Lessons from scaling Stripe | Claire Hughes Johnson (ex-COO of Stripe)

Claire Hughes Johnson (00:00:00):

What I say to people at Stripe... In our onboarding, I used to run a session. I was like, "If you're not sure who the decision maker is, one, it's probably you. And I'd rather you act that way than not because you're going to like slow the whole company down. Follow a process and get it done, and don't forget to actually make a decision. And if you don't know who the decision maker is and you're worried it's not, you just ask. Don't get stuck." Too many people get stuck and it makes your work terrible, right? What do we all care about? Progress, impact, momentum. If anything I would say about advice to people generally is be a force for positive momentum and it will be actually a real career maker.

Lenny (00:00:50):

Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today, my guest is Claire Hughes Johnson. Claire was most recently chief operating officer at Stripe for the past seven years, where she helped scale them from a small startup to the legendary company that it is today. Before that, she spent about 10 years at Google where she was VP of self-driving cars, VP of global online sales, director of sales and ops for Gmail, YouTube, Google Apps, and AdWords. Before that, she was in politics. She's also on the board of HubSpot and the Atlantic. And this week, she's releasing an incredible book called Scaling People, which in my opinion should be and likely will be on every founder's bookshelf. In our conversation, we dig into many of the meaty topics that her book covers, including building your operational cadence, defining your company and personal operating principles, your company's operating system.

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Also, tons of tactical advice around saying things that you cannot say, building self-awareness, distinguishing management from leadership, so much more. I say this a couple times in our conversation. If you enjoyed my newsletter and podcast and the fact that it's very tactical and full of templates and frameworks, you'll love Claire's book, and you'll love learning from Claire. I had such a good time chatting with Claire, and I know you'll learn a lot from this conversation. With that, I bring you Claire Hughes Johnson after a short word from our wonderful sponsors.

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Claire, welcome to the podcast.

Claire Hughes Johnson (00:04:49):

Thank you, Lenny.

Lenny (00:04:51):

So you wrote this book. It's called Scaling People. It's coming out this week. I actually read a preview copy, and it's incredible. Everyone listening to this should buy it, especially if you're a fan of this podcast. It's full of frameworks and templates and guides and all these things that I try to do with my newsletter and podcast. And so if you like what I do, you're going to love this book. And I can't imagine how much work it must have taken to write a book like this. So my first question just have relieved are you that you're done with this book and you can move on with your life?

Claire Hughes Johnson (00:05:21):

I am so relieved, Lenny. Writing this book was not my idea. Patrick and John Collison, Stripe's co-founders, really sort of pushed me into it. And I'm glad they did. I will admit that, as I am with most things they pushed me into, but it was a lot more work than I thought it would be, and it's very rewarding to have it done. Of course, though I've been re-looking at it and realizing there are things I want to add information or tweak what I originally said, but maybe we'll have to do a second edition. We'll see.

Lenny (00:05:55):

That's the benefit of a newsletter. I can just edit things and they're immediately live.

Claire Hughes Johnson (00:05:59):

Yes.

Lenny (00:06:01):

I want to talk about John and Patrick a little bit. But before that, something I wanted to ask is I find that when I write stuff, I am able to better understand and crystallize my own thinking. And I'm curious, having written this book, what is it that you were able to better understand and crystallize in your own thinking through that process?

Claire Hughes Johnson (00:06:20):

It's true, and it's funny, because if you asked me, I would've said I crystallize more by talking and speaking. But whenever I do write something down, I'm glad I did. So I probably do more crystallizing by writing than I would admit, but maybe I'm just lazy and I just like to talk. There's a part of the book, I think it's toward the end of the third chapter, which is about hiring, and that's a really long chapter. Turns out I had a lot to say about hiring and hiring leaders and processes and what you need want to set up. And as I got toward the end of the chapter, I found myself saying to the reader... You maybe have read this and thought, is she for real? You need to do all this work? You need to put all of this in? And I had to say, well, look... I started the chapter saying, if you believe that talent is everything, then your hiring process is everything.

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And so yes, you do need to put that work in. But I think, Lenny, to your point, when you see all the templates and the frameworks and the examples and the advice from my career... And I was at Google for almost 11 years, I joined Google when it was about 1800 people pre IPO and left when it was about 60,000. I had eight different jobs while I was there. And then joining Stripe when it was about 160 people, and now we're over 7,000 people. Yeah, I have a lot of examples, but really what's crystallized is how much work it is to build, to build a company. You know this. And I hope this book is a bit of a shortcut, but there are no shortcuts. I hope it will accelerate people's knowledge so that they can get down to work with our product and with our customers.

Lenny (00:07:58):

There's a story you share at the end of the book, I think it's in acknowledgements, about how people went and took John Collison out for dinner and were just picking his brain, and "How did you scale Stripe? How did you build this amazing machine of a company?" And he often came back from these dinners, and he's just like, "Claire, they just want to talk to you. You did all these things, not me." And it sounds like that kind of encouraged you to write things down, and then led to this book. One, is that true? And then two, I'm curious, what else did you learn from John and Patrick Collison that have stuck with you? I imagine there's a lot, but kind of what stands out?

Claire Hughes Johnson (00:08:31):

Yeah, no, absolutely. I think it is true that at Stripe, we're fortunate where we have so many users, customers who are themselves founders or interesting companies growing up around the world, whether at scale like Amazon or scaling. I've spent time with Discord and Toast and all kinds of interesting companies that are growing up around us. And a lot of their questions are not necessarily about Stripe's products always. They're really about, "Well, how do you guys do this thing?" Or "We're having this challenge. Are you having this challenge?" And John, yeah, would often come back from trips. He would travel more, and he is often probably meets with more customers than anyone in the Stripe leadership team, maybe other than our sales leaders. And they would ask about scaling, and he would joke. He's like, "We need Claire in a box." So I think the book is Claire in a box, I guess.

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But Patrick also would have that same experience. And when I contributed a chapter to Elad Gil's High Growth Handbook, even though if you look at High Growth Handbook, which I also really do recommend not just because I'm in it, I'm probably the least, I don't know, celebrity participant in his chapters, and my chapter got a lot of traction because I think it was very specific. It was very tactical. And Elad actually helped me to realize, look, examples and details and frameworks, my working with Claire document is in there, is like... He said it's catnip. And I think that is also what inspired Patrick to push me to do basically a longer version of that chapter that I did with Elad. But I've learned a lot from both of them. I used to think that I was... My parents are teachers, Lenny. I used to think I was very curious, and I'm a learner and I'll seek out information.

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And I grew up in a very educatory environment, right? Well, once I met the Collisons, the two of them are huge sponges, seeking out knowledge constantly. But also, anytime we were confronted with anything, even things I felt I'd done before, that I had the experience and we were going to build it, they were like, "Well, who have you talked to?" Or "What have you read?" And it was really good. I don't think I made enough phone calls in my earlier career and asked people's advice and asked for help and found the person who did that thing five years ago and found out what they learned. And I think that's probably my biggest lesson from working with both of them, is how much it pays to seek out knowledge from others because we're all just learning all the time.

Lenny (00:11:11):

Is there a story or example of that comes to mind that was really beneficial where you actually ended up follow that advice and reached out to someone, talked to someone, and that changed the way you think, changed the way you operate?

Claire Hughes Johnson (00:11:21):

There are two things that just jumped into my mind. The first one is early on at Stripe... When I joined, we were about 160 people. I started bringing in some leaders. We were building out go to market, we were starting to stabilize our support operations, building out recruiting and HR, all the things. We were really growing. And it became very apparent that we needed to put in some kind of job structure. Levels and ladders is what you would call it, which is there are different levels of pay, and they have to do with your experience and your impact and their expectations of those different levels, right? There's an engineering ladder. And this stuff is probably making some people listening like their skin start to crawl because it's never fun or easy to define all that, and it's not perfect. You're immediately getting into something that feels pretty suboptimal, but it is worse to have nothing because it starts to feel very unfair in the environment, especially if you have to start to change up compensation and reward or reward systems, right?

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So I realized, oh my gosh, we're going to have to put this in place. We didn't know HR people, so I basically ran a project. And the first thing I did though, thanks to Patrick and John, is I talked to Square, I talked to Airbnb, and I talked to two or three other companies. But those two conversations, I'm not going to say who said this, but one of them, the person said, "Oh, that's a blood bath." They were not encouraging about what we were about to go through. And another one said, "You know what? I'm so impressed that you're doing that so early. We waited too long." And actually, that's what a lot of my book. It's about is when should you start to think about this thing that you might need, right? And it's sooner than you think. And so putting in levels of ladders felt like ripping the off, honestly, but I was glad. One company I talked to waited until they were like 800 people, and it was apparently not fun because people don't like to be... Who likes to be categorized?

Lenny (00:13:26):

Yeah, and put it at a level that maybe they're not happy with, right? They're like, "Oh, I thought I was a lot more senior than that."

Claire Hughes Johnson (00:13:32):

Yep. Yeah, exactly. It's not easy. It's a form of change challenging. And I would not say we did it perfectly, but I'm glad we did it. I think that example was definitely one of them. Another was like we were really... We wanted to roll out 24/7 support in multiple channels, email, phone, chat in multiple languages and getting from where we were to where we wanted to be as quickly as possible. Not many companies have done at the scale, because Stripe has millions of customers. We're B2B, but we're B2B at a very high scale, which actually Google was as well. And so that was beneficial to me coming into the Stripe environment because I'd done parts of that for Google. And again, that's an example of something I thought I knew how to do, sort of, but we certainly didn't do it perfectly, and it's certainly different when you're talking about payments.

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That's people's money. That is a business'... If they don't know how to contact you and they have a problem, that is a huge issue. And so I did seek out a lot of advice. And I would say... Did anything change dramatically what we did? I think if anything, the advice pushed me to go faster on some of my intuitions about, for example, using vendors and outsourcing parts of the model. And I realized we're not going to scale all this internally, especially not at the speed that we're going, but it's hard to start to use outside sort of contractors if you haven't filled figured out all your tools and processes. So that balance was sort of freaking me out, but you just got to push through it.

Lenny (00:15:15):

There's a couple directions I want to go, but I'll go in an unexpected direction. At Stripe, you're kind of infamous for your titles. When I created this career ladder document.

Claire Hughes Johnson (00:15:24):

[inaudible 00:15:24].

Lenny (00:15:24):

Yeah, it's like everyone's product manager., They're like a VP of product potential and it's like product manager. What's the rationale behind that? I guess, and what's the benefit of that? But, we don't have to go too far down the road. I'm just curious.

Claire Hughes Johnson (00:15:37):

So this is something that Patrick and I actually really agreed on without a lot of discussion, which is not always the case. It has to do with a combination of optionality as you scale and grow, and also culture, right? And so the minute you start titling a lot, you're signaling hierarchy and authority. And the culture piece to Stripe still today, which is I think we could use more, at least more overt trappings of structure because it can get confusing. And I'll be the first to tell you that, and I admit that this might have carried on too far. But early on, at Stripe, there's a real belief. It's not a particularly hierarchical company. And if you're the person who has the knowledge, you are the expert on the thing, you better be, one, in the room helping make the decision, and two, driving, helping to drive the decision. And I don't care how senior you are, right? And that was the cultural signal that was important, which was about mutual ownership, and also expertise not sitting in hierarchy.

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And then the optionality thing is probably a little more obvious, which is don't make somebody the CMO, or even the head of marketing, if you're marketing team is two people, right? Yeah, you might make the right choice, but two years later, your marketing team's probably going to be more than two people, say it's 20. And are you going to have to layer somebody or have too many titles? And then someone feels like they're losing something, right? It goes back to the levels and ladder saying, but it's worse because you've given something, and then you're sort of taking it away, and that's just not... Organizationally, you want more flexibility. Honestly, I'll say my final thing, which is I have a little bit of a knit where you meet a company. I get what's happened, which is in order to hire this person, they had to sort of say, "I'll make you the VP of sales or the VP of this," but the company's like 25 people and there's seven VPs.

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If you're a customer or you're evaluating it, you're kind of like, "Really?" It's a little incongruous with the scale. So we kind of more flexible. We had a lot of growth, head of this or growth lead. I know you're all about growth, Lenny. Well, we definitely took growth and find that very broadly. But the other thing I've said to people internally... Sorry, you can really get me going on this one. I bet you didn't think that. If you are a stripe and you're going out into the market, actually it speaks to the same thing, which is you're going and trying to sell to a customer who's a lot bigger than you. I'm not saying make up a title. Don't say you're the VP of sales, but you can be creative about how you represent your scope because you probably have really big scope because you're one of the only people helping to sell the product. And that will help you because a lot of more established mature companies are trying to do that hierarchy match, where "Well, bring your SVP because my SVP is coming to the meeting."

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And we could be like, we don't really have that. It just gives you a little more selling flexibility too.

Lenny (00:18:48):

I like that. I like combo where you can just say something that fits in this situation, even though that's not your technical title.

Claire Hughes Johnson (00:18:53):

Yes, you can say, "Oh yeah, I actually am in charge of optimization for our payments product." I'm sure you are. I'm sure that's what you

Lenny (00:19:01):

Do. Coming back to something you talked about with the career ladder, and I had a question around this, you talked about how oftentimes people do it too late, and I'm curious why it's so important to think about the stuff that you wrote about in this book so early in your company's life cycle. I think in the book you mentioned that it's oftentimes as important to get your operational structure and cultural structures in place incorrect as finding product market fit or finding your first few customers, which I think would surprised a lot of people. Can you talk about why you found that to be so important?

Claire Hughes Johnson (00:19:35):

Not only can I talk about it, I wrote a whole book about it, so let's try to restrain me. But here's what I would say. Obviously product market fit is the most important. And what I do say in the book is focus on that and don't get too far. My book is definitely not zero to one. It's more like maybe 0.5 to 1.5 or one to two. Because I do think when you're smaller and focused on product market fit and finding your user and getting that traction, that shapes a lot of how you work and your goals and who you hire, and that all makes sense. I think the thing that happens though is, one, some companies don't quite realize they're hitting it and they start to get behind on actually building the company part. Because guess what?

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It turns out product market fit is just the product, and that is not a company, and that will not scale, to point. You see these companies that sort of fall over and there's sort of a bad article about them, and often it's not the product, it's the fact that they didn't actually build the company very well, and that started to harm, in fact harm the product and harm the mission. You have this vision, you're going to solve this problem with this product. And all of a sudden you can't solve it because you didn't scale the org properly. You didn't keep the cultural fabric strong as you grew, right? And so that's why I think it's so important. And so let's say you are hitting traction, and hopefully you do notice it. Because I think a lot of founders, you're kind of paranoid.

(00:21:08):

Like Stripe, I don't think Patrick and John fully embraced that they needed to start scaling maybe until I showed up, and that was part of hiring me. I was like, yeah, this is it. It's happening. It's not just look at the numbers. It's like look at the inbound support demand, look at the inbound sales leads. I just did the math, and I was like, this company should be probably twice the number of people it is right now, which of course freaked everybody out, but it was very obvious to me because I was coming in outside with that perspective. But more importantly, not just scaling things like sales and support... And as you probably know, if you work in payments, you've got a lot of other functions that are very important around risk and compliance and you name it, or the machine learning models and that help you do those things.

(00:21:55):

But for the sort of structures and operating processes that I talk about in the book, I do have this analogy which I think you picked up on to building a house, which is you have the supporting beam. Say it's a post and beam structure. You need the posts and the beams, and then you're going to have to do the mechanicals, right? There's going to have to be some amount of wiring in order for you. I don't know if you have your solar panels, but you got to bring in the heat, you got to bring in the cooling and plumbing, and then you have foundational stuff that you have to build or the whole structure will fall over. And I think of putting in the posts and beams and the mechanicals and the foundation as actually essential to scale. Because if you do those things well, you build them in such a way. This is almost like a Russian doll kind of thing, but you build them so that they're replicable, right?

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So the way that you do goals as a company can start at the company level, and this is how OKRs were so beautiful for Google and they can replicate down to the individual. And the same common structure allows that to happen at really different levels of scale. And that's what you're looking for, is what are these common things? We do not a lot of them, by the way. You don't want to mandate a lot, you don't want to put too much structure in place, but enough that everyone can play with it up and down what I would think of as the stack of the company. And if you don't start putting those things in early, people will just invent those things. And then you'll have... Picture a house that got added on to 17 times and it's not even two years old. It looks not super stable. And then you're going to find yourself having to do a tear down, which I think we've all seen companies do that.

Lenny (00:23:40):

I definitely want to get into that house structure and all the components of it. But before we get there, if you're a early stage founder just looking for product market fit, maybe the skipping ahead a little bit, but which elements do you think are the most important that they need to do now? Because they're going to read your book, which gives them so much advice on all the things you can do.

Claire Hughes Johnson (00:24:01):

Yeah.

Lenny (00:24:02):

If you have to pick a couple things that you have to nail when you're just starting out before product market fit, what do you think is most important?

Claire Hughes Johnson (00:24:08):

I think really that early, keeping it very simple and being focused on that goal of product market, which is like what is the problem you're trying to solve? What's your vision?Everything you have to do for an investor pitch deck matters not just for the investors. By the way, people forget this. A lot of the story you tell to investors, early ones especially is the story you should be telling internally to anybody you hire. Why do we exist? What problem are we trying to solve? What early customers have we attracted, and what's their feedback. That's what you mostly need, but you need to remember to share it and don't just use it for fundraising, or don't just use it for a board meeting or an investor meeting. Use it internally. And I think you can get pretty far actually with that core content. As you start to...

(00:24:56):

The first thing you're probably putting in place is a little bit of hiring process, and I think that's going to matter sooner than you think. Don't just be tempted to hire people in your friends. Think about what you need, what capabilities you need to build even pre PMF, right? And so as I said, there's a chapter about that, but I think some of the simplest versions of it is how do we evaluate talent? What kind of talent are we looking for? Where do we go look for talent, figure that out, and sort of train people a bit internally on interviewing. I think interviewing is not a skill that comes naturally. People think it does. It does not. And there's really basic easy tips and tricks you can find even on the interwebs about interviewing. And I really recommend... And my book has examples of rubrics, questions you can use. How do you really get at... Because it's hard to really evaluate someone in 30 minutes or 45 minutes.

(00:25:49):

So I think interviewing some of your fun fundamental early investor kind of content you need. But then when you start to get some traction, then you're showing to codify and actually document what I call more foundational content. Because if you're pre-product market fit, you're probably small enough that you just can tell everybody all the things. You don't have to send them the packet or have them sit in the onboarding. But the minute that you're starting to get any kind of hiring speed, you're going to want to document it more and you're going to want to start to put some very lightweight processes of how you get things done in place, because again, you're trying to replicate velocity. It's easy when you're all in one room and everyone knows like, "Oh, this is the most important thing to get done today," hack, hack and hacking away. But then pretty quickly, that is not going to be the case.

Lenny (00:26:38):

I definitely want to go one layer deeper on that, but there's this area I wanted to get to before we dive into some of the weeds around that, which is I found it really interesting that you started your book with this idea of personal operating principles versus here's how the company should work. It starts with here's how you should think about yourself. So I want to go... There's four of them... But before I get into them, can you just describe what is the idea of a personal operating principle and why is that important?

Claire Hughes Johnson (00:27:02):

Remember the book is about two things, company building and company structures, and all that, replicating all that good step and management. So the other thing that the book is really about is management tactical guides to... It would be easy to build companies if there weren't humans involved, right? But there's humans and they're complicated, and I'm complicated and you're complicated. And there are things that motivate us. There are things that demotivate us. They're not the same things, though Lenny and I, I think you and I have some things in common, but point is the book starts with you. And I think a lot of people think management starts with the team, or even the company. And actually, I think founders make this mistake. Founders think, well, it starts with my product. And yeah, but it actually starts with you. And so the book starts with sort of my belief system, which is self-awareness, which is the first operating principle. Self-awareness to build mutual awareness is actually the most fundamental thing you need to crack if you're going to succeed at company building or management, in my opinion.

(00:28:08):

But I would say I'm one of those people who has strong opinions that are pretty loosely held. This one is a strong opinion strongly held, which is the more that you can seek feedback, seek to understand your motivators, your strengths, your blind spots, your tendencies, and take that on board and expose it to others, you're going to be a much more effective company builder and manager. So it starts with you. And those operating principles that I articulate are sort of mine, but they're also foundational to the content of the whole book. I do think authentic leaders tend to have their own, right? Lenny, you probably have a few that you... You maybe have not articulated them all out loud, but I do have mine and they're in the book, but I think you would also find that some of them you could adopt. If you were looking for were some to start to use as a leader, I would hope that I've put forward a couple that might be useful.

Lenny (00:29:04):

I want to talk about these four, but while you're on that topic, what are ways to help crystallize your own operating principles? What advice would you give people to do this? Because to your point, people probably have them in their head, but they haven't really written them out.

Claire Hughes Johnson (00:29:17):

That's right, they haven't. The book has an exercise that I recommend in it that's a little bit more about crystallizing your personal values, but that's kind of the place you want to start. And it's essentially there's a whole menu, and you can find these online, of say 70 or 80 different values. And by values, I mean family, ambition, impact competition. People value education. People value different things differently, by the way. And there's no judgment. You might value being a very competitive person and I might value collaboration above competitiveness, and that's fine. We probably would both be very effective in a team for different reasons, right? So basically if you take a list of values and you say, okay, if I had to pick 10 of these that matter to me, then if I had to pick five of them, and then you really force yourself if I had to only pick three of them...

(00:30:09):

And it's actually good to have this in a dialogue with someone that you work with or well, and you sort of had to explain, well, why? Why, when I'm really pushed, do I have to hold on to say education or learning as a value? Or why do I have to hold on to integrity as a value? And I tell a story in the book about a manager I worked with where transparency was a very important value to him. And the thing is you usually have a story behind that value, right? And in the book, I use the name Eli for him. Eli ends up sharing this story at this offsite that we had. And the transparency value actually was a little bit problematic to manage because Eli would tell everyone everything, including his team, even when we weren't finished with the plan, right? But Eli got up and told a story of being younger, like seven or eight, and realizing his mother was very sick, and no one really told him what was going on.

(00:31:07):

And then unfortunately watching the process of her dying and then being taken out to lunch by his stepfather and told, "Your mother is gone." And okay, well, your whole worldview kind of explodes when you hear that, and you're like, oh, okay, this transparency thing is really real. This was a formative experience for him and it has changed how he operates, and it will probably have changed it for his whole life. And if you can get to that point on your own, of telling yourself, what was the story? What was the thing that made this so important to me? Then you're starting to be in a mode of self-discovery and then you're starting to document, okay, if these are my three top values, and here's why. And then I think what you want to look for are my, what I would call my work style tendencies? And so you get your values, and then you sort of go on a... I'm sorry, I could go on about [inaudible 00:32:08]. I warned you. I wrote a book about this.

(00:32:09):

But basically, all these work style assessments, Myers-Briggs, DISC, Enneagram, you name it. And by the way, I would take all of them because I find that very good. I mean some of it's just data. You're just taking on data. But a lot of them come down to are you introverted or extroverted? Are you more introverted or extroverted? Where are you on that continuum? And are you more task, if you kind of picture a horizontal and a vertical, are you more task or people oriented? And so I would take your values, and then I would plot yourself. Am I a more extroverted task-oriented person, which means you're kind of a director, get what done kind of person? Or am I a more extroverted people-oriented person, which might mean actually you're probably great at being very charismatic and building some followership and maybe selling a vision? A lot of salespeople are very extroverted people oriented people.

(00:33:03):

And then you start to see, okay, if this is my sort of tendency in my default and this is my value system, what are the ways that I operate that really make up who I am and becomes almost a belief system. And my operating principles in the book, one is to build self-awareness, to build mutual awareness. Another one is say the thing you think you cannot say. I think that I've come to believe that often your biggest strength, one, is also your weakness, but two, is something that you don't know is a big strength because it's almost like breathing. For me, saying something actually fairly openly and directly but in a non-threatening way is a thing I do. John Collison actually once said to me, he's like, "It's so interesting when you give feedback, that can be actually pretty brutal, I leave feeling really optimistic."

(00:34:02):

But I don't mean to be brutal, but I think I can sort of unpack and say this thing, like here's my observation, here's going on, and it's not judgmental, it's not threatening, it's actually opening up an opportunity for people. So say the thing you think you cannot say. You would actually find that more of us can do that. And then I come back to distinguish between being a leader and a manager, which is something early in my career, I did not do well, Lenny.

Lenny (00:34:30):

Before we get to that one actually, just to briefly ask you a follow up question, because I love that you're getting through all four here. This is great. But I was going to ask, is there something.. So clearly, you're really good at saying the thing you cannot say, and I love that. Many people are not good at this.

Claire Hughes Johnson (00:34:30):

No.

Lenny (00:34:45):

Do you have any tactical advice for someone that is not good at this for how to actually say something uncomfortable?

Claire Hughes Johnson (00:34:51):

I think the main thing is, and Fred Kaufman has this in his book, Conscious Business, this concept of a left hand... He calls it the left hand column, which is you're in a dialogue with me or you're watching a meeting happen, and you've got a running commentary in your head. And honestly, some of that stuff is pretty harsh, right? You do not want to open your mouth and just say that thing. But what Fred says is, learn how to detoxify the left-hand column. I would say think about a way to say that thing that you think you can't say. You've filtered yourself out, which I don't like. And I want you to think, okay, can I? And I think that the... Here are the tricks, a couple of them. One is, ask a question.Right? A question is not threatening. By the way, the question could even be, is there something we're not talking about? It feels like to me... And then you own.

(00:35:47):

So the next trick is you own it. This is your observation, this is your perception. This is not a judgment. I am not saying, "Lenny, I think you really botched that interview." That's not useful. If I said, "Lenny, you know what? I wonder if you missed an opportunity in that interview. Did you feel like you missed an area that..." And then you're kind of curious. You're like, "What do you mean?" And I'm like, "Well, I'm kind of looking at this with you, and I'm standing next to you and I'm observing it." Right? That's less threatening. So one, ask a question. Two, make an observation that you own. So if I said, "I feel like there's something we're not talking about, and I wonder..." Oh, I own it. "I wonder if it's the fact that these two teams both seem to have the exact same project."

(00:36:32):

I talk in the book about a meeting I was in where it was very clear that we had two teams in conflict, and no one was saying the thing that was really pretty bad. I was like, this is pretty bad. We have two teams that seem like they both own a piece of work and are in conflict with one another. But I would say if you do those two things, ask a question, own the observation yourself, don't pass a judgment, you will get way farther than you would've ever thought sharing. And by the way, that sharing, one, there's probably other people who just haven't, can't get it out of their head, and you have ar opened up a door that a lot of others can probably walk through. You're not alone.

Lenny (00:37:12):

You have this framework, I think you call it being explorer, not a lecturer. Is that what you just described? Is that how you describe it?

Claire Hughes Johnson (00:37:18):

It is. And to me, what I just talked about was more of a meeting or a conversation scenario, but I think that this... I'm glad you brought that up. I think this is actually a very fundamental management framework of mine, which is in a one-to-one interaction, your job as the manager... First of all, too many people think your job as the manager is to be the expert and tell people what to do. No, actually, your job is to enable people to be their very damn best on your team. And you have to create an environment and a context and provide them information, and then you need to provide them a form of coaching. Now, again, I think people start think coaching is lecturing, like let me coach you how to make this Excel model. And sometimes they do. Sometimes someone comes to you and says, "Can you exactly show me how to do this thing?"

(00:38:05):

Fine. But most of management is actually exploring with someone. It is being curious. It is saying, "I have seen this pattern of your work. Have you seen this pattern? Is there something..." I have a whole other framework which is about hypothesis based coaching. I think intuition as a word gets kind of a bad rap, and I kind of get why, look, especially if you work with a lot of engineers, which I do. It's not particularly always data driven, but guess what a scientific hypothesis is? It's a well-informed piece of intuition. And I think too many managers wait until they have a million pieces of data to make an observation to someone about an area for improvement. Instead, I would say take some data, form a hypothesis, and then explore it with the person. Because if you're well intended, which I think any good manager is, I'm bringing up this thing because I'm trying to help you see it and tell me if it's true so that we can both help make it more effective, better.

(00:39:11):

One very light example could be, "I felt like in that meeting... How did you feel that presentation went?" And the person sort of says, "It's fine. I think I got through the material." You say, "Yeah, I felt like you were maybe a little bit nervous. I'm just exploring. Were you..." And by the way, the person could say, "Oh, no, no. No, no, no, no." And then you could back off, or you could say, "Oh, well, maybe it was just me, but I noticed some physical. Your leg was shaking a little bit, your voice, you were kind of repeating yourself." And they're going like, "What?" And you're all you're doing is holding up a mirror... And you have to own it. You have to say, "My experience of you in that meeting was that you seemed nervous to me. Maybe you were not, but actually maybe this is just a physical coaching thing."

(00:40:04):

Have you ever had that? I have a few people on my teams who do this weird thing. This is pre virtual world, but when they're sort of getting it uncomfortable in a meeting, they put back their chair up off the table, sort of exit the circle. And that is a very physically big statement. And they had no idea, Lenny. They had no idea. I'm just watching the meeting, and I'm like, oh my gosh, you're like four feet from the rest of the group because you do not like this topic. And what I need to explore with you is how do you vocalize that instead of physically exiting the room or exiting the circle? These are just examples. Sorry, I could keep going. But I really think that that attitude of exploration and mutual sort of collaborative, let's discover some things about you...

(00:40:54):

And by the way, it can be mutual. They can go right back at you and say, "Well, I observe this." Great. Great. I've interviewed a lot of people for the book, different leaders and managers from lots of different fields, but one of them was Reid Hoffman, who's a more typical. But Reid, we were talking about the other operating principle, which is management versus leadership. And Reid was pretty honest. He's like, "Look, I'm more of a leader. I'm not a manager." He's like, "I'm not a great manager." And then he told me the story. He's like, he had in his first company that he was building, he had a guy that he'd hired who was more operational. And Reid was sort of making an observation to him about something they should do, and the guy goes to him, "Reid, I wouldn't hire you to manage McDonald's."

(00:41:42):

And Reid was like, "Okay, good. So tell me what we need to do so we can fix this thing." But what actually Reid's operating principle, interestingly when unearthed that whole thing, was that he prides... It's very important to him to create an environment of open feedback. He said, what I love about that story, yeah, it's funny and embarrassing, but actually that guy was comfortable saying to me, "I wouldn't trust you to manage a McDonald." And I think that actually I found inspiring because I don't think everybody who founded a company or who's managing someone has created an environment with how much trust in it, right? And that's how Reid thinks he gets a lot of stuff done, is people just come right back at him with the feedback.

Lenny (00:42:26):

This episode is brought to you by Dovetail, the customer insights platform for teams that gets you from data to insights fast, no matter the method. There's so much customer data to get through from user interviews to NPS, sales calls, usability tests, support tickets, app reviews. It's a lot. And you know that if you're building something, hidden in that data are the insights that will lead you to building better products. And that's where Dovetail can help. Dovetail allows you to quickly analyze customer and data from any source and transform it into evidence-based insights that your whole team can access. If you're a product manager who needs insights to motivate your team, a designer validating your next pick feature, or a researcher who needs to analyze fast, Dovetail is the collaborative insights platform your whole team can use. Go to dovetailapp.com/lenny to get started today for free. That's dovetailapp.com/lenny.

(00:43:19):

So we've done three of the operating principles that you personally use, which I love. I love that you're going to going through [inaudible 00:43:25]

Claire Hughes Johnson (00:43:24):

Distinguish management and leadership is the third one, yep.

Lenny (00:43:28):

And then just to summarize real quick, the second one was to say the thing that you cannot say. The first one was-

Claire Hughes Johnson (00:43:34):

Say the thing you think you cannot say, yeah.

Lenny (00:43:36):

And then first, build self-awareness to build mutual awareness.

Claire Hughes Johnson (00:43:39):

Yeah.

Lenny (00:43:41):

And what's cool is you're sharing all these amazing stories and tactics. In the book, you actually have templates to do each of these things for yourself. So a lot of this is pointers too. If you actually want to do this, go check out the book and you can actually do this. It's not just in a bunch of high level stuff. And then the fourth is-

Claire Hughes Johnson (00:43:57):

Come back to the operating system.

Lenny (00:44:01):

Let's talk about it.

Claire Hughes Johnson (00:44:02):

So this one is, sort of like I was talking about, touchstone documents that you might create for your company. This is our operating principles, our values. This is my touchstone, which is I think that especially high growth environments, but every environment you operate in can get really chaotic, and there's a lot of ambiguity. There's a lot of stuff you don't know, and it's kind of easy to get paralyzed or to sort of give into the chaos. And you're like, oh my gosh, I don't know what this day is going to bring. I'm just going to randomly assign some stuff, and I'm just going to get through it. And all you're doing in a lot of those moments is creating more chaos. And I think a really important role of definitely managers, but some leaders too is to create a stability when there doesn't feel like there's a lot that's stable.

(00:44:52):

And where stability comes from is in ritual and in common practices that you share. So we set quarterly goals or monthly goals. And that's a ritual, and that's a thing we do, and it's actually a source of stability. And yeah, it feels like a process. It might feel like a way of managing, but it also has a cadence to it. And I think one of the things that happened is you picture yourself sort of spinning out of control. You think, how do I come back to this is the order I do things, this is how I get decisions made, this is how we make plans, this is how we make decisions. Those touchstones are not processes to run the thing. If they're done well, they're stabilizing because they're a common way of approaching that everybody has, so they can at least hold onto that even when all the other stuff is going haywire.

(00:45:45):

You've got a customer churning, and you've got a big launch happening the next day, like, oh my God, oh my God. Come back. What's our launch? How do we launch products? We have a way of doing that. We do not need to spin out of control and reinvent the wheel here, right? And that's a stabilizing thing. And the other thing on come back to the operating system for me was, as my career scaled, as I went from a individual contributor, to managing a small team, to managing a bigger team, to managing multiple teams, to managing managers, you get it, I realized actually, and I started to have multiple functions. So I was context switching between... At Google, there was a point where I had some product people, industrial design operations, really BD, really different functions. Actually, how I fundamentally ran them at the bare bones, at the house architecture level was the same.

(00:46:38):

And that gave me a stability as a leader where I would dive into a meeting. I'd be like, all right, let's look at the metrics that matter. We all had... We had them for every team. Let's look at the goals we set. And that also helps you stabilize when your contact switching between seven different projects or seven different teams. And so I wouldn't say it's the operating principle that I talk about the most, but I think if you were like, "What's your sort of... How do you scale yourself?" I would say, "Well, I actually have a common operating system like a computer, and that is how I maintain a sense of stability."

Lenny (00:47:17):

Perfect segue to the next kind of broad area I want to spend time on, which is this house metaphor and the three components of it that you talked about. And this is like the core of the book. Can you talk about again, the three kind of pillars of this house structure? And then let's just go through each of these things.

Claire Hughes Johnson (00:47:33):

Yeah, it's definitely, the beginning of the book is about company building, and the company structure chapter is all about the sort of supporting beams, the mechanicals, and then the foundational stuff. And interestingly, it's sort of, well, I guess when you build a house, you build the foundation first. So one is the founding documents that you might create, which I'm happy to talk about. And then another are the supporting structures, which are some of the ways you do things we talked, like quarterly business reviews or OKRs, or how you use planning to create a structure that everyone... And then the mechanicals are what I might call the operating cadence, which is essentially the rhythm of how you work, right? The calendar, the year that we all experience tends to dictate a little bit how we work. Mondays feel different than Sundays, right? Well, companies have that same kind of a cadence, which is often also calendar driven, but also can be event driven.

(00:48:28):

We've talked often at Stripe about how our customer event, which we have called Stripe Sessions, is as important internally as it is for the customers because it's a forcing function for our cadence, how we plan our products, what we want to have achieved by that point, what we want to demonstrate. And that's true for a lot of companies, but we actually use it in our thinking about our cadence of the year. And actually, we've built this other event that I usually help run, which is an internal event that happens generally about six months before that, which is great because you can demo the stuff you think you want to demo internally. You sort of create a cadence of we're going to push ourselves to do some crazy wild stuff, internally demonstrate it, and then see if we can externalize it by the time we hit the customer event.

(00:49:16):

But that is a cadence. Quarterly business reviews are part of your cadence, et cetera. So that's the fundamental, but really while I'm trying to do is say, one, I don't think this stuff is super hard. You know this. It's kind of hard work. It's just putting it in place, and then actually using it. I think where a lot of leadership teams go wrong, especially of young companies, is they experiment with different vehicles to try this stuff. And then they either don't actually follow them or they throw them out the window after they haven't tried it for very long, and it creates a lot of chaos. So I would say do very few things consistently and try to do them well, and then see if they're working for you, and then once a year, maybe think about a revision. But don't keep throwing out new things you heard that other companies do. And it turns into a weird grab bag of operating stuff. You're nodding because you've seen this too lot.

Lenny (00:50:16):

Yeah, I think a problem I've seen is people think there's going to be this perfect system and process that's going to not have any flaws, and they're always like, "Oh, it's not perfect. We got to optimize it further." And what I find is it's always just like, this is the best one you can come up with at the time. This is the best idea you have now. There's going to be flaws. Just work around those flaws. But just know there's never going to be the one thing that works.

Claire Hughes Johnson (00:50:35):

There is no one. There's no perfect org structure, there's no perfect operating approach, there's no perfect, yeah, performance and management and level system. But having one and committing to it is good. And don't let the perfect be the enemy of the good.

Lenny (00:50:50):

There's another, you mentioned that I thought it'd be fun to talk about, that it's often chaotic at a company. I imagine people think about Stripe from the outset, like, oh, they've got it all figured out, so smooth, just runs like a machine. And I think people look at other successful companies and they're like, man, things are so crazy at our company. This isn't normal. But I think, you tell me if I'm wrong, most places are crazy and chaotic internally for a long time and often, right?

Claire Hughes Johnson (00:51:15):

Yeah. There are different kinds of chaos, but it's so true. What is that? There's like a saying. Don't ever believe your best press or your worst press. It's never as bad as whatever someone's saying it is never as good. It's just normal is not pretty. It's a lot. And that is true. It's happening everywhere. I used to have a friend who was building a company. We would see each other. We both were from the Boston area, and it's a long story, but we'd end up on the same flight off in Rhode Island, coming back to Boston occasionally for stuff, for family. And we'd be in getting yelled at by the passengers because we'd be in the aisle of the airplane comparing notes about stuff that was broken.

(00:52:02):

And we had this expression, it was like, oh, and then I picked up the rock, and under that rock were some really ugly, creepy crawlies. But that's just like the way it is, is it's never perfect. But I guess I would go back to what I just said about having some stabilizing ways of doing things because that can create, I don't know, I'm not trying for a perception that the thing runs a machine, but more of a, that is a well run thing, right? And how do you create that perception? Because you adhere to some ways of running things and that are consistent, and it feels better even to the outside, even if there's a lot of chaotic stuff going on.

Lenny (00:52:45):

Coming back to the founding documents, could you just talk about what are in this group of founding documents? And I think even more interestingly, what's a sign that you should invest more time in this area as a startup?

Claire Hughes Johnson (00:52:55):

Yeah. Very classic stuff is in here, nothing that you haven't seen or examples of. So one is I think it's good to have a mission. When I joined Stripe, we did not. It came to be apparent that to increase the GDP of the internet was probably the mission, because people kept repeating that back to us, and Patrick had written it on some website copy early on. But it was interesting that candidates and customers kind of grabbed it. It was very Stripe because it's a little bit intellectual and pointy headed and aspirational, but also it is... The GDP does involve economic progress, which we're all about, right? We're building infrastructure for commerce and payments for not just the internet actually. But anyway, point is have a mission, or at least the beginning of what's your one line of what you're seeking to accomplish.

(00:53:47):

And then I'm a big fan of writing sort of what we Stripe called our long-term goals, which were just not our short distance, but our longer distance, like why did we exist? And so the mission is one line, so you need a little more meat behind that, right? And actually, I think if you looked at our long-term goals, which by the way I thought would be a three to five year goal, I would say they're still relevant today. But one of Stripe's long term goals is to advance the state of the art and developer tools, which would not be something that everybody, especially every customer of would initially call out. But when you think about it... Lenny, you just did it. You think about it for a minute, you're like, yeah, the API and the docs and a lot of stuff that we've open sourced, Stripe cares.

(00:54:38):

Our forever user is fundamentally a developer. It's the person who's integrating Stripe, right? By the way, simple integration, complex integration, anywhere in between, we really care about their experience, and we care that the tools are excellent, because how are you going to increase the GDP of the internet if you don't advance the state of the art of developer tools? Right? Anyway, point is articulating that, because until I said that to you and I could talk about it with you and say you came to work at Stripe, you might not understand why we invested in certain things or why it meant so much to us in terms of our user experience and the mission. So articulate those things. And some of them might be a little bit aspirational, but they should feel at least real enough that you can have that conversation about... You look at anyone who works in a company, what they choose to do all day with their time should be guided by things like, what are we trying to accomplish?

(00:55:35):

What are our long-term goals? So if they don't know them, how are they going to make the right choices? So that's one. And then another is a lot of companies write company values, or at Stripe, we wrote operating principles. I think you had [inaudible 00:55:50] on, and she talked about these, and we even sort of took a version of ours and put them out for candidates so that they could evaluate, do I want to join this company, because I kind of want to know what it's like to work there? And I think that's really valuable to do because not every company is right for every candidate, and the more you can mutually match the better. But having some operating principles matters. I think you can go farther than that, but that's where I would sort of start, is those three things.

Lenny (00:56:17):

Awesome, I like the simplicity of this.

Claire Hughes Johnson (00:56:21):

How you know is people are asking you. Especially new hires are asking you a lot of questions about what's important, or "Why do we do it this way?" You said it yourself at the beginning. Doesn't writing something down, crystallize it? Time to write it down and crystallize it for everybody who works there.

Lenny (00:56:40):

And just to summarize you as a mission, your operating principle/values. What was the third one?

Claire Hughes Johnson (00:56:45):

Yep. Long-term goals.

Lenny (00:56:47):

Long-term goals.

Claire Hughes Johnson (00:56:48):

And sort of more details on why you exist. What are you really trying to accomplish?

Lenny (00:56:52):

Interesting. And then are those numbers in your experience, or is that a story of what [inaudible 00:56:57]?

Claire Hughes Johnson (00:57:00):

Those are a little bit more, I think headlines. And I think your shorter term goals have numbers against them, right? So if you looked at your long-term goal, which might be... Another one of Stripe's is about accelerating globalization, and if you thought about what would that require, that would require us to be in a lot of markets. That would require us to have users and customers in a lot of market, and also to eliminate friction across borders. So those things, which is a very high friction thing, unfortunately in payments, and moving money, which it shouldn't be if you want to advance globalization, accelerate it, right? And so that can then become numerical goals and short term goals.

Lenny (00:57:41):

Basically objectives, and then-

Claire Hughes Johnson (00:57:43):

Yeah, it's sort of the longer term objective, and then the key results part is early is shorter term. But actually, if you're having trouble writing your company goals, actually zooming way out and being like, "If we're going to meet this mission, what do we have to accomplish in the long term?" You can then walk back from that and be like, "Oh yeah, every goal we ever have probably fits in these three to five buckets." Bam. And then you write your short term goals actually more easily because there's always going to be one about, say, international expansion. There's always going to be one about additional products because we're trying to do X, and you can't do it with one product, or whatever. You can imagine the example.

Lenny (00:58:22):

Awesome. And I know your book has a actual examples of a lot of this stuff.

Claire Hughes Johnson (00:58:25):

It does. It does.

Lenny (00:58:26):

So again, pointer to that. Okay, so that's the founding documents. The next piece is operating system. Maybe we go there, just what fits into an operating system for a company? What are the components of that?

Claire Hughes Johnson (00:58:38):

I think a lot of the components we've sort of touched on, which is do you have some sort of goals? This is now goes back what we were just talking about. For Stripe, we have an annual set of numeric targets that we put together, we have a system of goals or OKRs, objectives and key results, but sort of like what is your structure for setting milestones that you want to achieve, whether they're numeric or more like a binary, we got this thing launched, we didn't? And then QBR, so quarterly business reviews. How do we review parts of the business? What is the cadence? Well, first, what is the form by which we do that? Which would be this... I share examples in the book of this might be the template you fill out if you're a team and your reporting on how it's going and versus your strategy and your goal.

(00:59:24):

And then there's also getting into metrics and dashboards. What are things that you look at internally to measure progress, the input metrics and the output metrics? And I give some examples of that. And then mostly, I think there are other... As I said, there could be less frequent forms you use, like a user event or a launch, a way of launching products, et cetera, but it's really simple. It's mostly goals and how do you review the business. Planning. I talk a lot about planning, which is. You said this earlier, and you and I think both agree, which is there's no perfect process to plan for the next year or the next two years, but you still need to fight your way through having something, especially after a certain stage. And every COO I meet with, we sort of ring our hands together.

(01:00:11):

We're like, oh, planning and everyone hates us, too burdensome, but you still got to keep trying. You got to do it. And so we talk about planning processes and what they might look like and how you set them up. And then that's how you'd use goals and QBR to measure against the plan, right? So those are some of the operating systems. And then the cadence is just how often do you do these things? Actually, one of our big lessons, I think companies that are moving quickly and that are younger tend to resist some of the calendar based cadences of more mature companies because they seem slow. You're like, really? You're going to just achieve that goal in three months? Or are you artificially restricting yourself to some lowest common denominator of time? And so I get that fear, and I would say your cadence doesn't have to be one quarter or one six month, or even 12 months.

(01:01:08):

Stripe, we did sort of six month processes for a while. So instead of a year, we did it in six months. Still, there were things that took, by the way, a year or longer, but I think that play around with the timeframe and don't feel restricted by what other companies do. But one of our lessons on the QBR was sometimes those quarterly, because that stands for quarterly, those quarterly business reviews were too infrequent, especially for new product areas. They we're still in development. They were still getting a lot of feedback, launching a lot. And so we just said, okay, they're not quarterly anymore. They're like every six week business reviews. Fine, change your cadence. The point is to have one, because then it's predictable for teams. They know what they're marching toward, they know when they're going to be reporting out, and they can set their goals in a way that makes sense to make progress in that timeframe.

Lenny (01:02:02):

One quick question there. What's a sign that your cadence is off? What's a flag that we should go shorter or longer?

Claire Hughes Johnson (01:02:10):

Well, everyone usually complains about these things, but I think if the... One, nothing, like you said, it's probably too fast if not enough progress is being made in between whatever your review or your reporting function is, and it's probably too slow if the content you're reviewing seems stale. And you're like, "Well, we knew this," or "We already did that thing," or "Yeah, we already had the meeting where we talked about that." That's another thing that's interesting, is some companies will have a pretty frequent metrics review cadence, and then an infrequent strategy review cadence. And what happens is the metrics review becomes the strategy review because you're not talking about the strategy often enough. And so you're talking about it through the data, and so then by the time you get to the strategy review, you're like, we already had this meeting. And that's just a sign that some things are just off. And to me, it's about timeliness and freshness of the content, but also that there's actually new content. If there's not new content, you're creating work for people. By the way, give them time to work.

(01:03:12):

And so I think don't fool yourself that thinking, having more frequent checks on things is going to actually make things run faster. I would say that the opposite can be true. And so be very wary of actually slowing velocity down by creating overhead. One thing we try to do at Stripe is if we're looking at metrics, let's just look at your dashboard live. Let's not create a special presentation. I actually just share your screen please on your dashboard, right? Which is a good discipline, because one, that means you have to have a really good dashboard that's real time, that's web accessible. No one had to pull or massage the data. That's a good sign. But it's also, you're not wasting people's time prepping all that information, which happened even... By the way, at Stripe, even when we put that in place, we still ended up with versions of that problem.

Lenny (01:04:04):

Yeah, [inaudible 01:04:05] I think mentioned that. I think there's a term for it, data something, where you randomly get chosen every week and someone has to present your data.

Claire Hughes Johnson (01:04:04):

The metrics review meeting, yes.

Lenny (01:04:10):

And it's like the next day, you're going to have to share your meetings and [inaudible 01:04:12]

Claire Hughes Johnson (01:04:12):

Yes. We called it the spin the wheel, the spin wheel on who gets to present. But that has a logic in it, which is then you're not working. So just prepare it.

Lenny (01:04:26):

Right. That's awesome. I love that policy. There's so much more I want to chat about. There's chapters on hiring, self-development, personal development, all these things.

Claire Hughes Johnson (01:04:34):

Team development. Yep.

Lenny (01:04:36):

What was that?

Claire Hughes Johnson (01:04:36):

There's a, yeah, intentional. There's a team building.

Lenny (01:04:40):

Team building.

Claire Hughes Johnson (01:04:40):

And performance management.

Lenny (01:04:41):

Yeah. Okay, so we could go through all that stuff. Instead, I want to talk about the COO role broadly.

Claire Hughes Johnson (01:04:47):

Yes.

Lenny (01:04:48):

I asked on Twitter, preparing for this chat, what people wanted me to ask you about it. And most of the questions ended up being about the COO role and things like that. So I just have a few questions lined up here for you.

Claire Hughes Johnson (01:04:48):

Sure.

Lenny (01:04:58):

Okay. So Amir [inaudible 01:05:04], with little accent at the end there, he asked just at what point do companies need a COO, and how would you judge if someone is a fantastic COO?

Claire Hughes Johnson (01:05:12):

Oh yeah. Well, I would first say most companies, if you looked at the universe of all companies, do not have a COO. I think it's fewer than 20%. It's definitely fewer than 30. And I think that's something to know, that I don't think it's an automatic role to have or hire. And I think you see it in more prevalently in earlier stage or high growth companies. You also, by the way, see it in certain business models. I actually think Apple was an interesting version of this, where Steve Jobs was oriented in terms of product and design, but also that Apple has... It's very intense to manufacture software and hardware that then works together. I learned that when I worked on self-driving cars at Google, and you need a very intensely operational, detailed manufacturing, hit the marks, hit the timelines person. So I think some businesses that have a very deeply operational, say a manufacturing component, that role might be more prevalent.

(01:06:19):

But point is, it's not an automatic. I think it's useful in a high growth... In an environment where you're having... Think about the founder/CEO of a company that is achieving product market fit and also having to build a company, and hire all the leaders. That is a lot because you are building the product and the business, you are building the company, and you are building all the people, bringing them all in. And that is where I think a COO type of role can give you leverage, which is... Essentially, it's a layer that takes some of those functions and helps build them with you and on your behalf, and also in some cases, bring some experience in maybe there's a particular function like go to market that needs to be built. And I think that's where you see it come up. What I've said to some people recently is I'm a little worried, just like there's a mythical founder, that there's some mythical silver bullet COO hire that everyone's like, "I will just find that person."

(01:07:20):

And first of all, we're all human beings. I'm not perfect. I certainly did some things well when I joined Stripe, and other things not as well, and I'm working on my self-awareness of what those things are. But I would say one lower risk strategy could be to bring in, say, a head of business operations or a role that's sort of COO like and try a couple of functions with someone and see if they scale with the company and with the role, and then maybe you decide they're a COO. I mean, I mentioned Stripe's business operations team. You could hire a business ops leader and sort of say, "Hey, build this team to help be the Swiss Army knife to help scale the company, and then maybe that turns into more." Or there's some CFOs that are quite operational. They could take on more scope sometimes.

(01:08:11):

But I think there are other paths to getting that leverage, and there are also ways to de-risk the hire because you could end up searching forever, right? And I worry that it's become too much of a panacea in people's minds, like somehow they're going to find... And people will call me, and they'll be like, "I just need to find you." And I'm like, "One, I may not be right for your company, but two, that was a lot of work, and I think we actually, in the end, maybe got pretty lucky." How would you know someone is fantastic? Someone said something very smart to me, which was... I was in a meeting. It was me and Patrick. So Patrick is the co-founder and CEO of Stripe. And they said that having just the right amount of tension in our relationship was how you knew it was working for the company.

(01:09:03):

And it gave us both a little bit of pause, but we ended up having quite a good conversation after that meeting, which is there has to be mutual understanding and trust and an ability for Patrick to say, "Hey, can you go do this thing?" And then believing, I will do it at the level of quality and intensity and intentionality that he would like. But there also has to be some friction, where I would maybe say, "No, I'm not going to prioritize that. I don't think that's important for the company," or I'm going to give you feedback that I don't think we're doing this well, or he's giving me feedback. The customer experience is suffering. All your scale stuff is degrading this thing, right? So fantastic is not all hunky dory. Fantastic COO is just the right amount of friction intention with forward momentum and mutual trust, because then the whole is greater than the sum of its parts, right? That's what you're looking for.

Lenny (01:10:03):

I was actually going to say, I've worked with some founders, and they have this concept that they hire a COO, and they would just solve all these cultural issues they're having these relationship issues. And sounds like that's exactly what you're saying, is that that is not often the solution to some of these deeper issues.

Claire Hughes Johnson (01:10:18):

Well, that would be the other problem, is actually believing... I was getting recruited, Lenny, and people would... Essentially, I felt like the founders were saying to me, "I'm going to give you all of the things I don't like doing as your job." And I was like, even if I'm by the way not qualify to do all those things, number one. And two is sometimes that list would be quite long, and that would make me nervous. I was like, "Do you really not running a company actually? Is that what's going on here?" And really, I think they weren't confronting elements of their work that needed to evolve and change. And what I loved about joining Stripe was... I think people also think, "I'm just going to hand all this stuff to this person and..." I'd love to say I took all this off of the Collisons plate, and Billy and John and the other people who were there at the time, and no, we actually were more collaboratively worked together, and I think it helped...

(01:11:18):

Well, one, you don't feel as isolated because you're in a team, but also there's more joint work than people realize, I think at least in the companies I'd like to work for.

Lenny (01:11:30):

For the final 10-ish minutes we have together, and you have to run-

Claire Hughes Johnson (01:11:33):

Yes.

Lenny (01:11:34):

... I was thinking I could go through just a rapid fire set of tactical questions and see maybe one piece of advice you would share with someone that's maybe struggling with this thing.

Claire Hughes Johnson (01:11:44):

Okay.

Lenny (01:11:45):

And the first is from a also Twitter person, Manuel [inaudible 01:11:52]. And he just had a question around, as you're scaling, keeping alignment strong is challenging. What would be something you'd recommend to someone that's scaling quickly and trying to keep people aligned?

Claire Hughes Johnson (01:12:02):

Well, a lot of what we talked about, having common codified documents of what we believe in, how we work, and then using communication practices very intelligently. Never think that one communication, meaning an email or an all hands, reaches the audience. You have to be smart about how you communicate.

Lenny (01:12:23):

Awesome. Amazing. On a different podcast, we talked about how the leaders are often the repeater in chief, just having to repeat the same thing again and again.

Claire Hughes Johnson (01:12:30):

Yes. And just like a marketer, use different channels. Some people read emails, some people watch videos, some people attend the meeting. Repeat.

Lenny (01:12:40):

Love it. That'll be our clip to take away from this. I was watching an interview with you, and you talked about the value of offsites for creating cohesion within a team. Can you just talk about why offsites are so important to a company and a team?

Claire Hughes Johnson (01:12:53):

I think offsite is really a vehicle. The concept is the following, which is when you yank people out of their day-to-day routine, you create space, and also you imprint memory. And so if you say, "We're going to do a very different thing with your time today or the next two days, we're not going to do our emails, we're not going to do our regular meetings, we are going to sit and work together, we're going to brainstorm," you're basically activating new parts of their brain, and then you're also having a group experience that cements a belief system usually, or a set of plans. And it also helps bring people along. We formed this thing together, it's not effective if I say, "I locked myself in a room for three hours, and then I came out and here's the plan." You want to lock yourselves as a group, as a team in a room for three hours. How do you do that? And so that's why I think it's valuable. It's just out of time, in a way. You're taking it out of your day-to-day time, and I can't not found a good substitute for that.

Lenny (01:13:56):

On a different topic, one of the most common questions I get from product managers and just founders that I haven't tackled yet, and I'm curious what your take is, is around just keeping the company updated on what's happening broadly.

Claire Hughes Johnson (01:14:07):

Yes.

Lenny (01:14:07):

What have you found works for just keeping people informed on what's happening across the company and-

Claire Hughes Johnson (01:14:12):

Having really smart communication practices is something that I think a lot of companies don't invest in early, and it's partly because it feels like extraneous, but it's a lot of time. If you're going to communicate well, you have to invest in your intranet site and what's on it. Ideally, everyone logs in and sees information on the homepage of your company internally. Do you have a newsletter? Do you have founders do like a message or a quick video, whether that's on Slack or email. There's a lot of smart tools. You can learn a lot from social media in some ways, but you actually need a strategy for it, and you need a set of people who help make sure it happens so that again, it creates stability and cadence. And if I want to find information about X, this is where I go. And I think there's also that if you do it well, it can replicate down to teams, which is, oh, we have our weekly snippet stock that everybody can see the important news or whatever it is.

(01:15:09):

But you need to create those things because they'll start to spring up, but then you'll have a million of them, and you won't be able to point people to the core messages. But it is not a thing to be taken lightly. And I think having someone who really not focuses on internal marketing, I'm talking about just good, "Here's what's important. Here's what you need to know." Sales teams actually do this really well, because they have to, because they have to keep the sellers up to date on the product and up to date on how to pitch it. And so it actually is worth talking to smart sort of sales leaders who've scaled and saying, what do you do that keeps everyone on the same page

Lenny (01:15:48):

As you're talking, I realized [inaudible 01:15:49], who we mentioned a couple times, she left Retool, and she's working at a startup that has trying to solve this problem, I think it's called. It

Claire Hughes Johnson (01:15:56):

Is a lot about what they're working on. And it's because it is, again, an unsung thing that is critical and that I don't think people naturally come to.

Lenny (01:16:03):

Next question, what are one to two, or maybe three things that people can do to run more effective meetings? I say give this masterclass on running more effective meetings. And just to boil down, what are a couple things people could probably change?

Claire Hughes Johnson (01:16:16):

I do have a video on YouTube about running an effective meeting, but I think the number one thing is the work of a meeting is not calling the meeting. Calling a meeting is easy. In fact, that is a problem. The barrier is very low, and it should be higher. What you really want to know... People need to know why are we meeting, and what is the point, what's the objective of this meeting? Is it to make a decision? Is it to share information? Who needs to be here? One of my favorite things to say is make the thing that's implicit explicit. Too many meetings are implicitly about something and not explicit enough. And I'm like, "No, no, no. I want to know why I'm here. Are we making the decision? Who's making the decision? And how?" Even better, you say, "Does anyone not need to be here? Because we'll just send you a note afterwards about what happened? Right? Make it more efficient, but be really explicit about the point of the meeting, and really do some inquiry on whether it's important, whether it's needed.

Lenny (01:17:17):

Maybe a final question is around decision making. So product managers who are, a lot of the audience of this podcast, have to, one, make a lot of decisions, get people to alignment, but they also don't classically have authority over anyone. What advice do you have for aligning and decision making?

Claire Hughes Johnson (01:17:34):

I love product management, so much accountability. So little authority. Such a hard job.

Lenny (01:17:39):

What a fun [inaudible 01:17:41].

Claire Hughes Johnson (01:17:41):

Everyone's like, "I want to be a product manager." I'm like, man, that is one of the hardest jobs in tech.

Lenny (01:17:45):

Yeah.

Claire Hughes Johnson (01:17:46):

But anyway, how do you get people to a decision?

Lenny (01:17:48):

Yeah.

Claire Hughes Johnson (01:17:50):

Actually, it's exactly... And I mentioned in my book, Gokul's SPADE Framework, which you can look up. He has a coda on it. But actually, it's the same thing that I said about meetings, which is making it very explicit, that there is a decision to be made, who is making the decision, the criteria by which the decision's going to be made, who will be informed. There's all these models. There's racy and radar, and there's a million different decision models. Just pick one, make it explicit, explain that's what's happening, and get people through it. Follow the model and do it. And by the way, you can always have an asterisk, which is if we want to revisit this decision, this is what we do. But I think too many teams get paralyzed because they're afraid, like, well, maybe they're not the decision maker, or maybe... When I say to people at Stripe in our onboarding, I used to run a session, I was like, if you're not sure who the decision maker is, one, it's probably you, and I'd rather you act that way than not because you're going to slow the whole company down.

(01:18:52):

But really, I think the other thing is, in the book, I talk about this framework that Bezos uses, type one, type two decisions. Is it high impact? Is it irreversible? Is it not? Really evaluate, what kind of decision is this? How hard is it? And then follow a process and get it done. And don't forget to actually make a decision. And if you don't know who the decision maker is and you're worried it's not you, just ask. Don't get stuck. Too many people get stuck, and it makes your work terrible, right? What do we all care about? Progress, impact, momentum. If anything I would say about advice to people generally is be a force for positive momentum, and it will be actually a real career maker.

Lenny (01:19:41):

I love that. Maybe we'll make that the title of this interview. With that, Claire, I know you have to run. Anyone listening, you got to buy this book. Like I've said at the beginning, if you like my newsletter, it's exactly my newsletter, but as a book about operations.

Claire Hughes Johnson (01:19:54):

Thank you. Scaling People.

Lenny (01:19:56):

Scaling People. Is there a website they can go to to check it out on Amazon, or is there-

Claire Hughes Johnson (01:20:00):

They can go to press.stripe.com/scaling-people.

Lenny (01:20:00):

Amazing.

Claire Hughes Johnson (01:20:06):

Or Amazon. Just search scaling people on Amazon.

Lenny (01:20:08):

Cool.

Claire Hughes Johnson (01:20:09):

But thank you, Lenny. I appreciate it.

Lenny (01:20:12):

Absolutely. Just two final questions. Where can folks find you if they want to maybe ask you questions, follow up, reach out? And then two, any other way people can be helpful to you, other than maybe pre-ordering the book?

Claire Hughes Johnson (01:20:20):

Well, definitely pre-ordering the book and giving me feedback on that. I guess Twitter is probably the best place to find me. I'm @chughesjohnson on Twitter. But honestly, I do hope you'll consume the book in some form and interact with it because the goal is to make it useful. We talked about this, Lenny, your podcast for my book is just trying to be of use, and I hope it is a positive force for positive momentum. And I really appreciate the opportunity.

Lenny (01:20:49):

Absolutely. Thanks for making time for this.

Claire Hughes Johnson (01:20:53):

Thank you.

Lenny (01:20:53):

Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.