C.E.O. or Not, You Always Need Feedback from the New York Times
By ADAM BRYANT
MAY 12, 2012
This interview with Deborah Farrington, a founder and general partner at StarVest Partners, a venture capital firm in New York, was conducted and condensed by Adam Bryant.
Q. What were some important leadership lessons you’ve learned?
A. I found early on as a manager that it was hard to learn how to delegate. I think that most people in their early leadership positions either tend to delegate too little or too much. And I delegated too little at first. I felt I needed to know everything that was going on, so I ended up doing a lot of the work myself that the people who reported to me should have been doing. I found myself working 24 hours a day, seven days a week. I stepped back and said, “This is not going to work.”
So I sat down and talked to the people who worked for me, and we agreed on various goals. But then I delegated too much. When they came back at the end of the quarter and I saw what they did, I realized that approach didn’t work well, either. So I learned the importance of weekly check-ins, and then I think I got the balance right.
Q. What else?
A. I had a terrific boss at Merrill Lynch who taught me that the most important conversation you can have with anybody who works for you is the performance review. Because people, especially those who are goal-oriented and very high-achieving, want feedback. They need that. And my boss made me feel that nothing was more important than this conversation. When you’re young, you know you can improve; you want to improve. You need feedback, and you need constructive feedback.
So when I coach and rate C.E.O.’s today — if I’m on a board, if I’m hiring them or giving them feedback — I’m always looking to see if they understood what they’ve done well. Do they understand what they didn’t do well? Are they listening to my feedback? Can they accept it? How do they then modify their behavior?
Q. When you started your own firm, you had a blank slate to create the culture you wanted. What did you do?
A. There were four of us who started the business together — three women and one man — and we had each worked at firms that we felt had been too aggressive, too cutthroat. We came from investment banks, from private equity, from other venture firms, where people were always vying to say, “I did this, and therefore I want the biggest reward.”
We wanted to start a firm that was based on respect for the individual, with a moral culture. So we started out with a rule: “No jerks allowed, ever.” The language was a little more blunt, but you get the idea. We’d all worked with too many people like that.
And we wanted a culture where accomplishments and results were valued above politics. Each person would have time to be heard. And each person would be required to be heard. You had to have an opinion. You couldn’t just say, “Well, I’m going to pass on that.”
Another thing we did was to bring in a leadership consultant, not long after we started the business in 1998, to run off-site meetings for the four founders once or twice a year. He helped us understand our individual styles and how we liked to make decisions and interact. One person went A, B, C, D — very linear. Another person quickly processed things, immediately went from A to Z, and said, “This is it.” And other people had something in between. So it really helped us understand the decision-making style of the partners, and that helped us develop some of the ground rules for how we make decisions.
So we really focused on communication and clarity. One of our rules is that everybody gets a chance to speak, and they have three minutes each. Then we would discuss, and then we would vote. We really focused on the process.
Q. When you’re working with C.E.O.’s of the companies you’re investing in, do you find yourself repeating certain things?
A. What I tend to say to them is, “Talk to me about what you’re doing right, and how you’re doing it, and what you feel you can do better.” I don’t want to hear only good news. Because with a growing company, and especially for first-time C.E.O.’s, I think they feel that they need to know all the answers — “I can’t show weakness. I can’t show that I don’t know how to do something.”
So they tend to want to come to you with answers and the problems solved. And I say: “No, that’s not what I want. Tell me what the problems are, so I can help you solve them. This stuff is tough. We don’t expect you to do everything yourself. Let me help you. Let the board help you.”
I look for people who don’t think they know all the answers, because no one does in this very fast-changing world, especially in technology. I want to know if they’re going to listen when I’m giving them feedback. Because I’ve seen a lot. I’ve invested in about 70 companies, and I’ve looked at hundreds of others. I tell them: I’m not preaching to you, I’m partnering with you. I’m not your boss. I’m a board member, and I’m trying to make you be the best C.E.O. you can be.
Q. Tell me more about how you assess chief executives.
A. Obviously you want expertise, technical skills, and you want them to be really smart. But I’m also looking for more subjective things, like self-awareness. Do they understand their own strengths and weaknesses? Can they create excitement for others and the desire to achieve?
I would say that in 75 percent of the companies we’ve invested in, the board has decided to change the C.E.O. So when you are hiring a new C.E.O., of course you want to know if they know what to do and how to do it. What I always ask them is: “Review your career for me. Tell me what you did and why you did it.” I want to understand that person’s history. And in describing their professional history, their personal history comes out when they explain why they changed jobs.
If they’re a first-time C.E.O., can they learn? Do they have the attributes that’ll make a great C.E.O.? Can they hire “A” players? Can they build a sense of mission and urgency? Can they maintain that energy and motivation to stay on top?