How to Hire and Fire, Establish Company Culture, and Go Public: 10 Lessons from Three Big CEOs at NVCA
Can you ever fire people too quickly, as chief executive? How do you foster a company’s culture as it grows? And what are the pros and cons of going public?
Answers to these pointed management questions could be found in yesterday’s technology track at the National Venture Capital Association’s annual meeting in Boston. Harvard Business school professor Bill Sahlman (a busy man this week) led a CEO panel consisting of some heavy hitters: Jim Baum from Netezza, now part of IBM (NYSE: IBM), Tim Healy from EnerNOC (NASDAQ: ENOC), and Andy Ory from Acme Packet (NASDAQ: APKT).
Here are 10 things I heard that stood out to me. Please excuse the rapid-fire mode; been tweeting too much lately:
1. “When you’re CEO of a public company, you’re at the top of the aggravation pyramid but the bottom of the liquidation pyramid.” That was Sahlman, referencing investor Tom Volpe.
2. “Going public is the beginning of a long process. It’s about locking everyone in. It’s an exit, but not for me [as CEO].” That was Ory talking about Acme Packet. “You have 180 days to understand who you are” in the transition from private to public company, he said. “Realize you can’t satisfy everybody.”
3. “In spite of [various investor issues], becoming a public company really did give us credibility, it really did help us with large customers. The benefits outweighed the negatives,” Baum said of Netezza.
4. “We’d rather have a hole in the organization than pick the wrong person and have to live with that,” said Healy of EnerNOC. (He spent 22 months interviewing 150 candidates for chief operating officer before going public in 2007.)
5. “Are they a happy soul? I won’t hire unhappy people,” Ory said. Baum added that he looks for intelligence, enthusiasm, passion, integrity, and cultural fit in his hires—experience is less important.
6. “You have to have the right people. If you don’t make the changes that need to happen, everyone sees it [and you harm the culture],” Baum said. That’s a lesson from his PTC (Parametric) days. Baum had fired an employee for poor performance, and his manager, Dick Harrison, said, “Do you think you fired that guy too quickly? Have you ever said, ‘Well, I moved too fast on that one’?”
7. “We’re in the middle of nowhere, and everyone’s against us. We’re the little guys,” Healy said of EnerNOC’s culture and mindset.
8. “We had a common enemy: Oracle,” Baum said of Netezza’s mindset. As for Acme Packet’s culture, Ory described it as “a positive, results-oriented humanistic environment where people are changing the way the world communicates.”
9. “Get in there, talk to a lot of customers, figure out what their real pain is,” Healy said of his company’s business growth strategy. “You cannot innovate in a vacuum. There is enlightenment when you engage [with customers],” Ory added.
10. “I try to get off the board [of a company] if we start having Groundhog Day meetings.” That’s Sahlman talking about companies that keep having the same board meeting over and over again.
In sum, these were some telling tips from four business leaders who have seen it all.