Building an Executive Team from Scratch in a Growing Startup

Your company cannot begin to grow unless you have built a team.


It doesn’t matter how strong an idea you have, how committed you are, or how many hours you are putting in. It really doesn’t:


Because a startup cannot grow over the founder’s shoulders alone.


Because eventually, the fate of every startup (hoping to turn into a growth company) rests on the shoulders of the team you have built.


Build a team of people who have the required skill set, who can deliver what you are looking for, and who are more experienced than you who can empower you. As a founder you must forget the idea of wading your way through the growth landscape on your own and learning along the way.


Generational Gap and the Myth of Team Learning


Startups often fall into the trap of empowered learning i.e. believing that they (the founders or the original team) can outgrow themselves at every stage of the growth phase. As a consequence, they hire people who they believe will learn and be trained to do a great job tomorrow. Hence, they waste energy and effort into creating a resource.


Empowered learning is a trap, primarily because the task of a growth company is to aggressively overtake market opportunities, and in the process scale its management and systems, restructure its organizational model, and re-establish a new company culture.


Plus, all that you are hoping to learn on your own (mostly hoping to avoid delegating responsibilities and/or leadership to a better person), is already available in the form of hard-learned wisdom of experienced people, and mentors. In the world of growth companies, you do not get a generational gap when it comes to mentoring and leading startups into the growth phase.


Hence, my first advice: Avoid wasting your time, efforts, and finances, on your amazing idea — on your own, or with the aid of a lousy team.


Build a team of executives, from scratch. By doing this, you can dramatically reduce your time to arrival at your expected destination.


This post is about aiding you build from scratch a team of executives capable of handling the complex territory into which your growth company is moving into, or you want to move into. Here’s a 5-tier plan for putting together your executive team:

  1. Figure out roles
  2. Recruit
  3. Measure performance / quality of team
  4. Identify gaps
  5. Debate the right structure


Let’s get started shall we?

Figuring Out Roles and Positions


When it comes time to hire an executive team, there are certain roles that you have to find the right people. Here are three prime roles you should be scouting:


Chief Executive Officer (CEO) — The two facts of the matter are: that the CEO is the boss of everyone and is responsible for everything, and that Founders cannot always be the CEO as the startup moves into the growth phase.


If you’re mired in the day-to-day details of the business and can’t yourself out, then you know you need a professional CEO. A CEO thinks about where the organization is going, where it has to go, and hence the people and processes that are needed to get it there while wading through the current market.



Chief Financial Officer (CFO) — CFO is the guy that handles the money. She/he creates your budgets and develops financing strategies so you can stop moping about not getting the latest upgrade on your servers. The CFO is that bad guy busy figuring out the most profitable products, business lines, and target audience to get that server upgrade next year. Avoid wasting your money, try moping, and hire the right CFO.


Chief Marketing Officer (CMO) — If you haven’t noticed yet, many startup battles are battle of marketing. As a result, many startup strategies are hinging on their marketing strategies. Hence, if your business’s success depends primarily on marketing, then you need to hire a CMO — the guy who owns the marketing strategy (and at times the sales strategy), and overlooks its implementation.


Mike Zammuto Meeting

CEO Michael Zammuto leading an internal meeting at Reputation Changer in West Chester, PA in 2013

The Required Skill-sets


One of the biggest mistakes startup founders make is that they assume that a title comes with self-explanatory job descriptions. You might think that it would be pretty self-explanatory that a Chief Marketing Officer should be a person would be someone with strong marketing skills. The job description varies from industry to industry and business to business e.g. B2C vs. B2B, marketing vehicles, etc.


It is your job to make sure that you are hiring someone who has (first and foremost) experience in successfully scaling up a business in your category (budget, tactics, etc.), and secondly has a deep knowledge of your specific industry.


Past Startup Experience

Know your budget, and hire accordingly. An experienced CMO who has had experience in scaling/leading a company with a $2 billion budget is highly unlikely to be able to lead a start-up with a budget $10 million.


A person involved with building big brands may not see organic and guerilla tactics (take viral as an example), and various low-budget engagement marketing opportunities (e.g. SEO, social media, responsiveness) in as bright a light as the SME niche might be seeing. She/he is also highly unlikely to make them as a major part of their marketing strategy.


You should be looking for someone who has demonstrated past success in leading early-stage businesses, operated a budget “on fumes”, and lead it from an “acorn into an oak”.


A Shared Vision


You are hiring someone to aid your startup achieve its goals founded on a vision for your business. You may be grateful to them for expanding that vision, but not changing it or creating frictions as your startup starts to scale. The growth phase is known to be tumultuous and the last thing you want on your plate are executives bent on leading the company in a completely different direction.


Hence, an equally important trait you should be looking for is that each member of your team shares a consistent vision on exactly what you are building. This ranges from the target market, and target audience, to the market dynamics you are hoping to engender through your startup.

Personality Fit With Team


Accept it, deny it, hide it, or try to make it as politically correct as we may, the truth of the matter is that startups are a 24/7 job.


So, you are going to be spending a lot of time with the team you have hired. This makes it critical that you find a candidate who has a good personality fit between the team. You seriously don’t want someone who gets on your nerves late into the night, or worse someone with whom nobody wants to work with.

You’re trying to win a startup race. You seriously don’t have time to work around this issue.


Surround Yourself with Mentors


Surround yourself with individuals who are much more experienced than yourself. It is important that you hire people who would empower you and the company to dramatically grow and succeed.


Here’s the deal: identify the people which you believe have (and can give you) what you need. Reach out to them, or gain an introduction and invite them to coffee or a lunch. On the occasion, briefly explain to them what you are doing, and ask them relevant questions. Once the conversation is over, ask them for a another follow-up meeting after 2-3 months.


Follow up, and you will automatically fall in the select few who have ever done that, and as a result would have shown them that you are interested in the matter.


Conclusion — The Importance Of Quickly Letting People Go


I’ve already discussed the importance of employing topgrading as an essential hiring device for the executives, but once again, nothing is more detrimental to the cohesion and optimal working go your team if people aren’t working at top performance.


Hence, it is important for you to keep the strategic vision of the company in check by continuously grading them with feedback, frequent job performance appraisals and immediate and proactive response in case someone is not working up to par with the performance needed of them — in a phrase let them go.


In the end, while you are building this team, remember that to be empowered, you yourself have to acquire a practical and growth oriented attitude — a defining character allowing you to make the decisions required of you. (Here is a good starting point for this: HBR’s article on Building Personal Character.)


I wish you all the best!

Why a Stint at a Large Tech Firm Can Make You a Better Startup Exec (from my time @ Microsoft)

What are the traits of a successful startup executive?


Here are my top picks:

  1. Bold. Adaptable. Lifelong learners.
  2. Culture builders. Great Executers. Great Hirers. Superb Firers.
  3. Passionate. Great Communicators. Team Builders.


1, 2, or 3, or all of them combined?


Whichever road you choose, the next question will always be the same: how do you become one?


It’s the question that a lot of younglings (graduates), new entrepreneurs, and people planning to become startup executives ask themselves, and experienced and successful startup executives. The answers can be divided into two primary camps:


  1. Joining a startup, and wading through birthing hell to understand the problems and realize opportunities firsthand
  2. Joining a large tech firm and gaining experience and building connections in its talent’ network pool


Andy Rachleff informs us of a mid path. He literally advises the younglings to join mid-sized private companies. However, I will not be going in that direction. And though I’d rather not conclude so early, I do believe that one should not learn how a startup culture is built by being part of a startup. It be learned, but it’s too formulaic. It curses one, forevermore, to finding the right formula for success instead of consistently evolving and testing and rebuilding the business model and organizational structure as they progress ahead.


On the other hand, I believe that a stint at a large, established firm is sure to bring you face to face with the reality of how to handle the top end — managing people, allocating talent, boosting morale, staying abreast of market changes, and keeping teams together. I believe “culture” will always remain something that you will have to found again at every new startup.


So without further ado, here’ what I had learned at my stint at Microsoft, and how it has shaped my executive career ever since.


It taught me to take action without discussions


The first aspect of management I learned was a lesson in management hierarchy. I found that involving others is not always the best job. I saw people and teams get stuck into what I’d call the think-tank loop. Everybody pitches in an idea and everyone wants to find the problem with it, you know, “be sure” that it is the perfect idea for the business.


It’s overly cautious, and it gets you nowhere.


You’ll always be taking a pilgrimage around the team leads, the department head, and other managers to get the big O.K.


If you really want to do something, then you have to take the action, believing that it is the right thing to do. I mean if you don’t make a complete ass of yourself from time to time, you’re either not doing anything or doing something seriously wrong. In hindsight, I realize how each of those teams (those that progressed and those that died out) was nothing less than a startup in their own right. I have already written on building startups for scaling, where I consider each team as a small startup, and now I caution people to be cautious of this attitude.


At a large firm, you have more leverage for taking bold (albeit thoughtful and reasonably calculated) decisions. Given that these firms are highly dependent on innovation, you have a higher chance of breaking through the chaos and leading something with backing of the entire structure. All the more training to work on the model and build a team to pad your decisions.


Allow, Nay! Value Screw Ups


The next lesson I learned was how to react to screw ups. I saw people getting worked up over small things and as a result made everyone in their team cautious. In hindsight, I see that many of those “mistakes” had no bearing in the next 5 years. It taught me to separate the things I don’t need to care about and the things that really need my attention.


I mean, unless employees are breaking things, or trying to bend the rules, how do you expect them to back your strategic and risk-laden decisions? How will they grow? How will the company grow if everyone would just stick to what they know?


It taught me to know when it was time to leave a big firm. Let me share it with you too: If the place where you’re working with has pin drop silence in meetings; if everyone is afraid making mistakes, and If the manager is too focused to bring your smallest of transgressions in your performance review, leave. Leave and find a different firm for your stint.


Being Proactively Engaged



You have to gain the trust and respect of your team. But how do you measure it? By your level of engagement.


Look for people who are seeking you out.


If they are not doing so constantly — ranging from discussing problem and ideas, or seeking things from you — then something’s a miss. The corollary from this is that you need to be engaged in all key aspects — ranging from checking mailing lists, the latest builds, and more.


You have to be proactive, because unless you’re plugged in, or turn away people seeking you out, don’t expect to be involved when the key decisions are being made. One way of being proactive is through part timing.




One of the best things about the culture at Microsoft was that one could try doing a different job for a while, all the time. It was quite easy to be a part-time Program Manager, or a part-time developer. People always love all the help you can give them.


Executives need to realize that the best way of tapping into someone’s potential is by letting them give a try to something they want to do. That they believe they want to do. Give them chances, yes multiple times. Give them some leverage, allow them to build onto their skills. Shooting them from the first miss-go will not only re-enact the cautious atmosphere in the office, it will also demoralize your resource pool.


Keep Trying Out Stuff


The tech industry is one that changes every few years or so. Hence, the worst thing an executive can do is to not keep up with the latest changes and let themselves stagnate.


I’m not saying you need to have your smartphone buzzing with apps, or have profiles on every new social networking site. I’m saying that you should be playing with whatever is receiving attention and is popular. Get the gist of it. Discuss possibilities for its use, and the like.



Let People Know


Executives have consistently underestimated the value of letting someone know that you appreciate what they’ve done. Praise them in public, and in case you have an issue with someone’s attitude and performance, have the conversation behind closed doors.


A little email goes a long way in making everyone happy, and a Public Display of Disappointment (PDD, for humor’s sake) can sink your talent pool like a flush tank.



In Conclusion — Don’t expect everyone to be passionate about the Organizational Goals


Executives are tasked with leading the company, strategically. That means they always have to see ahead (the bigger picture). It’s like dreaming; new possibilities may arise and appear, and causing waves of enthusiasm, which coincidently and unfortunately cannot be all shared with everyone else. And everyone else (the majority) is most likely to have other priorities from life — other than creating a better product or putting in the extra effort to eke out that small flourish in the product.

In the end, your career at a startup comes down to you knowing, working with, and dealing with the right people. Because remember, you have to scale the startup into a growth company, and that won’t happen if you have no idea, or have never experienced the culture and lifestyle of a company in its post-scaled years looks like, how to work with people in those circumstances, and how to lead them.






Who should work harder, the old or the young?

Maybe it is a sign of maturity (or simply aging) but I have a newfound respect for days off. There was a long period of time where I took minimal time off and tended to work through all of that. To be fair, there were times when I was in ‘startup mode’ where I clearly overdid it and it and acknowledge that it led to worse results not better. As my roles have become more strategic I realize that I need these periods to really think about the business and the team. I can also see the positive effects on our folks who need time off to recharge and prepare for the great sacrifices ahead.

Michael Zammuto headshot 2015

2015 Headshot for Michael Zammuto, internet and software executive.

But I do worry about the messages we send people earlier in their careers. Young, ambitious people need as many opportunities as possible to build skills and credibility. For these folks, I think a more rigorous schedule makes sense. I don’t think a lot of young people get the message that they should outwork their competition. I remember at most early stages in my career I would make it a goal to beat the boss to the office and stay until he/she was gone. This wasn’t a substitution of effort over efficiency so please don’t send me messages about working smarter. I am dedicated to that too. But as anyone who has read Malcolm Gladwell knows, effort is a critical part of success.

“Practice isn’t the thing you do once you’re good. It’s the thing you do that makes you good.”   – Malcolm Gladwell

So of course you should work smart. But never underestimate the need to gain as much experience as possible and that means working hard and working long. In fact, I would argue that a lot of skill building early in one’s career benefits most from trial, error and repetition. For executives the skillsets are different and they way you apply your skills are different. Being bogged down in repetitive, tactical execution is detrimental to successful leadership. So the main point I would argue is we should think about what drives the outcomes that makes us successful, acknowledge it changes as we change roles and adjust our work styles and schedule to get the best results. It isn’t sexy but the young do need to outwork the old.

“In fact, researchers have settled on what they believe is the magic number for true expertise: ten thousand hours.”   – Malcolm Gladwell

Re-Engineering HR [Part 2] — How to Manage Your Human Capital, Reduce Talent Gap, and Sustain Your Startup through the Growth Phases

Extensively Budget Training and Development

I’ve already discussed the inflation model for scaling businesses where scalability becomes intrinsic to your startup team. This involves continuously empowering your original team members through training and development programs, and utilizing all those newly instilled skills as abilities to complete various tasks, and as a result making them amenable to agility and mobility.

Mike Zammuto appearing on Varney and Company on behalf of Reputation Changer in 2013

Mike Zammuto appearing on Varney and Company on behalf of Reputation Changer in 2013

According to the WorldatWork report that surveyed 20 fast growth companies in the U.S’s West Coast, all surveyed leaders believed that offering training and development opportunities to their employees, decreased turnover rates, empowered them to take initiatives, and increase work engagement. These trainings (just to un-limit your budgets) also included sponsoring advanced degrees (Master’s and Ph.D.s) apart from work related skills such as customer service, new products, and technologies.

The simplest reason why training and development programs should be an integral part of your HR strategy is because you have to keep your talent pool market competitive.

BECAUSE, even in the ideal scenario where you have somehow recruited the most loyal talent in the world — one that would never leave your company no matter how stellar the deals are from other companies— their skill set would still become obsolete in a matter of years.

Training and development is crucial for building a flexible and prepared human capital, one that is cross-functional and can be deployed across your company.

Grow Inter-Organizational Career Opportunities

How long can you reasonably expect your top talent to find meaning, pride, and fulfillment from the same job description? Your top talent is looking for opportunities to exercise its talents, to break out, to create or build something on their own, to achieve something they can value, to lead, and more.

And they want to do them fast. Perhaps even now.

Unless you can offer them the fast career growth opportunities as you phase through growth stages, you will experience a talent drain. The most oft employed strategy is to offer accelerated careers proportional to the value these people bring to the table, and offer them new responsibilities and accountabilities. A cheat-strategy can be to consistently compare their growth with competitors (during review meetings perhaps) and demonstrate specifically how their growth at any level is several times faster than any other large competitors.

This obviously requires that you keep your top talent a step ahead of career-growth opportunities, as well as offer parallel career paths in managerial roles reflective of their experience and skill set.

Increase Communications

As leaders, your task is to communicate openly, constantly, and clearly. Integrate HR evaluations with company’s strategic goals and communicate them to the employees. Successful growth companies link messages by relying on their HR’s data. As a result, they are able to integrate the career demands of their employees with their business’s strategic goals.

Streamlining communication processes requires building a common medium for communication. Two common mediums include the intranet, and manager-employee face-to-face communication.


Another method of boosting talent retention for growing startups is by relying compensation methodologies in your HR department.

Pay for, and hence encourage, creativity and innovation. This results in an HR model that is based on, and pays strongly for performance/results. As a result, you’ll be encouraging poor performers to leave. A holistic and robust compensation strategy involves employing the following areas:

  • Paying Competitiveness
  • Cash Incentives and Variable Pay
  • Side Stepping Stock Options
  • Recognition
  • Benefits
  • Metrics and KPIs

Paying Competitiveness

Recruiting competitive talent is crucial to sustaining the often exponential growth of the company. When coupled with other career opportunities and training and development programs, it automatically increases retention rates. Monetary incentives for high performers allows your talent pool to dedicate efforts knowing that they will not only be recognized, but will also be rewarded and receive a monetary share for their efforts.

Cash Incentives and Variable Pay

Variable pay allows employees to leverage their contribution and added value to gain monetary recognition, and in turn increase productivity of your organization. Furthermore, variable pay and cash incentives are a great way to supplement your performance plan, and keep morale and retention high especially in case stock options run their course. Such incentives, when tied directly with performance metrics (individual, based on team performance, functional, or organization wide), are a great way of bonding people to the company and linking performance results.

Side Stepping Stock Options

A key issue in managing human-capital is that fact the non-scalability of stock options. The transition of the startup towards a full-fledged growth company is impacted by signing bonuses and non-bespoke stock options for a plethora of reasons. Some of the most common problems include:

  • The Reloading Dilemma — Often the best people leave the company to get new signing bonuses or because they’ve found better stock options at another company. This normally occurs because the HR does not realize that their original hiring package was based on the perceived value of the individual to the business, and not their current value
  • Unpredictability — Then again, many leave because they are not confident if the company will be able to sustain its growth at its startup or current pace. It is a common occurrence that as the startup continues to grow, fewer stock options become available for the taking. Given that the value of the stock is dependent on market forces outside of company control, such as the general economic climate and overall performance of the market niche, unpredictability sets in as setbacks may occur.
  • Entitlement — Many high performers leave because of employees who had valuable stock options, and have (or are likely to become) become entitled during the course of the transition. Think of it as a “last straw condition” for your high performers.

The best course of action is to task your HR to plan mitigation strategy into your startup before it gears into the high growth phase. In case you already are moving into the growth phase, shifting the focus to better retention incentives through due recognition of contributions, additional benefits, and finding the right metrics and KPIs for reviewing performance and contributions.

Recognition Programs

Recognition becomes increasingly problematic as the startup scales into a growth company. However, establishing sound recognition programs is crucial to the success of the company. This is evident when one compares the WorldatWork reports from 2005 and 2013. The latest report on recognition titled “Trends in Employee Recognition” surveyed over 470 of its member respondents and found that 88 percent had robust recognition programs in place.

What I find interesting is the fact that the 2013 report included metrics for peer-to-peer programs and programs for motivating certain employee behavior. The 2005 report did not have considerations for either, pointing to the evolution of the industry.

The fact of the matter is that reward and recognition is becoming an integral part of the HR strategy, where rather than simply rewarding someone at the end of the year for achieving goals, the company simply makes incremental rewards throughout the year (think quarterly or bin annual reviews, appraisals, recognition, and/or rewards). The purpose of these recognition programs is to reward significant contributions, inventions, breakthroughs, unexpected contributions to income growth, new projects and clients, among others. This makes it easier for employees to reach their goals and receive higher rewards while motivating them to align their contributions with company goals.

Some of the most common recognition metrics include above-and-beyond performance, length of service, and the social component of peer-to-peer recognition and programs. All of this fits neatly with the current mobile society where employees can move within an organization, especially the social component of the recognition program that allows co-workers to know when an employee has received recognition.

In Conclusion — Facing the Challenges

I believe that the sustained growth of startups is highly dependent on how well the HR manages to scale its model for talent pool management and retention. The biggest challenge in this area, especially for the growth tech companies, is of defining the metrics and skills to measure the creativity, innovativeness, and contribution of its employees in terms of their impact on company’s performance and profitability.

Technologies continue to evolve, and the HR must continuously re-invent itself and consistently develop and test newer methodologies to engage the company’s talent pool and mitigate turnover rate.

Re-Engineering HR – Managing Your Human Capital in a Growth Company

The biggest challenge facing executives while scaling their startup into growth companies is managing their talent pool while suffering growth pains.


If you hope to remain ahead of the fast-growth curve, and tranquilize as much of the associated pain (and prevent the HR nightmare of a blow up or total meltdown) then here are my thoughts on the matter: completely re-engineer HR processes and systems.


It is crucial to making a smooth transition.


Chaotic Change — Problem at a Glance


You’ll have to abandon a lot of practices that worked for your initial startup stages, and replace them with new ones. Given that all the human capital practices and process have to play catch up with growth, you will be required to stabilize your workforce to one where you have more dedicated and “intra-preneurial” talent, ones who could be more creative and dedicated to the company goals. This should point to the need for changing the overall culture of the company and make growth intrinsic not only to the company but also of its talent pool (through personal development and career growth and opportunities).


I’m sure of one thing: It will be chaotic. Then again I’ve seen that during rapid growth, executives are more than willing to respond to changes, adapt to different challenges, and find opportunities that can move the company to a more sustained phase of growth.


The three crucial areas that I believe need consideration include your retention, reward, and compensation practices. Let’s start with the first round of primary growth oriented changes that have to be re-engineered in the HR department.


I’ll start changing your HR filtration system: its existing retention, hiring, and firing processes.




Be selective. Identify and retain people who are essential to your business’s strategic goals and business model.

MichaelZammutoFoxApp - Copy

Many leaders would have already realized that the startup strategy of relying on career gamblers, transient, and free agents is no longer effective. It worked during the startup phase because the recruitment strategy was (and it normally is) of getting people into the empty seats and getting the engine chugging productivity. Growth phase demands selective empowerment and elimination from the current talent pool, while recruiting talent for core competencies.


Retain dedicated high performers closest to the organization’s core competencies. The retention focus of the HR should be on talent that directly affects core competencies and core business processes. This can be followed by marketing and other technology based jobs. Your goal should be to prevent talent drain to other larger companies.


Talent will always be magnetized by the best deals in the industry, and unless you offer them something that adds value to their work, they will get pulled to the ones that offer them or at least give them the perception of offering those incentives.


I believe two fundamental leadership actions for developing a robust retention strategy include:


Leadership Action #1


Understand the fragile balance between the talent that stays or leaves in terms of total rewards, i.e. the total deal that your company is offering them, including the company culture, the work environment and people, leadership, the terms of pay, career growth and development opportunities, and of course how interesting and creative the work is. (I’ll address relevant strategy in the next section)


Leadership Action #2


Appreciate key talent. Make your employees feel valued for the value they bring to the company, their contribution, dedication, and hard work. Reiterate the processes that show them that they count and are included in the company’s future. (I’ll address retention strategies and total compensation as another model for growth oriented retention strategy in the second section)


Total Rewards — Growth Oriented HR Road Map


Leaders in the surveyed companies provided their approaches to the elements of an integrated total rewards strategy.


Six core elements to forming a robust retention strategy include:

  1. Employee Engagement
  2. Company Culture
  3. Improving Manager’s Role
  4. Training and Development
  5. Career Opportunities
  6. Communications


Increasing Employee Engagement


A targeted study sponsored by Achievers (Harvard Business School Review, 2013) shows that employee engagement as crucial factor in achieving overall organizational success. Incidentally, efficient productivity was rated on par with employee engagement whereas the ability to innovate ranked lower than either. The most impactful factors driving employee engagement includes:

  • Clear job descriptions
  • How employee’s work contributes to the overall strategy of the business
  • Recognition given to high performers
  • Continuous and effective communication from the senior leadership
  • Efficient and fair performance reviews
  • Pay and appraisals directly linked to corporate goals
  • Development and training programs linked with personal growth as well as linked to the corporate goals of the company, among others.


According to the 8th iteration of the Gallup Poll, increased employee engagement has direct bearing on the important growth KPIs, growth sustainability, and integrity of the business model. From the poll, the following eight factors experience significant improvement due to increased employee engagement:

  1. Turnover (for high-turnover and low-turnover organizations)
  2. Shrinkage (theft)
  3. Safety incidents
  4. Quality (defects)
  5. Profitability
  6. Productivity
  7. Customer ratings
  8. Absenteeism


Renewing Values, Creating a Growth Oriented Culture


Finding a common ground definition of organizational culture for growth oriented companies is fabulous. You won’t find single culture or definition that has worked for all organizations. Some common cultural models include:

  • Performance culture — that values high performers, contributors, and achievers
  • Success-oriented culture — that links business goals and success of the business with the reward system, rewarding core competencies and top-performing talents
  • Enabling culture — that relies on empowering people, growing their capacities, and encouraging new job roles
  • Focused culture — that keeps re-inventing its core competencies and business processes only,
  • Others — a whole post, for another time.


I believe that a growth oriented culture is an environment in where your team members can become owners of the business process i.e. they don’t have to wait for the CEO to be in the room to make a decision. I believe strong growth oriented cultures empower employees and makes them dedicated to the team in a different fashion. And for me, the two values that should be intrinsic to the growth culture as the startup is scaled include agility and mobility.

  • Agility — the commitment to rapidly respond to change in market and company’s objectives, and hence, to always remain ready for stepping outside of their comfort zones
  • Mobility — a commitment to company’ strategic goals, to remain un-rooted to a single job description, and have the flexibility to be deployed in various departments and teams according company needs.

I believe a culture based on agility and mobility will always value continuous empowerment of its talent pool, risk changes to job descriptions, realize their abilities, capacities, and passion, and empower them to take new roles in the organization.


Investing and risking time and effort in your organization’s culture is important, primarily because it has powerful momentum, one that overcome the shortcomings of your strategy, and beat better and more competitive strategies in the market — Every. Single. Time.


Improving Your Managers’ Role


“Employees leave managers, not companies”. I think we’ve heard it too often for a single lifetime. To give credit to it, I must say that it has had its impact, but still the fact of the matter is your manager still needs improvement. It involves improvement in leadership role and setting an example as a role model, training and coaching, and in their ability to direction for your business, engaging team members, and aligning their abilities with business objectives and strategic goals.


You have to make them accountable for talent retention, development, and motivation. And the only way you can do that is to reduce barriers to decision making by delegating greater administrative authority.


[Continued in Part 2]



5 Systems That Have Helped Me and Can Help Other Startup Execs Discipline Their Business



If academics are rearing to jump on a reference to Foucault’s “Discipline and Punish”, then now’s not a good time.


We know the market has moved out of its earlier discipline and punish model to a better (and less panoptic) model of management. Hence, in this post no harm was done, nor any punishment given to any theoretical business beings (except, well, some business practices).


Disciplining Businesses


Once the startup has reached into the “fun stage”, where customers start placing orders, executives face the herculean task of keeping their business under control. Since the business has gained a momentum of its own, and continues to run on the intake provided by the customers, it can start to move into unprecedented territories.


Unless the executives are able to leash it, chances of controlling the growing entity can dramatically grow thin.

MichaelZammutoDistDish - Copy

From my experience, 5-systems have proved beneficial in overcoming disciplining problems. I believe, they will prove helpful for other executives in the same boat. These five systems include:

  1. Balanced Scorecards
  2. Strategy Maps
  3. Strategic Job Families
  4. Top Grading
  5. Business Rhythms


Let’s see each in brief.


Balanced Scorecards (BSC)


The worst thing that executives often do is to hang their strategic plan as portraits, watching them every once a while during the quarter. It is crucial that executives establish a framework for placing all important KPIs into the right perspective and then measuring them accordingly.


The Balanced Score Board (BSB) transforms your strategic plan into an order churning machine for managers and employees on a daily basis.


Its power is often underestimated by considering it as merely a measurement system, but I’ve found it to be a complete management system capable of providing feedback for both internal business processes as well as external outcomes. It will allow you to continuously improve strategic performances and results.


The BSB forces us to view the organization from four perspectives (Financial, Customer, Business Processes, and Learning & Growth), and hence develop metrics, methods of collecting relevant data, and analyzing each perspective to figure how value is being created for the organization.


This is then communicated using Strategy Mapping (next).


Further Resources


Gain basic insights into the use of the Balanced Scoreboard, read “Using the Balanced Scorecard as a Strategic Management System” (Robert S. Kaplan and David P. Norton).


For a more fundamental understanding of the Balanced Scoreboard read Robert S. Kaplan’s original work “Conceptual Foundations of the Balanced Scoreboard” published in HBR (2010).


Strategy Maps


It is crucial to communicate the strategy of the organization, focus its efforts, and choose appropriate measures to report to an organization’s progress in implementing a strategy.


This is where Strategy Maps come in. They are a simple diagram that explicitly shows the cause-and-effect relationship between the four BSC objectives (Processes, Financial, Customer, and Growth & Learning). With this diagram, you can easily and thoroughly document the primary strategic goals being pursued by an organization or a management team.


They have allowed me to easily communicate strategies for the prime question “How we are to create long-term value for the shareholder?”


With a Strategy Map, the creation of shareholder value (the result in most cases) is exhaustively linked to organization’s core capabilities, innovation, organizational design, human resources, IT, connected learning, and processes, customer, and quality management. This graphic communication of the strategy among executives allows one to align resources for the successful implementation of strategy.


Further Resources


You can look up some examples of Strategy Mapping here.


Strategic Job Families


It’s never enough to populate the company with outstanding employees. Executives must use them effectively though good organizational design. This is where Strategic Job Families has arrived as a greater device for addressing workforce management.


Imagine being able to direct the organization’s strategy by knowing which positions will have the most direct impact on the execution of your strategy.


This would require making tough decisions quickly, e.g. releasing employees who don’t rise to the challenge. By creating strategic job families, executives are able to identify he positions which may be Entry level but prove essential to the strategic development of the organization. Examples include entry level positions such as book keepers etc.


A good method of doing this is to analyze organizational strategy, develop a list of selection criteria, and then ranking and scoring each position.


Further Resources


You can brush up on the technique from Peter Reilly’s paper published by Institute of Employment Studies.




“The fundamental driver of shareholder value is the talent of everyone in the organization on whom you rely to implement your business strategies.” — Such is the recurrent Wisdom of Executives.


All of us realize that our strategies will become a wasteland if we are not able to hire and retain high performers for our organization. As an executive, we are tasked with developing a team of A players for every position in your organization. This is where topgrading comes in.


Topgrading, in simple terms, is the practice of first collecting, and then empowering, the highest quality workforce. This is done by proactively seeking out and employing the most talented people available — while redeploying employees showing lesser ability or performance.


Topgrading allows this by ensuring that talent acquisition and management processes are solely focused on identifying, hiring, promoting, and then retaining top people. It also allows you to easily coach and empower the right people in the strategic positions.


I’ve found it to be the best device for promoting the right people, in the most strategic positions. And from experience, I’ve seen that organizations that topgrade are able to drive improvements or changes in core strategic value drivers including time to market, quality, innovation, productivity, customer service, etc. These organizations continued to show growth and success because they have the most competent employees in all job families.


Further Resources


Read the original piece describing the practice in a thorough problem-solution oriented manner here.


Business Rhythms


Predictability is the essence of sustainable business activity. As an executive, it is strategically essential that you are able to keep all aspects of the organization predictable, and hence achieve a unique business rhythm.


This can be spread over 4 different areas:

  1. Vision — A preferable future that is consistently tested over time in face of new perspectives, and evolves. The clearer it is, and more connected it is with individual team members, the more rhythmic it becomes for them to work towards it.
  2. Achievements — By strategically defining milestones and goals, and consistently achieving them, you create a sense of purpose, identity, dignity, and confidence. This is only possible by creating a simultaneous rhythm between defining, tracking, measuring, and adjusting your goals.
  3. Meetings — A boon to productivity if they are not rhythmic in their recurrence, focus, engagement, and the decision orientedness.
  4. Growth and Learning — Unless you are able to coach, empower, and aid employees in re-inventing themselves and continuously upping their capacities, you fail to create a rhythm for learning and hence growth. Learning corporations are the future, or haven’t you heard it yet?



Balanced Scorecards, Strategy Maps, Strategic Job Families, Top Grading, and Business Rhythms have been the weapons of choice for me to handle and discipline businesses over the years. If you have been employing others, feel free to share!

Back in the startup game…shhh mode

I love being parts of great teams starting and building businesses. For the last 2 years I helped launch and its news media platform. That company is doing great and solves major problems for publishers and marketers alike. We built a great management team who have great technology and a proven business model and it is in great hands. So it is time for me to move on to a new passion. was about reaching people all around the world with content. It was focused on the premise that the way brands communicate and the way reporters source stories was not taking advantage of the internet, network effect and new business models.

MichaelZammuto2013Carolina - Copy

Another long-term passion is globalizing commerce. Within many markets, ecommerce has revolutionized how consumers gain knowledge, make decisions and purchase goods and services. But, on a global scale, ecommerce has become a complex patchwork of inconsistent solutions that limits the collaborative and scale benefits of the internet. My new company Cloud Commerce is dedicated to addressing that need.

I will publish more when I can but what is great is the fun and excitement of starting with a blank slate and I am happy to have another chance to do that.

The Rise of Digital Natives has a great team that includes Boomers, Gen X and Millennials and it is great to see how they all mesh together and complement each other. I have been very interested in ‘Generation Z’ and it was highlighted last week when one of my kids told me that her favorite band is Nirvana.

My oldest was the first place I heard about Instragram when I asked her several years ago why she had not asked me to let her get a Facebook account. She told me that she wasn’t interested in Facebook and introduced me to Instagram well before the big buyout. Since then I have really looked to my kids to understand digital culture.

So when Nirvana came up I was interested to learn more. Curt Cobain dies when I was 2 years out of undergrad. The interesting story here is not nostalgia or even a band from your youth coming around as a hip, retro experience. What is interesting is a generation who never knew a time when all the world’s information was online and when you could sample all the world’s content largely for free. Of all those limitless choices does this mean her choosing Nirvana makes her a new type of consumer? I think it does. Where I use the tools she doesn’t know anything else and that gives her and her generation a different vantage point to view information and decision making.

Michael Zammuto on the best and worst in automotive branding

Philadelphia, Pennsylvania, October 10, 2013—

Most consumers know full well that some auto brands are more reliable, better-designed, or simply more attractive than others—and according to Michael Zammuto, the realities of auto branding are rich with implications for the car industry. To illustrate his point, Michael Zammuto highlights a recent report from 24/7 Wall Street, which comments on the fact that some auto brands are simply more appealing than others—and that the more appealing the brand, the more money consumers are willing to part with. Zammuto has issued a new statement to the press, weighing in on the report.

According to 24/7 Wall Street, “consumers know what matters,” when it comes to vehicle brands, “and vote with their wallets. A more appealing car commands a higher price, sells more quickly and develops customers who are loyal to the brand. Cars with low score tend to do worse in these areas.”

The article goes on to cite evidence from a recent J.D Power survey, which seeks to evaluate consumer opinions of various auto brands on the basis of design, performance, features, style, and comfort. The measures add up to provide the car’s score for the Automotive Performance, Execution, and Layout (APEAL) report for 2013.

“The important point that this article makes is that these scores are not just matters of vanity, and they are not some meaningless marketing drivel,” Michael Zammuto explains. “The cars that enjoy the best public perception, in these categories, sell for much higher prices. Cars that are ranked lower do not sell nearly as well. The perception of a brand directly impacts bottom-line sales figures.”

“Many of the car brands with lower APEAL are struggling in the U.S. auto market,” the article confirms. “Nationally, sales are up by 7.5 [percent] this year, compared to the same period in 2012. Of the 10 brands with the lowest APEAL scores, eight grew at a slower rate or had
Expert Michael Zammuto Weighs in on Auto Industry’s Need for Better Branding Page 2

declining sales.”

According to the report, the cars with the worst brand APEAL include Smart, Mitsubishi, Subaru, Jeep, and Mazda. The runners up for this dubious distinction include GMC, Chrysler, Fiat, Scion, and Toyota. “This last one is surely experiencing residual effects from its fairly recent product recalls,” offers Zammuto.

Zammuto then turns his attention to the question of what these companies can do to improve their public image. “First and foremost, these auto makers need to understand that the public consensus is very much against them, and that they are faced with some serious reputational woes that demand total brand overhauls,” he says. “These companies need to develop brand identities that speak to quality, trustworthiness, and style, and then inundate consumers with this new brand message.”

The best approach, Zammuto says, would be for these auto brands to enlist the services of a professional reputation management company. “Our company,, is really in the business of building brands,” he says. “We have the tools and the strategies that can bring new brand equity to auto brands like these.”

Michael Zammuto is the president of, and a leading figure in online reputation defense.


Michael Zammuto is the President and COO of, and as such he is one of the most public advocates for the online reputation management industry. An award-winning technology entrepreneur, Zammuto has successfully launched and led numerous thriving online startups. His previous career experience includes work with ChaCha and Ontario Systems, among other companies.

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