cost of not hiring a Game Changer and look at the necessity and urgency of making a CXO hire before we go any further in the search process. SIMILAR PRINCIPLES APPLY WHEN ASSESSING CANDIDATES. IT SHOULD BE EVIDENCE BASED, RATHER THAN BASED SOLELY IN CONVERSATION Ideally the interview process will include the task of getting them to solve a problem within their functional expertise that you can't solve. You shouldn't expect a final outcome from this exercise, but understanding how the candidate thinks and approaches problems and data sets, and how they interact with you and the team is vital to the hiring decision; Founders need to know if the candidate can meet their expectations on how to approach problems before they go any further in the hiring process. Stakeholder confidence will increase with more validation. You also need to assess the quantifiable track record of the candidates - have they been through the same phase or transformation that your business is going through, what's the evidence that they actively contributed to a successful outcome, and how does that translate to the specifics of your company? This requires not only getting clear about the metrics of their past performance, but also getting clear about the metrics of your future performance and the roadblocks that you'll need to overcome. You really have to look at candidates and think 'is this the person who'll take us from $10-20m, or wherever your business is currently at. Then you need to look for evidence that they've done this, and understand the context of how it translates to your immediate requirements. And then test it. Does the candidate have a logical career story? It doesn't have to be perfect - pretty much everyone at CXO level has made a few missteps along the way - but it needs to be coherent and, ultimately, show a clear path to where you need them to be to execute on the job at hand. WHAT ARE THE BIGGEST CONTRIBUTIONS THAT SEARCH FIRMS CAN MAKE TO THE PROCESS OF HIRING A GAME CHANGER? 1. Defining the sequence of success for your business and turning it into a compelling story to attract top talent 2. Creating a consistent measurement framework for assessing candidates and aligning stakeholders 53 52 Notion Insights Game Changers 3. Providing a collaborative tool to integrate the whole process & make it transparent. Product teams use Atlassian, Marketers use Mixpanel, and we use Thrive TRM. We're not running global search processes with a pen and paper - it's a product-based approach. 4. Having a truly global network of experts and relationships so that geography is not a barrier to success. ON A PERSONAL NOTE, FROM ANDREW I've been working in executive search for almost 15 years, and have been fortunate to work with some exceptional people in strategically challenging situations. For me, there are three that stand out as being not only interesting to work on, but a real pleasure to get to know the people involved and see a tangible outcome that wouldn't have been possible without the addition of a Game Changer. THE FIRST WAS THE CTO OF BETFAIR, TONY MCALISTER We'd been appointed by David Yu, the CEO at the time, who had a very clear understanding of the business and where he wanted it to go. He was looking for people who'd worked in exceptionally high volume environments because of the nature of the betting industry, and who could transition Betfair. I spent some time with him at Betfair to understand the nuances of the requirement, as well as the culture, and it started to become apparent that not only did they need someone who had a brilliant technical mind, but also that they needed someone who could structure the organisation for high growth and, ultimately an IPO. We found Tony McAlister, who'd been CIO at Vodafone Live, the first mobile internet portal launched in the 3G revolution. He was a US national who'd previously worked with ecommerce pioneer Buy.com. He had the balance of deep technical understanding, as well as a clear view of the importance of great management and team mobilisation. He gave David the headspace to stop thinking about technical issues, and started shifting the dial on the mobile aspects of the business, ultimately launching the mobile platform so successfully that it accounted for 35% of total bets taken, within 3 months of launching. One board member remarked that the impact of the mobile product had added several hundred million pounds to the valuation at the IPO. THE SECOND WAS THE CPO OF PREZI, JIM BANISTER The brief from the CEO, Peter, was exceptionally culture-led. Peter had a clear vision of wanting to help people tell their story in a more compelling way; for him it's a personal mission as well as a commercial one. Being based in Budapest, and requiring the candidate to be 100% aligned with the mission as well as having the technical skill set to fulfil the deliverables was never going to be easy. So we started by asking the question 'who uses Prezi more than anyone else?'... Who are the types of people that love the product and what it stands for? After a bit of searching through the user base we found Jim who, at the time, had created more Prezi presentations in business than any other end consumer. He'd also been one of the Founders of Warner Brothers online and was transitioning the loyalty products for Tesco. He also had a background in product gamification which was a critical issue for users adopting Prezi. We approached Jim about the Prezi role and he couldn't believe it. He thought we were joking. For him, it was the dream role - working on a product that he was a prolific user of, with an altruistic mission and a commercial backbone. Overall it was exceptionally successful, both for Jim personally and for Prezi. LASTLY GM, EMEA OF DATABRICKS This was a business that was booming in North America with a new proposition from an established group of Founders. They had no employees in the EMEA region then, but had business emerging through inbound demand. The aim wasn't to start small, the aim was to make an impact from day one in the region. At the time we did the hire, Databricks was somewhat unknown particularly in Europe and there was a lot of noise around the business but no real results. Most companies fail in their first attempt at expanding into Europe, but for Databricks this was not an option - they needed a Game Changer with a proven track record. We hired Dave Wyatt who had done the same thing for Mulesoft from an early stage, where he had grown into being the Head of EMEA. Dave was already in a good position so helping him understand that this was a great opportunity was key. His impact has been transformative to Databricks Europe; they have significantly expanded and gained revenue in the region way ahead of expectations. We've thought about every aspect of hiring CXOs, obsessively, and we really want to help Founders through the search process because it's really hard. We take the view that if something is hard then you have to do it properly. ANDREW'S FOUR COMMON DIFFICULTIES WHEN HIRING A GAME CHANGER 1. Accepting that you can't do everything More often than not, Founders will have pushed through the seed stages of their businesses by being exceptional generalists supported by specialists in tech, product and marketing amongst other functional specialities. There will always be a pivotal point in a rapidly growing business when - in the interest of scalability and high growth - the founder 55 54 Notion Insights Game Changers can't have a strong view on every topic and be involved in every task. This can get in the way of hiring a Game Changer; the incoming CXO will inevitably take a significant proportion of the leadership remit, which requires the founder to let go of at least some of their day-to-day involvement in the business. It's a tricky process to let go and it largely involves building trust with people who're already

https://techcelerate.ventures

Helping to raise Series A investment for tech companies.

We know two things about our founders:

1. We only invest in them if we think they have what it takes to go on the ten-year journey from $1m–$100m ARR.

2. We know that they will rarely, if ever, be able to do this alone.

About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.

Comments

You must log in to comment

×

Modal Header

Modal body