The heartbeat of a Chenmark company
When we first started our endeavors at Chenmark, we simply purchased one company at a time, and each was a standalone entity that just happened to have the same owner. As our portfolio evolves, our focus has shifted towards thinking about how we can create a whole that is greater than the sum of its parts. To be clear, we are not talking about consultant-esque, power-point backed “SYNERGIES!”. Rather, our focus is on what it means to be a Chenmark Company.
We have spent a good deal of time over the past year articulating just that and for us, it means a shared commitment to our mission and values, the metrics to define success, and the organizational structures to support it all over the long-term. Taking the time to articulate these views completely and clearly is one thing, but equally important are the mechanisms we develop to hold ourselves accountable to that standard, day in and day out, year in and year out.
On that point, we enjoyed reading venture capitalist Fred Wilson’s blog posts (here and here) about how the best companies have a “heartbeat”. For Wilson, this means they “operate on a pace and a cadence and a rhythm that is perceptible to everyone in and around the company.”
Wilson doesn’t prescribe an exact formula for how to obtain this cadence but rather outlines that it comes down to the discipline of regularly setting goals, tracking results, sharing information, and reporting on progress. Interestingly, he also points out that these processes – whatever they look like – are more important than the actual content at any given time. From the blog:
“Many of USV’s portfolio companies use an OKR process to create this rhythm in their teams. What I have learned from watching these companies and listening to how the teams talk about the OKR process is that to some extent it is ‘form over substance’ in that the process is ultimately more important than the specific objectives and key results that flow through the process. I am not saying that teams shouldn’t be thoughtful in setting objectives and committed to hitting them. They should. But I am saying that the regular setting of objectives (quarterly is a time frame most companies use) and the weekly or bi-weekly reporting against them is the most valuable thing that comes from the process. It sets the heartbeat and keeps it. And that is so valuable.”
For us, this is a delicate balance. Each of our companies has its own leadership, its own culture, and its own structure, so we must be mindful not to drown out the internal cadence of the company while fostering the shared cadence of Chenmark. Ultimately, it is a simple but not easy thing to do. As Wilson puts it “setting objectives and meeting them on a regular basis is a virtuous system that brings out the best in people and teams.” We couldn’t agree more.