The New Director's chair
“You Have To Be Very Intentional About The Feedback You Give”
May 17, 2021
Tracy Streckenbach, operating partner at Gridiron Capital, shared smart insights from her boardroom experience with with me and my colleague, David Reimer, CEO of Merryck & Co.
Reimer: What are some key lessons you’ve learned from your years of serving on boards?
Streckenbach: What can be challenging for new directors, especially if they’ve been a CEO, is that they have spent much of their career learning how to assert themselves in order to be heard. That’s particularly true for women and people of color. So when you’re on a board, you almost have to unlearn that behavior and do the opposite.
You have to be very intentional about the feedback you give and make sure you don’t overwhelm the CEO and their executive team with feedback, because they know a lot more about the nuances of their business than we do as directors.
You have to be respectful of that line and make sure that you’re asking questions that are meaningful and pivotal in terms of key decisions, rather than just raising things you’re curious about. I’m a curious person, so I have to hold myself back from asking all the questions that are on my mind but that might not move the conversation forward in a positive way.
Having a really trusting and open relationship between the chairperson and the CEO is critical because often that chairman is the one who’s setting the stage for when to really dig into a certain conversation and invite more feedback and when to pull back and move on to the next topic.
Bryant: How do you think about the director’s role around discussions of strategy?
Streckenbach: It’s important to think about how board meetings are structured. It can be a mistake to spend a majority of the time reviewing historical financials and what was done in the last quarter to operationally move things forward.
Yes, these are all facts we need to know, but I prefer when we spend time together with the executive team to deal with the challenges that the company faces, and to make sure that there’s broad thinking around key strategic issues.
Reimer: When you join a board, what is the role that you typically play on that team?
Streckenbach: I try to encourage broad thinking about markets, and to be very aware of changes that could impact the business. My other focus is making sure that there’s a clear strategy and that the right leadership team is in place to deliver that strategy.
The third thing is actively supporting the team, both inside and outside the board meeting. To be able to do that, you have to have a confident CEO who’s willing to let you in and who wants to capitalize on some broader skills. And you have to have a team that’s not afraid of working shoulder-to-shoulder with you when everything’s not tied up in a bow in a polished presentation.
Bryant: So how do you build that trust?
Streckenbach: Part of it is signaling that there’s not an expectation that everything is going to be perfect, and that the company is always a work in progress. At Gridiron Capital, our culture is very strongly built around winning together, and the companies we partner with learn this about us from the start and they will see and feel this approach in all of our work together.
Personally, I don’t overstep. If a CEO does not want me to be interacting with his or her team outside a board meeting, I’ll respect that boundary. But my hope is that the CEO is always wanting to make improvements and to leverage whatever resources they have.
Because I’ve been a CEO, building that trust is easier.
Because I’ve been a CEO, building that trust is easier because there never would have been a time when anyone could have walked into my company and said everything is perfect here. That’s just not reality. We all have to prioritize making the parts of our business great that matter the most. I hope that I’m able to build that trust with the CEOs to let them know that I can contextualize all of that and understand it appropriately.
Reimer: Do you have a framework or rubric for how a board can get a sense of a company’s culture?
Streckenbach: Culture starts not only with the CEO, but with the observed relationship between the CEO and his or her executives leading sales, operations, and finance. That’s the three-legged stool, and oftentimes when you walk into a company, you can tell within 20 minutes what drives the culture, whether it’s growth, operations or finance.
Employees also pick up on the signals between those three parts of the leadership, and they say a lot about what everyone is going to be driving in the company. The best way to understand the culture of a business is to talk to the people who are closest to the customer. And by the way, they tend to have really great ideas about how to make improvements in the business.
Bryant: When you’re looking at CEO candidates, what’s the checklist in your head?
Streckenbach: The first cut is the gestational stage of the company. Is it a startup? Is it a scale-up? Is it a large, complex organization that may be in more of a slow-growth mode? Understanding what stage you’re in will change in significant ways the attributes you need for a CEO.
When I think about scale-ups, I’m looking for a bias for action. I’m looking for a person who understands the importance of systems, and I don’t mean technology systems, although that’s certainly a part of it. I mean organizational systems, because when you’re in scale-up mode, the CEO needs to be looking ahead and putting all the infrastructure in place that allows for revenue to grow at a faster rate than cost.
So that’s why, in some cases, a really excellent early-stage startup entrepreneur may or may not be able to transition into a scale-up CEO. Many certainly can, and with the right training and skills, many often do, but I think we just have to be very thoughtful about having the right person for the right growth stage.
Reimer: What advice do you give to new CEOs on how to work with their boards?
Streckenbach: One piece of advice that I’ve given to first-time CEOs is that, when they are in a board meeting, they shouldn’t be afraid to give the answer of “nothing” to a question about, “What are you doing about X?” It’s okay to say, “I’m not doing anything about this issue, and the reason is that it’s not one of my high-priority issues.”
I’ve encouraged CEOs to have clarity around what is urgent and important. When you have that visual map of the key initiatives in your organization, it allows you to provide focus and clarity for your executive team and not to be caught up in responding to every piece of feedback from the board.
I’ve encouraged CEOs to have clarity around what is urgent and important.
That framework also allows you to put the board’s mind at ease that you acknowledge the issue but you’re not prioritizing it right now. Then you can have a real conversation, and the CEO can ask, “Do you think I’m prioritizing it in the wrong place? If we need to bump it up as a priority, which of the current priorities, absent additional funding and resources, should fall off the list?”
And you can be a more engaged board member if you’re not sort of afraid that the executive team’s going to over-respond to everything because it allows you to ask questions more freely about, say, a particular dynamic in the market? You want to be able to ask those questions without worrying that you’re going to cause somebody to chase something down a rabbit hole.
Bryant: What is the hardest part of leadership for you, and for other leaders you’ve observed?
Streckenbach: I lack patience. It’s a character flaw. I like to move fast. There’s that saying that culture eats strategy for breakfast. I think that implementation eats ideas for dinner. You have to have the right plan, of course, but without implementing it, you’ve got nothing. So I tend to have a very strong bias for action, and that can manifest as me being impatient.
For others, one of the ruts that I see senior leaders fall into is that they have one really big success or failure in their background that then haunts them, because whenever they encounter a similar issue, they either gravitate to exactly what they did before because it worked, or they want to stay far away from the path that didn’t work.
We can’t over-rotate on our personal experience. That’s a mistake that I often see leaders make, particularly ones who have been highly successful.
Bryant: Where do you get your drive from?
Streckenbach: When I was a kid, I moved around a lot, and so I was always having to figure out how to navigate new environments. That made me very comfortable with change. And I watched both my father and my mother run their own businesses.
I’ve also always had a really strong interest in process. I can remember the first job that I had outside of our family businesses, which was at a fast-food restaurant at the age of 15. And I remember being uniquely perturbed by how the coffee station was set up because it was really inefficient. So every time I went to work, I would rearrange it in a way that made it a very streamlined process. I’m sure this frustrated the people I worked with every day, who were probably thinking, who does she think she is, coming in here and changing everything around?
I’ve always had this desire to make things run in a streamlined manner. So when I’m looking at the world, I’m always wondering about whether there is a better way to accomplish something. That’s just the lens I look through, and that drives me forward.
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