
Keith Rabois on the Role of a COO, How to Hire and Why Transparency Matters - jackgavigan
http://firstround.com/review/Keith-Rabois-on-the-role-of-a-COO-how-to-hire-and-why-transparency-matters/
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Roritharr
I'm very interested in the transparency side of things, because that structure
seems very risky and possibly instable. If you can chain good news after good
news then it's surely nice. But if your newly highered senior marketing
strategist just moved from half the planet to your company to then be brought
into the fold to find out that the company only has about 3 months of runway
left but "we're very close to signing..." then that could have very
demotivating effects, like whole groups of people leaving.

Maybe it's a German thing, but in my experience the very second one doubts if
their company CAN not keep the promises that were made financially, the
allegiance to that company drops like a rock. So having that kind of
information floating around people that most likely don't have the experience
to judge it fairly would most likely do more harm then merit.

Maybe there is a way to explain bad news without risking to kill the mood and
allegiance, i just haven't seen it yet.

The other thing is the one bad apple that abuses the transparency before being
found out. How does the recruiting and onboarding process deal with that?

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swombat
I haven't been in that situation in terms of being in a high-burn rate, VC-
funded startup, but I think the transparency can work if it is consistent.

Of course, if our company tells us nothing about its finances and then
suddenly the news leaks that there is only 3 months of runway left, then we'll
be likely to want to leave. Not only can the company not keep its financial
promises, it can't even give us ample notice about it!

On the other hand, if we are aware of our company's financial situation from
day one, then approaching the end of the runway is much more gradual rather
than sudden, and also this news comes as part of a whole pattern of honesty
and openness by the company. Within this context, I see it is entirely
plausible that the openness builds loyalty. Sure, some people will say "I
can't afford the risk of being unemployed for even a week right now, so I'm
going to have to get my ducks in a row to be able to find another job
promptly, and I may have to leave before the next round", but they will tell
the company that (so it can plan around those departures) and they will try to
arrange things not to screw over the company.

And what's the alternative? Lie to those people who are working hard for you,
and risk them screwing up their life if you don't manage to close the next
round? What kind of broken human does that to their colleagues as a matter of
conscious, systematic decision?

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Roritharr
Thats the thing, i completely understand this from the position of somebody
who joined the team, but do you tell every possible new hire how the company
financials look before they sign up?

I absolutely love the idea of that much transparency, but i'm just not sure
how it would work in less than perfect reality.

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blastrat
it's a buncha hogwash.

Companies need a board with a chairman, a president and treasurer, and vice
presidents of things like engineering and marketing. If you have 20 people,
you don't need more executives than that. If you have an operating business
with customers, you'll need a controller, and a director of operations. If the
company doesn't do R&D, it's simply an operations company (like say a
restaurant or a moving company) you could conceivably call the President also
the COO, because operations is critically important to operating the business.

Chief this and chief that make sense in a large company with need for extreme
specialization, like a chief technical officer for an airline: their core
business is not computer systems, but computer systems are critically
important, so the guy in charge of all that technology needs authority to make
executive decisions and to report directly to the top. But that's not a 20
person situation.

The point is, you don't sprinkle all these grandiose titles around to use them
all up like at an Aviato or a Pied Piper. You use them to describe meaningful
roles that reflect the business and managerial structure of the company, but
only in a way that is important. 20 person companies and even 100 people
companies don't have that much going on, in general.

If your business is developing software, you don't need a CTO (compare above
with airline) especially not one who is just a smart founder engineer with
limited managerial skills.

