CHAPTER SEVENTEEN

CREATING A COMPANY OPERATING SYSTEM

Startup CEOs need to make rigorous predictions about their cash flow and their budgets, despite the overwhelming uncertainty that makes it impossible for either of those predictions to be accurate. While you and your team simply have to accept market uncertainty as a part of startup life, you can mitigate it by maintaining a high degree of regularity in how your company operates. You do this by creating a Company Operating System: a regular set of behaviors and rhythms upon which your team can depend as they make that daily leap into the unknown.

CREATING COMPANY RHYTHMS

Whatever uncertainty the day holds, the sun rises when it rises, sets when it sets—and the moon accordingly appears on a regular schedule of waxing and waning. The same holds for weeks, months, and years. None of us know what surprises 2020 has waiting for us—but we know December 21 will be the shortest day of that year, like every other.

There's a way to bring the same regularity to the chaos of startup life. Is your latest product release going to ship on time? Is your new sales lead going to triple customer acquisition? Is your new marketing approach going to gain traction in the marketplace? Nobody knows—not you, not the head of product, not the head of sales, not the head of marketing. That said, there are some things every member of your team can depend on:

• An advanced schedule of major meetings. What you will discuss at your next quarterly board meetings or your next annual strategy session is anyone's guess. The date and time of those meetings should be common knowledge well in advance. It may seem like a minor point, but these types of meetings often result in significant changes in direction. By knowing the schedule, everybody will know exactly when to expect a potential change of course.
• A consistent format for major communications. At Return Path, we share our Board Book—the full presentation we give our board on a quarterly basis—to the entire company (excepting a few sections that need to remain “confidential”). The content is always different; the format is (almost) always the same. If there's major news, everybody will notice it right away, because they won't be trying to decipher some new layout. You can vary the format once every year or two, but try to keep all your reports in a consistent format and you will reduce the possibility of major miscommunications.
• Clarity around leadership groups and decision making. Even if your organization is flat, it will invariably have some kind of leadership team that steers the ship, possibly one with a few layers to it. Making sure those groups are known and their roles are clear is key. They should also have a name, a regular meeting time and an email distribution list (and other group lists on social media vehicles) so that people in the company know how to reach that group if needed.
• A rigorously enforced open-door policy. Given the degree of uncertainty that's inevitable with every startup venture, don't create new uncertainties by being cagey or closed off from your employees. If they have questions, answer them—and demand that your executive team does the same.
• A single set of IT systems and operational procedures. I mentioned this when I discussed the challenges of managing remote offices and teams but it bears repeating: don't slow down your team's productivity with insufficient or inconsistent infrastructure. The only challenge in sending an email should be crafting thoughts in a clear and persuasive manner—not getting attachments to work.

Keep these pieces of your Operating System in good working order and your team can be alert and ready to deal with the challenges that really matter.

A MARATHON, OR A SPRINT?

My Grandma Hazel had a Yiddish saying that she used to describe me from time to time: Oder gor oder gornisht, which means “all or nothing.” My dad has a Greek saying that he uses to describe me from time to time: meden agan— to the real sticklers—which means “everything in moderation.” These two approaches to life seem diametrically opposed. Which one is right?

Being a successful entrepreneur requires both approaches, each at different times. More importantly, it requires the ability to shift gears between the two and to be clear about the shift to yourself and to others.

There are periods of time when you need to be in “all-or-nothing mode.” Push extremes. Demand more from your team. Drop lots of the items from your to-do list and focus on the One Big Thing. Don't go for a light jog—train for a marathon.

Then there are periods of time when you're in execution mode. The path has been defined. Things are working. Put the “life” back in your “work-life” balance. A marathon? Are you nuts? Just run three miles a day and stay in shape.

It's hard enough to manage yourself through extremes like that. You're also responsible for making sure your entire organization is able to shift gears between the two modes. An organization that never goes through extreme periods is in grave danger of stagnating. No one in an exciting company ever has “business as usual” emblazoned on their to-do list 365 days a year. Organizations tend to take their biggest leaps forward when there's an extreme situation, an all-hands on deck, a crisis.

An organization that only knows how to exist in crisis mode can be miserable. Trust me, I've worked in one before. There's a shiny new object every week that everyone has to drop everything to pursue. Everything gets started; nothing gets finished. People are frustrated. They burn out. There is yelling. Sometimes tears.

Companies and people have to go through periods of time where they thrive on the routine and celebrate their every day achievements. The trick to getting this duality right is to make sure you are clear to yourself—and, when necessary, to others—about when you're shifting gears. For yourself: when you go into gor oder gornisht mode, clear that calendar and set aside the time to do the job right. For others: don't make them guess where you're coming from. If you're hitting an extreme patch, let them know by meeting or email. Make sure you're fair to them as well. If you're forcing people in the organization to focus on the One Big Thing, make sure you recognize the changes in their goals, their deliverables and their external commitments. Give them the flexibility they need to succeed. Going back into meden agan mode is easier but still requires a note of closure to your team, celebrating the success of the big push and probably giving everyone a day off.