During times of difficulty, company founders may be inclined to downplay drama and gloss over problems when communicating with their boards. This temptation is a misstep, says Gainsight* CEO Nick Mehta. In the final installment of a four-part video mini-series, Mehta and Roger Lee, a general partner at Battery Ventures, consider how “radical transparency” in the board/CEO relationship can be a recipe for success.
To run a company, you have to believe in it. In his own words, Mehta “bleeds Gainsight and customer success.” (Gainsight sells a customer-success software platform.) And yet founders must also accept that challenges will inevitably occur in any business. With this in mind, Mehta makes the case that CEOs can’t let obstacles detract from long-term confidence. Acknowledging challenges doesn’t mean you don’t believe in the end goal; rather, you are being realistic about the path forward.
It can be hard to openly and transparently address flaws, as there is a fear that doing so may lead board members to question the abilities and talents of the leadership team. But by admitting flaws, says Mehta, management can help the board have more confidence in executives’ ability to confront problems, and ultimately solve them.
Lee illuminates this dynamic by sharing the story of a board meeting at which Mehta used his penchant for truth-telling to ultimately sway the board to his side. The board was pressing Mehta to have more “swagger and gravitas” in his public appearances as CEO. According to Lee, this was bad feedback, as Mehta’s style was actually very effective. “Nick just needs to be Nick,” Lee said.
Mehta responded to the board’s criticisms by going off-script and defending who he was as a CEO. It was this moment of authentic and honest interaction that eventually led to the board embracing his leadership style. For Mehta, a commitment to open and “radically transparent” communication is the most effective way to gain the full trust of the board. For startup CEOs, honesty may indeed be the best policy.
The other videos in the series are available here:
- Marriage, VC-style: How One VC and One Software CEO Make it All Work
- Board Dynamics 101: Perspectives from A VC and Founder Duo
- Together in the Trenches: Managing Challenges in a Founder/VC Partnership