Category Archives: Management

Did Your Board Order a Proposal or a Discussion?

[Restructured.  See notes.]

I think board meetings should have more discussions and fewer proposals.  Why?

  • The hardest questions often don’t lend themselves well to proposals. Think:  global warming, cultural divisiveness.  Or, in business:  investor alignment, exit strategy, or a flawed corporate strategy.  You’re not going to solve those issues in 45 minutes by quickly reviewing three options.
  • Proposals can result in a myopic focus on approval.  Approving an operating plan can be a strategic exercise where a strategy is proposed and translated into an organizational structure and expense budget.  But it’s too often an 11th-hour exercise driven by financial constraints where everybody just wants approval.
  • Proposals usually feature limited discussion.  Both because of the format and the approval focus, discussions during proposal sessions tend to be hasty and shallow.  If everyone knows they need to leave at 5pm and that three other items are slated before the end of the meeting, you’re strongly disincenting discussion.
  • Boards know less about your business than you think. Management spends 60 hours a week at the company, while board members might spend 60 hours a year.  If you want to leverage your board’s knowledge, first spend 20 minutes simply baselining them.  It’s a great introduction to a discussion and only rarely happens in proposals.  The more they know, the more they can help.
  • Sometimes, people just need to talk.  Think of recent hard times, like the start of Covid.  Just talking about the problem with the board leveraged the knowledge of those in the room (e.g., if only to know what other companies were doing), made everyone feel better, and helped the board determine if management were taking the situation seriously and asking the right questions — even if nobody had all the answers.  The board getting together to “just talk” isn’t just a touchy-feely concept; it’s a legal one, too [1].

For clarity’s sake, I think board meeting sessions fall into one of three types:

  • A review (or, “deep dive”) where, e.g., the CRO reviews the previous quarter’s results, metrics, win/loss, lessons learned, and plans to address to key issues.  Or maybe it’s a review of the partner program.  Or the product roadmap.  The goal is deep inspection and learning.
  • A proposal, where, e.g., the CEO and CFO present next year’s operating plan, seeking board approval at the end of the session.  Or a stock option refresh.  Or executive compensation.  Management presents either one or three options and seeks an approval of their choice. Usually there is some discussion, but the goal is ultimately procedural:  getting formal approval on a proposed decision.
  • A discussion, where, e.g., the CEO leads a discussion on strategy, the CRO a discussion on sales models, or the CFO a discussion on an upcoming new financial standard.  The purpose of a discussion is educational:  to leverage the knowledge of everyone in the room so they all leave smarter on the issue than when they came in.  Discussions are also useful for consensus building.

So my advice is to look at your last few board agendas, classify the session topics by type, and analyze your mix.  Odds are, you’re having lots of reviews and proposals, but few or no discussions.  I’d say everyone would be better off if you changed that going forward.

For example, here’s a hard problem that many startups face today:

How are we going to make our cash last, while growing fast enough, so that — despite multiple compression — our next round will be an up-round?

Sure, you can run a proposal session on this topic.  You can build a spreadsheet to model a few macro scenarios (e.g., mild vs. modest recession), financing options (e.g., extension round, venture debt), and cost-cutting options (e.g., a 10% RIF).  You can make a decision on what, if anything, to do right now.  But, invariably, there will remain a ton of, “we’ll have to wait and see how things develop going forward.”

In this case, especially if no immediate actions are indicated, a discussion might be much more effective than a proposal.  I think what most boards care about right now are the answers to questions like these:

  • Is the CEO in touch or in denial when it comes to the changing business reality?
  • Does the CEO understand the new fundraising environment (e.g., multiples, constraints)?
  • Is the CEO too optimistic or pessimistic about the expected fundraising environment in 18-24 months?  What future environment assumptions are driving their point of view?
  • Is the CFO on top of cash planning and forecasting?
  • Is the CEO ready and willing to make cuts if indicated by the needs of the business?
  • Does the company have good leading indicators and are they tracking them so they can act early, if indicated?
  • What do my fellow board members think and what are they seeing in the market and with their other companies?

I think most boards would instinctively order a proposal, added to the next board meeting’s agenda.  I think smart CEOs might well convince them to order a discussion, instead.

# # #

Notes
I had planned to restructure this post in response to feedback on the draft, but failed to do so before it auto-posted earlier today.  Hence, I’ve restructured it largely in accordance with a rule from my grandmother, a high school english teacher:  most essays are improved by simply deleting the first paragraph.  I did a bit more than that, but the world’s most Irish grandmother (Margaret Mary Magadalene O’Keefe Downing Gardiner) was proven right yet again.

[1] If you ever wondered why unanimous written consent resolutions needed to be unanimous:  the idea is that if there is any dissent (i.e., if even one director opposes a motion), that the board must convene to discuss it.

The Decomposition of Marketing

To adapt Julius Caesar’s famous opening line of the Gallic Wars:  marketing as a whole is divided in three parts.

  • Product marketing (prodmkt), responsible in a word, for the message and how well it resonates with customers in the market [1].
  • Demand generation (demandgen), responsible in a word, for generating opportunities (oppties) to feed sales [2].
  • Corporate communications (corpcomm), responsible in a word, for communications, including branding, public relations, and corporate-level messaging [3].

Two important notes:

  • There is an optional fourth part, sales development, i.e., managing the team of sales development reps (SDRs) who convert MQLs into stage-1 oppties.  Whether this team should report into sales or marketing is a separate debate.
  • The lines between these parts are not black and white.  Social media advertising is demandgen, but posting is either comms or prodmkt.  Prodmkt helps provide content for demandgen campaigns.  Content marketing is a form of light prodmkt.

Marketing leaders grow up [4] in one of those parts and thus take one of the three basic flavors. But just as few CFOs grew up in legal, few CMOs grew up in corpcomm.  So it really comes down to two:  most CMOs either grew up in product marketing or demandgen (just as most CFOs either grew up in either finance or accounting).  The point being that virtually no one grew up in both.

It was this realization that led me to create “pillar profiles” for marketers — a score from 1-5 on each of the three (plus one) pillars of marketing: prodmkt, demandgen, corpcomm, and sales development.  The trick is you only get a maximum of 15 points to assign [4a].  While I’ve never blogged on pillar profiles, I did cover them in my SaaStr 2021 talk, A CEO’s Guide to Marketing.

If you’re searching for a CMO, the first thing you should do is identify your target pillar profile [5].  Remember that you get a maximum of 15 points and, harder yet, you’ll find that {5, 4, x, x} and {4, 5, x, x} candidates are very hard to come by.  Usually you’ll find {5, 3, x, x} and {3, 5, x, x} candidates.

In the past, this forced startup CEOs to choose between a prodmkt- and a demandgen-oriented head of marketing.  But, with marketing ever more accountable for building pipeline [6], it was a Hobson’s choice:  most picked demandgen-oriented leaders because without pipeline, well, everything stops.  It’s the physiological needs level of marketing.

Increasingly though, I see startup CEOs interested in changing the rules so they have both strong prodmkt and demandgen leadership.  They’re doing this by decomposing marketing and reconstituting it in various ways:

  • Generally hiring demandgen-oriented CMOs [7].
  • Moving product marketing to report into either the chief product officer (CPO) or the CEO directly.
  • Occaisionally moving demandgen under the CRO, leaving behind either a prodmkt-oriented CMO or additionally putting prodmkt under product, leaving a corpcomm-oriented CMO.

I think all of these options can work in different situations, so let’s review the pro/cons of four different marketing org structures [8].

New, Traditional Marketing Structure
I believe the new traditional structure [9] is to hire a demandgen-oriented CMO and put prodmkt under that CMO.

The new, traditional marketing structure. Demandgen-oriented CMO with prodmkt reporting in.

The strength is that you get to hire a strong demandgen leader in the CMO slot and they will likely do well at filling the pipeline.  It may, however, be difficult to attract the level of prodmkt leader that you want because they may feel like “they understand the business bettter than their boss,” even if they lack the demandgen skills required for into the CMO role.

Prodmkt Under Product Structure
In this structure, your hire a demandgen-oriented CMO and move prodmkt under product.

Prodmkt under Product marketing structure. Demandgen-oriented CMO who also runs comms.

The strength here is that you get to hire a strong demandgen leader as CMO and — if you happen to have the right CPO — then prodmkt can work quite effectively under product.  This works best when the CPO is a great outbound communicator who has both a genuine interest and prior experience in prodmkt.  Never, ever force-fit this.  Some product leaders just want to manage the backlog [10].  I would note that large-company general manager (GM) positions, e.g., the one I held at Salesforce, are effectively “product management on steroids” and those steroids include taking over a lot of product marketing duties.  In such organizations, product marketing also exists outside the business units, but it is staffed at a lower ratio, and more product-line and campaigns-support in nature.

Prodmkt Under CEO Structure
Here again you hire a demandgen-oriented CMO but move prodmkt directly under the CEO, instead of under the CPO.

Prodmkt reporting to CEO structure. A demandgen-oriented CMO runs DG and comms.

I like this structure for early-stage startups because it lets the CEO have their cake and eat it, too — i.e., they can attract strong demandgen and prodmkt leaders.  This structure also keeps the CEO close to the action during the early days when the company is still evolving its message frequently.  It gives the CMO a chance to keep their job while still subtly giving the VP of Prodmkt the chance to earn the CMO job if they work well with the CEO, crush the prodmkt role, and demonstrate significant understanding of demandgen [11].  A little internal competition keeps everyone on their toes.

Fully Decomposed Structure
Fewer people contemplate this structure, but I have seen it once or twice.  Here you move demandgen under sales, prodmkt under product, and hire a corpcomm-oriented head of marketing.

Fully decomposed with DG under sales, prodmkt under product, and a corpcomm-oriented CMO

I’m generally not a fan of this structure because I don’t like marketing reporting into sales [12].  The strength is theoretically alignment:  by putting demandgen under sales, the CEO can effectively delegate responsibility for aligning demandgen to the CRO.  This structure may work for product-oriented founders who have little interest in go-to-market (GTM) functions [13].  The weakness here will be potential difficultly in finding good people to staff both the head of demandgen and the head of prodmkt roles.  Additionally, I’d guess that only 1 in 5 CPOs are good fits to run prodmkt.

Conclusion
In this post, we covered several topics:

  • The idea that marketing fundamentally has three parts — product, demandgen, and corpcomm — and that sometimes there’s an optional fourth, sales development.
  • That we can and should make pillar profiles to identify, at the start of a CMO search, which pillar profile we are looking for.
  • That startup CEOs are increasingly exploring alternative organizational structures to have their cake and eat it, too, when it comes to hiring marketing talent.
  • We examined four different structures and quickly discussed the strengths and weaknesses of each.

# # #

Notes
[1] A more detailed list:  positioning, messaging, high-value content (e.g., collateral), sales tools and training, support for public relations (PR) and analyst relations (AR).  Because the latter is fairly product-focused and time-intensive (e.g., extensive RFPs, briefings, and demos), you increasingly see AR split from PR and often reporting into product marketing.

[2] I contemplated, but deliberately did not pick “pipeline,” because sales must be responsible for the pipeline.  I could have said “generating pipeline,” but that’s two words and marketing is only one of four sources for so doing.

[3] As companies get larger and have multiple products, the need emerges for a corporate-level capstone message that transcends product line messages.  Note that I contemplated but deliberately avoided chosing “brand” as the single word, because it’s highfalutin for an early-stage startup.  See my post, practical thoughts on branding.

[4] Meaning specifically, had their formative career experiences working in and thus both have a deep knowledge of and the embedded point of view of that given department.  Finance people generally look at the company differently than accounting people.  Ditto for product marketers and demandgen people.

[4A] On the rough theory that, “the universe doesn’t make those,” so if you’re actually going to hire someone you need to realize that even 15 points is a pretty good score.

[5] As a board member, nothing is a bigger red flag on a marketing search than when the three finalists bear no resemblance to each other, e.g., a {5, 3, 3, 2}, a {2, 5, 3, 4}, and a {2, 3, 5, 3}.  If you need a {2, 5, 3, 4} then all finalists should be pretty close to that pillar profile.  You’ve effectively deferred deciding what you need until picking, which wastes time and changes your final decision from, “of the three people who look like what we need, which one is best for us,” to “what type of person do we need again?”

[6] It may be hard to believe but 25 years ago, before the widespread adoption of CRM, marketing had largely tactical and poorly measured responsibilities on lead generation.  Here’s my take on the evolution of software marketing.

[7] While I know early-stage startups don’t often have CXO-style titles, please consider CXO here to be a compact notation for saying “VP of <function>” or “Head of <function>”.

[8] I’ll leave the SDR question to the side as I view it as orthogonal and addressed in this post.

[9] I suppose I could just say contemporary, but “new, traditional” strikes me as more precise.  It’s now the “traditional” way, but yes, it’s still fairly “new” from where I sit.  Neotraditional doesn’t work as that means a new adaptation of a traditional thing.

[10] Becoming an incrementalist is the occupational hazard of a career in product management.

[11] In which case the CMO would have no functional job change but get put under the prodmkt leader. If this is a possiblity far better to call one VP of Prodmkt and the other VP of Marketing, so when that occurs it’s a promotion to CMO for one of them, but not a demotion for the other.

[12] There is no doubt some religion in my dislike, having been CMO of three companies for over a decade.  I think the rational argument is that you don’t need to put marketing under sales to align marketing with sales, and such, doing so is rather a brute-force approach that will result in a smaller candidate pool.  Moreover, most CROs know little about marketing and are not able to add much value when they manage it.

[13] Of course my general advice is to develop that interest.  The typical SaaS company spends twice on S&M what it spends on R&D.  Thus, while you may think you founded a product company, you actually founded a distribution business.  So go figure it out!  (And it’s fun.)

Playing Bigger vs. Playing To Win: How Shall We Play the Marketing Strategy Game?

“I’m an CMO and it’s 2018.  Of course I’ve read Play Bigger.  Duh.  Do you think I live under a rock?” — Anonymous repeat CMO

Play Bigger hit the Sand Hill Road scene in a big way after its publication in 2016.  Like Geoffrey Moore’s Crossing the Chasm some 25 years earlier, VCs fell in love with the book, and then pushed it down to the CEOs and CMOs of their portfolio companies.  “Sell high” is the old sales rule, and the business of Silicon Valley marketing strategy books is no exception.

Why did VCs like the book?  Because it’s ultimately about value creation which is, after all, exactly what VCs do.  In extreme distillation, Play Bigger argues:

  • Category kings (companies who typically define and then own categories in the minds of buyers) are worth a whole lot more than runner-ups.
  • Therefore you should be a category king.
  • You do that not by simply creating a category (which is kind of yesterday’s obsession), but by designing a great product, a great company, and a great category all the same time.
  • So, off you go.  Do that.  See you at the next board meeting.

I find the book a tad simplistic and pop marketing-y (in the Ries & Trout sense) and more than a tad revisionist in telling stories I know first-hand which feel rather twisted to map to the narrative.  Nevertheless, much as I’ve read a bunch of Ries & Trout books, I have read Play Bigger, twice, both because it’s a good marketing book, and because it’s de rigeur in Silicon Valley.  If you’ve not read it, you should.  You’ll be more interesting at cocktail parties.

As with any marketing book, there is no shortage of metaphors.  Geoffrey Moore  had D-Day, bowling alleys, and tornados.  These guys run the whole “something old, something new, something borrowed, and something blue” gamut with lightning strikes (old, fka blitzkreigs), pirates (new to me if not Steve Jobs), flywheels (borrowed from Jim Collins), and gravity (blue in sense of a relentless negative force as described in several cautionary tales).

While I consider Play Bigger a good book on category creation, even a modernized version of Inside the Tornado if I’m feeling generous, I must admit there’s one would-be major distinction that I just don’t get:  category creation vs. category design, the latter somehow being not just about creating and dominating a category, but “designing” it — and not just a category, but a product, category, and company simultaneously.  It strikes me as much ado about little (you need to build a company and a product to create and lead a category) and, skeptically, a seeming pretense for introducing the fashionable word, “design.”

After 30 years playing a part in creating, I mean designing, new categories — both ones that succeeded (e.g., relational database, business intelligence, cloud EPM, customer success management, data intelligence) and ones that didn’t (e.g., XML database, object database) — I firmly believe two things:

  • The best way to create a category is to go sell some software.  Early-stage startups excessively focused on category creation are trying to win the game by staring at the scoreboard.
  • The best way to be a category king is to be the most aggressive company during the growth phase of the market.  Do that by executing what I call the market leader play, the rough equivalent of Geoffrey Moore’s “just ship” during the tornado.  Second prize really is a set of steak knives.

I have some secondary beliefs on category creation as well:

  • Market forces create categories, not vendors.  Vendors are simply in the right place (or pivot to it) at the right time which gives them the opportunity to become the category king.  It’s more about exploiting opportunities than creating markets.  Much as I love GainSight, for example, I believe their key accomplishment was not creating the customer success category, but outexecuting everyone else in exploiting the opportunity created by the emergence of the VP of Customer Success role.  GainSight didn’t create the VP of Customer Success; they built the app to serve them and then aggressively dominated that market.
  • Analysts name categories, not vendors.  A lot of startups spend way too much time navel gazing about the name for their new category.  Instead of trying to sell software to solve customer problems, they sit in conference rooms wordsmithing.  Don’t do this.  Get a good-enough name to answer the question “what is it?” and then go sell some.  In the end, as a wise, old man once told me, analysts name categories, not vendors.
  • Category names don’t matter that much.  Lots of great companies were built on pretty terrible category names (e.g., ERP, HCM, EPM, BTO, NoSQL).  I have trouble even telling you what category red-hot tech companies like Hashicorp and Confluent even compete in.  Don’t obsess over the name.  Yes, a bad name can hurt you (e.g., multi-dimensional database which set off IT threat radar vs. OLAP server, which didn’t).  But it’s not really about the name.  It’s about what you sell to whom to solve which problem.  Again, think “good enough,” and then let a Gartner or IDC analyst decide the official category name later.

To hear an interesting conversation on category creation,  listen to Thomas Otter, Stephanie McReynolds, and me discuss the topic for 60 minutes.  Stephanie ran marketing at Alation, which successfully created (or should I say seized on the market-created opportunity to define and dominate) the data catalog category.  (It’s all the more interesting because that category itself is now morphing into data intelligence.)

Since we’re talking about the marketing strategy game, I want to introduce another book, less popular in Silicon Valley but one that nevertheless deserves your attention: Playing to Win.  This book was written not by Silicon Valley denizens turned consultants, but by the CEO of Proctor & Gamble and his presumably favorite strategy advisor.  It’s a very different book that comes from a very different place, but it’s right up there with Blue Ocean Strategy, Inside the Tornado, and Good Strategy, Bad Strategy on my list of top strategy books.

Why?

  • Consumer packaged goods (CPG) is the major league of marketing.   If they can differentiate rice, yogurt, or face cream, then we should be able to differentiate our significantly more complex and inherently differentiated products.  We have lots to learn from them.
  • I love the emphasis on winning.  In reality, we’re not trying to create a category.  We’re trying to win one, whether we happened to create it or not.  Strategy should inherently be about winning.  Strategy, as Roger Burgelman says, is the plan to win.  Let’s not dance around that.
  • I love the Olay story, which opens the book and alone is worth the price of the book.  Take an aging asset with the wrong product at the wrong price point in the wrong channel and, instead of just throwing it away, build something amazing from it.  I love it.  Goosebumps.
  • It’s practical and applied.  Instead of burying you in metaphors, it asks you to answer five simple questions.  No pirates, no oceans, no tornados, no thunderstorms, no gorillas, no kings, no beaches.

Those five questions:

  • What is your winning aspiration? The purpose of your enterprise, its motivating aspiration.
  • Where will you play? A playing field where you can achieve that aspiration.
  • How will you win? The way you will win on the chosen playing field.
  • What capabilities must be in place? The set and configuration of capabilities required to win in the chosen way.
  • What management systems are required? The systems and measures that enable the capabilities and support

Much as I love metaphors, I’d bury them all in the backyard in exchange for good answers to those five questions.  Strategy is not complex, but it is hard.  You need to make clear choices, which business people generally resist.  It’s far easier to fence sit, see both sides of the issue, and keep options open (which my old friend Larry used to call the MBA credo).  That’s why most strategy isn’t.

Strategy is about answering those questions in a way that is self-consistent, consistent with the goals of the parent organization (if you’re a brand or general manager in a multi-product company), and with the core capabilities of the overall organization.

In our view, Olay succeeded because it had an integrated set of five strategic choices that fit beautifully with the choices of the corporate parent. Because the choices were well integrated and reinforced category-, sector-, and company-level choices, succeeding at the Olay brand level actually helped deliver on the strategies above it.

I won’t summarize the entire book, but just cherrypick several points from it:

  • As with Burgelman, playing to win requires you to define winning for your organization in your context.  How can we make the plan to win if we don’t agree on what winning is?  (How many startups desperately need to have the “what is winning” conversation?)
  • Playing to win vs. playing to play.  Which are you doing?  A lot of people are doing the latter.
  • Do think about competition.  Silicon Valley today is overloaded with revisionist history:  “all we ever focused on was our customers” or “we always focused only on our vision, our north star.”  Ignoring competition is the luxury of retired executives on Montana ranches.  Winning definitionally means beating the competition.  You shouldn’t be obsessed with the competition, but you can’t ignore them either.
  • While they don’t quite say it, deciding where you play is arguably even more important than deciding what you sell.  Most startups spend most of their energy on what (i.e., product), not where (i.e., segment).  “Choosing where to play is also about choosing where not to play,” which for many is a far more difficult decision.
  • The story of Impress, a great technology, a product that consumers loved, but where P&G found no way to win in the market (and ultimately created a successful joint venture with Clorox instead), should be required reading for all tech marketers.  A great product isn’t enough.  You need to find a way to win the market, too.
  • The P&G baby diapers saga sounds similar to what would have happened had Oracle backed XQuery or when IBM originally backed SQL — self-imposed disruptions that allowed competitors entry to the market.  IBM accidentally created Oracle in the process.  Oracle was too smart to repeat the mistake.  Tech strategic choices often have their consumer analogs and they’re sometimes easier to analyze in that more distant light.
  • The stories of consumer research reveal a depth of desired customer understanding that we generally lack in tech.  We need to spend more time in customers’ houses, watching them shave, before we build them a razor.  Asking them about shaving is not enough.
  • I want to hug the person who described the P&G strategy process as, “corporate theater at its best.”  Too much strategy is exactly that.

Overall, it’s a well-written, well-structured book.  Almost all of it applies directly to tech, with the exception of the brand/parent-company intersection discussions which only start to become applicable when you launch your second product, usually in the $100M to $300M ARR range.  If you don’t have time for the whole book, the do’s and don’ts at the end of each chapter work as great summaries.

To wrap this up, I’d recommend both books.  When thinking about category creation, I’d try to Play Bigger.  But I’d always, always be Playing to Win.

The More Cons than Pros of the Backdoor Search

You’ve decided you need to replace one of your executives.  Hopefully, the executive already knows things aren’t going great and that you’ve already had several conversations about performance.  Hopefully, you’ve also already had several conversations with the board and they either are pushing for, or at least generally agree with, your decision.

So the question is how to do you execute?  You have two primary options:

  • Terminate and start search.  Arguably, the normal order of operations.
  • Start search and then terminate.  This is commonly known as a backdoor search, I guess because you’re sneaking out the back door to interview candidates.  More formally, it’s known as a confidential search.

Yes, there are a lot of sub-cases.  “Search” can mean anything from networking with replacement CXOs referred by your network up to writing a $100K+ check to Daversa, True, and the like.  “Terminate” can mean anything from walking the CXO out the door with a security escort to quietly making an agreement to separate in 60 days.

As someone who’s recruited candiates, been recruited as a candidate, and even once hired via a backdoor search, let me say that I don’t like them.  Why?

  • They make a bad impression on candidates.  Think:  so, this company is shooting their CMO and that person doesn’t even know it yet?  (Sure, I’d love to work for them.)
  • They tie the recruiter’s hands behind their back.  Think:  I have this great opportunity with a high-growth data workbench company — but I can’t tell you who it is.  (Call me when you can.)
  • They erode trust in the company culture.  The first rule of confidential search is there are no confidential searches.  Eventually, you get busted; the question is when, not if.  And when you do, it’s invariably a bad look for everyone involved.
  • They are super top-down.  Peers and employees are typically excluded from the process, so you neither build consensus around the final candidate nor let them meet their team.
  • You bypass your normal quality assurance (QA) process.  By involving fewer people you disregard a process that, among other things, helps vet the quality of candidates.  If the candidate turns out a mishire you are going to feel awfully alone.
  • If you somehow manage to pull one off, the candidate gets off to a rough start, typically never having had met with anyone on their team.

That said, the advantages of confidential searches are generally seen as:

  • No vacant seat.  There’s no awkward period where the CXO’s seat is empty and/or temporarily filled by one of their direct reports.
  • Short transition period.  You elminate the possibility of an extended period of ambiguity for the CXO’s team.  Colloquially, you rip off the band-aid.
  • One transition, not two.  Some positions (e.g., CFO, CMO) have active fractional (or rent-a-CXO) markets.  If you terminate first, hire an interim replacement, and then search for a permanent replacement, you end up putting the team through two transitions.

I’d argue that for conflict-averse CEOs, there’s one bad “advantage” as well — they get to put off an unpleasant conversation until it’s effectively irreversible.  Such avoidance is unhealthy, but I nevertheless believe it’s a key reason why some CEOs do backdoor searches.

All things considered, I remain generally against backdoor searches because the cost of breaking trust is too high.  Lady Gaga puts it well:

“Trust is like a mirror, you can fix it if it’s broken, but you can still see the crack in that mother f*cker’s reflection.”

So what can you do instead of a backdoor search?  You have three options:

  1. Run the standard play, appointing an interim from the CXO’s directs or doing it yourself.  (If you have the background, it’s relatively easy and sometimes it’s even better when you don’t —  because it helps you learn the discipline.  I’ve run sales for 18 months across two startups in this mode and I learned a ton.)
  2. Run with an interim.  In markets where you can do this, it’s often a great solution.  Turns out, interim CXOs are typically not only good at the job, but they’re also good at being interim.  Another option I like:  try-and-buy.  Hire an interim, but slow starting your search.  This de-risks the hire for both sides if you end up hiring the interim as permanent.  (Beware onerous fees that interim agencies will charge you and negotiate them up front.)
  3. Agree to a future separation.  This is risky, but a play that I think best follows the golden rule is to tell the CXO the following:  “you go look for a job, and I’ll go look for a new CXO.”  A lot can go wrong (e.g., undermining, hasty departure, mind changing) and you can’t really nail it all down legally (I’ve tried several times), so you can only do this option with someone you really trust.  But it allows you to treat the outgoing CXO with respect and enables them to not have to ask you for a reference (as they’re still working for you).  You’re basically starting a search that is “quiet” (i.e., unannounced internally), but not backdoor because the CXO knows it’s happening.

Hat tip to Lance Walter for prompting me to write on this topic.

Crowdsourced Marketing:  Hey, We Can Put on a Show!

The plot of so-called backstage musicals usually centers around the production of a show, often created to avoid imminent financial peril, as you’d find in many of the depression-era Our Gang movies.  Invariably, as the characters realize their predicament, someone shouts the solution, “Hey, we can put on a show!”  (The ticket sales from which presumably generate enough money to save the day.)

The purpose of this post is to discuss one of the more serious forms of software marketing desperation, which I refer to variously as a backstage musical, a bake sale, or what one might more contemporaneously call crowdsourced marketing.

Since I’m mixing more metaphors than someone burning the midnight oil on both ends, let me quickly elaborate on each:

  • Backstage musical. Think: “Jimmy can tap dance, Mary can sing, and John plays the trumpet.  We can put on a show!”
  • Bake sale. Think: “You make the brownies, I’ll make the cookies, and Anne can make the cupcakes.  We can have a bake sale!”
  • Crowdsourced marketing. Think: “We can have a Sales town hall, set up a Slack channel, and call a meeting with Product to figure out how to generate sales.  We can crowdsource marketing!”

In all three cases, the presumption is basically, if only we had professional performers, bakers, or marketers, they’d know what to do, but since we don’t – well, let’s throw it together the best we can.  For the Our Gang financial dilemma or the classroom fundraiser, that might be good enough.  For your marketing department, it’s not.

I’ve spoken to CEOs who ask:

If we have all the performance data and conversion rates by (marketing) channel, and we understand that things aren’t purely linear but opportunity generation happens over time in response to numerous touches, and we can test the effectiveness of a various messages used in various segments, then how are we supposed to take all that information and decide what to do?

If only, I think, you had a strong head of marketing.  That is their job.  In most marketing organizations, it’s not their only job and they may have delegated a lot of it to the head of demandgen, but wafting through all that data and all those ideas, building a plan, getting buy-in to that plan from sales, selling it to the CEO, and maybe the board — well, that’s what of head of marketing is supposed to do.

You can’t hire an agency to decide it for you.  You can’t decide it in a board meeting or a call.  The CEO can’t decide it after looking at some reports.  The CEO and/or board can and should question any proposed plan, but making that plan is the head of marketing’s job.

And, let me be clear, it’s hard.  Which is precisely why no one else can really do it.   It’s a mix of art and science.  It’s a mix of re-running proven campaigns while testing new hypothesis.  It’s a mix of proven messaging and new messaging to address new trends, products, or partnerships.  It’s knowing the channel performance data cold, but also knowing the limitations on its interpretation and the scaling opportunity and cost per channel going forward (think:  exhaustion of low hanging fruit).  It’s hard.

There are zillions possible combinations.  There is no one right answer.  No report will ever tell you or John Wanamaker which half of the marketing budget is wasted.  Attribution throws a drowning victim an anvil, not a buoy; the best we can likely do is to make attribution suck less.

Believe it or not, I’m actually a big believer in crowdsourcing certain aspects of marketing – but not the plan.  The plan needs to be made by someone who understands the market and who is immersed in the data of the business.  If you don’t trust your marketing head to make the plan, you need a new marketing head.  Period.

When it comes to crowdsourcing and marketing, I believe there’s a time and a place for it.

  • It is extremely effective for review. Share a draft logo and you might learn it’s too close to an indirect competitor’s.  Share a draft name to learn it’s a bad word in another language.  Share a draft webpage to find errors.   Share a draft white paper to get your arguments torn apart.   Many marketers (and most agencies) are afraid of this because such feedback can interrupt your timeline.  But it can also help you catch mistakes, before they go live.  The great thing about marketing is that everyone is going to get a chance to review your work anyway.  You may as well find problems before the launch, not after.  Don’t be an unveiler.
  • It’s great for brainstorming. It’s great to sit down with a bunch of sellers and say, “tell me what would make your lives easier.”  Or, “I noticed we’re having troubles with our demo-to-close rate, what can we do to help improve that?”  Be ready for the usual answers and bring data to address them – e.g., “no one’s ever heard of us.”  Whip out your recent awareness study to present the actual state of relative awareness and then describe your plan to address it.  Some marketers develop a fear of ideas because they see each new idea as work.  Don’t be that person.  Love ideas.  Get as many as you can and then pick the best ones.
  • It’s great for guerilla marketing. We’ve got no more budget, but we still have a problem.  What can we do, on the cheap, to help solve it?  This often comes up in the context of field and/or regional marketing.  It’s arguably a form of brainstorming, but not the kind where you are at the start of an exercise, generating ideas.  Here, you’re in the middle of it, things aren’t going according to plan, and people need help.  What we can we do (given our constraints)?  The best marketers will go sixty minutes after the official end of the day, wringing brains, asking:  any more ideas, anything else anyone can think of?   Sometimes you get the best ideas on the third wring.

In this post, I’ve tried to convince CEOs to not turn their marketing into a bake sale.  If you’re a CMO and you feel like your CEO or CRO is trying to do just that, then you need sit down and have a talk.  You are a professional, you’re immersed in the data, and you understand the business.  Ask them to work with you to make a plan, explain in detail why you’re proposing what you’re proposing, and listen carefully to their ideas and concerns.

Then, as depression-era Grandpa Kellogg would say, “plan your work, and work your plan.”

If everyone else nevertheless insists on a bake sale, you probably have a bigger problem.