Managing Managers

How to effectively ramp the first set of managers at your startup

If you’re a founder in the process of scaling up your company, it’s an exciting prospect to bring on experienced managers for the first time.

Scrolling on Linkedin starts to feel like swiping on a dating app. There’s an endless pool of talented people who could join your company. You start to imagine that all your problems could be solved if you could just get that perfect person on your team.

This is true in some sense. You do need to hire talented people. But what many founders may fail to recognize is how much time it takes to manage managers effectively.

When we reached about 60 employees at Loop, we started to search for experienced managers to join the company. We knew that our core product resonated with customers. We had found PMF. It was time to start scaling, which required experienced hands.

We went out and conducted hundreds of interviews. We spent hours talking to candidates and found the right handful of people to lead functions like HR, Sales, and Marketing. We sent out offers, and everyone accepted.

Our problems were solved, right?

Not quite. We didn’t realize it immediately, but we had a big issue on our hands. Why? Because we didn’t understand how to manage managers. We assumed that experienced folks could do the job on Day 1. But even experienced managers need time to build context on your business.

It’s never enough just to get good people. Tons of work is required to make good people into productive assets for the company and eventually leaders that help you build further leverage.

A sports metaphor

Over the last 10 years, the English Premier League has spent more on players than any other league. EPL teams consistently spend more than other teams to acquire the best players on the market.

Below is a snapshot of spending by league in the 2022 summer transfer window. The EPL has spent more than all the other major European clubs combined. And this has been the case for years.

This should result in lots of wins in the European tournaments, right? English teams should obviously perform better. Except, in the last 10 years, English teams have won the European Champions League tournament just twice.

Having the best talent is not enough. So much more is required to win.

In the context of startups, managers are those expensive players you bring in to solve your problems.

How do you make those expensive players into effective players?

In my experience, there are two things you need to convey early and often to make this happen— the business strategy and your operating principles. The other details tend to get figured out on their own.

Strategy

The North-star metrics of the business will govern how managers should pick and prioritize projects.

We often tell managers to “attack the bottleneck first”. But unless you understand where the business is headed, it’s hard to know what to prioritize. If you don’t know the business's priorities, you’ll never know where the real bottleneck is.

As my professor at UIUC used to say, “strategy is a stream of decisions”. In the ‘Playing to Win’ framework, strategy requires setting a goal and then developing the core competencies to execute against that aspiration.

That is to say, every decision starts with the goal in mind. The “winning aspiration”.

Managers need to hear the winning aspiration early and often. If you do this, they will start to orient their decisions, even the subtle subconscious ones, toward the Northstar.

Operating principles

This is the “how” of the work you do, and it’s deeply intertwined with the company's culture. It shows up in the average pace of work and the quality of output. Operating principles can also show up in subtle ways, like how people speak with each other.

For example- Are you the type of founder that expects thoughtful written analysis and reports from your managers each week? Or do you prefer a verbal method where you set meetings to discuss progress?

Are you a founder that cares more about getting things done quickly at the cost of quality? Or are you a craftsman who expects the details to be perfect?

The answers will likely differ greatly based on the functions you oversee and the type of person you are.

Nonetheless, your managers (if they are experienced) have probably worked for many types of leaders in the past. They may arrive at your company with habits that don’t gel with your expectations. To minimize friction and increase the fidelity of your communication, express your operating principles early and reinforce the behaviors you want to see.

Wrapping it up

For the first set of managers that join your company, there’s probably not much documentation of your operating principles. This means that (without your involvement) your first set of managers will only be able to learn how to succeed in your company implicitly.

This leaves too much out of your control as a founder. Don’t leave things to interpretation and, therefore, chance.

Get comfortable dedicating an entire week to a new manager that joins. Say no to other burning issues to ensure your new managers get sufficient time with you. If you spend that time upfront and focus on communicating the two key concepts mentioned above, everything else should fall in line.