Note: This is a loosely defined “Part 2” to a prior post entitled: “Pulling Up from the Weeds of Cash Conservation.”
There is an old English adage: Just because you can, doesn’t mean you should. As explained in this HBR article and per the website PhraseMix, “This phrase is usually used to give advice to someone who’s using their money, power, or skill in a way that’s not very wise.” This sentiment has particular relevance to leaders of small-scale SaaS businesses — not as a warning against an unchecked abuse of power, but rather as guidance around how they spend their most valuable commodity — time.
Taking a step backward, entrepreneurial leaders are overwhelmingly encouraged to be scrappy. Countless well-worn terms underscore the seemingly universal acceptance of this common wisdom: hands-on, roll-up the sleeves, leading from the front, wearing many hats, and servant leadership, to name just a few. The truth is that these terms are commonplace because this approach works well in growing small-scale businesses…until it doesn’t.
First, let’s look at some of the important benefits of a “can do” attitude in a hyper-engaged leader:
· Learning: There is great downstream benefit for leaders to spend time in a business’ early days learning its various facets and functions. If you know how to do it, the thinking goes, then you know better how to hire someone to do it later. Ben Horowitz makes a particularly good case for leaders gaining first-hand functional knowledge in his classic book “The Hard Thing About Hard Things.”
· Team-Building: All of us perform best for leaders we trust; and being in the foxhole with the troops is an excellent way for leaders to build a foundation for outstanding collective performance. Conversely, command-and-control no longer works in growth companies (if it ever did in the first place).
· Financial Stewardship: In the capital-constrained (often bootstrapped) environment of early-stage SaaS businesses, frugality is a lauded virtue. Many stakeholders value thriftiness among company leaders; and the concept of a CEO as “chief cook and bottle washer” is often a celebrated one.
In these and other situations, leaders are motivated and rewarded for jumping into the fray with a versatile, “no-job-is-too-small” mindset. But these precise behaviors backfire as businesses begin to scale:
· Learning: Leaders that want to understand everything, truly understand nothing. Their learning curve becomes a bottle-neck and also a burden for others in the business to bear (“Ugh…I need to spend the afternoon teaching my luddite boss how to do X…”).
· Team-Building: While people need to trust leaders, they also want to feel trusted by those same leaders. With all respect to foxholes, leaders demonstrate this trust in others by stepping away and giving teams the space and autonomy to do their thing.
· Financial Stewardship: Cost-conscious leaders who selflessly insist on tackling low-value tasks inevitably divert their attention from strategic endeavors that deserve to be prioritized. When “no job is too small,” leaders tend to miss the big picture. We call this “majoring in the minors.” I was admittedly charged with doing this in my early days as a people-leader…and it’s not a compliment.
So how can leaders pull out of the weeds and find the right altitude, while keeping their feet on the ground? The truth is — like most issues of leadership — there are no easy answers. But disciplined leaders can consistently ask and answer a few questions to help make course corrections to help them fly right:
o How will my investment in learning [Topic X] help the business?
o Whose time / what company resources will I consume to learn [Topic X]?
o How will my decision add to / detract from someone else’s opportunity to learn [Topic X]? Do I need to learn this more / less than someone else in the organization does?
o Who will do [Task Y] if I don’t do it? How will that impact their professional development and / or their engagement with the company and / or their ability to execute on their core responsibilities?
o If I do [Task Y] what signal am I sending to that person? To their boss? To their peers? To their direct reports?
o What impact will my doing [Task Y] have on the team dynamic and its overall health? In the near-term? In the long-term?
· Financial Stewardship:
o What is the ROI on my taking on [Task Z]? Specifically, how much will it cost the organization; and what is the pay-back on that cost? Note: It’s worthwhile to have calculated and check against your actual hourly rate. A few recommendations on this: (1) base this on a 40-hour work week / 50 week year (so as to avoid an artificially low rate for the many workaholic execs out there), and (2) include all variable comp (again, to avoid an artificially low comparison).
o What is the opportunity cost of my taking on [Task Z]? In other words, what else could I be doing with this time, and what is the comparative value? Note: I like to use “selling on behalf of the company” as the constant basis for comparison. Given that top-line growth is the biggest driver of company value, the most valuable activity a senior executive can be engaged in is…exec selling in support of the team responsible for generating bookings. And, since SaaS companies are often valued at a multiple of Annual Recurring Revenue (ARR), a logical hurdle for any activity is that it had better drive 5X the dollar value of what an executive could reasonably help sell in that amount of time.
o What would I need to pay someone to do this meaningfully better than I could? Note: Tie goes to the runner here…if you can break-even relative to the cost of your own time — outsource to someone who specializes in [Task Z]!
The road from “small-scale” to “growing” rarely follows a consistent, upward path; and there are few easy answers to the question of whether a leader should be above or below the “I can do that” line at any given moment. Rather, it’s useful to maintain a flexible mindset on this front. This will help leaders determine when to ascend or descend across various “altitudes” of learning, team building, financial stewardship, and many other responsibilities that fall under their purview. In a complex and constantly changing environment, it is well worth it for wise leaders to ask whether they “should” do things, even / especially when they clearly can.