Archive for category: First Sun Blog

I want to talk about a specific type of meeting today — a Board Meeting — but this could easily apply more broadly.  A find many board meetings highly unproductive in that they are often just a date in the calendar where management is set to update its investors and other board members of its performance over the past time period.
This is a total waste.

No board will know your business better than you do but if managed properly they should be the most informed people about your business than any full-time executive. And because they have the luxury of sitting across multiple boards they ought to be able to bring you a helicopter view of the decisions you need to make in your business.

If you have board members you respect you owe it to yourself to run more productive sessions where board members contribute. So here’s a short guide to achieving that.

What you Before Sets the Course for How Well the Day Goes

1. Make sure you send your financial and operating metrics no less than 72 hours before the board meeting — even better if it can be a week in advance.
2. Schedule calls with each board member prior to the board meeting. Walk them through the numbers, make sure they understand the key issues and ask their impressions. Make sure you ask if there are any strategic concerns or topics they want to discuss at the board meeting.
3. Fix an agenda for the meeting. Send it out 72 hours in advance. Since you’ve already walked through financial & operating metrics the board meeting ought to be the time to run through 2–3 big strategic issues the company faces.
4. This is your chance to tell board members what keeps you up at night and let them offer you input into what they would do. I would think a 2–3 hour meeting with 2–3 topics ought to do. If you’re slightly later stage it might be 5–6 hours.

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In a perfect world you’d know the issues you want to discuss well in advance and you’d prepare a deck to guide the discussion. It ought to lay out the key issues, provide 3 options per issue and state which one management is leaning toward. If you provide these slides in advance you give board members a chance to reflect and come prepared for a real discussion.

Mohamad Torokman/Reuters

The mistake most founders make is sending out last-minute board packs. Investors sit on many boards and have many other job tasks so often if you get a deck the day before and you’re in back-to-back meetings and a dinner you’re only likely to have a cursory look at the materials prior to meeting.

It may feel like a victory if you get through the board meeting unscathed and with few questions and mostly the board members feeling good. This is failure. It is a waste of what should be valuable resources to you and it is a failure on your part to push yourself to really think about the long-term issues you’re facing.

Still, this is how 70% of board meetings are run. And management is mostly grateful to have it over to “get back to focusing on the business.” These leaders are short-term tactically focused more than strategically minded and this is has consequences.

Optimizing Performance During the Meeting

If you nailed the pre-meeting work then the board came to the meeting fully knowledgeable about the agenda and thus the objectives of the meeting.

The following are the biggest mistakes I see founders make in board meetings:

1. Allowing board members to get in the weeds. Even the best intentioned board members sometimes ask very detailed questions out of curiosity or thinking they are helping and in effect take the meeting off course. A board meeting shouldn’t be the place an investor questions why you’re focused on customers A and not customers B. It shouldn’t be the place where they ask why you have 8 sales reps and not 6. These are tactics — not strategy. The best strategy is to let the board member ask his or her question, write it down, tell them it’s a good question and one you’re happy to spend time with them explaining after the meeting but that your goal for today is to address the bigger issue of X.
2. Allowing board members to bring up topics not on the agenda. If you don’t allow time for board members to give you agenda feedback in advance then they have the right to bring up topics you weren’t expecting. But if you have a pre-call and ask their issues in advance then you have the right to say, “That’s a good question. It’s not a topic we’ve prepared for today and nobody raised it in our pre calls. So I’d like to note it and we’ll either address it between meetings or bring it to the next board meeting.”
3. Not pushing for votes. Ultimately if you’re seeking for approval or board consensus on an action (getting approval for a budget, raising money, investing in CAPEX, firing a head of sales — whatever) your job is to hold a discussion in which all board members who want to voice an opinion can do so and ultimately pushing for a vote or a resolution. My preferred strategy is for you to shape the issue by saying, “Here is what we’re pushing for. Here are the alternatives we’ve considered. We’d like to get your input.” Now if you did your pre-meeting job you already know people’s views. I would start the conversation by asking somebody to weigh in. It’s not your job to debate every board member. If somebody takes an aggressive tone against your desired outcome you can rebut it or you can call on somebody on the board who shares your opinion and ask them to weigh in. Over time you’ll figure out who the most persuasive board members are and who backs down too easily. Control the discussion. Make sure people feel heard. And if you think you have the votes then it’s time to say, “Ok, I think we’ve heard everybody’s opinion on this topic. If it’s ok with you, I’d like to propose we put this to a vote. All those in favor of the budget we’ve outlined … (or all those in favor of the budget we’ve outlined with amendments to the cost-line offered by Bob).” The reason I point this out is that all too often decisions go round and round and run out the clock with no sense of moving towards a decision. Honestly, people hate making decisions. It’s your job to guide them there.
4. Not controlling the clock. A good number of board meetings don’t have somebody managing the clock. Let’s call them “the Andy Reid of board meetings.” It’s very common that low or mid impact issues are discussed at length at the start of the meetings and key issues are rushed in the final 20 minutes of a board meeting when people are tired or in a hurry to get to the next board meeting. It’s really hard to manage a meeting and manage the clock. When I run important meetings like my annual investor meetings I have my partner Stuart Lander watch the clock. He’s better at it than I am and it makes sure we don’t train valuable time and rush important stuff at the end.
5. Letting loud mouths control the discussion. It’s no secret the every board meeting has vocal people. If they’re constructive, knowledgeable and often right then you tend to let them do more talking than others. Still, meetings are best when you get multiple people’s opinions. And even worse is when the loud mouth isn’t the smartest guy in the room. My strategy is the let loud mouth get his or her say. And then politely say, “Listen. I think I’ve got the gist of your argument. It’s helpful. I’d like to just bring a few more people into the discussion to make sure we hear from everybody.” It’s disarming. It’s very hard for them to say, “No! I don’t want to hear from anybody else!” (even though that’s what they’re thinking). And then you should actually call on somebody and say, “Mary. What do you think? Do you think it would be a good idea to expand to more markets this year or are you feeling more cautious?” Here’s the reality. 90% of the people in meetings won’t shut up a loud mouth to they rule the day.
6. Allowing non board members too much of the floor. Many boards have observers on them. Sometimes it’s because you have strategic investors. Sometimes it’s because the VC brings associates to the meeting. Many of these people can be helpful. But for the most part observers should stay silent unless engaged because otherwise you find out that some board meetings have 14 people in them and become totally unproductive. If every board observer speaks as much as every board member then they really are … board members. This is because very little is ever formally voted on so if they have the same amount of floor time they might as well be board members. Or better yet, manage their expectations about how much they’re expected to voice an opinion at board meetings vs. “observe.”
7. Allowing mobile phones, iPads and computers to be used freely. We live in an attention-deprived world and people are their own worst enemies. I highly recommend a “no devices” policy. If this gives your investors angst then have 5 minutes every hour of device time. Literally stop the meeting, let everybody do their quick emails and then restart with no devices. Things have gotten so bad in recent years. It seems in most board meetings there’s always at least one member not really paying attention and then the group discussion / dynamic is lost. Trust me — if you get people to agree to this you’ll get way more productivity from the increase in concentration. If you run poor meetings by letting people talk too long then don’t be surprised if people push back against the no devices rule.
8. Don’t allow the remote body to control the tenor of the meeting. There are always times where one member needs to be on a web conference or telephone call due to travel conflicts. It is what it is — you have to accept that. But your priority in running the meeting has got to be to the people in the room. I’ve been to a number of meetings where everybody who traveled ended up having a sub-optimal experience to constantly make sure the remote person was engaged. And half the time you know they’re zoned out and checking email. That’s why I like web conference over telephone — it keeps people more honest. But either way the priority is the room. If you constantly compromise by repeating things to the half-paying-attention remote person — frankly that’s bullshit.

Finally, the best run meetings are the ones that happen before the meeting.

1. If you have important decisions to make know where each vote comes out before the actual meeting. That way you can make necessary compromises to win support or at least gather more data to overcome objections if you know about them in advance.
2. If some board members aren’t persuaded on a decision that you want made use board members who are on your side as proxies. Instruct them in advance that you may need them to advocate more loudly in the meeting. Your board allies also should be counted upon to deal with unruly or over-talkative board members.
3. If you do a board dinner do it the night of the meeting not the night before. When you have a board dinner the night before everybody talks about all of the key issues there so the actual board meeting feels perfunctory and people pay less attention.

I’m sure there’s more. But I’m out of time and you’re out of attention. Hope that helps a bit. No, I haven’t proof read or even read a second time. I’ll visit it again in the morning.