This post is by Brian Halligan from HBR.org
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As I approach the 10-year anniversary of HubSpot, the marketing and sales software firm of which I’m CEO, I’ve been reflecting back on the decisions I’ve made — both right and wrong. There has been a fair share of both. I’ve also been considering how my decision-making process has evolved as the company moved from an early-stage startup to a growth-stage scale-up. Understanding my own evolution in decision making and the tools I use today may help spare other scale-up leaders some unwanted headaches.
Flip-flopping will cost you
In startup mode, I changed my mind all the time. Most decisions didn’t impact many people, so I didn’t hesitate to change course often. This became very problematic in scale-up mode: every time I changed my mind it impacted hundreds of employees and typically involved retooling lots of processes and systems. Over time, I learned that the cost of
your mind becomes huge as your startup scales up.
Optionality will also cost you
A closely related bad behavior is not making up my mind and keeping my options open. It’s hard to see at the time, but optionality has a hidden tax. Here’s an example. In the startup days of HubSpot, we argued for years about which target persona to pursue. Target personas go beyond the demographics and psychographics normally associated with target markets. Personas focus more on the specific needs, pain points, and buying process of your ideal prospects and customers. In HubSpot’s case, we were toggling between focusing on marketing manager types at midsize businesses and focusing on small business owners wearing multiple hats, including marketing.
I just didn’t make the call. My indecision meant the marketing and product teams had to serve multiple personas — and ended up creating middling solutions for each of them. Once we ripped off the Band-Aid and decided on one persona, the marketing and product teams could focus their efforts and craft the perfect solution. We delighted customers more, and our close and growth rates went through the roof.
As the company has grown, I’ve learned to listen carefully to all the inputs, engage in healthy debate with my team, take my time, make a decision, and “sail the ship.” Sailing the ship means that decisions are final. We put the sails up, send the boat out of the harbor, and there’s no turning around. I tell my team that I’ve heard their point of view and if someone disagrees, I’m sorry, but we’re ready to sail. The worst thing that can happen is people continuing to debate the issue when they’re on the losing side. It’s not always easy, but you need to make final decisions and not field arguments from the losing side.
Fast vs. right
In startup mode everything comes at you quickly, and you tend to react fast. If you’re a manager and make a wrong decision, you just roll it back. Simple. In scale-up mode, however, you have a choice: You can do things fast or you can do things right. There’s always a balance, but in scale-up mode you need to shift toward doing things right more often than doing things fast.
Stop making uninspired compromises
Nothing kills a scale-up like the uninspired compromise. The more managers sitting in the room with strong opinions and good arguments, the more likely you are to come up with an uninspired compromise. Everyone might be happy, but uninspired compromises tend to be conservative by nature.
In the early days it is just you and your cofounder making the big decisions. It is relatively easy to convince one other human being who likely sees the world in a similar way to make a risky, bold, counterintuitive call. As your company scales, there are a lot more people around the table weighing in on those decisions. If you did your job and hired well, those people are a diverse group who were hired based on varied experience and brainpower, and they likely have strong convictions and the ability to convince others. It is infinitely harder to convince those 10 people from varied backgrounds to make a risky, bold, counterintuitive call than it was to convince your cofounder. What you can find yourself doing is making compromise after compromise — and before you know it you are making the same decisions your competitors are making, you’re building the same product your competitors are building, you have the same culture your competitors do, and you and your competitors have the same mediocre results.
As CEO, it’s your job to make the right decision, not the most popular decision. There have been plenty of times during HubSpot’s scale-up period that I’ve left a meeting with some disappointed managers; I feel it as soon as I step out of the room. But uninspired compromises feel much worse. Once decisions are made, it’s important to communicate them clearly to the rest of your team. Again, the key to this principle is having a culture of healthy debate and people rallying around the decision — whether they’re advocating for it or not.
Focus on the three duties of a leader
Stop me if you’ve heard this one before, but I find myself using it a lot these days. It’s the bus analogy, and it goes like this:
A leader has three responsibilities, all of which can be illustrated by a bus trip. First, the leader needs a clear set of directions in mind about where the bus is headed. Second, the leader needs to know whom to pick up and whom to leave at the bus stop along the way, a concept the management writer Jim Collins made famous. The people on the bus need to be excited about the direction and ready to work together en route. Some will hop off along the way, and that’s normal. Third, the leader needs to make sure there is enough gas in the tank (cash in the bank account) to get to the destination.
The bus trip analogy is a back-to-basics approach to decision making that I try to use when I look at HubSpot and the leaders on my team. If you stick with the bus analogy, it’ll help you with any micromanaging tendencies that most CEOs, including myself, have.
Adopt a martian’s point of view
Sometimes you get so wrapped up in your own guardrails, your company’s set of assumptions, or your industry’s conventional wisdom that you can lose sight of the forest for the trees. When I’m in a meeting and feeling like I’m stuck in my company’s or industry’s box, I take an unconventional approach.
I ask: “What if a Martian landed in the room right now and was faced with this decision? What would she say?” More often than not, asking what a total outsider might do — someone with zero knowledge of conventional wisdom or company history — can help pull a discussion out of the weeds and help to make the right decision. At HubSpot, that means solving for long-term enterprise value, not for short-term goals or what an investor wants to hear.