15five Growth Guide PDF
15five Growth Guide PDF
15five Growth Guide PDF
HIGH-GROWTH CEO
Handbook
INTRODUCTION:
Growth. Almost everything written about business falls under the umbrella of creating more of it.
Growth is highly coveted by investors, founders, employees... really anyone who touches your
company. And customers of B2B software products want to know that if they invest their time, efforts,
and money integrating your offering, that your company is here to stay.
For those in the tech sector, the growth focus remains on unicorns (startups that grow rapidly and often
inexplicably to valuations of more than $1 Billion). While there is talk that unicorns are becoming rare,
we’ve saw an explosion of these finicky magical creatures. In 2009, there were four tech companies
valued at $1 Billion or more. In 2015 there was nearly one emerging every week.
High growth does not necessarily mean repeatable or sustainable growth. There are ways to hack
into short periods of growth with tactics rather than strategy, but two-thirds of the fastest growing
companies ultimately fail. Remember the gaming company, Zynga? In 2009, they were Facebook’s
#1 app developer. Their rapid growth was to blame for their eventual downfall, specifically two
expensive tactical errors: paying $228 million for their San Francisco headquarters and $180 million
for OMGPOP, the makers of Draw Something.
Volatile markets have led many investors to seek companies that are on the path of steady and
sustainable growth. Because while unicorns will happen, they cannot be made to happen by
following a magical formula.
Investors will likely find it counterintuitive to hear a CEO say, “we need to stop growing and figure
out our product-market fit, and then nail churn and retention before we start accelerating”. If you’re
going to try and grow big and become IPO worthy, you almost certainly have to do it that way
(unless you’re lucky or smart enough to somehow nail it right at the start).
We’ve put together this handbook for founders and executives to learn the fundamentals of steady
and sustainable growth - everything from hiring, contextualizing data, and maintaining a strong and
healthy culture. You can glue a horn onto a horse and call it a unicorn, or you can plan wisely and
build a solid foundation for success that you can ride all the way to the bank.
David Hassell
Founder & CEO, 15Five
In 2012, a survey by CareerBuilder found that In terms of the mechanic of hiring, here are some
66% of U.S. employers reported having bad hires tips for getting it right the first time:
costing upward of $50,000 each. Not only that,
those bad hires negatively affected employee Build Your Network Authentically
morale, decreased productivity and had a negative
When you go to events and meet people, you
impact on client relations. are not acquiring assets. You are creating trusting
relationships with colleagues. So when you hire,
Rand had some insights here too. He believes you can spread the word and people will flock to
that the wrong hire can make an entire team you or perhaps suggest someone that they trust
dramatically less productive: and believe in.
You can’t fix what you can’t see and you can’t manage what you are unaware of. This principle is
true for both top-down visibility, as well as awareness of what’s happening on and across teams.
Top-Down Visibility
Entrepreneurs and high-level executives are constantly seeking ways to gain visibility inside every
detail of their companies. Managers at every level often encounter the same problem: How do I
encourage front-line employees (who interact directly with customers) to be vulnerable, trusting, and
open enough to offer candid information about their work experience and the challenges they face?
Visibility depends on trust. According to Stephen Covey, “trust is the key leadership competency of
the new, global economy”. In his book, The Speed of Trust, Covey explains how when people are
trustworthy and build trusting relationships within an organization, that is when rapid growth occurs.
Covey discusses the four zones of the trust matrix, a combination of a high or low propensity of
trust and a high or low degree of analysis. On one end of the spectrum is indecision. These are
the micromanagers who have a low propensity of trust coupled with a low degree of analysis.
On the other end of the spectrum is judgment. This is the ideal, and these leaders have a high
propensity of trust and a high degree of analysis. They provide their people with ownership and
accountability over tasks and elicit resourcefulness and creativity.
High
1. Gullibility 2. Judgment
Trust
Low
3. Indecision 4. Suspicion
Low High
Analysis
Visibility into the team gives managers the confidence to let employees do their jobs. You can
quickly identify performance issues, triumphs, and the way that each individual team member feels.
Ask them what they would suggest and why in any given circumstance.
Allow every team member the opportunity to freely tell me where they are challenged, since
articulating problems begins the process of solving them. Employees grow more and more confident
in their skills and abilities, understand their roles better, and eventually unlock their potential.
Asking questions and receiving candid responses also creates a culture of communication and
transparency. When everyone on the team is communicating, they can hold themselves and others
accountable. You essentially have a whole team of managers without the confining aspects that
damage employee morale or that interfere with their autonomy.
But you can’t just disappear and assume that the employee can succeed on their own. The other
half of the battle is staying involved and present. How often do you check in? Once a quarter? Once
a year? Annual and semi-annual reviews simply do not offer enough insight into your employee’s
world.
Ask questions to quickly gain visibility into team morale, align employees around company goals,
and see where they feel challenged and need support. We have found the following questions to
be phenomenally well-suited for leaders to gain visibility, employees to be heard and recognized,
and to re-calibrate your team:
Are you clear on the overall company strategy and how you fit into it? If not, what would help you
get clear?
When an employee is unclear on strategy, you have a chance to step in and realign them. The big
picture goals should color every detail of their work, no matter how small.
Not all walls should literally be broken down with every employee having complete visibility into every aspect of
the business. There must be balance between transparency and privacy. Provide enough information so that all
members of the team feel like they’ve been hired into a unique and valued place at the company.
According to Bob Marsh in this contribution to the SalesForce Blog, openly sharing sales leaderboards is an easy
way to introduce light competition. The visibility created opens opportunities for coaching and learning between
sales reps. Of course, management has to prioritize collaboration over competition for this to be effective.
There must also be team-wide visibility so that everyone knows everyone else’s status and where they stand
relative to the greater mission. Clearly and openly articulate the big picture so that everyone knows which piece
they own. By having transparency around the mission, employees know what is needed to accomplish results
that are important to them individually and to hold others accountable for their part.
At 20 people let’s say your burn is $300K per month. This means that you burn through $1M in 3-4
months. You need to understand what each person does and calculate to the dollar how each new
person is adding to revenue to compensate for their hire. You can’t raise your way to getting through the
20-60 stage. At 60 people you are probably burning $1M per month. If you don’t have revenue, investors
won’t fund you no matter how great your idea is.
(Of course there are some rare companies who intentionally don’t generate revenue like Twitter, because
their specific strategy is creating a network effect. But these unicorns are the exceptions to the rule. And
if you are not a magic horse, you can outgrow yourself very quickly and run out of runway.)
Hold-off on hiring until you figure out how to be profitable and repeatable at 20 people or less. Take your
investment capital and use it to extend your runway. Sure you are going to have competitors eating away
at the sides of your business. That’s fine. If you build a defensible business at 20, the good news is that
most of your competitors aren’t going to be able to do that.
You can then add employees one at a time and watch the bottom line to ensure that you are indeed
increasing revenue and profit at the rate at least of which you increase employees. That’s how you get to
60 people and out of the Death Zone.
Leaders can put everyone in the organization on the same page by communicating:
• Where the company is headed
• Where the company is at currently
• What you need to do as a company
• What are the capabilities you need to take on
• How the marketplace is shifting
Are you holding a weekly growth meeting with your executive team or directors? What’s your process
around that? Judging by average salaries of director level and above, your growth meeting is the most
expensive hour of the workweek. You could be spending $50k or more on growth meetings each year,
so you need a plan.
Brian Balfour is former VP of Growth at Hubspot, and the founder and CEO of Reforge. So he knows a
thing or two about growth meetings. In this essay, Brian discusses several valuable strategies for powerful
leadership sessions.
Brian advises getting the team attached to initiatives that will have the most impact. High impact initiatives
come from continually learning about your product, channels, and customers and testing ideas against
those learnings.
The challenge is that most learnings end up living in silos among individuals or teams. If they live in silos,
others can’t apply those learnings to their work. If they aren’t applying learnings to their work, they aren’t
going to work on the most impactful items. The meeting’s focus is on extracting, discussing, and applying
the learnings across the team.
Of course that strategy won’t work unless you have tactics to help facilitate productive meetings. Our
friend and advisor Dave Kashen, CEO of WorkLife (Now Cisco Spark) shares this advice to make meetings
more productive and engaging:
For each topic, spend a few minutes up front determining the decision you need to make and the rules
you’ll use to make it. Then spend a few minutes at the end making sure you a have clear agreement
about whether a consensus was reached or not.
For each project or topic, make sure you have the conversation to determine exactly who is going to
perform which specific action items, and when those action items are expected to be completed. This
one conversation can make the difference between an entirely useless meeting, and concrete changes
like increased revenue, product improvements, or increased levels of customer satisfaction.
We live in a magical time, when technology can give us insights into just about every aspect of a
business. We can make educated data-driven decisions instead of playing guessing games with
our businesses.
The downside is that we can become addicted to data and over-reliant upon it. We get caught up
in dashboards, numbers, and charts — trends that go up and down. These numbers are created by
the activities of front-line employees. The managers who evaluate those numbers are often 4 or 5
degrees removed from the people who actually influence those metrics.
We look at a dip or rise in revenue and make assumptions and conclusions. We might applaud a
boost in revenue without realizing that it was a short-term fluke, the result of cutting off a product
that could have resulted in 5x growth six months from now.
One practice that has helped SIlicon Valley giants like Google and Salesforce grow tremendously,
as well as other Fortune 500 companies, is OKRs or Objectives and Key Results. This practice
allows you to metricize employee performance.
At the end of every quarter, managers from top to bottom have performance data on the highest
priority tasks for the entire organization.
Pro Tip
Key results must be measurable. For example, 5 new blog posts published by the end of the month,
or a 20% month-over-month lift in trials by end of Q2. The 15Five system (simply called Objectives),
allows employees to track the progress of key results each week. The percentage completion of
each objective under which those key results are nested, will then update automatically. See the
screen-capture below for an example:
The other half of analyzing metrics involves listening to employees to hear a story more subtle and
complex than the numbers alone can convey. For example, a company can look at a 50% completion
of an employee objective to increase sales by $50,000 in Q1. Take a step back to look at the quality
of demos that were done or the number of customer phone calls. Was productivity low? Take another
step back and find out why.
What you do with the weekly updates on performance data matters most. OKRs provide an at-a-
glance pulse check for managers, a cue to ask some qualitative questions to see what is occurring
in an employee’s professional or personal experience. Once that information is surfaced, managers
can offer support or coaching.
Time and again, companies that hold transparency high as a value have proven in many situations to
avoid costly and dangerous disasters. It is far better to see problems coming than to scramble to deal
with the fallout after the fact, through extra pain, extra work, retrenching or even losing the business.
To paraphrase the Scottish poet Andrew Lang, don’t use data as a drunken man uses a lamp post
– for support rather than illumination. Without supplementing the numbers with context, you are just
guessing about the future of your company. Start asking questions now or give up the opportunity to
create a company of thriving individuals and financial success that endures for years.
As your business matures and your revenue Regularly ask your entire team, “What’s a way
streams become healthier, your team will you’ve lived one of our core values this week?”
inevitably grow. This can be an exciting time in And by sharing your own answer, you can
your business. However, there are growth pains demonstrate that they are relevant for everyone.
and a deteriorating culture can be one of the Some people may cheat and visit the values
most dangerous. From communication between page on our website, but I am okay with that. My
office sites, or helping a dozen new hires mesh main concern is not for employees to memorize
with your team, growth can have an impact on the values.
culture. As your small business or startup scales,
your culture needs to scale, too. I want each employee to see how self-directed
activities fit into the cultural statements of the
Create Your Why company. Did an engineer “maximize his zone
To figure out your overarching company culture, of genius” by learning and implementing a new
you first have to define the Why behind the coding strategy? Did our customer success
company. We’ve worked hard to figure out manager “dare to dream” by reaching out to the
our Why: To create the space for people to biggest potential customer to date?
become their greatest selves. We develop our
product, work with our customers, and design Questions implicitly ask employees to think
our business processes with that goal in mind. about the lifeblood of your culture and the road
you’re taking in striving toward your purpose.
Live & Breathe Your Values The continued conversation brings the values
to life, establishing powerful drivers for the way
Once you have a clear mission in mind it’s
that you show up individually and as a company.
time to create your list of core values. Some of
15Five’s values like “cultivate health and vitality”
or “always be learning and growing” will likely
never be forgotten by the team. Employees
embody them by freely sharing articles and
books on a variety of business topics or personal
growth.
The most successful company leaders are growth oriented people who know how to listen. In Q4 of
2015, Alex Turnbull, CEO of the fast paced startup Groove began working with a growth coach, along with
the other 3 members of his leadership team. The team answered lengthy questionnaires and shared
Groove’s strengths, weaknesses, strategies and vision. Here are some of the benefits they gained:
As a CEO, if you don’t make time to learn and grow, you’re robbing
yourself and your business. There isn’t a business problem that you’re
dealing with that nobody has ever solved before. Before you try and brute
force your way through every challenge, get help. Read. Talk to people
more experienced than you are. Take on advisors and mentors. Spend
time on growing yourself, and you’ll be surprised at how much more
effectively you can grow your business.
Of course, some managers don’t know where to begin when it comes to coaching and mentorship.
A surefire way to save time and develop trust is to ask questions on a regular basis:
Are there any obstacles you are facing and can I help?
Looking back on the week, is there anything that could have gone better?
What’s an action you can take next week to improve your overall performance?
What would you like to learn that could help you in your role?
With barely enough time to get your own tasks completed, you may be tempted to just let
challenged employees figure things out for themselves. But employees whither in overly stressful
and unsupportive environments. Their performance will suffer or they will seek employment
elsewhere. Balance the space you give them with letting them know that you are available when
they get stuck.
Find a way to mentor employees yourself, or leverage others at the company who have knowledge
to impart. Pretty soon you will have a staff that is equipped to handle new tasks and responsibilities
with confidence. They can train others as they step into more advanced roles and help up-level
your entire organization.
I’ve interviewed over thirty executives and founders, who all have similar stumbling blocks on the path
to sustainable growth. Hopefully I have addressed most of those pain points in this handbook.
It all begins with hiring right, not just for competency but also for culture-fit. Next, you must be intentional
about the company culture that you create. Cultureis going to happen either way, so lead by example.
The company’s purpose (or Why) and core values are the bedrock of the culture, but it’s much deeper
than simply what you post up on your company’s wall or website.
The true culture is an expression of what is actually valued, regardless of what’s written down. One
way to assess the strength and alignment of a culture is to measure the difference between the
stated values and the actual lived values. A good culture exists when the two are aligned, and it takes
continuous steering to make sure the actual culture doesn’t drift away from the stated ideal.
The next step is establishing open channels of communication. This is accomplished via technology
so that the right information is passing seamlessly between the right people. But even the most
sophisticated technology can’t substitute the values that company leaders establish and live. To
encourage trust and transparency, you must be willing to share vulnerably with your team. Be
grateful and responsive to feedback, even if it’s negative. Along the way, be driven by data but
remember to check-in with your employees regularly to contextualize the numbers.
Orient yourself towards personal and professional growth. Take time away from the desk to learn
and grow, and encourage your team to do so as well. The world is evolving rapidly and new
technologies or events can render your offering obsolete. By keeping ahead of changes and
trends, you can innovate in ways that keep you ahead of your competition.
ABOUT 15FIVE
15Five is a fundamentally new way for businesses to maximize their talent by creating a
culture of feedback. Through a lightweight weekly check-in, 15Five delivers a full suite of
integrated tools - including continuous employee feedback, objective tracking (OKRs),
pulse surveys, and peer recognition. Over 1,100 companies worldwide use the platform
to allow employees to self-reflect on successes and challenges, stay focused on key
objectives, and get regular feedback from managers who support them in reaching
their potential.
Books:
The Speed of Trust: The One Thing That Changes Everything by Steven M.R. Covey
Image Credits:
Olivier Carré-Delisle, https://www.flickr.com/photos/84593672@N05/10141810486/