Why aren’t we hiring leaders based on their ability to build teams of lieutenants?
This post is going to have more questions than answers.
When I joined Pantheon.io I knew right away that the company had a middle-management problem.
My first project was to raise the Series D. Here’s how some of it played out:
Investors would send over follow-up questions after the first/second meeting. I’d go to the relevant executive. They would tell me a highly contextualized story. One that was more likely to be true than not, but rarely backed by bottoms-up data.
Often this high-level answer had gaps. So I went to the most junior analyst I could find, asked them for access to the raw data, built my own analysis, developed my own story, and answered the question.
Asking the executive or the analyst were the only two options – there was no middle management with whom I could have a data-informed forward-looking conversation.
On paper there was a Senior Manager to Senior Director layer. In practice, at the time when I joined (well into double digit ARR), there was nobody in the company who could actually say “Here’s what we objectively know, here’s how we think about it, and here’s what we’re doing with it.”
Here I was, 30 days into the business, mapping data to our product vision for the first time in the company’s history. Validating if what the executive team believed matched what the individual contributors experienced in the field. All of this being driven by incoming investor questions.
Eventually, we fixed the issue by hiring a layer of VPs, but my open questions remained:
(1) How could the company get to $XXM in ARR and still think this is OK?
Why did the analyst looking at the data not raise their hand and say “Hey, I actually have data to help you think through that story you’re telling”
Why did the front-line manager not recognize that their job isn’t just to pass instructions down and supervise, but to also help leaders make better decisions?
Why did the executive not nurture the behavior described above?
(2) Why did it take another two years for the company to acknowledge this was a talent and not a BI systems problem?
(3) Was hiring VPs the right answer…or should we have been up-leveling the Directors?
The reality is that Pantheon wasn’t unique in this regard. I see this over and over when I work with Series A/B/C startups. When I see companies stumble well past the point of proving out initial product-market fit, miss that growth goal, and delay the next raise –
20% of the time it’s because they had the wrong strategy
30% of the time because they missed a market or economic cycle
50% of the time it’s because they didn’t have good middle managers to execute
So, my question is: why aren’t we hiring leaders based on their ability to build teams of lieutenants?
Not simply large teams of individual contributors – but impactful teams of potential successors.
I’ll attempt to break that down over the rest of the quarter.