People Matter: Prioritizing Human Capital Along with Investment Capital
In 2022, the world has clearly changed with continued volatility in the economy and public equity markets. Respected investors have offered valuable advice with a consistent theme around extended cash runways and sharper operating focus on 1st principles of the business. Having lived thru the dotcom bust and the 2008 recession as an operator, the most valuable lesson I learnt is that credible resilience plans always start with protecting your Human capital.
People matter, because it is not just about surviving the stormy seas, it is about coming out on the other side more focused and ready to accelerate. CEOs/Founders will face some gut-wrenching people decisions - should we still hire amazing candidates, how do we get to our target cash runway without impacting people, how we retain our best talent, who is impacted etc. As you work thru these decisions, I’d like to offer a framework on engaging your teams ..
Foundation of trust
Successful startups & companies are built on trust. Your team trusts the founder’s vision and buys into the journey to get there. As the seas get stormy, it is imperative that leaders clearly communicate the new operating context and the tough choices ahead. Transparency and ownership reinforces trust and helps the team buy into your resilience plan. For without your teams commitment, your cash runway wont matter ..
It is imperative that these decisions not be made in a black box, key decision makers (stake holders) are made part of the process within the context that was shared. Being fair in – how you make decisions on where to cut spend, how you treat any impacted team members, retention initiatives, leadership team’s skin in the game – all will be closely watched and will impact the morale & energy levels of your team
Know your teams DNA
A team is a mix of DNA – engineers are motivated & process communication differently from sales people, likewise for marketing, operational functions. It is important for CEOs/Founders to understand these nuances as it helps you move at a quicker pace & align your team to the task ahead
Customers are people too
Every successful sale & win is built on relationships, it might your champion, it might be the CIO/CTO who took the bet on your product, it might be the partner who opened doors for you. Know that your customers and partners are going thru their own version of a resilience plan. Engage them as you would your own team – with transparency & respect and proactively work out the new win-win equation
Take care of yourself
Yes, being a CEO/Founder is a lonely job. In these stormy seas your ability to be that cheerleader, communicator, decision maker, counselor, sales person are amplified and can sap your energy. Ideally you have a trusted relationship(s) – your co-founder, one of your senior leaders, perhaps even a board member to brainstorm with. While founders are super human, It is ok to seek advice and help. You will need the energy to lead your team and help them accelerate out of this phase.
I have been privileged to be part of some amazing teams which facing down tough markets & executing under pressure to deliver world class products & amazing financial results. As a team, we took ownership of our destiny by making tough decisions and trusting each other. These relationships are the safety net for your company to get thru the hard times. People Matter !
Today the waves are big, and the storm may last a while. But no matter how long the clouds last, the sun always comes out. Together you will rise higher, with greater resilience and deeper connections. Believe it!