Always Consult Your Employees--Even If You Don't Want To
By Anonymous

(FORTUNE Magazine) – Two weeks after I arrived at my startup, my boss asked me to present a product plan to my colleagues. I was shocked. He tried to reassure me: Just throw together some slides and tell us what you want to do--the guys want to see, he said.

The rest of the company was only about 50 people, but they represented an unpredictable mix of engineers, project managers, marketers, and executives. I came from a big conglomerate where the idea of figuring out a new product, let alone presenting it, took months or years. Even then, individual responsibility was comfortably softened by the team approach.

I had no idea what I wanted to do; needless to say, the meeting went badly. My voice tends to quaver in direct proportion to the amount of bull in my message--I was virtually stammering. I stopped trying to reach for the Coke that some sympathetic soul pushed my way because my hands were shaking too much. My colleagues listened patiently while I tried to sell the idea of creating an online magazine to help users (Silicon Valley-speak for "people") use our Website better. It was a bad idea, and I knew it. Once I had finished, the questions came. They were probably polite enough, but to my guilty soul they sounded like an interrogation. The engineers are the best and the worst: They say exactly what they think, in a matter-of-fact, nothing-personal sort of way. "Do you think our customers are stupid enough to need this?" they asked. To me it sounded like, "Are you stupid enough to need this?"

Out of stubbornness, I created a Webzine (thankfully, now long forgotten). Slowly the lesson of my first debacle sunk in. At a startup, all the early employees have huge equity stakes that one day may make them very rich. They are passing up bigger salaries and saner working hours for the chance to cash in big time. As a result, they feel as much ownership of the company as the venture capitalists who fund it. They are even tougher critics because they know the company from the inside out. At a startup, you need to sell everyone on what you aim to do.

The real test for management is a call for a company meeting, usually spurred by engineers complaining that they are unsure of the firm's strategy. Imagine a lot of sullen youths slumping in chairs and on the floor while the boss holds forth. Following a brief, respectful silence, their hands go up (a lot of the folks are just out of school) and the grilling begins on every detail of the company's business. My own bad moment was nothing compared with the dressing-down that the CEO and the head of marketing received at other junctures. At one meeting the CEO thought he could deflect criticism by encouraging breakout sessions to reflect on some issues facing the company. The move backfired when each group said they found the company directionless. It wasn't really true, but perception counts more than reality for the morale of a small startup.

This sort of management torture test reflects Silicon Valley's culture of flat hierarchies. It's not that they are really flat; leadership and responsibility are very important to the success of startups. What it does mean is that the troops grant leadership to certain people, based on how smart they are, how hard they work, and how well they evangelize. In a big corporation, title and power are what matter; startup leadership, on the other hand, is effective when the guy in charge earns the team's respect, most of all that of the techies who are at the heart of the firm.

It doesn't take exotic methods to do so (although the art eluded me for some time). Once when I was really struggling with some issue, the founder, a real Silicon Valley veteran, said, "If you'd only ask some people for help they would give you lots of good ideas." The same folks, I thought, who humiliated me at my first meeting? Wrong. They didn't actually mean to humiliate me; in fact, if you listen to engineers talk, they're very tough on one another as they bat ideas around. It's nothing personal. "That sucks" doesn't mean you suck.

If you aren't already an immortal in Silicon Valley, like Jerry Yang or Marc Andreessen, the trick is to work the flat hierarchy. In the early days it's important to consult colleagues broadly and solicit ideas, then play back plans repeatedly for comment. Though the process takes patience, you build a better plan, happier teams, and stronger leadership. Remember, it's the so-called techies who've come up with most of the great ideas on the Web.

ANONYMOUS was a high-ranking executive at a prominent Internet company. This is the third column in his series on learning the ins and outs of Silicon Valley. He admits to being a carpetbagger. And he wishes to remain anonymous.