What should a VPE share in a Board meeting?
What should a VPE share in a Board meeting?
The answer: It depends...
As head of engineering at a venture backed company you will very likely be required to update your Board of Directors on happenings within your organization. The updates you provide are part of a regular, likely quarterly, Board of Director meeting. This is a meeting in which the company’s management team gives the Board an update on the most salient topics - good, bad and ugly - facing the business. What then, should the head of engineering present to her board?
Your narrative to your Board will ultimately depend on the overarching themes that your CEO wants to update the BoD about. This implies that it’s the CEO who will typically set the agenda for the BoD meeting and you, as head of engineering, are responsible to prepare material that supports or is connected to that narrative. I’ve attended countless BoD meetings in my career and have come across a few themes that I will outline in this post.
Scaling the team
This is the most common theme, even though I suspect it isn’t in vogue right now given the public market gyrations and the default to conserving cash. Be that as it may, it is one of the more common themes that I have encountered, especially in the earlier stages of a startup’s life: series-A through C.
The reason this topic is both relevant and important to your BoD during this stage of the startup is simple: engineering (and sales) is a bottleneck that is preventing the company from growing. The engineering team that you had in the earliest days (seed to series-A) will very quickly become unable to service the growing needs of your business. You need more engineers, hence this becomes a topic of importance to your BoD.
Your update to the BoD should cover your hiring goals and where you are relative to those goals. The BoD will also be expecting “more” out of the engineering team as you scale it. You need to temper those expectations. Scaling an engineering team is hard and impacts your productivity. That's a tight rope that you will have to navigate.
Metrics to present
Hiring: Actual vs Plan
Attrition
Interview metrics: Pipeline conversion rates, time to hire a candidate, offer close rate. These are all in support of your narrative that hiring can impact productivity
New product launches
This theme pops up to Board level importance if key business outcomes - sales - are dependent on a new product launch or new features. Your BoD will want to know if you are on track to deliver these features/products and contingencies or implications if you are not.
Your update to the BoD will go seamless if you have positive news to share: you’re on track or released. However, if you’re delayed, which will happen, you should be ready to walk them through your action plan to get back on track. Your plan has to be aligned with sales, and potentially marketing, especially if these new product or feature launches are requirements for future revenue. Your operating plan and sales targets might change as a result of engineering delays. Because of the significant downstream effects a delay can have, notably on sales, your update to the BoD might result in on the spot problem solving. You have to be in control of the narrative, especially when sharing bad news. This implies, showing the BoD (really this is for you), that you have a plan to address the delay. This could be reducing scope and releasing on time with less scope than planned, allocating more resources to work on the product/features and so on. Regardless of what you do, do not walk into the meeting without having contingency plans.
Metrics to present
Product/feature launch: Actual vs Planned
First customers and product feedback if already launched
Contingencies if delayed or timelines at risk
Cost reduction
This theme is all the rage now, even though it can pop up in good times too. If you’re in the midst of a downturn or your business is facing economic challenges, then you’ll be presenting a cost cutting plan to your BoD that spans headcount and program spend. The latter covers travel, legal fees (patents), reducing SaaS spend and perhaps reducing your product initiatives too. Your plan must be aligned with the overall cash-out and cash-burn plan that the CEO & CFO will share with the BoD.
Counter-intuitively this theme does pop up in good times too. The most common time this pops up is if the company is planning for a near-term IPO. That’s when margins come into play, especially gross margins, of which engineering can impact quite significantly. You might be tasked to drive operational efficiencies, typically by running SaaS infrastructure more efficiently, to improve gross margins.
Another area where cost cutting comes into play is for hardware products. In this case, the cost reduction efforts are also in service of improving margins by reducing the cost of your product’s BOM.
Metrics to present
RIF plan
Gross/Operating margins: actuals vs plan
Action plan to hit target COGs/Operating Margins
Quality
The ugliest theme of them all. You have a quality problem and your business is suffering. Your NPS is low, churn is high, your support team overworked and your engineering team demoralized. This is a hard place to be in, especially if it is visible at the BoD level.
If you find yourself in this position, I suggest that you first outline your plan of action to address poor product quality. You should also be clear that there’s no silver bullet here and that rectifying this situation will take time. Poor quality is an engineering cultural issue and therefore hard to turn around. You should also share leading indicators (metrics) that help you evaluate if you’re headed in the right direction or not. Expect to continue sharing these metrics on a go forward basis as long as this issue persists.
Metrics to present
NPS, CSAT, churn
High level test metrics: regressions, test gaps, coverage
Production incidents: Uptime & Sev 0 incidents/outages
Final thoughts
If you’ve never presented to your Board before, the first few times can be daunting. The truth is, presenting to your Board should be no different than you confronting the realities - good, bad and ugly - facing your team. I’ll offer three pieces of advice: be honest, be on top of your challenges and ask for help if you need it.
First, you must always share an accurate and honest picture to your Board. Do not hide challenges from them, especially ones that impact the business. A narrative that is entirely positive will be met with skepticism. Startups are hard and messy, therefore the default is to face challenges.
Second, always show that you have a good handle on the challenges your team is facing. Don’t tell your board that you have a problem and are clueless about how to solve it. You’ll very quickly be polishing your resume.
Third, keep in mind that Board updates are also an opportunity for the management team to ask for help. I’ve asked my BoD for help with hiring many times. Most investors have internal Talent teams who work with their portfolio companies. BoD members are also very well connected and might be able to introduce you to key talent.