Claire Hughes Johnson: Scaling People; Tactics for Management and Company Building

Scaling People

I strive to make implicit structures and beliefs explicit. Making those elements clear to everyone allows a group of people to become a true team and a company to scale.

On a practical level, teams with strong management will deliver more — and better — work, which any scaling company needs. On a more personal level, a great manager can change someone’s trajectory. They can push employees to make career choices that leave them much more fulfilled. They can coach their people through balancing a tough personal situation with work commitments.

Fitts and Posner described their skills acquisition observations in three stages. The first is the “cognitive” phase, in which a person starts off slowly and clumsily as they familiarize themselves with a task and discover new ways to accomplish it. The second is the “associative” phase, in which the person becomes more efficient and makes fewer errors. The last is the “autonomous” phase, in which they complete the task reasonably well without thinking about it.

To make a break-through performance improvement during the autonomous stage, you need to set an uncomfortable pace for yourself. Kind of sounds like the pace of a company that’s growing rapidly, building its support systems as it goes, right?

The core frameworks

Company-wide frameworks are indicators of your company’s priorities. Think of them as the set of actions or processes that everyone must perform or follow in concert and in the same way.

Taken together, a company’s core frameworks form an architecture that keeps systems consistent and running smoothly so that people can do their best work.

I believe core, company-wide frameworks should apply in the following areas, each of which has its own chapter in the pages to come:

• Foundations and planning for goals and resources.
• A comprehensive hiring approach Intentional team development.
• Feedback and performance mechanisms.

“Scaling to the call” — meaning that as a company grows, the individuals within it are called to lead in larger and more complex roles. Even if a person’s job hasn’t changed, the scope of it has, and the individual must “scale to the call” to maintain their performance and produce results.

Essential Operating Principles

Build self-awareness to build mutual awareness

There are thousands of ways to run an organization and make decisions, so why do you do it the way you do? Maybe you strongly believe that management is a practice of leading by example.

Maybe you believe that no decision should be made without data. Or maybe you’re a master delegator.

Self-awareness is the most important of my four principles, so we’ll begin there.

Build self-awareness to build mutual awareness. Self-awareness is the key to great management. The other three operating principles are much more about functioning in the moment as a manager, but this is the one that underpins them all.

Self-awareness has three components: understanding your underlying value system, identifying your innate preferences — your work style and decision-making tendencies — and being clear about your own skills and capability gaps.

Much of building this dimension of self-awareness comes down to paying attention. If you spend even just a few weeks writing down the moments when you feel energized, when you feel drained, when you feel like you’re reaching new heights at your job or hitting new lows, you’ll start to see patterns.

At a basic level, most work style and personality preference assessments plot you and your team on a continuum from introverted to extroverted and from task-oriented to people-oriented.

• Analyzer (introverted, task-oriented)
• Director (extroverted, task-oriented)
• Promoter (extroverted, people-oriented)
• Collaborator (introverted, people-oriented)

None of these work style preferences is objectively better or worse than another. Often, however, one might be better or worse in specific circumstances.

A few other assessment frameworks that follow this general pattern include DiSC. As well as the well-known Myers-Briggs Type Indicator (MBTI), which helps identify 16 different personality types and is based on the work of Carl Jung. My personal favorite is Insights Discovery. The Insights Discovery assessment puts you into one of four colored quadrants of a circle: red, yellow, green, or blue. Your placement with respect to the center of the circle depends on the strength of your preference.

Skills are quite tactical. At a slightly higher level, they also encompass abilities. But they’re all fairly binary: Yes, I have done this, and yes, it was effective, or no, I haven’t done this, or no, it wasn’t effective.

Capabilities (also called competencies) are a step above a pure skill. They’re more about an innate ability to use a particular set of skills in a given situation.

Your strengths are the sum of your skills and capabilities.

Speaking of strengths and weaknesses: The not-so-secret secret to building self-awareness is to understand that strengths can also be weaknesses.

Even though it’s tempting to build a team that coddles your own skills and capabilities, what you really need is a team that complements them. Your teams will be much stronger if you can build a portfolio of people with a diversity of preferences, experiences, skills, and capabilities.

Writing a “Working with Me” document forces you to reflect on how you like to get work done. You can’t change how you work if you don’t understand why you work the way you do.

Say the thing you think you cannot say

Be wary of over-filtering. Fine-tuning your filters and pushing yourself to name your observation in a constructive way means you’ll be able to have a more honest conversation about what’s going on. Then you can all start working on a solution in earnest.

Learning to constructively express the closest thing to your truth helps you keep your balance. It feels high-stakes because it is, but honing this ability will help you land the dismount: building trust.

Distinguish between management and leadership

Leaders don’t have to be managers, but if they aren’t, they need to know how to work with and hire managers to build the right teams to execute that vision.

Great managers run teams that do the actual building. Management is all about human-centric execution.

I often refer to a framework in The Practice of Adaptive Leadership by Ronald Heifetz, Alexander Grashow, and Marty Linsky that evaluates technical versus adaptive problems. Technical problems have a solution and an achievable resolution, while adaptive problems are continuously, well, adapting. They’re an infinite game, if you will.

Marty Linsky, one of the authors of the book The Practice of Adaptive Leadership, has a saying that I’ve repeated often to colleagues and direct reports: Leadership is disappointing people at a rate they can absorb. Leadership is ultimately about driving change, while management is about creating stability. Stability is important in a work environment, but confronting challenges and realizing new ideas require discomfort.

Experienced employees mostly need a leader and just a bit of a manager. Less experienced employees mostly need a manager and just a bit of a leader.

The ability to build a repeatable operating system for every team I manage. They each have the same components: clear missions, stated goals, metrics that matter, similar meeting structures, and weekly and quarterly cadences.

Core Framework 1: Foundations and Planning for Goals and Resources

Founding documents

Having strong founding documents that share why you exist and what you seek to achieve ensures that the operating systems you put in place share a common purpose, flow from your objectives, and are guided by a clear company ethos from top to bottom, from leadership to individuals.

Founding documents should include a mission, long-term goals, principles (often called values), and team charters.

Every part of the stack — the team, the division, and the company — should have a mission. Individuals can also have missions, although those missions are likely to shift quite a bit as their roles and responsibilities evolve.

The next elements you need to codify at the highest level are your company values, which form the basis of your culture. Your values, or principles, establish the culture that enables you to work toward those goals. At Stripe, we call our values “principles” because we like the connotation of a shared system of beliefs and behaviors.

MIT professor Edgar Schein described culture as having three levels: artifacts, espoused beliefs and values, and basic underlying assumptions.

We think that the traditional way candidates are interviewed in the tech industry is suboptimal. We’ve invested significant effort in fixing it by introducing work sample tests, dispensing with whiteboard programming, de-emphasizing credentials, and actively working to combat unconscious bias, among other changes.

I recommend that teams create an additional founding document: a team charter. Team missions will follow and support the company mission and values, and they’re generally one or two sentences long. A team charter is a longer document, maybe a page long, that should create clarity about the team’s purpose. It should articulate to team members and others within the company why the team exists and what their long-term goals are. When things get complicated, a good manager will sometimes seek to simplify the work by laying out the jobs to be done. The team charter is a summary of those jobs and what others can expect from the team, both immediately and over the long term.

Together, the mission and charter should provide a clear description of what each team does, explain why the work matters to the company, and share key metrics and major risks and dependencies.

The operating system

An operating system is a set of norms and actions that are shared with everyone in the company.

Keystones like an annual plan, quarterly goals, and regular communications allow everyone at the company to track progress and common priorities at the highest level.

At every level, a good operating system makes clear the desired results, how and when to communicate progress, and how to measure achievement.

Once a company can no longer fit into a single meeting room, it’s time to start writing down your operating system and its component structures. Before this point — when you’re still trying to find product-market fit, for example — it’s too early.

A Yahoo SVP named Brad Garlinghouse published the internal memo that came to be known as “The Peanut Butter Manifesto,” exhorting the company to focus. The upshot is best captured in this quote: “I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do, and thus we focus on nothing in particular.”

“A strategy should hurt.” There’s no such thing as a strong strategy that prioritizes everything at once.

McKinsey has a famous framework of three growth horizons:

• Horizon 1: Current source of growth.
• Horizon 2: Next source of growth (one that’s still nascent but looks promising).
• Horizon 3: Investment in a yet-to-be-determined third source of growth.

In tech, you often need to start working on Horizons 2 and 3 very early on.

To strike that balance between short-term and long-term focus, I recommend developing two artifacts:

• A financial model of the next three or so years, plus a list of what needs to be true to achieve those numbers.
• A shorter-term plan that answers the questions “What are we trying to get done in the next 6 months, and in the next 12?” and “What does the P&L look like by December of this year?”

The art of planning is to allocate enough funds and employees to earlier-stage efforts to give them a chance to demonstrate success, while simultaneously streamlining the more mature parts of the business so that they realize operational efficiencies and demonstrate increasing profitability as early as possible, without undermining their growth.

Headcount allocation comes up frequently in the conversations I have with founders.

The slowdowns founders often observe reflect the harsh side of scale: increasing coordination and interface complexity.

It’s vital for companies to start building that planning muscle, and for leaders to start using objective assessment measures, so that they don’t get trapped in a situation where the person most adept at arguing their case gets the most resources.

Leadership should publicly celebrate managers who are actively improving their operational efficiency, for example by coming in under budget at the end of the fiscal year or “giving back” headcount allocation.

Just as it’s effective to remind people about inherent biases before making a hiring or promotion decision, it’s helpful to remind people of what you expect from them as you face big decisions.

Then-CEO Eric Schmidt shared a simple but extremely effective framework to resolve these tensions: 70-20-10. Google would devote 70 percent of its resources to the core business, 20 percent to emerging products, and 10 percent to research and development for future products.

There are two kinds of goals: binary tasks and ongoing metrics.

There are now many schools of thought on how to write goals. OKRs and SMART (specific, measurable, achievable, results-oriented, targeted) goals are two popular examples, and they’re not mutually exclusive.

Why we set goals?

• Define success: Goals are statements about successful end states. What are you trying to do, and how would you know if you did it?
• Focus: There are always far more things we could be doing than we have capacity for.
• Allow for autonomy: Aligning around and committing to a shared definition of success creates accountability.

What good goals look like. Remember: FOCUS (S)! Good goals are focused, concise, and comprehensible.

• Focus on the most important things: Your goals should help you identify and avoid the distractions.
• Objectively assessable.
• Challenging but possible.
• User-oriented: Never organize team goals by function (engineering, design, etc.). Success depends on all team functions coming together to deliver a great product, and a single set of goals helps force an alignment of efforts.
• States, not activities.
• Sensitivity and specificity.

Heuristics for testing your goals. Assess your goals using these guidelines: Does your goal start with a verb (“launch,” “build,” “refactor,” etc.)? Then you probably have an action, so reframe it to describe the outcome you want.

Could one team member think a goal is achieved and another one completely disagree? Can you imagine a scenario where the goal is achieved but you’re still dissatisfied with where you ended up? Could you be successful without achieving the goal?

John Tukey said, “Far better an approximate answer to the right question, which is often vague, than an exact answer to the wrong question, which can always be made precise.”

What if you can’t agree on what the goals should be? Here are some common issues people get hung up on:

• Different assumptions about vision or strategy.
• Different assumptions about priorities.
• Different interpretations.
• Incomplete success statements.
• Different assumptions about feasibility.
• Different assumptions about capacity.

OKRs are just goals with a particular structure.

Where do I want to go? This answer provides the objective. How will I pace myself to see if I’m getting there? This answer provides the milestones, or key results.

An individual’s goals should include one or two personal goals.

Pay attention to how the person or team approached the work.

Make sure you ascertain the “how” alongside the “what” and provide feedback to individuals accordingly.

“Performance = results × behaviors. It’s multiplicative. Hitting targets while fomenting unrest and backstabbing should get you a 0, not a 95 percent [on your targets].”

Your core company metrics are another structure that can — and should — replicate down from the company level to divisions, teams, and sometimes even to individuals.

Metrics can’t help you if you don’t use and review them regularly.

Accountability mechanisms are tools that both leaders and managers should use to review progress toward their goals and missions.

These mechanisms include elements like meetings to review plans and action items, metrics dashboards, and written project snippets.

The first step in implementing accountability mechanisms is to identify who is going to participate in the mechanism and the cadence.

QBRs are a common accountability mechanism among companies that have reached a certain level of complexity, for example more than 200 employees and many products and teams. They are both backward – looking assessments of how the team or business unit performed that quarter, including a review of key metrics, and forward-looking discussions of what the unit aims to accomplish over the next few quarters.

Constantly tweaking your company mechanisms can be counterproductive, but taking stock at least once a year can help you evolve as you scale.

Team-level accountability mechanisms are likely set on annual, quarterly, monthly, and weekly cycles that reflect the company-wide cadence.

I recommend at least these two forms of accountability mechanisms for every team:

• Weekly team meeting.
• Weekly team metrics review.

For managers, the frequency of the accountability mechanisms should correlate with how quickly your team can impact the metrics in question.

Accountability mechanisms are not the same thing as monitoring.

By the time your company hits 150 people, you should have an internal company website, clear communication guidelines, and policies for what information gets stored, through what channels it’s communicated, and what information teams are responsible for maintaining. You should also formalize a means to deprecate out-of-date content.

If every team is following their own playbook for certain types of communications — for example, if some organizations communicate divisional changes widely, while others do not — you’re going to end up with subcultures that don’t resonate with the broader company operating principles.

At Stripe, writing is a key part of our internal communications strategy. Discussions are written down and sent out as notes. Important company reviews require a pre-read. And “presentations” are often delivered as written memos.

We’ve invested heavily in writing for three reasons:

• First, writing is an equalizer. Great documentation provides context for the people who were not in the room: another team, a colleague in a different office, or someone who has yet to join the company. The latter is particularly important for high-growth businesses.
• Second, at Stripe we believe longform writing leads to higher-quality thought. For the writer, it’s much easier to spot gaps in logic when you need to string sentences together into a coherent narrative.
• Finally, writing is efficient. People who are great written communicators are, perhaps, also somewhat lazy communicators.

The cost of a strong writing culture is that you end up with a lot of documents. It means you have to be diligent about content management across the company. You need to differentiate between evergreen documents, work-in-progress documents, and one-time documents.

When you’re building and assessing your internal communications policy — whether for your team, the division, or the whole company — check if it meets these criteria:

• Is it complete?
• Is it accessible?
• Is it reliable?
• Is it transparent?

Employees are like consumers in this way: They have different preferences around how they process information.

Company-wide meetings should be scheduled sparingly.

Instead, use other communication channels, like your intranet site or email.

Either invest in making these company-wide meetings great, or only hold them when you can invest the time to make them better.

Used by 99 percent of Stripes in the last month, Home is the source of truth for who we are, what we’re doing, and why — and a platform for enabling individuals and helping them get to know one another.

Individual Stripes collaborate — a lot. Our search system lets Stripes look across documents, people, teams, and even API models, with live filters to help narrow the corpus quickly. The search interface is completely API-driven with modular content indexers underneath, so it’s easy to add new types of content to the same interface we use to find everything else.

We’re still figuring out how to balance transparency with information overload, serendipity with curated content, and crisp interfaces and team boundaries with the actual human part that makes the company what it is.

Operating cadence

Be sure to solicit frequent feedback on the operating system and cadence.

Does everyone know what the mission and the objectives are for the company, the division, and the team, as well as the work they’re individually expected to do?

Is there a clear timeline for planning and execution, and are there established measures of progress against targets? Are projects with dependencies aligned and agreed on across the relevant teams and leaders so ownership and priorities are clear? Does everyone know how you’ll measure success and who is accountable for the constituent parts of the work?

Are there mechanisms in place to monitor progress, make decisions, and unblock teams? Are there communication structures in place to provide updates on goals and notify relevant teams of any changes?

Do you recognize and celebrate success? Do you share and learn from mistakes?

Process has become something of a pariah in modern business environments.

I often hear from founders who worry about their companies becoming “bloated” with process, meetings, check-ins, and updates.

Revisit your processes every six months or so. More often than that can be destabilizing, but less often will cause people to switch to autopilot and stop engaging.

A sound operating system running on an efficient cadence is essential to execution and lays the groundwork for great management.

Exercises and templates

Objectives are clearly defined goals that answer the question “Where do I want to go?” Objectives should be an outcome — a description of the state of the world at the end of the quarter. They should focus on the user problem you’re solving. Objectives should be focused on the most important work.

Objectives can be aspirational (70 percent) or committed (100 percent). Identify which are which!

Key results are concrete definitions of success. Key results should list outcomes, not activities. Key results are measurable and binary. Key results flow from a theory of a plausible causal mechanism that connects the key result with the objective and with your own work.

QBR outline

• Note: The suggested word count and page limits are directional, to help you stay within the six-page limit. If your content exceeds the six-page limit, the QBR leader should determine which section(s) to shorten at their discretion.
• Executive summary (250 words or less). What do you want leadership to know about your performance and strategic direction? This should be a candid assessment, not a summary of your successes.
• Narrative (two pages maximum). Write up to two pages on your team’s quarterly performance and strategic direction. Your narrative should be grounded in your charter and operating metrics, including your discussion of performance against goals.
• Metrics performance (two pages maximum — if you have additional metrics, please put them in the appendix) For the most part, your metrics discussion should happen in your narrative. Use this section to briefly describe changes to the metrics you use to measure your performance (changes since last QBR or anticipated changes).
• Product P&L Product teams: In addition to your metrics, please work with finance to include your product P&L as a table in this section.
• Cross-functional focus areas. In addition to your core performance and metrics, we’ve defined a set of focus areas that are important to the company and require engagement from business leaders to make progress on our company objectives.
• Progress on goals (one page maximum — if you wish to share additional goals, please put them in the appendix). Select your top 5 – 10 goals and summarize them in the table on the next page. There is a strict one – page limit.
• Appendix A: Required tables Prior QBR action items
  • Operating expenses (for non-product teams)
  • Headcount
  • Top asks from users
• Appendix B: Additional supporting materials

Core Framework 2: A Comprehensive Hiring Approach

If you believe talent is everything, then your hiring process should also be everything.

Seek a hiring approach that balances the need to hire quickly with the need to hire the most successful person for the role rather than the most expedient one.

What the industry calls “talent acquisition” is really just marketing and sales — specifically, what we call growth or performance marketing.

I recently received two texts from founders asking if they should interview every candidate who is a finalist for a role at their company. If you’re early in your scale — say, 100 employees or less per founder or trusted senior leader — the answer is yes.

• Recruiting: attracting candidates into your hiring pipeline
• Hiring: decision-making, from onsite to offer.
• Onboarding: setting your new hire up to succeed.

Building market awareness for a new product can be hard. Building awareness of your company among potential talent can be equally challenging.

Early on, the easiest thing to do is to mine the personal networks of the founders and early employees. This approach can work initially, but it doesn’t scale.

Hiring is everyone’s job. At Stripe, we have extensive internal guides that outline each person’s role in the recruiting and hiring process for hires below the leader level.

Recruiting

Stripes’ commitments to recruiting:

• Keep your calendar accurate.
• Know the role and the interview.
• Review job descriptions, capabilities, and frameworks.
• Know the routine.
• Know the candidate.
• Submit feedback on time.
• Be an active participant in tropes (hiring meetings).
• Follow up with candidates.
• ABR (always be recruiting)!

What kinds of people have we hired previously? Who’s doing really well? Who’s scaling at the same pace as the company? Why? What qualities and capabilities do they exhibit? What perspectives and experiences are we missing at the company? Where are we less diverse? What are our weak points and capability gaps?

A Venn diagram with three circles: people who are good at their work, people who have a great impact on the company’s progress, and people who love what they do. The ideal employee fits into all three.

Once you’ve decided to take the plunge and start hiring for a role, it can be tempting to make job descriptions into rosy advertisements for your company and team. Resist that urge, and instead design your job descriptions and hiring process to entice prospects who might be a good fit and discourage prospects who might not be.

Referrals shouldn’t be your only source of candidates, however. Referral processes are difficult to scale — and, as I mentioned earlier, they can undermine attempts to diversify your team. But don’t underestimate how effective referrals can be.

Your screening processes will differ based on the volume of applicants, with different people (or machine learning algorithms) conducting the initial résumé reviews. (Referrals might skip this step.)

I sometimes call hyperscaling “riding the dragon”: You need your dragon riders — your fearless leaders — before the beast takes off to still greater heights. It can be hard to recognize exactly when you’ve hit one of these “I need a leader” moments, especially for founders and builders.

If your company is scaling, it helps to remember that your primary goal is to work yourself out of a job.

One particularly popular story of this kind among scaling companies is Molly Graham’s description of her time working through hypergrowth at Google, Facebook, and the startup Quip, where she was COO. She draws an apt analogy to a child building a Lego creation: Even if you give the child more Legos, they’ll be reluctant to share the ones they have.

A leader has to spend their time on things no one else can do. If you’re doing something that others on your team could do just as well, you’re just wasting your time.

When you’re in a high-growth mode, it’s often the case that you don’t have the capabilities you need fully in house, but you may not realize this until you’ve completely assessed the company’s current state.

Whether you promote from within or hire externally, you’ll want to be clear on three things: What is the work to be done? What does “great” look like? How will we assess people against that benchmark?

The desire for a COO makes sense given the demands on the CEO, which range from customer, product, and business decisions to implementing company infrastructure and tending to company culture. But ultimately, a COO is an extra layer of management, and once companies achieve more scale and a more fully developed leadership team, that layer might not be necessary.

The idea of a business operations team: a team staffed with folks who have a mix of consulting and entrepreneurial backgrounds, who thrive on new situations and on solving problems as Stripe scales.

Before you hire a COO, consider building a biz ops team and hiring a head of business operations who can proxy some of the COO’s responsibilities.

As the manager of a potential new leader, there’s one more element to consider for your rubric: complementarity with your existing leadership team.

You should emerge from this research-intensive phase with a better understanding of the role and its job description, an assessment rubric to use for candidate screening and interviews, and a list of individuals who best represent the qualities you believe you’re seeking for your pipeline.

Is the person ambitious and seeking new challenges, and have they demonstrated that they can overcome a challenge and deliver results? That’s about desire, grit, and intelligence. Don’t just test for credible experience — test for that too.

Once you’ve identified the kind of person you want for your senior or leadership role, the next question you should ask is whether you should promote from within or hire from outside.

For early – stage companies growing quickly, my experience has been that at least one-third of promotions should come from within. One – third should also come from outside. The final third is a toss-up.

Hiring

I do think interviewing is a skill that improves with practice. It’s also a skill that is best employed within a set process, with clear frameworks for assessment.

Here are some general guidelines for setting up a strong interview process.

Have a clear job description. Determine who will conduct the interviews. Seek to have candidates only meet a maximum of eight people in the process. Make sure your interviewers are trained on effective interviewing. Share your assessment rubric with all interviewers and assign one or two elements of the rubric to each interviewer to avoid overlap. For more custom or infrequently filled roles, have a kickoff meeting in which everyone gets aligned on the role, the rubric, and their part in the process. Potentially, have a first round of three interviews to narrow the field before you ask the entire interview panel to participate. Conduct a hiring committee or candidate review process to finalize your selection. Have the recruiter and hiring manager check the candidate’s references. Make the offer.

There are reasonably good training materials on interviewing and interviewing frameworks out in the market, such as the STAR (situation, task, action, result) method.

The best interviews find out how someone:

• Works with other people.
• Gets quality work done themselves.
• Motivates and develops themselves.
• Has or can develop the expertise needed for the role.
• Demonstrates leadership and resilience.

To prevent hiring mistakes, improve outcomes, and avoid bias and an inconsistent quality of hires, your hiring processes and interviewing skills need to be well-defined and rigorously observed and measured.

For less frequently hired and leadership roles, I recommend having the same people interview all of the candidates.

Once your company is big enough that leadership can no longer meet every candidate, I recommend establishing a program similar to Amazon’s Bar Raiser program. Bar Raisers are an exclusive group of interviewers who are considered good stewards of Amazon’s standards and culture.

Before you start interviewing candidates at any sort of scale, it’s critical to be clear about who ultimately makes the hire or no-hire decision.

The next decision required for an offer is where to place the candidate in terms of job level, which then determines their compensation. Once you’ve established the level you’re hiring for and the candidate you’ve selected for a position, you can determine their compensation. You’ll likely have two things: a salary band and target offer points for new hires. The recruiter and hiring manager must recommend one of two points in the salary band to offer the candidate. We do this using a compa-ratio. I am increasingly of the belief that jobs should have set salaries, and that all compensation motivators should exist solely as bonus and equity vehicles. The set salary for a given role might change if market data changes, but otherwise you would either have to change roles or get promoted to earn a higher salary.

Unlike companies that leave all hiring to the discretion of the hiring manager, Stripe has a more consultative process in which the hiring manager owns the decision to recommend a hire to final review but consults other interviewers in order to reach a decision.

The goals of those who steward the hiring process are to:

• Guard the candidate experience.
• Really listen to interviewers’ input.
• Bring the organization along.
• Decide based on what’s best for the company, not for the team or individual.

Candidate review (CR) is a process to review interview feedback, hire and no-hire recommendations, and leveling decisions for candidates who interview for most of our engineering roles.

As with the team screening, the recruiter and hiring manager can share the reference call responsibilities.

Here are a few manager reference call questions that are more specific and behavioral:

• Where do you see this person in three years?
• When was the last time you didn’t see eye to eye?
• What are some ways you’ve seen them be helpful to others?
• Tell me about a time when you coached them on something.
• How would you rate the candidate on a scale of 1 – 10? You can’t say 7!
• What’s a skill you’ve seen them grow?
• What advice do you have for me as a manager to help them be successful in this role?

As a sales leader once told me, “Time kills all deals.” The same is true for recruiting. Get the candidate’s questions answered quickly, and consider offering a “sell chat” with a person who is critical to their role or even an executive in the company, depending on how important the position is to fill or how excited you are about the candidate.

I believe it’s best to make it known internally that you’re seeking to fill a leadership role.

It’s difficult to tell someone that they’re being “layered” — that is, having a new hire come in above them — and it’s even harder to replace someone in an existing role. In the layering scenario, you’ll need to lay the groundwork with the person or people who will be most affected by the hire by providing feedback about their impact and level of experience.

Although I am a believer in the wisdom of crowds, I think a leadership hire is a decision to be made by the CEO or a top executive rather than by a group hiring committee.

Introducing new leaders to an organization is like introducing a foreign substance into the body — it’s no wonder that companies anxiously try to avoid “organ rejection” of new leaders.

Here are some recommended steps for building the leadership hiring process to produce the highest likelihood of gaining company buy-in for a successful, accepted leadership hire:

• Screen the candidate so that at least two important people are excited about them.
• Identify the main stakeholders affected by the leadership hire.
• Conduct an interview loop that includes key colleagues and stakeholder representatives.
• Set up the hiring deliberation as a feedback-collection forum, not a decision-making forum.

Just as the experience trap can hurt you when assembling a list of candidates, it can also lead you astray during the interview process.

Onboarding

Companies should seek to design the new-hire onboarding process in a way that feels true to the business. This should include: The “why” of the company, including the mission and the story behind it. The “what” of the business, including current priorities and goals. The “how” of company behaviors, including how people work together and the operating principles.

Internal new hires are often overlooked in the onboarding process. Internal mobility can be a sign of good company health, but it can also be a warning about a certain manager or division. In my experience, when people change jobs, they’re either running to something, running away from something, or, in the worst case, being pushed to move on because they’re poor performers.

In a fast-growing environment, it’s often unavoidable that some people will have many different managers in fairly short time frames, whether or not they change teams. I wish this weren’t true, but I’ve met a few folks at Google and at Stripe who have had more than six managers in one year.

One place to use your “Working with Me” guide is in the first meeting you have with a new report, which should be devoted to setting mutual expectations for how you’ll work together. Plan to cover:

• Onboarding: Share any additional team context or information.
• Operating approach: Go over how you’ll work together, when you’ll meet, and what you’ll talk about.
• Management style: Discuss what kind of manager you are and how your report can expect you to be involved in their work and career. Share your “Working with Me” guide and invite them to write their own if they’re so inclined.
• Communication preferences: Talk about how you each prefer to communicate and what response times you should expect from one another. You should also align on how you’ll use your 1:1 time.
• Initial priorities: Discuss each of your priorities with respect to the team’s work and the individual’s role.
• The upcoming career conversation: Explain that once you’ve worked together for a few months, you’ll schedule time for a longer meeting to learn more about the person’s experience, the arc of their career, and, importantly, their ambitions for the future.

Onboarding is an important collective experience that should set a cultural tone for every new person in the organization.

The highest art of leader onboarding is equipping new leaders with the perspective to know when to switch from gathering information to taking action.

It’s also crucial that the leader’s direct reports get adequate time to collaborate with their new manager.

Everyone loses when a new leader fails. By definition, they have significant responsibility at your company, so their failure means a failure for your division.

Give your new leader data points, not judgments. If we hired them, we think they have good judgment.

Similar to giving good feedback, it takes active, conscious, mindful effort to frame information in a way that sticks to nonjudgmental, grounded facts.

One of the biggest changes for new leaders is understanding the company culture. One of the biggest challenges is understanding the unwritten parts of the culture.

New leaders are often hired based on the strength of their previous successes and experience. We expect them to bring the expertise and proven playbooks that have served them well in the past. But playbooks often depend on the assumptions and constraints that existed in a prior environment, and need to be tweaked or adapted when those change.

The informal org chart should include all of the context around the formal org chart: key decision-makers, domain experts, incentive structures, challenging situations, high performers, underperformers, and so on. Make sure to also cover forums, operating structures, operating cadences, and processes.

Hiring mistakes

The good news is that even a basic applicant tracking system, or ATS, can help you gather data to improve your process, including:

• Time in process: Are some roles or teams taking longer to hire? Why?
• Funnel performance: The recruiter equivalent of sales metrics.
• Interviewer stats: Who interviews the most?

Most data from an ATS or company survey will give you a place to start your investigation but not a lot of detail. True insights will come from marrying data from the hiring process with people’s performance once they join the company.

Hiring is expensive, but talent is everything. Think of hiring as a critical and foundational experience.

Exercises and templates

Interview Framework and Rubric: Recruiting for Recruiters (L2+)

Competencies being assessed:

• Collaboration
• Conscientiousness
• Willingness to be wrong
• Intrinsic motivation
• Structured thinking
• Resilience
• Accountability

Evaluate the candidate’s structured approach to problem-solving and ability to start with an open-ended scenario, narrow down the parameters, build a solution, and measure success.

Getting the job done may necessitate unusual persistence or dedication to results, especially when faced with obstacles or distractions. Tell me about a time when you were able to be very persistent in order to reach a goal.

Follow-up questions:

• Situation: What were your goals? What were the obstacles you faced? What caused them?
• Action: What are examples of your persistence? Who did you work with to achieve the results?
• Result: Were you successful? What did you learn from the experience?

There are a lot of sample interview questions available online. Ultimately, the key is to be consistent in what you ask and be sure to ask a range of situational (“How would you handle this scenario?”), behavioral (“Tell me about a challenge you overcame”), and strict competency (“Describe the last Excel model you built and how”) questions.

Asking interviewees to complete a decent, well-constructed written exercise – be sure to provide clear instructions – is an opportunity to signal that your organization’s work culture values timeliness and diligence. Whether or not an interviewee returns a high-quality response to the written exercise on time will tell you a great deal about how much they value these qualities.

Attributes we’re seeking:

• Written communication.
• Data analysis and ability to translate data into actions.
• Understanding the customer (customer sense).
• Product sense.

Because we often match an engineering hire with a team after they’ve gone through the hiring process, candidate review (CR) acts as both a hiring manager and an equity process. The committee reviews interview feedback, hire or no-hire recommendations, and leveling decisions for each candidate and provides final approval for the hire.

CR receives a candidate packet, submitted by the recruiter, containing the following information:

• A résumé.
• A set of completed interview scorecards and a completed hiring committee scorecard.
• A suggested outcome:
  • Yes for the company, no for my team (this outcome should be very rare and include a clear rationale).
  • Company hire.
  • Team hire.
  • No hire.
• A suggested level This packet of information is shared with each CR reviewer.

Panel agrees and the CR lead selects one of the following outcomes:

• Hire at suggested level.
• Hire at higher level.
• Hire at lower level.
• No hire: trope outcome overturned.
• No hire: trope outcome confirmed.
• TBD: sent back for additional information.

Working with Me Template:

• My role. Describe your role and goals.
• About me. Describe your personality, communication preferences, and boundaries.
• Operating approach. Include how you like to work, your day-to-day cadence (including 1:1s, other recurring staff meetings, and your operating cadence), what to loop you in on, longer-term strategic and planning cadence, and how you keep a pulse on your team and meet with them.
• Management style. Add a few bullet points that summarize how you manage people.
• Supporting you and your team. Set expectations around how you’ll discuss individuals’ careers, development, and goals together, as well as check in on progress.

The NLE is a program designed to help welcome and onboard new leaders to Stripe. The program consists of welcome emails, a series of prescheduled meetings and pre-reads, a leadership assessment (the Hogan Personality Inventory), and access to a coach for six months. It also suggests a series of first-month actions and provides a 360° review process at the end of the first 90 days so the leader can receive immediate feedback.

Core Framework 3: Intentional Team Development

Team structures

Much of what people call “teams,” however, are actually just groups of individuals parallel processing their way through work.

I recently had a conversation with Tracey Franklin, Moderna’s chief human resources officer, about the structures you need to put in place for a healthy company. She lamented the lack of team – focused performance tools: “Too much today is focused on the individual,” she told me. “It’s teams that get the work done.”

A new person entering the culture — the rituals — of a high-performing team will absorb that culture, as long as you help them understand the norms and the relationships between them.

So, how do you create the environment, set the rituals, and manage constant change? If your role or team is new, start by determining what type of group you need to realize your plans for the part of the business you’re accountable for.

Bill Parcells, who decorated the Dallas Cowboys’ locker room with what Lewis calls “words to live by”:

• “Blame nobody, expect nothing, do something.”
• “Losers assemble in little groups and bitch about the coaches and the system and other players in other little groups. Winners assemble as a team.”
• “Losing may take a little from your credibility, but quitting will destroy it.”
• “Don’t confuse routine with commitment.”

The goal of a team is to produce the best results, and your job is ultimately to organize the team (or teams) to do so.

Sometimes you need to form a team with a lasting mission and goals. Other times you’ll want to create a task-oriented project or working group that can dissolve after the task is completed or the goal achieved. The primary difference is that a team works on a collection of persistent jobs to be done, whereas a task-oriented project or working group addresses a temporary, circumscribed action or mission to accomplish.

If a working group needs to persist past a few months, perhaps your overall structure is wrong and that group should be its own team.

The worst thing you can do is let a temporary structure persist for too long. This causes two problems. First, you will not have invested at the right level for that structure to be successful. Second, the structure’s persistence will be confusing to permanent teams, which should hold the primary scope and accountability for work that must be persistently done.

Earlier-stage companies tend to organize teams around functions, such as product, engineering, support, and sales, which makes sense because companies usually start with just one product.

I think of functional structures as primarily vertical. The vertical structure can translate down to the division level, and then within divisions, you might have a horizontal team embedded within the vertical ones.

If your company expands from a single product to multiple products or business lines, be prepared to constantly reevaluate your team structures to achieve the desired results.

Stripe’s version of a business unit leader is called a business lead, or BL. BLs are accountable for a given area of the business, usually a discrete product or a collection of related products in a specific area, like payments.

Teams that constitute a clearly defined business and can be evaluated on a set of easily agreed – upon metrics that are mostly extrinsic to the company and predominantly within the team’s direct control (e.g., revenue for the product line, margin contributed, 30-day active users) can be organized into structures with a single multidisciplinary manager.

Any other group that feels it represents a sensible, distinct business in which progress is actively being slowed down by the current org structure may request to be considered for this structure.

Dual reporting will be likely for many roles in the business, particularly on go-to-market teams. In practice, this means that managers will collaborate on goal setting and performance reviews, and the individual will likely have separate 1:1s with each manager.

As a manager, you’re making micro structural choices for your own team, so it’s worth tracking the macro company structure and how it’s evolving.

A high – growth environment will also require a lot of change in reporting structures. Carefully consider the number of reports you take on directly.

Having too many direct reports is a common challenge for leaders. It’s not easy to introduce a new layer of authority — whether they’re an internal or an external hire — under you, but in a high – growth environment, it’s often necessary.

When you’re ready to communicate the change, consider crafting a message to each individual who will be affected. Take care to highlight the benefits of the new structure for those who might experience no longer reporting to you as a loss.

Diagnosing team state

Once you’ve determined that you need to invest in a lasting team and not a more temporary structure, assess your starting point. Do you have the team you need?

It’s especially important to take stock when you start managing a new team in order to assess whether it has the structures, plan, and people it needs to deliver excellent results.

In his book The Five Dysfunctions of a Team, Patrick Lencioni lays out the five primary challenges a team might face: absence of trust, fear of conflict, lack of commitment, avoidance of accountability, and inattention to results.

For a high-functioning team to exceed the sum of its parts, you first need to assess whether the team as a whole is capable of achieving that state. If not, concentrate on each member individually and identify any changes you might need to make. For these assessments, I like to apply the skill-will matrix created by longtime executive coach Max Landsberg to evaluate a person’s ability to accomplish a specific task.

“Skill” refers to the ability to do a task, and “will” to the motivation to achieve the task. Identifying where teams and individuals are under-or over-indexing will help managers figure out what needs to change if the team is not on track.

Diagnosing the team is only the first step. As with most challenges, 10 percent of the work is figuring out the plan and 90 percent is executing on it and making hard choices about what you will and won’t do.

Team changes and restructuring

This is a good moment to bring out something like a trusty effort-impact matrix and think through your next steps.

If you’re trying to decide whether your teams need a structural change, there are two triggers to look out for:

• Your team structure doesn’t match your strategy.
• You have a talent issue.
• There’s a third trigger I’ve often seen misused: an underperforming team, or a team that otherwise isn’t working well together.

Don’t leave the ice cream on the counter for too long. One of my business school professors, Sigal Barsade, once described organizational changes to me this way: “You know when you take the ice cream out of the freezer and you leave it on the counter for a while, and then it gets all melty and when you refreeze it, it’s never quite the same? That is what happens when you let an organizational change linger in limbo.”

It will always feel like a reorg is coming at the wrong time.

The key is to do the reorg quickly, once people are made aware of the changes, so that they can start settling into the new normal.

In a perfect world, you would never restructure around one person, but there are some exceptions.

A reorg involves the following three phases:

• Decide whether you need a reorg and determine your new structure.
• Get buy-in from the key people who need to be involved.
• Create a communications plan and inform those affected.

One useful practice to understand your team members better is to schedule career conversations with them.

 (Re)building the team

Delegating can be a tricky skill to nail, but it’s a worthwhile one to cultivate. It’s the key to getting your own work done, advancing your team members’ development, and increasing your team’s impact.

Delegating takes two forms.

• First is general work assignment.
• Second is a one-off assignment that might not neatly fit into the day-to-day work but that you or someone on your team needs to accomplish.

Pressured by the many moving parts and tight deadlines involved in producing hardware , Apple coined the term “DRI,” or directly responsible individual, to signal who would be held accountable for meeting a goal or ship date.

Managers who under-delegate are often also folks who might be called micromanagers.

Managers who over-delegate are very good at making employees feel empowered and trusted, but they get too far removed from the work and don’t recognize when an employee is in over their head.

The framework I use for delegating is similar to Jeff Bezos’s Type 1 or Type 2 decisions. It has two axes: High impact or low impact: Who or what might be impacted by the work? What teams does it affect? Does it have an effect on users? How many? How immediately does it affect the business? Would it change a critical company goal or metric? Trapdoor outcome or adjustable outcome: Will the work at hand lead to what I call a “trapdoor” outcome — an outcome that can’t easily be reversed — or will you be able to adjust, iterate on, or change the work?

Sometimes you should personally take on adjustable or low-impact work. There are three reasons why you might do this:

• Modeling: You want to show what “good” looks like.
• Urgent work: Sometimes work needs to be done quickly and you haven’t done enough delegating or training to give the task to someone else.
• Resource constraints: Sometimes we all have to jump in and roll up our sleeves if the team doesn’t have enough people to delegate to.

Here’s a set of steps for a good delegation conversation:

• Bottom-line the assignment. Describe the broader context and why the assignment is important.
• Explain why the work assignment is right for the person.
• Set clear deliverables.
• Discuss timeline.
• Get buy-in.
• Outline next steps.
• Keep track.

Creating the team environment

Offsites generally have three objectives: Evolve a set of people from a work group into a team. Evaluate progress and determine near – term priorities and goals. Engender long-term strategic thinking.

As it turns out, teams go through somewhat predictable stages of group development. Bruce Tuckman, one of the first researchers in this field, created a model that describes the four phases of group development: forming, storming, norming, and performing.

Focus too much on the task, and the team suffers. Focus too much on the team, and the task suffers. Neither is sustainable. As a simple rule, the more mature your team stage, the more you can focus on the tasks versus the team.

A shared offsite planning document is a helpful forcing function to ensure that you get the best, most thoughtful information from everyone on the team.

Check-ins set an emotional rhythm for the day, which can be helpful for getting a good outcome. Ask everyone to share how they’re feeling about the offsite, any reflections they have going into the day’s sessions, and their objectives for the day.

Icebreakers are meant to be more personally than professionally focused. They should be a fun way to get people sharing and set the energy bar for the day.

For each section of the agenda, make sure to have the following items documented in a place that the whole team can reference: Purpose Agenda Limit (time allocated to each item). Discussion notes and actions (to be completed during the offsite).

Meetings can have a number of different purposes, including:

• Decision – making
• Sharing information
• Live review (of priorities, roadmaps, metrics, etc.)
• Alignment Problem – solving

Running effective meetings requires investment and strong foundations.

Great meetings are generative, dynamic, challenging, individualistic yet collaborative, and, my favorite: decisive! There are two components to every good meeting: the groundwork you lay up front, and the mechanics of running the meeting itself.

The meeting owner is often the person who called and organized the meeting, but that doesn’t mean they should own all the roles. Make sure you’re all clear on who will fulfill these functions:

• DRI: The person responsible for the meeting’s success.
• Facilitator: This is often the DRI or the meeting owner, but it doesn’t need to be.
• Notetaker: Since it’s difficult to facilitate and take notes at once, it’s advisable to ask someone else to record key discussion points, decisions, and action items.

Notes should not be a transcript of the meeting, however. The best notes are sent out after the meeting and include the top-level discussion topics, decisions made, and follow-ups or action items from the meeting, with each follow-up assigned an owner and an agreed-upon time frame for when it will be completed. The notes should also document any outstanding questions or concerns that were not covered in the meeting and that should be discussed at the next meeting or resolved prior to it.

A meeting should only have one or two purposes: updates and priorities, for example, or alignment and decision-making.

PAL as a guide:

• Purpose: If the purpose is alignment and decision-making, each instance of the meeting should serve that purpose, such as deciding on the features to build in the next sprint.
• Agenda: The agenda lists the topics that will be covered in service of that purpose.
• Limit: Set guidelines for how long the meeting and agenda items will take.

Figure out logistics. This includes:

• Meeting time: Set an optimal meeting time and agree that participants will arrive on time.
• Delegation: Decide whether someone can send a delegate if they’re out of the office or have to miss a meeting.
• Pre-reads: Agree on whether pre-reads must be complete before the meeting or if you’ll set aside 10 minutes of reading time at the start of the meeting.
• Action items: Decide whether their status will be updated asynchronously or at the start of each meeting.
• Electronics use: If in person, decide whether anyone but a presenter or notetaker can have their laptop open.

To grossly generalize, some people are operators, and some people are makers or creators. You have to balance your meetings for both kinds of people and both kinds of work.

Check-ins and check-outs are extremely simple and undervalued meeting tools.

Starting the meeting with a check-in can shift the group’s attention from whatever was going on before they entered the room to the meeting itself. There are two types of check-ins you may want to use: work check-ins and personal check-in. Work check-ins formalize what people hope to get out of the meeting, how they’re thinking about the topic at hand, and where their headspace is.

Personal check-ins give participants an opportunity to share their state of mind. I’ve found that combining a work question with a personal question makes people more comfortable to give the personal update.

Check-outs help people commit to memory what they’re going to take away from the meeting. My favorite check-out — probably because I tend to run out of time wrapping up meetings and capturing action items — is the one-word check-out.

There are a few different ways a decision might be made:

• Autocratic: One decision-maker. They may consult the team, but no matter what, they’re the decider.
• Consensus: Everyone in the group comes to an agreement together.
• Democratic: The group votes on the decision and the majority wins.
• Consultative: The decision-maker, usually the leader, will consult the group but ultimately makes the decision.
• Delegated: The leader and the team agree on a delegate who will make the decision (using whatever method they choose) and agree that they will all stand behind that person’s decision.

Some companies and teams employ a common decision-making framework: Bain has its RAPID framework, and my friend and former Google and Square leader Gokul Rajaram built a SPADE toolkit on Coda that anyone can use. When I interviewed Dongping Zhao, the president of Anker, he said McKinsey’s seven-step problem-solving process was the most helpful framework he’d learned in his career.

The best way to course-correct errant meeting behavior is to provide feedback outside of the room.

Patrick Lencioni’s book The Five Dysfunctions of a Team lays out the concept of a person’s “first team”: the group of individuals with whom you work most closely to accomplish goals.

Team-building complexities

When your team is remote or distributed, you’ll have to work harder to get people to care about one another’s work and truly work together so that you’re forming an actual team.

One thing that has really helped at Stripe is that most “hallway” chats occur in Slack channels instead of in person. Watch out for Slack retention rules, though — if it needs to be permanently documented, put it elsewhere.

Type of remote team and their Primary challenge:

• A few remote employees on a largely centralized team. Participation.
• A whole team that works remotely. Cohesion.
• A team split across two or three different offices and some remote locations, or two teams that need to work across locations. Coordination.

Here are a few key elements to keep in mind as you add remote workers to your team:

• Maturity of operating system.
• Role. Is this a job that requires a lot of coordination?
• Manager support. Remote management is its own skill set.
• Experience level. At Stripe, we’ve found that it’s easier to support remote employees who have already had experience working remotely.

In my experience, missing a goal is often due to a dependency, or many dependencies, on other teams. This is especially true as your team scope and your company grow.

I often think of my work as a manager as clearing the path my team will need to travel. Anything that slows them down is on me.

It’s important to de-risk those dependencies. Here’s a quick guide to doing that:

• Identify dependencies during your planning process.
• Set up a semi-regular check-in to keep your team and partner teams up to date on progress.
• Embed someone on the team.
• Form a working group.

I try to be open and honest with my teams during times of uncertainty. This doesn’t mean you must index toward negativity and pessimism — in fact, I would advise the opposite. But it’s critical that you demonstrate that you have a good pulse on the team’s state and that you’re aware that a change is necessary, even if you don’t know exactly what that change will look like yet.

Despite all of your instincts to the contrary, I recommend biasing toward action during times of uncertainty.

Diversity and inclusion

Homogeneous teams may execute more quickly, but they don’t generally push the thinking. Diverse teams get the most outsize results, although it takes time and investment to build what Harvard Business School professor and researcher Amy Edmondson calls the psychological safety to outperform.

Managers can exercise influence on diversity and inclusion in three areas in particular — paying attention in each to ensuring that opportunities are broadcast widely both internally and externally.

Team communication

Much of my advice for teams ultimately boils down to communication: Set expectations well, share the same information with everyone, and create an environment that facilitates an open exchange of ideas.

I recommend including a “pass – downs” agenda item in your team meeting to share information from company leadership that’s relevant for your team members to know, either for context or because it directly impacts their work.

Of course, you’ll need to continually exercise judgment about what to share and deeply consider how to frame the information.

Try to end every day thinking about what you need to tell other people.

Core Framework 4: Feedback and Performance Mechanisms

Hypothesis-based coaching

I find managers often fall somewhere on a continuum between the “extreme coach” and the “forgot-to coach.” The extreme coach spends too much time involved in the day-to-day, providing endless feedback. The forgot-to coach is often very clear about what results they want to see but is unclear on how to help their direct reports achieve them.

Before we get to performance reviews, let’s talk about informal feedback and coaching.

An intuition is just a hypothesis. You observe a few examples of a phenomenon, and you think, “I wonder if there’s a pattern here.” Then, like a scientist, you figure out a way to test your theory and collect more data. You observe a particular need, form a hypothesis about what might be the root cause of that need or a possible solution to it, and then you test the hypothesis, sometimes directly with the person in question. Sharing your hypotheses with your reports can initially feel strange, but as you start integrating this approach into your management style, you’ll be able to have much more targeted performance conversations.

Hypothesis-based coaching also helps you act quickly rather than relying on a long process of observation and gathering data on a person’s performance before coming to a conclusion.

Intuitive coaching consists of three steps, which you may repeat a few times before getting to an insight you want to share or a firmer conclusion about a strength or development area your direct report might have:

• Gather data: You have more than you realize and need less than you think.
• Form a hypothesis: Based on your observations of your report, develop a sense of their strengths and weaknesses.
• Test your hypothesis: Be rigorous and vulnerable as you do this.

If most of your hypotheses are correct after three to six months of practicing this form of coaching, you can start to assume that your manager’s intuition is developing nicely. If your assessments end up being wrong more often than not, you may need to spend more time in the data-gathering phase, relying more on peer feedback and results, and likely spending more time with your report.

Before you promote someone, have them perform some of the duties they’d have to take on in the role in order to see how they’ll fare, and see if they’re aware of any gaps in their abilities.

Giving hard feedback

Constructive feedback can feel hard to deliver because there’s a risk that you’ll hurt the person’s feelings.

You also probably have some great ideas about how to solve that problem. But if you offer solutions before you both agree on the problem, there’s a good chance that you’ll alienate your report.

Your goal is to get your report to think with you about the problem and start to generate solutions. There are two methods for getting to this state: asking an open-ended question or sharing an empathetic observation.

Someone once said to me, “Feedback is just holding up a mirror and describing the image you see.”

To build a healthy feedback culture, model the behavior in both team meetings and 1:1s.

Creating a culture of informal feedback

This largely holds true, especially for individuals, but I do make a distinction between team and individual feedback.

The formal review process

I’m not a believer in the recent trend of abolishing formal performance reviews in favor of “continuous feedback.”

I talk to people at companies that don’t have formal performance reviews, I often find that promotion and performance rating processes are still taking place in some form, but they’re happening behind the scenes — often without the knowledge of the person being “reviewed.” If employees discover that this is happening out of sight, it can undermine trust.

To build trust in the performance assessment system, people need to know how they’re going to be measured, that the measurement will be considered fairly, and how results will lead to recognition and reward (additional responsibility, promotions, or compensation increases). To do this, you need:

• A talent strategy — this could be as simple as “pay for performance,” i.e., performance-based compensation rewards.
• Rubrics for how someone’s performance will be measured.
• A program to capture performance feedback and promotion nominations via written and numeric assessments A clearly communicated process for calibrating performance assessments across teams.
• A compensation philosophy and a means for the performance and promotion processes to feed into any compensation outcomes.

To me, the most fundamental elements of a strong formal review process are performance feedback, calibration, and compensation structures.

Performance reviews are formal check-ins to assess how well an employee has been meeting the responsibilities outlined in their role charter and laid out at a high level in the job ladder.

The peer feedback and employee self-assessment can be submitted simultaneously. The manager review should be written after the manager has read the peer and self-assessment feedback.

Written performance reviews are, by nature, backward-looking, but they’re most productive when you use them to set the stage for a discussion about the future.

By redirecting backward-looking comments to forward-looking discussion, it’s more obvious that the point of a performance review is to help the person succeed going forward, so people tend to be more open to really hearing the feedback.

Here are the steps involved in a successful calibration process. Note that prior to calibration, you’ll need to have established a job ladder and outlined the expectations for each level. You can then use a rubric to establish assessment criteria for meeting expectations at each level, preferably with examples.

Managers submit a draft of their performance reviews, performance designations, and any promotion nominations. This draft is turned into a packet of information, ideally generated by your performance tool, that can be consulted by the calibration group.

Ensure that a senior leader is prepared to facilitate the calibration. Convene a set of managers who manage similar roles and levels. Remind the group of the types of biases that might surface as you discuss individuals’ performance and promotion status.

Examine the data and take note of which managers have low or high average designations or nominees for promotion compared to the group. Discuss each level in turn.

Once you start reviewing non-managers who are at the same level as the managers in the room (e.g., Level 4 and above), start excusing the more junior managers.

Throughout, make changes to the performance designations or promotion decisions.

Do a final review of the data after you’ve made any changes in order to check for broad parity. Roll up all of the outcomes from the calibration sessions for senior leadership to review. The ultimate result of calibration is usually a spreadsheet or updates to your HR tool that record any changes to performance designations and promotion status.

Compensation

“Compensation should be market-competitive to help attract and retain top talent, with higher rewards for higher performance.”

To determine your compensation framework, you’ll need to establish your job levels.

In my experience, people usually want to know two things about their compensation: Am I being treated fairly? Am I being recognized for my performance?

For highly motivated employees, compensation is an effective management tool to reinforce their motivation and contributions.

If you’re managing someone out or providing a lot of critical feedback, compensation conversations can be a helpful tool to make the situation feel concrete.

Every company should have these basic people processes — performance feedback, calibration, and compensation — in place fairly early on. Once you exceed 20 or 30 employees is a good time to get started.

Managing high performers

To manage high performers, you first need to understand what drives them and how they operate. High performers tend to fall into two groups, which I call pushers and pullers. Pushers are highly ambitious, and they’re often critical. Pushers reliably use performance reviews as an opportunity to ask why they aren’t getting a larger raise or being entrusted with more responsibility. Pullers are the types of high performers who will take on much more work than they should. But pullers get burned out. They suffer silently and won’t tell you they’re unhappy until the 1:1 where they tell you they’re quitting.

The manager’s challenge is to nurture the best version of each high performer but also to make sure those high performers are positively impacting the entire environment, not just their own work.

If you can’t find interesting opportunities for a high performer on your team, don’t hold on to them for too long. Stalling a high performer will always come at the detriment of the longer-term health of your relationship with the person and your team’s output.

You should be focusing on the employees with the highest long-term return, not just current high performers.

The biggest mistake I’ve seen people make with regard to managing high performers is when a manager thinks that top talent is “good enough” and doesn’t challenge them to be even better.

It’s very easy to promote people too quickly — after all, you want to reward them for their great work. But you need to make sure to do a gut check and ask yourself whether the person is truly performing at the next level and can sustain that performance.

The steady middle

It’s easy to neglect medium performers. That’s particularly unfortunate because they’re often sources of stability, and many are culture carriers. Every manager should consider their team as a portfolio of talent, and each person in that talent portfolio should be assessed and either supported, coached to better performance, or moved into a more suitable role, team, or company.

Managing low performers

When there’s a persistent gap between a report’s performance and the demands and expectations of their role, you’re managing a low performer.

Your job is to figure that out and identify whether there’s a performance issue, then either improve it or move the person out of your team or company.

Performance issues aren’t always the result of lack of skill or will.

It’s tricky to provide one-size-fits-all advice here, but it’s helpful to do two things in these sorts of situations. First, if you can, involve your HR team. Second, don’t back away from feedback.

You can’t lower the expectations of the role, but you can make changes to the employee’s responsibilities by moving them to a part-time or less demanding role, particularly if the difficult situation is temporary.

Waiting for your company’s formal performance assessment process to deliver feedback to a low performer is a mistake. Provide feedback, especially on a performance issue, early and often. Document your feedback.

Compassionate management does not mean holding off on giving feedback because you notice the employee is already overwhelmed or prone to taking feedback badly. It also doesn’t mean dropping your other work to get the person back on track. Compassionate management means providing someone with honest observations of their performance, being clear about the options an employee has to course-correct, outlining what work would be required for them to start meeting expectations, and sharing what you think is the likeliest outcome for them at your organization.

In performance management, timing is everything.

Managing low performers can feel like an up-and-down process that’s difficult to track, so I’ve broken it down into a few phases, with a rough timeline for each.

• Phase 0: Your one- off feedback becomes a pattern; form a hypothesis on the outcome. This may be counterintuitive, but it’s critical to develop a hypothesis on what you think the outcome will be before you start the process. There are three likely outcomes: The employee improves and stays in the role. The employee changes roles or teams. The employee leaves the company. Starting with a hypothesis about the most likely outcome will help you communicate expectations.
• Phase 1: Get aligned about the performance challenge. You’re moving from an informal coaching mode to a more formal performance assessment. This is crucial. The employee will usually respond in one of two ways: with denial (“I disagree”), or with relief and a readiness to problem-solve (“I think you’re right, and I need help”). You can then get into problem-solving mode by asking some or all the following questions, directly or indirectly, depending on the context and the person: What do you think is going on? Do you like this work? Is this the right role for you?
• Phase 2: Agree on next steps.
• Phase 3: Create an action plan. A formal performance improvement plan (sometimes called a PIP) should be drafted by the manager and then agreed to by the direct report. It should include: The skills or behaviors that need to change and what improvements you need to see. An end date, at which point you’ll evaluate the employee’s improvement. How you’re going to measure progress. Performance issues tend to be addressed by three types of fixes: Operational or tactical, Overall skills fit for the role, Behavioral or attitudinal. The hardest part of writing the formal performance improvement plan is detailing how you’re going to measure progress. Make sure you outline how you will determine output, quality, and process. Try to avoid a situation where you and your employee reach the end of the performance improvement plan period and are in dispute about how to assess their progress.

Managing managers

“You have to move from being a captain to a colonel.” He meant that I had to make a mental shift from being in the weeds with my team’s work to implementing a system that helped me stay involved enough that I could unblock and coach my teams, but not so involved that I was doing everyone’s job for them.

The main goal when managing managers is to be their coach, sounding board, and unblocker so that they can achieve their own goals and those of their team.

Whether the other person proposes it or not, 1:1s should start with two things: asking how someone is doing — checking in really matters — and agreeing on the most important item to discuss and talking about it first.

Managing out, firing, and layoffs

Firing someone is probably one of the hardest things you will have to do as a manager, so pull in the support you need from your own manager and your HR department, if you have one, for help making the decision or to have a practice conversation, for example.

Letting bad hires linger leaves organizational scars that take a surprisingly long time to heal. It’s crucial to fire fast but fire well.

The departure of a senior leader will also have an impact on many individuals, so part of your managing-out process will need to focus on the transition plan.

The less mutual it is, the more you should expect to negotiate. In this situation, the best tool at your disposal is a severance matrix, the framework your HR and employment legal teams should have developed for what might be offered for a termination departure. Refer to that framework and use it as a backstop. If the negotiation is a tricky one, it’s sometimes best to involve your HR or employment legal partner, if you have one, to help run interference and enforce the matrix.

Exercises and templates

Performance Review Template. This template is meant to help managers create an outline for a written performance review.

• Name:
• Current level:
• Start date in role:
• How long they were here during the review period: (Note whether the review period was less than a half – year and consider any time on leave.)
• Proposed designation:
• Proposed promotion (yes or no):
• In one sentence, why did you not choose a higher designation? (N/A for “greatly exceeds”)
• In one sentence, why did you not choose a lower designation? (N/A for “does not meet”)
• In one sentence, summarize the takeaway you want to deliver to this person with this half’s designation and review: (You should communicate this to the person during their review.)
• Impact: Using the template questions below, describe the 2 – 3 projects or areas where the person had the most impact this half. Area for impact: Describe briefly here. Name/description of project/area, including relevant context (e.g., size of project, level of difficulty, etc.). What was the duration of their contribution? Who were the key collaborators or stakeholders? What was their role and expectation for impact in this area? What was the resulting impact, and were expectations met? If not, why not? Include relevant metrics if possible.
• Strengths: Describe which 1 – 2 strengths this person demonstrated during the review period and provide an approximate designation for that strength relative to their current level. Strength: Describe briefly here. Approximate designation (partially meets, successfully meets, etc.) for this strength. Summary, including 1 – 2 examples.
• Development areas. Describe which 1 – 2 development areas this person demonstrated during the review period and provide an approximate designation for that development area relative to their current level. Development area: Describe briefly here. Approximate designation for this development area. Summary, including 1 – 2 examples Ideas for how to improve.
• Promotion proposal: yes or no

Conclusion—You

The more senior you become, the more creative reality gets at finding ways to beat you up every day. You will have days — sometimes many in a row — when your highest performer is threatening to quit, a top customer has just informed you that they’re moving to a competitor, you’re leading a company-wide meeting the next day and haven’t had time to prepare, and the cross-functional project you kicked off last week is already going off the rails. Many people don’t have the psychological strength and resilience to keep going. In The Hard Thing About Hard Things, Ben Horowitz calls this “the struggle,” when “nothing is easy and nothing feels right.”

Manage your time and energy

Sometimes there are tasks that remain incomplete week after week. These tend to fall into two main categories: Tasks that I’m unsure how to get done or that I’m not best suited to do.

Tasks that don’t fit into my normal way of operating.

Management is about cultivating the psychological strength to compartmentalize.

Foster relationships

The reason the expressions “It’s a marathon, not a sprint” and “If you want to go fast, go alone. If you want to go far, go together” are so often repeated is because they’re true. You need to pace yourself, and you need to have someone to run with.

It’s also important to have the broader context of your role. Ron Williams, the former CEO of Aetna, talks about the ‘two and two,’ which is knowing the people and job roles two levels below and two levels above you.

Founders have their jobs because they had a vision that turned into a business. Senior managers have their jobs because they made management their business. (That doesn’t necessarily mean that they’re good managers, but it does mean that they’ve likely been doing it for a while.)

Founders are coming from a place of first principles, and you’ll be coming from a place of experience. You can both learn a lot from each other.

Your challenge is to figure out what rate of change the organization and the founders can and should absorb and how you should work together to determine those changes. Here are some principles I’ve found helpful to do that:

Check the fruit. Prepare for a lot of ideas to stay in the bag forever. But it’s often better to wait for an organization to be ready for an idea than to push something through that the company will reject.

Build the Camry, not the Escalade. Sometimes you still want to make a change even if the founders don’t think the fruit is ready. (That is, after all, part of your job.) When this happens, a lot of people make the mistake of trying to build a Cadillac Escalade when they should really be trying to build a Toyota Camry, or maybe even a bicycle.

Understand what matters. Just as you should understand your reports’ values, you should work to understand your founders’ values, too.

Consider your career

The biggest trap I’ve seen people fall into is getting stuck either chasing someone else’s version of success or in a role that doesn’t prioritize their strengths or make them feel fulfilled.