The Art of Management Team Rituals

Editor’s Note: This article first appeared on Medium here.

As your company grows from 10 to 200 people, new challenges begin to pop-up every day— like structuring your management team, sharing information internally, aligning your board/managers/employees while also keeping the team focused on the right goals.

Do you recognize any of these?

• Lack of alignment between C-Levels
• Unclear key milestones for the next 2 quarters
• No clear understanding of your budget constraints
• Requests from your board for things you are unable to provide
• Difficulties convincing your managers and employees

If so, then, you need to read the following article and build your own management rituals with your team.

To be honest, I have experimented with a lot of methodologies over the past 20 years— first, as a CEO/COO of different software companies, and then as an operating partner at Serena (OKRs, holocracy, fully asynchronous communication, holding one-on-one meetings).

One of my major takeaways from these experiences is that you cannot scale heavily without aligning and co-constructing within your team. As a result, I have honed a management system, comprised of rituals, in order to achieve this balance.

Let this management system serve as food for thought in your journey to finding your own rhythm and rituals. But, be aware that if you don’t find the right governance with your team, then you will end-up with real difficulties.

The good news is that it’s easy to fix if you just maintain a good process.

The internal governance system

Why do I use the term “system”?

To align and co-construct your team, you really need to establish a system of scheduled specialty meetings from the first day of the year until the last – and you need to stick to it.

These specialty meetings consist of the following:

1. Quarterly off-site meeting with your management team to define the global operational roadmap for the upcoming quarters
2. Bi-monthly management team meetings with your management team to follow the activity and the roadmap defined during the off-site
3. Weekly one-on-one meetings with each of your managers to discuss ongoing business
4. Monthly global exchange with the whole team to share progress and difficulties
5. End-of-year budget meeting to aggregate the next year’s plan and set the right figures
6. Annual Strategic meeting to challenge the vision and mission of your team and look at the competition

Let’s start from the top.

1. Organize your first quarterly off-site

The main objective is to use creative collaboration to establish your operational roadmap for the next 2 – 3 quarters.

Invite the major key holders (C-level + other vital team members):

• Often, the most complex question is: Who are the attendees?
• Normally the attendees are C-levels – those who report directly to the CEO or COO
• But everyone wants to be part of the “Management Team Meeting”: First time employees that were part of the decision process and were integral in the early days are always very sad not to be part of these meetings and you have a high risk of losing them when you start structuring your governance.
• Our recommendation: be adaptable.
• Ideally, keep it to less than 12 participants, although some companies manage to accommodate up to 25 attendees.

Each division has to be well represented. However, it’s not necessary to have multiple people from the same division for a 2-days off-site session.

Why book 2 days?

Believe me, one day only allows time to discuss the current challenges of the company and next steps. There’s no time to set up the next steps.

Some other (pre) off-site recommendations:

• Start the ball rolling 2 weeks in advance: A little bit of preparation for you and your team never hurts. In this case, it’s actually essential to ensure everyone is in the loop and everything runs smoothly.

• Find a cool but not too expensive location: Get out of the office! This way you will be able fully focus on setting your goals and people won’t be disturbed. However, remember that you are still there to work. No need to splurge. You can make even more out of it by spending the night somewhere, planning a dinner or even a short activity. It’s an occasion for team building (especially when you start having teams in different countries) and it can help people stay on topic during the 2 days if they have a fun activity scheduled.

What about the practical details? Off-site meeting deliverables.

At the end of this meeting you should be ready to deliver:

• A set of decisions made and validated by everyone in attendance
• A list of milestones to achieve during each quarter. As in, big achievements expected per quarter like “first 3 customers in UK” or “V3 released” or “Infra migrated on…”
• A list of key projects with deliverables, owners and dates (Including projects that improve operational efficiency and achieve key milestones)
• And, eventually, a revised Excel budget

Also, at this time we all need to examine operational efficiency, it is a good time to rethink the optimal team structure and organization in each department to see if some improvements can be made.

Why 2 days off instead of different one-on-one meetings?

• Empowering Management: In our startups, C-levels are generally young managers. It’s super important to expose them to the company goals, constraints, KPIs and costs to empower them in their management position.

• Commitment: During the off-site, each of the managers commits to his personal goals in front of the others. This will be summed-up in the milestones spreadsheet that will be shared with the team and with the board.

• Simplify execution: Each of the key people that will be in charge of rolling out the key projects and decisions has global and the detailed focus. No more discussions, just execution.

• Ease of Coordination: After these 2 days of discussions, the interdependency between actions, decisions, and projects become clear to everyone. If anything changes, in the near future, all attendants will be able to analyze the impact and warn his colleagues if needed.

• Reaching a Consensus: Generally bright people with the same level of information deliver the same decisions. As decisions are taken all together in these off-site sessions, every attendant should fully support decisions that are made.

• Aligning the whole company: The larger the number of people in a company the greater the need for alignment. It is not just about informing people about decisions; it is about being able to explain to any employee the rationale behind each decision made.

And just dream about the outcome:

• A shared operational plan
• Clear milestones achievable by all departments
• Support from all C-levels
• Establishing what is “doable”: budgeting and HR constraints having been taken into account
• A vision that is easy to share internally and with the board

Everyone knows exactly what they have to achieve in the next quarter(s) – and has personally committed to do it.

At the end of the off-site meeting, your team should look like this:

via GIPHY

2. Bi-monthly management team meetings with your management team

To make sure that the plan defined together during the off-site will actually happen, it’s essential to have a regular follow-up. After having experimented with a few different frequencies, I would recommend every 2 weeks with the same attendants as the off-site for a 1.5-hour meeting:

• Each manager updates the group on his own KPI evolution: MRR evolution for the VP sales, Churn or NPS for the VP customer success, etc.
• Round table about any difficulties experience or news that needs to be communicated to the group. Note: No slides needed.
• Review of the projects and milestones defined during the off-site meeting.

What’s the difference?

A project review is a great motivational tool as it keeps track of all that is being accomplished. The managers discuss the orange and red issues between themselves and to table any discussion that gets too long agreeing to discuss later in smaller committees.

A milestones review occurs before each board. This discussion about the company goals set by the attendees is to be shared during all boards and company global team meetings.

Guidelines to discuss progress: Green = “on track”, orange=”late”, red=”off-track”

3. Weekly one-on-one meetings with each of your managers to solve their issues

Schedule hour long, one-on-one meetings with everyone who directly reports to you to review operational issues, progress and difficulties. Make sure they properly follow their own business KPIs so that you can have data driven discussions. For example, pipeline volume, win ratios, MRR vs. budget with your VP sales.

4. Monthly global communication for the whole team to share progress and difficulties

The objective of these meetings – everybody has to be aware of the company’s current situation but also its vision and mid-term goals:

1. Share KPIs

• Share the most important KPIs with the team to give a clear picture of the company situation even if it’s tough, it will help you to get the support of everyone during transition periods. These KPIs are the ones each manager follows and also the ones that are reported to the board – see The Perfect Board Deck Template for SaaS Companies for some KPI examples

• Show what has been accomplished by sharing the milestones spreadsheet. It is always good for everyone to see progress.

2. Every department presents their own milestones and highlights the key projects

3. Off-site meeting feedback

Explain what happened during the 2 day off-site and reassure other team members who can get stressed out about not seeing the management team in the office for 2 days

4. Present the long-term vision

Share the mid and long-term vision, at least, every quarter after the off-site using the agreed upon framework

5. End of year budget process

Budgeting should not be a long exercise at a startup, but it helps to step back once a year and rethink you structure, organization, costs, and overall effort. So, take this time with your team in a well-prepared off-site meeting. It’s also a good exercise for the whole team to analyze last year’s figures and to make informed decisions.

When do you need to start your budgeting process?

• Start in October
• End in December
• Board validation: January 2nd

Example of a simple budgeting process:

1. CEO

• Define the frame for next year – revenue, MRR, Ebitda, lowest cash level, Countries…
• Identify the big questions to be discussed

2. Each C-level

• Analyze last year’s performance in respective department vs. goal
• Identify personnel to be hired, promoted, fired
• Identify additional costs: tools, travels, consultant fees…
• Identify risks and propose solutions to assess risks

3. CFO (or CEO)

• Build the budgeting model – We have already compiled some best practices to build your budget
• Aggregate the information from the C-Levels
• Check consistency
• Calculate key ratios – check with industry standards
• Check cash burn rate

4. Prepare for budgeting the off-site meeting

It’s almost the same exercise as the one described for standard off-site meetings but with a specific goal: building a budget understood and agreed upon by everyone in the management team:

• Aggregate the requests
• Build a first draft of the budget that includes manager’s first assumptions
• Send it to the managers

5. 2 days off-site budgeting meeting

• This is the time for each team member to explain his key choices, projects and goals for next year. Time also for an open discussion with the other managers to make sure that the budget is consistent in terms of timing and investment. No need, for example, to put sales resources in Q2 on a product that won’t be delivered in H1 on the product roadmap.

• It’s also time for arbitrage: generally, when you put all managers wishes in the budget spreadsheet, you end-up with a crazy deficit. It’s time to collaborate! A good management team is able to do that smoothly because they know the goals, vision and next steps. The CFO helps by comparing the company structure to similar ones. But at the end, it means accepting cost constraining efforts. You will know that you have built a great management team if, as the CEO of the company, you are able to say “we should find 1m of savings in this budget” leave the meeting and go back 3 hours later to the off-site with a solution approved by all team members. That’s the goal 😉

6. Board validation

The last step of the process is to get formal board approval: simply present the framework for the next year, the key assumptions you’ve made and the outcome: P&L and cash forecast.

7. Strategic meeting once a year to challenge vision, mission and look at the competition

Now that you are a champion of quarterly off-site meetings, including the budgeting process, it’s time to move to the next internal governance level. Time to convey your first strategic meeting. Always the same format: 2 days to have enough time to discuss, wrap-up and define next steps. But, it’s time to open the circle up to new participants. In the end, the idea is to have a 360° vision of your position in the market, to be challenged by strategic advisors who know the market, have a good understanding of the company’s current situation and some competitors insight.

This is a team effort. Ask them to challenge you, prepare your management team for this exercise. And, in turn, be open to their challenges.

Participants

• Management team
• Strategic advisors
• Key board members

Strategic Meeting Agenda

• Competitive watch
• Current offer presentation
• Updated vision
• Big blocks strategic roadmap
• Equity story

8. And Now…

You have now set-up a full internal governance system! You have built a true management TEAM able to build a meaningful plan together to address any company challenges. You are ready to address the day-to-day issues, the next milestones, the budgeting topics but also strategic vision and ensure company alignment.

You are now ready to “do what you say and say what you do”. I’m sure that Gartner will recognize you in the top right corner of the magic quadrant for your vision and ability to execute.

Get the template: Building Your Own Management Rituals. Access here.