Consistency.

Something I appreciate a lot in life and business is consistency. Sounds easy, no? Well, conceptually, yes. Practically, no... The target doesn't have to be too precise. But it has to be clear, as the big picture doesn't change, usually. Commitment is more tricky. When you decide to do something, first, you need to stick to it. The other challenging part is having the right parameters in place to do so consistently...

Why am I bringing this up today? Well, companies are in different phases at different times. Not just as they grow, but also as the market conditions change... We are coming out of a time of excessive exuberance. More than ever, investors are looking for consistency in execution. We need to really batten down the hatches and execute on our core performance drivers, especially post-Series A. Check out this post on how your company should approach budgeting these days.

The word of 2023. Consistency.

I mentioned previously (check out here) that ‘startups need to adapt their plan to weather the uncertainty in the markets: What targets put you in the best possible position to raise your next round while not being overly reliant on external capital in the next 18 months?’

One thing I did not highlight (enough): Consistency. Consistency in business builds trust. Investors are searching for it, from the very early stages. A big vision - yes, of course. Hype - not enough. In other words, you just can’t sell a picture of an ape or a rock for $1M anymore...

This is tough, especially at the very early stages. When you build a business, things constantly change, which makes it difficult to have consistent performance, well, consistently... And I'd argue it is impossible if you don't have the right parameters set up. Let's have a look.

The Business OS. Setting the right parameters.

Every company needs a pulse. I am not talking about a budget (more on this here - if you still need to get your 2023 plan approved, it is really not OK - do it...) but a company's operating or management system. Every great company I worked with has this 'drum'.

They operate on a cadence and a rhythm perceptible to everyone in and around the company. The same goes for individuals by the way. Routines are the biggest productivity hack there is. Albeit in a specific context, Garry put it nicely: 'How do you build a brand? Spaced repetition. If you can hear about a product/service at 1, 10, 30, and 60 days, most people who experience that will remember you for years.' The same holds true for business operations. Cadence will make people stick to your mission and the steps towards it.

While there are many approaches to it (hi OKRs!), it is a simple idea: Using the company’s values, create a set of consistent rhythm for communications, meetings, procedures, and decision-making… which helps align everyone’s goals with the ultimate objectives of the company. This is not a substitute at any point for a strong culture or strong management, of course. As Doerr puts it: 'I like to say that good business judgment trumps this (Business OS) system, but when those fundamentals are in place when you have a strong culture and stronger management, this kind of (Business OS) goal system can take a team to the mountaintop...'

Get a Head of Ops on board post Series A.

It is the Head of Ops/COO’s job to build this system. Post Series A, every company should make this key hire (on top of an excellent head of finance - more on that later; and HR person - see end of this post). Top management needs to lead this Business OS implementation. They are the drummer in the band. They need to set the pulse to make the organisation live. But the CEO needs support. 90% of companies introduce OKRs through their leadership team. The goal here is to also improve corporate governance and take this baby to the next level.

In practice, this comes down to some answers to questions like this:

- When do we plan for the next year? And who owns the process?

- How do I measure my performance against my, or my team’s goals?

- How do I know what I am working on aligns with the company’s goals?

- What metrics do we report company-wide and every team? And why?

- I’d like to send out a company-wide update on something my team did. How do I do that?

- I need another person on my team to help better reach my team’s goals. How do I go about doing that?

- ...

One of the key improvements you should see as a result of this should be more consistency and clarity in communications and processes. One single and easy-to-use reporting template, one single IT system like Google Drive, one single communication channel, etc.

These parameters are the foundation for consistent performance. They will help everyone see the bigger picture. It gives the top management the tools to emphasize key consistency drivers while having the agility to tighten or loosen the screws where needed. The opposite of having an effective business OS is a company that is confused due to lack of clarity and unable to move in the same direction together. Missed goals and opportunities are the inevitable result... Here are some areas I see most founders structure the OS around:

- Company-wide communications and meetings

- Creating, aligning, and sharing goals transparently

- Measuring performance against goals and metrics

- Establishing cadence, rhythm, and deadlines

- Well-functioning systems and operational processes

The impact will be that the CEO can communicate almost everything clearly and consistently in the context of the company's Culture/Values, Goals/KPIs/Metrics, and Systems/Processes.

There is not one size fits all.

There are many ways to get this pulse going and sustain it. There are techniques like monthly and quarterly OKRs, weekly shows and tells at the all-hands meeting, etc.

To some extent, it is 'process over goals'. I am not religious about one method or another. But we need to choose one. 93% of business units that had fully adopted an agile model before the pandemic clearly outperformed business units that hadn’t. Every team needs to figure out what they like best. The process is as important as the underlying objectives.

The regular setting of objectives (quarterly is a time frame most companies use, including public companies for their earnings reports and guidance expectations) and the monthly or bi-monthly reporting against them is the most valuable thing that comes from the process. This is also why I like to set board meetings quarterly (with monthly or bi-quarterly updates). Without this pulse, we won't survive...

Nothing trumps culture.

You can get everything else right, but if you get your culture wrong, we are going to have problems. Some cultures are more welcoming and supportive. Others are more aggressive and mercenary. But all great ones have a strong common mission and values. It is difficult to describe. You can just feel it. Everyone in the team pulls the strings to reach their shared vision and is excited about it.

Culture is the foundation of every Business OS and is often part of the parameters of the Business OS. These 'culture parameters' are set very early on, largely by the founders and the early team they surround themselves with. But you also need to sustain it. I invite all my companies post Series A to consider bringing someone on board to help nurture this culture while scaling. To be consistent, we also need clarity on 'who we are'...

This Christmas, I visited a good friend in Mexico. I had the opportunity to spend some time in Quimixto and Yelapa on the Pacific coast. I love this video I took on new year's eve as it reminds me of the picture I took three years ago for the landing page of this blog in Normandy in France. 2023 will be buzzing. As our founder Paul puts it: One of the biggest lessons coming out of the current tech layoffs is that there will be tons of new startups... 2023, here we come!

Life is awesome,

Yannick

Other content I found useful.

- Check out this video by the CEO Macy of our portfolio company Enstack. Enstack is on a mission to digitize micro businesses in SEA, and its impressive traction out of the gate suggests that they are really on to something special...

- $4.4bn IPO on only $7M of VC funding? Veeva. Great read by Amory on how Veeva built a huge success story in the vertical software space: Business model, culture, timing, and more.

- Some good news from the FT : The eurozone will avoid a recession this year, according to a widely-watched survey of economists. Analysts now expect it to log growth of 0.1% over the course of 2023.

- Great thread on the story behind Bernard Arnault's luxury empire. Buy, build, and repeat...

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