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I have been to thousands of board meetings. Maybe tens of thousands. I’ve done them in person, on the phone, and on video conference. Most of the time I think I’m additive to the mix. Yesterday I had a board meeting (where I was remote on video) where on reflection I was a lousy participant and miserable contributor to the meeting.
I had a really nice dinner with a founder of a company that was recently acquired by a company I’m on the board of. I vented a little about the board meeting to him at the beginning of dinner and then he asked me questions about how I think a great board meeting should work. As I was talking and explaining, I realized the board meeting wasn’t crummy. Instead, I was lousy. So when I got home, I sent the following note to the CEO and the largest VC investor in on the board (who I view as the lead director for this company.)
Dear CEO, Lead Director:
Post dinner, I thought I’d drop you another note. Please feel free to share with the entire management team if you’d like.
I thought I was a shitty board member today.
1. I was late. My brother had surgery today so I had an excuse, but that set a crummy tone.
2. I was painfully bored by the first 90 minutes. I let myself get frustrated as you read us the board package. I know some board members like this and while I don’t, that’s my problem, not yours. You get to run the board meeting however you want.
3. I was annoyed with my lack of clarity on what you were looking for.
4. I let myself get distracted. Rather than pay attention, I drifted to email which I hadn’t been on all day. The mediocre audio wasn’t helpful here, but again that was my problem. I could have paid attention.
5. I then got very frustrated with what I thought was a “let’s go raise a bunch of money thread” which I couldn’t tell where it was coming from, but I presumed that there was some positioning going on. I shouldn’t have. But I let that + my general annoyance derail me.
I’m sorry. I know I wasn’t helpful today.
So you are clear about where I’m at.
- I’m psyched about the progress you are making.
- I’m totally comfortable with you running hot at an $xxx net burn rate for the balance of the year. You’ve got plenty of money.
- When I’m bored in, or annoyed with, a board meeting, that’s my problem in the moment to deal with, not yours. You’ve got 14 people in the room / on the phone and that’s more than any human should have to try to process.
- You and <your COO> have my full, unambiguous support.
We all have off days – when you have one – own it.
In my new book, Startup Boards: Getting the Most Out of Your Board of Directors, in addition to decomposing and explaining a lot about the functioning of board meetings, I also describe my ideal board meeting.
I had four of them this week. That’s a lot of board meetings in a week, but my weeks tend to either be “lots of board meetings” or “no board meetings” as I generally bunch them up. Thankfully, all four of them used my ideal board meeting template.
A critical aspect of my ideal board meeting is that the entire board package should be sent out several days in advance to all board members. It should be thorough, including whatever the CEO wants the board to know about what has happened since the last board meeting. While I prefer prose to a PowerPoint deck, either is fine. Optimally it’s in a format like Google Docs where everyone on the board can comment on specific things, allowing open Q&A on the board material prior to the board meeting. I like to decouple monthly financial reporting from the board package, but including a look back of the financials, along with discussion and framing is useful. But the meat of the board package should be what’s going on now and going forward, not looking back. The looking back is for support of the discussion.
Then – the board meeting has a simple structure intended to fit in three hours. Optimally all participants are either in person or on video conference. Since I’m not traveling for business right now, almost all of my board meetings have a video conferencing component. When done correctly, it’s often just as effective as an in-person meeting, and in some cases (if you follow my video conferencing rules) even more effective. What is not effective is when one or more people are on an audio conference.
Once everyone is settled, break the board meeting into three discrete sections. They, and their descriptions, follow:
Administration (30 minutes): Board overhead, resolutions, administration, and questions about the board package.
Discussion (up to 2 hours): Discussion on up to five topics. The five topics should fit on one slide or be written on the white board. The CEO is responsible for time boxing the discussion, or if he needs help, he should ask the lead director to do this. If you don’t have a lead director, read my book and get yourself one. This should be a discussion – you’ve got your board in the room – use it to help you go deeper on the specific topic you are trying to figure out. These topics can be on anything, but my experience is that the more precise the context is, the richer the discussion. I prefer for the full leadership team to be in the meeting for this part, although it’s entirely up to the CEO who is in the room.
Executive Session (30 minutes): CEO and board only. Here the board can give feedback specifically to the CEO or sensitive issues around personnel or other things the CEO wants to discuss separately from the management team can be covered. At the end, the CEO leaves and let’s the board have some time alone where the lead director checks in if there is any feedback the board would like to give the CEO.
If you have less than five topics, the board meeting can take less time. Or if the five topics only take an hour to go through, the board meeting can take less time. There is nothing ever wrong with ending a meeting early. Ever.
Now this template doesn’t always work – you often have other specific things you have to address. When a company is going through an M&A process, the board meetings tend to be frequent and cover other stuff. Or, when the company is in a downward spiral, or dealing with a crisis, the focus is often very precise.
But in my world, the day of the “board update” is over. I find no value in sitting in a room for three hours, paging through a PowerPoint deck while people present at me, and the people around the table ask an endless stream of questions, mostly demonstrating that they haven’t been engaged in what the company has been doing since the last board meeting.
I joined my first board of a company other than mine in 1994 (NetGenesis). Since then, I’ve sat on hundreds of boards and been to a zillion board meetings. It crushes my soul a little to think of the number of board meetings I have sat through that were ineffective, poorly run, or just plain boring. I guess that’s part of the motivation I have in writing Startup Boards: Reinventing the Board of Directors to Be Useful to the Entrepreneur (the next book in the Startup Revolution series which should be out sometime this summer.)
In the mean time, over the past two years I’ve done a lot of experiments with the boards I’m on. I’ve tried a lot of different things – some that are awesome, some that don’t matter, some that suck, and some that have been epic fails. For any that aren’t awesome, I’ve tried to kill the experiment quickly so it didn’t hurt anything and when I reflect on everything I’ve tried I think I’ve managed to “do no harm”, which is more than I can say for a lot of the other VCs who I’ve sat on boards with since 1994.
By this summer, I expect I’ll have a very clear view on the best practices from my perspective for making a Startup Board effective. Until then, I’m still running experiments, or experiencing experiments that the entrepreneurs run. And I’m thinking out loud (including in posts like this) on what has worked and hasn’t worked.
One of the things I’ve played around with is the board package. The number of different formats, styles, information incorporated, and distribution methods over the years boggles my mind. I not-so-fondly remember toting around “binders full of board meeting material” in the 1990s. Or pre-Gmail having a “board meeting folder” in Outlook so I could quickly find the upcoming board meeting documents. Or fighting through 19 attachments to an email to figure out where the actual board material was. PowerPoints, PDFs, Word documents, text files, Excel spreadsheets, Prezi docs, videos, email outlines – the list goes on.
Recently, I had a magical moment. I’m a huge believer in distributing the board material a few days in advance, having all the board members comment on it in advance of the meeting, and then having the meeting without going through the board material page by page. No death by endless Powerpoint, no reading a document I’ve already read. My favorite board meetings are the “one slide board meeting” where the only piece of paper allowed in the room is the agenda of the meeting.
When entrepreneurs don’t get this, I suggest that they pretend their board members can read and cognitively process the information in advance. And, if they don’t believe their board members will do this, just start having the board meeting under this assumption and watch how they board members get their shit together and read the material in advance.
In this recent magical moment, rather than receiving anything via email, a Google Doc notification showed up in my inbox. I went to it and the entire board package was in a single Google doc file. The entire management team and the entire board was included on it. As I read through the Google doc, whenever I had a comment or a question, I highlighted the section in question, hit Command-Option-M, and left a comment. Then, as other people read through the package, they left comments. And then the management team responded to the comments.
Voila – an interactive board package. Zero special technology. It wasn’t planned, or assigned. It just naturally happened. When we showed up to the board meeting, everyone had the issues in their mind. We’d already cut out an hour of setup, and probably another hour of discussion. So we got right down to the higher level issues that the board material, and comments, and the responses generated.
In this case, the CEO created a very simple agenda immediately before the board meeting that captured the strategic issues we needed to address. There were a few tactical questions outstanding – they got knocked off quickly. We had a two hour board meeting – 90 minutes of it was intense and fruitful. No one referred to any paper – we looked each other in the eyes for 90 minutes and had a deep, engaged, substantive discussion.
I’ve been describing this as a part of a “continuous board engagement” – similar to “continuous deployment and continuous innovation” in Eric Ries’ The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. I get information daily from most of the companies I’m involved in. I’m in the flow of a lot of information – some “noise” but a huge amount of “signal.” Then – the week before the board meeting, the current state of things gets consolidated into a dynamic document that allows everyone involved to interact with each other around the content.
I’m going to play a lot with this in the next few months. Any suggested tweaks or changes to this approach? Any obvious pitfalls?
I’ve been writing about boards of directors some lately – both changing my behavior as well as thinking out loud as I explore reinventing how boards work for the book “Startup Boards” that I’m working on with Mahendra Ramsinghani. All fit in the context of continuous communications as I believe three things about early stage companies and their boards.
1. Board members should be actively engaged with the company on a continuous / real time basis.
2. Existing board meeting dynamics are often an artifact of how they’ve been done for the past 30 years.
3. The way most board meetings are currently conducted is a waste of time for management, significantly inefficient, and generally ineffective.
One of the very simple tactical things I’m shifting to is a totally different board rhythm. Historically, many of the companies I’m involved in have been on a board rhythm of meetings every four to six weeks. As they become more mature, these board meetings shift to quarterly, although many of them have mid-quarter update calls. The board meetings themselves are long affairs (even the monthly ones) – often lasting three or more hours.
At some point I’ll dissect one of these board meetings and explain all the things that are artifacts of the past. These artifacts are a result of the communication methods that existed 30+ years ago that required paper and face to face meetings and resulted in very structured communications. But for now, I’ll give you three specific things to change.
1. Separate the monthly financials from the board meeting. Send out monthly financials (Income Statement, Balance Sheet, Cash Flow) with a written analysis of them. This written analysis should be done by the CEO (or president / COO), not the CFO, and should be in English, not accounting-ese.
2. Have quarterly board meetings. These should be in person meetings with no laptops, smartphones, or iPads in the room. Give the people pads of paper to write on if they don’t bring their own (I don’t carry paper). 100% attention for the meeting. Arrange the meeting so you can have a dinner the night before or after the meeting. The meeting shouldn’t last more than four hours but should be fully engaged.
3. Provide regular weekly CEO updates, to all board members. The best entrepreneurs I know communicate regularly with everyone in the company and have a structured update process of some sort. The best CEOs send out short but focused weekly updates to their boards. These are not “templated updates” – they don’t necessarily fill in a set of things that they update each week. Often they are just a “sit in front of the computer and send out an email update” type of update full of substance, whatever is on the CEO’s mind, and requests for help. My favorites have typos and look like a blog post of mine (e.g. it looks like someone just wrote it rather than struggled over it for hours to get it just right.)
While my 2012 board meeting schedule is locked in, I plan to shift to quarterly meetings in 2013 for every board I’m on. I’m sure some of my co-investors will still want monthly meetings, but that’ll be up to the CEO to ultimately decide and I’ll commit to being in person for one a quarter, but fully engaged on a continuous basis (like I try to always be.)
I love getting post board meeting emails that are retrospectives from execs in the meeting. This one came a week ago from Jeff Malek, the CTO and co-founder of BigDoor. They’ve been on a tear lately and are in the process of a massive set of Q1 launches for new customers.
We had a solid board meeting, but I suggested they were being too casual about a couple of things, including communication about what was going on. This is NOT a casual group and I knew using the word casual would press a few buttons. And they did – the right ones. Jeff’s retrospective is awesome and he was game to have me share it with you to get a sense of what’s inside a CTO’s head during and after a board meeting.
I have a retrospective addiction. But as a result of looking back at our meeting today Brad, words like ‘casual’ still ringing in my ears, I recognized I’d let some of my own assumptions drive away potential opportunities, maybe even creating some problems along the way. I’ve always run under the assumptions that :
- your inbox is an order of magnitude more onerous than mine (quite)
- the best way to respect and value your time would be to limit email/communication
- you and Keith have regular communications complete with bits about what I’m up to and thinking
- you know even in the absence of communication from me that I’m working like a madman, doing everything I can to make it happen
- you also know through some process of osmosis how much I value you, Foundry, your approach, feedback, etc
Just so you don’t get the wrong idea, it’s not that I took your feedback and concluded that I needed to give you more BigDoor insight, or that you needed more info in general to get a better picture – that’s what the numbers are for.
So while all of the above assumptions are probably true to some degree, here’s the new protocol I’m going to start optimistically running under:
- thanks to your candor and aversion to BS, you’ll tell me to STFU as needed
- you’d like a concise ping about whatever, whenever from me
- you’ll give me feedback if/when it makes sense to, and I won’t expect a reply otherwise, unless I’m asking a direct question
- doing so is likely to benefit both of us, one way or another – hopefully more candid feedback will ensue
- you know that I value your time highly, and mine specifically in the context of devoting most waking hours to making BigDoor a success
- you know that I am incredibly grateful to know you and have you as an investor
Those are my new assumptions. I felt like giving this topic some time and thought, glad I did, will keep it (mostly) short going forward but hopefully you know a bit more about where I’m coming from, out of this.
Thanks again for the time today, I thought it was an awesome f-ing meeting. I always leave them on fire.