Build a company, not just a business

Originally posted at mattmunson.me. Subscribe here for regular updates.

When attrition is not an option

During a particularly difficult time in my last business, we laid off nearly 80% of our staff. We reduced the team size in order to buy runway in support of a major change in how we were selling our product.

The business was already doing over $1M in ARR and supporting dozens of customers. We needed to keep those customers in order to keep the business alive. We also needed to engineer our way away from a sales-driven customer acquisition effort to a fully self-service effort.

As leaders, we agreed if we were going to have any chance of making it all work we needed to retain our remaining team. If anyone left we were in trouble. And if there was an exodus we were doomed.

But these people had just been through hell. They had witnessed, or in some cases helped to plan and execute, the laying off of dozens of colleagues and close friends. Like many startups, our company was a close-knit team and for many employees their primary friend group.

In the days leading up to the layoff, I found myself obsessed with the question of how we would retain the remaining team. How could we get everyone to pull together, stick around, and see this herculean effort through?

The realization

I explored the question with my leadership team and cofounders, with trusted friends and advisors, with my coach, and even with my therapist. I do not remember exactly where the realization crystallized, but I remember that it did.

Somewhere in the years leading up to the layoffs, I had been exposed to the idea that a business and a company are not one and the same. We tend, in startup-land, to use the terms interchangeably. But they are not the same.

A business is comprised of a product or service sold to customers in exchange for money, attention, or some other form of payment.

A company is a collection of humans brought together around a shared effort or mission.

We speak a lot in startups about how to build a business: how to learn from customers, how to build a great product, how to test various acquisition strategies, how to raise capital, etc. But we speak very little about how to build a company.

Even when we do discuss culture, we treat it as an afterthought. A necessary complexity to be tacked on afterward once the business is working. Some mishmash of ping pong tables, free lunches, and paid vacation.

The realization that crystallized for me around the timing of that layoff was that I had for too long negated the building of our company. While the business had some problems, and while we had a plan for testing our way through those problems, we would only have a chance of keeping the necessary humans together (and hopefully thriving!) if we tended to the company.

The exploration of how to effectively build a company while building a business became an area of obsession for me. Over the 24 months following the layoff, we were able to retain that entire team and also to turn our $1M, cash-burning startup into a profitable $5M+ business without adding any employees. The investments in the company paid off big time.

As we later began to add team members, they were invited into a thriving company, not simply a growing business.

The cost of this error

Since later selling that business and transitioning to full-time coaching, I have witnessed a similar under-investment in dozens of companies.

I hear from CEOs who feel fully out of touch with the experience their employees are actually having.

I hear from leaders who feel burned out and unable to do their best work.

I sit at off-sites with teams of people who have worked together for years but who barely know one another and, as a result, do not trust one another.

These companies are leaving a massive opportunity on the table: the opportunity to get the most out of their teams. Not through longer hours or stricter turn-around times on projects, but through building a place where people actually give a shit.

The job of a CEO, and by extension the leadership team, is to:

  • Hold the vision
  • Recruit and retain the team needed to achieve that mission
  • Resource that team with capital, clarity, and care

I have written elsewhere about some of the practices that support clear vision and team clarity and how to raise capital. This post is largely about how to retain your team and how to create a company that cares for its people. I will share some ideas on what is needed to create such a company and also some practical tactics to get you started. If you would like support beyond this post, please feel free to reach out.

What is needed to build a company?

To build a company and not simply a business, or put differently to care for the humans involved in the business and to enable them to pull together as a team and really thrive, we need to create space for different kinds of conversations than those which happen in the weekly operations meetings.

While team happy hours or fun offsite activities can be helpful in creating space for a team to get to know one another outside the day-to-day work, these activities are often helpful but insufficient in allowing a team to achieve real intimacy and alignment.

To create real intimacy and alignment, we need to create a different kind of space. And we must provide some structure around that space. A team needs space to explore and discuss the human side of the work. There needs to be time for feedback on how we are working together as a team.

A high-function team needs time to discuss how we are or are not living up to our values and the changes needed to facilitate more consistency.

To achieve real alignment between the company and the business, a team needs time to explore how they might better align the company they are building with the lives they desire to live.

All of this of course begs the question of how. So let's explore a brief menu of options to get you started. Below are a few of my favorites, variations of which I have seen work well in my own companies and in those of many clients.

A few practical tactics

Shared language

A helpful starting place is to separate out in your own mind and in internal communications, just as I have done above, the concept of the business and the company. You might introduce the differentiation to your leadership team, your board, and your employees in order to establish a shared vocabulary going forward.

As you do so, you create the opportunity for distinct discussions and experimentation on what is needed for the business vs. what is needed for the company.

A different kind of weekly meeting

The next helpful step might be to try separating efforts aimed at running or scaling the business from efforts aimed at running or scaling the company.

You likely already have some kind of weekly operations meeting aimed at things like checking in on key metrics, reviewing work accomplished, eliminating blockers, etc. But if you are like most teams I meet, you likely do not have any weekly time aimed at connecting and supporting the humans involved.

In addition to any operations meetings, it is helpful to set up a dedicated company check-in once per week. I am a fan of end-of-day Thursday as people are often traveling Fridays, but schedule as you like. The agenda may look something like this:

  1. Check-in
  2. Gratitude
  3. Values shout-outs
  4. How can we work better as a team next week?
  5. Any other open questions about anything?
  6. Closing: most looking forward to next week

Here’s how it works:

  1. Check-in

For starters, it can be helpful to do these kinds of meetings sitting in a circle if your team size supports it. Or on video, if needed. (If your company is too large to support a close conversation, you might split into smaller groups and find a way of rotating who is present in each group so there is some cross-pollination of conversations and relationships throughout the organization.)

For check-ins, I am a fan of a simple red, yellow, green check-in which I have written more about here.

The goal here is to hear how everyone is coming into the time. People are welcome to share details on their color or not. Often what happens as trust and openness grow is team members will share details on what has them feeling particularly green or particularly yellow or red. This can be a highly effective way in helping people get to really know one another beyond the work.

If someone checks in yellow or red, the facilitator or anyone else on the team might ask “how can we support you”? The person sharing is welcome to state that no support is needed or ask for whatever they would like. When support is helpful, this creates a powerful and practical way to begin establishing the team as a place people can find actual help with the challenges they are facing.

For example, we might learn that one of our engineer’s kids broke her arm and that sending the family dinner would be helpful to ease the stress of the week.

2. Gratitude

The second time around the circle, or popcorn style if you like, you might invite gratitude check-ins. I like to ask people to check in with one thing they are grateful for at work and one thing outside of work.

This has two benefits. First, it is an additional space for people to learn about what is going on outside of work for their teammates which helps facilitate intimacy and trust. It also helps build resiliency. Startups are fucking hard. Sharing and receiving gratitude helps bolster a team.

3. Values shout-outs

This is simply a time for any team member to acknowledge any other team member who has done a great job of living our values this week. It is a helpful way to make our values an active part of the regular conversation rather than simply words on the wall.

It can also be a space for raising concerns about where we are falling short on our values or any actions or decisions taken recently which did not land quite well with anyone on the team.

4. How can we work better as a team next week?

This is probably my favorite part of the agenda. I like to ask this question and then simply leave it open.

It can be helpful where needed to allow for some silence or contemplation here. When I am facilitating any kind of group work, I will often warn the group that I am a big fan of silence and will be leveraging silence to ensure people get time to think and to really share. Be ready for that here and if you like provide your team the same warning!

Over a few weeks, as your team gets accustomed to this question being asked, this space has the potential to be a time where anyone can bring any concern or conflict from the week into the group.

This is also a time for us to check in on how we have agreed to work together and note anything that can be done even better.

This can also be a powerful place for addressing frustrations. As a coach, I often hear leaders complain that much of their week is taken up by people dropping in to their office or into their inbox in order to complain about something that someone else on the team said or did. One of the goals of this space might be to create a trusted, shared space to bring any such concerns.

As a leader, you might invite people where they feel comfortable to bring their concerns openly into the group. (Or perhaps to handle anyone on one-on-one concerns directly with the individual they have the problem with, but any broader concerns with the team dynamic in this open forum.) It is not easy to achieve this level of openness and trust, but you can get there with some practice and the impact on your calendar can be profound.

5. Any other open questions about anything?

This is a catch-all. I will often invite people to ask me or the leadership team any questions on anything they like.

It is an open space to ensure that anything anyone is unclear on has time to be addressed.

6. Closing: What are you most looking forward to next week?

This last piece is a way of closing out the time and further supporting connection and optimism.

The invitation is to go around the circle and simply share, for the coming week, the thing to which you are most looking forward. It could be at work, at home, or both.

This piece tends to also give the meeting a positive, connecting close.

Again, there is no right way on any of this, but hopefully, I have given you a few fun things here to experiment with.

Dedicated offsite time

If your team has a practice of company offsites, it may be helpful to divide the time in two with half focused on business building and half on company building. I love to do quarterly, two-day offsite where the first day is focused on the business and the second day is focused on the company.

For a company-focused offsite day, you might leverage longer-form versions of the elements noted above for company-focused weekly meetings.

Below are a few other tools you might try out:

  1. Provide an hour for the team to openly brainstorm and discuss the following question: What would it take for you to be excited to spend the next 10 years on this mission with this team?

This question provides a way for the leaders, and everyone else, to learn about the kinds of changes that would support deeper alignment between the work people are doing and the lives they are living or desiring to live. You obviously cannot implement every idea, but you might find some real treasures that have a profound impact on preventing burnout and helping your people do their best work.

2. Check-in on working norms

How well is the way we are working together supporting us doing great work? Where are things like Slack interruptions, too many meetings, or other unhelpful work practices getting in the way of us providing more value to our customers?

Poorly run companies never talk about their working norms. Well-run companies make their working norms explicit and invite revision and evolution.

3. Partner walks

Invite team members to break into partners with someone they do not know super well. Provide a prompt for sharing (such as: What would you most love to experience in your life or work in the coming year?) Set a timer for 20 minutes; then instruct each pair to walk “out” for 10 minutes and then “back” for 10 minutes with a different partner sharing during each direction.

When back in the group, go around and have each person share the key things they learned from their partner’s sharing. You might use this discussion to identify opportunities to evolve the way you work as a team.

4. Origin stories

If you are looking to help a new team get closer with one another, this is a powerful tool. Take turns sharing the following:

  • Your full name
  • Your parents' full names
  • Your place of birth
  • Your place in the birth order
  • One challenge you overcame in childhood

This may sound a bit funny, but learning these personal details about one another has a powerful, subconscious effect on a team. We immediately feel closer to one another. And the final question can provide profound insights into why each of us is the way we are. If you doubt it, try it. And feel free to drop me a note and let me know how it goes!

There is no right answer on how to structure company-focused offsite time. These are just a few ideas. Feel free to brainstorm your own and invite your team to brainstorm what they would find most helpful. Or, if you would like some help with design or facilitation, let us know.

The potential return

The return on investing in your company, and not only your business, is profound. If all of this sounds new and messy, that is totally ok.

There is no perfect in any part of startup building, and there is no perfect here. It is ok if your early efforts feel a bit disorganized or uncomfortable. Every step toward building a strong company will pay dividends.

If I can support you in any way as you explore how to build a place where you and your people can thrive, please reach out.

In the meantime, wishing you connection and ease; I know the days can be long and the road difficult.

Matt

Originally posted at mattmunson.me. Subscribe here for regular updates.

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