Arthur Matuszewski (VP of Talent & People @ Better)

Hey everyone, this is Erik Torenberg and you're listening to Execs by On Deck. Execs is a show for founders, operators, and leaders who want to understand the playbooks, frameworks, and tactics that leading tech companies today have used to scale. Our guests are tech execs in key roles at top tech companies who share their hard-won, earned secrets on how to scale faster. Arthur Matashevsky was most recently the VP of Talent and People at Better after leading portfolio operations at Human Capital and strategic talent sourcing at Wayfair. This episode is about the fundamentals of building out talent teams. We highlight frameworks and first principles for hiring talent more broadly, and then talk about how that changes during hypergrowth. So Arthur, when you look back at the arc of your career and the various different positions and experiences that you've had at different companies, what is sort of the thread that ties your interests together or that has explained the various different things that you've pursued?

For sure. I think the biggest thread is bringing opportunity to talent. How people find themselves in their work is an extension of their values, who they are, their formational experiences. But more than anything, it's an expression of what they want to achieve and who they want to become. And so being able to build organizations that produce more opportunity and aligning that to individuals that can make good on that promise of opportunity.

It's fascinating because, as you well know, On Deck is evaluating people before they have ideas often, and so before they have companies. And so you really just are evaluating the people itself. And who knows better how to evaluate people than people who do that as their full-time job and do that for companies?

That's true.

And so you've worked with VCs and you're very interested in the investing world as well. What do you think VCs should learn from people leaders and talent leaders about how to evaluate talent, especially at the earliest stage? Like, how do you evaluate founders pre-company, pre-idea? What do you think about that?

So broadly, I think there's a lot of falling onto secondary indicators of where people went to school, what companies people have been affiliated with. It feels like the last couple of years have been the crop of, you know, ex-Airbnb, ex-Uber, ex-what have you across LinkedIn. I think when you're looking for potential, it becomes more of a matter of understanding understanding the context that folks have come from, as well as the slope of the line that they've brought to the impact and the learning that they've had. So someone coming out of community college that's somehow managed to figure out how to code well enough to wind up on the radar of a YC or other prestige indicator company is going to hit differently than someone coming out of CS50 at Stanford, not because the inherent quality is different, but the amount traveled in terms of impact to potential is very different. So ultimately, I think boiling it down to understanding deeply what people have done and what structural challenges they've overcome, whether that's educationally, interpersonally, individually, but also what headwinds, tailwinds they've had from a business environment. It's very different to be at a company when everything is going well for it than being the person that was at a company and helped turn it around from a bad situation to a positive one. It's harder and harder, I think, to separate the signal from the noise in terms of the halo effect that comes with success, but really untangling what that individual was able to uniquely contribute to that success rather than just following along based on the various institutional credit that they could lay claim towards.

Yeah, it is interesting. I mean, if you're a VC firm focused on talent, you need to do one of two things. You can evaluate talent in different ways than other firms are, and thus you see things other people don't, or you can just look for pools of talent other people aren't seeing. At On Deck, we do that by focusing on employees who haven't yet started companies and trying to identify who would be good future founders. Sometimes the challenge is that sometimes I'll do references on founders who end up being successful that got bad references because they were bad employees, or they got references, oh, this person's talented, but They couldn't stay focused or whatever it is. Vice versa, sometimes people are great employees or executives or leaders within companies, but they don't have the founder magic or whatever it is. And so it's interesting that sometimes it's not an exact correlation.

Most definitely. Yeah. And I usually think about it in terms of the typist problem, where the best typist in a pool is being evaluated on detail orientation, on throughput, on ability to crank out as much individual contribution as possible. And if all of a sudden you start evaluating the person that is managing the typist, you're looking for the folks that can build process, galvanize an audience, drive people to standards of sameness. You see a similar effect in sales and biz dev roles. You see it to a lesser extent in engineering. But typically the attributes that you're looking for in leadership are sometimes inversely correlated to the attributes that make folks successful in their day-to-day. Um, and I've seen that a lot with first-time founders, um, as well as folks that are figuring out, uh, what they're good at, give— if they're earlier in their career. But typically, if you're only playing to the strengths that have served you at one stage, whether that's being a good student, whether that's being a good developer, you have to lean into some of the things that you're probably worse at, um, to get wherever, uh, your founding journey needs you, whether that's fundraising, whether that's hiring, whether that's, um, actually delegating away leverage. And one of the, one of the challenges that I think folks make is, uh, trying to translate Attributes expected in a certain context to another, rather than focusing much more on what is the business problem I'm trying to solve, what are the attributes that will likely be necessary in solving that, and looking at it more from a bottoms-up view rather than expecting to pattern match this person to this, therefore they should be successful at this, but actually breaking that down into the component collection of values and abilities that would give you that indicator.

Yeah, that's really interesting. I want to segue the conversation a little bit to, let's pretend we're giving advice to a founder who's raised $4 million. They have some semblance of product-market fit or exciting customer demand, and they now need to build out their people team, their recruiting team. Why don't you talk about kind of the sequencing of when founders should think about hiring their first recruiter, when they should think about firing their first HR person, what to maybe look for? Why don't you give some advice to these stage founders?

For sure. When I think of the sort of founding journey and going through the cycles of company formation, ostensibly, you want to be really clear on what are the business objectives on what timeframe that you're solving for. The secondary piece is understanding your commercial model, your cost base, your fundraising cycle. Third is actually then developing a point of view on what hiring plan will help you meet those objectives on a 3, 6, 9-month, or 1, 2, 3-year basis. I think if you're building a business that is, um, principally going to be human capital intensive, rather than, hey, I need the 5 best coders to get us towards an MVP, your, uh, importance of having an earlier, uh, stage talent person in that forming team, so 0 to 5, 0 to 10 people, um, will increase. If your business is, uh, more technical and can be headcount light until you hit product market fit, um, then you can defer that hire until you get to the, you know, 15, 30, going to 60 growth rate. From a, um, people and culture perspective, hold the, uh, sort of semi-confident view that, um, you know, the founder is and will remain the head of people until roughly post-product market fit. Um, because you are very much figuring out what the values, uh, that you want to reward and recognize, as well as, uh, punish and reprimand in your organization are. And the only way you're going to be able to do that is by being in the trenches, um, seeing people's behaviors and driving towards that. A lot more of the, um, people opportunity in early stage is one of communication and narrative. And it's really the founder, um, that will hold and own that story. Um, so if she's raising and, uh, rehearsing the pitch, um, time and time again with prospective partners, clients, VCs, what have you, um, that's the same narrative that should be coming back and updating real time in terms of each and every person's role on the team, why it's relevant towards whatever near and medium-term objective there is. And it's hard to put HR in a box and push it to the side when you're doing that, because the feedback loop needs to be near real-time and mark-to-market.

Totally. When should a company be thinking about hiring? When do you hire a head of recruiting, or when do you hire, you know, sort of a more senior people leader?

Totally. I think if you have, you know, medium to high confidence in your growth rate, you know, either just before product-market fit, I think that part of the challenge with hiring people and talent leaders is a lot of folks default to the view of, let me find that player coach and let me hire a person that can do it all from designing our compensation strategy to making sure that, you know, we're running PIPs and firing people, you know, productive ways as our company scales. And there's generally a misnomer of like, hey, let me hire a person that's larger than what I need today because that'll pull forward my talent strategy. people and talent maturity curve, when in reality you want to be bringing in a leader once you've already tried the spreadsheets and bubblegum versions of all these approaches, and when you're ready and willing to resource that leader to be successful. And resourcing doesn't necessarily have to mean just headcount of, you know, I'm hiring a head of people when I feel confident that I can hire, you know, 2 to 3 folks supporting them, or a talent leader in the same vein. But from a tools perspective, from an external partner perspective, from advisors, consultants, what have you. I think part of the challenge that companies have is their appetite for solving the HR problems leads them towards trying to find a person that's maybe a bit more strategic, a bit more experienced, rather than being willing to sit in that position of pain a little bit longer to really figure out and invest in developing the capability so that it actually makes it a compelling opportunity for that right, more experienced, more strategic leader to come in and really take it from, you know, not just 0 to 1, but from 1 to 3.

Yeah, that makes a lot of sense. As you well know, you know, right now, people leader at a senior level is in one of the most demand positions right now and one of the hardest for CEOs to hire. Let's talk about that. What's your advice, given where the market is today, for a CEO to find that person who can help take it from 1 to 3, as you mentioned? What are the different archetypes of people leaders? What should people be looking for? Are people okay? Should they be okay taking risks on people who are really smart? But don't necessarily have the right, or don't have a ton of experience. Why don't you unpack some of that?

So I think I'll break it into 2 parts. Like, one is sort of preparing for the hire, and 2 is sort of who is that hire? What do they look like? What do they bring to the table? On the preparing for the hire side, I've seen a lot of organizations that are caught in this trap of like, oh, we'll wait to roll out a compensation philosophy or a strategy for performance and promotions or a go-to-market approach. for where we're going to hire, flexibility. And so your people and talent debt just increases. So first play is to make sure that you're making efforts to do those things, even if you feel underqualified or underable. Pull in resources, pull in consultants, pull in advisors to help you come to at least a provisional point of view and make progress towards that. Because the more debt that you accrue, the harder and harder it is to fill that great big unicorn spec. In a similar vein, begin resourcing against that. Some organizations have the tendency to only hire top down and I'll wait to hire the first recruiter. I'll wait to hire the first HR associate until that head of people or head of talent comes in. Again, by default, it makes the role less appealing and makes that executive joining less likely to succeed versus a team that, yes, maybe they didn't hire them. Maybe they didn't have full line of sight into how it's structured. But coming in day one, knowing things are happening and there are people to help you achieve things. is a very different palette to start from than coming in with, you know, 30 people shaking 30 strategic priorities at you. And the third piece is also being mindful of the business strategy and not letting HR be dictated by other business leaders, HR and talent speaking broadly. Because I think part of the challenge becomes, hey, you know, I own revenue or I own our product roadmap. And therefore, this is what people and talent should be focusing on. I think one of the challenges for people and talent leaders coming into this role is, you know, they're coming in not just to have a seat at the table, but to sit 10 inches away and help set the table for other execs to collaborate productively, to get to alignment around vision, purpose, and sort of talent and resources aligned towards that. So put that all that in the preparatory camp. In terms of the second piece of like archetypes, I think you basically have in terms of looking at people and talent leaders, you have a dearth of folks that have come up commercially. So in the historical precedence of talent and people, you've seen many more folks geared towards bottom-line risk reduction and sort of this legacy HR of avoid liability, avoid fault. So if you're looking for folks that have been doing this for 10 or 20 years, there are exceptions to that model. Early versions like Laszlo from Google, you know, one of the first folks coming out of McKinsey into talent and people.

Mm-hmm.

Practice, but those are probably single-digit representatives of the commercial profile. I've seen one version of taking that, you know, McKinsey EM plus some business operations experience that has an affinity towards people and talent and being successful in the role. I've seen the second version of that being folks that have come up through HR and talent, but have then shifted over into product or shifted over into marketing or shifted over into other domains that are closer to the business that can then come in at a higher level, having that hybrid mixed bag of experience. And the third archetype is folks that are sort of part of first-class talent people organizations at places like Airbnb or Stripe, et cetera, that have seen it, but haven't had that larger position of responsibility. And I think in those cases, it's more understanding when they came in and what impact they were able to have. In that impact, what has been kind of run the machine versus what has been build the machine. And I think for most organizations, you're looking for the latter experience of folks that have come in, you know, before there was a way that you organized your go-to-market org, before there was a way that, um, you had, you know, incentive-linked compensation and had to actually grapple with the problem of solving that. So when you're evaluating, uh, the talent pool, finding the HRBP that solved for that and giving them a broader remit at an earlier stage both makes that a compelling, you know, value prop rather than just focusing on the folks that, you know, have have, you know, punched their time at one startup or another. Um, because candidly, I think for a lot of folks that have done it, there's a lower desire to do it again. And not surprisingly, it's why you see so many folks shifting to more fractional or consulting or advisory, uh, kind of roles, because it is a job that more so than others takes a lot of that emotional labor in addition to intellectual, practical, roll-up-your-sleeves kind of work.

That's really helpful. I want to talk about a few different elements of running a talent and people team, and for you to give kind of like first principles frameworks or non-obvious advice on how you approach it if you were just entering a company. So first, building a quality— let's say the company's now a bit Series A, Series B, even like a bit more mature, a bit more established. How about like just quality sourcing infrastructure? And what is your framework or philosophy on how to build quality sourcing?

So I think when I think of quality of a recruiting engine broadly, I think of supply and I think of delivery. On the supply side, Um, which is where, uh, sourcing would sit. Ultimately, there's only so many ways to grow supply in a marketplace. So you think about channel effectiveness as a function of input costs required on the part of individual stakeholders involved, whether that's the sourcer recruiter, whether that's the hiring manager, whether that's, uh, the candidate. And then you look at it, um, from a perspective of time to fill, time to fill by sort of volume. And the third, uh, leg I would look at is complexity of role.

Mm-hmm.

So the more senior the role, the more technical, um, typically the more complex that hire is. Typically the longer your time to fill will be. And a good sourcing, uh, organization takes all that into account and sort of starting from the, um, most expensive in terms of dollar cost, um, but quickest time to fill, um, is looking at agency. I tend to think of agency spend as the cost of not having, um, an effective internal talent pipeline and organization where yes, you can spend more between, you know, $20,000, to 33% of, you know, first year salary, some cases equity included, to get that person that otherwise you would not be able to get. Typically agency conversion is something like, you see 5 candidates, you hire 1 in terms of putting it through the loop. So it's more effective in terms of time cost for hiring managers, obviously time cost for recruiters, but ultimately most expensive. Second rung would be looking at referrals. Referrals typically convert at something like 1 in 20. You want to incentivize your referral programming, whether that's through direct cash, experiences, have a sit-down with the CEO, have recognition in an all-hands meeting, gamify it, put prizes out there, et cetera. The cost of referrals is mainly in network and having to deliver quality candidate experiences. So create— having a passive referral strategy is kind of a misnomer because you have to make sure that you're treating people's relationship with with care and attention so that you get more of them. There's various like platforms, tools that you can use to optimize that. But ultimately the challenge is, even though it's more effective, it does take recruiters having more conversations, having a lot of these opportunistic chats to pre-clear and pre-vet people, but doing so in a way that represents the brand so that even if it's not the referred candidate, that they are then more compelled to refer folks. Third category is looking at direct sourcing, and there's not a lot of magic there. Generally, it's sort of 50 profiles to 1 hire. It's most burdensome for recruiters and sourcers to have to do that outreach themselves, whether it's layering in Gem, whether it's, um, giving sort of masterclasses in LinkedIn recruiting. Um, sourcing is mainly a volume game where you can map the markets, you can get smarter, you can find the candidates, and the best sourcers are, uh, more effective from profiles they identify to conversations they have. And then you can go sort of down the line in terms of message deliverability, how many messages you send to get to what kind of open rate, uh, to get to what kind of conversion. The challenge for sourcing is ultimately it takes time and it takes a while to actually hone the message that appeals to a broad enough population. It works great for pipeline-based roles where you're hiring, you know, a dozen similar profiles. And for executive roles, you know, it's going to be your primary channel of finding, you know, one person to the next, to the following. But in terms of constructing it, a large part of it is get the value prop right. Make sure you have, um, the mental model, um, for expectations clearly set and that you're measuring against, like, are people doing the component inputs to get to the right output? It's not always going to win day one. It's rarely gonna win in 90 days, but over 6, 9, 12 months of building the function, you can get to a place where it's relatively healthy. And the 4th big bucket is, uh, thinking about inbound. For any sort of growth stage company, inbound is gonna represent, uh, between 40 and 60% of your hires. Um, and so most folks think of inbound as very much set it and forget it. Largely, you know, inbound conversion rates for, uh, non-sponsored jobs that are closer to 200 to 1. Um, by putting incremental spend behind it, you can get that down to 75 to 1. And ultimately what you're trying to create in terms of the sourcing strategy is a way to use those dollars, uh, judiciously from agency to referrals to sourcing on down to inbound and making sure that you have the right analytical framework for every dollar spent advertising. comes back to us in the form of decreased cost per hire, decreased time to fill, or increased quality of candidates across any of the channels.

Yeah, that's a lot of wisdom there. Let's talk about the other element, which is building kind of an excellent interviewing— or we talked about sourcing. Now let's talk about how to make sure that we're evaluating talent properly and being able to close once— you know, want a great process such that we can sell and close once we do make an offer Or to find the right people. If you just came into any kind of random company, what would be your approach or misconceptions would you make sure to root out or processes would you make sure to—

Sure.

Go ahead.

Yeah. So most of the delivery side of recruiting, the reason recruiting fails is rarely a supply problem. It's easy to point the finger at, we're not talking to the right people. We're seeing too few good people. Why don't we have better taste? 60, 70% of the time, the challenge is going to be on the demand side and how you're actually articulating your job specifications. The challenge most folks have, uh, with systematizing interviewing is not sort of shifting to competency-based interviewing or, you know, having the right mix of behavioral and, uh, sort of analytical evaluations. Um, the challenge is in being imprecise about what is a must-have, uh, what's a nice-to-have, and what's sort of extraneous. Um, people tend to pattern match to this one candidate or this one person, uh, that's in the job and that has done it well. And I think part of the goal of a good, uh, interview process is that you run it like an experiment. So what do you have confidence on, uh, is a must-have for the role. How do you prove or disprove that based on the candidates that you're actually talking to and actually have that feedback loop between the hiring manager, the recruiter, and ultimately all of the interviewers that are playing, uh, the subordinate parts of evaluating for this or that capability. The second big concept is, um, really being mindful of believability. And so are you asking the person, uh, that is credible in, uh, building an analytical model to understand Your customer growth, uh, to evaluate for someone's collaboration and teamwork when 80% of their job is like hanging out in Looker and building dashboards. Make sure you're aligning interviewers', um, credibilities to the credibilities you're looking to evaluate in candidates. And then third piece is, uh, like anything else, being mindful of, uh, the various stakeholders. So you have your candidates, um, and candidate experience is kind of a through line. What I've seen historically is that the higher the NPS, the higher your acceptance rates, and most of the component parts of candidate experience are having impressive people that know what they're evaluating for and know what the organization is focused on impressing the candidates. You can take most of your other variables of like speed and process of, you know, whether you're sending folks swag and push them off to the side. In reality, you just want to have your most impressive people at the front lines. Folks tend to sometimes put the most junior person interviewing folks initially to save time or save focus. In almost all cases, you want to do the opposite and have the folks that can— most clearly articulate the grand strategy that you're chasing, be at the front of the line. Second piece on the hiring manager experience is making sure that you're holding folks accountable to hiring as a discipline, not just as an outcome, where even if folks are making hires, if those hires are not being onboarded well, if those hires are not succeeding in their role, if those hires don't know what their role is once they start, part of the take of like good recruiting orgs is being able to have that carrot and stick to enforce good hiring standards. And having a point of view of what does the first 30, 60, 90 days look like for this hire? How does this hire develop over the first, you know, 6, 9, 12 months of their journey with your company? And then from a recruiter experience, being mindful of how challenging the front-end supply is, partnering with the recruiter to make sure that they're getting the inputs they need. I've seen a lot of cases, hiring managers that don't want to spend time with their recruiters, and that typically leads to being out of sync very quickly. on the spec, obviously questions of like motivation, performance, et cetera. But ultimately being mindful that, you know, the candidate is not always right and that you want to support your recruiters in being able to hold the line, whether it's questions of compensation, whether it's questions of role spec and definition, but really making the recruiter feel a part of the team. So if a candidate asks a question of like, what's a day in the life? What does the team worry about on a week-over-week basis? Actually inviting that recruiter into the ongoing business so that they can take notes and distill what is essential and then replay that back to the market.

That's super helpful. I want to shift over to the people side a bit and talk about how to build an excellent sort of culture of performance management and compensation. What are the things to really get right there, things that you think companies don't always get right but should?

So on the performance side, part of the challenge that most companies have is, you know, it goes back to OKRs and having like a clear mission and that broken down into what metrics, what KPIs, however you want to think about it, are most important. Performance doesn't happen in a vacuum. It's not just thumbs up, thumbs down. It's towards what end? In some cases, if you're sprinting towards metrics such as customer growth or, you know, getting bigger accounts or what have you, if you're doing that in a way that is short-term minded and not focused on building either the team to deliver that in the future or the processes to ensure that that's scalable, you need to— be real in terms of what are you optimizing for and what are you asking people to do and not just trying to true up every, you know, 6 or 12 months on whatever annual or biannual cadence that you're running, but making sure that you have as near real-time focus from the business strategy to what you're asking. Because business strategy can shift, but typically the company is actually better at pivoting than individuals are. It takes longer for an individual to adjust to, oh, you know, what's important is not just we opened, you know, 3 new cities, but now all of a sudden it's important that we have good stakeholder relationships, or it's important that our technology partners can build the product alongside our expansion. And so a good performance cycle addresses for that reality by leaving enough flexibility and latitude to— this is to say, this is what our expectations were 6 months ago. This is how they changed. This is basically what responsibility we're accepting. And this is the responsibility we're therefore putting on the individual. Ultimately, performance is a question of clarity. And if you're running good performance cycles, there's lots of methods Whether it's 9-boxing, whether it's force ranking, whether it's having more regular, more repeatable 360 feedback in an organic way. It's less a question of how, it's more of a question of why and what. So what matters and why are you communicating this feedback? Are you doing it for the purposes of promotion, for the purposes of compensation, or are you doing it for the purposes of growth? And I think a good performance process separates those where you could expect high performance tied to high compensation, and that's the baseline, and then sort of remove the conversation of, are you getting your bonus or not from performance? But I think it somewhat depends on, again, what outcomes do you want and how are you designing for that? On the compensation side, I think we happen to be in a time where, for all your philosophy and all your principles, labor and human capital has more pull than capital capital. The reality is most folks are motivated by some mix of mastery, autonomy, and purpose. And so compensation is a reflection of that. that mastery tied to market. And so ultimately, when you're talking about 4-day work weeks, when you're talking about cost of living adjustments, et cetera, are you actually saying that you're valuing contribution differently? Or are you just saying that, hey, like, we believe that, you know, the external market is more important than your personal market? And I think that's the biggest tension that companies usually have to unwind, which it's silly to be frustrated at folks for compensation expectations. If you don't have suitable or company expectations. But if you know what this work is worth to you, then in my view, compensation should flow from that, basically as a function of your revenue model, your stage of growth, and what you can afford. But ultimately, it's less of a tension of like, what are you willing to pay? And it's more of an acknowledgment of this is what value we believe this has, and this is the price that we think the market will take for it.

I think it's interesting you talk about, you know, capital and labor and capital. I do wonder wonder at some point how efficient the market will get for employees, whereas they can know what anyone is willing to offer them at any given time and truly know what they're worth. I mean, hire.com did this to some extent, but I'm wondering how efficient that market is going to get. I'm also wondering if employees will get a chance to kind of diversify a little bit. They have all their eggs in one basket, and if they'll be able to trade or share or kind of pool in some interesting way. We see some companies like Lattice, and we're doing this too. Basically, if employee stays for longer than 3 years, we'll invest in their company when they go out. Or AngelList gives them a scout fund, their employee scout fund, so they have some additional economics or diversification. What do you think about any of that?

It's a big booster for this generally. I think ultimately treating employees with agency is the one thing that's been most shown to increase, uh, sort of value creation and retention. So if you believe your employees are good enough to produce value, uh, for you, you should have the equal and supporting belief that they're good enough to produce value externally. Ultimately, uh, the more ownership you can, uh, give employees, um, whether that's sort of real-time incentives tied to, uh, the sort of work that they're, uh, doing day to day, I think, um, my, my long-term sort of ambition and dream in the space is get clearer and clearer on drivers of productivity in a way that, you know, changes the traditional construct of, you know, essentially a salary being lagging indicator of performance. Uh, I think the challenge is, is how do you get, uh, to the point where if the market gets more efficient, that employees can put more money at risk to bet on their performance? And then by virtue of that, um, you know, have other capital providers, whether they're companies or VCs, you know, you're seeing the rise of all these like company-wide angel networks, whether that's the Air Angel Or, you know, the PayPal Mafia and Original Take or any of these folks. But what you're starting to see is like, uh, the collective coming together to, um, decide, um, their potential to create value. Increasingly, um, as you get, you know, uh, the rise of compensation software, as, um, you get this efficiency in the market, increasingly you're going to have the power of the collective really dictating the price. So it becomes less of top-down, uh, organization setting, um, but you get get to this question of like, how do you reconstruct cap tables so that employees have, you know, governance voice instead of just the capital providers? But I think that's still, you know, a little bit further down the line. But I think that whole space is ripe for innovation.

Yeah, totally. Let's move down the line in terms of, in terms of founder journey to when they're starting to hyperscale, starting to hypergrowth. You know, they've got people leaders. What's the right way to make sure that you keep culture strong as you're scaling, or what's important to get right or not get wrong?

Ultimately, cultural strategy is derivative of business strategy. And so I think the biggest thing is to have truth in culture tied to what is most important to the business at what point in time. I've seen a lot of companies where culture is an afterthought, and where you sort of backdate yourself into, oh, we've always done it this way. And I think it's easy to have that bias, particularly tied to success, where, you know, I've been part of organizations that have had strongly defined cultures, like we'll go 20, 30 years, and then we'll write down what we think made us great, instead of really what culture comes down to is what are the behaviors at the top of the organization? What are the behaviors that are sort of rewarded, reprimanded at the middle? And for all new folks coming in, culture really is a matter of integration. And so it starts It starts with the interview process and the conversation you're having. It goes to, you know, the moment where you got the offer, where someone's communicating the singular excitement around what you will bring to add to the culture rather than just how you will fit into the culture. And it goes all the way through onboarding to your first couple weeks on the job as your manager's checking in. Culture is less this thing that's like written down and, you know, plastered on the website. And in most cases, it's more important to be able to define it in the negative around like, we are not that versus we are this, because this is— we are this is more of an emergent property of the people on the field and the projects and what's happening. But I think it is pretty critical as you're scaling to have the tension of like, hey, we know we don't want to become a culture that's not collaborative. So instead of trying to optimize for our silos, we will make deliberate efforts to have meeting cadence or have things written down or bring people along in decision-making or in different versions like, hey, we really believe that we want individual contribution to be more weighted than than anything else. So here's how we're going to design our performance and our incentive plans to do that. And so culture, obviously, is much more of a horizontal, but ultimately, it needs to match up to whatever is most important for the company at the time.

Yeah, that makes a lot of sense. One of the downsides of hypergrowth, hyperscale is sometimes you hyperscale too quickly and have to lay people off. What is the right way of doing RIFs or reductions in ways that mitigate the damage. What is your advice for people having to go through that?

I'm going to figure out whether this goes in the editor's note or not, but obviously Better is probably a strong case study in pitfalls of where things can unfortunately go wrong. Ultimately, I think the reality of layoffs is one that is the sort of dark side of hypergrowth, where there's this belief that going up and to the right will save us, when in reality, the closer you get to IPO, the closer you get to any sort of secondary validation of what it is that you're doing or trying to do, the more you're going to focus on leanness and effectiveness. And what worked for, you know, getting the rocket off the ground isn't what's going to work for, um, the rocket, you know, continuing forward. You know, my, my first principles around this are, um, to be real. There's, um, a lot of leaders that bias towards a culture of high accountability, uh, but low individual responsibility, where it's very quick to point to market conditions or to failures, um, on the part of the organization rather than the individual that are the component parts driving that organizational strategy. So acknowledge, you know, ultimately responsibility for what is happening, be accountable for the follow-through. And so in most cases, that means, you know, have a plan for how to support these folks on the way out. I think the, you know, reality is one of like communications and messaging as much as it is the follow-through of introductions, of creating opportunity for the people that are leaving, as well as really substantiating the value creation that employees had during the period of time they were there. And we've all been part of relationships that haven't worked out. And I think the difference between, you know, a good breakup and a bad breakup is largely one of trusting sort of mutual intent. And the only way the company can maintain that is by not, you know, leaving employees in the lurch and, you know, disappearing into deactivated Zoom or deactivated Slack. You need to be mindful of the emotional journey that folks will go go through, um, as they're grieving, as they're angry, as they're desperate, um, and really, um, being there at different stages with, uh, whether that's resources, whether that's, um, connections, but more importantly, um, that being community. And I think particularly for Ondex's mission, um, that's one of the areas where, you know, founders go through those stages of grief constantly depending on, on the week, but taking a lot of, um, what works in terms of mentorship and guidance and transposing that to the employee population. So that, you know, there's not this sudden like, hey, this is my life, this is my identity, you know, what do I do tomorrow? But making that gradual transition both like affirmative and future forward rather than necessarily dwelling on the moment of the layoff, which is pretty factual and unfortunate.

And there's a challenge where when you do a layoff, there's role elimination and then there's just low performance. Do you try to combine them all into one? Is it better to separate them out? And how do you think about when to manage out over time versus when to bundle in a layout?

Totally. I think the reality is always that performance and low performance in particular, the textbook answer is you always have to be managing out. You have to be running a continuous cycle. There's not many of us that clean our filters regularly, but that's the ideal. Presuming that hasn't happened, there's always going to be some regrettable attrition and unregrettable attrition in any sort of layoff. The nuance, once a person is losing their job, their community, their sense of purpose, largely doesn't matter. And so if the organization is losing a part of itself, I think being real about that and being real about the challenges of that transition is going to impact the lower performers as much as it's going to impact the high performers. And so presuming that you're going to be doing it. Like, if it all goes together, so it goes. But I'm definitely a proponent of over time having, you know, a performance culture that is laying people off ongoing when they're not clicks for the organization, because that might be like better for the individuals and better for the organization. But I think maintaining that discipline is just obviously a lot easier said than done.

Yeah, definitely challenges as one is hyperscaling. One thing that's also challenging is hyperscaling is challenging but also presents opportunities is remote. What have you seen cultures who've been remote as they've been growing, what have they done right or what's important to not get wrong or what's your advice for companies going remote in terms of team culture or accountability or other things that you don't get from an office?

I think there are 3 pieces of remote culture that are sort of distinct and salient. One is sort of maintaining that common sense of purpose, common sense of mission. I think it's easy in the office to fall into the trap of, hey, I'm managing by walking around and, you know, I can check in with folks, I can get the pulse, et cetera. But it's sort of a challenge of narrative of, um, not just, you know, writing it down and, you know, putting it on Loom and sharing the story frequently and constantly, but really trying to make that explicit tie-in to where does the individual and the team fall into that broader company story. Um, so whether that's, you know, uh, in later stage organization function department specific, or whether that's in earlier stage organizations, uh, making sure there's like a common knowledge base, a place where the new joiners can go back and reference town halls, reference the past. It's just as important towards feelings of cohesion as anything else. I think the second piece for remote that's pretty critical is the importance of the sort of many frequent touches, that it's a little bit harder to— if you have like one team meeting and that becomes the only means of disseminating information and checking in. If you're doing a more agile and more regular cadence of like, hey, tell me about how you're feeling about what's going on personally or what's going on professionally. It's at some point becomes less important to have, you know, your calendar full of like 40 one-on-ones and just making sure that, um, you have the regular, uh, enough cadence with all of your folks. And obviously there's still a place for one-on-ones. Um, but I think in many cases the one-on-ones become ways to address challenges in communication, but like really prioritizing, uh, the time that's sacred for standups, for, uh, check-ins, um, of that variety. And I think the third piece, um, largely is Making sure that you're mindful of like how to engage folks and meeting people where they are. So for some folks that might be common working hours, for others it might be Slack, for some it might be email, but understanding and encouraging folks to express their ways of working across time zones, across different functional groups, and how they would prefer to engage rather than setting, you know, like, hey, you know, everything in our company happens on Slack. That's where you go to do things. I think it's different for a sales org that is on customer calls and doesn't want the constant Slack, then maybe a ticketing system hits for engineering where it's easier to feel that sense of accomplishment when you're filing something away in Jira, being clear departmentally and individually in terms of working styles and working preferences.

Yeah, that's really helpful. What have we not yet covered that you think our listeners might want to know, or you think that seems interesting, or is an expertise of yours or hobby of yours I think we haven't talked that much about upskilling and learning and development broadly. Let's do that.

Organizations like On Deck obviously play a crucial role in that. But when I think of the development journey, it starts individual with like me and what am I trying to get better at? It very quickly goes to the work and what is the primary function that we're all trying to endeavor towards? And then it goes pretty quickly to the we of how will we do my individual development goals and the work that I'm trying to accomplish better together. And I think having explicit developmental objectives are just as important as, you know, having performance and outcomes-driven objectives toward not only sort of retention, engagement, all like the traditional stuff, but in terms of giving folks something to aspire to and look forward to their lives. When you read sort of the, you know, value props of most companies, it's like, hey, come do challenging work with challenging people and build meaningful relationships. But the common thread is that sort of growth journey of going from, you know, the person or organizations they've been a part of to something more. And so I think most companies massively underinvest in that earlier and then try to catch up later with kind of forced skills mapping or internal mobility or whatever permutations. So if you're not designing your organization and your roles with development as a core objective, I think you're ultimately throttling the long-term growth rate of your company by basically agreeing to only pay spot price and then by default have having to upgrade your team at each component level of complexity, instead of figuring out like, hey, how do we know we're going to have a bunch of foundational employees that aren't going to scale as quickly as the businesses? What can we do to scale them quicker? Whether that's coaching, whether that's community, whether that's consultants, advisors, whatever, to layer in the subject matter expertise that they're not natively going to develop.

Arthur, why don't we talk a little bit about how companies can focus on the of their employees, because that's another lever to get more out of them, is not just find great people, but also help develop them internally. And if there's anything else that you think companies do wrong when trying to do that.

Most companies make the mistake in terms of employee development of presuming that one size fits all. So it's like, hey, we got this training organization to come in and do manager training. You know, there are probably atomic elements of management around feedback and communication cadence and, you know, writing things down, etc., that are broadly applicable. But ultimately, I think the hallmark of good development programs are tied to meeting employees where they are and creating more cohort-based models of learning. So, who are you starting with that's similar? Who can you draw on when you don't know who to Slack? And how can you guys figure it out together? Part of the universal challenge of L&D is that you talk about, you know, what's the right amount to invest per employee? What's the right amount to invest per leader, et cetera? When in reality, the conversation is more like, what's the right amount to invest into our organization? Because for every time you add a new requirement or a new competency or new specification to a job, essentially you're saying, hey, I will pay this future better person more, or I will spend longer to find this person. And I think that question of capability development over and above just skills development is one that doesn't get brought up enough in the talent acquisition challenge. But where can we build our own data capability set and move folks from, you know, one level of competency to another. And so I think that that equation between, you know, invest for growth and invest for what we think people can achieve day one, it needs to be sort of fleshed out more for different organizations, particularly for organizations that have like a large volume of hiring needs. I think I've been fortunate to be part of organizations where we've made that investment and saw both in terms of retention, but in terms of overall productivity, the amount of value that can be unlocked by putting you know, folks through boot camps or accelerators or programming to give them that opportunity that otherwise, you know, their experience set wouldn't afford them.

Yeah. Maybe the last question here. What would your advice be to On Deck or other companies trying to upskill employees outside of their own companies? Like, what's the opportunity that we can help employees develop in ways that their companies are unlikely to be set up, besides helping them find their next opportunity, but like within the context of their job?

Yeah, I think within the context of a company, you're limited to what can the company teach you versus what can, you know, the world and other companies teach you. And I think that's really kind of the unique market opportunity that On Deck or other similar organizations have, which is, you know, if you're taking the classic example of an industrial organization that's trying to go digital, they're probably not the best folks to teach you how to go digital. You're better off learning from digital native and digital-first companies. And so I think part of it is the benefit of learning from a community and a tribe and folks that are best in class at what they're doing, rather than, you know, the company trap that you get into, which is like, we're good at this thing. By all means, that organization should feed the reservoir of learning and put individuals back into collective, you know, of knowledge production. But the reality is most of the development that individuals experience is individual. It's not driven by, you know, I'll learn this widget here and this widget there. But if you can sort of bring that collection, help show folks what they might have missed by not having had different experience sets in consulting or finance or tech or what have you, then whatever organization that individual is part of is going to be all the richer for it.

Totally. That's a great way to close. Arthur, this has been a fantastic episode. For people who want to learn more about you, where might you point them?

Find me on LinkedIn. Pretty open, accessible. Long Polish last name, but trust you can find me.

Awesome. And we'll put that in in the show notes. Thanks so much for coming on the podcast, Arthur. This has been a masterclass on talent.

So fun, man. Talk soon. Cheers.

Awesome. Okay, take care, Arthur. Thanks for listening to today's episode. Execs is produced by On Deck, where top talent goes to start companies, find their next roles, or invest in their careers. If you're looking to start a company, uplevel your career, or navigate a career transition, I encourage you to visit beyonddeck.com. See you next time.