A Leader’s Most Important Skill

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Though effective leaders tend to possess a multitude of different skills and abilities, my experience as a CEO taught me that the most important skill for any leader to possess is that of clear and effective communication. Indeed, a CEO’s strategy is only as good as her ability to communicate it. This is equally true of her mission, vision, values, company goals, and most other things that fall under her direct purview.

Though some of the basic tenets of effective communication are obvious and intuitive, others are less so. Though I had always thought of myself as an effective communicator, the experience of leading a growing company over many years illustrated that good organizational communication often goes well beyond the basics.

In this blog, I will share with you some of the most important lessons that I learned about effective communication within my own company. I hope you’ll find at least some of them to be instructive.

Become Obsessed with Creating Organizational Clarity

In his book, The 4 Obsessions of an Extraordinary Executive , author Patrick Lencioni posits that the highest performing CEOs tend to be maniacally focused on four primary things:

1. Building and maintaining a cohesive leadership team (see my blog about this here);
2. Creating organizational clarity;
3. Over-communicating organizational clarity;
4. Reinforcing organizational clarity through human systems (“human systems” referring to things like hiring, performance reviews, and so on).

My experience as a CEO helped me appreciate just how important these four things were. Over time, I came to appreciate that many of the problems that surfaced within my company were actually just symptoms of a larger underlying problem, being lack of organizational clarity. These problems included anything from resource constraints, to product decisions, to disagreements at the management team level. Not coincidentally, the more deliberately I focused on creating and over-communicating matters of organizational clarity, the less frequently these problems seemed to emerge.

More specifically, CEOs must become obsessed with making clear the forward-looking statements and guidelines that exist to act as a kind of “north star” for the rest of the company to lean on when making difficult decisions of their own. These forward-looking statements start with your company’s mission, vision, and values, which in turn become distilled into your company’s 10, 5, 3, and/or 1-year goals. In my opinion, creating and reinforcing clarity around these specific things is perhaps the most important part of a CEO’s job.

Providing this type of clarity can be hard to do, especially when companies and industries are in a near-constant state of change (which almost all are), and the appropriate “north star” either isn’t immediately clear to the CEO, or can change depending on evolving internal or external circumstances. However, this clarity must be provided and understood by all, else the CEO will find herself barraged with an endless number of problems and questions on a near daily basis (among other challenges).

One helpful way to think about organizational clarity is this: Make one decision to avoid having to make hundreds of decisions: If each employee is absolutely clear about what is truly important to the company and where the organization is going (which, by definition, communicates what’s not important and where the organization is not intending to go), then they’ll already have the appropriate framework in place to make decisions themselves that would otherwise make their way to the CEO’s desk. This, in turn, may also allow you to hold your employees to higher standards of decision making, given that they should already be in possession of the guardrails necessary to make difficult the trade-off decisions that will inevitably (and regularly) arise.

Organizational clarity is also necessary for your company to maintain its focus: There is an inverse correlation between organizational clarity and the risk of your company being distracted by tempting new initiatives (which are often off-strategy). These can include extraneous new product features, off-target distribution partners, sales opportunities outside of your target market, and/or growth opportunities that fall outside of your company’s core competencies.

Frequency of Communication

Regardless of what you’re communicating, if it’s important, I’ve come to learn that you simply can’t communicate it frequently enough. You should aim to over-communicate at every turn, especially as the company grows, as communication always seems to get worse as companies scale. When communicating something that you want to be truly retained by your team, a decent rule of thumb to use is that you should say it at least 7 different times. Though this may sound like overkill, it’s not only consistent with my actual experience, but also consistent with countless scientific studies on human information retention and its relation to repetition. Though you should certainly use repetition as a tool to communicate matters of organizational clarity (mission, vision, values, near and long-term goals, etc.), repetition can and should also be used as a tool to communicate substantially anything of importance to your company.

I remember in my early years as a CEO, I used to get incredibly frustrated when certain of my employees never seemed to retain pieces of information that I had previously communicated to them. With experience and perspective however, I came to learn that the problem wasn’t with them, but instead was with me, as it simply hadn’t been communicated to them frequently enough.

In addition to frequency, I also found that retention levels were higher among my employees when I used multiple mediums to communicate the same message. These can include formal mediums (things like town halls, quarterly business reviews, monthly financial updates, and so on), but importantly also included informal mediums (internal blog posts, periodic email updates, even uploading YouTube videos of me communicating something verbally).

Establish a Communication Cadence

I found it helpful to establish a formal communication cadence, whereby employees came to (rightfully) expect important updates at regular, pre-determined intervals. Specifically, our communication cadence included annual reviews and previews, quarterly updates, and monthly Q&A sessions (these in turn were complimented with informal means of more regular communication, via email and the like). Not only does a predictable cadence ensure good communication hygiene within your organization, but it also provides the management team and employees with the infrastructure to discuss different types of information: For example, annual reviews naturally covered higher-level strategic considerations, whereas monthly Q&A sessions covered very detailed and tactical items.

One important thing to note: Your communication cadence must increase materially when the company is facing some sort of material problem, be it internal or external. Problems beget uncertainty, and uncertainty begets questions. Unanswered questions create unnecessary fear and anxiety, which in turn brings about all sorts of destructive behaviors and thought patterns. For example, during the early months of the COVID-19 pandemic beginning in March, 2020, we increased our communication cadence to daily: We would send out daily email updates at the conclusion of each workday, and we did a weekly all-company Q&A session every Friday. Though I fumbled my way through more than a few issues at the onset of the COVID-19 pandemic, I can say with certainty that this frequency of communication was one of the most powerful things that we did to help employees through a time where they needed that help most.

What to Share, and What to Omit?

The question of what and how much to share with employees doesn’t have an objectively correct answer. If one were to ask 10 different CEOs their philosophies on the matter, 10 different answers may emerge. Nonetheless, we chose to frame our answer to this question via the following belief:

If you treat people like adults, then they’ll tend to act like adults. If you treat people like children, then they’ll tend to act like children.

We applied this philosophy to a wide variety of things including our policies on sick days, office entry/exit times, and dress codes (our dress code, taken directly from Google, was “Please wear something”). Specific to communication however (and more pertinently, to the question of whether/how to share bad news across the company), we came to recognize that our employees were generally mature adults who knew how to handle bad news, as long as I communicated what happened, why it happened, and what we were planning to doing about it.

Early in my tenure as a CEO, I was often very apprehensive about sharing bad news with my employees, as I worried that it may scare them off (as there were plenty of other software companies that they could have worked for). However, over time I came to appreciate two things: First, it often wasn’t the news itself that that the potential to scare people off, but instead how that news was delivered. Second, I needed to give my employees more credit when sharing bad news: Indeed, most people weren’t scared off, and in any case one should want their best people working on their biggest problems.

Two other practical manifestations of our “treat people like adults” communication policy included:

• Terminations: When we had to terminate an employee, we found that we experienced the worst cultural outcomes when we were less than forthright about why the termination occurred (of course, in all instances, we remained deeply respectful of the departing employee, as well as our ethical and confidentiality responsibilities towards them). That notwithstanding, we found that the more honest we were about why a termination happened, the less disruptive and nerve-wracking that termination was for the remaining employees. This was especially true when we made a hiring mistake, and had to fix that mistake quickly after making the initial hire: If I noticed a poor performer, chances were very high that several others had already noticed the same thing, and were waiting for corrective action to be taken.

• Sharing Financial Results: Over time, we simply shared all of our financial information with all of our employees. I was initially worried about sharing too much (what happens if we have a down quarter! What happens if we’re trending in the wrong direction! What if employees think we’re too profitable and demand raises as a result!), though honestly none of my worries ever came to fruition. Instead, people appreciated the transparency, and any time there was indeed a problem reflected in the financial information, I could get my best people working on the problem that they now had a more nuanced understanding of.

One additional thought on terminations deserves to be mentioned here: Though we indeed experienced our best outcomes with being transparent around terminations, it’s important for all CEOs to remember that your employees will carefully watch how you treat people in all situations, including and especially on their way out of your organization. Outgoing employees should be treated with the same care and respect as incoming employees, and CEOs would be very foolish to be publicly disparaging towards a terminated employee under the veil of transparency.

As entrepreneur and investor Ben Horowitz has said: “You can take somebody’s job, but you don’t have to take their dignity”.

The Mood of the Company Directly Reflects the Mood of the Leader

Though this sounds intuitive now, this was a reality that surprised me when I first came to appreciate the direct correlation between my own mood and that of my broader company. When I was down, sluggish, tired, or worried, almost inevitably the broader employee base came to experience and reflect those same things. When I was excited, energetic, and optimistic, most others tended to feel the same way. This didn’t necessarily oscillate on a daily or weekly basis, but tended to be true in periods of time measured in months or quarters.

Some of the things that this taught me included:

• Even when you think you’re doing a good job of “shielding” your employees from your worries, concerns, uncertainties and hesitations, these things tend to make themselves apparent in other, less deliberate ways
• As a leader, you don’t always have to be robotic and pretend like there are no problems or issues. Instead, my best outcomes occurred when I was honest about what was weighing on me, and subsequently sought help from those most able to help me address the problem
• Self-care (which better regulates and manages your own mood and disposition, which in turn regulates and manages the mood and disposition of your employees) is critically important not just for you as the leader, but for your entire company. As a CEO, investments in yourself become investments in your company. As a result, they are the furthest thing away from being selfish acts.

In Sum

If I were to summarize all of my lessons related to communication in two sentences, it would be these:

1. There’s no such thing as being too clear or being too communicative;
2. Honesty is just always easier

As mentioned above, a CEO’s decisions are only as good as her ability to communicate them, and what constitutes good communication isn’t always as intuitive and straightforward as first meets the eye.