Women Board Directors and Chairs – Why do the numbers remain so low and how we can change them!

I was recently honored to be named board chair at Lumentum, a terrific public company in the technology space. As I thought about my new responsibility, I became curious as to how many other companies have women board chairs and unfortunately what I found was not good.  

First, for context, consider the number of women on boards in the US. While the number of women directors has increased marginally in the last few years, women still make up less than 23% of the S&P 500 directors**.

The situation is no better as you go down the market to smaller companies.  Women only just achieved 20% of director seats in the Russell 3000 halfway through this year (up from 16.4% in 2018). Additionally, while all S&P 500 companies have at least one women director (the last holdout added a woman earlier this year), a staggering 10.8% of the companies in the Russell 3000 still do not have a single woman director.  

Companies in the information technology industry are even worse—woman comprise less than 15% of the board members in this sector (perhaps the only “good” news is that the energy sector is even worse, with women comprising only 11% of the board members).    

And remember, just one woman on a board isn’t enough. We now know that more than one woman in the room changes the dynamic to enable the women to be more likely to be heard and not interrupted and/or talked over, as well as often providing greater representation of the customer base. It’s good to see Blackrock will vote against boards who do not have two women on the board in 2019 and Vanguard and State Street will now vote against boards with no women. Investors can definitely put social pressure on this issue. 

But while we chip away at simply getting to a reasonable percentage of women onto boards, the number for the chair position remains abysmal. Only just over 4% of the S&P 500 or of the Russell 3000 had a female board chair in 2018. While we strive to get greater gender equality on boards, we must also recognize that leadership positions on boards should also be open to women.  

We know it’s time to change. The research is now conclusive – diversity in all its forms makes business sense at every level. 

At the top, California is forcing a change with its new, controversial law to mandate the number of women on boards; other states such as New Jersey are considering following California which will increase the number of boards affected. We see that larger companies, typically under more public scrutiny, are ahead in fixing the problem. Companies with < $1B revenue had 12.8% female directors in 2018 whereas companies with > $20B revenue had almost twice as many at 24.1%. 

Having diversity at the top can also help mitigate risk in the #metoo era. I have observed firsthand that women in leadership positions are able to see and identify problematic behavior very quickly (not that men can’t but many women, including me, have been the subject of the inappropriate behavior and so they know immediately the impact of the problem). Sexual harassment incidents can cause material reputational, and hence valuation, damage in today’s social media era and boards need to be both sensitive on this issue and vigilant. 

I have served on public company boards since 2006. For many years I was the only woman on the boards I served on and even today I am the only woman on one of my four public boards. I’ve learned a lot about where the resistance to change comes from and how powerful it is when a board decides to diversify.  While the law can push change, change can be even more powerful and beneficial when the benefits of diversity are recognized within the boardroom.  

So how do we make change happen so that boards become more diverse, including offering greater leadership opportunities for women at the board level?

First, we must recognize the benefits that come from board refreshment.  In my experience part of a good board evaluation process is recognizing that there should be reasonable board turnover on a regular basis. Over 50% of the Russell 3000 companies made no changes at the board level in 2018. When you think about how fast the world of business is changing this slow rate of change at the board is surprising. 

There are a number of steps related to board refreshment that boards can take to encourage greater diversity at the board level.  These steps can include the following: 

  • Reviewing the skills and experience truly needed by the company and then taking a hard look at whether all directors still belong on the board through that lens. This requires board members to engage in a real board assessment process, assessing each individual director (not a check-the-box process) and can lead to a difficult conversation with a long serving director but it’s necessary to ensure the company has the best possible board in place.
  • Recognizing the potential loss of independence for long-term directors. This one is controversial in the US where the average tenure of a director is greater than 11 years, and in 25% of cases is greater than 15 years. Europe is different. I serve on the board of Faurecia, a publicly traded >15B euro global company headquartered in Paris. In the EU a director is not considered independent after 12 years and so directors will typically be asked to serve only two 4 year terms and this is made clear to a new Faurecia director up front. While most US companies do not have term limits, in my experience there is a basis for the belief that very long-serving directors (however that is defined) can become more closely aligned with management and less independent.  
  • Putting age limits in place. Again, this one is controversial since age diversity, both young and old, can add to the richness of the discussion in the board room.  Further, and as with term limits, hard rules make for hard cases.  I know this personally, as one of the greatest directors I have ever served with was 80 years old and an active chair when he passed away this year but if a director is snoozing in the meeting or out of touch with the industry then s/he should probably be aged out.

Second, boards must be willing to elect first time board directors. And yet of the <50% of companies who did elect a new director in 2018 less than 25% hired directors with no previous experience (although again large companies were twice as likely to do so as small companies). I’ve heard the objection too many times – “we don’t want to have to work with a new director, it’s too disruptive”. Well guess what? You need to in order to bring diversity and fresh talent into the director pool. I’ve been involved in doing this several times now and so long as a member of the board signs up to mentor, and the candidate signs up for director training, you can absolutely find a rich pool of highly experienced executives who are ready to work hard to learn how to be a great director. 

Third, boards must have a transparent recruiting process. The days where a board hires their golfing buddies need to be over (yes, I’ve seen this behavior). The governance committee needs to be clear and open with the whole board about the specification, the process and the recruiter. Since the majority of directors are still male it is very reasonable to need to hire a recruiter to bring candidates to your attention whom you would not normally meet.

But finally I want to tackle the elephant in the room – the directors who just don’t think diversity is important. Its old school thinking, and time will age these directors out, but in the meantime it’s important for the directors who do believe in the power of diversity to speak up. Male or female, directors should insist that the boards they sit on diversify and insist that board searches target the group that is being sought for the board – be it gender or race diversity – because unless a search targets a diverse candidate the probability is the next hire will likely be a white male who is known to the board. Having led this effort myself, I know great women can be found, although the recruiters have to work harder, and the new director may be a first-time director.

Again, the law can be used to force change. In France 40% of the directors must be female and my experience of the women I serve on the Faurecia board with is that they are smart, engaged and steeped in the industry and markets Faurecia serves. But the bias runs deep. When I was joining the French board a US director I served with had the nerve to tell me that this had led to weaker boards with unqualified female directors. He stunned me with his claim that forcing diversity reduces quality. This is simple bias without any basis in fact or research.  Unfortunately, I know such statements continue to be made behind closed doors—an all too difficult reality to recognize—but I admit I was still stunned to have my fellow director make such a statement. 

So what’s the answer?  Unfortunately there is no single answer.  Instead, it requires a broad attack on a number of issues.  But for my $0.02, the critical first step is recognizing the importance and benefits of diversity at every level and setting determined goals to change the numbers, especially in the board room and including within the leadership of the board room.  

** Statistics from the Corporate Board Practices in the Russell 3000 and S&P 500: 2019 Edition which asks the question Why Aren’t Boards Diversifying Faster?


Is 2019 a turning point for women executives?

On International Women’s Day today I find myself asking could it be that the momentum is finally building to escape velocity? Escape from a world where the majority of corporate power is held by white men? It feels like it.

The new California legislation requiring the boards of companies who have their headquarters in California to have women on their boards may or may not be constitutional but for the first time it is absolutely forcing the conversation. I’ve been raising this issue for many years now and for the first time I feel the wind at my back. I am now getting frequent inbound inquiries asking for suggestions of women I know who would be qualified as board directors, sometimes even from men who have been die hard opposers to the need or benefit of adding a woman (or one woman more than me) to their boards.

As any recruiter who has been working on getting women onto boards for a while now will tell you this is not a supply problem. There are plenty of highly qualified CxOs who are female and interested. It’s been a demand problem, especially when the easiest objection to put up is the director must have prior public company board experience which perpetuates the bias to older men. Now it’s finally changing.

We are also seeing, on the heels of the #MeToo movement, that executives who sexually harass their employees, or have affairs within their company, are no longer tolerated. Even a couple of years ago this was not the case as I saw to my dismay but it’s clear now the objectification of women in the highest corridors of power holds them down. Some of the most senior executives are now being brought down by their failure to respect the women around them. It’s about time.

We have the largest number of women in the Senate and in the House of Representatives in history – potentially energized by our current political environment – but maybe also because women are finally coming into their own politically.

And maybe, just maybe, the toxic conversation towards women that we see at the highest level of our government is the dark just before the dawn. Are women finally reaching into enough levels of power that the resistance to us sharing power is having its last, blustering hurrah?

I choose to believe so.

The movement to put women onto boards is profoundly important. In no way will this lower the quality of directors (as several men have told me) but will instead improve the quality of the conversation and the financial results of the companies. Less group think, less clubby agreeing. More diverse input and, I often see, less of the old and tired conventional input. Women who have made it to the top of their game in 2019 have had to work harder and be smarter to get there – they are often over qualified before they come to the table. If a woman graduated in the 1980s or 1990s I guarantee she has at some point had to out-work and out-smart the men around her to get ahead. The unconscious bias has been powerful and unrelenting but when you meet women directors and CxOs today they are impressive because they have had to be to get to where they are.

I believe, more strongly than ever, that we need to create a world where women have equal opportunity with men. As today’s campaign theme says #BalanceforBetter. Balance so women have equal economic opportunity to make money and lead enterprises. Equal opportunity for political power. This is how we create stronger societies and lasting peace.

And I believe the tide has turned, the momentum is building, and we are entering a world where power can be shared across genders.

Photo: Herculaneum © 2011 Penny Herscher

Career Advice

Talk in Powerpoint not in Word!

It’s tough to listen when you just want someone to get to the point.

People talk too much for many reasons: nerves, wanting to be recognized or heard, wanting to look knowledgable or sometimes even because they enjoy talking, have lots of thoughts in their head and want to get them out. If you are with friends in a restaurant and they enjoy your style – who cares? But in the office talking too much will work against you because you’ll suck up other people’s time which they will, eventually, resent.

It’s very important to match your style to your audience – whether you are presenting to 1000 people or talking with 1. But it is much harder to be concise than to let your thoughts flow. It is much harder to make a 3 minute presentation that a 10 minute one. It takes discipline and a great deal more preparation.

Being concise is a skill you can learn, like any other skill or language. It takes work, and practice, but once you learn it it is very powerful.

First, consider Powerpoint and Word. In Powerpoint you write down bullets. Short, smart, impactful bullets. In Word you write many sentences, elaborating and expounding on your thoughts.

To teach yourself to present concise ideas start by preparing your bullet points before a discussion. You’re going into a one-on-one with your boss and you know you need to make some points, and discuss some issues. Prepare by making your bullet point list (preferably 3 or less, no more than 5). Then, when you are in the discussion stick to your points. Don’t run on about one or another, make yourself concisely state your issue/point of view and stop.

If you do this every time before you go into a meeting then the next step is to learn to do it on the fly. You’re in a discussion, you know you have a point you want to make, take a deep breath, count to 5, or 10, focus your mind to only the essential of what you want to say and state 1-3 short points, not an essay. Then be quiet and pause for clarifying questions – which gives you the opportunity to crisply expand your thoughts in response.

It is also important to watch your audience carefully. Are they truly with you or zoning out and politely nodding? If you talk more than a minute, pause and check in with the person you are talking with. Ask an open ended question like “what are the holes in what I’m saying” not a closed question like “make sense?” to which yes is the polite, but meaningless, answer.

With some people you may find having a piece of paper and drawing a picture of your idea, or your key points, may help. Many people are more visual than verbal. Sitting with a large pad and jotting down your points together can help you focus and not ramble on. This physical prop can also help you listen better. Writing down what the other person is saying will help you focus on their ideas instead of simply thinking about your response before they have finished.

Finally, always be aware of time. It amazes me when I meet with people and they talk for 10 or 15 minutes about themselves, what they want to tell me etc. without noticing how long they are talking, especially if we only have 30 minutes! If you need to catch up socially first then schedule that into your meeting time; if you simply need a focused conversation schedule 30 minutes and be disciplined about it. One prop is to wear a watch and put it on the table if you need to learn this. Most people will support you if you are straightforward about why you are watching the time. And if you are given 1.5 hours and your executives, or board, want a discussion don’t ramble on for an hour about generalities (as I recently experienced in a board meeting). Talk for 15 minutes max and then figure out how to make your discussion interactive.

The exception to this, of course, is if you are telling a story or you have been asked to make a speech on a topic. Whether that story is professional, or personal, if you have permission from your listeners to tell a story then take your time. Expound, embellish because that is part of the pleasure for the listener and part of your persuasive power to build the picture in your audience’s minds.

If you are naturally loquacious being concise is a hard change to make but it is an incredibly powerful skill for your career and it can be learned. If you want outside help join something like ToastMasters, or a competitive debate club. Nothing focuses the mind like competition.

Photo: Dante’s Barque, Venice © 2018 Penny Herscher


What impression are you leaving once you leave?

It can be a strain to be aware of your actions 24/7 but as a leader it is critical. You leave an impression every time you interact with anyone, and if you are a busy person you may be leaving the impression in a few seconds.

Think about when you enter a meeting room, realize you are in the wrong room and leave. What did you say? Did you come across as simply having read the wrong room on your calendar, or as a disorganized ditz.

How about when you have just given a talk and there is a line of people waiting to talk with you, but you are tired? Do you take the time, despite your fatigue, to greet every person, listen to their question and thoughtfully answer, or do you say “sorry, have to get to my next thing” and leave?

Or you visit a site in China, or India, and you are horribly jet lagged but to the employees who you are meeting with your visit is a big deal. Do you let on that you are struggling with jet lag and whine a bit or sit up straight and force yourself to be charming and attentive to them?

Then there are the times you go out with sales people to celebrate a big win or mourn a loss. Do you relax and have a few too many drinks because you are with the lads, or do you keep a watch on your own imbibing so as to not make a mistake and say something you’ll regret.

There are thousands of such moments when you need to chose how to behave and, as a leader, I believe you always need to keep the impression you leave at the front of your mind. For you the encounter may be minor and forgetful but for the people you are meeting with – employees, customers, peers, shareholders – it may stick with them for years, especially if you let them down or disappoint them in some way.

The more people who work for you, the more important every small interaction is because your time gets sliced thinner and thinner. When you have more than 20,000 people working for you, which you may do one day, every moment leaves an impression as the CEOs of the big companies are very aware.

I’ve watched dear friends in powerful positions struggle with this. The stock takes a precipitous tumble on one day and it can be hard not to lash out and be negative to the people around you. The company misses its number and it can be hard for the head of sales not to get drunk with his boys. I’ve fought hard not to be negative when grossly over tired and had to lecture myself in the ladies room mirror to stay positive. We are all human and being self aware and conscious of the impression you are leaving with the people around you is serious work.

But if you want to be a leader it is critically important. You never know who is watching (particularly important if you are CEO of a public company). You never know what is really going on in the lives of the people you are working with and how much they may be needing you to lift them up that day. You cannot know how you may change their career choices with a few thoughtful moments.

So pay attention! I wish I had more than I did.

Photo: A pigeon hogging a Venetian water fountain © 2019 Penny Herscher


Don’t argue in front of your customer!

We’ve all been there. You’re in a meeting with a prospect or customer and someone on your team says the wrong thing. You’re infuriated and your knee jerk reaction is to correct your teammate in front of the customer. Or get angry with your teammate. Not a good idea.

This can happen when you take a junior engineer into a meeting and she feels she has to tell the customer everything that’s wrong with the product. Or a senior executive who commits you to a schedule you know you can’t make. Or a loser sales person who can’t stop talking. Or a hungry, skilled sales person who is trying to pull a deal in earlier than you think makes sense. Or a tired customer support person who is down a cynical rat hole.

When these things happen, or the thousand other ways you can see the wrong thing being said in front of the customer it’s up to you to keep a cool head and manage through without getting angry or embarrassing your teammate in front of the customer. A customer is in the room with you to get as much out of you as he or she can to solve their problem. They don’t want to know about your problems. And they certainly don’t want you to air your relationship dirty laundry in front of them.

So how can you prevent or manage this?

First prepare. Hold a prep meeting and try to anticipate the issues and questions that may come up. Be as clear as you can what the pot holes could be and who is playing what role in the meeting.

Then, if your teammate is saying something you know is wrong, try to deflect by going on a tangent. Don’t say “John is wrong… we can’t commit to that”, instead ask a question of the customer to take the conversation in another direction.

If you are still on the wrong track let the issue go unless it is going to seriously damage your project or company’s future. There are not many issues discussed which can’t be changed with a follow up conversation. “I know John committed XYZ to you but when we got back to the office and did some more digging we realized XYZ is not the right answer (timing, service etc) for you.” Customers do that to vendors all the time!

And finally be sure to debrief with your team. Great coordination in front of the customer comes with practice, practice working together as a team. Learning who should speak on what issue, who has command of what topic. You won’t get it right the first time you work with your team, but over time you’ll build the muscle memory to navigate tough issues in front of the customer. But in the meantime, don’t disagree in front of her!

Photo: Tapestry in Sevilla, Spain © 2018 Penny Herscher

Career Advice

Startup or large corporate – which is best for you?

Everyone has an opinion of whether you should work for big companies or small, startup or corporate, but the answer is very personal. I was coaching a group earlier this week and the question came up as “I am working for a startup but everyone is telling me I should go work for a big corporate now for my resume – what do you think?”

I believe there is no right way, no right answer. But there are dimensions to consider as you map out your next step.

  • Are you working for good, experienced managers? Do you respect them, and will they invest in you? If so, stay with them as long as you are growing and learning – whether you are in a small or a large company. It is so much more efficient to learn from good managers than from bad. There are a thousand ways to do a job badly and a handful of ways to do it well so learn as much as you can from people you respect for as long as you can.
  • Are you working for a winning startup? I have found many employees are very loyal to their company, even when in their hearts they know it is failing, and yet if the company is not winning you may not grow. It could be that you get more experience because you get a battlefield promotion, but more likely if the company is not growing your responsibilities and span of control will not grow. Remember 9 out of 10 startups fail. So if you are early in your career and want to advance fast try to find a startup (if you chose to do one) that is growing.
  • Do you long for more formal training, If so then it’s probably time to go to a larger company and grow your large company skillsets. These may be larger team management, scale, working with international teams, and probably politics. Larger companies will typically either having training programs internally, or have the budget to send you out on courses. I was fortunate enough to be sent to the Stanford Executive MBA program, all expenses paid (while I was pregnant) because the company wanted to invest in me. It was a fantastic experience for me, a math major with no business training, to learn the basics of finance, marketing, management and organizational development in a crash course. A startup would not have been able to invest in me that way.
  • Do you want to manage lots of people? Again, a large company stint may make sense for you. It is certainly a great experience to manage a large team of people or a large P&L at some point in your career. But with that will come both good and bad politics. Good – the art of influencing people in a constructive way; Bad – the art of backroom lobbying and selfish decisions. So prepare yourself for both.
  • Do you need stability? There are times in all our lives when stability is very attractive, such as when we are caring for an ill family member, and times when it doesn’t seem important. Be aware of what you need right now.
  • Do you need to make a high end salary for the level/job you are in? Larger, established companies will typically pay more, especially if you are in a very competitive job category. Startups will typically want to conserve cash. Make sure you know what you are worth in the market at large and then consciously make the decision that works for you and your financial plans.
  • Do you enjoy risk and want to have fun? Well then, a startup is probably for you.

And when you are all done, looking back on your career from a beach or with grandchildren on your knee, what’s important is that you have lived to your highest potential (whatever that means to you) – and that you have worked for and with great people in fun companies. Life is too short to work in low quality companies, with and for bozos, when there are so many terrific companies and people to work with.

Photo:  Sheep in the Roman ruins of Baelo Claudia on the south coast of Spain. © 2018 Penny Herscher

Career Advice

So you want to raise money – chose your investor carefully

At least once a week I take a call, or a coffee, with an entrepreneur who wants advice on how to raise money. We talk about her product and market, the stage of her business, how good is her story and what her vision is. And then we talk about the tactics of raising money. How to get a warm intro to reputable investors, how to think about angel vs. seed vs. venture, how much to raise, what a strong pitch looks like – the usual tactical coaching.

Yesterday I was delighted that the entrepreneur I was coaching also brought up how to assess the quality of the investors. The quality of the firm and the individual. She’d had a bad experience in the past and simply did not want to have a poor quality individual in her deal.

Many entrepreneurs never realize how important this question is: all money is green but it is not all equally valuable. Investors, like human beings, come in all styles and since building a company is a marathon not a sprint you want to be running with someone who is enjoyable to be with and who will help you win the race.

First, pick someone who has the same vision and values as you. You are (hopefully) in your venture because you believe you can change the world (if you are doing it to get rich stop now because you don’t get rich in the startup world by trying to get rich, you get rich by building something) and it’s very important that your investors want you to change the world too. There are many, many tough moments of truth when building a company, and none more so than when you get an offer for your company before you think you are ready – before you have built the strategy and value that you believe is possible. That moment is when you find out whether your investor truly shared your vision on how to change the world or was just telling you he did.

It’s also important to pick a partner who can do heavy lifting for you when you need it. Great venture firms have a rich, deep network to help you recruit, develop partnerships, manage sticky HR issues and even find office space.

Avoid the money based VC (often a former investment banker) who’s motivated by running a portfolio, who wants to tell you what to do but has never done it himself. Find someone who walks the talk and builds great companies. Find a former entrepreneur who has really done it him or herself. If you can, find a VC who has been doing it for more than 10 years and has a great track record – and talk to their CEOs – or find one who’s been a CEO, built a good company and taken it public. All this is visible on their web bios.

And pick someone you enjoy being with. Most companies take many years to mature and if you are going to meet with your board a couple of times a quarter for 5 years it certainly makes the journey more fun if you enjoy interacting with them.

Sadly there are many entitled, think-their-shit-doesn’t-stink VCs in Silicon Valley. I could fill a book of stories of men who think they are rich because they are smart and that they don’t have to be courteous or helpful. Who are openly rude, dismissive and condescending. For comic relief – one of my most bizarre meetings was with a young VC whose firm had been in early at Google and he spent the whole meeting behind his desk checking the Google stock price and telling me how much money he had made. He was not the partner in the deal, just in the partnership, and yet he still thought it was all about him and I should be impressed!

But at the same time there are plenty of men, and women, who truly love working with entrepreneurs and have a very healthy respect for how hard building a company is. The challenge is you may have to kiss a lot of frogs to find your investing prince or princess. So manage your time and do your research up front.

Of course, in the end, you do need to get funded and you may need to take what you can get, but if you have the chance to be selective, the right investor is more important than the highest valuation because you’ll build a better company, have a stronger chance to change the world and make more money in the long run with the right partner.

Photo: Valetta, Malta © 2018 Penny Herscher

Career Advice

There’s no dishonor in being fired (most of the time)

So you “get fired” – what does that really mean? And should you feel bad, or is it an opportunity to review where you really belong.

Let’s start with the word. Fired. The web has a variety of etymologies for the word fired being applied to losing ones job but the version I grew up with is that when a craftsman was very bad at his job (say… working on a Medieval cathedral) and he was kicked off the crew his tools would be thrown into the fire (so he could not continue), as opposed to the craftsman who loses his job because times are slow in which case he is given the “sack” – he put his tools into his sack and left.

People get “fired” for a whole variety of reasons and in the majority of the cases it has little, if anything, to do with how good they actually are. They may lose their job because a company is downsizing, or reducing a group because a project is over, or the team/task is being moved to a cheaper location. I know a fantastic Bay Area VP who lost her job because the team was moved to Denver by the acquiring PE firm and she said no thank you (even though the severance was pathetically small).

A person may lose their job because they were in the wrong job in the first place: the job was simply not a good fit for their skills and it’s a shame they, and the hiring manager, did not figure that out up front. This is a great opportunity to get feedback, get coaching about where the fit would be better, maybe make an inventory of skills and satisfaction and figure out a slightly different career (see my blog post on this here).

I’ve seen great sales people fail, and get fired, because they switched industry and, without a deep knowledge of the product they are selling, they never quite grok the new sales process well enough to make quota, but they are still great sales people.

Sometimes people get fired because they challenge their boss to a point where the boss feels threatened. If you work for a weak manager this is always a risk, so find a strong person to work for. This happens to senior executives who go over their bosses heads to the CEO, or even to the board. If you find yourself in this situation don’t be naïve. Know that if you lose faith in your boss (or know they are doing something really wrong and won’t listen to you) and go over his or her head there is a 90% probability you’ll lose your job. Even bona fide whistle blowers lose their jobs in most cases.

You can even sometimes see executives lose their jobs because someone has to be sacrificed (to the SEC, or major investors) and the board is not willing to let the CEO take the fall. Yes, this happens.

And then we have the whole recent crop of media moguls, executives and CEOs who have been fired for breaching some part of the sexual harassment code of the company. What’s fascinating, and worrying, about this trend is we have the whole spectrum from the ghastly Harvey Weinstein to CEOs being fired for having a relationship which breaches the company’s rule for relationships within the company, to  “code of conduct” reasons where the company does not say why (but they say in their press release that it is unrelated to the business). My biggest worry about boards acting as judge and jury on sexual harassment cases (oversight of which is loooooong overdue, trust me) is that we could get a backlash and future serious cases of harassment will get ignored. If the #metoo movement sticks and creates permanent change that’s a good thing, but with most board members still being male (and too often not wanting to deal with harassment issues that come up) I do hope boards don’t get bored and stop paying attention because too many marginal cases come up.

So how to think about it if you have been let go? Unless you have done something really wrong like steal from the company or sexually harass a coworker or let a customer down through your own negligence or missed days of work and then shown up high as a kite (all of which I have fired people for) then your “firing” has little to do with your worth as a professional or a human being. It has to do with your fit in the job you found yourself in, or the circumstances of the company. So you are still great. Don’t let being fired cause you to doubt it.

Photo: Musée de Cluny, Paris © 2018 Penny Herscher

Career Advice

How does your investor make money?

So you want someone to give you $100,000? $1,000,000? How does that person or firm make money?

Too often I review business plans which have a great idea, a huge market, but no viable business plan that explains how the investor makes a return. I saw two this week like this (one in the US, one in Israel). Terrific technology ideas, potentially large markets, enthusiastic smart young teams but no P&L, no future financial plan and no discussion of current valuation, or even readiness to discuss it.

Before someone other than your friends and family will give you a useful amount of money they are going to want to know how much return they are going to make, and over what period of time. Unless you are a former founder with an amazing track record, or flat out lucky (and you can’t plan for luck) you will need to be able to explain the following:

  • what the size of the market is for your idea – who buys what/when/why
  • how you bring your idea to that market and how much money you make over time (your best stab at your P&L over the next 3-5 years)
  • what your idea/prototype/beta is worth now (i.e. if you want to raise $1M and you only want to give away 10% of your company then you have to justify why your current company is worth $10M today)
  • how the value of your company grows over time and possible exits – why is it IPOable at some future date or who might buy it?

You don’t necessarily have to have slides for all of this because the first thing you need to do is hook an investor on your idea but if they bite and start to ask how you see your revenue and value developing you’d better have enough of an answer to get into a good discussion. Don’t be intimidated. Remember the investor does not know more than you do about your idea (even if they act as if they do), and whatever you say will not be what happens (reality has a way of messing with even the very best of plans) but you need to have thought about how you’ll make money and be able to engage the potential investor in a discussion.

Eventually you’ll need to be able to make the argument for how revenue grows, how much cash you need to get to cash flow breakeven (i.e. self sustainable) and what the company will be worth in the future when you do. And the great VCs, if they are intrigued, will then dig in and help you figure out your first business plan and how to value your initial round.

Photo: Dante’s tomb, Ravenna Italy © 2018 Penny Herscher

Career Advice

Managing the switchbacks of your career

A successful career is rarely a straight line up the slope. It is so often a weaving up through experiences and it’s important to recognize how and when to weave.

I did a coaching session yesterday where just this question came up. This time the individual had years of engineering, both as a stellar software engineer and also as a manager and can feel he wants to do more – can do more – and knows he needs to broaden his skillset.

I have a handful of principles which can be helpful when you are wanting to grow and create more upward momentum in your career:

  1. Make sure you are in a critical path for the company (and this will vary by industry). For tech companies success hinges on sales (revenue and cash) and product. In, and in-between, these functions there will be a number of critical roles and projects. These could be supporting the top customers, could be developing a handful of critical new relationships, could be bringing a new product to market. Learn what these are and which would be i) new to you, ii) challenging for you and iii) valuable to the company.
  2. Make sure you advocate for a new position you can be successful at if you work hard and learn fast (which I assume you would!). It’s important that you succeed in each role you take on even if it’s a bit rocky as you come up the learning curve. It’s OK to make short term tactical mistakes in your career, it’s not OK to make strategic ones.
  3. Stay visible. In some companies a tour away from HQ is truly valued but in others it may be the kiss of death for future promotion because you are out of sight and out of mind. If you do decide to step away from HQ to stretch yourself – for example to China or DC – agree on a time frame with your management (e.g. 2 years) and be sure to discuss what you would be eligible for when you come back, but before you go.
  4. Be aggressive – that you are very focused on personal growth – but humble  – that you know you have a lot to learn. I’ve had too many engineers tell me they know they’d be good in sales while massively underestimating how truly skilled great sales people are, and too many sales people sure they can do marketing (better than marketing is doing it) with no comprehension of what it takes. If you have not worked in a job I guarantee you underestimate it, so be humble.
  5. Be direct. It’s rare, especially in small companies, that your executives are sitting around thinking about taking risk with you to broaden your career outside of what’s immediately expedient for them so don’t beat around the bush.

If you’ve been in the same role for 3 years look up, and across, and consider stretching yourself in to a new role – unless this is truly what you want to do for the rest of your working life.

Photo: From the garden of La Foce in Tuscany © 2012 Penny Herscher