24. Leadership Transitions: Uncompromising Strategies for Success

In this episode we unpack the topic of: Leadership Transitions: Uncompromising Strategies for Success with Andrew Duncan, Talent @ Atomico (ex-UpGroup) and Maddy Cross Partner @ Erevena (ex-Notion Capital)

We discuss the following with Maddy and Andrew: 

• Given the average tenure of senior execs in scaleups, what advice would you give execs and what should companies that are hiring consider? 
• How uncompromising do you need to be to get the right leaders in place?
• What is the difference in leadership skills needed between early and late stage? 
• Do we need someone that has been there and done that? 
• What is the right mix of experience needed for a leadership team? 
• How do you identify gaps in a leadership team?  

References

• Barry McCarthy (story mentioned by Andrew)
• Former Netflix CFO Barry McCarthy Joins Super-Secretive Payments Startup Clinkle As COO
• Clinkle's Still a Hot Mess as Its Big Shot COO Departs
• Clinkle Up In Smoke As Investors Want Their Money Back
• The COO role (giving context for how Andrew thinks about the role)
• Stepping up: What COOs will need to succeed in 2023 and beyond
• Second in Command: The Misunderstood Role of the Chief Operating Officer
• How Best To Onboard Into Different Types Of COO Role
• What is a Chief Operating Officer? 
• From the beginning to a billion. How unicorns built their leadership teams (mentioned by Maddy)
• What to Look for in Your VC's Talent Arm (mentioned by Brandon and loved by Maddy)
• How to Understand the ROI of Investing in People (wasn’t mentioned but Maddy thinks is a great piece)

Biography: 

Maddy Cross is a Partner at Erevena, an Executive Search firm focussed on investor backed businesses, where she leads the European Technology and Engineering practice for B2B. Previously she was Talent Director at Notion Capital, a $1bn B2B SaaS focussed VC, and she holds an MBA from London Business School.

Andrew is a Talent Director at Atomico, one of Europe's largest venture capital funds. He supports portfolio companies in finding and hiring elite executive talent and is responsible for advising founders on the evolution of their leadership teams. Previously, he spent time building executive teams while at Kindred Partners (San Francisco) and The Up Group (London).

Summary: 

• Cannabis legalization in the UK. 0:06
• Bethany Ayers discusses her frustration with the UK's lack of progress in legalizing cannabis, citing the ease of access and variety of strains available in the US.
• Brandon Mensing agrees, noting that alcohol is often used as a stress reliever in the evening but can have negative effects on the body.
• Bethany researches cannabis for blood sugar control and weight loss, finding limited evidence but potential benefits for women.
• UK legalized cannabis for medical use five years ago, but limited access and high costs for patients.
• Bethany and Brandon discuss leadership transitions with Andrew Duncan and Maddie Krause, with a focus on the ideal tenure for executives (2-4 years) and how to handle executives with shorter tenures.
• Maddie shares advice on how to handle executives who have experienced a shorter tenure than they would have wanted, emphasizing the importance of empathy and support.
• CMO tenure and leadership in enterprise software companies. 8:03
• Duncan notes short tenures for CMOs in tech, but highlights successful cases.
• Executive tenure and its impact on career growth. 9:45
• Maddie Cross and Andrew Duncan discuss the nuances of being asked to leave a business, with Maddie sharing examples of sensitive departures where people have stayed in the company for years after being asked to leave their original role.
• Andrew adds that for senior execs, especially those later in their careers, market timing can play a role in their ability to find new opportunities, and talent professionals should consider this when evaluating candidates.
• Both Maddie and Andrew emphasize the importance of handling departures with sensitivity and respect, and providing support to help people move on to new opportunities.
• Maddie Cross highlights the importance of considering tenure in the context of each function, as marketing and people roles tend to have shorter tenures in high-growth b2b software companies.
• Andrew Duncan asks if the same tenure standards apply across functions, with CFOs having shorter tenures due to their specific roles and responsibilities.
• Leadership decisions and ruthlessness in business. 15:49
• Andrew Duncan and Brandon discuss the importance of assessing someone's background and experience to determine their fit for a business, and the potential for short tenure in leadership positions.
• Maddie Cross emphasizes the need for ruthless decision-making in leadership positions, but also stresses the importance of being direct and constructive in those decisions.
• Managing a business during a downturn. 18:57
• Founders, investors, and executives are having harder conversations about business performance and course of action.
• Bethany and Maddie discuss the challenges of making difficult decisions as a founder, including sequencing and taking advice from trusted individuals.
• Maddie suggests breaking down the decision-making process into smaller, more manageable steps to avoid feeling overwhelmed and making no decisions at all.
• Leadership skills and expectations at different stages of a company's growth. 22:31
• Andrew Duncan notes that companies have had to develop internal communications plans to effectively communicate sensitive decisions to their organizations, particularly in the last 12-18 months.
• Bethany asks Andrew about fundamental changes in skills and expectations at the BC-D to IPO stage, and what leaders bring to the table.
• Andrew Duncan: Executives in later stages may prioritize process management over working in the business.
• Bethany: Communication and delegation become more challenging in later stages, with many layers between leaders and those doing work.
• Leadership team composition and diversity. 27:47
• Maddie Cross suggests having a mix of experienced leaders and up-and-coming talent on a leadership team for a healthy balance of perspectives and skills.
• Brandon agrees and adds that a mix of both types of individuals can provide a more well-rounded leadership team, with the caveat that everyone needs to know their role and responsibilities.
• Maddie Cross analyzed two groups of b2b software companies: unicorns (valued at over $2B) and less successful ones.
• Key differences between the two groups include the range of years of prior experience (tighter delta in less successful companies) and educational background (more people from top universities in successful companies).
• Leadership team gaps and hiring decisions in early-stage companies. 32:33
• Andrew Duncan emphasizes the importance of trusted leaders in early-stage companies, even if they haven't held similar roles in other businesses.
• He highlights the need to balance proven track record with potential risks when bringing in outside execs at later stages of growth.
• Founders should consider a mix of people with and without prior experience in their role to bring diverse perspectives.
• Identify gaps in a leadership team by clearly defining North Star goals and assessing confidence in assigning them to team members.
• Use a combination of internal and external resources to surround functional heads with people who can increase their likelihood of success, such as mentors, boot camps, or other trusted individuals.
• Hiring and leadership for venture-backed companies. 38:48
• Key capabilities need to exist in a business for a successful series B fundraising round, and a strong leader must be responsible for those capabilities.
• For B2B SaaS businesses, a strong sales leader is crucial for fundraising, while a CFO with extensive experience may not be as critical.
• Maddie Cross advises not letting fear of making hiring mistakes hold you back, while Andrew Duncan highlights the importance of contingency planning for executive success.
• Andrew Duncan and Maddie Cross discuss the importance of accepting risks in building venture-backed companies, sharing examples of successful executives who have made mistakes.