How to Build and Run Your Exec Team

As your startup scales from the dozens into the hundreds and more, it starts to grow into a real organizational structure. Before this transition, you probably have some notion of “teams” and “managers” but it’s pretty loose. Everyone sits in a room with the founders, and everyone knows who’s got the street cred and can make a decision. 

The transition to a real structure with “teams of teams” and executives is fraught for two reasons: First, as the company is going through a transition where employees no longer automatically know everything and everyone, the founders are not going through that same transition. They don’t realize the employees are losing track of all the new people, don’t know the priorities any more, and are feeling disconnected from the mission. This makes the founders slow to add structure and process as they scale up.

Second, some founders internalize the success they had innovating on product and business model, and take it as a license to innovate on everything else. They impose creative new org structures and business processes, with predictably awful results. Don’t do this. Focus your innovation on your core product and business.

Along with the new structure comes, for the first time, an exec team. Done right, the exec team provides the founders an infusion of experience and lots of new leverage for running the company. Done poorly, the exec team can be a source of endless politics and drama, grinding the company to a halt as everyone starts cosplaying Game of Thrones. 

A few simple rules turn the exec team into a source of operating leverage for the founders:

Just organize the company functionally. There’s no need to waste time innovating on this. Your departments are probably engineering, sales, product, marketing, customer success, finance and HR. Each one will need a leader who reports to the CEO. For short times, two of these can have the same leader, especially when you’re still growing into this structure or when one group is in between leaders. Two leaders for one of these groups is a red flag: If you want to try this, look in the mirror and ask if you’re just ducking a hard decision.

The exec team meets every week, ideally first thing. My favorite structure is a 9am Monday exec team meeting right after the 8am forecast meeting with the sales managers. I even like to put these meetings in the same room. (Mysteriously, sales managers seeing that the VP will be immediately taking the forecast to the exec team helps improve forecast accuracy.) The exec team, as a team, runs the whole company. That means, as a group, we all look at the updated sales forecast and roadmap delivery every single week. Gaps and misses prompt a discussion of what we, as a whole company, can do to cover gaps. The rest of the meeting will be topics du jour, often decisions one team member is bringing to the group for company-wide buy-in.

The team should be composed of half up-and-comers and half seasoned veterans. The veterans are folks you’ve hired externally to come in and manage their department. They’ve led their departments before, with headcounts of the size you’re hoping to grow into. Meanwhile, up-and-comers are promoted from within. They often started as ICs in the early days, naturally assumed leadership of their teams when they were small, and were a natural choice for formal leadership of the group when you created the exec team.

Up-and-comers inspire the team, bring the energy, and invent innovative new ways of doing things. At Periscope, we were known for our 5-second customer support SLA. No externally hired head of support would have ever committed to that. These are the things no one thought possible, that become part of what elevates your startup to greatness. Also, it inspires the whole team to see that your first growth hacker is now VP Marketing at a scaling company. These stories are why we join startups.

Veterans bring wisdom, and keep your up-and-comers from driving off the cliff. Veteran leaders are very expensive, require a retained search to hire, and mostly run their playbooks. These playbooks deliver on-plan results but rarely the discontinuous, once-in-a-generation outcomes. But twice a year the up-and-comers get very excited about a major pivot that risks destroying the company, and your veterans will tactfully bring the team back around to sanity. They are also terrific recruiters, will gracefully help out the up-and-comers with people-management challenges, and can jump in to manage peer teams on an interim basis when a leader leaves unexpectedly. A CFO who has finance locked down, keeps you from tanking the company with this week’s brilliant idea, and can jump in to run another department in a pinch is a great thing to have.

Take the exec team offsite once a quarter. It doesn’t have to be far: Just get them out of their comfort zone. Pack the day with agenda items about all the important things that aren’t urgent enough for the weekly meeting. Are we building X or Y next year? Are we comfortable ramping up burn to try upmarket sales this year? If sales donates budget for 10 engineers, can we have that new feature a quarter earlier? (Narrator: You cannot.) Pack the evening with team building activities. It can be paintball, go-kart racing or just cooking a meal together. The real goal is to get the group some shared experience together so they work as a team the other 89 days of the quarter.

Bring the exec team to the board meeting. A typical board meeting will be a couple hours of open session where one or two execs present, and then a closed session with just the board members themselves. These presentations will feel kind of pointless to you, but the board likes to hear from the team, and most importantly, the exec team should feel accountable to the board for the company’s performance. A good beginning-of-quarter cadence can be an exec offsite followed by a board meeting followed by an all-hands. The agenda for each of these is informed by the previous one’s outcome.

When an exec is leaving, announce and move on ASAP. With an experienced exec, the departure will be an ongoing conversation. Their dissatisfaction or yours has been known and discussed for a while, and an honorable transition is a priority for both parties. Sadly, not every exec behaves this way. Also, it has to be said, insecure founders who feel personally rejected when someone quits can easily make transparent conversation impossible. Regardless, once it’s decided that someone’s future is not at the company, announce to the company ASAP and move them along. A visible senior leader whose heart isn’t in it can quickly have a toxic impact on the team, even when they’re trying not to. Move the team to the interim leader right away.

But take your time finding a replacement. Replacing a departing leader is a sensitive situation. You are feeling the pain from a department that’s no longer delivering, and is at best in a holding pattern. But rushing to bring in a new leader who then doesn’t work out makes things exponentially worse. It then typically takes a quarter to realize and act on the failing new leader, during which time performance degrades and the team is further destabilized. And to add insult to injury, the board starts getting antsy about your ability to hire and retain this key role. So when a leader departs, move the team into an interim situation you can live with, and take your time running a strong process to find a great replacement.

Leadership is putting the team ahead of yourself. Every exec has to deliver, and every exec has to uphold the company’s culture and values in the way they manage their team. But beyond that, the true test is acting in the interests of the whole team – not just their department – and putting those interests ahead of personal interests. (The whole team here, it should go without saying, includes the investors and former employees who believed in you when no one else did.) 

Sometimes these are little things: Reallocating some budget to T&E that they then use up themselves. Sometimes it’s bigger: Jumping ship for personal gain in the middle of an M&A process, putting the whole team’s outcome at risk. These things are toxic no matter the size: When you allow these behaviors, your honest, loyal execs start to feel like suckers for not playing this game, and the culture of excellence dissolves. When you see these behaviors, and when you hear of them in backchannel references, know in your gut that it’s time to move on. 

This standard of leadership has a flip side: These execs will see up close how you operate as a founder. Is the story you told at the All Hands reflected on the cap table? Are the salary bands you laid out true for everyone, or just “most people”? Your leaders have enough access to systems and board members to verify. The standard you personally uphold is the standard you can and should expect from your senior leaders. Make it a high one.