BE A BETTER BOARD MEMBER – BACK OFF A BIT
One of the recurring conversations I have with startup teams at 1871 is about their “bad” board members. I discount a fair amount of this talk because I have been on both sides of this particular table many times and I understand that most first-time entrepreneurs would be “pleased as punch” if their investors just sent over a bag of money, dropped by once a year for a nice meal, and waited patiently for the day they could help ring the bell at NASDAQ or just start clipping their coupons. More seasoned entrepreneurs understand that a strong, engaged, experienced and additive board is every bit as critical to the business’s long-term success as any other part of the company’s management team.
Nonetheless, I think this is an important issue as well as one which, for a lot of obvious reasons, is very hard for the entrepreneurs themselves to raise and discuss with the men and women on their boards. It also turns out that these issues are very hard conversations for the board members to have among themselves as well - even when they very clearly recognize the problems that may exist with certain directors.
The truth is that in many cases these days, you don’t really get to pick and choose your fellow board members. So these concerns are just as much issues for the board members as they are for the entrepreneurs. The last thing that a new business needs is a situation where you have a bunch of micro-boards where certain board members communicate with other members of the board on sensitive issues, but not with all the members of the board. That leads to very mixed messages for the entrepreneur and a lot of hurt feelings – often, I have found, to be the result of mis-directed or inadvertently forwarded emails.
Also, more and more these days, you have very diverse boards (from an experience standpoint) and, in many cases, this situation puts very seasoned investors at the table with a bunch of angels (or industry-savvy “strategic” directors) who may have initially put their money in the deal (or their company’s money in the deal), but who have very little to add as advisors going forward either because: (a) as angels, they lack any significant and useful business or investing experience; or (b) because as strategics, they often have no real “skin in the game” and tend to be reluctant to commit to much of anything in the way of hard decisions. I don’t think you have to love your other board members (or even like them a great deal), but as a foundation for an effective board, you do need to have at least some basic respect for their opinions and expertise.
In other instances, the interests and agendas of the board members can radically diverge early on and make for some very stressful and difficult sessions where it’s not always clear who is acting in the company’s best interests and who is looking out for their own interests and agenda. I see this type of problem arise regularly in cases where the entrepreneur quickly falls out of love with certain investors either because: (a) they’re too critical and over-involved at the outset (these kinds of businesses don’t all happen to get built overnight) or (b) because the entrepreneur feels (often rightly so) that there were unkept promises and undelivered connections, relationships, introductions, customers, etc. which turned what looked like a promising connection into a bad arrangement from the entrepreneur’s perspective. Sadly, in the constant frenzy of early stage fundraising, entrepreneurs make a lot of bad choices out of necessity and most often fail (with respect to board members) to heed that very important hiring advice about hiring slow and firing fast. Needless to say, it’s very, very hard to ask someone to get off your board a few months after they’ve joined.
All of these considerations can be made better or worse by the behavior of the parties. I think we all know what the entrepreneurs can learn to do better, but I thought I would share a few of my observations regarding directors and also describe some of the behaviors and attitudes that seem to be at the center of these kinds of unfortunate situations. If the shoe fits, you know the rest.
Some successful entrepreneurs (even one-time wonders) can be great angel investors. Their decision speed; bias for action; appreciation of the ambiguities and uncertainties inherent in creating a brand-new business; and their commitment to seeing things continue to change for the better are all important advantages and reasons to have them as investors. But as board members, it can quickly become a very different story. Many of the very same skills, talents and attitudes that are benefits on the battlefield can be brutal in the board room. Among other things, they often suffer from “founderitis” – roughly described as “my way or the highway” and that just won’t cut it at all in someone else’s board room.
As I wrote here recently (See: http://www.inc.com/howard-tullman/whats-the-one-skill-that-will-make-you-a-consistent-winner.html ), great listening skills are an important part of being a board member and not something that entrepreneurs generally have in their bag of tricks at the outset. And I’m not sure that compromises, concessions and building consensus are even a part of the entrepreneurial DNA. So, as the CEO, you want to be careful before you invite too many bulls into your very fragile and young china shop. And as an entrepreneur acting as a director, it’s a good idea to try to check your ego at the door.
Here are a few other tips from the trenches that I hope you’ll also keep in mind.
(1) Family. We aren’t yours. Just because your wife and kids don’t listen to you at home doesn’t mean you get to take it out on the guys you invested in. You’re not our Dad and you’re not Mr. Rogers. So spare us the homilies and the heart-to-hearts.
(2) Flyovers. Showing up is table stakes. Being prepared and focused is what we are looking for in a good board member. If your attention span is roughly akin to a Mexican jumping bean; try taking some Adderall and come back when you’re calm. As far as drive-by mentors go; we say tell them to keep on drivin’. (See: http://www.inc.com/howard-tullman/how-to-deal-with-marginal-mentors.html )
(3) Fables and Fantasies. Just because it happened to you doesn’t make it interesting or important to us or to the business. And just because things turned out well doesn’t necessarily mean you had anything to do with it. Impress us with data; not dicta. Data always beat opinions.
(4) Forget the Format. The value and timeliness of the information is what matters; not the volume and weight of the board book. We’d rather have the right facts on a roll of toilet paper than a perfectly-bound book of boilerplate slides and a bunch of bullshit. Directors who are more concerned with form than substance tend to be the same guys who are more concerned with punctuality than productivity.
(5) Focus on the Forest; Forget the Trees. It might seem like the directors’ job is to get into the weeds, but it’s not. Their job is to set the broad strategic directions for the business and to hire and fire the CEO. The directors don’t need to be minding everybody in the business’s business; that’s the CEO’s and his team’s job – not theirs. It’s counter-productive, annoying and a great waste of time to try to end run the chain of command. It’s there for a reason that smart directors understand and respect.
PS: “You Get What You Work for, Not What You Wish for”
