Tips for building a performance culture at your startup

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Key takeaways from “The Knowledge Project Ep. #173, Frank Slootman: Doing Less, Doing Better”

Link to podcast

I recently listened to an episode of the Knowledge Project where Frank Slootman, the CEO and Chairman of Snowflake, talks with Shane Parrish about what it takes to build high-performing companies. If you’re a founder or leader in the startup world, I highly recommend giving it a listen. Slootman is one of the most respected Silicon Valley executives and has a 30-year track record of building standout cultures and great teams. This episode is packed with practical advice for leaders on how to build great companies with performance cultures and has a great ratio of insights to words spoken. Here are my key takeaways from the episode: 

Assessing your team members; Performance vs. Behavior 

  • Give time for performance, not behavior. Your leadership brand is getting bad behavior out of the org fast. 
  • Behavior is a choice, not a skill set. If someone has behavior that doesn’t align with your company, you should separate from them.
  • As a leader, your team watches not just what you do, but also what you don’t do. Don’t be tolerant of behavior that you shouldn’t be tolerant of.

Culture and your team

  • Driving culture is really important as a leader. You need to drive the culture, or it will be driven by someone else. The company needs to stand for something. 
  • Establish trust with your team by being fair and make sure you’re not using personal preference when making decisions.
  • Businesses are like pro sports teams, not families:
    • You can’t fire your family!
    • In a business, you’re coming together not over friendship, but over mission. Mission is a shared purpose.

Prioritization; how to get things done in your company

Where companies go wrong:

  • Not choosing what to prioritize is the worst thing you can do. When you don’t prioritize, you’re compromising everything 
  • Often, people are spread a mile wide and an inch deep. They are involved in too many things, and never really push anything forward

How to combat this:

  • Ask yourself, If I could only do 1 thing, what would it be and why? Figure out what is most critical, and revisit this question constantly. 
  • Do things in sequence, not in parallel 
  • As an organization, things really move when you have the resources necessary. If you’re sharing resources with 50 other things, nothing moves forward

How to prioritize as your company grows:

  • As you get better, your company as a whole will be able to handle multiple tasks simultaneously. This will be because each team will concentrate on one specific task at a time.
  • Moving multiple priorities along with momentum and velocity is the art of management.
  • Revisiting prioritization over and over again is important. You want to convince yourself over and over again if you’re correct or not 

Fighting bureaucracy

  • Larger companies become their own worst enemies. It’s not what their competition does to them, it’s what they do to themselves 
  • Bureaucracy in companies looks like an undo process and a lot of friction in terms of getting things done.

How to fight this:

  • You have to hang on to your youth, your innovative muscle, your audacity: “Let’s be like Peter Pan, never grow up”
  • Hierarchy and org charts should mean nothing. Operate through influence, not by title, and build a meritocracy 

Creating a Performance Culture

  • In Frank’s companies, for all non-sales employees, every quarter, the company has to earn the bonus pool. They earn it by hitting specific and clear metrics that everyone knows about.
  • Once the company earns it, then you start allocating the bonus pool. You use this money to send messages to your team members about who is performing incredibly well, and who isn’t
  • The most important part is to make sure you’re paying those exceptional performers well enough; you don’t want the great team members to feel like they’re being treated the same way as someone that’s not performing well. That’s not a performance culture 
  • Making company goals clear creates an openness that results in good and direct conversations with team members, and helps you help them improve.

Sales teams, the difference between a good and a great sales org 

  • Great sales organizations are a result of having alignment in the entire company. You need to have a company where everyone is working for Sales because Sales experiences the reality of the marketplace first
  • When managing your sales team, it’s important to track goals closely quarter by quarter. This means not only focusing on making sure you are hitting your numbers for that quarter, but also that you’re setting yourself up for success in the next quarter 

Sales vs. Product tension in your organization

  • Typically, sales problems are product problems
  • A good salesman can’t sell a lousy product, but a bad salesman can sell a good product. This is why amazing companies with the best products often don’t have the best sales people

Making mistakes: what do you do when you make one?

  • Use mistakes as a cultural and teaching moment
  • As a leader, it’s good to say “I really screwed this up.”
  • What is devastating for companies is when people defend bad positions. It’s far more important to fail fast and course correct.
  • If you acknowledge your mistakes as a leader, you neutralize making mistakes as a bad thing for the rest of the company.

Recruiting, interviews, and references

  • It’s hard to test people’s skills during interviews for nontech roles. An interview is really a sniff test.
  • The way to find out about people is to fully surround where they’ve been. Figure out who in your company has worked with the person you’re interviewing, then go outside of your company. Look for consistency of feedback; this will help you build conviction.
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