In this interview we explored what it means to be a CEO dealing with transitions of a company, how to scale rapidly and deal with the challenges executives face when scaling up their businesses. David Mandelbrot gives his personal experience as the CEO of Indiegogo and shares the most valuable thing he has learned during the up scaling of Indiegogo.
Interview transcript below:
Banu: Hi, everyone, today I'm at Indiegogo I'm with the CEO, David Mandelbrot. I met David actually a few years ago we were just talking about how many years it's been. It's been, I think two and a half years ago. This was when I was designing an initiative for Indiegogo and what I remember from that time was that I really enjoyed being in your presence, to be around you because it was kind of stressful times at the company. But you had like this kind of a thing that was going on. You have such a warm, welcoming all encompassing presence. So it was really pleasant.
David: Yeah, that's nice to hear that you remember that. I do remember being a cat at times, but it always feels to me like there's an opportunity to create sort of a warmth, and maybe some order, no matter what the situation is.
Banu: Yeah. And now you're the CEO of Indiegogo.
Banu: And I know you've been the CEO of companies before. To give perspective, can you tell us how many years experience you have as an executive at different companies?
David: Ooh as the executive? Probably now I would say about probably 15 to 20... 20 years, actually. Boy, I had to do the math really quickly in my head. About 20 years really as an executive. My first large scale management experience, managing 100 people or more, was at Yahoo! probably about 18 years ago now.
Banu: Wow. Okay, that's quite some experience I'd say.
Banu: One of the main areas we work on with my executive clients is how to scale yourself as a leader when the company is scaling.
Banu: That is one of the biggest challenges. Number 1: Do you believe that an executive has to learn how to scale themselves? Does it work like that or is it that it naturally happens?
David: I don't think that it naturally happens. I think that to be able to scale any business, it's really important that you set up systems that enable that business to scale. I spent a lot of time working with companies that are transitioning from being early stage start-ups to larger companies with at least one hundred or more employees. And what I found is that companies in that stage really struggle with scaling and it's primarily a struggle of going from being a company where the CEO or whoever is in charge of the company is making every decision to transitioning into a company where others are empowered to make critical decisions.
Banu: And how do you do that?
David: That's a great question. There's a few ways to do that. You know, as I mentioned, when I worked with Yahoo!, a long time ago in my career, our president at the time was Jeff Mallett. I used to go to him seeking advice about how to scale companies because when I joined Yahoo!, there were, I think, seven hundred people there and when I left, there were twelve thousand, six years later. So the company really grew and scaled really rapidly and I asked Jeff, "How do you scale a company that fast?" and he said the only way to scale really quickly is to hire really good people, which we can talk about more, and the second thing is to then push out decision making as far as possible. And those words have really stuck with me all these years, because at the end of the day, if a company is struggling to scale, what it's really struggling with, I think, is the ability to make decisions and act without needing meetings or a CEO sign off on whatever it is. For very big companies to be able to scale, they need to be set up operationally in a way that enables them to make decisions and act quickly.
Banu: I really believe that the bigger the company is and the higher position in the hierarchy, the less busy a person should get. So the busyness level should be opposite to the level of any hierarchy as a company is growing and I think it also forces the creation of a system that works without the need of time, because the person who is doing the strategizing has to have space and time to work on that.
David: Yeah, I completely agree. One of the things that you ask about how do you scale and how do you enable a business to scale as it's growing and there's a few things that I think really need to be done to enable that business to scale quickly. One is establishing consistently for the whole company what the biggest priorities are. So, for example, in Indiegogo, I think about five years ago now, we implemented an OKR system (Objectives and Key Results) so that across the company everybody knows what is a priority, so that when something new is crossing somebody's desk, they can they can see that thing and they can see whether it jives with what the priorities are and if it doesn't, then they can back burner it and can focus their energy on something that's higher priority. The second thing related to that is to set really clear goals for everybody. A lot of times I think when companies are struggling to scale, what they're really struggling with is people are not independent and they feel like they need to get signed off for each thing that they're going to do: "We just got this contract offer and I want to make sure you're OK with me going back with this response". But what I think is actually a better way to manage is to make sure that each individual is clear on what their goals are and then stay out of it, then let them accomplish their goals their way. From a management standpoint, that system works a lot easier also, because at the end of a performance review period, you don't have to decide if the person was good or bad, what you're really looking at is their effectiveness at accomplishing those goals that were laid out for them.
Banu: Sometimes I feel it's easier said than done. What you are saying is a challenge for people to actually step away from that and then doing that psychologically. Have you ever felt that psychological challenge of stepping out of that process?
David: Yes, I have and I think for anybody that's managing, it's sometimes hard to to to step out a little bit and to and to actually empower other people with something important. One of the things that I love about Indiegogo, and was actually in place at Indiegogo even before I arrived here, was our core company values. They have the acronym FACE for: fearlessness, authenticity, collaboration and empowerment. And that last one, empowerment, like all of them do, but that one in particular has always really resonated with me. I think part of the trick of effective managing is really empowering people to take on big tasks and what I found is that when you do that, you actually empower people to take on a big challenge and by empowering them, you're stepping out of it a little bit. Through empowerment they gain knowledge and experience that only further allows you to scale because they're getting the knowledge and experience that enables them to do it the next time and the time after that, as well as for them to teach then other people to do it. Whereas if you're always getting involved, then there's always this need for you individually to get involved and you can only scale the company as broad as you yourself can go. And to go back to your original question, I completely agree. If I feel like my schedule is booked back to back to back to back with meetings, it means that I have probably not done as good a job as I could do at empowering the people around me.