Executive Teams: Structure and Strategy for Success

Earlier today, I tweeted about the new $650m investment fund established by Marc Andreessen and Ben Horowitz.

Now, for those of you who read me regularly, you'll know that I'm a fan of both Andreessen and Horowitz (which makes it convenient that they keep starting up firms together).  From Netscape (sold to AOL) to Opsware (sold to HP) to Ning, these guys just keep doing wondrous things in the technology space.

More recently, they started actively investing by establishing their own firm, the eponymous Andreessen Horowitz (aka, a16z).  (You also want to read their blog - because it's great.)  At first, they had a $300m fund.  Now they've got the new fund.

They're also really, really clear about what they are and are not going to invest in - from which technologies (which isn't surprising) to where (which is).  Their decision is to keep it local.  No China, no anywhere else.

What's even more interesting, though, is the way they structure their work with the firms in which they invest - and that's the actual purpose of this post.

Because they work as a team.  A real team.

Andreessen gives credit for this to one of their limited partners, Michael Ovitz, who built an entertainment empire with his Creative Artists Agency.  (He also got organizationally shafted by Michael Eisner at Disney when he was brought in as President of that company.)  And, yes, I'm a long-time fan of Mr. Ovitz, too.

(Do you see a trend here?  I am invariably a fan of people who do and create and expand.  That means you, too.)

The difference between the way a16z operates and other firms is that they get all their partners involved with the companies in which they invest.  They bring in all their brain power, expertise and support to help the entrepreneurs they trust (which is why they invest in them) to succeed.

Why this is different is because in most venture firms, the approach is segregated.  Each partner has his or her own area of specialization.  That partner, with that particular specialization, works with the companies and entrepreneurs in his or her particular space.

Moreover, if you look at the players - even within the venture firms - they compete with each other.  Big time.

These are incredibly competitive players who make little to no differentiation between their competition with other firms and their competition with their own firm's other partners.  After all, there's a lot to win - and the winnings are big in everything from money to reputation to name recognition on a large scale.

It is the venture equivalent of a standard organization chart.  Finance.  Operations.  Administration.  IT.  R&D.

You get my drift.  Separate.  Apart.

Seemingly with the same purpose - and, supposedly, all working together.

But, in fact, not.  Because we all know what the reality is - even at the executive level.  The competition is fierce and, in a larger organization than a venture firm, that competition and separation manifests and replicates itself at the lower levels of those same parts of the enterprise.

And that means a direct disconnect between the strategy of the enterprise and its execution.

So, senior executives, non-executive directors and investors, this is for you.

If you're a Chief Executive, start taking a different sort of look at your executive team.  A team-based look.  Be objective.  Analyze and assess.  Determine whether they are working your (for which read, the company's) agenda or their own.

Sure, they're going to have individual goals.  That's to be expected.  But the moment those goals start manifesting themselves in ways that work against your organization and their colleagues at the executive team level, you've got a problem.

The good news is, it's a problem you can fix.

If you're a member of an executive team, take a look at your own agenda and actions.  Look, also, at how your attitude - spoken or not - is reflected at the lower levels of your organization.  What are your people focusing on?  How are they being rewarded?  How are you making your decisions about who's good and who's not?

And, finally, if you're a Non-Executive Director or investor, do your job.  Look at how well the CEO is doing in ensuring that the organization is working as a concerted, aligned entity - all with the same goal, with everyone on the same side.  If you see something that doesn't fit, start asking questions.  See how the CEO responds.  If you have evidence (not just opinions) and the CEO still doesn't respond, then it's time to look at whether the CEO is the right person for the job.

Businesses of all sizes and in all sectors don't have time, money or opportunity to waste.  A lot of that waste starts at the top - simply because the "executive team" isn't working as a team, at all.

You can do something about it.  So, do it.  Now.