Track 1 - Managing Transactions, Cash and Talent
Thursday 11/12, 2:00 p.m. - Building the Team that Delivers on Its' Promises
Moderator:
- Aaron Lapat, Managing Director, J. Robert Scott
Panelists:
- Andrew Clark, CEO, Bridgepoint Education
- Russell Planitzer, Managing Principal, Lazard Technology Partners LLC
- Matt Trevithick, Partner, Venrock
- Jeffrey Glass, Managing Director, Bain Capital Ventures
“No matter how good your service or compelling your technology, people are what make or break great companies,” proclaimed Aaron Lapat, Managing Director of J. Robert Scott as he kicked off the educational breakout session Building the Team that Delivers on its Promise held the Ernst & Young Strategic Growth Forum.
Before a large crowd of entrepreneurs, Lapat moderated a panel discussion among distinguished executives including Andrew Clark, CEO of Bridgepoint Education, Inc.; Russ Planitzer, Managing Principal of Lazard Technology Partners, LLC; Matt Trevithick, Partner at Venrock; and Jeffrey Glass, Managing Director of Bain Capital Ventures.
Building a powerful team starts at the top. When asked to describe the key attributes they look for when hiring senior executives for their own company or for one of their portfolio companies, the executives agreed that chemistry is the most critical attribute, but it is also the most difficult to anticipate.
“Our success at Bridgepoint Education is the way our team is able to work together even when we disagree,” said Andrew Clark, CEO. In hiring senior talent, he said he works to understand what a candidate's priorities are from a personal standpoint. He added that he likes to understand their priorities in terms of ethics and values and whether they match with the rest of the organization.
Chemistry was also critical to Jeffrey Glass of Bain Capital, who said that companies still make mistakes when hiring because it is difficult to understand how a candidate will interact with their team in a non-scripted environment. He suggested that companies get creative when possible and try to simulate the working relationship: Offer candidates projects and create scenarios that get them out of the office and into personal settings.
But when it comes to finding the right person, he said: “It's a little bit science and a little bit art. If you can get it right 70 percent of the time you're doing well.”
“If you want to know what someone is going to do in their future look at what they've done in their past,” said Russ Planitzer of Lazard Technology Partners. To find a leader, someone who can build a team that delivers on its promises, he advised the audience to ask their candidates if they have people who will follow them.
The panelists also agreed that companies should never stop recruiting or trying to upgrade their own talent pool.
“We should always be recruiting,” said Venrock's Trevithick. Bridgepoint's Clark added that there are so many candidates in the market now that it's critical to “roll up your sleeves” and work harder to find the right people.
Glass urged the audience to take a candidate's past performance into consideration especially if the candidate exhibits repeated success, but he encouraged the audience to “go deeper than the resume” and try to determine the inner behavior and capabilities of the candidate.
He cautioned that just because someone was successful in one environment, it doesn't mean they will be in another.
With the perfect candidate so hard to find, Trevithick suggested a unique solution – the creation of a dual leadership structure – teaming a company's driven entrepreneurial leader with a respected industry professional.
When the discussion shifted from how to find great people to how to keep them, the executives indicated that bonuses and equity were the key retention tools but how companies use both in their overall compensation programs needed to be reconsidered.
Planitzer explained that executives he recruited over the past year have been asking for more cash-based compensation and less bonus since some did not receive a bonus from their last job because they did not meet their goals.
“Bad goal setting leads to no bonuses and makes people risk averse when it comes to compensation,” he said.
As far as using equity as compensation and motivation, Trevithick urged the entrepreneurs to create a culture that values equity and make sure executives understand that their path to personal wealth is through the success of the company.
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