Zac Smith -Leading Leadership Teams
A big part of my work involves helping leadership teams navigate change — reorgs, product pivots, a round of funding and as leaders come and go. I wanted to talk with a two-time entrepreneur to understand how he thought about guiding a leadership team.
I’ve known Zac Smith for quite a while. He and his twin brother Jacob Smith came on the series earlier to talk about leading through an acquisition. Given his experience founding two companies, I asked Zac to come back to talk about how he thinks about hiring leaders and leading leadership teams. One thing that really struck me was the way his thinking has changed.
We talked about:
How founders might think about the right CEO
The three layers leaders need to navigate
The importance of personal user manuals for leaders
The benefits of taking time to communicate strategy regularly
Ensuring leaders are the right fit for what the org and business needs
How to think about the size and composition of the leadership team
SB: Always great to see you. Always, always, always. I know this is our second time here. We've known each other for, I guess it's been about, has it been five years now?
ZS: Thanks for having me. I think we're more on the decade side of the curve. It must be seven or eight. I'm going with that. No, the pandemic adds four or five years to everything.
SB: You and Jacob were here to talk about leading through an acquisition. I wanted to have you back to talk about leadership teams. Will you introduce yourself to folks?
ZS: Well, first off, thanks for having me. It's great to be back in round two. Ding, ding, ding. My name's Zac. I live in New York City. I've been here for, gosh, almost 30 years. I came to New York from Southern California where I grew up. And I dropped out of high school and I was 17 and decided I was gonna come to New York and be a musician. So I came here, was at Juilliard playing the bass, I thought I was gonna be in the Philharmonic or something cool like that.
It turns out that wasn't in the cards for me. But I just love New York, I love the energy of it, I loved the mobility that I had in terms of getting to meet people and see different things that I just wasn't able to have in my upbringing, which was great, but it was suburbia. It was relatively kind of closed about the people that I got to see and meet. It was totally different in New York.
Side note, I grew up in the eighties in Southern California and there was this public school program called Project Self-esteem. It's very odd. It was a hippie, 1970s thing in California. They took all of us out of class once a week and went to a workshop where they told us to do daily affirmations about how special we were, and that we could do anything. I had a T-shirt that said I am special. I think it ruined a lot of us, but in many weird ways it helped me when I was in New York, because I was like, “Oh, I'll just go introduce myself to this person or whatever.” That helped me out after Juilliard and switch careers. I decided I might as well go and try and be an entrepreneur and start a business, even though I knew nothing about it. I found my way into the world of cloud computing and data centers where I loved it. I loved open source. I love the community aspect of building companies. I love the global kind of diverse nature of the internet.
I built a few companies, made a lot of mistakes, learned from some of them, and tried not to make them again. It’s extremely rewarding, growing a few companies and selling them.
Over the past five, six, or seven years, I've started to invest in more businesses and more founders, which is something I really enjoy. I do a lot of that these days through a venture collective we call Humans of the Internet with my brother. I also participate in a few social impact causes. I chair the operating board of pursuit.org, which is an organization based out of Queens, where we help widen the tent to bring more diverse and non-traditional talent into the world of technology. So that's me in a nutshell. I still live here in New York, in Manhattan, with my two boys and my wife.
HIS FIRST BUSINESS
SB: Your background in founding multiple companies and your work investing in companies made me want to talk with you about leading leadership teams. How much thought did you give about leading a team of leaders before you became a CEO? Was it something you thought about?
Way back when I was starting my first business, I thought absolutely nothing about being a leader or being part of a leadership team. I just thought, well, I'm going to start this little small business and see what happens.
ZS: It's kind of interesting because I love to work around and with others. I’ve discovered that about myself. I love the dynamic of more people. When I started my first company, I partnered with another gentleman named Raj. We merged our companies and our leadership style became somewhat like co-CEOs. From a title perspective we weren’t actual setup that way, but we were two partners running a small business with 10 people. It grew to 80 or 90 people around the world which was relatively big for me at the time. We never really planned how we would grow that team. I don’t remember us talking about our leadership principles or anything. We had some natural alignments from a cultural and moral standpoint. We believed in transparency, we believed in doing the right thing. We didn’t write any of these things down or communicate them, they were just a natural part of how we worked together. But we had different styles about how to do that. The things that worked in a very small-incubated business broke later when we got bigger.
We didn’t realize until later that it had already broken – to the point where we almost went out of business crash and burn style, but when faced with that situation we ended up bringing in a new leader to be our boss. We had realized we needed to hire somebody who could form a team and figure out how to get us all working on the right things.
We had all this opportunity but we were just bumbling through it with the best of intentions. Everyone was working so hard, but we were just not getting what we felt the results should be. It was frustrating – to the point where I almost lost this friendship with Raj. Now we're well past that and great friends, but that was a tenuous time. I learned a lot through that first phase.
So when we brought this gentleman, Raul Martynek, in as our boss, I was struck by his very purposeful leadership style and his approach to the leadership team. Within the first day, he was asking, “What are we doing here? How are we running our leadership team?” I was like, “What do you mean how are we running? We always have stuff to do.” He instituted a strong concept of accountability that was important to him. He's like, “Do what you say you're gonna do. Let's write down the things that you are accountable for, and then you have to deliver those to this team” He had a strong cadence about how you report to each other when you meet. He felt leadership teams needed to be able to work together so they needed to get to know each other. Wednesday management meetings from 4 - 6 pm were non-negotiable. At 6pm you had to go to the pub with him to build a relationship. It was interesting because he was mixing in how we get our stuff done with how we understood each other. This meant more than the walls of the office or our work events, it was critical that we knew about each other's kids or what we like or social things or jokes or whatever. So that was good. That left an impact on me.
Way back when I was starting my first business, I thought absolutely nothing about being a leader or being part of a leadership team. I just thought, well, I'm going to start this little small business and see what happens.
STARTING PACKET
ZS: When I formed my next company my brother and I thought a lot about leadership. It wasn’t hey, we have this great idea, we should work on it. It was, we have this great idea to start a company and we wanna make it a great company. We thought purposely about how we were going to form a team and what we were going to do to make sure that we maintained it in a healthy manner.
We talked about who should be the leader. It was a somewhat sober assessment of our respective qualities. The quality that made me a good CEO for that company, Packet, was that I had a lot of domain expertise. It was a very product-driven company. It had a strong product vision. In a service provider business you need to be good at running the ships and trains on time and we felt the head of the company should have the strongest viewpoint of the product. The second aspect is that I like to be out in the world. We knew Packet was going to be a vision-focused business. We’d have to tell a lot of people our story because we were going against the trend. So those two qualities were my ticket into the CEO job.
I’m a super bad delegator. Like not good. Some people might call me a control freak but I probably internalize that as saying I’m simply very interested in the details. So m as CEO I had to learn things like how to let people do their thing in their own way, which is not natural to me. I also had to relearn my “from the hip” management style and be more purposeful.
So the first time I didn’t think about leadership style much at all. The second time I thought about it a ton. Because of that, we had a much stronger and healthier organization. We also solicited a lot of outside help from the beginning. It's hard to work on yourself while building a business. So sometimes you need some help doing that.
SB: It’s a perfect story to illustrate. Founders often just think about the business. I think of three layers that leaders need to navigate. The function or area, what we’re responsible for. Connecting what we’re responsible for to the business. The thing leaders often forget is the organization – the leadership team, how we’re going to work together, and everything that surrounds the work. I think a lot of us miss the org layer aspect of our work.
That’s what I think you’re speaking to. The first time you didn't quite think about that. You had somebody who really thought about that and showed you what that was like so that you could think about it more purposefully in the future, right?
We talked about who should be the leader. It was a somewhat sober assessment of our respective qualities. The quality that made me a good CEO for that company, Packet, was that I had a lot of domain expertise. It was a very product-driven company. It had a strong product vision. In a service provider business you need to be good at running the ships and trains on time and we felt the head of the company should have the strongest viewpoint of the product. The second aspect is that I like to be out in the world. We knew Packet was going to be a vision-focused business. We’d have to tell a lot of people our story because we were going against the trend. So those two qualities were my ticket into the CEO job.
ZS: Yeah. When we started Packet, we knew we wanted to build a purposeful, meaningful company. We weren’t just going to try to make some stuff. We wanted to make a company that was going to lead its industry. If we’re going to do that, we were going to need to create ripple effects that would go well beyond what we could touch directly.
The thing I’m most proud of is that the organization that I helped found over 10 years ago is still functioning and growing today without me. Many of the principles are the same. Some have changed and evolved - which is awesome and makes me proud.
Building an organization is very different versus how you build a product. At Packet, we knew we wanted to build something that was going to be a purposeful and lasting organization. You have to start with a baseline approach of how you’re going to build management and your leadership team because it’s going to ripple from there.
You can’t have a disorganized core that magically fixes itself as it scales. That almost never happens. Maybe that happens by accident — I guess all things are possible — but from my experience probably not the usual outcome.
LEAVING PACKET
SB: I want to go back to what you said about the two of you realizing that you needed someone else to come in to lead. This is common. What we need in leaders changes at different phases. We might need different people to lead the company. When leaders leave a company people think something is wrong. In my experience, it’s often that they’re no longer a match for what they bring to the table and what the company needs.
ZS: Yeah. During my first transition from Voxel, the company Raj and I built, we both almost had nervous breakdowns when we left that business because it was so much a part of our lives. We weren’t ready for that transition and it took a major personal toll when we left it. This past June when I left Equinix (after selling Packet to Equinix in 2020), I had spent 3 years integrating a startup into a much larger Fortune 100-ish company. I was leading a big division and decided it was no longer a fit for me. I loved the people. I loved what we were doing. I loved our customers. But where I was best as a leader was not as a multi-matrix integrator of a unit within a large organization. I know I am best when I can think outside the box and move things outside of the realm of structure. That kind of out-of-the-box thinking wasn’t a right fit within such a large company and, frankly, could be disruptive. I thought, “Oh, wow. This is probably not the right time for me as the leader here.” I knew someone else could do way better and that the leadership team needed to change. It was hard for me to recognize that at first, but having outside eyes (my mentors, coach, etc) to help me reflect on what the company needs and what I was good at was super helpful.
Building an organization is very different versus how you build a product. At Packet, we knew we wanted to build something that was going to be a purposeful and lasting organization. You have to start with a baseline approach of how you’re going to build management and your leadership team because it’s going to ripple from there.
SB: I love that. I want to go back to what you said about starting Packet. Did you think about what the team would look like after Series A, Series B, etc or did it happen more organically as you reached other milestones?
ZS: There's the famous South Park underwear gnome story. Are you familiar with it? No? Okay. I’ll preface it for you. Kyle loses his underwear and he doesn't know where they're going. Finally, they find that these little gnomes are stealing them and they put them in a big pile and ask the gnomes, what's going on? (Because they got all the little boys' underwear.) So they say, “We're working on the plan. The plan up there says number one, steal underwear, number two, question mark, number three, profit. We're still working on number two”
So it’s like we’re doing the thing but we’re not sure what goes in the middle but toward the end…unicorn, rainbow, kittens. We started Packet with what my brother says, default alive vs default dead. So we were going from, we have this crazy idea to start a company that’s completely world changing and how we do it. Shall we try? Well, let's get to the stage where we're not dead, right? Because when you're super early as a company, all the things are against you. Everything's not figured out. You have to get to the point where you even have a chance of long-term survival. So we had to do that first and that was a known and clear phase for us. We're gonna be able to figure it out and prepare ourselves as a team to go through a whole bunch of weird changes. As such we organized ourselves for agility. We wanted to be able to make decisions because we had six to nine months of oxygen so we had to figure things out quickly.
Once we figured that out a little bit then we had to dig in with more grit. We had to think about what it was going to take and how we were going to get there. Then we went and did the thing. I knew we would get through those. I didn’t know exactly which progression it would get to but I’d learn some things watching Raul come in and help us organize the Voxel business. I learned about how our valuation had gotten cut in our acquisition process because we didn’t have this document together or that some legal process wasn’t done properly during the early days of the company. Simply put, we hadn't built Voxel as a business that could be easily bought. But with Packet, we knew we wanted to build a generational company but that it probably wouldn’t live on its own. It would probably become part of somebody else’s business. So we had to prepare for an eventual sale. We called it data room ready. It was having the docs and everything buttoned up every day. We closed our books every month ready to be acquired or to raise money no matter what.
But also organizationally, everybody here should be replaceable, right? As my dad says, “The cemeteries are full of irreplaceable humans.” We're all replaceable in that regard. And that meant let's document things well, let's build cultural institutions, let's build habits throughout the organization versus just force of will of individual humans.
Let's make sure that the leadership roles are not about people, but about the jobs that need to be done. Oftentimes you're like, “Joe will do that because Joe's great at that and then we'll form the role around Joe.” We wanted to build an organization that had a leadership structure. I can't say we were always successful because you always make trade-offs. Like, should we hire a great CFO, but we don’t have any money. So I guess we’ll just hack our way. So there were trade-offs along the way but we did at least think about that third phase which is this will get acquired or raise more capital where we won’t be the majority owners. And it is very possible we won’t be here.
SB: Leaders will come to me and say, “I don’t think I'm a fit for this role anymore.” Sometimes they wonder if they did something wrong. My response is “You didn’t do anything wrong. Maybe you did everything right. We forget that organizations are living, breathing entities. They’re not. People change, and the organization changes.
HIRING LEADERS
SB: How did you decide to bring in new functions? What did you consider when you hired senior leaders?
ZS: First and most important is to be super crisp and clear about the values of the organization. People can learn new skills, and you can move people around, but it’s really hard to adjust people’s value sets. We had a couple of strong, purposeful values at Packet that really helped us. One of the things we did was read the mission statement to anyone we were thinking of hiring. You can fall in love with people because they have certain skills but you have to ground on that. One of our leadership coaches, Steve Smolensky, told us to start every interview by reading the mission statement. He said half the people will say that’s not for me.
Ours went something like “We aim to lead this entire industry..”. . That means you have to work your butt off to figure out all these new, hard problems. Not everyone wants to do that. Some people want to leave at five o’clock every day. The way we put that in was, we are extremely passionate about leading our industry. That was not a “nice to have” - it was hugely important to us. So you were going to find a lot of passion and a lot of emotion going on at this organization.
There were a couple of values that were good "tells" such as one about being community-minded. We wanted to invest in our ecosystems and the people and communities around us so we did a whole bunch of stuff for free. So we’d ask questions about these value systems – which ones resonated? It worked out so well. When we skipped over that stuff we ended up with some good people but just not right for the organization. So it was a super helpful construct for us to be super clear on our mission, what we’re trying to accomplish, and then our values.
The other thing, especially for a senior leader, was getting people who subscribe to our accountability. So not just being clear about the job you’re going to do but the accountability you’re doing to have, that the leadership team is going to count on you for. We followed a framework called EOS which says the right person, in the right seat, at the right time of their life to do the job you're asking them to do. We’d ask ourselves, is this the right person? Are they in the right time of their life to do the job we’re asking? Did they have the capacity to do it at this time of their life? Maybe they were the right person 10 years ago but now they have three kids and we’re asking them to be on the road all the time.
SB: Love this. How much did you look at things like their previous expertise or whether they’d worked at this phase of business before? Did you consider those things?
ZS: It would certainly make us ask the question a few more times but we didn’t want to be too biased in that regard because it’s possible for people to have worked at larger organizations and want to try something different. They had to be comfortable scrubbing toilets so to speak. So when we interviewed people from a large corporate coming into this 20-person startup we asked about other areas where they were comfortable being hands-on. It’s cool to be part of a brand new startup but do you really want all the things that come with it?
Otherwise, I never really cared too much about skills. I'm an awful interviewer for that. I think skills are important, but we weren't interviewing for brain surgery. It was context, awareness, cultural fit, etc. Then, of course, you need to have the right kinds of interests. That was probably the biggest part of interviewing any one of our senior executives. If you haven’t logged in and used our platform or bothered to try our product, you’re probably just puffing hot air. It worked out almost every time that way.
SB: I think people overemphasize leaders being an expert in a function. That gets you into senior leadership but other things matter more than those functional skills. There’s a lot more that surrounds it.
ZS: (laughs) If others interviewed me that way, I would have never been hired as the music major graduate for many jobs. Honestly, I never thought about it in that regard but did see as a requirement that you were interested and curious. You had to want to learn. When I was at Equinix, I had a talent acquisition partner and I guided him during a senior leader hiring process to filter out candidates who hadn’t used or logged into our platform. We had a SaaS platform that anyone could just log in and try. If they haven’t bothered to do that, do you believe that they really want this job or were interested in more than just a paycheck? I felt that leaders would need to have the core value of being passionate about leading our industry. In simple terms, you didn’t need to know everything, but you had to want to learn more.
You can suffer from having a lot of strong personalities. That can get over-indexed. You have to rely on frameworks whether that’s outside coaches or a manual about how you run things that allows and encourages different types of personalities to participate. Otherwise, a lot of times senior leaders are senior because they take the microphone, they do things, they get stuff done and that’s great but it can often mean that you’re self-selecting in or self-selecting out certain people. I had to be aware of that.
LEADING LEADERS
SB: What do you find trickiest about leading senior leaders?
ZS: You can suffer from having a lot of strong personalities. That can get over-indexed. You have to rely on frameworks whether that’s outside coaches or a manual about how you run things that allows and encourages different types of personalities to participate. Otherwise, a lot of times senior leaders are senior because they take the microphone, they do things, they get stuff done and that’s great but it can often mean that you’re self-selecting in or self-selecting out certain people. I had to be aware of that.
I learned this from David, the founder of a company called Better Cloud. He gave great advice for a CEO to write a user manual. That user manual was your interface about how you work best. One of the things in my user manual, which we published on wiki and everyone could read, was that if I’m asking you about something it’s not because I don’t trust you and more that I’m just super passionate about it and I care deeply about how things work. Another thing was I can get very excited and start talking about stuff. The user manual said that everybody was completely, 100% invited to tell me to shut up. So I had my user manual and encouraged other strong leaders to have that as well because otherwise, it could take a while to get to know each other and your personality can get in the way.
I would say some practical concepts on how to do this are identifying and understanding people’s personality types, what motivates them, and how they work. And then making sure that they can do that within the values and culture of the organization. You don’t want five CEOs, it’s really important to have one. It doesn’t have to be the same one forever but it has to be one person who sets the constructs that we want to operate under. And the tiebreaker needs to be the CEO. I’ve seen some other leadership teams that have gone so far that they’ve given up the role of CEO. They’re like “What do you all think about everything?” It’s like, “We want you to make the decision”. My take on it is that’s why you’re the boss – that we need and want you to make the call on things so we can move forward.
It’s important that you know the construct of the leadership team so that decisions get made. I also believe strongly in this servant-leader approach. I’m like that shuffleboard guy, right? How do I sweep the puck in front of you? What do you need me for? What can I do so that you can do the absolute best work of your life? Do you need more resources? Are you confused? Is the strategy changing, what do we need to do? So making sure that with a great leader, they can move fast and build amazing things. If I hired the right person, they didn’t need me to check on their work. What they needed was me to unblock them across different parts of the organization. So I focused most of my time trying to give them that space and be the unlock for them. That last part served me well.
I didn’t spend enough time on it but when I did, gosh, what helped me was just writing stuff down. Taking time to write the revision of our five-year plan – this is where I think we’re going. I spent a good amount of time on it, but I always felt that could be more. Writing things down allowed good leaders to really swim out for it. They could take that additional context and could move ahead. So spending more time writing down good strategy and refreshing it regularly was something that paid off in droves for my senior leaders. They could take that and be like “oh, that's where we're going. Let me go, you know, add a whole bunch of leverage to that”.
SB: So important. What's your philosophy about leadership teams, or do you have one?
ZS: I don’t know if I have a great quote. I do believe in a framework. I don’t think it matters which one. Build a framework, use a framework, there’s a bunch out there. Stick with it. I don’t believe most leadership teams are naturally born great and that they evolve all the time. So having a framework to get through changes is really useful. At Packet, we had a coach, Steve, who said instead of working in the business, you gotta work on the business. The most important thing about working on the business is to work on your team. Have scheduled time, have a way to do it, and make sure you don’t forget about it because it will always be last. What do they say? The completely urgent but not important things will hit you today. This will get delayed. Having the wrong leader in the wrong seat isn’t urgent but is so vitally important to get right. You gotta have a place to deal with that in a way so that you don’t become overwhelmed with the super urgent but not important stuff of the daily running of a company.
Then, be honest with yourself. I mean, me as CEO. I’ve been thinking about my next phase. I love supporting other leadership teams but I’d much rather be the leader. I love it. I love to work. I love to “do”. I was listening to a podcast from Brian Chesky, CEO of Airbnb. He said that he got away from the product for several years. In the name of empowering leaders, he was not doing the thing that he was best at, which is probably the single most comprehensive, thoughtful product leader at Airbnb. He removed himself from all of that. I also saw that Mitchel from Hashicorp recently left after being co-CEO, then CTO, and then being an individual contributor engineer for the past few years because he knew that’s what he did best. That he was a really good engineer and wanted to be on the engineering team committing code, not trying to be a CEO. For me, I love to be part of the product vision, leading the product. So if you’re a CEO building a leadership team or you’re on a leadership team, you don’t have to stick to some perceived notion of what a good team looks like. Figure it out, and make sure that’s going to work for you. Be honest with yourself. Are you making a big compromise? Are you just trying to fit around it or is this what you’re born to do?
For me, a product-led CEO role is great and I think can be really good for the organization. I personally love to do that role, but it isn't for everybody. Lean into that if that’s really what you do but I would question yourself. Are you really the best person or are you just a control freak? Do you just want to be the product person, not be the CEO? Just be really honest and have some help around you to pressure test that.
SB: It’s a good point because CEOs can be internally focused or externally focused. They can be big team builders. They can be all sorts of things. It varies according to who you are, what you bring to the role, and what the org and business needs at that time, which will change later.
ZS: Yeah, I think, for example, if you had put a much better CEO from a running a company standpoint in charge of Packet in 2015, Packet would have died. We needed someone with an abnormal amount of, “We’re going to figure this out. We’re going to look at it from all angles.” I obsessed about it. It was necessary to pull the company from probably being dead to not being dead and then surviving.
That’s why at Series B or C when we were acquired as a public company, I was probably not the right person for the job. We weren't gonna die, but what we needed to do was figure out how to scale from 300 people to 1000. I was like, that sounds awful. I don’t wanna do that! However, for some I’m sure that sounds amazing.
SB: We don’t think enough about what leaders want to do. Do they want to do this particular phase of business? A seed-stage startup is so different from a Series B. They’re completely different animals. You need different kinds of leaders.
ZS: Yeah, or somebody has to be able to make that transition and know that it’s possible.
LEADING LEADERSHIP TEAMS
SB: Right, exactly. You have to be intentional about the team and the people who are at that table. Was there ever a point where you felt like the leadership team wasn’t as gelled as you wanted or was pulling at the seams a little bit?
ZS: Yeah, all the time. If you’re in sports, music, acting, or that kind of thing you’re used to doing self-criticism. I was ok with the idea that everything needs to be better all the time. I never once had a teacher at Juilliard say, “That was perfect.” They would say “Not bad, but you can do better”. We were always focused on the journey of improvement. You’ve got to be thinking you’re a work in progress. So from that perspective, one thing I find useful for leadership teams is to rank themselves every quarter. What’s the health, how are we doing business-wise? I found it a great practice to rate ourselves 1 to 10 about how we felt. It oscillated. We had a couple of really rough patches which often coincided with other big changes in our organization. Or things were happening in people’s lives. There was a time when three members of our team were going through really big health issues. That severely impacted their ability and meant that people were carrying different weights. That was hard. And so we had to make some changes along with that while still honoring our people.
Then we had other things that changed the business dramatically like we were too early on some go-to-market things. I was waffling after our Series A and started to scale some of our go-to-market when we weren't ready. We were not ready at all. It was still in founder sales mode and not very repeatable. We tried bringing somebody in and it just didn't work. It wasn't his fault. It was our fault. We weren't ready. The team felt that stress and wasn't working well together.
We had this strong culture of accountability and yet, the biggest thing that we were trying to do wasn't possible. So we had to change, adjust and improve.
This is something a business coach had told me. He would say, “You don't have to outrun the bear. You just have to outrun the guy next to you.” Most businesses fail within five years. 60 or 70% of businesses don't make it. Although you want to aim for a 10, let's say on a zero to 10 scale, if we can just get the management team to function at a six, seven, or eight and make sure you keep improving that’ll be good. A lot of times organizations and leadership teams are operating at much lower than that. It’s just shocking how bad and dysfunctional some teams are. I don’t think we were ever down that bad at Packet, but there were a couple of times where we got to a five, knew it felt awful and something wasn’t working. Usually we weren’t having a tough conversation that needed to be had or we didn't have trust. I found in those times, we usually needed some help figuring that out.
SB: I love that you did it quarterly as a team. Making it conscious. As I call it, talking about talking. Talking about how we’re doing as an entity. My guess is that while you might be struggling you never fell into false harmony because you were open to ranking how you’re doing.
ZS: Yeah. I think that as long as you could point to the mission, and everybody was aligned to that, what we’re trying to do is this thing that is big, that it's going to require us as the leadership team to be on our A game. Being willing to work on yourself and your team because everybody wants to accomplish the mission, is powerful.
You’ve got to bring vulnerability to it as the CEO. You can’t be like, this isn’t working. We need to fix you guys. That’s where I leveraged a coach or leadership consultant. It didn’t have to be me to see it. Often, I was bringing up hard topics the wrong way and would address certain things in ways that wouldn’t be very comfortable for some of our leaders. They would shut down. As such, sometimes I needed help to try different ways and leverage an outside perspective.
I think there were only six or 12 months when our budget got cut around something after the acquisition, that we didn't have a leadership coach. The rest of the time during our eight-year history as a company organization, we always had a coach every quarter. That served us well.
SB: You know I love this. I swear it’s not an advertisement. (laughs) Having an impartial voice, someone who’s outside can help you talk about the hard conversations, and shift power dynamics which is important for a CEO, especially if you have a particular style that’s strong for some.
ZS: Yeah, yeah, most CEOs do.
You’ve got to bring vulnerability to it as the CEO. You can’t be like, this isn’t working. We need to fix you guys. That’s where I leveraged a coach or leadership consultant. It didn’t have to be me to see it. Often, I was bringing up hard topics the wrong way and would address certain things in ways that wouldn’t be very comfortable for some of our leaders. They would shut down. As such, sometimes I needed help to try different ways and leverage an outside perspective.
SB: If you could go back, what advice would you give pre-CEO you about a leadership team or what would you remind future you?
ZS: I’m such a people person. One of the challenges I’ve always had is that I would tell existing and previous CEO Zac to take more time in hiring leaders. Just take more time. That means interviewing more people. You'll probably lose some. It doesn't mean that you shouldn't be out looking for new talent all the time - I was always interviewing, always looking, always meeting, always making relationships, and finding people who were attracted to our mission and vision. But I would have had a much more formalized interview process. Not that you need to put every candidate through three phases and you must answer all these questions in front of a panel. More of you, you’ve got to interview 15 people.
I would hire too quickly. What they always say is pretty true – hire slower, fire faster. That's what I would have done. I still find it hard. I find it hard coaching young companies who feel they don't have the time. It takes a lot of energy to go through 15 interviews and do it well. Talk to real candidates and be purposeful about writing a great accountability chart and job description and be thoughtful about it. Trying to find the best person in the whole universe by marketing that job description out to the world. That's hard. It takes effort. So I would do fewer of those, but spend more time on them.
LEADERSHIP TEAM SIZE
SB: Was there anything we didn't cover about what you think about leadership teams?
ZS: One thing I’ve been struggling with is the size of the team. It can be tantalizing to build a big leadership team. More help around the table can be helpful in an early company. You can often do a lot of title inflation and then have to deal with it later.
Oftentimes you bring people into early-stage companies because they are the one person that does the job so they're naturally the head of the thing. Then they become on the leadership team. I see series B and C companies that have people like, what are they doing with that person on the team? Often that person started here and they did this and they were really important.
SB: Yep. They have institutional knowledge.
Less is more. Give really great leaders more stuff to do. Go with that until you have a really strong reason to expand your leadership team.
ZS: So I've been thinking about how to be more purposeful about what the team looks like. So you don't accidentally get into having 11 people on your leadership team and you're not sure how you got there. So being clear about those roles, being clear when you create another one, and then maybe even finding outlets for unique free radicals. I've seen a lot of CEOs add free radicals into their leadership team because they want the outside voice but that person is not a good leader. So they want them close to the positions of leadership, but they don't actually want them to be a leader. That’s something I learned when I was at Big Co at Equinix that actually might, I've been toying with is this concept of almost entrepreneur-in-residence. At Packet we had a labs group which was like the weird science project room that people can hang out in. The more corporate function for that would be CTO groups where you allow some of that. I surrounded myself with a few people like that. I didn’t want them to lead teams but I wanted them close and the context they had was super useful. So the size of the team is something I’ve been struggling with. I’m not really sure.
Less is more. Give really great leaders more stuff to do. Go with that until you have a really strong reason to expand your leadership team.
SB: I see it all the time. I worked with a company that had 18 on its leadership team. It split into two groups – VPs and C-Suite. It was just too big. They needed to rethink the leadership team.
ZS: Well that's a party.
SB: Yep.
ZS: That’s pretty hard. You know, when you have nine people saying that they're all going to help out doing something, you're like, wow.
SB: Right. It was bad because the VPs felt like they were at the kid’s table at Thanksgiving.
ZS: Hehehehe
SB: Leadership team size is really important. And then the makeup of it. Who gets to sit at it? Who needs to be there? We really need to interrogate that rather than putting people on the team because they’ve been here forever. We need to be clear about what they bring to the table.
ZS: When you figure out the ultimate leadership team size, send me the podcast link.