EO and YPO for Entrepreneur Peer Groups

Last week I was talking to a local entrepreneur about peer groups. This particular entrepreneur has built a multi-million dollar revenue business with dozens of employees after years of high growth. Now, the business is much larger than him and he’s spending more time as a business manager, and less as a scrappy, growth-oriented entrepreneur. He wants to scale to the next level, and is looking for a peer group to share ideas and grow as a leader.

My recommendation was to consider the Entrepreneurs’ Organization (EO) and the Young Presidents’ Organization (YPO), both of which have been immensely valuable to me. In addition to strong programming and networking, the heart of each organization is the small group (usually eight members) forum experience. Forums meet monthly for four hours in a setting of strict confidence and high commitment. The confidentiality is serious — nobody, nothing, never.

Forums often have a consistent agenda:

  • Opening
  • Lightning round
    • Short questions for every person in the group to answer
  • Monthly updates (10 – 15 minutes per person, inclusive of questions)
    • Business
      • Last 30 days
        • Highlights
        • Lowlights
      • Next 30 days
        • Most looking forward to
        • Least looking forward to
    • Family
      • Last 30 days
        • Highlights
        • Lowlights
      • Next 30 days
        • Most looking forward to
        • Least looking forward to
    • Personal
      • Last 30 days
        • Highlights
        • Lowlights
      • Next 30 days
        • Most looking forward to
        • Least looking forward to
  • Presentations
    • Member does a deep dive on a topic, the groups asks questions, the group shares experiences, and the presenting member closes with any takeaways
  • Closing

A small group of people committed to helping each other and meeting on a regular basis is one of the most powerful things I’ve ever experienced.

Entrepreneurs would do well to seek out a peer group like EO or YPO. For me, it’s made a tremendous impact.

Quarterly Review Formats for Employees

Last week I was reading the excellent Iacocca: An Autobiography of Lee Iacocca — one of my favorite book genres is life adventures of people who created or changed an industry. Here, the stories are superb, and one of the comments by Iacocca caught my attention. The author writes:

If our stockholders had a quarterly review system, why shouldn’t our executives?…I’ve asked my key people a few basic questions:

What are your objectives for the next ninety days?

What are your plans, your priorities, your hopes?

And how do you intend to go about achieving them?

Now, the book was published in 1984. 1984! When I started my entrepreneurial career full-time in the early 2000s, people were still talking about annual reviews. Annual reviews never made sense to me. A year was much too long of a time frame with most of the review comments being the current, top-of-mind items.

When we were building Pardot, and working towards establishing our company as one of the top market automation platforms, we modeled our quarter review process based on a variation of Patrick Lencioni’s recommendations. Everyone answered the following questions in a simple Google Doc and shared it with their manager and direct reports:

What did you accomplish last quarter?

What are you going to accomplish next quarter?

How can you improve?

How are you following the values?

Simple. Effective. Repeatable. Regardless of the quarterly review format used, it’s important to develop a rhythm that aligns the team and focuses everyone on the mission.

Figure out what your team needs and consider these two different approaches to the quarterly review process.

The Canada Rule in Startups

Yesterday I finished reading That Will Never Work: The Birth of Netflix and the Amazing Life of an Idea by Marc Randolph, the founder of Netflix. Told through the format of a live narrative, Marc does a great job capturing the ups and downs of the first five years of the Netflix journey. One of the recurring themes throughout the book is the importance of the Canada Rule.

The Canada Rule was originally introduced by Marc when they debated at Netflix whether or not to expand to Canada. Netflix was small, but growing fast domestically. Canada, at roughly 10% of the size of the United States, was obvious for geographic expansion, but would add significant complexity. The Canada Rule, simply, is to focus on the core business and not get distracted by expansion ideas. Do one thing, and do it well.

The old adage still rings true: many more startups died of indigestion than starvation. 

The next time someone brings up a great expansion idea, but takes away from continuing to improve and optimize the core business, invoke the Canada Rule. Focus, focus, focus.

Weekly Communication

In Patrick Lencioni’s latest book The Motive, he writes that leaders make their organizations healthier by “reducing politics, confusion, and dysfunction and increasing clarity, alignment, and productivity.” In today’s turbulent world, the need for strong organizational health has never been more important.

Entrepreneurs often struggle with a lack of clarity and alignment due to weak communication.

The more turmoil, the more communication required.

The more uncertainty, the more communication required.

The more chaos, the more communication required.

Regardless of the times, entrepreneurs should send a weekly email update to their constituents — employees, advisors, mentors, and investors. People want to know what’s going on. People want to help. Regular email communication is the most repeatable, and scalable, method.

As for the format of the email, go with something simple:

  • Purpose of the company (repeat it every time!)
  • Recent customer story
  • Recent culture story
  • Goals with current progress
  • Any other highlights (employee, team, department, etc.)

That’s it. Communicate in a variety of manners, repeat the message, and make the foundation a weekly email.

Disrespecting a Team Member is Never Acceptable

I was two years in as a full-time entrepreneur and we were meeting a potential customer in a small nondescript building less than a mile from our office. Our startup was still struggling and I, as an eager first-time entrepreneur, was chasing any opportunity regardless of fit. Helping me that day at our sales meeting was our lead engineer, and after a few pleasantries, we started talking shop with the prospect.

Quickly, as the conversation turned technical regarding product capabilities, our lead engineer dove in regaling all the details. Only I, as a sales-oriented entrepreneur, thought our lead engineer was focused too much on the minutia and not enough on tying the functionality back to the customer’s needs. So, in an expression of poor leadership, I interrupted him mid sentence and took the conversation a different direction.

Another topic with the prospect, another detailed comment from our engineer, another poor interruption from me going a different direction — on and on it repeated.

Only after the meeting, as we got into the car, the lead engineer shared with me how little he felt. How I had unprofessionally talked over him. How poorly I had reflected our company in front of the prospect. How miserable I was in the setting.

It was all true.

Now, 16 years later, I still remember this lesson. I did an unacceptable job setting expectations with the lead engineer before the meeting. I did an unacceptable job showing respect to the lead engineer in the meeting. I did not lead, I trampled.

Disrespecting a team member is never acceptable.

The next time you have the urge to talk over someone, let them finish. Hear them out. Reflect on their position. Treat them with respect — it’s always the right thing to do.

‘I’ vs ‘You’ When Giving Advice

Back in 2008 I had the opportunity to join Entrepreneurs’ Organization (EO) and go through a day long program called Forum Training with the excellent Ellie Byrd. In addition to meeting a number of great people, the most valuable education to me was learning about the Gestalt Protocol.

The Gestalt Protocol, in it’s simplest form, says to share personal experiences for the purpose of giving advice only using ‘I’ and never ‘You.’ Most often, when people give personal advice based on their experiences, it’s in the form of “You should do X because that’s what worked for me.” Instead, remove the use of ‘You” and reword it with ‘I’ so that it’s like “I did X and here’s what I learned.”

When giving advice, especially from a person that’s in a position of power or more experience, it’s too easy to start telling the other person how to do things, even while they lack the details and context of the situation, beyond what they’ve been told. In addition, when receiving the advice, it becomes less valuable when the advice comes across as directives without the corresponding experience and learnings behind it.

By following the Gestalt Protocol and using ‘I’ instead of ‘You’ when giving advice, it becomes more about experience sharing and letting the other person understand what did, and didn’t work, from a similar situation in the past, without passing judgement on the specifics of the current scenario. Personal experiences, delivered via the use of ‘I’ make for much better sharing and mentoring.

Mentors would do well to follow the Gestalt Protocol and focus on sharing personal experiences.

The Struggling Executive Who’s Really a Manager

One of the more common conversations I’ve had with entrepreneurs scaling their startup goes something like this:

Me: How are things going?

Entrepreneur: We’re having a hard time with leader X?

Me: Why’s that?

Entrepreneur: It feels like he’s always reactive.

Me: What do you mean?

Entrepreneur: Well, we keep having issues in his department and it feels like they’re things that shouldn’t be issues.

Me: What should he be doing?

Entrepreneur: He should be proactively spotting things that could be potential issues and addressing them so that they they’re non-events.

Me: Sounds like the struggling executive is really a manager, not an executive.

I’ve had this conversation with entrepreneurs numerous times and it’s always the same issue: a person was put in an executive position and they aren’t really an executive, they’re a manager.

Managers see short-term, right in front of them, and are often reactive.

Executives see long-term, around corners, and are proactive.

Managers bring problems forward.

Executives bring solutions forward.

Now, not all managers are like this and not all executives are like this, but the key difference between and a manager and an executive is the ability to see further out into the future and proactively get things done.

The next time you’re having an issue with a leader, ask the key question: are they a manager or an executive?

Statute of Limitations on Experience

Last week I was talking to an entrepreneur and she started asking me questions about recruiting best practices. How do I recruit engineers? Where do I find them? How do I build a high performance engineering culture? All great questions, but is my personal experience out of date?

This prompted me to think about the role of experience, more specifically recency of experience, in helping entrepreneurs. When an entrepreneur asks me for help, it’s most likely due to the success of Pardot. Only, Pardot was nearly seven years ago.

Since we sold Pardot, I’ve started several more startups but never got to product/market fit, making it feel like there wasn’t as much experience gained. Now, the investing and co-founding side has proved more successful than expected, but I’m a layer removed from the front line decision-making.

When does advice become stale?

When does the statute of limitations for experience occur?

Some of my recommendations should be timeless. Build regular simplified strategic plans. Be the best place to work and the best place to be a customer. Develop a meeting rhythm. Culture is the only sustainable competitive advantage completely in control of the entrepreneur.

Yet, my more specialized knowledge is dated. SEO? Marketing automation? DevOps? Agile? UI/UX? Recruiting? I’m feeling stale on a number of things that were stronger a few years back.

Now, my approach is to focus advice on high level startup and leadership strategies, and away from specific tactical things we employed at Pardot. Today, it’s more sharing personal experiences, mental frameworks, and startup strategies leaving tactical items to other practitioners with fresher knowledge.

General experience is invaluable, tactical best practices age over time.

Reforecasts and Communication

Two years ago I was sitting down with an entrepreneur debating what to do next. It was early in the hyper growth stage of the startup and things were growing fast. Only, with limited operating history, growth expectations were even greater than reality, and there was no way the annual forecast was going to be achieved.

Accountability was tied to the forecast.

Goals/OKRs were tied to the forecast.

Bonuses were tied to the forecast.

What to do?

This challenge is much more common than expected. Fast growing startups are inherently unpredictable. Even with bottoms-up and top-down forecasts, reality is different from the spreadsheet. At some point, trying to hit a forecast that is no longer possible is more demoralizing than motivating — it’s time for a reforecast.

A reforecast is simply redoing the budget and expectations after the year has already started to reflect new information. The key is to get all the stakeholders together, work to make the new forecast as accurate as possible, and then communicate it with the team.

Communication is the most important part.

By over-communicating, including why the reforecast was necessary, learnings from the experience, and go-forward expectations, team members are more bought in and more accepting of the changes. People don’t expect leaders to be perfect; people expect leaders to lead and be transparent.

Reforecasts are part of normal startup life. They shouldn’t happen yearly, but they do happen in the normal course of business. When a reforecast is necessary, make the changes and over-communicate with the team.

We > I for Entrepreneurs

Over the last year I’ve had the opportunity to meet with dozens of entrepreneurs through the Endeavor program. At one of the events I was seated, listening to an amazing entrepreneur tell his story and it was incredibly compelling. Only, every 10th word was “I.”

“I grew sales 30% last quarter.”

“I acquired a competitor last year.”

“I hired an amazing executive.”

“I raised an institutional round.”

Finally, I interjected and asked, “Are you open to feedback?”

Curious, thinking what he had said wasn’t necessarily feedback oriented, I shared that his use of “I” was disappointing. He didn’t achieve those things by himself. He leads a team, not just himself.

Leaders need to say “we” and not “I”, especially when referencing organizational results.

“We” accomplished the goal.

“We” made it happen.

“We” > “I”, always.