Hiring for Leaders: Your Company Won’t Scale if the Leaders Can’t

By Jonathan Shottan

Companies that scale quickly share many of the same problems. Institutional knowledge becomes fragmented or lost as people leave. Decision-making authority changes or becomes opaque. New cultural norms are developed. Personality conflicts arise as the old guard and new guard merge. Collaboration becomes even more essential, because almost everyone is involved in creating new functions and establishing new processes.

But if the conditions during scaling are similar, the results vary widely. Some companies thrive through it, while others struggle. I’ve seen both in my career, working at Pinterest, Facebook, and other startups, and cultural differences don’t explain it. Leadership does. There is universality to the qualities exhibited by the best leaders at successful companies. If you’re hiring or promoting from within during a period of high growth, these are the qualities that you can and should identify. Leaders with these qualities naturally maintain momentum, exceed their objectives, develop and attract top talent, and amplify the best aspects of your culture. They are best suited to thrive on constant change and they are instrumental in driving success for the organization. Colloquially, they are the 10Xers.

From my own personal experiences leading teams through scale at Pinterest, Facebook, and other startups, I’ve identified a set of three attributes to consider when vetting leaders during the hiring or promotion process:

  1. Leaders That Scale Take A Position…

What is it: Leaders who can scale companies successfully know how to take a position. I know it sounds simple, but not everyone can do it – especially during times of pressure. A position is an informed stance amid a swirl of uncertainty, which galvanizes others to understand it, respond to it, and imagine how it would work. As such, it speeds the organization toward decisions and action.

Why is it Important: A position is not an opinion, because everyone has plenty of those. A position is also not a point of view because again, everyone has a perspective from which they view the world. A position is a singular proposal for addressing a particular issue. In taking a position, you may actually diverge from your own opinion or perspective, in order to take a position that’s more provocative and therefore more productive. Taking a position creates urgency and gets the conversation moving toward an agreement on next steps.

This is critical because as organizations grow, people can get stuck in paralysis by analysis. They’re not sure of their status yet. They may be afraid of making the wrong decision, or making the right decision, but in the wrong way for the culture they find themselves in.

Leaders who take a position dissolve all this. Though it may sound like a paradox, taking a strong position at the outset of a meeting is a unifying force, not a divider. Everyone else now shares the same task: testing the position, modifying it, figuring out whether and how it would work. It’s easy to focus because a hodgepodge of opinions and questions has been replaced by a proposed solution. Even if the stance is only a straw man, it sparks a productive conversation. And if the position becomes a North Star that everyone can navigate by, you’ve just taken a great leap forward.

How to Hire or Promote for it: First of all, you want candidates with a wide range of knowledge and interests, not superficially, but down to details. These people tend to be polymaths. They are familiar with a wide range of fields, technologies, cultures, and customers, and they can see the big picture intuitively. They can also explain it from multiple angles. They love to share their data or historical knowledge if it will enlighten or empower others. Typically, they can formulate their position as they walk into a room, because that’s how their minds work: synthesizing many factors into one proposition and pitching that proposition at the right level for others to understand and react to.

During the interview pick a big hairy sector, such as transportation or education, and ask the candidate “How do you think this sector will change in 10 years? In 50 years?” Ask about the candidate’s hobbies, pick the one you’re most familiar with, and ask the candidate to talk about it at length; you’re looking for what it says about them, their passion, and their personality. What was the last book they read? What is the next book they want to read? Do they play a musical instrument or a sport? Ask them to analyze the strategy of the organization they’re working for now, both pro and con, to see how many different perspectives they incorporate into their analysis.

  1. Leaders Don’t Get Stuck On A Position…

What is it: The second trait for leaders who scale is effortlessly moving off their own positions when the time is right. They do this because they understand that the position is a means to an end. If you’re familiar with the expression “strong opinions weakly held,” you understand this trait already. In many ways, it’s the flip side of the first trait. Strong opinions weakly held means that leaders readily evolve their positions in the face of new information or through an ability to read a room. They understand that a stronger position is forming – and this was the reason for taking a position in the first place.

Why is it Important: Why does this matter for scaling an organization? Because you need everyone to share their ideas, even if they’re shy. Being inclusive of thought accomplishes this. It also draws out sharper analysis from bolder or more informed members, because they trust that they’re not going to hit a wall if they voice partial or even complete disagreement with a leader’s opinion. Getting to a new, better, shared position makes everyone feel connected to the outcome. Now it’s time for action.

How to Hire or Promote for it: Testing for the ability to gracefully move off a position can be fun for you and the candidate. Before the interview, pose a real-world business problem within an area where you have lots of data but there are many ways to solve the problem. For example, if you’re at a ride-sharing company you could ask “How would you build a driver loyalty program?” Once the candidate states a position in the interview, begin to challenge it constructively, as if you were colleagues in a meeting. Probe for the thinking behind it. Share new data and see how they change their position. You’re not just looking to see if they’re open to revisiting their conclusions. You also want to see if they can continue to effectively articulate their position in the face of resistance — without getting stuck on it.

  1. Leaders Embrace the Outcome…and Adapt Appropriately

What is it: Unless you’re the CEO you don’t get to make the final decision most of the time. That’s when leaders need to have a third critical trait: they embrace the outcome of the conversation that just concluded. If the board decides to cut marketing hiring by 50%, the leader of the marketing department could respond in a variety of ways. The one you want is understanding and expressing the consequences of that decision to the department, in a constructive way.

Why is it Important: Psychologically, this leader has an innate ability to assume best intent. If a management decision goes against such individuals, or their organizations, they don’t take it personally. Quite the opposite, they default to a position that the people above them or around them share a vision for success and that the decision was necessary. Today is not forever, and marketing will be hiring again in the future. The focus now is making the current strategy succeed, rapidly. A good leader will take a positive, proactive position on how to do that.

This natural aptitude is an invisible bulwark against confusion and fatigue during times of rapid change and growth. Why? Because leaders with this trait are consistent in message, countenance, and style. When the environment is constantly changing, people look to their leaders. If the leaders are showing up as constructively positive in good times and bad, their teams will adapt a similar penchant for consistency and there will be fewer productivity troughs.

How to Hire or Promote for it: There are two approaches that can help you identify candidates who will naturally embrace an outcome, turn it positive, and lead their team to success with it. The first approach is to ask the individual to describe a time they disagreed with a boss or peer, and how they responded. You’re not looking for surface answers like “Of course I had to go along” or “I won.” You’re looking for the ways the candidate turned the adversity into opportunity – graciously.

The second approach is to actually put the candidate through adversity as part of the hiring process. If you gave them a homework assignment before the interview, change the terms before they can present their work. Substitute in an interviewer they didn’t expect to talk with. Pick something on their resume that could potentially be a deal-breaker and ask them to reframe it into a deal-maker instead. Again, you’re not looking for pat answers. You’re looking for the natural inclination to embrace what’s happening and turn it positive.

 

The Most Important Deliverable You Have

In my own career I came to realize that vetting for and then fostering leadership attributes on my teams was more important than any other deliverable I had. I am also aware that this knowledge can get crowded out when your company is on pace to grow 10X in two years, because you’ve got so many high-priority problems to solve. Fight the tendency. Sure, you don’t want to be distracted. But you still have to get leaders in place who can scale. Making this a priority benefited my teams tremendously. Individuals with the traits described above were resilient culture carriers who instilled confidence, trust, and good-will in the organizations they were involved with. They were best suited to manage constant change and rapid growth, and most responsible for the ultimate success of the organization.

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Jonathan Shottan is an Executive-in-Residence at TCV.

The views and opinions expressed in the blog post above are that of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This blog post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified above, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.

 


The Rise of Augmented Marketing: Q&A with Michelle Peluso

Michelle Peluso has spent the past two decades helping to forge a new relationship between people and technology. She started her first company, Site59, with a group of friends in 1999 and later sold it to Travelocity, where she served as CEO during the “roaming gnome” era. Peluso became an Executive Advisor to TCV before joining Citibank as Global Consumer Chief Marketing and Internet Officer responsible for the digital experience of the bank’s 100 million global customers. Peluso then took the helm at fashion pioneer Gilt, which she later sold to Hudson’s Bay Company. She became IBM’s first Chief Marketing Officer in 2016 — a move that highlights the transformation of marketing into a core corporate capability.

Still an Executive Advisor to TCV, Peluso remains committed to discovering how marketing can redefine relationships with customers, a transformation that requires curiosity, agility, innovation, persistence, and resilience. In this exclusive interview, Peluso discusses:

  • How the CMO’s role has changed in the last decade
  • Four trends that continue to revolutionize marketing
  • How the rise of ‘augmented marketing’ will challenge CMOs as never before

TCV: It’s widely acknowledged that there has never been a more challenging time to be a CMO. How have you seen the role change since you founded Site59 in 1999?

Peluso: It’s no wonder the average CMO tenure is only 2–3 years and has seen a drop over the past two decades. It’s a hard and incredibly dynamic role, as marketing has shifted from a thoughtful, functional discipline around creatively amplifying the company message to a much more dynamic, real-time, analytical  —  and creative  —  driver of client experience, revenue, and company performance. Expectations have never been higher for marketers, and the new seat they have at the table is an amazing opportunity for the best of them to grow and lead.

TCV: It’s easy to say all these changes have been driven by the rise of the internet. But there are several distinct trends that are reshaping marketing…

Peluso: Clearly four major shifts have shaped, and are shaping, how we can connect with customers, how we can analyze our effectiveness and drive results, and how we need to lead our respective organizations. First was the era of digital. For me, this was the beginning of the internet, making transactions and content interactive, convenient, and more personal. Then, we entered the era of social, which has been all about engagement and authenticity. Social toppled the notion of hierarchy and forced brands to think differently. Third, we have seen the era of mobile, which began with mastering the art of a smaller screen but evolved into much more as the focus has been about location and real-time and always-on engagement. These three eras have dramatically reshaped every industry while elevating the role of the individual, with far-reaching consequences.

TCV: That’s three…

Peluso: Right. We are now on the cusp of the era of cognitive learning, or as we call it at IBM: Augmented Intelligence (AI). We’re building fast and smart systems that understand vast amounts of unstructured information, such as natural language and imagery, recognize data patterns to create recommendations, continuously learn from these recommendations and many other sources of data, such as books, medical records, and conversations with humans and finally, interact with humans in a natural way. AI lets us better understand and engage with our customers; it enables us to make more precise bids on advertising and improve ROI across every dollar spent, and it will fundamentally shift the paradigm of how consumers interact with websites. Arguably, we are already starting to see this with new AI home devices and natural language interaction.

TCV: This new vision will require an entirely new way of doing things, which is a significant change for any company, much less for a massive organization like IBM. How does a CMO drive these kinds of changes within such an established framework?

Peluso: The cognitive change is no different than any other large-scale change management program. To be a cognitive company, you need to be clear about your mission  —  what challenges do you want to solve? What decisions do you most want to improve? You need to have the assets, which are all about your data sets but, even more, your team, marketers, developers, and data scientists. And, of course, you need the right tools. Companies new to AI should identify a handful of specific problems they want to address and apply AI tools to solving those problems. Then, repeat the process to address new challenges. This way, a corporation will see meaningful and measurable results as they evolve into a cognitive company. Patience is required. Companies must learn how to use AI, and these systems also require learning, so “training” the system is critical. It’s a classic crawl, walk, run.

TCV: How does this new approach to marketing change the way you look for and hire the right talent for ‘augmented marketing’?

The traditional marketing waterfall process  —  develop a creative idea, send it to advertising, media, and a CRM team, and then analyze results  —  can no longer keep up with the pace of the market today. I take a lot of inspiration from the Agile movement, which fundamentally reinvented the technology development process. At IBM, we’re applying Agile to our marketing function, and that means creating small empowered teams with the right skills, clear accountability, sprints, and a constant focus on prioritization. When you adopt Agile, you can see how different marketing becomes, and the emphasis it puts on hiring Agile teams that have a strong mix of creative, process, digital, and data science skills.

TCV: What role will marketers have in identifying and developing new technologies for the augmented marketing era? Or will that function remain within the realm of the IT department?

Peluso: AI is about man (or woman) AND machine. Users of all sorts, not just developers or CIOs, can use AI in small and big ways to help them solve the most difficult problems. That’s the promise, and we’re starting to see this at organizations all over the world. Marketers will play a critical role in how AI is developed and applied. One of the many things I learned while working with the TCV team and their companies is that it’s fundamentally important to be insatiably curious about technology because the most successful marketers are as analytically rigorous as they are creative.

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The views and opinions expressed in this Q&A are those of the interviewee and do not necessarily reflect those of TCV or its personnel. Executive Advisors are typically independent consultants who are not employees of TCV but have a strategic relationship with TCV and/or provide valuable advice or services to TCV and/or its portfolio companies. For additional important information regarding this post, please see “Informational Purposes Only” under the Terms of Use section of TCV’s website, available at http://www.tcv.com/terms-of-use/.