Molly Graham – Counterintuitive management lessons from Lambda School, Quip, Facebook & more

[00:00:00] Context is one of the hardest things to remember, to pass on as a leader. And it's one of the most important for teams to do their best work. So helping people understand the larger context in which they exist with business, why we're focused on the things we're focused on as a leader, like you're in these conversations regularly, you're making the decisions and you sort of forget where your team is.

So bringing people with you is actually a skill 

[00:00:32] welcome to in depth, a new show that surfaces tactical advice, bounders and startup leaders need to grow their teams, their companies, and themselves. I'm Brett Berson, a partner at first round, and we're a venture capital firm that helps startups like notion, roadblocks, Uber, and square tackle company building firsts through over 400 interviews on the review.

We've shared standout company, building advice. The kind that comes from those willing to skip the talking points and go deeper into not just what to do, but how to do it with our new podcast in depth, you can listen into these deeper conversations every single week, learn more and subscribe today. At first round.com.

Our very first episode, we thought there was, was no one better to bring on than my friend, Molly Graham. If you're a long time, first round review reader, you'll probably recognize Molly's name from a number of interviews we'd done with her most notably, her classic startup advice in giveaway your Legos, a 2015 article that racked up hundreds of thousands of views and is still constantly shared to this day.

But if you're not familiar, she's a favorite of ours for a reason. And her bio makes it clear that she's something of a startup whisper. She started at Google and comms and followed a few of her colleagues over to Facebook in the early days. Where she helped kickstart the HR department working on early performance management compensation and employee engagement systems.

And then she joined her Facebook colleague, Bret Taylor's new startup Quip to figure out the business side of this SAS product, which sold to Salesforce in 2016, after helping spin up the Chan Zuckerberg initiative, Molly consulted for a number of startups, including Lambda school, which he recently joined full-time as the COO, as Molly puts it, she loves the messiness of scaling and figuring out what it takes a startup to go not from zero to one, but from one to two, on today's episode, we're digging really deep into what that looks like from a manager's perspective.

This is a topic Molly has strong opinions on. She seemed time and time again, across her career. How so many startup mistakes come down to general management issues from the traps that managers can fall into to why you should be spending more time with your highest not lowest performers. To the manager she's learned the most from Molly shares, tons of insightful advice and practical tactics for stepping up your management game.

I really hope you enjoyed the episode. And now my conversation with Molly.

So Molly, thanks so much for joining us. One of our first guests. This is quite an honor. 

[00:03:14] Thanks Brett. Thanks for having 

[00:03:16] me. We kind of dive in and I thought the first place we would spend time talking about is one of your favorite topics, which is general management and maybe a way to sort of ground the conversation is to have you define, like, what is the job of a manager and maybe how do you know if you're doing a poor, good or epic job in that?

[00:03:35] This is something that I got very opinionated about when I was at Facebook working in people because. One of the big mistakes. I think people make both in constructing people's systems, but also in sort of wanting to be a manager is conflating management and leadership. I strongly believe you can be a leader without being a manager.

I actually think management is one of the hardest jobs in the world. And I think only people that have certain characteristics and certain loves should be managers. I basically think management, true management is the act of making the people around you better. And it only works. If when I ask you, what do you love doing?

One of the answers that you give is I love investing in people and I love making them better, making them into the best versions of themselves. Management is not telling people what to do. It is not setting a vision and aligning the work around it. I think of those well, particularly the second one as leadership management is the act of investing in people, figuring out who they are, what they're good at, what motivates them, and then aligning that to the work that a company has to do their role, their growth areas.

And. I think the easiest way to tell if you're doing a great job as a manager, is, are the people around you growing? Are they growing in scope? Are you seeing them change in terms of the things that they were not good at six months ago? And suddenly they're better at, are you pushing your highest performers and watching them explode and end up running the company in some form or another, are you helping your lower performers figure out what's not working?

The job of manager in my opinion, is to bring out the best in people. And it is not something that lots of people get joy out of. So the first question is always, do you love doing that? Is that something that really brings you joy? And if the answer is no, then I would strongly encourage you to not be a manager.

But if the answer is yes, it's one of the most powerful and leveraged jobs inside of organizations. 

[00:05:40] So does that mean that every well-functioning team is led by a manager or leaders who are not managers can actually still lead high-functioning teams? 

[00:05:52] So I think you find leadership and management in some people, like you can find the combination of the two of them.

And particularly in bigger organizations, you actually often find really extraordinary managers that are not leading a team. Meaning when I say so I'll define leadership. I would say leadership to me is someone that's able to not just set a vision and say, Hey, here's where we need to go. But to bring people with them, to inspire them, to make it clear.

Why? So it's not just defining the what, but also helping people understand why that, what, so why does it matter if we hit back all et cetera? Like what is the context in which we exist and are trying to achieve things? You find extraordinary leaders that genuinely gets zero pleasure from managing people from spending time with people from doing one-on-ones.

And a lot of times what. I do, if you have the head count. And also just in general, as you're looking at leadership teams and things like that is let's say you're working with a CEO. That's an extraordinary leader, but does not get joy from management or is just not particularly experienced at it. You can often pair them with someone.

That's a really great manager with someone that's great at saying, okay, well, here's the work we have to do? How do we organize the people that we have around that work? Those pairs are often where you find really extraordinary high performing teams. Sometimes you'll find management and leadership in the same person.

But I think it's good to recognize that they often don't come together and if they don't come together, you actually need to compliment the leader with some really extraordinary managers. Otherwise you tend to get dysfunctional teams. You can find self-organizing teams that have great managers within them that may not be directly managing the team, but have ended up helping organize the team in one way or another from the side through indirect management.

So I would say contrary to what I think. Folks that spend a lot of time thinking about managing. I would say, I would say there's a bunch of different versions of high-performing teams and there's no specific recipe. Like you have to have X and Y and Z, and then you got a high-performing team to me. It's about, okay.

Who is the leader of the team that is sort of the permanent fixture? I think a lot about startups. So I think a lot about founder CEOs and then what do they need in their compliments? So in their leadership team, on their team, in order to round out how to get their team to like a high-performing level, 

[00:08:19] drilling down more into the topic of management, I'm curious, what are the traps that you see come up most often for managers?

[00:08:28] There's a couple, the first is probably believing that you're supposed to have the answer. I strongly believe, particularly in growing scaling companies. One of the most important things to understand as a manager is, as it is not your job to have the answer, it is your job to bring a group of people together, to help them figure out what needs to happen next, but you're not supposed to be the smartest person in the room.

And if you operate that way, it actually can be hugely problematic and usually limits your career in one way or another, because you're not making the most out of a team of people. Like I said, my management philosophy, how I think about management is bringing out the best in the people around you, which means often your job is to facilitate a conversation, to set up structures, roles, or design, et cetera.

That brings out the best in the people that you're hiring. Not for you to be right all the time. So that's one huge pitfall. I think particularly when you're a new manager, it can be really, really intimidating when someone comes to you and says, Why are we doing this? Or what about this? And you don't know the answer.

It takes time and confidence to be able to say, you know, I don't know the answer to that, but that's a great question. What do you think let's figure it out. Like who would you ask? Because you sort of think you're supposed to know. So letting go of that sense of like, I'm supposed to have the answers to questions that people ask and being able to find strength in the figure, it out mode is really important.

I think, you know, it's interesting. This is a more nuanced one, but I was talking to someone about it the other day. So it's top of mind, which is, I actually think as managers, we often forget that we should be spending most of our time with the highest performers on our team. It's really easy to think. Oh gosh, that person is so strong.

They're just. They take care of themselves or they manage themselves and I'll go focus on the rest of my team. But one of the things I always say to managers is you should actually literally look at your calendar, look at your time and how you distributed every week. And you should be spending the majority of it, your time with the people that are moving the needle folks that are your highest performers.

Those folks actually have the potential to really change the company. And when high performers, if you give them feedback, usually you just see explosive change. That's one of the most rewarding things in the world. Is coaching and managing high performers. But often as a manager, what you find is when you actually look at how you spend your time is that you're spending time with people that are struggling and you're trying to help them not struggle, which is both like a totally worthwhile effort for a while, but you have to be really self-aware and conscious of the fact that sometimes people are taking up too much time.

Sometimes you're spending huge amounts of your time, making someone else successful in a way that isn't going to be sustainable and is causing you to not be able to spend time with your higher leverage folks, but actually indicates like. You probably should think about having a conversation with that person about whether this is the right fit for them.

So it's actually a good exercise in sometimes identifying low performers that aren't going to make it because you have to spend so much of your time with them that it's just not sustainable for you or for the company. But if you literally just take that rule of I, the majority of my time, coaching energy, et cetera, should actually go into people that are high-performing that like can actually become these rocket ships and end up running parts of the company someday.

It can really change how you think about your team and also about your time. So 

[00:11:55] how do you know in terms of low performers, if it's a lost cause or if they can actually grow and change, and I guess sort of the adjacent question is when you think about your role over many years as a manager, how often do you find somebody who's a low performer and there's something that changes and they're no longer a low performer, 

[00:12:14] oh, many in many different ways.

Just to say it often a low performer is not someone that is inherently low performing. It is someone that is in the wrong job in the wrong organization, has the wrong set of circumstances around them. I think as a good manager, first step is identifying that something's not working. Second step is having the conversation with the person and saying, Hey, something's not working.

Here's what I'm seeing. And I want to talk about why that is. You're not meeting deadlines. You're constantly turning in work. That's at 80% of what I would expect, blah, blah, blah. And just have the, like what's going on for you conversation a lot of times. And it obviously depends on every circumstance, but I think particularly in cases where, you know, the person has been successful in the past or, you know, they're a really talented person in one way or another, just having that open dialogue of like what's going on.

Sometimes people just need to be able to say I'm really confused, or I hate this role, this isn't right for me, or I'm feeling. Like this organization isn't right. For me. Or usually when you take the direct path and have those conversations with people, you find that on the other side is particularly for self-aware people they're struggling and they're confused and they don't know why things aren't working, but they also feel like something's not right.

And then the question is, okay, what's not working a lot of times, frankly. It's because no one's told them the way that they're coming off, the way that their deliverables are landing, what's actually expected of them. I find one of the reasons I can manage teams where I don't have a lot of expertise, like for example, marketing or whatever, is I focus entirely on clear roles and clear expectations.

Do people's roles make sense? Do they know how they fit? How they align to the business? And then. The second is, do they know what's expected of them? Do they know what success looks like? And I will just say 80% of the time I go into a team that's struggling. The answer to both of those questions is no.

So do you know what the roles on the team should look like? Does each person know what's expected of them is like exercise one. Usually you find some role that's been poorly defined. You go to define it, and then you find that the person that's in the role for one reason or another is not actually a fit for what the business needs and that conversation.

It can be a relief to the person on the other side. Cause they're like, I don't know why I'm struggling, but I'm struggling. And then you explain, okay, here's, what's expected of you. And here's what you're delivering and here's the gap. And they're like, oh, now I get it. And either they say, okay, I have the energy to fill this gap.

I know I can do it. Here's what that looks like. Or they say, you know what, this really isn't for me. So to me, the most important set of exercises are, what is this person's job? What is expected of them? Do they know that? And then do they want to, they have the desire, the energy, et cetera, to fix it, but saying, Hey, this person is low performing and they're struggling.

And not going through that exercise, I think often does a disservice to them and to you because a lot of times people are struggling, not just because they're like. Bad at stuff, but because they don't know what's expected of them. And I have many times over seen every version of this story. So version one would be you clarify roles and expectations.

People know what's expected of them and you see a dramatic change in their performance, just because they suddenly know what they're aiming for in the role that they're in. Second version is. You clarify roles and expectations and you help the person understand the gap. And they say, gosh, this really isn't for me.

This isn't what I want to do. This isn't what I'm good at. And either they find another role inside the company or they find another company. And the third is the harder one where you say, Hey, here are the roles and expectations. Here's the gap. And they don't see the gap. Those ones are tough. And they're really pretty rare.

I have to say like most people, when you help them clarify what the gap is, they see it too. And they understand it. But most of the time, what I see is folks that. Aren't a fit in one role or in one organization, you see them go to another organization or another role and just totally blossom and flower.

So I'm a fan of giving people multiple chances, but also sometimes I'm a fan of setting people free. So saying like, Hey, we've been really trying to make this work inside this company. I don't think you're happy. I don't think we're happy. Like, can we just, everybody call it and let us help you and support you in finding a path out of the company and also just like a new life and a new work life.

And there's often great ways to part amicably, particularly when you've been having like really direct and clear conversations with them. 

[00:16:41] When you think about roles and expectations, can you give an example of a really good job, something in your orbit now, or sort of a previous experience that kind of makes that point?

[00:16:52] Oh, sure. I'll give one. That's probably close to the heart of a lot of people in startups because. One of the hardest things when you're inside of a business, that's sort of in figure it out. Mode is when you have a role, that's like, I need you to figure out what our sales motion should be. So like a lot of my time at Quip, we were trying to understand what we were selling and who we needed to be selling it to.

And what a lot of people would say is like, what was our primary sales motion? And in startups, when you're in that phase, it's really challenging to find the people that are truly exceptional at figured out mode versus the people that need structure and clarity. And in particularly in sales, like clear incentives and a clear plan.

One of the most interesting exercises I did really early at Quip was I went around and met with like, A ton of the sales leaders or early sales folks at some of the SAS companies like Optimizely and LaSeon and places like that. And I literally asked each of them who closed all of your first customers in Alaska in case they don't even have salespeople.

So question I just asked is actually the appropriate question, which is like, how did you get your first customers? And then how did you get your first 10? How did you get your 10 to 50? How did you get 50 to a hundred in terms of number of customers and almost invariably. The first 10 often are closed by the CEO or someone like that.

The next 40 are closed by someone that does not have like the pedigreed sales background from Salesforce or X or Y or Z. Like I remember talking to one company and I can't remember who it is now where their first sales person of what is now like a multi hundreds of millions of dollars business was a mattress sales person that was just like friends with the founder.

And they were like, Hey, can you come help us figure this out? And he just like closed a ton of deals and helped them figure out. What their primary emotion was. And then they hired someone on that was more about like, okay, how do we take this and scale it. I often say, when I'm talking to like my team or other teams, whoever does that first set of deals, it's just like a completely different exercise.

Then the next set that is a valuable conversation. When you're talking about role clarity, I've definitely hired tons of people, including. Early on at Quip where I was Joel, trying to understand both what our sales motion was and frankly, how to effectively manage a sales team. We hired people that needed more structure than I was able to give them.

And ultimately some of those led to, Hey, I'm not going to be able to provide you with clarity. I actually need people that bring their own clarity and structure. And because I just don't have a lot of the answers right now. And you seem like someone that actually needs that clarity instructor and like, wants to know like wants a playbook and I'm not going to be able to give it to you because that's just not where we are as a business.

And I don't want you to spend two years inside of an organization where you're just like constantly not feeling successful because you don't have this playbook and it's not how you. Thrive. And it's not the kind of work you love doing. And those folks were often like, yeah, I, this is not fun for me. And it's not what I signed up for.

And we found ways for them to still feel successful. And they've gone on to do lots of really wonderful and successful things at other organizations. But for me, it was like one of the biggest things with management is you have to be really realistic about what you can control and what you can offer and what you can't.

And I say that to a lot of managers inside of scaling organizations, because so much stuff is out of your control. Like you can't control the fact that it's chaotic, you can't control that. There's a lot of ambiguity. You can't control that there's change all the time. So you actually need to be like blunt and direct with people, both when you're hiring them.

And also when you're talking to them about performance, about the fact that like. Sometimes it is a sink or swim environment. And sometimes like they need things structure, et cetera, that you can't give them because no matter how hard you try, there's just a lot of stuff that's out of your control. And so it's a sort of a funny example when you're asking about role clarity and expectations.

But to me, it was one of the most interesting examples when I was sort of beginning that sales journey at Quip around like, whoa, there's so much I can not control here. And it really takes a very particular kind of person to be successful when there is so much that's undefined in a business 

Can you describe what the role and expectations were, or should have been as sort of an example of what good kind of expectations and role clarity? 

[00:21:20] Yeah, for sure. I think in that case, I did it well with like one or two people and not as well with others, but it was, we need people that are going to come figure it out.

And the interesting thing for us. Sales is a very particular example because are used to working off a sales plan where a part of their compensation is based on their performance, how many deals they closed, et cetera. And so one of the first things we had to figure out was are we in a place where we can even have a sales plan, like a compensation plan that we're folks get rewarded based on the deals that they close.

And we use this sales plan that Jason Lumpkin posted that is all about alignment between the company and the incentives of the company and the incentives of the salesperson, where basically you only make money as a salesperson once you pay for yourself. Or if you're like costs the company a hundred thousand dollars, you divide that by four.

So you have to make $25,000 a quarter before you even get paid back, which is not a typical sales plan, but it was super helpful. Jason posted it on his blog and I saw it and was like, this is exactly the phase we're in because. We need salespeople that are company aligned. So a lot of it, what we saw was folks would come into the organization and we had some people come in and were able to like crush that sales plan, like able to pay for themselves and then more and et cetera.

But it was not an environment where they felt like they could be successful when you would see them struggle. And they were frustrated because they weren't getting paid as much as they thought they would be or should be. And a lot of that had to do with what they were used to doing all day, every day, et cetera.

But for me, it was like really clarifying both for myself and then ultimately for the members of the team that we need people that are going to come in here and are going to make a playbook. They're not going to get handed a playbook and execute on that playbook. They're going to come in and actually be able to go, just like call the 10 people they know best and be like, Hey, why would you want to buy this or learn and help us shape and understand what.

Those sales should look like and what our core selling motion was. So the expectations were basically like, Hey, that you're going to be focused on making, equip successful first. And then you get the upside after you've sort of like done that B that like a lot of this job is around figuring out what it takes to sell this product and all the different motions entailed on that and not handing you something that's repeatable yet.

But I don't know if that answers your expectations question, 

[00:23:45] one other sort of question in terms of this area of sort of managing performance or managing low performers. Before we flip back over to talking about high performers, do you have a benchmark in your head when you think about the managers that report to you in their teams?

Like what percentage of people should be managed out of the organization? 

[00:24:05] Oh, it vastly depends on the size of the organization. And I would say when you are looking at attrition, which is the people leaving the company, it is really important to look at the difference between what people in HR call regrettable, attrition and non regrettable attrition.

So regrettable is like, I really wish this person had stayed and non regrettable is, were okay. That they left. The best kind of attrition somewhat, obviously on the kind you're asking about is non regrettable attrition. So folks where it just wasn't a fit, not that they're bad people or anything just that it wasn't a fit, particularly for smaller companies.

I wouldn't put a percentage on it because that can actually be dangerous. Like you can say, we should be managing out 5% of people. Why are we not doing that? And it can just sometimes be a real drain and a sack on the organization to actively go on sort of a witch hunt. But what I actually look at a lot of times is how many people have you hired in the last year?

A lot of times you'll see companies that are doubling, they've gone from 50 to a hundred. And then you ask how many people have left the organization and it's like zero. And you're like, okay, well based if you just literally look at that math, you are assuming you are perfect at hiring. You are assuming that you literally have a 100% success rate at hiring, which I've just like never seen before.

So typically when you are actually adding a lot of people to the organization, You need to be actively asking and managing a process and people teams can help with this or experienced managers can where you're asking. Okay. Do these people fit? And in larger organizations, a lot of times you look for actually like five or 10% non regrettable attrition, but that has to come with numbers, right?

That doesn't work in a 20 person organization. Because you were talking about like individual humans there. Whereas if you get into the hundreds percentages, make a little more sense, but the truth is every organization is different. The most important thing I look at is if you're hiring a ton, you should probably be managing a number of people out just because like, chances are your hiring process is not that good.

I've never seen one. Even at the best, most scaled organizations, I've never seen a hiring process be a hundred percent successful. So I don't have a perfect set of numbers, but I will say one of the best things to get good at when you are a growing organization is recognizing who's not working out and having a process to help them find their way out of the organization.

If you are not good at that early, you will not get good at it over time. And it can really weigh down organizations to have a lot of folks that aren't meeting expectations in our performance. 

[00:26:48] Are you able to paint a broad brush and say like in general, people do not. Ask enough people to leave or you can't make a broad generalization.

[00:26:57] Yeah. In general, people do not ask enough people to leave or it takes too long. 

[00:27:02] I tend to think in sort of any facet of running a business, it's hard to be at perfect equilibrium. And so like in general, you kind of lean on one direction or another. And I think in this case, it may be useful to say, okay, on average people lean in this direction, so you need to be more intentional or watch this sort of thing more closely.

[00:27:19] Yeah, in general, I would say companies end up in one of two places. They end up as an organization that is high-performing and efficient and generally good at getting rid of folks that just aren't a fit for the organization. Or they end up as an organization. That's a little bit fat and bloated. It can still be high-performing, but tends to have lower margins because they just have a lot of barnacles on the ship and you have to decide early if it matters to you, which one you are.

And if you want this sort of efficient, faster ship, you actually have to get good at having hard conversations and managing people out of the organization. And most people are too chicken to do that. Most founders and CEOs, most management teams, let people stay around a little bit too long when it's clearly not working for them or for the organization, 

[00:28:02] because people are just conflict averse or there's some other reason.

[00:28:07] Yeah, no, I mean, I would say just in general, humans do not. Tend to like having hard conversations. Like you think about it, interpersonally, most people do not enjoy fighting. Most people do not enjoy having tough conversations where you say, Hey, this isn't working. And I think it really, particularly for newer managers, which you've got a lot of insight of smaller organizations, like it's really scary because you spend a lot of time assuming that it's your fault and you think the person's going to be angry at you.

And once you do it, a couple of times, you realize. People want to know where they stand. One of the things I always say is direct is actually kind. So you think it sounds horrible to say to someone, Hey, something's not working a lot of times. They're like, oh, thank God you said that. Like, I also feel that way.

You're making a space for me to actually say this. And if you say, Hey, something's not working. Like, here's what I'm seeing this just like isn't feeling. Good to me or to the people around you. And we need to figure out how to fix it. That person at least has a forum to say, yeah, I feel really attacked. Or I feel really out of sorts here.

I just don't feel like I fit here. I'm not happy or whatever, but a lot of times we're too scared to even have those conversations. So we sort of say, well, you were, I don't you're okay. I really like you as a person, but I just feel like sometimes you don't. Exactly. And the person can't follow the direct thing that you're trying to say, which is like this isn't working, you are not performing.

And you end up with a lot of surprise from people where the manager can't summon the courage to actually have the direct conversation. And then eventually they just get so frustrated that they want to fire the person, but that person never had a chance to actually know what was going on. So I think one of the biggest skills to work on as a manager and as a leader is to be direct with people.

Our first episode is with Molly Graham, a seasoned exec and builder who excels at helping startups to go not from 0 to 1, but from 1 to 2. We’ve interviewed her four times on First Round Review — which might be a record — because the advice she has to share and the experiences she can draw from are unbelievably helpful to founders and startup leaders. She helped build and scale Facebook, Quip, The Chan Zuckerberg Initiative in their early days, and is now the COO of Lambda School. In this episode we dive deep into management. From the traps that are easy to fall into, to why you should be spending more time with your highest—not your lowest—performers, to the managers she’s learned the most from, Molly shares tons of insightful advice and practical tactics for stepping up your management game.

Molly Graham – Counterintuitive management lessons from Lambda School, Quip, Facebook & more

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6 Counterintuitive Rules for Being a Better Manager — Advice from Lambda School, Quip & Facebook