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9 Takeaways from Raines’ Private Equity Webinar

Raines Managing Directors Patrick Gray and Mercedes LeGrand co-hosted a fantastic webinar March 17 on Transitioning to Private Equity.

The discussion, featuring Larry Prior of The Carlyle Group, Alicia Sontag of Prelude Growth Partners, and Neel Bhatia of Arcline Investment Management, looked at panelists’ journeys to their current PE roles, misconceptions about PE, and advice for how to be successful after transitioning to PE.

During live polling, 66% of attendees shared that their biggest challenge in transitioning is their lack of relationships with PE firms. To this, panelists advised connecting with executive search firms like Raines and PE firms directly. In addition, be sure to understand where you add value, where you can offer expertise, and how your dream PE firm operates.

See nine key takeaways from the 45-minute webinar below. You can also watch the webinar recording at the bottom of the article.

1) Not all PE firms are the same. The more time you can spend getting to know a firm and learning its business, the better. Part of the reason Larry’s transition to The Carlyle Group was seamless was because he had relationships with firm members for 20 years, so he wasn’t surprised about the dynamics once in the role.

2) Get to know not only the firm, but the team with which you would work. “There can be a tendency to just jump in,” Neel noted. Instead, “be very thoughtful about not only the firm but the person within the firm. If you’re a Private Equity executive, you’re primarily working with one or two deal partners, maybe some operating partners,” so really get to know your future team.

3) Think like an owner: “In PE, as an executive, you can’t think about it as an employee,” Alicia said. “You have to think about it like an owner because that’s how the PE firm is thinking about it, and that’s how the founders and managers are thinking about it.” Alicia said often this is the hardest mindshift for leaders new to Private Equity.

4) Be coachable. Neel identified two common profiles of PE executives — an experienced PE executive, who has a playbook for operating, and a novice. If the person is new to the PE world, PE firms look for someone who can quickly adjust and importantly, is coachable either by outside coaches, the board, or other leaders in the company.

5) Think faster: While the plurality of holding times for a PE firm is 3 to 5 years, your action plan for results is in terms of months and quarters. “When you make the move from publicly traded to Private Equity, try to understand and be comfortable with these couple of different gears, with both the long-term strategic focus but also the intensity of putting it in play almost daily,” Larry recommended.

6) Connect with specificity: Alicia says she receives warm and cold calls frequently. “We really appreciate building those relationships because the timing might not be right now but it could be 6 months or a year, or it could be right now coincidentally.” But, when you do connect with a PE firm about a position, the more specificity you can provide about your skill sets, the better. And, be sure the firm invests in your industry. Case in point: Say you are a great supply chain leader for industrials, don’t say everything you can do — pick two or three key strengths and emphasize them. “It’s all about strategy, but it’s also all about A+ talent,” Alicia notes.

7) Are you the pig or the chicken? To get the big return on investment, you must be committed. “Are you the pig or the chicken at breakfast?” Larry asks. “How committed are you, and have you invested alongside that PE firm, both from the fund and through direct investment in the opportunity? If you’ve made that commitment, it can be very rewarding but it has a time horizon measured in 3-7 years, and you have to have patience for that kind of return. More importantly, you have to make it happen.”

8) Be introspective. Both Alicia and Neel flagged an individual’s self-reflection and assessment of strengths and weaknesses to be key in finding success in PE. Leaders must be willing to listen and be held accountable.

9) The best idea wins. “Whether it’s an associate, a vice president, a managing director, if you have an idea, your voice is heard and the best idea wins,” Larry has found. To that end, if you have great relationships, and you are both showing up and speaking up within the industry, you will position yourself well to be on PE firms’ radar.

Follow Raines on LinkedIn for information on our next webinars, thought leadership, and other news. E-mail us to discuss a move to Private Equity.

Raines Webinar: Transitioning to Private Equity

A 4 Pillar Operating System for Innovation & Growth

Innovate or die. Whether you are in B2B or B2C, people always want something new. While it is the lifeblood of an organization — driving topline and improving the bottom-line — too many organizations wait too long to prioritize and promote innovation throughout the company. But, by that point, it may be too late as the infrastructure for change is not in place. This is when our phones ring from clients seeking the quick-fix management to build innovation into their businesses. Raines’ new Executive Assessment process, which analyzes candidates against six criteria, prioritizes a candidate’s innovation capability.

An organization and its leaders must create and abide by a strategy and operating plan for innovating and high-powered team building. When this happens, unparalleled product, service and operating excellence follow, generating more growth and value creation. Raines sought the views of numerous innovators in multibillion dollar global organizations. From these discussions, we were able to identify four core pillars for ensuring a company or organization has an operating system to support innovation, growth and sustained relevancy to customers and investors.

1. Innovation Leaders Listen & Learn

2020 leveled many playing fields. The best leader isn’t just strong and forward-thinking, but also agile and ready to dive in to direct the innovation. “Most of the really good, modern day CEOs have a penchant for getting their hands dirty,” says Glenn Sanford, CEO and Founder of eXP, the fast-growing digital platform that virtually operates a giant global real estate brokerage without any real estate itself. Current market value for the virtual-first company has shot to more than $10 billion almost overnight from a billion in early 2020, with current revenues of more than $1.5 billion.

“Innovative CEOs are willing to get in and play with the tools and be in the trenches with their teams,” says Sanford. “If you’re not in the trenches, actually figuring out what really works and what doesn’t work, there’s no way you can accurately innovate. You might occasionally get lucky, but if you’re hands on, you’ll be able to bring a decision-making toolset.”

Equally important is the fit and culture of the leader and organization. Innovation isn’t a line on a resume. Elon Musk, the PayPal, Tesla and SpaceX entrepreneur, would not thrive in most organizations. But in his own company and with a team he hand-picked and assessed for its ability to run with him, Musk was able to reach for the stars—literally—and has. “Innovation is driven out of curiosity and listening, and at the same time, it’s critical you are surrounded by the right people,” says Jack Bamberger, Chief Commercial Officer of Amobee, the global advertising technology company and wholly owned subsidiary of telecommunications giant Singtel. “Innovation doesn’t happen in a silo or by one individual,” Bamberger adds “It can be ignited by an individual…but ultimately to build it, innovation is a team sport.”

And it is a sport for which every element of a business or organization must be dialed in. “Innovation needs to be embedded and be made to permeate the organization and culture,” says Michael Frankel, who leads the Deloitte New-venture Accelerator, which drives the innovation and creation of new technology businesses in Deloitte to help bring cutting edge hybrid (technology and services) innovations to Deloitte clients. “You need to build a team so that you have innovators wrapped around the Innovation Leader and so innovator seeds can be planted throughout the business.” That team can include finance, product, marketing, analytics, technology experts, and other subsets, working together to execute and enable the innovation leaders. Leaders must have both vision and creativity for not just the big picture, but also the myriad of elements that must come together to ensure great execution.

2. Customer Obsession Counts

To identify how to drive an organization forward, leaders must prioritize listening, understanding, and obsessing over what customers need and want. Innovation is a “practice driven in purpose, meaningfulness, and value,” notes Bamberger. “That is where you start. Hopefully, you get innovation. The marinating process is ultimately how you get there — listening, asking questions, being curious.” Being customer-obsessed enables leaders to know what problems exist, what improvements can be made, and what new territory to explore.

3. Try New Things, But Don’t Ignore the Core

Balance sectors of experience with innovation, ideas and goals, great customer experience, and great revenues so you can pull ahead of competitors to create edgy, but well-rounded offerings. Google famously allows employees to spend 20% of their time on innovating and side projects, but at the end of the day, they are still spending 80% on existing, working initiatives. “The idea is to continue to lean in and eventually you find out what works, what doesn’t,” says eXp’s Sanford. “Then you leverage the heck out of the things that work.”

Justin Parnell, who runs the iconic Oreo brand at Mondelez, notes that while the original Oreo remains the crown jewel, the company experiments with limited edition or seasonal Oreos to refresh the brand with consumers on a regular basis, thus keeping the core brand top of mind with the consumer. Today there is even a gluten-free Oreo. The idea is to “continue monitoring what’s important to our current consumers” and that their love remains for the brand.

4. Be Daring!

Innovation and risk are not mutually exclusive. Innovators must make bold decisions and may need to try three times before getting board or CEO approval. Similarly, acknowledge that ideas can sometimes get lost in organizational bureaucracy. “All the bureaucratic elements of a large organization can stifle innovation before the innovation can get started,” notes eXp’s Sanford. Create checks and balances to ensure you can “Always Be Innovating.”

2020 made this clear: Agile leaders must be willing to try new things, quickly. Be willing to re-write plans and take a different approach to execute great ideas. Having an innovative finance leader onboard can be instrumental to helping “sell” the costs of innovation says Deloitte’s Frankel. That person can help solve the questions of “how do we price creatively to build an innovative offering or accurately calculate and recover the costs associated with the innovation or innovative new offering so that you can build a profitable growth business.”

Remember: Innovation may not always be sexy or have sizzle, but it should always have substance. A tremendous money-making innovation may be administrative or something small or that consumers never notice, but which helps make the plumbing better and save the organization millions or more. Case in point: By recategorizing its product lines, The Kraft Heinz Company expects to save $2 billion, while also growing its business.

Finally, innovation should be tied to outcome and viewed as a lever to deliver growth. Often “a thousand little ideas” leading to “the Big Idea” is the real innovation, Deloitte’s Frankel has found. The Innovator must bring vision, systems thinking and be a great conductor in making it all work. In our work for clients, Raines’ Innovation Practice prioritizes the critical factors to identify innovators, builds teams to support, and advises organizations on how to best support and promote innovation, all in the name of growth.

John J. Keller, Managing Director, leads Raines International’s CEO and Board Practice and Innovation & TMT Practice.

3 Tips for Aerospace and Defense Leaders on How to Stay Ahead in 2021

As with every industry, the COVID-19 pandemic and related shutdowns forced Aerospace & Defense companies to quickly adjust and adapt. In a survey I conducted of more than 30 A&D company executives in the weeks following the outbreak of the pandemic, the three largest pain points were reassessing supply chains (65%), rebalancing capital (68%) and accelerating digital initiatives (60%). And while executives are indeed reeling from 2020’s turmoil, for most, the year ended in a much stronger position than expected.

There will certainly be permanent changes to the way the world does business and the way the government handles defense. Dozens of leaders I spoke with are mindful of restructuring as consolidations and layoffs continue, and largely plan to remain risk-averse in the first quarter. The A&D industry is bifurcated in terms of the impact of COVID-19 to the industry, with the defense segment faring much better than the commercial side. While there was a precipitous drop in the demand that feeds commercial OEMs and suppliers, strong defense budgets continued to prop up the defense segment. It’s no surprise then, that companies with a diversified customer base across both defense and commercial segments have enjoyed more stability and room to adjust than their solely commercial aerospace counterparts.

As we kick off 2021, keep an eye out for the following trends from successful organizations and incisive leaders.

 

1. Be agile and start thinking ahead now.

In 2020, A&D companies came face-to-face with both the vulnerabilities and the resilience of their supply chains. When COVID-19 struck, the prevailing theory was that–as a matter of economic and even national security–companies would stop relying on foreign suppliers altogether, and as a result local manufacturing would benefit. In practice, that has largely not been the case. It may seem an oxymoron to say “plan in order to be agile,” however, the companies that most expediently resumed their operations were the ones that had invested in supply chain resilience technologies and practices pre-pandemic. These companies used technology to tell them where excess capacity in the supply chain could be optimized, how employees could be redeployed across facilities, and in some cases to help them reimagine their operations to create new products. Their supply chain and operations executives had already established and maintained strong relationships with back-up suppliers. That smart planning permitted a speed and agility that allowed organizations to outperform. We’re not out of the woods yet; expect this emphasis on agility to continue well into 2021.

 

2. Be innovative and opportunistic.

For various reasons, A&D and government services companies traditionally shied away from work-from-home. However, many of those companies whose teams were able to quickly initiate remote operations have recognized the value of technological agility, and as a byproduct, decided to accelerate other technology initiatives company-wide. For example, one aerospace manufacturer shifted some of its production to 3D printing, which significantly reduced overhead and backlog, at a time when workers couldn’t fill the shop floor. This has had the added benefit of reducing materials waste and thus has cut costs significantly. Other examples include companies doubling down on data & analytics, automation, and sensor technologies to hasten automation, planning and inventory management, and direct customer engagement. And the development of secondary supporting technologies, such as cyber, artificial intelligence and 5G, is doing double-step as well. The pandemic has provided us an unexpected and unparalleled opportunity to test the business case for these technologies, and many companies would appear to have ended internal debates about their value. With technology innovation and new digital capabilities, these smart companies will make leaps ahead of competitors, bypassing future supply chain disruptions, quickly adapting to manufacturing or workforce changes, and flexing newly-built product innovation muscles. If you have new technology initiatives still sitting on the shelf, you may be hamstringing your ability to compete this year. Roll them out.

 

3. Onboard leaders who are decisive, can pivot and who are sensitive to emotions.

As you think about future-proofing your organization, ensure you have executives on board who can succeed in change management and organizational transformation. Generally, turnaround experts are known for their abilities to slash and burn. But the best leaders this year have been the executives who were calm under pressure and could appeal to their team’s humanity. Interestingly, many executives I’ve spoken with have echoed findings of a recent Harvard Business Review study concluding that female leaders were more effective during this pandemic. While that may be further evidence of the importance of diversity, regardless of gender, leaders who are steadfast, can connect with employees and can navigate emotions have been tremendous difference-makers throughout the past ten months’ turmoil. To future-proof your organization as we continue into 2021, look for the type of leader who can, in the worst of times, steady, inspire and retain employees through issues such as pay cuts and reassignments.

While it may be difficult to predict what obstacles the A&D industry will face next, taking the right steps to ensure future agility, making needed technological advances and bringing on board leaders who can be both decisive and sensitive to team members’ emotional needs are critical pathways to success in 2021. Take a few moments now to assess where your organization measures up in each of these areas and where you may be able to take steps to surge ahead of the industry.

Mercedes LeGrand is a Managing Director at Raines International and co-leads our Aerospace, Defense and Government Services practice. Reach out to mlegrand@rainesinternational.com to discuss these trends and how Raines can help you identify the difference-makers your organization needs in 2021.

4 Takeaways from AESC’s Chief Diversity Officer Panel Discussion

Raines International’s Head of Diversity, Equity, and Inclusion Pauly Rodney moderated a fantastic DEI discussion in late November called “Learning from Those Who Lead the Way.” The panel, part of the AESC’s Annual Global Conference, was held virtually this year.

From looking at the DEI function through the lens of pre- and post-George Floyd, to advocating for data tracking to strengthen DEI, panelists gave examples from their research, professional experiences, and backgrounds to help participants hold organizations accountable and empower employees. The panelists were Molly Q. Ford, Vice President of Global Equality Programs at Salesforce, Erika McConduit, Vice President of Diversity and Inclusion at Centene Corporation, Salvador Mendoza, Vice President of Diversity and Inclusion at NBCUniversal Media, LLC.

Some key takeaways from the hour long discussion:

  1. Everyone is part of DEI work: Both Ford and McConduit emphasized the importance of incorporating allies and everyone at the organization. DEI is not only the responsibility of those with that in their job description. Without the entire company from the top down and bottom up invested in DEI, the culture of an organization won’t shift. Likewise, Mendoza – who flagged the ability of NBC Universal as an entertainment and news company to reflect society, share new storylines, and cover communities sensitively and fairly – highlighted how internal decisions have ripple effects externally. As an example, NBC News’ decision as the first news network to replace the phrase “illegal aliens” with “undocumented immigrants” led to all but one other news network to do the same.  Further, panelists advised DEI leaders to meet employees where they are in their DEI journey. Not everyone at a company may understand why DEI matters or what is or isn’t insensitive. The DEI team needs to be able to present a variety of arguments — from the emotional to the business side — to reach the most number of employees.
  2. Data is king. Whether you are tracking diverse candidates at every stage in the hiring process, analyzing attrition and promotions, looking at onboarding and succession planning, or deciding on equity metrics, creating and utilizing a robust data dashboard can make a tremendous difference. Important to remember: DEI efforts shouldn’t only focus on gender and race, but include a variety of other inputs affecting family life, including benefits to support parents and LGTBQ+ families.
  3. It’s never too late to start; your organization isn’t too small: No matter the size, industry, or age of an organization, it’s never too late to implement or expand a DEI program. All panelists remarked that the smaller an organization, the easier it is to effect real change and have its impact as a core thread grow in the organization. On the opposite end of the scale, changing the culture of a larger or legacy organization may be incremental, and one may have more work to do, but the organization likely has more resources to put behind DEI efforts.
  4. What’s next? During the COVID-19 pandemic, all organizations have been tested and forced to adapt. Similarly, DEI efforts and programs have been pushed to consider new ways to help employees. For example, organizations may need to offer additional paid time off to allow employees to provide elder or child care, or emphasize health equity given the disproportionate effect of COVID-19 on underrepresented communities. Moving forward, one area in development is how to advance DEI globally and how to keep programming in step with international governmental regulations. DEI work never ends.

To discuss Diversity, Equity, and Inclusion — or how to better promote these ideas in your organization, reach out to us to discuss.

The Time to Appoint a Head of Cybersecurity is Now

The escalation in cyber-attacks, leaving hundreds of millions of consumer accounts and personal data naked, is growing at frightening levels and showing no signs of slowing down. So too are physical security compromises—many with lethal consequences. With people everywhere vulnerable to this scourge, and investors seeing their investments melt down, many want to know who should be in charge of turning this around, and is enough being done to find the right leadership to ensure security and protect critical data.

The average data breach costs a publicly traded company $116 million. Equifax spent a whopping $1.7 billion in remediation costs after its 2017 hack. In the first six months of this year, more than 500 data breaches affecting 163 million people were reported. Just this weekend UHS hospital network, which operates more than 400 hospitals, was reportedly hit by a ransomware attack, forcing hospital workers during a pandemic to scramble. Company and organization IT departments are struggling with tens of thousands of attempts a day and rising — and this is just in the US. Is your data protected, or will you be the next organization in the long list of companies severely impacted by unauthorized access, insider threats, phishing, malware and other break-ins?

Every month another major company makes the news not for its record profits or an exciting new product, but because of a likely avoidable cybersecurity problem. Think Garmin, Equifax, Capital One, Marriott. Just recently Uber announced the personal information of 57 million customers, including names, emails and mobile phone numbers were stolen—in 2016!

Cybersecurity crises seem never-ending.

Now, as remote work in response to coronavirus becomes the new norm, cybersecurity concerns are elevated.  With that in mind, and as part of Raines International’s new Security Practice, Raines International spoke with a dozen cybersecurity leaders to identify emerging trends in the field.

In recent years, Raines has observed the convergence of cyber and physical security, as well as a growing need for leaders in this space. Cybersecurity leaders for global organizations with $1-$15 billion in revenue echoed these concerns. This need to blend the two disciplines is manifested in a variety of ways, depending on an organization’s size and industry. Convergence requires organizations to acknowledge that cyber threats are not just the obvious hack into a system, but exploitation of data that may even already be public.

The world’s rush into mobility has made all of us and what we own more vulnerable. And there are growing national security implications. In one famous example, publicly-available Strava running data, generated by military personnel wearing mobile physical activity devices,  unintentionally revealed the location and perimeter of military bases in Afghanistan.

“We design a tool for a specific purpose but hackers will use it to do something entirely different that may have not crossed the minds of those who developed it nor of those who run it in their organizations,” Elad Yoran, Executive Chairman of KoolSpan and CEO of Security Growth Partners explains. Add new technologies into the mix, like the 5G rollout, and any organization with IP or confidential information that is not considering its cybersecurity weaknesses could be found negligent.

Forward-thinking, younger organizations tend to be more aware of the convergence of physical and cyber domains, cybersecurity leaders told Raines, whereas legacy organizations may be a bit behind the curve. One concern is that legacy leaders may be slow to respond to the need of this newer approach as it may eliminate their positions and skill sets. Regardless, the dangers posed by this growing threat should outweigh the career considerations of a relative few. This needs more attention now. “Are people investing enough time and money in this? No,” says Paul Ferrillo, a partner at McDermott Will & Emery, who specializes in cybersecurity and regulatory aspects of cyber security. “America is taking a very long time to understand cybersecurity despite years of it being headline news.”

Once an organization decides it needs a cybersecurity leader, the problem lies in finding the right candidate and creating the right position. This problem is not easily solved due to a major shortage of talent both from a leadership perspective and down the organizational chart.  “There aren’t enough qualified people out there,” Ferrillo says. The 2019 (ISC)² Cybersecurity Workforce Study found that the U.S. has a cybersecurity workforce gap of half a million people. “By combining our U.S. cybersecurity workforce estimates and this gap data, we can calculate that the cybersecurity workforce needs to grow by 62% in order to meet the demands of U.S. businesses today.” (ISC)², the membership organization for cybersecurity professionals, blogged. Since cybersecurity is relatively a new field with these shortages in talent, organizations may need to be creative and find talent in different industries like physical security, financial, or DevOps backgrounds.

Several executives agreed with Raines that the best CSO is a difference maker who understands risks, threats, and business continuity. The details of where the threats live — whether online or physical — can be taught.  Ultimately, organizations need to have a plan before an intrusion because it’s not just an organization’s data or IP that’s at risk. After all, it was not just the hack of 147 million Americans’ personal data that doomed Equifax; stocks plummeted and executives were fired because of the slow detection of the intrusion coupled with nearly $700 million in regulatory fines. Even worse, the intrusion was easily preventable.

With client or customer personal data on the line, an organization can be held to countless regulations and laws.  When dealing with public and sometimes private companies with lots of personal identifiable information, the question that comes out of the boardroom or C-suite is now what do we do?” Ferrillo says. “How do we handle the breach? Who do we disclose it to? Between federal law, SEC law, HIPAA law, New York law, and California law, there’s all sorts of disclosure requirements and they all have time attributes to them. New York says you need to notify the authorities within 72 hours. That’s not a lot of time when you’re in the middle of a sophisticated malware attack.” As such, organizations must have an aggressive leader and operational cyber structure in place to kill attempted invasions at the doorstep before they can wreak havoc. Same goes for having an efficient alert plan that can quickly take down intruders who still manage to make it inside.

Depending on the size of an organization, one leader may be tasked with both sides of security, while another organization may have one cyber leader and a physical security leader who work in tandem. A third option presents: An organization may appoint a Chief Risk Officer to oversee both physical and cyber security concerns, as well as any other concerns including regulators. “One thing that organizations can do is look at a layer above both cyber and physical security, and think of it as a risk management endeavor of which cyber and physical security are both components,” Yoran tells Raines. Leadership is critical and with the shift to work-from-home, companies need to establish processes to monitor for insider threat and prevent outsider threats. Ultimately, the title of the position does not matter as long as the person is empowered with the authority and breadth of control needed to get the job done.

https://rainesinternational.com/diminishing-importance-job-title/

Institutional Shareholder Services, an advisory firm viewed as the global authority on corporate governance, recommends organizations put cybersecurity executives on the board. “You see it among technologically savvy and technologically back-boned companies,” Ferrillo tells Raines. “You don’t see it enough among the small to medium-sized businesses.”  Almost all the leaders Raines spoke with agree that cybersecurity should be elevated to the C-suite as a role reporting to the CEO, and they say C-suite executives should see it that way too. They found that it is also critical that such expertise be elevated to the board level, given the financial and business risk of a cyber intrusion. The current crisis demands more than lip service.

In a time of cost-cutting amidst a pandemic, many organizations may be inclined to address cyber concerns at another time. But the attack on data is underway and relentless. The time is now. “After Equifax, the government and SEC have very little time for companies that don’t pay attention to cyber,” Ferrillo warns. “You’re gonna get fined, you’re gonna get penalized, your market capitalization is gonna go down, and your board could get sued by its shareholders. It’s my view that regulators have no more…tolerance for this.”

Insightful organizations are seeing that action now to build vastly improved security management can ensure more time to focus on building valued cultures, disruptive products and exceptional customer experiences.

The Chief Security Officer (CSO) in the Post-COVID-19 World: Lessons Learned from Security Leaders

Raines International and The Lake Forest Group spoke with numerous security executives from major global companies in industries ranging from oil and gas to technology this summer to discuss the trends and new issues a CSO faces in light of the COVID-19 pandemic.

This article is first in a series of thought leadership about the role of security leaders in organizational success.

While a major focus has been on when life gets back to “normal” after the COVID-19 pandemic and what that means for business, forward-thinking business leaders are thinking about the gaps COVID-19 has exposed in their business, specifically from a safety and security standpoint. The upheaval caused by the outbreak has highlighted the need for a strong, agile security leader in organizations of all sizes to protect organizations and maintain business continuity. Raines International, in conjunction with The Lake Forest Group (LFG), spoke with numerous Chief Security Officers and leaders in the security field to discuss how the pandemic has affected the position.

Security during COVID-19

Traditionally, organizations view protecting the physical security of employees through the lens of criminal, accidental, and natural events. The concept of a pandemic had been discussed in the security world as a possible scenario, but the scale at which COVID-19 has disrupted business is extraordinary. Many — but not all — of the leaders Raines and the LFG spoke with acknowledged their companies were not prepared for the scale of COVID-19. Whether companies had to adapt to a sudden shift to work-from-home or simply procure PPE, the pandemic caught many unprepared, but not surprised. Some organizations had plans for previous public health threats like Zika or Ebola, but ultimately, they were far from perfect and might have been outdated. Other organizations always intended on preparing for a disease outbreak, but preparing for threats like kidnapping, terrorism, or active shooters took precedent. As this coronavirus unleashed a new level of security awareness, it amplified concerns and an organization’s responsibility for protecting their employees’ health, along with their safety and security. Unlike disasters like hurricanes or fires, COVID-19’s response and recovery phases could extend longer. This storm won’t pass next week.

While protecting staff’s health and wellness may have previously fallen under Human Resources, Health, Safety, and Environmental, or Corporate Social Responsibility departments, during the past six months, nearly all of the security leaders Raines interviewed assumed handling virus-related concerns and procedures as they saw their roles change significantly. Many security leaders assumed responsibility for ensuring that workers knew how to transition to work-from-home and coordinated company-wide directives for COVID-19 response plans. Other organizations including government contractors balanced security needs by having employees focus on administrative or training tasks during remote work and instituting alternate in-office days to work with classified information.

Organizations also struggled to keep up with constantly changing government and medical guidelines for COVID-19. In February, companies may have been concerned with cleaning surfaces, where now the concern is aerosol transmission. Organizations that are based in the U.S. are still responding to travel restrictions and regional outbreaks, whereas organizations in Europe or Asia may have much more flexibility and “normalcy” back in place. Regionally, nationally, and internationally, each week companies have had to pivot their expectations to match the realities they faced.

Remote Work & Return to Office

The shift to work-from-home and remote work is one of the most obvious changes to companies across the globe in response to COVID-19. Most of the organizations Raines and the LFG consulted had some form of a work-from-home policy already established, albeit on a much smaller scale. While one leader Raines spoke with compared the concerns of shifting to work-from-home to the unrealized panic toward Y2K, in general, the largest work-from-home issue security leaders have faced involves the hurdle of new IT and cybersecurity needs. But, as work-from-home becomes the new normal, many organizations are reluctant to rush back to the office or are even offering permanent work-from-home options. This shift raises numerous security concerns that leaders must consider.

One important area that organizations need to focus on is the impact the shift of the home as the workplace has on its employees. An astute CEO and security leader should prepare for the impending rise in domestic violence and addiction issues triggered by COVID-19 as their Leaders should be prepared to identify warning signs and establish what an organization’s response will be to security concerns at home. Possible solutions include frequent video conferencing to physically lay eyes on employees and increased support for resource groups that employees can access. This challenge presents an opportunity for progressive business leaders to thoughtfully prepare procedures for handling the inevitability of domestic stressors spilling into the workplace, since the definitive line between home and place of business has considerably blurred.

While all 15 leaders Raines and the LFG spoke with said their respective organizations are adhering to CDC guidelines and local and state ordinances for return to work, including masks, symptom questionnaires, and social distancing, the overriding trend called for restraint in returning to the office. If employees’ job responsibilities do not require them to be in the office, organizations have preferred allowing employees to determine when to return to the office, and to avoid potential lawsuits that requiring them to return to what they consider an unsafe environment could trigger.

For employees who are returning to the workplace, most organizations Raines consulted are instituting new security technologies, including temperature checks, touchless technologies, and contact tracing. Many organizations are limiting the number of workers in the office and conducting health checks. One executive at a large technology firm noted that many of its workers were eager to return to work because they missed the community feel of the office; in that case, the organization had to establish policies for permitting partial return-to-work including alternate days and flexible work shifts in the office. This is an area that security leaders have been adapting to throughout the past six months, as guidelines shift and scientists learn more about how the disease spreads.

Now with six months of coronavirus response data, many organizations are taking a step back to review how they handled the emergency. Raines’ partners at the LFG recommend an After Action Review to assess their decision-making. “An After Action Review is a process-based retrospective approach that provides key findings, insights, and lessons learned to improve future response for comparable incidents,” the LFG’s founder and CEO G. Michael Verden explains.

How to Identify the Best CSO

For organizations seeking to establish a Chief Security Officer position in the post-COVID-19 world, the best candidate will be able to anticipate, prevent, and react to events while also remaining adaptable to respond to unexpected incidents or emergencies. In general, when asked what professional backgrounds serve a Chief Security Officer well, law enforcement and military were the top responses. Advantages of this background include the ability to adapt quickly with whatever tools are on hand and a proactive approach to security. While a military or law enforcement background may lend itself well to a security position, the best security leader is well-rounded and able to offer soft skills of emotional intelligence, approachability, organization, and team building. Leaders also must balance the rigidity of security needs with the reality of a workforce that may not welcome more guidelines and policies. In addition, because security leaders must understand the nuances of the corporate world in order to be effective, organizations can offer security executives tailored corporate training and leadership courses and a thorough onboarding process.

“As the pandemic crisis moves from the response to recovery phase, businesses need to prepare people for returning to the new workplace well before they step into the building,” the LFG’s Verden advises. “They can prepare their employees through a customized training, education, and awareness program that’s delivered via virtual forums like webinars and videos.”

“Effective CSOs understand their organizations need a comprehensive security program that protects employees and visitors through risk and security assessments that identify what they have and what they need to promote a safe and secure workplace, emergency management plans that protect against all hazards, and training that addresses workplace violence, warning signs of concerning behavior, and other security related areas,” Verden continues. “As we’ve seen during the pandemic, security leaders have responded to a myriad of business continuity challenges because security’s role in protecting an organization and its employees is intrinsically intertwined with its business objectives.”

 https://rainesinternational.com/why-veterans-are-an-untapped-resource-for-corporations-what-hr-needs-to-know/

Raines advocates for the Chief Security Officer to have a seat at the C-suite table. If that’s not possible, the CSO must at least have a direct line to the CEO and COO to be most effective. Security leaders must also have a strong relationship with the human resources department and communications team. Whether informing employees of the new protocol for return-to-work safety procedures or producing videos demonstrating how to securely work from home, the support of the communications department cannot be overstated. Because employees’ natural instinct may be to avoid protocol if it is cumbersome and every employee represents a potential risk to the company, it is vital that a CSO educates and engages all employees to participate in best practice-based security measures.

The Way Forward

COVID-19 has exposed weaknesses in many organizations, disrupted traditional business models, and offered an opportunity to adapt and grow. Whether preparing for or responding to a crisis or conducting general checks on security processes, the CSO plays a vital role in business continuity. An outstanding CSO offers organizations the opportunity to not only protect their employees from threats and concerns, but also to position the organization itself to excel.

We don’t have an end date for COVID-19 or work-from-home restrictions. We don’t know a lot about the disease or its long-term effects to society and individual and public health. But we do know that creative, adaptive, reflective, and well-prepared security leaders help their organizations navigate these crises more effectively. A CSO adds tremendous value to an organization by preparing for business continuity, preventing physical, cyber and human threats to an organization, and, ultimately, responding when a threat becomes a reality. While we plan and prepare for the many risks we might face, the right security leader empowered with the right tools, authority, skills and knowledge brings your organization a step closer to safety, security, and success.

The Simple Act of Opening an Email Does NOT Constitute a Job Done.

It is likely a cultural thing, and perhaps yet another unanticipated consequence of social media. We are all inculcated to liking, swiping, loving or in other ways spending nano-seconds on responses to a barrage of needy people.

But, e-mails require more than that. So do texts, Messengers, Slacks and all other forms of what are intended to be written dialogues. Answer. Even if your answer is, “Sorry, can’t get back to you on this just now”, or maybe even “No thank you.” “Not now, or ever.” or other such responses that might keep people from spinning endlessly.

Here is a rule of thumb. When you are on the receiving end of an e-mail, imagine that the sender is in the room with you. You have been asked a question. Would you, were you to be in the same room, not answer that question? Doubtful. Equally, if you are sending some form of digital communication, make sure your ask is clear. That you have made it easy for the person to whom you are writing to understand what action you would like to have him/her take.

Simple. Most things are. But if you are to make a real difference as receiver or sender, you have to act in order to make that difference. Let’s affect real change. One communication at a time.

Is Your Chief People Officer Keeping Up? The Ever-Changing People Function

Today’s pace of change is forcing companies to adjust in big ways, including in the People function and the role of the Chief People Officer. Read on for how Human Resources has and continues to evolve, what your competition is doing in each aspect of the function, and if your CPO is keeping up with the times.

To understand the complexities and possibilities of the People function today, one must consider the context: workforce changes in makeup and mobility, technological advances with artificial intelligence and automation, a volatile and ever-changing competitive landscape, heightened consumer expectations, and a market more sensitive to a company’s impact on society at large. Businesses today largely accept that they are living in the widely referenced VUCA world of volatility, uncertainty, complexity and ambiguity, complete with a crushing pace of change.

So what does this have to do with a company’s workforce? Quite simply, everything. Human capital is increasingly viewed as the competitive advantage of most organizations, even with all of the technological advances. As noted by a recent Boston Consulting Group publication, “tech is meaningless without the talent to put it to use…in an age of automation, robotics, and artificial intelligence, human talent is more important than ever.” With the pressure and speed of transformation, companies can no longer depend on an isolated C-Suite and hierarchies, and need to unlock the potential of the entirety of their workforces to drive innovation, flexibility, and speed on the front lines.

The Evolution of the People Function

The elevation of the human’s unique contribution in the business world is reflected in the evolution of the People function, including that of its leaders. From the Ford Era-demand for consistency and uniformity from humans and the promotion of one universal method of HR, came companies like Netflix and Google, with Laszlo Bock arguing that “all it takes is a belief that people are fundamentally good…and enough courage to treat your people like owners instead of machines…machines do their jobs; owners do whatever is needed to make their companies and teams successful.”[1] Human Resources became an increasingly valued component of the C-Suite, with concepts such as the G3 triumvirate of the CEO, CFO and CPO to run organizations, and today, as Adobe’s CPO Donna Morris puts it in CNBC’s 2019 Work Forum, talking about the Chief People Officer simply “getting a seat at the table” can be viewed as insulting given its importance. With the increasingly recognized weight and complexity of the space, we’re seeing more and more people flock to the function, most notably from elite strategy consulting firms.

The Ask

The People function, and those who lead it, are charged with aligning the entirety of the employees’ efforts with the overall business strategy: how to properly grow, incentivize and celebrate the workforce to get the best from it towards and beyond a company’s goals. Given corporate strategies and goals differ, it is up to the Chief People Officer to understand what levers to pull to best execute on that mandate. This includes keeping current on each element of the function, knowing what’s new and different in each category, and constantly asking whether the current state of an organization’s People practices is best serving its broader business aspirations.

Some examples of trends CPOs are implementing in their organizations:

  • Compensation: Experimentation with frequency of salary adjustments, employee choice of compensation mix, and transparency of standing relative to competitor compensation.
  • Performance Reviews: Movement away from annual reviews toward more frequent or project-based schedules to keep up with the speed of change (i.e. monthly check-ins, quarterly reviews, etc.).
  • Other Rewards / Flexible Work Arrangements: Use of rewards over traditional compensation to drive buy-in, personalize employee experience, and define employer brand, including increase of flexible work arrangements to enhance employee experience.
  • Learning & Development: Democratization of L&D expertise due to online programs and badging, allowing leaders to mix and match programs while demanding more proof of ROI.
  • Talent Acquisition: Utilization of AI and technology to better the quality, speed and reach of interactions and create more transparency in the recruitment process while, importantly, controlling for the negatives of automation.
  • People Analytics: Diversification and redefinition of KPIs beyond the mainstream (with relational analytics, etc.) to better get at how the people function is really meeting the strategic needs of an organization.
  • Organizational Design: Experimentation with agile (whether company-wide, cascading or isolated in one business unit) to drive innovation and speed.
  • Startup Market: Constant upkeep of new technologies and players, which is becoming increasingly difficult given the swelling number of organizations entering the space.

With a world in a constant and increasing state of flux, the demand on and expectations of the Chief People Officer have never been greater, and the ability to constantly learn and push beyond boundaries is of the utmost importance. Every People function will and should look/operate differently to help accomplish a company’s overall objectives, pulling together an ecosystem that breathes life into an organization and has it operating at its absolute best. For companies that want to make a major impact, they need to ask themselves not only if their Chief People Officer is up to that challenge, but if the companies themselves are providing the right environment and support to allow those changes to occur.

At Raines International, we are privileged to work with leaders from both a company and candidate perspective who are committed to driving marked progress and innovation in the people space. It’s an incredibly exciting area to watch, be a part of, and contribute to, and we cannot wait to see where it will go next.

 

[1] Laszlo Bock, Work Rules (New York: Twelve, 2015), 13, 15.

What Happens When Life Happens

“Life happens.” It’s a cheesy quip we throw around, a tidy little phrase used to lament a missed taxi, a sudden rainstorm, the dog’s untidy mess on the carpet. But life, specifically our personal life, is at times much more devastating, much more paralyzing, than these mild annoyances and can disrupt many aspects of our day-to-day, including work. Those of us who have been in the workforce for several years have become masters at separating personal disruption from professional success, striving to move forward in our careers despite what may be happening at home. But what happens when this balancing act comes crashing down? When a loved one dies, when divorce looms on the horizon, when one’s health is in jeopardy? When “life happens”?

In the past, it was generally understood that personal struggles should be kept out of the workplace. Not only does personal talk detract from time working, but admitting to these struggles can expose vulnerability and diminish one’s authority. To be successful, leaders were required to broadcast strength at work even if they were hurting personally. However, there has been a shift in this thinking in the last few years, and even the most successful businesspeople have talked openly of their private struggles. Mark Zuckerberg, for instance, has spoken honestly about his and his wife’s miscarriages. Carol Bartz, former CEO of Yahoo, candidly described her brutal battle with chemotherapy in the months after beginning as CEO of Autodesk. Even Arne Sorenson, the CEO of Marriott, recently revealed his diagnosis of pancreatic cancer and his decision to begin treatment. These public confessions, instead of conveying weakness, actually revealed a more human, relatable side to these public figures. They, like us, bleed. These titans of industry recognized that the acknowledgment of their personal challenges was needed and necessary in order for them to continue their work.

This shifting trend is especially relevant for those of us navigating the workforce, whether we are taking our next step into a new career or establishing ourselves in an industry. Rather than neatly compartmentalizing one’s career and one’s personal life, it is important to recognize how the two intertwine to shape and influence each other. This is not necessarily a bad thing. A strong support network of family and friends can encourage success on the job, and connecting with co-workers can lead to long-lasting relationships outside of the office. Yet the opposite is also true. Personal tragedy can undoubtedly bleed into one’s working life, and emotional, mental, and even physical stress can do away with any kind of work productivity. So what to do when life can no longer be confined to home? When we are dealing with our own personal struggles while trying to maintain a career? There is no one right answer, but many professionals, especially the two people below, have figured out their own ways of facing the vagaries of life while still being able to succeed at work.

Ben Greenzweig, current CEO and co-founder of Momentum Events, is one man who has endured a tumultuous, painful journey in both his personal and professional life and survived to tell the tale. In 2012, after he resigned from a toxic work environment to start his own conference business, his former employer sued him for millions in a lawsuit that would take four agonizing years to complete. Enduring the continuous assassination of his character in the courtroom while simultaneously attempting to launch his business became a dangerous balancing act that took a heavy financial, physical, and mental toll.

“I handled it in self-destructive ways. I began self-medicating, I stopped eating, and I internalized everything. Any energy I had went to my family. It was a tremendous loss of physical and mental health.”

Despite a favorable outcome in the trial and the relieved, albeit weary, excitement in finally being able to get Momentum off the ground, life was not done with Ben yet. Only 10 weeks after canceling a celebratory dinner with complaints of a headache, Ben’s business partner died suddenly of an extremely rare brain cancer, leaving an already battered Ben in a violent maelstrom of chaos and pain. He didn’t have the luxury to think as he commenced “battlefront triage,” working to take care of not only his business partner’s grieving family but also his clients and employees. He describes that time as “marching through hell,” where the only thing he could do was find ways to keep moving forward.

Even after stabilizing the business and taking on a new business partner, Ben dealt with a severe bout of depression. Five years of devastating turmoil had made a lasting impact, and it was time for him to address his mental health.

“I was at rock bottom mentally,” Ben says. “I was dealing with the vertigo of those five years, and I needed some time for myself.”

Ben re-prioritized his schedule and, with the full support of his new partner, was able to take the time needed for self-introspection, emerging with a better mental balance and a clear idea of what he wanted to do next. He became dedicated to breaking the stigmas surrounding mental health and identifying barriers to treatment. Now, Ben talks openly about his battle with depression and his larger story with the hope that he can reach people in need. As someone to whom life has dealt some of the most devastating blows, he encourages others to be vulnerable and honest and to seek help when it is needed.

“None of this would have been possible without the love and support of my business partner. He understood, as best as one can who doesn’t suffer from a mental illness, my struggle and just wanted me to get healthier. Mental health needs to be treated as any other disease. You can’t fix it yourself. Understanding that really changes how you approach the issue and I’m working to shed light on that,” Ben explains.

Though his own story is very different from Ben’s, Clint Lautenschleger is another successful executive who has dealt with the struggle to balance personal catastrophe with career development. Back in 2014, only a couple of years after Clint and his ex-wife divorced, his ex-wife was diagnosed with breast cancer. After a very brief remission in 2015, the cancer made an aggressive return, and his ex-wife passed away soon after.
“The two worst days of my life,” Clint says, “were the day my wife and I decided to get a divorce and the morning after she died when I had to tell my kids they no longer had a mother.”
To continue working in the midst of such pain would be difficult in any industry, but that difficulty is exacerbated when one’s role requires significant levels of human interaction. As Vice President of Human Resources and Talent Management at the time, Clint was constantly in front of employees and had to find a way to continue performing in the midst of his grief. What helped, he says, was the empathy he received from coworkers.

“They respected me and trusted me to not let my work falter. At the same time, they also allowed me to talk at work if I was down.”

Enduring the tumultuous years of his divorce and ex-wife’s death was not easy, but Clint’s coworkers, in addition to an extremely supportive family, helped him in more ways than one.

“Going through that has really changed how I’ve treated people. I’ve become more understanding. You never really know what someone is going through in their personal life,” he says.

Clint also learned the importance of being open about his experiences. Whereas before he rarely talked about his struggles with anybody, over time he realized that being honest about what he was going through was the best path to healing. He advises those who are going through similar personal struggles to embrace vulnerability and not be afraid to share with others, whether they be a family member or a good friend at work.

Additionally, Clint explains that in the midst of personal tragedy, one has to decide what is truly important and act accordingly. Is it work? Family? A balance of both?

“For me, I couldn’t check out of work and I had to keep my family strong,” Clint explains. “So I did what I needed to do to make that happen.” Luckily, Clint had the support at work and at home to make sure that neither his career nor his family fell by the wayside.

His last piece of advice was quite simple:

“Continue to do things that give you joy. If you stop doing that, the issues are only exacerbated. Don’t be afraid to be happy.”

Clint and Ben’s stories are simply snapshots of the wider reality all of us in the workforce face. We endure pain, tragedy, and unspeakable loss but still find a way to get out of bed in the morning. It is not easy. But hopefully, it is comforting to remember that we are not alone in this balancing act and that work does not have to be a hostile environment separate from personal struggle.

And for those of us who regularly interface with people in the workforce, whether in the executive search industry or otherwise, may we be continually cognizant of and sensitive to the complexities of an individual’s personal journey and recognize how our work can and should positively impact not only their professional goals but also all aspects of their life.

The Ego Trap: How Founders Can Fail Their Startup

Have you ever considered starting your own company? And then growing it to be the next Facebook, buying a Tesla and attending the Met Ball? You are not alone. The number of people launching their own business was higher in 2017 than in the previous 4 years. With conventional wisdom declaring that 90% of startups will fail, many of these new entrepreneurs will end up back on their couches playing Fortnite and watching Friends’ re-runs in just a matter of time. Starting a company is hard and it is ultimately the founders who hold the key to the door to success or to the door to failure. The bottom line is: have they prepared to navigate the perils of growing a company from an idea to a large institution? Many decisions in a startup’s early existence are crucial, such as creating a promising business model, securing access to funding, and receiving intellectual property protection, yet nothing affects a startup’s success more than the hiring decisions founders make.

Many prominent industry leaders agree, when you are going from an organization of 40 to 140, hiring is the most important part of the job as a founder. Specifically, a bad hire has a cascading effect, especially in a small startup. “B players attract more B players who are comfortable with C players, who do not threaten their position” Sapphire Ventures, and Former Wildcat Venture Partners, Talent Partner Elizabeth Patterson explains. To find sustained business success founders need to hire the best talent for their firm’s culture and business goals at the correct time in the startup’s lifecycle.

Perfecting when to hire

A founder needs not only to understand whom to hire, but when to hire. The growth of a startup, which reaches Series B/C funding often takes the form of a curve with diminishing returns (see blue lines below). The company first experiences high growth, attracting a generous round of investment, but experiences diminishing returns in the growth of the firm over time.

TheEgoTrap.Graph

Early in the lifecycle of a startup, Patterson suggests founders hire employees who are, “goal oriented, able to go the distance, curious, and display hunger, grit, and persistence.” Whereas later, in a firm’s growth stage, generally after a Series B or C funding round, founders should aim to hire seasoned industry executives, who have demonstrated success in growing and leading a function in a venture-backed firm, a private equity portfolio firm, or a large corporate company.

The way an entrepreneur views their role as the leader, CEO and/or torchbearer for their startup will inform the type of hiring decisions they make. Those who fall prey to the ‘ego trap’ put their own priorities before the needs of their startup, leading to ineffective hires and the start of a failing venture.

The new entrepreneur in society

Being an entrepreneur is in vogue. Instagram, Twitter, and LinkedIn profiles read: ‘Bitcoin investor: founder’, ‘Founder, Stealth Company X’, or ‘Serial founder’, which is often the golden ticket to amassing followers and, thus, ‘success’ in the current social media economy. With the rise in entrepreneurs’ social capital, the role of a founder has been glorified. The grueling 20-hour work days and continuous ideation are not publicly seen, leading many to aspire to found companies for the boost in social capital and perceived perks (magazine covers, keynote speeches, VIP lines, etc.).

A greater emphasis on acquiring social capital and attaining material goals often leads entrepreneurs to ego-driven decision-making. Mark DeSantis, CEO of Roadbotics, and Co-founder of kWantix Trading LLC, which was acquired by Moody Aldrich Partners, emphasizes that to be true leaders, entrepreneurs need to remove their social capital-driven desires from decisions they make on behalf of their startup, “The moment [a founder] takes a dollar of investor money, it is no longer [his] company. It is an institution he created and asked other people to be a part of. A founder’s accomplishment is the architecting of the institution, which is now making other people’s lives better.”

Thus, ego can cloud hiring judgment in several ways, leading, generally, to a less optimal firm structure with low to mid-level talent and decreased growth.

theegotrapchart

 

Errors and tensions in hiring

Founders need to trust partners who can advance their startup ‘baby’. DeSantis stresses that once entrepreneurs lose sight of the main goal of founding an institution – to contribute something positive to the world, “the startup becomes a founder-centric company, where the founder’s ego becomes an emotional factor in all decision making, wrapped up in the status of being at the center of the company”. One Silicon Valley founder and CEO recounts, “At my second company, we took a ‘promote-from- within’ approach, where we wanted to see our talented hires develop with the brand into leaders. While this approach worked to a certain extent, it took more time than it should have for us to reach out to our network to hire an executive recruiter to bring in seasoned executives.”

He goes on to say, “The most important tension a founder will face arises when the company’s board is trying to push someone onto your executive team who is not a cultural fit with the founders. It can be a fit for needed skills but not a fit for having a working relationship that will be productive.” Founders have many things to think about, including relationships with board members and investors – juggling these relationships while maintaining a positive approach to leading the startup is critical. A recent CBInsights post-mortem study of 101 startups showed 23% of startups failed because they had hired the ‘wrong team’. Having a team that vibes together, to form a positive and unifying culture, can mean the difference between success and failure. This means founders need to be particularly focused when working with investors to hire employees with similar passions and goals.

At the other end of the spectrum, Sam Wilcoxon, founder of Lorem, who just raised a seed funding round in NYC, has not reached the stage of needing to make executive hires, yet he wonders whether he is prepared to do so, “I think hiring is somewhat intimidating… it is done fairly quickly and you can do all the vetting you want but when it comes down to giving a piece of the company to a new person it is like a leap of faith, which is always scary but a necessary affair.” Sam is confident when it comes to bringing in technical hires but will rely on mentor and investor guidance to make future senior hires.

What are investors doing to help founders lead their firms?

While a startup’s product, service, or market may be new, hiring is not new, and entrepreneurs should not discount the wealth of information and advisory services available to them. On one hand, Venture Capital firms are changing their operational structures to provide more resources to the founders in their portfolios. Early stage VC firms, such as Precursor Ventures, which Sydney Thomas helps lead, take a hands-on approach to guiding and mentoring their founders through the early perils of startup ventures. “We offer hiring screening as one of our core tenets of support, in addition to emotional and strategic coaching to help them structure their business plans and intake of new hires.” Thomas emphasizes how important it is for Precursor to provide hiring guidance because she has seen the detrimental effects that the “growth at all costs mentality” has on entrepreneurs. “I have also seen founders suffer from decision burnout where so many decisions need to be made to the point where they start questioning their decisions – this is where our value as a resource and partner come into play.”

Later stage firms, such as Sapphire Ventures, are organizing internal resources for entrepreneurs to access. These resources include industry experts as mentors, Talent Partners to help with hiring processes including bringing together Executive Search firms with founders for executive hires, and Marketing and Communications professionals to aid with startup campaigns and M&A. With these resources, venture firms are coaching founders through the startup growth process to best prepare
them to avoid the ‘ego trap’.

On the other hand, business services firms partner with growth stage Venture Capital and Private Equity firms and their portfolio companies to provide talent consulting and Executive Search services in crucial times. For instance, Executive Search firms provide a larger network of relationships to allow founders targeted access to the best leaders in an industry. While the investment up front can range $70-150k for an executive hire, the impact of new leadership and ideas can be the difference between accelerated growth and firm failure. Startup success is often dependent on entrepreneurs, who best understand their strengths and weaknesses, to position themselves to tackle the hardest decisions with the support of advisors and industry resources. Putting all the ingredients together to lead a high-growth startup is challenging, but founders have more resources than ever before to get the recipe right.


Contact Jesse Schwimmer to discuss or comment: jschwimmer@rainesinternational.com 

Jesse Schwimmer leads Raines International’s Venture Capital Practice in San Francisco. Prior to Executive Search, Jesse was in Operations leadership at a Series C startup. He also holds a Masters degree in International Development from Oxford University, as well as a Bachelors degree in International Relations from Brown University.