1、Leading in Uncertain TimesCARL ESCHENBACH&JESS LEE JUNE 2022SEQUOIA CONFIDENTIALAgenda1.Leadership Principles2.Communication Principles3.Q&AThis conversation is based on our experiences.By no means do we have all the answers,or have all the correct ones.But hopefully this will provide a framework fo

2、r leading companies through uncertain times.The presentation will cover two main topics:Leadership principles and communication principles.Leadership PrinciplesSEQUOIA CONFIDENTIALFundamentals of Business LeadershipVISIONClarity of thoughtConvictionInspirationEXECUTIONSelf-assessmentComplimentary te

3、amsSingularity of purposeCULTUREFabric of the companyLive it every secondHow you act when no one is lookingAt the highest level,business leadership requires vision,execution,and culture.First,as a leader,you have to have a vision.Your vision must be supported by clarity of thought.You must communica

4、te your vision with conviction,and a sense of inspirationSecond,you have to have an execution mindset.Execution is simply the discipline of getting stuff done.In periods of uncertainty,execution often IS the best strategy.Third,youve likely heard the saying“culture eats strategy.”Culture is the fabr

5、ic of your company.Its what you do,how you do it,and how you show up every day.In times of challenge,your culture is what defines your path over any hurdle you need to overcome.Its what you do when no ones looking that ultimately defines your culture.SEQUOIA CONFIDENTIALThe 4 Cs of Leadership During

6、 Times Of Uncertainty CommunicationConvictionConfidenceCalmnessThese are the 4 Cs of leadership in uncertain times:As you communicate with your teams,you need to remember that especially in times like this,you have a megaphone in front of you.What you say is amplified.You need to deliver your messag

7、e with conviction.You need confidence but also a sense of calmness.You must be optimistic,but also a realist.SEQUOIA CONFIDENTIALPush vs.Pull LeadershipMotivational=PushingInspirational=PullingPUSHPULLThere are three types of effective leaders:The first are motivational leaders.They tend to push the

8、ir teams to success.The other side is inspirational leadership.Inspiring leaders pull the organization toward them.People want to be around them and to make sure their leader does not fail.The third type of leader can both be motivational to push their teams,and inspirational to pull them together.D

9、oing this with authenticity and vulnerability can rally the team around the company mission and vision,so it all comes together and you move as one big team.SEQUOIA CONFIDENTIALTeam of Leaders vs.Leadership TeamTeam of LeadersLeadership TeamThis is a valuable business leadership principle:the differ

10、ence between a team of leaders and a leadership team.Team of leaders:You likely have great leaders on your team.But a team of leaders who lead primarily for their own organizations does not always get the best outcome.Leadership team:This is when your leaders think of their primary team as the one s

11、urrounding the CEO or founder every week.If your leaders think about the companys executive leadership as their first team(as opposed to their individual functions as their primary team),you will likely have a better outcome.Focus on building a leadership team.That does not mean you dont want these

12、leaders to lead their individual teams.But they have to think about their primary responsibility as the leadership team of the company,and then to focus on their respective teams.During the downturns in 2000 and 2008,leadership teams overcame challenges more effectively than teams of leaders.SEQUOIA

13、 CONFIDENTIALStrategies During Uncertain TimesFocus-Simplicity scales,complexity doesntSpeed-One of the greatest business strategiesPeople-Double down on your top talent i.e.topgradingDecisions-Alignment over agreementValue Proposition-Tighten to drive sales-Drives revenue growth-Saves money(strong

14、ROI)-Reduce risk-EVERYTHING ELSE IS FLUFFHere are a few business strategies that are especially relevant in uncertain times:Focus:Simplicity scales;complexity doesnt.Over the last couple of years,many businesses created complexity because of the pace and rate at which they hired.This has created mor

15、e layers of the organization and changed hierarchies and decision making.Prioritize simplicity.Speed:Companies that are faster at making decisions will outmaneuver their competition.People:Double down on top talent through topgrading or having the right people in the right jobs at the right time so

16、they can drive better outcomes.This does not necessarily mean taking people out of the organization.Decisions:Seek alignment over agreement.If your team always agrees on everything,you probably arent getting the most out of everybody.You need people to disagree.But at the end of the day,align and go

17、 forward on a specific mission,strategy or message to your teams.Value Proposition:When selling in challenging times its important to tighten up the value proposition to ensure youre offering a must-have solution,not a nice-to-have solution.People buy for one of three reasons:Driving top line revenu

18、e growth Saving money(the greatest strategic selling value proposition ever)Reducing risk(for example in the security market)SEQUOIA CONFIDENTIALThe most important number in the companyWhat is the most important number in a company?Your forecast,and your ability to forecast accurately.Everyone in th

19、e company should own the forecast.Consider tying a portion of sales leaders comp to the accuracy of their forecasts(not just their quota).“It takes many quarters to gain credibility and only 90 days to lose it.”CARL ESCHENBACHIt takes many quarters to gain credibility from either your shareholders,y

20、our board,your investors or your employees.And it takes all of 90 days,or one quarter,to lose it and start all over again.Forecasting accuracy is one of the key metricsif not the key metricthat informs how to operate your company.Communication PrinciplesWeve talked through what to DO,now lets talk a

21、bout what to SAY.“The difference between management and leadership is communication.”WINSTON CHURCHILLThis quote from Winston Churchill illustrates the difference between management and leadershipManagement is telling people to do a task.Leadership is inspiring people to want to show up and do the t

22、ask.Great leaders give their words meaning,energy,force andmost importantlyfollow-through.“Sometimes your only available transportation is a leap of faith.”MARGARET SHEPHERDAnd in difficult times,when the metrics arent going up and to the right,and its not clear if youre the winner,the only way to m

23、ove forwardthe only available transportationis often a leap of faith.“Sometimes your only available transportation is a leap of faith.”MARGARET SHEPHERDTrustTrust is the key to getting people to take that leap of faith.Your team has to trust in you,the CEO/founder.Ability to Deliver ResultsHonesty,O

24、penness,and FairnessConcern for the Well-Being of OthersCompetenceIntegrityBenevolencexxTrust=There are three pillars to building trust:Competence:The ability to deliver results.Integrity:Honesty,openness and fairness.Benevolence:Concern for the well-being of others(in this case the team and the cus

25、tomer).Most leaders tend to over-rotate on competence since theres pressure to pick the right plan.Its not that leaders dont have integrity,but in difficult times the openness of communication can drop.People can feel compelled to hide problems so as not to worry others.And people forget about benev

26、olencejust knowing that a leader cares about the team and the customer makes the biggest difference in the mood.Make sure to show your authentic,human side,and how you deeply care for your team,your customers,your mission.SEQUOIA CONFIDENTIALThe Anatomy of Communication in Uncertain Times1.Acknowled

27、ge Uncertainty2.Signal Change 3.A Simple,Focused Plan4.Regular Check-ins5.Motivate with Mission6.Be Present,Be HumanIntegrityCompetenceBenevolenceWe tried to break down the anatomy of good communication into components.There are six components that map back to the three pillars of trust(integrity,co

28、mpetence,and benevolence):First,to establish integrity,you need to acknowledge uncertainty and signal change.You have to be honest and upfront,to acknowledge that there is a new normal and things have to change.To communicate competence,you need a simple,focused plan that you can present on one slid

29、e.And you need to do regular check-ins to keep your team accountable to it.To be seen as benevolent,you can motivate with your mission,your customers,and your culture.And you need to be more present,more human,than ever before.Next,well go through examples of each in more detail.Some of these are al

30、so from my time at Polyvore,where I had the unique privilege of being on the roller coaster of consumer social and raising during the 2008 downturn.A huge thank you to Yong Kim and Helen Mayer at Otter for being willing to share their case studies too.SEQUOIA CONFIDENTIALAcknowledge Uncertainty Team

31、 growth outpacing revenue growthAddress the elephant in the room.Contextualize how it affects your business.We have over$X million in the bank and our monthly burn is$X,meaning that we have X months of runway,X months conservatively.Going forward,I will share snapshot updates about our cash reserves

32、 and burn on a monthly basis.In spite of the macroeconomic context,I believe our financial position buys us some time to judiciously experiment.To acknowledge uncertainty,you have to address the elephant in the room.In challenging times,everyone knows the macro environment is not good.If youre a gro

33、wth stage company thats now overvalued because of multiples being reset,you can acknowledge the impact on tech stocks.If youre a consumer company you can acknowledge pricing pressure on consumers and inflation.Contextualize how these macro trends will affect your business:At Polyvore,as noted in the

34、 middle of the slide,team growth was outpacing revenue growth.Web visitors were declining.Revenue was up 20%but team size had grown 63%.Its important to be clear in acknowledging these challenges.And like the last sentence in the example at the bottom right,you can put into context how you feel abou

35、t the runway,or what signal you think your team should believe.SEQUOIA CONFIDENTIALSignal Change Be specific about expected behavior change.Example:Focus.Another part of having integrity is signaling the change that you want to see in your team.This is an example slide about becoming more focused:Wh

36、en flush with capital,experimentation is critical.In wartime,a companys survival depends on strict adherence and alignment to the goals.Pick a clear message about the expected behavior change,and then provide an anecdote,analogy,or framework to explain it concisely.SEQUOIA CONFIDENTIALSignal Change

37、Be specific about expected behavior change.Example:Velocity.This is an example slide signaling a need to move faster.Maybe the bar has raised on what you need to achieve by your next round and you need to create a sense of urgency around accelerating.SEQUOIA CONFIDENTIALSignal Change Be specific abo

38、ut expected behavior change.Example:Resourcefulness.This is an example from Wonolo,which CEO Yong Kim graciously agreed to share.Yong has been a tremendous leader.Due to factors outside of his control during the pandemic,Yong had to rally people through very challenging times.These are the slides he

39、 shared when he needed his team to be more resourceful and to do more with less:He talked about how having resources doesnt necessarily mean you move faster.When you have plentiful resources,you tend to overcomplicate,over-plan and over-engineer.The result is that youre slow to produce results.So Yo

40、ng said:Were going to be resourcefulwere going to narrow the scope of problems,increase speed to market and were going to show results.SEQUOIA CONFIDENTIALA Simple,Focused PlanSimplicity increases your odds of success.Moving on to the importance of having a simple,focused plan,here are examples of h

41、ow simple it should be.These slides are from Airbnb,early in the pandemic.Brian Chesky broke his plan down into simple,declarative principles.SEQUOIA CONFIDENTIALA Simple,Focused PlanStrategyMetricBaselineGoalTacticsCreate the future on mobileMobile DAUX+50%3 Small TeamsMore At BatsFast MVPsFund the

42、 future on webWeb VisitorsX+20%SEOMobile WebEmail RetentionIncrease ARPURevenue/UserX+100%Launch More AdvertisersInternational CPCYield OptimizationSimplicity increases your odds of success.If youre a seed stage company,your plan might look a little more like this.This is an example template for thr

43、ee strategies you might need your team to focus on.Identify a metric that shows progress,establish what your current baseline of that metric is,and a goal.The goal is key for accountability.In the last column are the tactics you want your team to use to get to that goal.This format is effective beca

44、use it fits on one slide.Your team can hold it in their head,and you can easily check in against it.SEQUOIA CONFIDENTIALRegular Check-insGoalMetricGoal%to GoalTacticsCreate the future on mobileMobile DAUX90%3 Small TeamsMore At BatsFast MVPsFund the future on webWeb VisitorsX30%SEOMobile WebEmail Re

45、tentionIncrease ARPURevenue/UserX75%Launch More AdvertisersInternational CPCYield OptimizationRepetition,repetition,repetition.Hold yourself and your team accountable.Once youve established a simple,focused plan,its important to regularly check in on your progress against the plan.This slide shows t

46、he percent to goal,so you can measure your progress across key metrics.After the all hands where you communicate your plan,repetition is crucial.You probably need to do more frequent all hands meetings than you might otherwise,and refer back to the plan and your progress frequently.SEQUOIA CONFIDENT

47、IALMotivate with MissionAn American author,Carlos Castaneda,famously said,“we either make ourselves miserable or we make ourselves strong.The amount of work is the same.”We will obsess over the following three things:who we serve,how we manage time,and where we focus.Who we serve:Front-line workers

48、and customers need us more than ever.There are now more unemployed/underemployed workers who need us direly.Our customers need us to help them manage ups and downs of their mission-critical operations.Both sides need to know that we are open for business and here for them.Remind people why theyre th

49、ere,using customer stories and cultural tenets.Now we move into benevolence and motivating with mission:You need to remind people why they are there and inspire them.You can do this with customer storiesremind people who you serve and why their problems are important to you.Here is another example f

50、rom Wonolo.Yong started with a quote,and then reminded the team that Wonolo serves frontline workers.He said,They need us more than everthere are now more unemployed and underemployed workers,and our job is to make those people live better.Additionally,you can share the story of an individual custom

51、er your company helped.You can also talk about the culture that youre trying to create and why now is the moment to leverage your biggest strength.This slide also reflected back survey results from Wonolos team about what parts of their culture they were most proud of:compassion,adaptability,optimis

52、m and flexibilityexactly the traits you need in a challenging moment.SEQUOIA CONFIDENTIALMotivate with MissionI wanted to look back and forward with you.I launched Otter on Monday October 26,2020.Around 10am,a caregiver called me,frantic about having run out of snacks for the kids she was watching.A

53、t first,I panicked too,but then I realized I could make her life easier by just ordering a delivery of fruit and Graham crackers to help things run smoothly for the day.For good measure,I added some dark chocolate because shed mentioned to me during our first call that dark chocolate was the only sn

54、ack her kids didnt eat so she got it to treat herself.Things like this dont scale,but they do help parents who are otherwise stretched thin feel seen,while making it easier for them to be present with the kids in their care.We have an incredible opportunity to make our earliest caregivers feel champ

55、ioned,celebrated,and cared for and this is aligned with our mission to create a world of care and opportunity.By taking care of our caregivers,well help them access the economic opportunity that is at the core of our mission.Remind people why theyre there,using customer stories and cultural tenets.H

56、eres an example that Otter CEO Helen Mayer allowed us to share.Otter is a marketplace for caregivers who take care of peoples kids.Helen shared a very personal story which demonstrated how you can go above and beyond for customers,how a small gesture can make caregivers feel championed,celebrated an

57、d cared for.Helen reinforced that this is what Otter needed to do.Sharing customer love in a dark time can be very powerful and motivating.SEQUOIA CONFIDENTIALBe Present,Be HumanShow up,authentically.You dont have to be perfect.Create fun rituals.Lastly,be present and human.You dont have to be perfe

58、ct.Rather,you need to show up authentically.During a dark time you might feel pressure to showcase your competency,your ability to have the perfect plan.But people dont trust people who are too perfect.So these are the moments to show a little of your quirky side,whatever that is.Dont take yourself

59、too seriously.It actually increases trust when there are fun rituals.These are some of the moments when the team can bond the most.This slide shows Carl dancing at VMware summit.The bottom shots are something we created at Polyvore called the Polyvore Olympics where the team pushed each other around

60、 in office chairs and did silly competitions.The top examples are from from Wonolo.Yong mailed handwritten notes to every employee.And there is a fun tradition(which Yong did not start)where the Wonolo team sends a flat cardboard cutout of Yong around to different people across the company and they

61、take selfies with it.“People will forget what you said,people will forget what you did,but people will never forget how you made them feel.”MAYA ANGELOUMaya Angelou said:“People will forget what you said,people will forget what you did,but people will never forget how you made them feel.”You dont ne

62、ed the perfect words.You dont need the perfect plan.More than anything else,you need to think about what feeling or emotion you are trying to evoke in your team:Are you trying to make them feel inspired?Are you trying to make them feel like they can trust you?Are you trying to make them feel determined that youre all going to get through this together?Being intentional about how you create those feelings in the way you talk to your team is the key to effective leadership.