Banking & Finance
In employees we trust
How to build a team that complements your strengths
By Matt McClelland
Smart Business Northern California | May 2008
Penny Herscher
president and CEO, FirstRain Inc.
As president and CEO of
FirstRain Inc., Penny
Herscher has access to plenty of information. But she
can’t use that information as well
as her 140 employees on the
front lines do, providing research
applications for FirstRain’s
clients — investment professionals and corporate executives.
“The further you get up the
management ladder, the less
real information you have,” she
says. “You’re dealing with meta-data, not real data. So I’m a big
believer in getting information
into the employees’ hands and
then trusting them to make
good decisions.”
Smart Business spoke with
Herscher about how to build
trust with your employees so
that you’re comfortable allowing them to make decisions.
Q. How involved should a
CEO be in the company’s
day-to-day operations?
It depends on the type of
leader that you are. Some leaders are very operational. They
recruit strategists to work for
them. Then there are other leaders who are strategists who
recruit operational people. I’m
definitely in the latter category.
I work on four things: strategy,
culture, customers and our
investors. I’m not very involved
in the day-to-day schedule planning or resource planning of the
company. I’ll review it with the
senior members of my staff, but
I don’t roll up my sleeves and
develop product plans.
Q. How do you set those
priorities?
I’ve been a CEO for 11 years
now. Early on, it was a struggle to figure out what my job was
because, as CEO, you can work
on anything at any point in time.
During the first four to five
years of being a CEO, I thought
about where I was effective,
where I was helpful. It developed over time as I looked at
what I naturally gravitate to,
what I was good at and what my
team wanted me to work on.
I’m not necessarily as good at
some of the operational things.
So I’ve learned to hire people
who are complementary to me.
Q. How do you build
a complementary
management team?
It’s important to value
diversity right upfront
when you’re building a
team. The easy part is
doing the breakdown of
what skills you need to
hire — the technical
skills, finance skills or
sales skills.
Then there’s a challenge
for any leader to consciously look for diversity
in the team. By diversity, I
mean not just the traditional — gender and race
— but also thinking styles
and decision-making
styles.
Q. What is the benefit
of a diverse team?
If you get a very diverse group
of people in the room with open
communication and trust, you
can make complex decisions
very quickly because many different viewpoints get brought in
to the decision-making process.
You’re able to look all around a
problem or all around a decision.
Then if you have a high degree
of trust, everybody puts their
opinions on the table. You can consider all the opinions and
make a decision.
I like to build a team that is
very diverse, where the personalities are different, and sometimes, it’s a little challenging to
get the team to gel if they’re all
very different. But if you put the
effort into building the culture
so the team trusts each other
and not tolerating politics in any
way, then you get the benefits of
the diversity.
Q. What are the keys to
leading a diverse team and
organization?
One is building an open culture with open communication.
Another is hiring great people. I
have a lot of focus on the quality
of management — the quality of
my team and the quality of the
people who work for my team.
As a result, I build a culture
that has open communication
and a very high level of trust,
two-way trust. I need to trust
my employees, and my employees need to trust me.
Q. How do you develop an
open culture and two-way
trust?
Tell employees the truth, and
tell them what they need to
know. Trust them to use that
information responsibly.
I tell employees, ‘I’m going to
tell you the truth, but you need
to demonstrate to me that you
will use that information responsibly. And if I ever learn that you
don’t use the information
responsibly, I’ll stop talking.’
It creates a two-way bond of
trust. I also believe that reasonable individuals given the same
information will make the same
decision. It’s very important to
give the employees as much information as possible that is pertinent to their jobs.
Q. How do you attract quality
employees?
Quality employees attract
other quality employees. It
starts as you develop the vision
for the company and start putting the strategy in place.
It starts with being vigilant
about the quality of the first 10
people you hire. Then, as you
hire great people, remember A
players hire A players, and B
players hire B and C players.
HOW TO REACH: FirstRain Inc., (650) 356-9040 or www.firstrain.com
