CEOs must keep raising their games to grow their companies. They need to have their thinking and strategy challenged, and yet, they frequently face decisions on matters they have never tackled. The learning curve is intense. While coaches can fill in the gaps in skills, a new CEO is more likely to depend upon a mentor who has had equivalent experience. A 2015 Harvard Business Review survey showed that mentored CEOs improve company performance, make better decisions, meet stakeholder expectations and become proficient faster.
A recent Enlightened Speaker Series event paired two relatively new CEOs and their mentors for a discussion of the process. How does one find a mentor? What does a mentor look for in a mentee? What are the rules of engagement, and how important is it to match styles?
The pairs were Gordon Daugherty, a managing director and general partner at Austin’s Capital Factory. Daugherty has witnessed about 1,000 startup pitches, offered advice to over 200 entrepreneurs and raised over $40 million in private and venture capital. His mentee was Sam Ulu, a rocket scientist turned entrepreneur who founded Kandid.ly, an online community and marketplace for photography enthusiasts, in 2013. After getting a master’s degree in mechanical and aerospace engineering from the University of Cincinnati, Ulu was an engineering team lead for Inno360 working on product development. Prior to that he worked as a simulation engineer and analyst for Proctor & Gamble.
Mentor Jan Ryan has been both an entrepreneur and CEO, focused for 30 years on building early stage and expansion
stage companies. Her work has resulted in four successful acquisitions and one IPO. She is a partner at The Capital Factory, and is the founder and general manager of 3Hills Group, where she works with companies ready to go to the next level in sales, penetrate a new market or merge sales teams after a merger or acquisition. Her mentee was Autumn Manning, CEO of YouEarnedIt, a SaaS software firm that enhances a company’s culture by redefining how organizations engage with their employees. Manning joined YouEarnedIt in 2012 and became CEO in 2013. She has seen NBC, Anheuser-Busch and Conde Nast join the client list.
How did these pairs find each other?
“In building Kandid.ly, I knew I needed to build an advisory board as an extension of my team,” Ulu said. “I looked at my own skills and figured out what I had experience doing and what I needed help with. Gordon has operational experience and for the first two or three months I would reach out and we would work on something I was struggling with. Once we did several sessions together, I felt this was somebody I could work with.”
Daugherty said he has a four-point test to help determine whether he would be a good fit with the mentee: the personality of the mentee, whether his own experience could help the mentee, a return on investment (Daugherty said he is usually compensated with equity), and what he can get from the experience. “I’ve never worked in a company that’s a marketplace,” he said. “So selfishly, that’s what I want to learn from Sam.” If all four points are not met, he declines the invitation.
Ryan and Manning are farther along in their relationship than Daugherty and Ulu. Manning started YouEarnedIt in Arkansas, and moved it to Austin four years ago. Soon after she arrived, other CEOs started reaching out to her, offering help as she encountered different challenges in her business. One of them recommended she meet Ryan. “We met for lunch and right away she was able to offer perspective on what I was going to go through and had gone through. It was a great conversation,” Manning said. “Once I got more comfortable with the authenticity she brought and how curious she was about the company and where we were taking it, we started slowly formalizing the relationship.”
Ryan said the mentee must be coachable and trustworthy. “We could not continue in our relationship without trust,” she said. “Autumn knows anything she says to me remains confidential. Sometimes you know things about people that could potentially hurt them, be awkward or damaging. You have to like each other.”
Daugherty told a story about building trust with Ulu. “Sam’s family came over from Nigeria and he asked me to join them for lunch. This was not just bringing me into his business life, this was bringing me into his personal life,” he said.
“Life is too short to work with people you don’t like or can’t stand to be around,” Ulu said.
Once the relationship is established, the amount of engagement ebbs and flows. “At the beginning,” said Ulu, “we met nearly every week and on Fridays we’d have a Skype session to talk about what happened that week. When it came time for fundraising we were talking nearly every day.”
Daugherty said his “best practice” for engagement is to defer to the entrepreneur. “There are times where they don’t need me for a few weeks,” he said. “I don’t feel unwanted, that’s just the way it is.”
Ulu said it’s important to have an agenda for their get-togethers. “The last thing I want is to have a meeting with Gordon without any actionable items,” he said. “What I like to do is to give him homework where he can figure out something for us because we have limited resources.”
But Daugherty said he’s not there to give answers. “I will oftentimes come back with questions and then another question and another question to make Sam try to find the answer,” he said. “Often there are four or five paths that can be taken and it’s up to the entrepreneur to pick one and then execute like crazy.”
Ulu prefers it that way. “For me, that is the best engagement,” he said. “Gordon asks me the right questions that allow me the opportunity to go back and make the right decision — the right decision at that moment in time.”
Manning said her relationship with Ryan has also evolved. “At the beginning there were clearer reasons to engage together and it felt more structured and formalized,” she said. “Now going into next year, the needs are not as clear. Today it feels like there are fewer right and wrong answers, but rather what am I comfortable with. Today, I just need to talk it out with someone I trust.”
Manning said Ryan’s mentoring style is similar to Daugherty’s, in that both prefer to ask questions over providing answers. “She’s an advisor, a mentor and a friend,” Manning said. “She’s that someone I call who can offer perspective. She asks me the right questions but she doesn’t try to take over by saying, ‘Here’s what I would do.’”
She added that the relationship grows when both sides reveal their vulnerabilities. “Being able to be vulnerable and bring your entire self and talk things through has been the biggest difference in being a CEO and having several mentors to turn to,” she said.
Both Manning and Ulu indicated that they have more than one mentor. “At every stage of your career, you should be surrounding yourself with people who can offer perspective and advice, and challenge you,” Manning said. “I want to surround myself with success.”
“My advice,” Ulu said, “is to understand the phase your company is in, the resources you are lacking and identify a diverse group of advisors to engage with.”
Manning said she doesn’t have a formal advisory board, but does meet with four advisors over questions of sales and marketing, and scaling her business.
Daugherty suggested the entrepreneur can look for advisors by engaging in a form of speed dating. “Play the field, get to know as many people as possible,” he said. “You need to validate your gaps and weaknesses, and you will naturally gravitate to one, two or three of them.”
He said entrepreneurs must look for different qualities in an advisory board than in a mentor. “As the company scales, consider advisors based on what they know and not who they know,” he said. “You’ll need people who understand your sales model, compensation and things like that.”
Ulu said the value of an advisory board is proportional to the amount of work they are given. “If you have 10 advisors, the only way they are all beneficial is to create enough work for all 10,” he said. “For me, the magic number is three.”
An audience member asked how to know whether the arrangement is working.
“When you are actually adding value to the relationship,” Ryan said.
“I like it when we’re diplomatically arguing things,” said Daugherty. “There needs to be a little bit of tension sometimes when you’re in a good debate.”
Ulu agreed. “For founders and CEOs we are eternally optimistic,” he said. “So, it helps to have advisors who can challenge your decision process. When Gordon doesn’t agree with me, I go do my homework to justify my decision.”
The mentees ended the session with their final thoughts.
“Have a diverse group of advisors,” Ulu said.
“Watch your most precious commodities — time and focus,” said Manning. “Be careful that you don’t get caught up in a relationship with someone who wants to chat and have coffee. That’s easy to do.”