In this interview with Jeremy Glaser, who is a partner at the law firm Mintz Levin and also serves as Co-Chair of the firm’s Venture Capital & Emerging Companies Practice, we discuss the importance of managing expectations on a board of directors. You need to provide transparency to your board of directors. No surprises. Under-commit and over-deliver.
Patrick: That was one of the big things that made me effective with my various boards. I did that. I knew the power base. I knew who the key influencers were. You want to make sure that you meet with those folks ahead of time, or at a minimum, have a phone call. They might still blow up in the board meeting for show, but that’s just the way things are sometimes.
The other big thing for me has always been transparency. Transparency doesn’t mean that you tell the board everything. It’s like the movie A Few Good Men. Some people just can’t handle the truth. They want to eat sausage, but they don’t want to know how it’s made. You need to have judgement around that.
With big things that are impacting the business, whether they’re good or bad, providing a level of transparency is very important. You don’t want to scare the board, but you want to keep them informed and aware. If they find out that things have been going on outside their purview for months, then there will be a big blow up. That’s never a good thing.
Jeremy: I completely agree. You also want to under promise and over deliver.
Patrick: When you’re planning, you want to establish stretch goals for yourself and your team. At the same time, you want to set expectations based on something that’s realistic. We would do “reasonable worst case” revenue planning when we did expense planning. We said, “We’re going to run a really tight ship.” Then, if you’re exceeding, you have board meetings as a private company every six weeks.
You can then loosen up the purse strings a bit and fuel the growth. In case things do go bad, you’re not so far out over your skis that things are going to go really bad. In terms of planning and setting expectations, you want to under promise and over deliver. I see the reverse of that so often.
Jeremy: A lot of this conversation is about having the confidence that you’re going to be successful as the CEO. If you want to undermine your ability to be successful as a CEO, walk into board meetings where you haven’t talked in advance. Tell them all the great things you’re going to do in the next quarter. Don’t tell them why things didn’t happen between the board meeting and the end of last quarter. Show up at the next board meeting and tell them all the great things that are going to happen in the next quarter. If you do that once or twice, you will lose your job.
This is Patrick Henry, CEO of QuestFusion, with The Real Deal…What Matters.