Learn the fundamentals of steady and sustainable growth – everything from hiring, maintaining visibility, and scaling communication as you grow.

1. 15Five’s
HIGH-GROWTH CEO
Handbook

2. 2 • 15Five’s High-Growth CEO Handbook 15FIVE.COM
INTRODUCTION:
Growth. Almost everything written about business falls under the umbrella of creating more of it.
Growth is highly coveted by investors, founders, employees... really anyone who touches your
company. And customers of B2B software products want to know that if they invest their time, efforts,
and money integrating your offering, that your company is here to stay.
For those in the tech sector, the growth focus remains on unicorns (startups that grow rapidly and often
inexplicably to valuations of more than $1 Billion). While there is talk that unicorns are becoming rare,
we’ve saw an explosion of these finicky magical creatures. In 2009, there were four tech companies
valued at $1 Billion or more. In 2015 there was nearly one emerging every week.
High growth does not necessarily mean repeatable or sustainable growth. There are ways to hack
into short periods of growth with tactics rather than strategy, but two-thirds of the fastest growing
companies ultimately fail. Remember the gaming company, Zynga? In 2009, they were Facebook’s
#1 app developer. Their rapid growth was to blame for their eventual downfall, specifically two
expensive tactical errors: paying $228 million for their San Francisco headquarters and $180 million
for OMGPOP, the makers of Draw Something.
Volatile markets have led many investors to seek companies that are on the path of steady and
sustainable growth. Because while unicorns will happen, they cannot be made to happen by
following a magical formula.
Is growth always a good thing?
According to Moz founder Rand Fishkin, “the biggest danger for subscription businesses is to start
scaling up effort, money, people and time into marketing and growth before you have high enough
retention and a low enough churn rate”. For example, his benchmark for a subscription business
is that you are looking for globally under 5% churn monthly and less than 2% annual churn rate for
your most loyal cohorts. If you can do that, you can really pour on the growth. If not, then as you
grow, you’ll burn through a huge percentage of your market.
Investors will likely find it counterintuitive to hear a CEO say, “we need to stop growing and figure
out our product-market fit, and then nail churn and retention before we start accelerating”. If you’re
going to try and grow big and become IPO worthy, you almost certainly have to do it that way
(unless you’re lucky or smart enough to somehow nail it right at the start).
We’ve put together this handbook for founders and executives to learn the fundamentals of steady
and sustainable growth - everything from hiring, contextualizing data, and maintaining a strong and
healthy culture. You can glue a horn onto a horse and call it a unicorn, or you can plan wisely and
build a solid foundation for success that you can ride all the way to the bank.
Founder & CEO, 15Five
David Hassell

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TABLE OF CONTENTS
Chapter 1: Talent Acquisition
Chapter 2. Maintaining Visibility
Chapter 3. Scaling Communication
Chapter 4. Maximize Your Meeting ROI
Chapter 5. Use Data To Guide Decisions
Chapter 6. Scaling Culture
Chapter 7. Coaching & Mentorship

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CHAPTER 1. TALENT ACQUISITION
In 2012, a survey by CareerBuilder found that
66% of U.S. employers reported having bad hires
costing upward of $50,000 each. Not only that,
those bad hires negatively affected employee
morale,decreasedproductivityandhadanegative
impact on client relations.
Rand had some insights here too. He believes
that the wrong hire can make an entire team
dramatically less productive:
You can hire one person who makes ten less
effective, which is far more dangerous than
not making that one hire. Instead, create super
efficient processes, nail down the actual work
that needs to get done instead of wasted busy
work that won’t lead you down the right path.
Unless you are on an exceptionally small team,
you should be outsourcing this task to a people
and culture role (HR). Certainly the hiring manager
must craft the job description along with input from
the team, but if you’re spending your time talking
to recruiters and evaluating resumes, your can’t
focus on growing the company.
In terms of the mechanic of hiring, here are some
tips for getting it right the first time:
Build Your Network Authentically
When you go to events and meet people, you
are not acquiring assets. You are creating trusting
relationships with colleagues. So when you hire,
you can spread the word and people will flock to
you or perhaps suggest someone that they trust
and believe in.
Screen for Passion/Culture Fit First.
Do candidates have the attitude of this is the most
incredible company I can imagine working for and
I wouldn’t want to work anyone else? Or are they
thinking, you’re one of three opportunities I’m
looking at ? If they have the passion, then it’s time
to screen for values and culture fit. Remember, skills
can be taught, but values cannot be learned. Hiring
new staff that are not in sync with values of existing
team members may result in eventual financial
losses due to the inevitable churn that comes from
hiring people who don’t share your vision.

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Design Your Hiring Standards
Institute hiring practices to attract superstars —
with no settling for less. Create an organizational
mandate to hire only A players and clearly define
what that means. Then craft an interview process
in layers, beginning with discovering the way that
a candidate thinks, inquiring about past results and
finally seeking the big picture of what he or she
wants from a career.
Choose a Peer Council
The council should meet prospective hires for
coffee (or a video meeting for remote candidates)
and have each team member feel them out
individually.Afterthesestaffersgivetheirblessings,
start the rigorous interviews. As with nearly any
business decision, get the facts and then go with
your gut. But if something is amiss or doesn’t feel
right to the rest of the leadership team, this is a
good enough reason to say no.
Hire People Smarter Than You
Hire by design beginning with your very first
employee. Success-focused employees will
always choose candidates who complement
their skills and abilities. Hiring people who are
smarter than you means that the work can be
confidently delegated over time. Then focus on
the important stuff — growing your business and
hiring more A players.

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CHAPTER 2. MAINTAINING VISIBILITY
You can’t fix what you can’t see and you can’t manage what you are unaware of. This principle is
true for both top-down visibility, as well as awareness of what’s happening on and across teams.
Top-Down Visibility
Entrepreneurs and high-level executives are constantly seeking ways to gain visibility inside every
detail of their companies. Managers at every level often encounter the same problem: How do I
encourage front-line employees (who interact directly with customers) to be vulnerable, trusting, and
open enough to offer candid information about their work experience and the challenges they face?
Visibility depends on trust. According to Stephen Covey, “trust is the key leadership competency of
the new, global economy”. In his book, The Speed of Trust, Covey explains how when people are
trustworthy and build trusting relationships within an organization, that is when rapid growth occurs.
Covey discusses the four zones of the trust matrix, a combination of a high or low propensity of
trust and a high or low degree of analysis. On one end of the spectrum is indecision. These are
the micromanagers who have a low propensity of trust coupled with a low degree of analysis.
On the other end of the spectrum is judgment. This is the ideal, and these leaders have a high
propensity of trust and a high degree of analysis. They provide their people with ownership and
accountability over tasks and elicit resourcefulness and creativity.
High
1. Gullibility 2. Judgment
Low
3. Indecision 4. Suspicion
Low High
Analysis
Trust

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The best observation technique is asking your team questions. Knowing what drives the team and
knowing their pulse (what they need, how they feel) allows for the cessation of micromanagement
and the establishment of space for employees to flourish creatively.
Visibility into the team gives managers the confidence to let employees do their jobs. You can
quickly identify performance issues, triumphs, and the way that each individual team member feels.
Ask them what they would suggest and why in any given circumstance.
Allow every team member the opportunity to freely tell me where they are challenged, since
articulating problems begins the process of solvingthem.Employeesgrowmoreandmoreconfident
in their skills and abilities, understand their roles better, and eventually unlock their potential.
Asking questions and receiving candid responses also creates a culture of communication and
transparency. When everyone on the team is communicating, they can hold themselves and others
accountable. You essentially have a whole team of managers without the confining aspects that
damage employee morale or that interfere with their autonomy.
But you can’t just disappear and assume that the employee can succeed on their own. The other
half of the battle is staying involved and present. How often do you check in? Once a quarter? Once
a year? Annual and semi-annual reviews simply do not offer enough insight into your employee’s
world.
Ask questions to quickly gain visibility into team morale, align employees around company goals,
and see where they feel challenged and need support. We have found the following questions to
be phenomenally well-suited for leaders to gain visibility, employees to be heard and recognized,
and to re-calibrate your team:
Are you clear on the overall company strategy and how you fit into it? If not, what would help you
get clear?
When an employee is unclear on strategy, you have a chance to step in and realign them. The big
picture goals should color every detail of their work, no matter how small.
What challenges are you facing?
Employers don’t actually have to step in and provide help, but knowing they are there is invaluable to an
employee. Leaders can act like a spotter who psychologically adds confidence when people challenge
themselves by lifting more weight.

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Cross-team Visibility
The level of transparency will vary by culture. On
one side of the spectrum, some businesses keeping
information under lock and key. In my opinion this
creates an unhealthy work environment. On the other
side of the spectrum, everything is shared including
employee compensation and stock options. That type
of culture can quickly fall apart unless the entire team
has integrity and trust.
Not all walls should literally be broken down with every employee having complete visibility into every aspect of
the business. There must be balance between transparency and privacy. Provide enough information so that all
members of the team feel like they’ve been hired into a unique and valued place at the company.
According to Bob Marsh in this contribution to the SalesForce Blog, openly sharing sales leaderboards is an easy
way to introduce light competition. The visibility created opens opportunities for coaching and learning between
sales reps. Of course, management has to prioritize collaboration over competition for this to be effective.
There must also be team-wide visibility so that everyone knows everyone else’s status and where they stand
relative to the greater mission. Clearly and openly articulate the big picture so that everyone knows which piece
they own. By having transparency around the mission, employees know what is needed to accomplish results
that are important to them individually and to hold others accountable for their part.
What are your top 3 priorities for next week?
When your employee is aware of their top priorities, it means that they are working effectively by focusing
on what is most important. Once you communicate clear goals to the team, give each employee the
autonomy to do what it takes to achieve them. Stay present with a fine balance. Micromanaging leads to
stifling creativity and discourages employee engagement, but obtaining regular feedback is the first step
towards fostering growth in your employees. The impact is enduring, you secure a mutual understanding
of responsibilities and goals while keeping your finger on the pulse of progress.

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CHAPTER 3. SCALING COMMUNICATION
Dave Sifry, founder of Technorati -- which grew
rapidly to be the web’s largest blog search
engine -- developed a brilliant theory on scaling
communication along with company growth. In
this chapter, we paraphrase Sifry’s “Death Zone”.
While investors are looking for linear and
predictable growth, certain psychological and
biological limits prevent that growth on any
size team. So no matter how many people you
have right now, the key to sustainably scaling
communication is to be mindful of where you
are in organizational development so that you
can find the tools and build the systems that are
appropriate for each stage.
Early Stage Startup
Early stage startups are made up of a couple
of founders and a handful of self-motivated
people. There is little communication overhead
(the cost to share information) from bringing on
each new person. Everyone is sitting around a
table together, so you don’t really need to have
meetings. But once you grow beyond 8 people
or so, things really start to shift.
At this stage, everyone knows more or less what’s
going on in the company, but people split off into
their specialties. Structural management focus
begins to emerge. Management meetings and
scrums occur for the dev team. The marketing
people don’t need to be present at all of these,
these, but they also have no idea what’s going on
with development. So you have to have another
meeting to ensure that people who need to know
have access to that information.

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Communication costs are still relatively small and localized when within departments, but you have
to be really careful at the executive level to make sure that any communication misses get caught
and corrected quickly. This is where communication software begins to have value, especially for
distributed teams. Each individual team manager needs an efficient way to communicate with their
direct reports and send that information to different team leads or executives.
The Death Zone
If you are able to scale up to about 20 people you run into a different problem. Sifry calls this stage, “The
Death Zone”. You think to yourself, “if we can just get some more people we can get more done. When
we hired people before we became more efficient. Let’s do it again!” But from roughly 20 to 60 people,
that same thinking won’t work. The whole feel and tenor of a company shifts at this stage, and formalized
management structures create different teams with their own sets of initiatives.
At 20 people let’s say your burn is $300K per month. This means that you burn through $1M in 3-4
months. You need to understand what each person does and calculate to the dollar how each new
person is adding to revenue to compensate for their hire. You can’t raise your way to getting through the
20-60 stage. At 60 people you are probably burning $1M per month. If you don’t have revenue, investors
won’t fund you no matter how great your idea is.
(Of course there are some rare companies who intentionally don’t generate revenue like Twitter, because
their specific strategy is creating a network effect. But these unicorns are the exceptions to the rule. And
if you are not a magic horse, you can outgrow yourself very quickly and run out of runway.)
Hold-off on hiring until you figure out how to be profitable and repeatable at 20 people or less. Take your
investment capital and use it to extend your runway. Sure you are going to have competitors eating away
at the sides of your business. That’s fine. If you build a defensible business at 20, the good news is that
most of your competitors aren’t going to be able to do that.
You can then add employees one at a time and watch the bottom line to ensure that you are indeed
increasing revenue and profit at the rate at least of which you increase employees. That’s how you get to
60 people and out of the Death Zone.
In addition to manager-employee communications and communications across teams, it’s important
to also have clear communication from company leaders with respect to the vision and goals of the
organization.
Leaders can put everyone in the organization on the same page by communicating:
• Where the company is headed
• Where the company is at currently
• What you need to do as a company
• What are the capabilities you need to take on
• How the marketplace is shifting

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SOURCES
Web:
http://www.businessinsider.com/the-number-of-unicorn-startups-worth-over-1-billion-explosive-
growth-since-2009-2015-9
http://fortune.com/2016/03/07/fast-growth-companies-fail/
https://techcrunch.com/2016/01/31/tech-valuations-in-2016-the-end-of-the-line-for-sloppy-growth/
http://www.careerbuilder.com/share/aboutus/pressreleasesdetail
aspx?sd=12/13/2012&id=pr730&ed=12/31/2012
http://socialmedia.typepad.com/blog/2008/04/keynote-david-s.html
https://www.salesforce.com/blog/2014/09/workplace-competitions-for-collaboration-gp.html
https://www.15five.com/blog/productive-meetings/
http://www.coelevate.com/essays/learning-and-impact-over-ideas-and-activity
http://www.coelevate.com/essays/growth-meeting
https://www.groovehq.com/blog/hiring-a-business-coach
Books:
The Speed of Trust: The One Thing That Changes Everything by Steven M.R. Covey
Image Credits:
Olivier Carré-Delisle, https://www.flickr.com/photos/84593672@N05/10141810486/