Toby Murdock

Aug 28 · 14 min read

Preface

This document expresses my thoughts on best managerial practices to drive business success based upon my experience in many organizations and in particular upon my tenure as CEO of Kapost. There are many drivers of business success — function-specific practices, external strategy decisions, culture, organizational health, etc. By managerial practices I refer to internal practices that are applicable across functions. In defining success I include the various perspectives of the many stakeholders involved: customers, shareholders and colleagues. Many of these concepts I learned the hard way, i.e. by doing the opposite. My own practice of the concepts is a work in progress.

Particularly in the “start-up” stage so much of success is how well an imagined product satisfies the currently unrecognized but quickly emerging demand in the market. Practices for such innovation are more the stuff of product-market fit and backcasting. This document will not touch here either.

While these concepts are applicable to all companies, they are most focused upon start-ups.

Basic Principles

Before detailing specific company best practices it is necessary to lay out a set of basic or first principles about what a company must do in order to succeed. Each of the practices then exist as methods to achieve these principles.

Decision-Making

A company begins with a vision and in ignorance. It has a vision for where it wants to go, but does not know where that destination is nor even the path to get there.

The vision, the destination is a better way to serve customers for which there is significant, well-sourced demand: i.e. product-market fit with efficient distribution. I often think of the company as a boat exploring towards an unknown faraway destination, an explorer sailing off the map:

A company is making decisions all of the time of all levels of magnitude: from deciding which function to use in a line of code up to what ideal customer profile to utilize to define a market focus. Every such decision — each in its own way — is a re-orientation of the course of the boat in its search for the vision, for the destination.

The quality of these decisions, i.e. their accuracy in steering the boat towards the destination, the vision, is of course critical to the success of the company.

Time & Energy

This exploration, of course, cannot go on indefinitely. The boat only has so much provisions, and the company only has so much resources. The resources are measured at one level in the financial resources of the business which translates ultimately (at least in modern, non-capital-intensive businesses) into the time and energy of the colleagues or employees of the company.

The time and energy of the team is the scarce resource that propels the boat, and is a precious resources for each individual and must be used wisely to maintain healthy work-life balance. Thus care must always be taken to spend this resource wisely.

Ownership

Daniel Pink’s breakthrough book, Drive, outlines three majors drivers of motivation:

• Autonomy — the desire to be self-directed
• Mastery — the desire to continuously improve
• Purpose — the desire to make an impact towards the company’s overall mission

All three of these drivers are contained in the principle of ownership, which seeks to provide colleagues with projects and responsibilities that they direct, that have clear meaningful impact, and that provide opportunities for growth and learning.

In addition to Pink’s principles, I would go further and add that in order for teammates to be fully motivated, they must “buy in” to all major decisions. “Buy-in” requires that colleagues are part of the decision-making process and that their voice is heard. When everyone is thus involved in decision-making, they feel less an employee working at someone else’s business and more as an owner guiding the course of their own business.

Having colleagues take an attitude of ownership is critical to the success of the company. Reid Hoffman, founder of LinkedIn, terms such ownership as “entrepreneurial thinking” or the “founder mind-set” and believes that “entrepreneurial thinking and doing are the most important capabilities companies need from their employees.” Such a sense of ownership drives colleagues to make keener decisions and bring more energy to their work, propelling the boat faster and more accurately.

When hiring, I’m always evaluating for candidates who are hungry for such ownership: they want the authority, the purpose, the challenge, the seat at the table. A start-up cannot succeed without such owners. In particular it cannot scale without such owner-leaders: if the founder(s) is/are still owning too much and not delegating, they will quickly become overwhelmed, their colleagues will lack motivation, and the company will suffer.

Alignment

To continue with the boat metaphor, alignment ensures that all of those on the boat are rowing their oars or steering their tillers in the same direction, with a clear understanding of how everyone works together in propelling the boat. Naturally if those on the boat are paddling in opposing directions or having their oars knock into one another, the boat’s progress towards its goal suffers.

Similarly a company cannot succeed if each individual does not understand the goals and strategy of the business and their team as well as their role and the coordinated roles of others in moving the business forward. With alignment each decision that every colleague makes is more accurate and the time and energy they invest is more productive. Without alignment decisions are disoriented and time and energy are squandered.

Best Practices

The following practices outline ways for companies to operate to optimize for the principles of decision-making, time and energy, ownership and alignment.

Asynchronous Communication

Anyone who has worked in business — or most any kind of job — for a good amount of time has developed a frustration with meetings. Meetings seem to consume so much of our time and energy, but, for the most part, we continue to hold them and squander our company’s most precious resource.

Of course companies are inherently collaborative and there is a good intention in bringing folks together in a meeting to collaborate. But what is required is a better understanding of how meetings should be utilized. Most meetings are a very inefficient manner of communicating information. Consider how a meeting typically goes.

Take a product roadmap meeting. All sorts of personnel from an organization are brought together to go over the roadmap. The meeting leader likely brings up a power point of the roadmap and talks through the roadmap, taking any questions as they come up. At the end of the meeting, the leader asks for any questions or concerns and looks to get sign-off and approval on the roadmap so that it can be enacted for the next quarter.

Such real-time communication of information is massively ineffective for a number of reasons. All attendees have different information needs, but all have to undergo the same process — the meeting — regardless of the differences. So say in the roadmap meeting the Sales attendees may be much less familiar than the Product attendees around roadmap detail. The Sales attendees thus have to ask questions and discuss a number of points to become fully informed, while the Product attendees just waste time hearing about what they already know.

Meetings also prohibit deep consideration of the material being communicated verbally in real-time. While when one is reading information one is able to pause and consider a point, there is no opportunity to do so in a meeting.

This dynamic is made all the worse when then, at the conclusion of the meeting, attendees are asked to make a decision such as the sign off requested in the example roadmap meeting. I recall so many meetings where I felt the strain of having to choose between taking more time to consider a decision by asking more questions and wasting the time of my colleagues who likely already knew the answers!

Lastly the need to schedule the attendance of all stakeholders puts even greater strain on schedules and the use of time. Oftentimes decisions are delayed because time for all stakeholders to meet cannot be found for a number of weeks. Conversely when meetings are the only method of communication stakeholders who only play a small role for an issue — e.g. Legal providing branding sign-off for a new product launch — have to endure the full duration of the meeting, in this case the full product roadmap, in order to perform their role.

Synchronous verbal communication of information through meetings is thus an enormously inefficient use of our most precious resource — our team’s time and energy — and also inhibits the pausing and deep consideration required for high-quality decision-making. The better alternative is to convey information asynchronously. This is typically done in written form, though tools like Loom now make it really easy for those who’d like to use their own voice.

Thus learn to be more thoughtful on how to use meetings. Yes you can still have meetings, but they should be used to discuss, to debate. Prior to the meeting the meeting leader should send out the “pre-read” information to all stakeholders well enough beforehand such that:

• Everyone can read over the materials
• Everyone can leave comments and ask questions
• The leader can respond to comments and questions

The meeting itself can then be used for discussion and debate. You will find yourself scheduling fewer and shorter meetings, finishing them early and overall making better use of your team’s time and making better decisions for your business.

Transparent Documentation

As the team becomes more habituated and skilled in communicating in an asynchronous / written fashion, you begin to develop compounding benefits: all facets of your business are documented, generating improvements across the basic principles.

Critical to this effort is having a well-organized, universal repository for documentation. Wikis and intranets have been proliferating for years, but a recent generation of workspace tools — led by Notion — have combined ease-of-use, easily structured data, and external tool integration to truly enable a single hub for cross-company documentation.

With the right expectations, tools, and then habits, companies can then transparently document all dimensions of the business. Of greatest importance are the top-level documents that are applicable to all colleagues. This begins with distilled “one-pagers” that clearly state core vision and strategy to the team. There are many ways to express this. I always look, in addition to vision, to answer the following questions: who is the customer, what is their problem, how do we solve it, how do we do it better, and how do we measure customer value. Closely following strategy is the messaging document that conveys just how we articulate our value. Then strategy is put into motion through some sort of cascading goals structure, whether OKRs, V2MOMs, or your acronym of choice. Naturally all of these company-wide principles and structures are documented.

But this documentation habit and centralization continues with meeting pre-reads, financial plans & reports, marketing metrics, product roadmaps, sales goals & territories, success playbooks, services process, and on and on and on. With such documentation, decision-making improves as deciders are better informed by that information available to them. Time is used more efficiently as colleagues are able to more readily find needed information (and not spend time responding to information requests). Colleagues have a greater sense of ownership of the business through having such full access to its information. The team is much better aligned through transparent documentation, as all colleagues understand the strategy and direction of the business as well as the efforts and approaches of their teammates in pursuing that direction. Documentation also drives alignment through clarity: verbal agreements and goals are often misunderstood by different parties; documentation provides crystal clarity on what was agreed upon.

Memos

As has been discussed, making great decisions is critical to business success. But multiple pressures push back against quality decision-making. The Ownership principle strives to include many stakeholders in decision-making, both in empowering colleagues to make decisions around their responsibilities and involving many in decisions to drive buy-in. Large scale inclusion in decision-making, however, can be a major drag on the efficient use of time.

The most valuable company in the world, Amazon, has developed a particularly best practice around decision making in the form of a memo. Rather than the typical approach of discussing decisions in a meeting over powerpoint slides, Amazon requires the writing of narrative memos, for reasons that Jeff Bezos articulates:

The reason writing a good 4 page memo is harder than ‘writing’ a 20 page powerpoint is because the narrative structure of a good memo forces better thought and better understanding of what’s more important than what, and how things are related. Powerpoint-style presentations somehow give permission to gloss over ideas, flatten out any sense of relative importance, and ignore the interconnectedness of ideas

The act of writing a memo, in other words, generates better thinking and a better output. In fact while a memo is seen as a medium of communication to others, its primary benefit may be in its effect upon the writer. As Andy Grove of Intel says in his masterpiece High Output Management: “Reports are more a medium of self-discipline than a way to communicate information. Writing the report is important; reading it often is not.”

The practice of memos drives better decision-making, both through the act of writing, the superior opportunity for feedback, and through the standards and examples that can be developed through a documentation repository. Less experienced colleagues can review the memos produced by more senior colleagues and learn how to produce good memos, and, in so doing, learn to make better decisions. This dynamic enables more delegated, autonomous decision-making.

Such standards of memos and decision-making include:

• Hypothesis clarity: crisp articulation of the change or choice being proposed
• Customer-centric: focus on the impact of decisions upon the customer
• Data-driven: use of data to support the proposed approach
• Success-metrics: statement of metric achievement that will show that the decision has been effective (or not) and commitment to future review and learning
• Strategic alignment: assessment of the decision’s alignment with the wider direction of the business

Memos can also be used to not only improve the delegation and quality of decision-making but also the principles of achieving buy-in in a time-effective way. Imagine a meeting (done well, with a pre-read) where the team engages in debate over a decision. However achieving consensus becomes a struggle as a few hold outs oppose the proposed direction. What to do?

Continuing to spin in a meeting is likely a poor use of time. Instead once a log jam is detected, the meeting should quickly eject and a leader of the dissenting voices should be requested to draft a memo explaining their alternative proposal. This gives time for those with a dissenting perspective to articulate their take and provides for a most time-effective review of their approach. It also facilitates ownership through widespread empowerment of the team to drive the course of the business through making well-crafted memos to express their views.

Empowerment

In start-ups your major asset is your people and the maximum performance of that asset is driven through empowerment. Empowerment is achieved through three components: authorization, guide posts, and coaching.

Authorization clearly defines and the responsibility and authority of a team member. That authority must be continuously respected: a manager cannot subsume the authority of one of their reports. Only through full authority can a teammate feel the full ownership that will maximize their motivation. Also for growing businesses, leaders must delegate authority effectively; those who try to run everything undermine their personal wellness and the company’s success.

A leader can assuredly pass authority to a teammate so long as they have clear guide posts that define the boundaries of their work and the measures of success (e.g. a SVP of Sales needs to close $500K of ARR per quarter). Such guide posts ensure alignment and prevent peers from overlapping responsibilities (or prevents gaps in responsibilities). Guide posts drive ownership through outlining the impact of a teammates work on the overall mission of the business. And finally they do define the terms whereupon the manager must begin to intercede in the teammates responsibilities: i.e. when the teammate repeatedly fails to achieve the success criteria.

With well defined guide posts in place, the leaders job is then to become the coach. And as a mentor often reminded me, a coach’s place is on the sidelines, not on the field (i.e. doing the work). So as a coach you give feedback, not stating your take on what should be done, but rather socratically asking the questions that help your colleague find the answers that they themselves own. You remove roadblocks. And when your colleague does the right thing and has success, you cheer like hell! In fact, nothing better encourages best practices across a team like celebrating good behavior and performance. Have a Slack channel dedicated to celebration, and immediately post shout-outs whenever you feel appreciation for a colleague’s contribution.

There can be a tension between empowerment and short-term results, which, in a start-up, can have existential consequences. Does a leader continue to coach a struggling colleague? Or do they step in to help prop up performance? There is no right answer here, but while stepping in can assist in the short-term, the best practice for the long-term is to continue to empower the colleague, build their capabilities, and continue to grow the strength of the overall company.

Empowerment can operate both at the individual level — a SVP of Sales owning the revenue responsibility — and the group level — e.g. the Leadership Team collectively sets the strategy of the business. For group empowerment, the leader needs to employ the same principles of authorization, guide posts and coaching with the team, and utilize some co-creation tactics like workshops to generate the collective outputs of the group.

A Note on Distributed Organizations

All of the concepts discussed here are important, I believe, for all types of organizations operating in all formats. However the shift towards organizations operating in distributed fashion that has been massively accelerated by the covid epidemic makes all of these practices much more critical.

Office-centric organizations can get by without such principles as in-person interaction can inefficiently fill in gaps. Poor distribution of information in an in-office organization can be remedied through excessive meetings (in fact, that is the norm). In distributed organizations having a similar cadence of meetings over Zoom would have soul-crushing and productivity-destroying consequences. Thus the asynchronous communication principle, while highly advantageous for office-centric companies, is a must-have for distributed ones. In fact the adoption of many of these modern managerial practices is critical to operating in a distributed model.

Further Topics

I’ve chosen to consider in this document the easier CEO topics around managerial practices. In future writings I hope to cover the more difficult — and more important — topics that are less managerial and more human. Specifically there are two topics yet to cover: organizational health and the founder journey.

Organizational health is a term coined by Patrick Lencioni through his books discussing how the interpersonal interactions of companies are as or more determinant of success than more typical cited factors such as strategy, resources, etc. I learned so much from his books and from my work on Kapost’s organizational health — particularly on his foundational principle of trust — and intend to share my learnings in a future essay.

As an entrepreneur I have labored with the psychological challenges that commonly accompany that role. I have learned the hard way about best practices to better manage those challenges, which I consider critical to both start-up success and founder well-being. My reams of anguished journal entries provide good material for future writings.

For Further Reading

I was fortunate to come upon a Tomasz Tunguz blog post that recommended The Great CEO Within: The Tactical Guide to Company Building by Matt Mochary. Matt is an executive coach and the book distills his wisdom into a concise guide with references to many other books that shaped his thinking.

I found the book to be a great articulation of a lot of approaches I had come to use, plus a whole lot more. While the title suggests a focus on the CEO role, I think the book conveys principles applicable all across the organization.