A culture of open communication is great when profits are up and a company is growing, but it’s not so easy to appreciate that
open communication from employees when things aren’t going so well, says Carl Eibl, managing director at Enterprise Partners
Venture Capital. The danger in being harsh with people who bear bad news is that the next time a problem arises, they may just
keep their mouth shut, depriving you of critical information. By encouraging open communication at all times, the 24-employee
venture firm is thriving, with $750 million in active capital under management. Smart Business spoke with Eibl about how face-to-face meetings create intimacy with your customers and why it’s important to hire quality over quantity.
Be a team-builder. You have to be able to
work as a team. There isn’t any company
that gets built or organization that gets
built on the back of just one person. A lot
of leaders feel like they don’t need a mentor but having one is very valuable.
The biggest trait is the ability to listen.
You have to have a lot of self-confidence
and have your ego in check.
You can’t impose your view on other
people. That’s really not how it works. You
have to take the input as to how they view
the market, how they view the company
and how they view what needs to be built.
Be able to take that in and synthesize the
shared vision and lead on the basis of a
shared vision.
Find your leadership style. Usually, it’s just an extension of their personality. Figure out
what you do well, what you are passionate
about and what you like doing. Be able to
shape a vision for the future and shape a
vision for the company.
You have to get people genuinely excited
and passionate about what you want to
do, and you have to be able to show how
they can get aboard your team and put an
imprint on your business. If you can do
that, you’ll attract high-caliber people.
Hone your vision. You have to get together with people that are experienced and go
through your pitch. Refine your pitch.
Refine your thinking. Bounce ideas off
people. Your vision evolves. It’s not something that just pops out and you have it. It
evolves over time, and you have to put a
lot of work into it.
Get out and see your customers. There’s no substitute for talking to the customer. If
you’re not talking to your customer,
you’re not going to succeed. Go see them.
It’s amazing how many people don’t go
see their customers. Go fly to them. You
want to elicit from them what their needs
are and how you’re going to fulfill their
needs. If you don’t go see them, they don’t
confide in you. They may complain. They
may tell you what you need. But they
don’t confide in you.
That gives you the real intimacy with the
customer.
It’s best to not have too much prep. Have
bigger topics that you want to touch on,
but don’t have it be scripted. You don’t get
the confidence. You get an exchange of
information, but you don’t get the feel.
Communicate and overcommunicate. Just keep talking with people. Communication isn’t
just one way. It’s two ways (and) face-to-face. Walk the halls. Don’t sit in your
office.
Be in touch at all levels. It doesn’t matter
how big the company is — you have to.
The more the senior management communicates, the more their values come
through and the more people understand
the personality of the organization and the
more people open up to the organization.
Set the tone. If people see the leader being flexible and embracing things that he or
she may not have embraced in the first
conversation about it, it tends to rub off
on everyone else. Then everyone else is
flexible and accepting. If the leader is
going to be stubborn, usually what happens is the team, to different degrees, becomes resentful.
Assess risk through finances. If you can’t distill it down into financial terms, you probably shouldn’t be doing anything. If you can’t say how much money you’re going
to lose or how much money you’re risking
or what’s the return on that, you’re not
looking at it the right way. I think it’s
always financial.
Get feedback on failure. Why did we fail? Where did we go wrong? How can we fix
it? If you don’t have people that are capable of doing that analysis and taking corrective actions, you have to change the people. You don’t fire the people for making mistakes. Everybody makes mistakes. You fire people for not adjusting or changing once mistakes are made.
Always be evaluating. If somebody has to
come in your office and get a once-a-year
(review), you’ve messed up. People
should know all the time where they stand
in the organization (and) whether they are
doing well or not.
Hire for quality over quantity. You don’t need a lot of people. You need a few very good
people. A lot of times, people hire bodies
rather than hiring capability.
They underestimate what people can
achieve. They think they need a lot of people. That means each individual is viewed
as not being able to achieve that much.
You can give people a lot more responsibility.
Keep an eye on the future. Be very disciplined to make sure you review your strategic
road map. You’ve got to take the thinking
time to evaluate that. You’ve got to get
away from the day to day and get off-site.
You need to have some thinking time.
If you do it in the office, you end up
thinking about stuff that you have to do in
the office, rather than thinking more
broadly.
Always have a strategic road map.
Review that road map several times a year
with a lot of depth with your senior-most
people. The landscape is always changing,
and there are always refinements.
HOW TO REACH: Enterprise Partners Venture Capital, (858) 731-0300 or www.epvc.com