I give this article a 4.5 out of 5

It’s annual review time once again, that precious time of year when every manager gets to say to his underlings, “Remember when you really annoyed me last February? I do!” It’s a time for cheers, tears, and annoyed grunts. Much like Christmas or our wedding day, we enter with big expectations and some of us get lucky, while others end up with cake all over our faces, wondering who all these strangers are and who stole our pants. Maybe that’s just me. Either way, that was one strange review process and I’m glad I only worked there for four years.

Anyway, performance reviews can be extremely valuable if done correctly (and with minimal de-pantsings). They offer an opportunity to step aside from the day-to-day, reflect on how other people are doing their jobs, and then tell them what you think of them. Constructively, of course (or not, if you want them to quit). This process is called “feedback,” and like the screeching sound created by holding an electric guitar too close to a speaker, it’s an acquired taste that can make you look like a genius if you do it correctly. And I want nothing more than to make you look like a genius, especially if you work for me, because then I can take credit for hiring you. Reading this article counts as mentoring, by the way. Without further ado, here are 5 tips for giving the kinds of performance reviews that will have people asking for them every quarter!

1. No surprises

If you spent an entire year working side-by-side with people and none of them ever gave a hint as to how they feel about you and your work, you should check to see if you are invisible or someone’s imaginary friend.

I open every performance conversation with the phrase, “None of this should come as news to you….” This is because, if I’ve waited for a whole year to tell someone what they’re doing well or poorly, then they really shouldn’t have stuck around. We all want to hear praise when we do something well, and people who say, “The work is its own reward” are either liars or living in complete solitude. If you spent an entire year working side-by-side with people and none of them ever gave a hint as to how they feel about you and your work, you should check to see if you are invisible or someone’s imaginary friend. As a manager, you owe it to your people to say, “Good job,” “Thank you,” and “Wow, I never would have thought of that,” especially when it’s true. I’m not talking about fawning over people and telling every one of them what a special, special flower they are. That’s up to their parents. But if they do something well and you want to ever see them do it again, you need to tell them.

If, on the other hand, someone does something that you don’t want them to do, you need to correct them so they don’t keep doing it. I’ve seen managers wait an entire year before telling someone that they had been making obvious mistakes that irritated everyone around them, mainly because the manager wouldn’t have an uncomfortable conversation until they were forced to. By that point, the damage was done and the person was left saying, “Why didn’t you tell me that I was doing that? Everyone hates me now!” That sort of surprise leaves you feeling like you’ve just come home from a cocktail party, only to have your wife tell you that you had a huge piece of spinach in your teeth for the entire night and excuse herself by saying, “I didn’t want to embarrass you.” Man up (or woman up, if you prefer) and have the uncomfortable conversation immediately, so that, at review time, you can say, “I know you’re working on this, and you’re already improving.”

2. Be specific

If you feel like your people are wandering around making terrible decisions, maybe you need to look at the guidance you’re providing.

I once dated a girl who told me, “I need you to make me feel special. And you need to be more attentive.” I had no idea what to do with that guidance. Was I supposed to praise her constantly? Buy her gifts that I couldn’t afford? Stare at her for hours on end? How was I supposed to make her feel anything? Maybe I was supposed to slip Xanax into her drink. Would that make her feel special, or just sleepy? I couldn’t handle the confusion, so I broke up with her. (I feel compelled at this point to state that this was not my wife, because she’s awesome and would never say crazy things like this. Hi, honey!)

Sometimes, while trying to be helpful, we can sound like crazy work girlfriends: “You need to be more motivated!” “I need to see that you really care about your career here at Acme Corp.!” “The client feels that you aren’t really looking out for them. Go fix that. But don’t give anything away for free! Oh, and make them feel special!” General guidance leads to general behavior (also known as “erratic,” “hit-and-miss,” or “spotty improvement”). If you feel like your people are wandering around making terrible decisions, maybe you need to look at the guidance you’re providing. Are you giving them a specific target to hit, or are you just pointing them in the general direction of “better?” Can you remember the last time you pointed out a specific example of something they did well or something that they shouldn’t have done? Human brains can handle abstract concepts, but we’re still wired for narrative. If you can tell me a story with a happy ending, then I can generalize it to bring about other happy endings. If you illustrate my own personal office tragedy for me, then you can help me rewrite it in my head so that the ending is better next time. If you just tell me to be happy, then eventually I’m going to have to break up with you and find someone who can show me how that’s done.

3. You aren’t a mind reader

When you give in to that desire to know why people do things, instead of focusing on what they did, then you brand them in your mind, for good or ill.

Speaking of narrative, we all love to tell ourselves stories about the people around us, and every good story needs motivation and characterization. Jack sold the cow for a handful of beans because he was foolish and a dreamer, but he stole the giant’s treasure because he wanted adventure and he loved his mother very much. He killed the giant because, underneath the foolishness, he was also very clever. This works well when you’re writing fiction, but it can be disastrous when you’re dealing with real people. You can assume that Jack screwed up the budget because he’s lazy and doesn’t pay attention to detail, but what if he’s actually very conscientious and Jill gave him the wrong information? You’ve already decided that Jack is lazy and stupid, so you aren’t going to trust him with important tasks anymore. He gets bored with simple activities, which only reinforces your image, so eventually you fire him. Then he goes on to become the CFO of your competitor, Giant Industries, and crushes you (see what I did there?).

We all want to understand other people’s motivations, especially when they do something we don’t like. We want to know why they did that annoying, hurtful, or dumb thing so that we can make them never do it again. The problem is, unless you ask the person why they’re acting a certain way, you’ll never know for sure. In fact, you really can’t know for sure even if you ask them, because sometimes people lie. And sometimes they don’t even know. And the problem with these assumptions, especially assumptions about a person’s character or capabilities, is that they’re permanent. Jack can’t stop being stupid even if he wants to.

When you give in to that desire to know why people do things, instead of focusing on what they did, then you brand them in your mind, for good or ill. Now, that’s not to say that some people aren’t stupid, careless, or lazy. There are plenty of those people around, and their consistent behavior will show it over time. It just doesn’t do you any good to make that decision for them, because what are you going to do: tell them to stop being lazy? If that was your answer, please reread Tip #2, above. Whatever a person’s inherent character traits or innate capabilities are, they’re beyond your reach. All you can monitor, quantify, or change is their behavior, so that needs to be your focus. Which bring us to…

4. Behavior leads motive

When striving for better performance, the wise manager focuses on behavior first and motive second.

What is performance but behavior over time? Good performance, bad performance, high performance or low, it’s nothing but the sum of our daily activities gathered up into an annual bundle. Do you really need to know that I nailed that client presentation because I want to have your job within three years? Or that I finished that project early because I wanted to take a long weekend? Or that I was late to the big meeting with the Sea World account because I have a crippling, inexplicable fear of dolphins? You don’t really need to know what my motives are as long as you’re getting the behavior that you need. But most of us want to do the right things for the right reasons, and we want the same from the people around us.

So how do we get there? For years, consultants, pastors, life coaches, and motivational speakers have tried to change behavior from the inside out. By changing people’s motives, we hoped to change their behaviors. Motivate the employees and they’ll work harder. Teach the fat people to want to be skinny and they’ll change their eating habits. Tell the criminals that crime is bad and they’ll stop doing it. We thought it would be easier, because once you changed the one thing (motive), then all the other things (behaviors and actions) would naturally follow. One is less than a bunch, so the math seemed easy. There are three problems with this:

1. Internal motives are closely held, often core to a person’s self-image, and really hard to change.
2. Even with the right motives, people often still do the wrong things.
3. Even good motives can conflict and cancel each other out.

I want to lose 25 pounds. I am motivated to do so by all of the pictures on the health magazines that show me what my ripped abs look like, if I can just find them under that layer of extra insulation. I know that I will be healthier if I lose 25 pounds and that being healthier is better. All of my motives are correct. And yet, the 25 pounds remain (year after freaking year). So am I poorly motivated, or am I embracing the wrong behaviors?

Did I mention that I also enjoy food? This is also a good motive, but it conflicts with my desire to lose weight. Given the choice between not eating something delicious and eating it, I will generally choose to follow the motive that puts something delicious in my mouth. I don’t overeat, binge, or try to eat my feelings, so this isn’t an unhealthy motivation, but it’s keeping that 25 pounds hanging around (did I mention year after freaking year?).

In Outliers, Malcolm Gladwell points out that it isn’t the most motivated (or even talented) players who succeed in professional sports. It’s those who work the hardest, those who have the right behaviors. Whether they’re doing it because they love their Mama and want to buy her a house or because they hate A-Rod (and who doesn’t?) and want to beat him until he cries like a little girl, it’s the actions that they take in response to those motivations that make them successful. In the same way, when striving for better performance, the wise manager focuses on behavior first and motive second. If you tell your people what you want them to do — and make it specific enough for them to take action — then you have a much higher chance of success than if you try to make them feel better about their jobs.

The interesting thing about this is, when the behavior is better, then the job satisfaction and the motivation tend to follow. When I do something well, I’m happy about it, which makes me want to do it more, which makes me better at it. When I do something poorly or I receive negative feedback, I don’t like that feeling, so I don’t want to do that thing again. Proper feedback and guidance on behavior, then, leads to better outcomes, which lead to better motivation. I may still be doing well because I want your job, but if I and my teammates are all doing a great job, then you’re likely to get promoted, so you won’t need that old job anyway. Everyone wins.

5. Don’t forget to dream

Get through the boring stuff... and take advantage of this annual break in the action to think about what might come next.

Let’s face it: unless you enjoy making people uncomfortable or you’re one of those people who offers “constructive criticism” to the wait staff, performance reviews kind of suck. And if you’re following these tips, especially #1, they can start to feel unnecessary as well. So if you’re like me and you can start your reviews with, “This shouldn’t be news to you…” then use this opportunity to dream a little. Get through the boring stuff — “You’re awesome, I helped make you that way, and you’re already improving on that little thing we talked about last week” — and take advantage of this annual break in the action to think about what might come next. What are your dreams for your team, as a group and as individuals? What could they do that would make you stand and proudly watch them like a dad whose kid just hit a home run? What will make them glad to come to work each day, what challenges make their eyes light up? How can you help them be so awesome that they don’t even need you anymore? What do they want to do next? Don’t know the answers? Here’s a thought: ask them. After all, it’s their performance review. Shouldn’t they get a chance to talk, too?

You’re doing a great job. Keep up the good work.

Hacking the startup life

The founder of the first software company that I worked for put his head through a wall. He was upset about someone leaving, but you know, it was a wall. And his head, which was arguably the most important asset in the company’s portfolio.

At that same company, I had to break up a fight between two designers who couldn’t agree on a page layout. I had to pick one of them up and carry him out of the room until he could cool off. Fortunately, his hair was in a ponytail that day or I might have suffocated.

At another company, one of my standard interview questions for potential managers was, “What will you do the first time that someone comes into your office and bursts into tears?” My favorite answer, after a thoughtful pause was, “Well… first I would offer them a tissue.”

After 20 years working in technology startups, I know I’m not the only person who watches HBO’s Silicon Valley and thinks, “Wow, they’re really toning it down for the masses!” Startup life is hard and a little crazy. We tech people, as a rule, bring our own crazy to the office party. Put these things together and you have a volatile mixture. Blend in long hours, high stakes, and a general sense that there are always too many bases to cover, and it’s no wonder that people lose it once in a while. Of course, it’s only a short trip from “once in a while” to “every day, twice on Fridays.”

There’s a conversation going on about mental health and burnout in startups, and we need to keep it going. My friend Dave Mayer shared some of his own experiences as a founder and friend of founders, and I read another powerful view from the trenches by Sarah Jane Coffey last year. There have even been sessions during Boulder and Denver Startup Weeks dedicated to this important topic.

We tend to glamorize the startup life as a place where brilliant, dedicated, and — most of all — energetic people are changing the world, making it a better place and making their first millions in the process. We are the engine of the economy, the force of innovation, the ones who keep America from falling behind the other superpowers through the sheer power of our brilliance and the sweat of our furrowed brows. We tell each other things like, “I wanted to work somewhere that I knew I could make an impact,” and “I don’t want to be a corporate drone, sitting in meetings all day.” We don’t meet, we scrum! We don’t just write code, we sprint! We work all day, take a short keg break on our rooftop deck, and then we work all night, with the occasional foosball game to keep our reflexes sharp and aggravate our carpal tunnel. Who wouldn’t want to be part of that? Corporate drones, that’s who!

But there’s a dark side to startup life. Yes, you have a greater impact when you’re one of ten people in the company, but those ten people are usually trying to do the work of 30, so you do the math. You’re never bored, but you’re never offline, either. Office perks are fun until you realize that you can never leave, and it turns out that “dedication” and “passion” can quickly become presenteeism and a grinding competition over “who wants it more.” But on the bright side, the stock options are generous!

The problem for leaders is that these changes usually happen when we aren’t looking. The excitement that you feel for your market-beating/world-changing idea masks the little problems until they become crises. You look around at the tired faces of your team and think, “We’re just in crunch time right now. After this push, we can relax.” But this little push is followed by another little push, and then you land your first big customer and they need “a few small enhancements” to make the product work for them, and then there’s the release for the big industry event, and then you find out that you have competitors…. There are blogs to write about your development philosophy and Medium posts to show how awesome your company culture is. Pretty soon, the rooftop deck is covered with snow and you’re explaining to your wife that you just have to do a little bit of work on Christmas to make sure that the release is ready by the first of the year. Meanwhile, the other startup founders you know are bragging about being able to get by on 3–4 hours of sleep a night, and you start to wonder about how to quantify the Sleep Gap as a measure of your company’s competitiveness. When people quit, they tell you that it’s not because they’re unhappy; they just got another offer that was too good to pass up. You notice that the foosball table is pretty quiet these days, but you don’t hear the grumbling that’s replaced it.

The startup monster will eat everything you put within its reach, including your free time, your health, and your family. As leaders, it’s our job to fence it in and protect both our teams and ourselves.

The startup monster will eat everything you put within its reach, including your free time, your health, and your family. As leaders, it’s our job to fence it in and protect both our teams and ourselves.So how do we do this? There’s always more work to be done, and for every triumphant cry of “inbox zero!” there are a thousand whimpers of “I’ll never get through all of this.” The startup employee who leaves at the end of the day thinking, “I have nothing left on my to-do list” either isn’t paying attention or was just laid off.

So here’s a thought: stop trying to get to the bottom of the pile. One of the worst mistakes that startups make is that they grossly undervalue their own time. Instead, acknowledge that time is a valuable and limited resource and decide how you’re going to invest it. Start saying, “we’re not going to do that right now,” and keep saying it until you find the most important items, then do them. There are probably a few items on your team’s to-do list (and your own) that you can quickly knock off, but this quickly gets difficult as you’re forced to make tradeoffs and give up things that feel really important. Remember, though, that the most successful startups are those that ruthlessly focused on a single goal until they were big enough to diversify. An unfocused startup is one bad decision away from a death spiral. So, focus. Ruthlessly. If that email, phone call, or feature idea doesn’t move your company definitively towards its goal, then it can wait, maybe forever.

Of course, in order to do this, you need to know what that one goal is. You do know what your company’s one goal is, right? If not, stop what you’re doing right now and go find a quiet corner, a mountain cabin, or a dark closet where you can put a towel over your head, and stay there until you do. Until you know why you’re in business and can clearly articulate that vision, you’re going to do more damage than any competitor could possibly do, chasing after bad revenue, distracting your team with useless projects, and generally diluting your valuable efforts. The biggest complaint that I hear from front-line people in startups is “Management doesn’t know what they’re doing.” The key words to note in that sentence are management and doesn’t know. When you start wandering all over the landscape in search of a purpose, you stop being a leader and you become “management.” Find your vision. Test it. Cling to it. Defend it like a loved one, and don’t let anything, even the lure of side money, pull you away. Even if you decide that you need to pivot that vision, do it purposefully and completely. Charlie Brown can be wishy-washy; you can’t if you expect people to follow you.

Setting the proper boundaries is also about more than good intentions and cleverly worded vacation policies (“take what you need, don’t be a dick” is my favorite so far). If you want your team to be healthy, you have to lead by example. I once had a boss who always made sure that he had the first email in everyone’s inbox every morning and the last one every night. If anyone tried to reply, he would send another response, and another, and another, until the conversation petered out in the wee hours of the morning. He wasn’t inspiring us with his work ethic; he was marking his territory, peeing on everyone’s inbox every day to remind us who was top dog. Unsurprisingly, he also spent a lot of time talking about the level of commitment required to make the company successful. We had a lot of turnover at that company.

On the other hand, the kindest words I ever received from a boss came when I was working late and he walked by my desk on his way home. He stopped, stuck his head around the corner, and said, “I love you. Go home.” For the little worker bee me, that was a freeing moment. With five words, he simultaneously recognized my effort and freed me from defining myself solely by it. When he turned and walked out the door a moment later, he set a healthy example as well.

We need to do more than talk about work/life balance: we need to model it. In my experience, “we work hard and we play hard” really translates into:

1. We work hard and we have a ping pong table that everyone’s afraid to use, or
2. We work hard, drink hard, and code drunk.

How about a new mantra: We work hard, get stuff done, and go home.

Working in a startup shouldn’t feel like an extension of dorm life: it’s healthy to take breaks and explore other interests with people who aren’t paid to be near you. Late nights and weekend work are occasionally inevitable in every startup, especially in software, where major releases and critical commitments inevitably create a last-minute crunch. But when this becomes the norm, you’re heading down a bad road. If the gas pedal’s already to the floor, you have no way to get more speed when the real crunch time comes. Plus, having a happy, supportive family life greatly reduces stress and burnout. The thing is, your family has to recognize you before they can support you.

Finally, in order to do all of these things, a startup needs leaders who understand people and what motivates them. Investors look at founders’ technical experience, industry knowledge, and business acumen, but too often they forget to ask whether these founders are capable of building and retaining a great team to bring their idea to life. It’s impossible to build the next killer app if you keep killing your team’s motivation with blockheaded management decisions.

Look around your leadership team. You probably have the business person, the sales person, and the technical person, but who’s the people person? Who among your executives is specifically charged with making sure that the rest of the company moves with purpose and vision? Who has actually built a high-performing team before? Who knows what to do the first time someone bursts into tears in their office? You need one of these, and no, that’s not HR’s job. HR’s job is to keep you from being sued when one of your executives inevitably says something dumb that offends someone. This is a job for your core leadership team. Motivating and caring for your people is as critical to your success as any patent or proprietary technology, because, let’s face it: for most technology companies, our people are our competitive advantage. They’re also our most expensive assets. As the cost of hardware and infrastructure continues to drop through virtualization and distributed computing, we’ve reached the point where replacing an engineer is more expensive than replacing a server. If you can’t find any other reason to protect your people from burnout, at least consider it a prudent financial move. You have a CEO, a CFO, and a CTO. Who’s your Chief People Officer?

The startup life is great. You get to wake up every day feeling like you’re changing the world for the better, or at least building a killer product that will have the world beating a path to your door. You get to have a say in the company direction and have beers with the CEO, all while wearing jeans and a T-shirt. You get to use phrases like, “killing it,” “secret sauce,” and “industry disruption” with perfect seriousness, even after the third beer. You also have a chance to make a genuine difference in the lives of others, even if that impact is limited to the people you work with.

We can do better at this. We need to do better, by recognizing our shortcomings and refusing to let our enthusiasm overshadow our better judgment. We need to recognize that, in this case, passion and ingenuity aren’t enough. They need to be accompanied by vision, focus, and empathy. We need to make our people part of our investment plan and be careful not to burn them out in our race for greatness. In short, we need to do more than build better products.

We need to build better startups.

You have to give to succeed

Giving is a way of life in my family. I’ve talked before about how we make this a priority in our lives and our finances, and we try to make it a part of our everyday lives as well. For years, when anyone left the house for the day, they would leave with the words “Be a blessing!” in their ears. We want to be more than good people; we want to be a blessing to the world, and every part of my personal life is tuned toward that purpose.

Work? Not so much. Putting other people first at home is one thing, but doing it at work always seemed to be the fast track to a career in doormats and punching bags. When your boss has Sun Tzu’s The Art of War on his desk, maybe graceful capitulation isn’t the best strategy. So I learned to keep my generosity at home and to be more strategic in my dealings at work.

I had a certain image in my mind of what a “giver” looked like: nice, soft, beaten down, carrying some girl’s books to school while she walked arm-in-arm with the jock who would shove him in a locker later. In other words, a wimp.

I had fallen prey to the myth that “nice guys finish last.” If you wanted to succeed, you had to take: take every opportunity handed to you, take advantage of every weakness, take every bit of energy you had and put it toward your own success, because no one was going to give you anything. Did I like it? No. Was I comfortable behaving that way? No. But that was the way it was, so I could either toughen up or get used to doing everyone else’s work.

And yet I still wanted to make the world better, and not just during my few non-work hours. So I learned to camouflage my giving. I read The Art of War and hid my feelings under a gruff exterior. Better to be thought brusque than soft, right? I justified my mentoring and coaching because it made someone a better employee rather than a better person. I gave time and support and help, but I kept score because that’s how you make sure that no one’s taking advantage of you. I became a successful manager, but I wasn’t a whole person. I was living in hiding.

One day as I walked miserably to work, I decided I was done. I wasn’t going to keep trying to be one person at home and another at work. I decided that my mission, my ministry if you will, was to make work better for everyone. I couldn’t change everyone’s work environment, but I could certainly change mine. I could make work more fun, more generous, for myself and everyone around me. In short, I could start giving again. I would still be smart about it, because I wasn’t about to become a doormat and I was (I hoped) too smart to let someone trick me into doing their work for them, but I could be intelligently generous. My back was strong enough to carry a little more of the load for other people. I could help them with their problems too, whether or not they were on my to-do list. I could show others how to succeed with the confidence that it didn’t threaten my own prospects.

And you know what happened? I thrived. I wasn’t just happier, I was more successful. I took on bigger challenges, I built stronger teams, and I earned more money for my company. My true self turned out to be better at my job than my old, false self had ever been. My bosses noticed, and they promoted me. More challenges, bigger teams, more success. It turns out that giving works.

Until recently, I thought I was an aberration, the kind of statistical anomaly that makes people buy lottery tickets, because I didn’t see a lot of other successful givers around me. Then Micah Baldwin recommended a book by Adam Grant called Give and Take: Why Helping Others Drives Our Success. This book clarified everything that I had felt about work and life, but it showed one more thing: not only do givers succeed, they’re more successful than takers and matchers. The ripple effects of a generous lifestyle not only create a better world for the people around you, but for yourself as well.

If you want all of the details, then buy the book. I’d give you my copy, but Amazon hasn’t figured out how to let me loan a copy of a Kindle book yet (I could loan you my Kindle, but I’m not that much of a giver). In short, though, here are the concepts:

Everyone has a “reciprocity style,” the way they interact with others and score those interactions. Most people occupy the middle of the spectrum as “matchers,” expecting a quid pro quo interaction where the scales even out (I scratch your back, you scratch mine). A smaller percentage are “takers” or “givers.” Takers look to get the most out of every interaction, harvesting their relationships for their own benefit. Givers, on the other hand, offer help and resources without worrying about whether they’ll be paid back. As Grant puts it:

If you’re a taker, you help others strategically, when the benefits to you outweigh the personal cost. If you’re a giver, you might use a different cost-benefit analysis: you help whenever the benefits to others exceed the personal costs.

When Grant studied the reciprocity styles of some of the most successful industry leaders, he expected to find alpha-male takers dominating, just as they dominated every room they walked into. And while he found many, as well as some matchers, he found a surprising number of givers at the top as well. In fact, some of the most successful, most loved leaders were givers rather than charismatic takers.

Digging deeper, we can see why:

• Most people are matchers, so they have a strong sense of fairness. When they see an imbalance, they seek to redress it, so the natural balance ends up working against takers (who gain for themselves only) and for givers (who help others, creating a “karmic debt”).
• Takers are often aggressive networkers, but that’s because they’re busy burning their bridges behind them, draining relationships of value and moving on. Givers, even those who dislike “networking” (whew!) have deep, strong networks full of people who are eager to help them when given the chance. This creates a deep well of resources when they need help.
• Takers and matchers see most situations as a zero-sum game, where a bigger slice of the pie for me comes at your expense. Because givers tend to look at the world differently, specifically by empathizing and seeing things from another’s point of view, they frequently come up with creative solutions that enlarge the pie, meaning that there’s more for everyone. So when you cooperate with a giver, everyone wins!
• Because they’re always maneuvering for their own advantage, takers have very different relationships with people depending upon the power structure in the relationship. They are very charming and deferential, even submissive, with people who they perceive as higher up or able to help them, but unkind or even abusive with the people below them. This two-faced approach of “kissing up and kicking down” offends most people’s sense of fairness and, if they succeed and climb higher in an organization, creates an army of subordinates who are eager to see them fall. Givers, on the other hand, work to lift up the people around them regardless of their relative stature. This creates stronger organizations made up of people who want to see the giver succeed.

Backed by both anecdotes and strong research, Grant shows that smart givers can avoid becoming doormats and not only become successful, but do so by building stronger, healthier companies and relationships. In the middle of a year continually tainted by the actions of our President, the Taker-in-Chief, this gives me hope, not just for myself, but for our society. While the takers may thrive for a while, they do so while sowing the seeds of their own destruction. Meanwhile, the givers of the world, supported by the matchers, build the strong future that continuously replaces them. Back to Grant again:

This is what I find most magnetic about successful givers: they get to the top without cutting others down, finding ways of expanding the pie that benefit themselves and the people around them. Whereas success is zero-sum in a group of takers, in groups of givers, it may be true that the whole is greater than the sum of the parts. As Simon Sinek writes, “Givers advance the world. Takers advance themselves and hold the world back.”

So I’ll leave you with this thought: what kind of a company, or group, or world, would you rather belong to?

A zero-sum environment characterized by backstabbing, power plays, and constant maneuvering for position, where every meeting starts with a silent stack-ranking of the people in the room. A place where a bus must be driven through every hour, because someone’s getting thrown under it in every meeting. Where giving is a sign of weakness and keeping score is the only way to know if you’re better than the person next to you. Where the top-ranked person gets all the credit and his underlings get all the work and blame. Where the key character traits are self-interest, pride, and irascibility.

… or…

A place where people support each other, working through problems together. Where a leader’s job is to make his people successful, lifting them up and coaching them to become better at their jobs and happier in their lives. Where giving is a sign of strength and deep reserves, and those who help are given more and better responsibilities. Where your status is measured by the people you’ve helped to grow and move on rather than the ones you’ve forced to stay, and those who stay do so because they can’t think of a better place to work. Where no one has to announce their accomplishments because others have already done it for them. Where creative solutions not only help individuals, but help the company win in their market. Where the key character traits are generosity, humility, and self-control.

These are obviously extremes, and no one workplace, family, or country is purely one or the other. I can tell you, though, having worked in places that came close each of these extremes, I know where I’d rather be, and I know how to get there.

By giving.

Startups: When to Hire a CxO

In my last article, I told you that you don’t need a CTO yet, and I received some interesting responses. In one discussion, someone pointed out that this doesn’t just apply to CTOs but could really include any C-level position that the founding team doesn’t already have covered. I agree: I chose to write about the CTO role because it’s closer to my experience, so I end up discussing this function with startup teams, but you could just as easily say, “Don’t hire a CFO yet.” As this person pointed out, you need to take care of the functions that are covered by these roles, but you don’t need to create the titles until they’re absolutely necessary.

So let’s assume you took my advice (because you really should). The logical next question is: when should I hire a CxO? The actual timing varies by your company and situation, but here are some pointers to tell you when the time is right.

When the hat gets too big

“We all wear a lot of hats around here.” I’ve heard this enough times that it might as well be printed on a poster and issued as part of the Entrepreneur Starter Kit, along with a case of ramen noodles and a framed picture of Larry Page and Sergey Brin. Any company, no matter how small, includes basic functions like sales/marketing, finance/accounting, HR, product development, and customer support. Leading the company means ensuring that every one of those areas runs effectively, so every leadership team has to cover a lot of ground in the early days. And if your founding team didn’t come with those skills built in, then someone has to do two or more jobs (i.e., wear more hats).

(Photo Credit: Kris Davidson

As your company grows, the needs in each area naturally grow, as well, but not all at the same pace. HR functions are hard to set up initially, but the difference between one employee and ten isn’t that great. Going from 10 to 50, however, adds a whole new world of complexity as you suddenly become subject to federal leave laws and other requirements. Finance and accounting are really no more than bookkeeping until you start making a profit or bring in significant funding. Then your investors start expecting quarterly finance reports, you start talking about the differences between GAAP and cash accounting methods, and the government starts asking for its share.

The function’s criticality should dictate the seniority of the leader.

As your company’s needs grow, you’ll need people dedicated to each of these functional areas: it’s impractical for the CEO to also be the bookkeeper for a 20-person tech company. But when do you need a full-time leader? Here are some signs that it’s time to delegate a function, but even then you may not be ready for a C-level hire. The function’s criticality should dictate the seniority of the leader. If a function is time-consuming but necessary, then you may be able to get away with a director-level leader who can later join a larger department (operations is a great example of this). However, if the function is core to your business, then hire a senior strategic leader who meets today’s needs and has the capacity to grow the function for the next few years.

• The function is critical to your company strategy but outside of your wheelhouse. In the early multi-headgear days, founders can get away with playing to their strengths (product strategy, financial planning, sales, etc.) while competently covering the other parts of the business. As you start to see success, though, you need to build a team that’s strong across the board. Too many companies stumble just as they’re gaining momentum because their founders are afraid to admit their weaknesses and cling to leadership when they should delegate to an expert. If you’re leading a software company and you aren’t a technologist, then hire one before you become the problem.
• Trying to cover the function part-time has become an impediment to the company’s growth. Even competent leaders become incompetent when they’re overtaxed. Ask your teams to tell you when you’re becoming a bottleneck. When company progress is delayed because certain areas aren’t getting enough attention, then it’s time to hire a new leader.
• The team is too big to manage part-time. When a functional team reaches the size where you can no longer manage them with part-time direction or where keeping that team on track takes up a disproportionate amount of your time, then it’s time to offload the work. Find someone with both the domain expertise and the people management skills to keep the team running efficiently with general guidance from you.

When your investors tell you to

After reading my last article, several people replied, “Why even worry about this? The VCs are just going to replace the entire leadership team anyway, aren’t they?” While slightly hyperbolic, this statement points to an underlying truth: investors want a strong leadership team, and they aren’t shy about taking action when necessary. It even makes sense from the investor’s point of view: they have an investment to protect and they can’t have your underpowered team screwing it up.

So if you don’t have the right leadership in place — or even if you think you do — be prepared for some changes when you take on large investors. In case no one mentioned this, large-scale financing is a direct trade of control in exchange for money and experience. Your investors have strong opinions on what works in your industry, and they’ll expect you to listen when they make “suggestions.” The upside is that they also have a network of experienced leaders that they can bring to bear on your leadership problems, so use them.

I’ve seen several companies “bring in the adults” without thought for how they would blend with the existing team, with disastrous results.

Just make sure that you don’t trade too much control in this process: this person still has to fit in with your team and your company culture. I’ve seen several companies “bring in the adults” without thought for how they would blend with the existing team, with disastrous results. You don’t want to hire a new leader and leave them with no one to lead because the entire team fled.

Before your investors tell you to

If you want more control over your team-building, then consider hiring ahead of your needs. Going to investors with a strong leadership team that’s clearly ready for the next phase of growth can speed up the financing process and minimize board-level meddling later on. This approach requires you to spend more money up front, since you’ll be looking at people who are overpowered for the current position, but hey, you have to spend money to make money, right?

If you plan to assemble the superteam before seeking that next round of financing, then focus on the areas that are both critical to the investment thesis and weak points in the current team. Do you plan to increase revenue by 400% in the next three years? Then make sure you have a superstar Chief Revenue Officer. Planning to disrupt an entire market with proprietary technology? Then you need a business-savvy CTO and a Chief Scientist or Product Architect with a stellar resume in your proprietary approach (a couple of patents can’t hurt, either). You don’t need to fill your boardroom table with CxO name cards, but you need to have the right people in key positions if you want to set your investors’ minds at ease.

Hiring senior leaders should always be a careful blend of financial planning, insights into current and future needs, and a comfortable fit within the current leadership team. Take your time and do it well.