Covid-19 Shredded the Startup CEO Rulebook — Here's How to Rewrite It To lead our teams through these challenging times effectively, we need to change our approach.
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Even though we've had two years to adjust, the pandemic is still a struggle for many companies, including startups. For a founder like me, this is difficult to admit: We pride ourselves on being decisive and agile. The problem is we've been relying on an outdated rulebook.
The startup CEO's "rulebook" is an unwritten manual of principles and lessons that founders have been taught by mentors, peers and investors. Every CEO's rulebook is his or her own, yet the lessons on dealing with financiers, employees, customers, rivals and shifting markets are remarkably consistent. It's what every startup founder and CEO learns whenever he or she faces adversity. There's just one problem: The rulebook doesn't say anything about a global pandemic.
No matter how complete the rulebook, none written before 2020 could have predicted the past two years or told us how to get out of it.
Chapter rewrite No.1: Input bias
One of the rulebook's first chapters is all about how to manage your people: motivate, demand and reward. We are taught not to let our workplaces feel mundane or bureaucratic, like those in large companies do. We need to provide constant carrots, from catered lunches and in-office recreational options to special events and awards ceremonies.
In exchange, CEOs expect devotion, resilience and high productivity, measured in regular meetings, the energy in the room and the quality of the chatter. We have lots of two-minute "door frame" conversations to assess how plugged-in our people are.
But many of those honest, reliable social signals are gone. With no one at the office, video meetings generate no sustainable energy — too many people have their cameras off. In the early days, I tried posting video messages four times a week to keep my team's motivation up, but the outcomes were no better.
So, I changed how I communicated. In online meetings, I made a point of speaking to people individually, to try to help them see their role in the larger picture. I also scheduled lots of one-on-one meetings. In a remote-work scenario, the best reward a CEO can offer is a sense of connection and purpose.
I have also made a conscious effort to focus less on inputs like hours at the office and begun measuring productivity by outcomes — deliverables, timelines, quality work, happy clients. I also let my staff manage themselves much more than before. This runs contrary to the rulebook's teaching to always retain CEO control over productivity and outcomes. But without the motivational social cues of office life, the rulebook tactics of motivate-demand-reward are reduced to just demand-demand-demand.
Chapter rewrite No. 2: The trouble with troubleshooting
The rulebook prescribes specific systems for swift troubleshooting. Every day, the office of a growing startup is filled with scrum meetings, which can be a joy to behold: Problems are efficiently identified, and solutions are devised in minutes.
Hybrid workplaces make on-the-spot scrums challenging because every meeting now entails a flurry of video-chat invitations and reschedulings. Scrums work by iterating and advancing through loose collaborations, but online meetings require new online tactical and linear project-management tools, pushing scrum leaders to spend more time managing processes than addressing actual problems.
The original rulebook assumes that teams are working autonomously, sharing up-to-the-minute information and knowledge in real time. But hybrid workplaces create information lag and a higher probability of misunderstandings, so teams need support. I now spend more time sorting through problems that never used to find their way to my desk. I'm challenged to be more thoughtful about how I untangle them and how I communicate my assessment back to my teams.
Chapter rewrite No. 3: The fail-fast imperative
As any startup's challenges mount, the legacy rulebook tells CEOs to protect the burn rate, or the speed at which they spend their investment capital. It's part of the "fail fast" mantra: If the company isn't functioning as it should, you cut staff, slow the burn, rebuild and grow again. Fail fast and move on.
I have always been leery of this mindset. While micro-failures are part of the natural physics of entrepreneurship, embracing them carries its own risks. You overcome failure when you take something seriously and work through it. If we teach leaders and entrepreneurs that failure is normal, we will remove the powerful force of anxiety as a catalyst for making correct decisions during uncertain times.
Starting from square one
The pandemic has pushed me to change my approach as CEO — most importantly, to embrace the power of communicating clearly and addressing challenges more determinedly. Now, instead of weekly all-hands motivation sessions, we hold more one-on-one and small-group meetings. In addition to solving big problems, I spend more time on small ones. Where I used to try to drive productivity, I now try to encourage outcomes and let staff work autonomously, offering support when it's needed.
On balance, these changes have helped re-establish the connections and relationships my startup needs to function at a high level. Our old workplaces were a creation of their era, one that valued and rewarded a hard-driving style of leadership. The pandemic has forced a change in leadership style toward trust and empathy. What needs to be torn down and rebuilt isn't our startups — it's the rulebook.