Develop Your Leadership Style: Lessons From Scaling Teams At Stripe

Introduction

Dewi Fabbri: On this episode of Moonshot, we chat about all things people management with Claire Johnson Hughes, corporate officer and advisor at payments platform, Stripe. Claire held the role of Chief Operating Officer at the startup from 2014 to 2021, and grew the team from 160 to over 6,000. She also held leadership roles at Google during its early days and details her experiences at both companies in a new book titled, Scaling People: Tactics for Management and Company Building.

In this episode of Moonshot, Peak XV Partners’ Managing Director, Abheek Anand and Claire discuss the difference between leadership and management, why it’s so important to incorporate a culture of open and honest feedback within your organization, and how startup founders can build and set expectations with early hires.

The conversation was recorded at an event for Peak XV founders in May 2023.

Abheek Anand: Welcome, Claire. Thank you for joining us. I want to start with the question that we at Sequoia always like to ask founders in our very first meeting. It’s actually one of the most common questions that we ask people, which is, tell us about your founding journey. And I want to ask you a similar question, but more about your book. What made you write this book?

Claire Johnson Hughes: The book came about not by my choice exactly, which I think surprises people, but it was not really on my list that I needed to write a book. But Patrick and John, the co-founders of Stripe, are both very well-read autodidacts… They founded a company when they were teenagers and sold it; I don’t know if you all know that. And then they founded Stripe and really felt that in this sort of canon of business books that there wasn’t one that was tactical enough on kind of the combination of some company-building practices and management. So, a lot of management lessons I don’t think are actually that hard to learn, but they happen behind closed doors, right? You don’t see one-on-ones, you don’t see performance conversations, and if you’re a founder and you’re sort of on a very steep trajectory of having to learn all of that, it’s useful to see how others do those things, right? So anyway, they became convinced that the market needed such a book and that somehow I was the person who should write it. And I guess that’s a compliment about what I was working on with them as we were building Stripe, but I will say initially it didn’t seem like I was going to be able to finish it, because when I started I was full time COO of Stripe, and though the pandemic was a difficult period – is still difficult – for the world, we all have that to thank because me being locked in my house and not traveling is probably one of the reasons the book actually did come to fruition.

The four operating principles of leaders and managers

Abheek Anand: Fantastic! You know, you talk in this book about the four essential operating principles of leaders and managers. And I’m saying the words, ‘leaders’ and ‘managers’ and I’m later going to talk about the distinction between leaders and managers, because you also talk about that, but let’s start with these four operating principles. What are these principles? What can we learn from them?

Claire Johnson Hughes: Yeah, I realized before I dove into some of the content with the other frameworks, that I needed to set a framework for what I believed were the key elements that I’d learned… And I agree with you, it’s ‘manager’ and ‘leader’, and some of these operating principles apply more to you as a leader, and some more as a manager. And I say in the book that – and I mean this –  which is, everyone who is on a journey to develop as a leader and a manager has to be on their own journey, right? Authentically, how you show up and lead is different than how I do. And so I want to own that and say, I’m sure the people in this audience will have their own principles, but I think mine are pretty… At Stripe, we like to say we abstract away complexity and try to simplify to really what are the abstractions, whether it’s in the API or in the payments landscape that matter the most, and so I’m trying for some principles that I think could be universal. And the four are: build self-awareness to build mutual awareness, say the thing you think you cannot say, distinguish between management and leadership, and then come back to the operating system. And they’re all actually quite different, I would say.

A lot of people feel like management and leadership starts with the team, and the organization, and what you’re building, which is a very legitimate belief, but I actually think it starts with you really understanding how you show up, where you have strengths and capabilities, where you might have blind spots – which is hard because they’re blind spots – I think we all can talk about things we need to work on, but we don’t actually really deeply know where we just don’t even see the field, right? My belief is that if you can build an ability to get that feedback, do some analysis of yourself, understand, then you’re going to build a stronger team. They’re going to be more complementary to you, which is critical, and they’re also… If you do the work together and this is where the ‘build mutual awareness’ [part is], you actually can build more of a team.

It’s almost like if you had an inventory of the talent in the room and people were open about, “Hey, I’m better at this and I could use help with that”, you’re going to operate more effectively. But getting to that environment where people are open to sharing and talking about sort of how they interact and make decisions as a team, where they have strengths, takes work. It takes some real work. And so that’s the first one.

The ‘say the thing you think you cannot say’ is more of a behavioral principle around getting comfortable putting sometimes uncomfortable things on the table. Sometimes that’s difficult feedback, sometimes that’s the question that no one in the room is asking because it might feel too scary in the moment; and we can come back to how I’ve learned how to do that, but I think that I’ve become a more effective leader as I’ve become more comfortable, whether that’s in an individual one-on-one, sort of saying the thing that’s in the back of my head that I’m not articulating, or even in a meeting saying, “I feel like we’re not talking about the real decision here”. And actually, I think some of the best investors I’ve come across – I now sit in enough board meetings –  [they] do the same thing. They really try to elevate the key question, the thing that everyone is thinking but no one is saying, and I think that’s a skill.

The third one, ‘distinguishing between management and leadership’, I’ll try to boil it down to… Is [that] there are some leaders I’ve met, I interviewed some for the book. One of them was Reid Hoffman, and he is of this school of thought that believe they… And I’m going to say a lot of founders tend to be more leaders – and I’ll describe the difference –  in that they can hire managers to complement them, like, “I’m going to hire people who are going to complement me, who are better at the day-to-day, the sort of ‘getting from A to B’, the organizational work”. And I think that’s a fair belief system. Reid has a funny story that I repeat in the book about how he had an employee who was giving him feedback and got frustrated with Reid and said, “I wouldn’t hire you to manage a McDonald’s”. And Reid, which… I actually think is probably hard to manage a McDonald’s… But Reid then said, “OK fine, tell me what I need to do. Help me”. And actually this is a side story, but Reid told the story as an example of a value that he really holds deeply for his operating principles, which is transparency. He really believes that he has and creates open environments of feedback. And that’s true that someone he had hired felt comfortable saying to him, “I wouldn’t hire you to be a manager”, is really actually a great story about open dialog in a power structure. But anyway, I don’t believe Reid is correct in my system. My system is actually that some of us grow up with more natural manager instincts – and I’m one of those people – and some of us grow up with more natural leadership instincts, and I think you get to a point, and I think this is particularly true by the way, for founders who are CEOs, where you need to be able to access both of those skill sets. You might be stronger and more dominant in one and that’s fine. But for example, if you’re the CEO and you’ve got to create an executive team, that is going to take both leadership – leadership is about setting the vision, it’s about the really hairy, audacious, saying we’re going to accomplish something and you don’t even know how you’re going to do it, but you know, putting it out there and really turning up the heat – honestly, [keeping] the bar very high, the standards very high, the expectations high. And management is more of the, “I’m going to break this thing down. I’m going to get from A to B, I’m going to organize the people, the process, the project management. I’m going to set the metrics. I’m going to track the goals”. Like, “I’m going to give feedback day-to-day on getting this done”, those things. You need to be able to speak both languages, in my opinion. There’s a point in your career where you will cap out if you can’t.

And then the last one is ‘coming back to the operating system’… It’s more conceptual, which is that if you do put some of the structures that I’m advocating for – company structures, foundational documents, ways of your operating cadence, your rhythm of the meetings in the year and how you run things – if you put those things in place, and you do sort of the right level of them and this I can make more detailed if useful, those structures can replicate up and down through your company, which gives you some scale abilities, right? It’s like Google’s OKRs. Everyone at the company had OKRs, the leadership, the executive team had OKRs as a group for the company and also as individuals. That replication of a system will help you in these moments of chaos. Startup environments especially, but every company. Things happen, macro environment things happen, competitor actions happen, employee challenges. Believe me, they happen every day and you’re going to have a lot of ambiguity, a lot of chaos. And if you can create some structures; not heavy ones, not bureaucratic ones, but really smart [ones]… So think of it like the architecture of a building, really smart structures. Then you can create points of stability amidst all of what can be very chaotic. And so don’t forget, you’ve got that system. And when things are getting kind of out of control, how do you come back to it and keep people feeling stable with the touch points you’ve created on how you run things. It’s extremely valuable and human beings really do like routines, right? And I think having some is your friend and some people say, “Oh, process, blah, blah, blah..”, you know, but I actually believe having some routines is your friend.

Abheek Anand: Now there’s so much to unpack here.

Claire Johnson Hughes: I know, sorry. That was a lot.

Abheek Anand: There’s a lot. I’m going to try to work my way through this. And let me start with the first topic on self-awareness… It kind of reminded me of things. One, this age-old sort of Greek saying about ‘know thyself’, which has been around for thousands years, but I’m also reminded of a class – personal story – I did in grad school, where we talked about influencing people, and the takeaway of that class was [that] the best way to influence people is to be influenceable. And you know, a lot of that comes from the self-awareness to say, “I’m willing to accept feedback, I’m willing to give feedback”. And you work with leaders at some of the most amazing organizations, you’ve interviewed many of them… What in your opinion has really stood apart for people who have embodied that self-awareness and what has their journey been like? What can we learn to keep improving on that dimension?

Seek feedback: “What could I have done differently?”

Claire Johnson Hughes: Yeah, I mean, if you sort of asked me, “What’s the thing I’ve actually learned the most from Patrick and John?” It is that they are constantly seeking feedback, whether that’s sharing an email draft that they’ve just written to see, “Does this read the way I intended?”, or calling a bunch of peer companies, if there’s a situation we’re facing that we think others might have faced… I think that the best leaders and founders I’ve worked with have the ability to have conviction about a vision and an opinion, but also the ability to open up the decision or the moment and say, “OK, is there something I’m not thinking about?” or “What could I have done differently?” That’s one of my favorite questions. Instead of saying, “How did I do?” – you say as a leader to a group of people, “How was that meeting?” or whatever, they’re going to say, “Great, great”. But actually saying, “What could I have done differently to make that even better? Tell me.” You know, I think…

Abheek Anand: It’s more actionable.

Claire Johnson Hughes: It’s more actionable and it’s also more learning-oriented. I mean, that to me is really the crux of it, which is like, “I desire to learn and I am curious and I am curious about others”. And by the way, there’s a respect in there. I think you are right. I have worked with some extremely talented and intelligent people and I count myself extremely fortunate, and I sometimes sit in the room and I think, “How did I get in here? These guys are blowing my mind!” And then, one: I remember I also have intelligence and talents. They’re not the same. They’re different intelligences, different talents. But two: they are asking for me to give those. Like, that’s the key – is to say to someone else around you… They may not be literally a rocket scientist, but they have something to offer you, and if you can get that out of them, you will be better. And I think that’s a sort of human-level respect that’s extremely… Build a team of talented people and then actually listen to them. Think how powerful that is, but how weirdly rare sometimes.

Abheek Anand: You know, it reminds me of one of our senior partners, Doug Leone. He used to run Sequoia until last year. And I don’t know if you’ve met Doug before, but Doug has these phrases that he uses a lot. And, you know, when we were sort of celebrating his time leading the firm, people started to sort of repeat the kinds of phrases that he’s used for the last few decades, and one of the ones that stood out for me was, “Always have Dumbo ears”. And you know, it was in the context of being a good investor where you always have to listen for the signal and everything that’s going on, but I think what you’re describing for Patrick and John and many of the other leaders is this idea of receiving feedback, being open minded to it, which is incredibly important.

Claire Johnson Hughes: Asking for it. Yeah.

Abheek Anand: Absolutely. Now there’s the other side of feedback, which is giving feedback. There’s a quote that you have in the book which basically says that “Leadership is the art of disappointing people at a rate that they can absorb”, which I thought was very well-put. I read in a recent interview you talk about how leadership is about stepping up the heat. And you know, it’s about really how do you help organizations become more effective, not just managing, but leading. And so what can we learn about this art of giving feedback? What is this principle? Can you share more about it?

How self-awareness helps you receive feedback

Claire Johnson Hughes: Yeah, definitely. I will say both of those concepts, ‘leadership is disappointing people at a rate they can absorb’ and ‘turning up the heat’ come from ‘Adaptive Leadership’. This is [by] Ron Heifetz and Marty Linsky. These are some long-time researchers, professors at Harvard who are well-known for a lot of research on a certain type of leadership… And by the way, I think if you’re working in tech or in any new company, ‘adaptive leadership’ is the name of the game, in my opinion, and so I want to give credit to them and say it has certainly influenced my thinking. But I think that the key is, you know, there are technical problems, things like, “OK, we have a reliability problem with our product” – that is technical and solvable – it’s painful, but you can decompose it and you can come up with a plan. Adaptive problems never go away. It’s like systems, right? They’re going to be a continuous exercise for your life or for your company of something you have to keep studying. I think feedback to me, the people who get really excellent at it, have first a really core understanding that… And this is easy to describe and somehow hard for humans to do, which is when I’m giving feedback to someone, I am not passing a judgment on them as a person or their character. I’m talking about a work product issue. A task, an idea – yes. And it may be an idea they had, but I’m not talking about who they are. This is where I think you can take some of the emotion out of it. I’m saying, “Hey, come stand next to me. Let’s look at this thing that happened together and talk about it.” Again, there’s maybe some good things in it, but what was… And I think the way you start with something like that. So if you picture separating out from the person this object; “Now we’re going to talk about this object.” Maybe it was a presentation you just gave. Maybe it was the way you handled a particular issue in the company. And I’m the leader, I’m setting this high bar, I’m turning up the heat. And so I’ve got to say to you, “I had a standard for that thing that you did and you didn’t meet it”, right? If we’re going to use this example.

But I’m going to separate that object out from you and me, and I’m going to say, “Come look at this thing with me. What do you think?” The very first thing when you give feedback – and if you actually study education and pedagogical trends and if any of you have kids or have worked with kids – a lot of the best educational methods start with the students self-assessing because human beings learn from their own mistakes if they are able to articulate them and say, “What could I have done differently?” It also builds confidence. This is where you get growth mindset research, right? And so you say to them, “What do you think?” And I will tell you, most of the time I don’t have to give a lot of the feedback because somebody knows. They know it wasn’t their most effective action. They know that that thing wasn’t the level that you expected. Sometimes they don’t; and I talk in the book about a self-awareness gap problem that I’ve seen with some individuals, which by the way, I think is probably one of the hardest management issues you face, which is when you think someone is sort of operating here and they’re like, “No, no, no, I’m great at that. I am the best salesperson that you’ve ever met.” And you’re like, “But no, look at the data. No!” Anyway… And that’s probably a situation, that unless they can really change that, you’re going to have to get pretty difficult with the feedback on. But most people tell you, “I think I could have done better”. And you say, “Yeah, so let’s talk about it. I think that’s true. Tell me one thing you’re going to work on.” And they tell you and they’re usually right and you back it up and you say, “Yeah, how can I help you?” And you say, “We’ve got to do better. You can’t launch a product that has that issue in it.”

And they know, because if you’ve done your job as a leader, you’ve already set those standards. You’ve already talked about it. That’s the other thing I would say. One is, get objective, ask questions. The other is, set the expectations at the beginning. People should know what you want. You want the best. And if you haven’t said, “Hey, for this particular role, I expect that you talk to a customer every single day”, or whatever it is, then when you’re in a position where you’re saying, “You’re not meeting my expectations”, it’s been clear and they’re nodding, they’re saying, “Yep, you said that to me.” I mean, even if it’s kind of abstract, I think it’s really important to set that vision.

Abheek Anand: And I guess that’s why the self-awareness part came before the give feedback part. Without that self-awareness, feedback’s a little bit harder.

Claire Johnson Hughes: And by the way, in the next… The final end of that conversation is, “How can I help you?” Like, “What do I need to do differently?” Maybe I should have set the expectations even more crisply. Maybe you didn’t feel you were equipped to run that meeting? You know, absolutely being self-aware that you may have contributed. But by the way, don’t let them off the hook. I hate this trend where someone’s giving feedback and then saying, “It was probably my fault”. No – there’s more than one person in this and everybody’s got to learn.

Abheek Anand: Yeah. You know, I remember a conversation recently with somebody who was very good at giving feedback, and I was in awe of how this person turned a difficult conversation about feedback into a constructive one, simply by restating it as saying, “Hey, this is the objective that we’re all aligned on. And the objective is to do better as an organization.” And then once you sort of preface it by that, any sort of feedback lands so much better because it’s not against the person, but it’s a call for the team to perform better.

Claire Johnson Hughes: And by the way, I think that’s incredibly powerful in any moment of friction. Whether that’s with a colleague or an executive team or in the company, which is to say, “Wait a minute, we’re all here for the same reason.” This is why you want to set your mission and vision and why do we exist, because you can just keep laddering up to the one you all agree on, and then everyone’s like, “Yes, that’s true. We do all want the same thing.” You’re like, “OK, so let’s take some friction out of here and think about how we get there, 100%?”

Abheek Anand: I want to switch gears a little bit and you know, one of the things that you talk about a lot in this book, you actually alluded to it earlier as well, was just the variety of leaders that you spoke with, not just in tech, but outside of tech as well. And you know, for better or worse, all of us on this call spend the vast majority of our time in and around tech. How can we make sure that if there’s anything that we can learn from from people from different walks of life, people in different businesses… By the way, many businesses that have been around for a lot longer than Stripe… What can we learn from them? Are there any stories that stand out? Any people that stand out?

Claire Johnson Hughes: Yeah, thank you for bringing that up. Interviewing them really reinforced actually the operating principles that I articulated that we talked about at the beginning of this conversation. There is so much agreement about the management-leadership distinction and what it looked like, and also the people I interviewed are all quite successful, in my opinion, in very different industries. One was the CEO of the Metropolitan Museum of Art. And he’d been a college president, but he was actually one of the best interviews because I’ll be honest, he probably was the oldest individual I interviewed. I also interviewed someone who ran a hospital system, but the individuals I interviewed who had a lot of years of experience also had a lot of wisdom, right? Which makes sense. They were the most articulate to me of their self-awareness, really understanding when you’re leading versus when you’re managing. And also, we were just talking about this, what it takes to day-after-day, pick yourself up and be in this isolated CEO kind of role. And by the way, the answer for different people is different. But the guy, Dan [Weiss], who is just now retiring as the CEO of the Met, said to me, “Look, fundamentally, I need to have some individual work I do.” He’s written, by the way, several books, and apparently he just is like, “I also have to make time to write and do my own work or else I will be unhappy being the CEO.”

And I think the awareness of what are the things that help keep you balanced personally… But the thing that was really striking was the agreements about change management and how you manage it, about how you create cultures of decision-making came up, how you delegate and empower people… There were actually quite a lot of conversations about power, and I think the best leaders understand they have it. Founders, especially. You all, even in a small young company, you’re loud. People are listening. Like talk about Dumbo ears around you. People are listening. They’re watching your actions. By the way, what you do is way louder than what you say. So what do you value with how you spend your time? Where do you spend your time? Who do you recognize for what? All of that is very loud. And the people I interviewed all had an awareness of that and then thought about how to create… Let’s go back to the environment of curiosity, how to create an environment where they were hearing, where people were telling them what was really going on.

I mean, Zanny [Minton Beddoes], who’s the editor-in-chief of The Economist, said she often just doesn’t speak at the beginning of a meeting because they’re having a conversation about what content do we put in this very influential publication; and she said, “I wait. I wait to give my opinion because I will start to sway the conversation and it’s not healthy.” And I think there are different tactics like that too, on how you manage your power. But, the main thing is to be soliciting that feedback, asking “What have I not thought of? What could I do differently?” And creating that culture early on in your company will be very powerful.

Scaling: Repeatedly being able to do something incredibly well

Abheek Anand: As investors and founders, you know, a lot of our conversations tend to be about business. It tends to be about, “Do we have product-market fit? How fast is revenue growing? What is unit economics like?” And, you know, obviously all of us want our companies to be going up into the right [direction]. It’s never that smooth, but hopefully for the good ones, that’s where we end up over the long term. But you know, we don’t often enough talk about scaling other aspects of our business, and the two aspects of our business that you refer to in the book are really scaling teams and scaling culture. At Sequoia, we love to talk about building enduring businesses because our belief is to build something valuable, you have to build for the very long term and then over the very long term, things like hiring, things like culture just continue to become more and more important. So I guess my question to you is what advice would you give to founders? By the way, a lot of them are early-stage founders who are really focused on the first topic because people like us keep asking about scores and metrics… What advice would you give them about team and culture?

Claire Johnson Hughes: So I mean, I think that there is this interesting thing that happens the more successful you are as a company builder, as a founder, the more you have to then do the other work that you’re talking about. So the first part is product-market fit, get to traction, get the numbers in the right direction, and that is one skill set. But then you have to turn to company-building, which is actually quite a different and other skill set. And then, in order to do the company-building well in an enduring product plus company, you have to then do what I think you’re talking about, which is the cultural investment in how a thing operates. And you alluded to this at the beginning.

I really do find companies that have existed for more than 100 years fascinating, and I recommend to folks, if you’re going to look at histories of things, like why did these companies exist for so long; and I think the lesson from studying, you know, whether it’s Hallmark, where I was on the board, or Coca-Cola or there are some Asian companies – some out of Japan – soy sauce companies that have existed for hundreds of years. Hundreds! And you say to them, “What was it?” And when you think about scale, people use that word, they throw it around, like ‘scaling’ and they think… Some people think that’s their revenue number, some think it’s the number of people, but actually to me, successful scale is when you can repeat it. It’s repeatedly being able to do something like hiring incredibly well.

Like there’s a quote from a coach, which is that you can repeatedly win and here’s the next level of it – without all the same people involved. So, what if I swapped out most of the team doing that work? Would they still be able to repeatedly hire the best or would they repeatedly be able to launch great products? And when you really do that thought experiment, you think, “Huh, that means that I need to build, instilled in them, a value system and a way of operating.” And I use the medical school term here, which is [that] people need to see it, they need to be able to do it, and they need to be able to teach it without the founder in the room. And that involves codifying sort of belief systems, ways you make decisions, what you value. And then yes, also some processes that have been proven to help you win, right? Like for sports teams, there’s ways that they practice certain things that equal winning. And so I think that I find this really important to think about, but I want to go back to your comment, which is, “You don’t want to tackle it all at once.” You really want to know, “What stage am I at? Which of these things do I need to focus on?” I think some of the management practices for your early team would be useful, but a lot of the foundational, “How do I build an enduring company that can repeatably win?”, is going to happen after maybe you’re 50 or 100 people.

Abheek Anand: When you joined Stripe, was it like 156..?

Claire Johnson Hughes: 160.

Abheek Anand: And I remember in one of your conversations you talked about how it should have really been 500 because that was sort of the ‘right number’ for that company, but they were just operating so leanly.

Claire Johnson Hughes: Yeah, they hadn’t quite… It was a little scary, to be honest. I think that the Collisons to their credit, by the way, [were] very conservative, very paranoid, but kind of hadn’t accepted that they’d got the traction. I mean, it was in the numbers, but they were really… And it was a little bit of that wanting to stay lean, which I admire again, but I did a bottom-up, top-down, pretty detailed analysis. I looked at inbound customer demand, support demand, what was the legal requirement of our regulatory position, what were we seeing on the engineering side in terms of roadmap, whatever…

When we were ending that first year that I was there – I joined in October – and we ended the year at about 185. We should have been more like 400-something. And I had John say it at an ‘All Hands’ meeting because I didn’t want to say it. I thought everyone was going to run me out of the building… But we did. We showed the analysis and people there were like [mind-blown] and I was of course thinking, “What are we going to do?” It’s almost like you’re starting underground. You’ve got to fill in all the dirt to get up. But it meant we had to build some things that, again, were just more repeatable. Like, our hiring was very bespoke. You can’t… You’re not going to hire a few hundred people more if you do it one-off, every few days you reinvent your process. That was just an example of something that needed to change.

Abheek Anand: In the book, you also talk about some of the organizational structures that the best founders put in place from the very early days, they may not be used as much…

Claire Johnson Hughes: Yeah, maybe [when you’re at] 30, 40 people…

Abheek Anand: What were some of those examples that we can learn from?

Claire Johnson Hughes: Essentially, when you’re in a very small starting group environment a lot, you’re actually building the culture then. Of course you are. But it’s very organic. It’s like you’re all in the room together. Everybody can see everything. You can make the decisions together, you can communicate with everyone basically at once, even if you’re virtual…. Like [there’s] so much interaction. And what’s happening is you’re starting to form some of the things that I think you have to document, but a lot of it is implicit. It’s sort of like breathing for the company. “Well, this is how we think about product quality” or “This is who our target customer is”. You don’t actually write them down early on. You’re literally just doing it. And you’re experimenting and iterating. And then there’s a point where you’ve got the traction or you’ve got the beginning of it, and I’m just advocating that that’s when you start to realize, “OK, there’s too many people in the room to be all on the same page anymore.”

This is the first principle, which is, if I spend all day with someone, we are always on the same page. If I don’t spend all day with someone because they’re off doing one job and I’m doing a different job, we are not automatically on the same page. So I have to take that implicit stuff and make it explicit: “How do we think about our customers?” It starts with your sort of operating principles or your values because they’re sort of, “Why do we exist?” And then there’s, “How do we want to work?”, which is what I think those operating principles are. And I go back to the medical school, “How do I teach?”, and it’s about documenting, it’s about having an onboarding, having a hiring process. It has some structure, having an onboarding program, even if it’s one day where you’re like, “I want to instill in these new hires this belief system of what excellence looks like for us”. You’ve got to start articulating that and setting that tone.

Play to your strengths when developing your leadership style

Abheek Anand: Fantastic. Starting by articulating that really from ‘Day One’ for people to join. Being a founder is about being open, having a high EQ. How do you navigate this if you’re naturally reserved, maybe non-approachable, a little bit of an introvert? Have you seen that in action? How has that played out?

Claire Johnson Hughes: I think the answer is you will develop. The key for you is to develop your own style. And maybe, for example, if you’re more reserved and this is true for Patrick Collison, he’s the more introverted of the Collison brothers. John is more extroverted. He’ll write more. A lot of his communication to the company is through really thoughtful writing. He likes to really process on his own, which many introverts do. And I think he knows that and he knows that he has to call on others when there’s a moment that might need a different tone. So one is self-awareness, which is: What’s your style? Where are you impactful? Is it in more different kinds of communication?

The other thing I’ll say, and there’s another question in here about imposter syndrome is, you’ve just got to get the reps in. Like you’ve got to just… Even if you don’t feel it, you are going to be uncomfortable. By the way, leadership every single day is uncomfortable. It is not easy. It is not fun. And I think of it, you know, whether it’s like you’re working out to build muscles, the first time you lift the heavier weight, what’s happening? You’re shaking, you’re dropping it, you’re not able to do it, but you’ve just got to keep doing it because it actually does get easier. You know, this thing [called] ‘muscle memory’, it’s real. Get up at the ‘All Hands’ and push yourself. Push yourself to be a little… And I’m not saying change who you are, though. I’m just saying if you’re on a continuum and you’re over here, and you know, “I probably need to be a little over here”, you’ve got to push yourself. And actually you’ll find that it will become easier. And no one needs to know that you maybe aren’t quite feeling it at that moment. Sometimes, “Fake it ‘til you make it” is real. I’ve been there. I still do it. I still do it.

Build trust and set expectations with early leadership hires

Abheek Anand: You know, founders and CEOs can help great execs be successful. And really, to me, it’s like the analogy of you joining Stripe. What did John and Patrick do to make you more successful?

Claire Johnson Hughes: Early leadership hires really do have… And are important and they do have a lot of impact on the culture in the company. And so, take your time with those. There’s sort of the referencing and [asking], “Is this person accomplished and do they have the skill set?” Do an analysis, “What do we really need in the company right now? Does this person have a track record of that?” But the other is the chemistry, right? Like we spent a lot of time, John, Patrick, and I, and also another leader in the company together, working through… Like, I felt like I knew what was happening inside Stripe before I joined because we had talked so much and so openly. And there was a trust and we had to build the trust to get there.

And really, I think for me, we went on a journey from me getting interested and thinking I would really like to work with these people. I like this vision for this company. I like what I’m seeing in the numbers for the potential of this company. To them also saying, “Hey, we have some challenges and we’re going to need… Is your skill set the right match for these?” And we went on this journey together where we had the same expectations, I think, of what they needed and what I brought to the table. And we also really aligned on what were my priorities as I came in, because I could have worked on seven or eight different things. And the reality is I’m a human being and I was one person joining a company of 160. And so I really said to Patrick, “I think I can only focus on these three things. The first, well one, I’ve got to get up to speed the first three to six months”. And I said to him, “One of the other things that I could focus on is probably going to blow up”, which was our support, by the way. And then it did. And I was really glad that we’d set mutual expectations that we’re taking a risk that this thing is going to fall. I will deal with it, but I will not deal with it first because I had to do the recruiting thing we talked about and also sales. I had to build sales. And so, I think really being aligned on expectations and giving the person some cover internally, like, “I’ve asked so and so to really focus on X”, because they need some. And giving them some time to build some trust internally too.

But the reality is that challenge and there’s another question that alludes to this is what an early leadership hire has to do is more what I call ‘full-stack’. They’ve got to be an individual contributor. They’ve got to manage themselves, be a Director, be a VP, be a C-level. And that profile of a person is not necessarily going to scale with you forever. But that’s okay. They know that maybe in the back of their mind, you know that. Get the right person for that moment and then maybe they’ll scale better. But there may be a moment three or four years later that you have to think, “Well, now I need a slightly different skill set, less full stack, more specialized, more scaled experience.” And that’s hard. But that’s also… I don’t know. Go back to the comment you made, Abheek, which is, “What’s your common vision? We’ve got to do the right thing for this vision.” And there’s a point where the people who are the right people aren’t exactly the right people, but that’s a good problem to have if you can get there, and tackle it when you get there, is my advice.

Abheek Anand: How should they build and inculcate culture for the very long term? What have you seen work?

Claire Johnson Hughes: You know, I think a lot of this is… In the book are some examples of what I think. And I don’t think there’s a lot. There’s sort of like: “What are your consistent ways you communicate in the company? How do you do planning? – very lightweight, but keep people on the same page every quarter. I mean, I’ll tell you a little secret, which is that what they are exactly does not matter that much. It’s that you have them, and that you don’t have too many, and they’re not heavy, but that you have them and that you honor them. I think the worst thing you can do, and I’ve seen… I did this at Stripe a little bit, is [to] build something that not everybody really likes, the founders didn’t participate in, or the leadership team didn’t actually care about.

We did one planning process where people wrote these enormous documents and we couldn’t even possibly read all of them, let alone have a meeting and give them detailed feedback. And it was really ruinous because it was like, “This is ridiculous. We don’t need this much detail.” We were too young. We didn’t need all that detail, we didn’t need this heavy process. And the founders were like, “I can’t even engage with this.” Does that make sense to everyone? Like, you really want to be careful that it’s the right size and that it’s sort of… There’s a concept in brand that is a weird acronym, RBED: Is it relevant? Is it believable? Is it enduring? And, is it deliverable?

But, that to me applies to a lot of company processes. Is this relevant for what we need right now? Is it believable? Like, “I actually think this will be worthwhile”. Is it enduring? Like, “We could do this next year and we’d be fine”. And can you deliver it? “Can everybody participate, and it’s not painful”, right? Like think about that role. But just have a few things and really honor them, rather than overbuild or overset the expectations of your involvement. I mean, Google, look…  It was OKRs, plus they had TGIF, which is this end-of-the-day Friday ‘All Hands’ where anybody could ask a question. And the founders showed up for both of those things, 1,000% and they really matter to people. TGIF moved to Thursday though for timezone reasons. Anyway…

Abheek Anand: And it’s amazing. Just the simple act of showing up, and willing to answer anything. And by the way, many of these are uncomfortable questions to answer and just builds such a massive culture of trust in the organization. I think that’s a great example. One of the things that a lot of us have seen in many other parts of the world is this institutional knowledge that has been built out over decades and generations of operators. And you know, the fact that you’re here sharing that with us and helping make sure that that knowledge through osmosis transfers to other parts of the world is fantastic. So, thank you very much for that.

Claire Johnson Hughes: I mean, one of the most important things we can do as a community of people who are working to build the future, right, anybody founding any company related to technology anywhere in the world, is that when someone says, “I need advice or help”, there’s an expectation of, “I’m going to go help my fellow builder”, right? I love that about this community. And if there’s anything I can do to create access to knowledge, information, I will do it because it doesn’t seem right to me that it exists in certain pockets, and certain networks, more than others. That’s not how we’re to build the future that I think many people on this call are envisioning. We’re all in this together and I’m so grateful. Thank you.

Abheek Anand: Thank you very much, guys. Bye bye.

Dewi Fabbri: You’ve been listening to Claire Johnson Hughes, corporate officer and advisor at Stripe, and Abheek Anand, MD here at Peak XV Partners.