There is an old saying in poker that if you don’t know who the sucker at the table is – it’s you.
The same can be said of critical decisions in a board meeting or frankly any other meeting where major decisions are ratified. If you’re turning up to important meetings hoping to persuade the critical people who attend to a decision you’re trying to make and have already “counted your votes,” you are sub-optimizing results.
This is a classic mistake many entrepreneurs make so I’d like to offer some constructive advice on how the savvy hand would be played.
Pre-Meet With Board Members
It is healthy to allocate 30 minutes per board member for a call at least a week in advance of your board meeting. Your objective should be to walk through your planned agenda for the board meeting and seek any major items that he or she would like included.
There is a YouTube video interview I did with Seth Sternberg with tons of practical advice but specifically where he went through how he did his pre-meetings with Sequoia and others on his board at Meebo.
It may seem like “overhead” to have pre meetings but it is really not. If you have smart investors and board members, this time could be some of your most valuable because you get a 1-1 dialog about your business without all of the pomp and circumstance of a formal board meeting. You can get their reaction to your company progress and to the strategic topics you plan to cover at the board meeting.
You should specifically ask them whether there are any agenda items they would like to add. This is the best way to avoid surprises at your board meeting and the golden rule of board meetings is, of course, no surprises. If they bring up a controversial topic at least you’re prepared for it and you know their views before the meeting. Good pre-meeting board management is the surest way to maximize the productivity of that rare occasion (six to eight times per year) when you actually have 5-8 key people in the same place at the same time discussing your business progress and offering suggestions. For more about board management, click here.
If you’re a normal company contentious issues will creep up from time to time:
- A founder involved in a scandal
- Co-founders fighting
- Whether you should raise a big round of capital and from whom
- M&A discussions
- Press scandal
Or just garden-variety complex issues:
- Should we raise debt?
- Can we do an inside round of capital?
- Should we open up an office abroad?
- Can we spend $500,000 on capital equipment?
Never find out in real-time how a group of individuals will vote on things that are important to you. Unfortunately many startup CEOs do exactly this. Think like a lawmaker. You need to “count the votes” in advance and understand why people are for you or against you and what you need to do (change, compromise, persuade) to get your votes.
How to Approach Contentious Decisions
Make sure to have the pros and cons of a decision laid out before your pre-meeting call (or in-person coffee if you’re in the same geography). If you’re deciding between options have the details of each option, including costs and consequences. Do the quant work, show that you’ve thought about the issue and don’t be afraid to outline which option management is in favor of and why. Board members expect you to have an opinion.
Don’t leave anything to chance. Ask your board member on the spot if they support your decision and whether she sees any weaknesses in your approach. If she’s not convinced, at least you’ll know in advance and you’ll know why. The basis of all good decision-making on hard decisions is that once you know the “objections” somebody has you can begin to make changes to your position, make compromises or double-down on convincing them why they’re not seeing it correctly.
Once you’ve met your multiple board members and started to read the politics you can also begin to use existing board members to help persuade unconvinced outliers. It is far more effective to have board member to board member discussions than for you to have to do all of the persuading, but obviously you first need to know who’s on your side.
Purists will hate the idea of pre-meetings. But why would you ever leave anything important to chance? And I certainly wouldn’t enter the meeting only to find out that every other board member had already met and conspired against the outcome I wanted. If I’m going to lose a vote I sure as hell want to know before the votes are even cast. Remember – if you don’t know who the sucker at the table it – it’s you.
If before a big meeting you don’t have the votes, you can avoid the vote by either changing your position or delaying a decision and living to fight another day.
So if you have to do all of this pre-meeting politicking, what is the sense in having a board meeting in the first place?
A board meeting (or any big meeting inside a large company) is where you ratify the decisions that were already debated. It’s where you mix five or six opinions when before you only had one-on-one conversations. I fully accept that at times the group conversation can add value to what you had perceived in one-on-one sessions and at times this yields better results. But more often than not, real-time decision-making in groups yields group think, indecision, avoidance of difficult choices and sub-optimal outcomes. Know your advocates in advance and make sure you have them weigh in in favor of your decision.
Documenting And Ratifying Important Decisions
The most frustrating thing as a board member and also somebody who has attended meetings of significance for the past 25 years is the sheer number of times that decisions reached in meetings aren’t properly documented or remembered correctly after the fact. It is critical that you summarize the decisions reached in your meeting before you leave. Make sure there are no disputes.
The day after your board meeting I would recommend you send out an email with a summary of your understanding of the key decisions reached so that it is memorialized. I would have the legal board minutes sent out within a week of the board meeting and ask for unanimous approval via email immediately.
Most boards approve minutes at the next meeting when people’s memories of the events are questionable. There is no sense in having difficult discussions and making tough choices if the outcomes are only to be disputed 60 days later when you reconvene. After many years of such meetings, trust me that people will remember the decisions you made very differently after that fact. Ratify early.
If you enter a meeting where a difficult decision must be reached and you haven’t worked to gain consensus and understand others’ views prior to the meeting, you will sub-optimize decision-making. You will leave to chance how people are feeling on any given day or who ends up being the most persuasive on the spot.
You will get conflicting advice from people who hate the idea of pre-and-post meetings. So my advice would be simple: you don’t have to pre-lobby key decision-makers in advance if you don’t care about the outcome of your decisions. It’s that simple.