Managing a Board of Directors (continued from yesterday):
It is simple: Either you the CEO manages the board or it will manage you. Once it starts managing you, the end game is already in play: in a short number of months your services as CEO will no longer be required. As in fired.
The board does not what to manage the startup. They have too much to do with their other startups, especially the ones that are in deep trouble. They do not need one more troubled company (yours). So the board exercises extra energy in attempts to not get to that bad situation. That is one reason they meet with the CEO and core management team each month.
Managing a board of directors may sound like a paradox to first time startup CEOs. After all, the board is the boss of the CEO. But the serial entrepreneurs know what is expected: the CEO leads the board and the board members contribute as each sees best. That is how it is done when it is done right in startups.
Here are some tips for how to manage your board of directors: (continued from yesterday)
· Expect to be alone. Leading the board is your job. No one else can do that without you capitulating as leader of the company. Sure, you can have a strong personal relationship with the lead investor, but you should not expect to do whatever that partner tells you to do. Instead, you have to discuss and agree on differences of opinion and then go to the board meetings united.
· Be 100 percent honest: Trouble for you begins when the company gets into deep trouble. Then you will know what it feels like to be a spear catcher. It is not pleasant, but it is part of what comes with the CEO job. The human tendency is to give only the good news and try to fix the bad things in time for the board meeting. Then you will start to dig your own grave because you will start to shade the bad news with undue optimism and week after week the truth will be bent out of shape. Eventually the bad news will emerge and you will become the bad news. That leads to career shortening.
· Declare bad news immediately. Learn to announce the same day you get the basic news of big trouble. Pop the short email instantly. Then dig for more facts. As they arrive, pick your subsequent days to report on how the company is coping with the trouble. By the monthly meeting you will have had a lot of phone calls, mostly with suggestions on how to work on the trouble. Few board people will be screaming at you, demanding your head. Instead, they will work together to support you and the employees putting out the fire.