Unlike most chief executives,Matt Stevensalways wanted to be a CEO. He took the tech route to the job, starting out as CTO before becoming CEO of network performance monitoring company AppNeta in 2014. Since then, he has put some interesting programs in place to keep employees aligned and engaged. Read on to learn about his leadership approach as well as why he puts team “at the tip of the pyramid.”
AppNetahelps customers such as Amazon, Netflix and Boeing monitor their network performance. Their technology provides end-to-end application monitoring for better end-user experiences, whether that user be a Marriott guest trying to check out or an employee in a remote office.
AppNeta CEO Matt Stevens
You had a tech career path. How did you think about the CEO role? Did you want to become one?
I always wanted to be one honestly. I knew I wanted the opportunity to run an organization in some kind of leadership position. I don’t know that I necessarily wanted the CEO title. I wanted to be a founder or principal helping to shape the direction in a business. So yes, from my early days.
We share that then. It’s interesting because most CEOs don’t have that as their career goal. Was there something in particular about the role that interested you?
The number one thing is that throughout my entire career I’ve really enjoyed being part of a team with a common vision and goal. It is awesome to achieve any level of success however you measure it. When you have more than two people trying to solve something together and work towards a common vision, it feels incredible. I felt that in school and with sports. I really wanted to have that same kind of feeling in business.
Looking back, would you have taken any different courses or done other things to prepare you for the CEO role?
I’ve never thought, “I wish I’d done more ‘X’.” I think I probably would’ve gotten more involved in programs, clubs, and committees like student politics to understand how they were solving problems. I believe it would have taught me some of the subtleties required to build and be part of an effective team. When I started my first few jobs, I realized it was a lot different than I expected.
It’s kind of funny: We reward students for individual achievements in school. Then in the workplace we reward them for group achievements, especially leaders.
On a side note, I’m the lucky father of four boys. I’ve seen a very big shift in our education system. They are trying to be a lot more group focused rather than individual focused. Schools in the Northeast focus on that a lot, which I appreciate.
That’s good. It certainly was not the case when we were growing up. How much early warning did you have on getting the AppNeta CEO job? Did you have years to prepare or did you learn one day: “Congrats! You start in two weeks!”
I’ve been very fortunate in my career to work with some outstanding mentors who help me think about different things. This is my fifth start-up. I was a founding employee of NetApp back in the 90s. A senior sales leader named Tom Mendoza became our President. He still gives very worthwhile advice to all members of the former NetApp team. When we startedAppNetain 2011, I became the co-founder/CTO and my co-founder became the CEO. As you know, start-ups are a struggle. You are wrestling with product market fit, funding, hiring, competition, etc. Frankly, it’s exhausting. Three years later the pace started to get to him, and he gave the board a 60-day notice. I knew the board would ask me to either do a CEO search or maybe keep the job in house. They took the latter route, and 60 days later I became CEO.
Usually when the board makes an internal selection for CEO, it’s a sign that things are going well, and they are not looking for a huge change. Did you have different priorities when you took over?
It’s funny when you think about your background and the challenges you’ve solved. You have a certain point of reference that at the time feels right to you. As CTO of AppNeta, I was focused on customers and technology. The team was always important, but I was fortunate that we had a strong engineering team. It was only after being in the CTO role for two or three years that I realized some of the things we weren’t focused on as much.
When I became CEO, the whole wheel pivoted. I put team at the tip of the pyramid. With team first everything is possible. If you put tech or customers first, you still need the team to solve either of the other two.
As CEO I wanted to ensure that we had a common mission across our team. I needed to understand better for myself who my peers were going to be in leadership and if we had the right pieces in place for the broader team. At the time we were having good growth and financial success, and we were getting lots of competitive wins. We had the luxury of time to figure out the team. When I took over in July of 2014 the leadership team was myself, the heads of product marketing and engineering, and a part-time CFO. That was the group, and we were fortunate to build from there.
Did you notice any changes in the way people treated you when you made the CEO transition?
Not with the team already there. I had strong cross-organizational relationships. AppNeta wasn’t huge when I became CEO. We had 65 employees, and I knew everybody.
The change I did pick up was during our next growth phase. When new employees came in and discovered that I was the CEO, they acted a little differently around me. I noticed they did not want to bother me with too much detail. There was just a little bit of distance is the best way to describe it.
This actually helped shape the next wave of how we grew the team, and those fundamentals remain true to this day now that we have 130 employees. We call it TPT: Transparency, Performance, and Trust. Transparency is the one we work hardest on. Regardless of your title or role or length of service – whether you just joined or have been here for a couple of years – you conduct yourself with transparency. You should also expect transparency bidirectionally from everybody else. This goes to your question: This transparency took the new hires aback. They were not used to seeing it in previous organizations.
How do you help a new employee develop that comfort level with you as CEO?
Some little things and some big things. Making yourself available is the most basic and obvious. Things like keeping your door open unless you are in a meeting or on a phone call. I have to remember to consciously get up from my desk and open the door. It sends an invitation to employees and is something that moves the needle.
The second thing is to respond. We have many modes of communications at AppNeta: e-mail, chat, text. If people take the time to ask you a question or include you, don’t bypass them. Respond. It shows you’re listening. Some of the bigger things we do is schedule all kinds of meetings: one-on-one meetings, company meetings, etc. As a leadership team, we make ourselves available. It’s not a broadcast down from the mountain type of approach. No one wants a lecture.
Do you have a lot of remote employees?
AppNetais generally centralized in two locations: Boston or Vancouver. We’re split about 50/50. There are a handful talented employees in other places. Truthfully from an inter-office/intra-office perspective, this has given us an advantage. From our inception in 2011 it forced us to be good at communicating remotely. We have to be inclusive to two offices. It instills good work habits for inside the company and for working from home. You are already good at being online and being responsive.
What’s the next step for AppNeta from a culture perspective? How do you maintain it?
It takes an increasing amount of effort to keep it strong. When you get 25 percent bigger, it takes 50 percent more effort to maintain the culture. We have a healthy culture with our three-pronged approach of TPT (Transparency, Performance, Trust). As the organization gets bigger, transparency is harder to maintain at the same level. We think we are pretty transparent, and then things happen and people do things within their group or department that they may not think to explain to the wider organization. We need to ensure that it comes full circle and understand why people are doing different things, not just the what and how.
Performance and trust are equally important as you grow. As an employee, you have to understand that you have taken on a responsibility and own your own performance. The onus is on all employees to perform for the business, their teammates, and their department. If AppNeta has a tough quarter, we want to ensure that we don’t point fingers. For example, that product isn’t blaming sales or sales isn’t blaming marketing. You have to trust in your fellow AppNetians, as we call each other.
I’ve found that somewhere between 100 to 200 employees, a whole new level of management emerges. These managers are responsible for supervising arguably the most important employees in the business: The first-level employees who are touching customers and getting the day-to-day work done. How do you maintain a consistent management organization at your size when you are no longer in close touch with those managers?
Our senior leadership team has bi-weekly meetings and an off-site meeting every quarter. Then every other quarter we get the full leadership team together. During this meeting we share information from the senior leadership team off-site. Then we challenge everyone on the broader leadership team to determine how our quarterly goals impact them and their groups. We have a broad management by objectives (MBO) program. Every team member’s quarterly MBO’s directly align with our business strategies, whether it’s to increase customer retention, improve win rates against the competition or understand a new market. We’ve done this for six quarters now and have received positive feedback from managers and teams. They feel much more included and confident that they understand why we’re doing things. There is trust in the process.
Do you use a system to drive your goals process?
From a tool perspective, about 40 percent is Google docs and the rest is a people ops application called Namely. But the real key to the whole process is the managers and the transparency by which we arrive at each person’s MBOs.
As you mentioned, the more people you add, the harder it becomes to instill your mission, vision, and values. How do you educate new employees?
It varies by role. Everyone goes through a base-level orientation, which is not too unique. As part of the process, every employee gets to meet all the leadership team members. We spread this out over three weeks. I spend some time with every new hire as well. We do this in small classes of three to five employees so they can bounce ideas off each other and verify what they are learning.
Then they go back into their respective groups. Sales has a long cycle of 12 weeks of sales enablement training. Conversely, the engineering side has a different, eight-week on-boarding process. We have an agile development process where we push updates out every two weeks. Engineers learn everything involved in delivering our SaaS-based solution. For instance, we are hyper-focused on security.
When did you put that in place? What did it take?
I learned from my great mentors, so I’ve done this in previous companies as an engineer/VP of engineering/ CTO. We had great results with it. When I took over as AppNeta CEO, we did the first version for non-tech teams. However, I did it through an engineering lens. It didn’t always work out.
This was a two-year learning process where eventually we knew the right questions to ask. Now we do it slightly differently by the expectations of each department and role. This took until 2016. I think we’re at a B right now, and I would love to get it to an A but it’s really hard. It’s funny, we have a new director of people ops. We ran him through our process, and he came away saying two things: It was a great way to learn about the company, and now I know this will not be dumped on my lap now that I’m here!
What’s your best advice for CEOs?
Nothing profound other than it is important to focus on your immediate team, especially the leadership team. You must be aligned on your mission. It’s so easy to just sit back and say of course you all know where we’re going. It’s shift vs. drift. Make sure and test that everyone is aligned and that you have alignment in roles. We work with smart, motivated people who sometimes will stay in a role just because they are being a loyal soldier and are good at it. This may not be a role that really excites them though. We want to ensure that they are in a role where their passion has a chance to come through. We do not want to take them for granted. That is my best advice.