#47: Management & Career Growth
David Cancel: We're back.
Dave Gerhardt: We're back. This is going to be a thorough one. And the only reason I know is because, I can see DC has notes out.
David Cancel: This is a first Seeking Wisdom that I have notes for. FYI.
Dave Gerhardt: This is the first time you've ever been prepared for in advance. So, we're going to talk about career growth, progression, and basically bringing on a management team at a startup and all the different layers. So, you shared something with us recently, you're doing this kind of CEO peer group thing. And, there's like an interesting chart that they shared and you shared it with us to basically break down, the different skill sets of a CEO throughout the different phases of a company. So, it basically starts with the first phase is you're just starting up, really early days, and the CEO is very hands- on because product is getting off to a start and starting to figure out where everything is going. But the thing I want to talk about is, each of those phases and kind of like something that you've said to me is just about people in their career. Rarely does somebody start their career with a company and progress as fast as that company is growing.
David Cancel: Yeah, that's an important thing. When you're in a kind of early- stage company or any stage company I should say, and you're ambitious and you want to grow quickly in terms of like your responsibility, in terms of your scope within that company. I have this conversation a lot with people throughout the years. And one thing that is hard for people to understand is you can control, it's hard, but you can control your own rate of growth, right, and so the things that are easily controllable by yourself, what is hard to control and this makes all the difference in a high growth company, whether you go up the ladder, you increase your scope or not. Is your rate of learning and growth at the same rate of growth as the company.
Dave Gerhardt: Right.
David Cancel: So imagine these two parallel lines and so like for them to move at the same slope, right, throughout all of time, very rare for that to happen. That's why it's very rare for people to make it throughout all the different stages of a company.
Dave Gerhardt: Yeah, or let's give an example. Let's think about Slack, right.
David Cancel: Mm-hmm(affirmative).
Dave Gerhardt: Three years ago, they had no revenue. Today they have a hundred million in ARR, right. No individual could have possibly accelerated as fast. You don't just get to skip from zero to a hundred million ARR.
David Cancel: Imagine you were a salesperson there. They say, they don't have salespeople, they do have salespeople, FYI. Imagine you were an early sales person, and they had$ 0 in revenue.
Dave Gerhardt: Right.
David Cancel: And now they're at a hundred million or so of ARR. How many people in the world do you know that could have gone in two and a half years to grow at that same rate?
Dave Gerhardt: Right, like the first year is all about being scrappy, you're signing up every customer you can. And then you fast forward three years later, all of a sudden it's like super process driven, like looking up your Salesforce queue, calling leads every day.
David Cancel: So if you were the first sales person there to be the ultimate VP of sales or CRO in that company a year from now, you basically would have had the skill sets that would have made you great at the zero revenue stage, zero to let's say a million dollar stage.
Dave Gerhardt: Yeah.
David Cancel: But still three years later have the exact skill needed to take them from a hundred million to, let's say 250 million. I don't know a lot of humans that look like that.
Dave Gerhardt: Yeah. So there's this interesting chart that you have.
David Cancel: Mm- hmm(affirmative).
Dave Gerhardt: And just about like growing through the different phases, and you said even from a CEO perspective, rarely have you seen it. It's rare that a CEO is able to basically execute on all five different stages.
David Cancel: Yeah, to go from zero person company to public company. It happens, it's rare. That's why we hear those stories. And the chart that Dave is talking about, is this great chart, I'm about to join this a CEO group forum here in Boston, mostly SAS companies. And the organizer of that, her name is Boujer. What's up girl. She shared this chart with me, that they have, and it blew me away. It's a very simple chart, but it blew me away because it's something that it's kind of a confirming evidence. It's something that we had been talking about for years, about like there's different stages and you need different people for different stages. And what stage are you right for? And we've always talked about it this way, but it's the first time that I saw it graphically. And so the stages that she talks about here, her and her partner, there's four stages, right. There's the start- up stage. And there your sole focus is developing product. There's the second stage, initial growth stage. And there your focus is on driving sales.
Dave Gerhardt: You kind of like shift from being a hands- on to more of a delegator and like setting the direction.
David Cancel: And then you go to third stage, rapid growth, there you're trying to lead the market. And then you go into the fourth stage, continuous growth, and there you're trying to dominate an industry, right. And in each of those four sections, you go through various turmoil and ups and downs, and what have you, but you have leaders that are great at different things, right. In that phase, in that early phase of developing the product startup phase, there you're trying to have leaders who are doers slash decision makers. So they are player coaches, right. They are people who can lead and do at the same time because of your size. Then you keep growing into different stages. And then all of a sudden you need a leader who's good at delegating. And then you move to the next stage. And you need a coach, a person who's good at team building, a planner, a great communicator. And then you move to the fourth stage and now you need to be great at strategic innovation. You need to be good at affecting change across hundreds of people, good at building organizations and being the kind of chief of culture of your team or your functional area. So like there, you've gone through all of these major shifts and that's why very few people can make all of those shifts.
Dave Gerhardt: Yeah, so one of the reasons I want to talk about this is from your perspective as a founder and a CEO, how do you know, so not even just like you as a CEO, but like your team, right. How do you know that, when is the right time to move people in and out through each stage and what would be the signs for you to say, Hey, this person can progress through the next stage, versus continuously trying to swap people out based on the stage of the company.
David Cancel: So hard to figure this out. I mean, at one level you want people who are great at their stage, but are kind of growing at a faster rate than the company. So they're going to lead you or lead that functional area into a new place, into that next level. And so you want someone who is almost too good for kind of the role that they're doing now or doing it too well and excelling too well. And it's almost too easy for them and they need that next challenge, right. Versus someone who you see that is probably not a good person to move up there, where they're spending most of their time, kind of in the weeds, most of the time kind of trying to tread water, how do you say that, tread water and most of the time kind of like firefighting. And so like, they're trying to just keep everything in order. They're probably not a great person, or probably not the best fit for you to like move to the next stage because they're having enough trouble right now in their stage. And they're kind of hitting a plateau in their growth. This does not mean, this is a bad thing. This does not mean that person's a poor performer. They could be an amazing performer for that stage. It might just mean that they're not the best person to take on the next role.
Dave Gerhardt: Right, but you've also seen like this can also work in the opposite way too. Like you could bring on, a senior exec too early.
David Cancel: Yeah, and most of the problems actually happen in this scenario where it's the opposite way, where you bring on someone who has too much experience. So let's say, they are fourth level, they're good at the fourth level of stage, which is continuous growth and dominating an industry. So imagine you were in SAS and you wanted to bring someone from... This is the classic mistake, oh wow, Salesforce or Oracle people who dominate their industry. And then you try to bring them into your company that's in stage two. Where all you're trying to do is get initial growth and drive those kind of first number of sales. Probably not a good person, someone who's this great agent of change, organization builder, good at strategic innovation is probably not the best person to be the leader, who's good at just delegating and, and getting that crosstalk
Dave Gerhardt: This is a hard thing to fight though, right. Because you look at, in the early days, you look at somebody and you're like, oh man, this lady has this amazing resume from this company, this would be an amazing fit to our team right now. But basically the whole point of us even doing this episode is like, so many other factors, like the stage of the company, right.
David Cancel: So important.
Dave Gerhardt: Rest of the team when I apply to making those decisions.
David Cancel: Yeah, it's the number one, well, it's one of the top, I'll just say it that way. One of the top higher mistakes that I see. That I've made myself many times and I see other people fall into. And so we talk about this a lot with lots of friends and peers and because most people are really good at screening people for cultural fit and for their skillset, for the job their basic skill set and competency level, let's say. What they forget is the third thing that they need to look at beyond, cultural fit and do you get along with them and are they competent or not. Are they smart or are they not smart. Is this third leg, which is what is the stage that they're naturally good at, right. Or what is the stage that they've had great experience in. And if they naturally good at and, or have had most of their experience in a certain stage, I would say that first stage or that fourth stage or whatever stage you're looking at, is probably going to be a stretch for them to re- invent themselves. Forget everything that they've learned, because in some ways you're hiring them because of what they've learned and ratcheted back down, or ratchet it up to meet your stage.
Dave Gerhardt: And what makes it hard is that, it's easy to look at a resume and see, check this box, check this box. It's harder to go find the people who might be up and coming and progress into that role.
David Cancel: And it's easier to, like you said, check the box. It's seductive because it's like, wow, we got some big names, we have this big name.
Dave Gerhardt: You want that press release higher.
David Cancel: Like, wow, they hired this amazing person from this huge multi- billion dollar company. But yet, they're just getting their initial product into market. They haven't reached a million or$ 5 million in revenue yet, but they're hiring someone who's sold into billions of revenue per year. It's hard for that person to make the switch. And you're almost setting that person up for failure because you're putting them in a scenario that they're not naturally good at, right. And you're asking them to race on a course that they're not prepared for.
Dave Gerhardt: It's hard. So another thing that you mentioned to me is like, the hard part about making those hires is that there's never really the perfect time for it, right. Usually it's going to be like, we might be six months too early, but the right person fits perfectly. Or if we don't make a decision, we're going too be to late.
David Cancel: Yeah, and that's why we have this great old saying, which I hope I say it correct, which is, horses for courses, right. And that's, you want the right horse for the right course, right. You wouldn't go out there and say, we need a great runner, so let's go find the world- class sprinter when you're running a cross country race.
Dave Gerhardt: Right.
David Cancel: You need the person who's right for this stage, nor would you hire a professional baseball player to play in your, pony league game, right, or your high school league. Because it's hard to translate, that someone who's kind of a super- duper specialist who probably requires a lot of maintenance and a lot of people to coach and a lot of support. And you're trying to move them down into an entirely different league.
Dave Gerhardt: Yeah. What advice would you give to somebody though, that wants to figure out how to progress through all of those stages?
David Cancel: One, know that it's super rare.
Dave Gerhardt: Yeah.
David Cancel: And, don't see it as a failure if you're not able to do it, because- crosstalk
Dave Gerhardt: Would you say, maybe once or once or twice in 20 years, almost?
David Cancel: Yeah, in 20 years, for me, it's been like a handful, let's say I can count them on one hand the number of times that I've seen people make it through all those stages, which is so rare. That's why when you see that founder, CEO, who's taken a company public, that's why it's a big deal because it doesn't happen, respect. And if you look at their management team, it is extremely rare for the majority of that management team to have been that team that was there, day one, almost never. Almost never happens. And so, because you need different strengths for different stages of the business, it's not a negative thing. And so, if you're trying to do it, one, don't be bumbed if you can't do it, because it's super rare. Two, the only way you're going to be able to do it, is you're going to have to grow at a faster rate than the company. Though not too fast, you can't be two stages ahead, you got to be moving...
Dave Gerhardt: I'm glad you mentioned that, this is a good place for us to wrap up, because I think that there is an easy trend, which is you try to manage to the next stage, right.
David Cancel: Mm-hmm(affirmative).
Dave Gerhardt: And so, if you're still at a stage where you need to be really hands- on and a doer, you can't just because you want the next phase, skip a step.
David Cancel: Nope.
Dave Gerhardt: And just go straight to thought leadership mode.
David Cancel: Nope, definitely. I'm glad you brought that up, that is a common problem.
Dave Gerhardt: Yeah.
David Cancel: People do.
Dave Gerhardt: Yeah.
David Cancel: All of a sudden they want to be a strategic blah, blah, blah, something, something.
Dave Gerhardt: Yeah.
David Cancel: And, you skip two or three stages in that case.
Dave Gerhardt: Yeah. So anything else we wanted to hit on with this. I think the main thing was...
David Cancel: 5 start reviews. Oh, sorry.
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David Cancel: Call up Dave, hit him up. He'll send you the link.
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David Cancel: Mm- hmm( affirmative). What, that's not scalable, bruh.
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Dave Gerhardt: It was 153, but there was one weird thing about them. All of the 153 had like five stars next to them.
David Cancel: It's all five stars.
Dave Gerhardt: Is that a bug?
David Cancel: No, we only get 5 star reviews. My boy Matt, he's over at WordPress. You know who you are.
Dave Gerhardt: What's up Matt.
David Cancel: He tweeted this morning, I hope you put that 5 star review in bruh.
Dave Gerhardt: All right. We're out of here.