Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at email@example.com.
Q. I’m worried about one of the companies in our portfolio. The business is doing very well, but the company is getting slammed by the press for its culture. I’ve tried to call attention to this issue, but it’s still not fixed. Given your years of board experience, I was hoping you would have some guidance.
–Investor and Board Member
Dear Board Member,
It sounds like a tough situation. It’s hard when you are seeing unseemly behavior. It’s especially hard when you’ve called it out, it’s been ignored, and now has become a public issue.
I’m sorry that your warnings have gone unheeded. First, it’s a sign that they don’t respond well to feedback and a signal that they are reluctant to follow good advice. Second, an ongoing issue like this will have real ramifications—including an impact on hiring and shareholder value. The truth is this will end up preventing the company from living up to its full potential. Regardless of the fact that they have not listened in the past, it is still your job to get through to them now. You are on the board and you need to continue to try to make the behavior stop.
I’m hopeful that since the issue has been more broadly exposed it will be addressed more seriously. I always advise companies to look at every decision and action they make as something that could be on the front page of The New York Times. Would shining a spotlight on it make them proud? Or embarrassed? Another exercise I suggest is to imagine your mother sees everything that you do—would she be pleased? Would you? Now that this is out in the open, perhaps they will be more responsive to making meaningful changes.
When you next discuss this issue with the founders—even if you are rightfully annoyed—I would urge you to listen first. This is not a time to pile on and make accusations. Sort out any of the emotion and defensiveness so you can get to the facts, and more importantly, get to the behavior change needed to get back to making the company great.
To move ahead, I suggest they hire someone to do an independent review and that person report to the independent directors. This will help to surface the issue from unbiased parties and give concrete recommendations on what to do to move forward.