What do these numbers mean to you?
At a recent offsite, during our conversation about evolving our communication patterns (which I refer to, in my head, as “the Matrix”), Ryan said “16-49-81.” Everyone stared at him and I responded “4-squared, 7-squared, 9-squared.” Then, everyone nodded their heads but were probably thinking “these guys are numerology goofballs.”
But then Ryan said, “Metcalfe’s Law” and everyone immediately understood.
When we were just four partners, our communication matrix was 16. We added three new partners and it became 49. We recently added a General Counsel to our team and consciously included our CFO in the communication matrix, so now it’s 81.
81 is a lot different than 16. Our communication matrix is highly optimized (and something we are extremely focused on as a key attribute of what we do), but Ryan was pointing out that we needed to make sure we were paying attention to make sure we kept it clearly optimized at nine people, rather than just four.
We describe our communication and decision-making process as continuous. It happens in real time, on multiple channels, between all of us. We have very specific ways of reacting to new data which can flip quickly to a yes or no decision, rather than storing things up and making a collective decision at the end with summarized information. We have no intermediaries in our process – the seven partners are the ones interacting, with our GC and CFO now in the information flow.
There are days where it feels extremely noisy and others that are strangely quiet. This is different than a decade ago when it felt noisy all the time. I find the difference fascinating as I get used to the new surface area around the matrix.
I said some version of the following statement several times in the past few weeks.
Assume aliens came down and one of your senior leaders was taken away to their home planet. Do they have a person reporting to them who could step into their role, even if it’s only temporary?
If you are the CEO, this includes you.
It’s remarkable to me, even in companies that are over 100 people, how the answer to this question is no. I get that this can feel theoretically challenging in a very small (less than 20) person company, but it should still be an aspirational goal. Once you get to 100, it should be a requirement for every leader to be able to identify this person.
This should not be viewed as a threat. If you have this conversation with your leadership team (or are on a leadership team having this conversation) and are threatening (or feel threatened), you are missing the point. Realize that things happen and people leave organizations suddenly. They die. They have a dramatic personal change. They get bored. They scale out of their role. They get stopped at the Canadian/US border by CBP agents and can’t get back into the country. The aliens show up.
Less dramatically, leaders go through stretches where they are in a doer mode. The company has a crisis in an area and a leader has to spent 100% of her time working on this area, rather than covering her entire span on control. Or, focus shifts around a product launch and a leader who covers several aspects of the company focuses all of her energy on one of the three areas she has responsibility for. Or, someone really needs a vacation and goes off the grid for two weeks.
As a CEO, a big part of your job is to work “on” the company, rather than “in” the company. At the top of this list is making sure you have the right leadership team and they are functioning in a highly effective way. Part of that is making sure everyone on the team has a backup person identified and is not afraid to have them engage at any moment.