BUSINESS & ENTREPENEURSHIP

The Four Tiers of EngagementThe Four Tiers of EngagementThe Four Tiers of Engagement

What Silicon Valley taught me about collaboration and time management

by Reid Hoffman

Recently I was talking with the noted surgeon, writer, and public health researcher Atul Gawande about his demanding schedule – and how he tries to manage it for maximum impact.

As I described the framework I use to navigate Silicon Valley and all its potential deals and alliances, Atul suggested my approach could help any busy professional trying to prioritize her obligations, not just Silicon Valley types. So I'm sharing it here.

In Silicon Valley, thousands of start-ups are taking root and reaching fruition at any one time. For those who work here, staying focused and productive becomes a challenge as new opportunities present themselves.

Early in my own career, for example, I was immersed in running my own start-up, Socialnet. It was a serious foundational commitment, but then Peter Thiel and Max Levchin approached me about helping out at their own start-up, PayPal.

That also seemed like a major opportunity, so I started wondering: Was there a way I could have a strong impact at PayPal while fulfilling my existing role at Socialnet?

As I note in The Startup of You, I reached an agreement with Peter and Max that essentially involved a formal but limited commitment of time: I would serve on their founding board of directors and promise to return their phone calls by midnight the same day.

This allowed me to collaborate on PayPal in an ongoing and substantive way and yet continue my work on Socialnet. Eventually, I decided to commit fully to PayPal, and that turned out to be a hugely important decision in my overall career arc.

In Silicon Valley, this is the kind of challenge that entrepreneurs and executives face as their networks expand. In an environment of increasing abundance, it's crucial that you learn to invest your time, your resources, and your capital to greatest effect.

Defining my relationship with Peter and Max in a flexible but clear-cut manner was an early instance of my framework for maximizing collaborative opportunities in a time-crunched world. Over the years, I've continued to develop my approach, which essentially mirrors how Silicon Valley creates start-ups.  

Specifically, I think in terms of four tiers of potential engagement with a company or any project.

While these different roles help determine how I engage with start-ups, I use them generally too – for projects as well as formal companies.

For example, when I decided to develop and co-teach a course on blitz-scaling for Stanford University, I committed to functioning as a principal for the course of the project. There was no company involved, but in my mind, and in budgeting my time as we developed and then taught the class, I operated as a principal member of the team.

TIER OF ENGAGEMENT: PRINCIPAL

When you commit to functioning as a principal, you essentially say, "I own this, and it's my responsibility to bring this endeavor to fruition."  You're involved on a daily basis. You may have contributed your own assets. You probably have or at least are in the process of recruiting and thus managing employees. You're responsible for the active management of whatever resources define the entity or project.

Being a principal, in short, is a serious commitment. You deal with all the significant issues that arise, and ultimately you determine the overall path and outcome of the endeavor. If it succeeds, you bask in the glory. If it fails, you own the failure.

So at the end of the day, you can't just say "Well, I did my best and tried and that's that." If you're a principal, you're a captain of the ship. And that means it's your obligation to do every that's reasonably possible to bring that ship to port.

Of course, the definition of what's "reasonably possible" changes depending on the scope of the endeavor. If you're working on a small project, such as hosting a birthday party for a friend of yours, "reasonably possible" could mean working through the weekend. If you're CEO of a company that has raised $100 million from investors, it means a great deal more. You're the captain of that ship,  and that means you're the first person on it and the last person off it, whether it sinks or successfully arrives at port.

Because of the commitment level required, being a principal necessarily means limiting your focus. As my friends Elon Musk and Jack Dorsey are currently demonstrating, you can in fact be a principal at two major companies at once. But it's an extremely expensive proposition in terms of the time and focus you must invest, and thus very difficult and rare.

If you're talking about projects rather than companies, your potential capacity increases. For example, on the company level, I have a principal role as a partner at Greylock. And in the course of developing the blitzscaling class at Stanford – I functioned as a principal there too. But that was a project rather than a full-fledged company, and I had other partners functioning as principals too – Greylock's John Lilly, my LinkedIn co-founder Allen Blue, and Chris Yeh, who also co-authored The Alliance with me (and Ben Casnocha).

So functioning as a principal on projects rather than companies can expand your capacity. But it shouldn't expand it too much. Indeed, if you find that you're always engaged as a principal in four or five different projects, you're probably not giving at least two of them the fully engaged leadership that success demands in today's ultra-competitive professional landscape.

TIER OF ENGAGEMENT: BOARD MEMBER

As a board member, you engage in a substantive but less immersive fashion than you do as a principal. You've committed to providing ongoing strategic governance and assistance to the endeavor. But while your mandate is to help manage resources intelligently, you're not directly responsible for the project's outcome in the way that a principal is.

As a key strategic partner to the endeavor's principal or principals, you must maintain an ongoing picture of the endeavor's strengths, weaknesses, opportunities, and threats – i.e., what's commonly known as a SWOT analysis.

For example, you must understand where the project is in its development cycle. You have to know how it fits into the overall industry or domain in which it's situated. To maintain this evolving, three-dimensional image of the endeavor,  you're probably communicating with the principals on a weekly to monthly basis.

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That way, when you're out in the field, you can function as a key ambassador and intelligence gatherer for the project's principals. Could the person you're having lunch with benefit from whatever the project's greatest strength is? Does that new startup you heard about have complementary resources or assets that could help shore up one of your project's weaknesses?

At the same time, your role is not only outward-facing. Part of your responsibility involves monitoring and assessing the principal's performance, and offering productive (and sometimes challenging) feedback.

While you function as a key strategic advisor to the principal, your primary allegiance is to the greater endeavor or organization. You should be doing everything you can to help the principal succeed – except in cases where it's the principal who is impeding the overall chances of the endeavor's success. Then, in your role as a board member, you have to make the hard decision of finding a new principal.

Of course, as a board member, your role may vary substantially from endeavor to endeavor. Even in the case of formally appointed boards, this is true, with different companies having different expectations about what level of engagement each  board member provides. It may be that your duties/expectations are fairly limited, such as helping a principal recruit others for a project, or helping to scope out a start-up's vision and culture.

In less formal scenarios – i.e., when you're functioning, say, as a "board member" for a colleague's effort to host a fundraiser for a local nonprofit  – this is even more common.

In either case – formal or informal – it helps to mutually articulate the scope of your ongoing commitment. You don't have to map out every detail in advance, as commitments and expectations can evolve over time. But you do need clear communication right from the start, and an ongoing emphasis on clearly defined roles.

As a board member, you can participate more broadly than you can as a principal, but there are still limits. Because board member duties can vary widely from endeavor to endeavor, your capacity can vary broadly too. If you're functioning primarily as a VC partner or investor and being a board member is essentially your full-time gig, you might pursue as many as 10 – 12 board-level engagements at any one time. In contrast, if you're the founder of an early-stage start-up, you'll probably want to limit your board-level engagements to no more than one.

TIER OF ENGAGEMENT: INVESTOR

A third way to participate in the various opportunities that present themselves is as an investor. Here, whether you're dealing with a for-profit start-up, a

philanthropic project, or any other endeavor, your role as an investor will likely have a literal component – i.e., you will be contributing money to the endeavor.

And at the very least, you'll be investing some kind of tangible asset – access to your Rolodex, an agreement to make a series of introductions, a commitment to serve in an informal role as an advisory board member.

Because you have made this investment, you will certainly try to be helpful to the endeavor's principals however you can. But ultimately your level of commitment will be reactive rather than proactive.

Unlike a board member, you won't have to maintain a real-time SWOT analysis of the company or project. Nor will you be responsible for the project's overall success or failure in the way that you are when you're a principal or a board member.

But if a principal whose project you've invested in solicits your advice and assistance, you'll be committed to offer your assistance on a responsive basis. You may not end up fulfilling the exact request the principal makes. But you are committed to trying to be helpful in some way.

TIER OF ENGAGEMENT: FRIEND

The final tier in my framework is that of "friend." As a friend, you have a relationship or alliance with one of the endeavor's principals, but no formal or even ongoing commitment to the project. You might even put money into a project – but you ultimately exist outside the project's orbit. Your engagement is serendipitous, reactive, and ad hoc.

If you're having lunch with a principal, and she wants to discuss her project, you do what you can to offer feedback, advice, and whatever other useful counsel you might provide. But your commitment in the project exists only in that moment. When lunch is over, so is your commitment. You might keep thinking about the project, but you have no explicit ongoing obligation or tie to it.

STRENGTHENING ALLIANCES THROUGH CLEAR ENGAGEMENT

To be a key strategic ally to the people in your network, clarity matters. You should aim to strengthen relationships through proactive engagement. But you should also be clear about what you're committing to.

Successful collaboration is a key to long-term career success, in Silicon Valley and everywhere else. But the key to successful collaboration is managing your own time well.

That's why I've found this simple framework so useful over the years. When new opportunities arise, it offers an easy way to do a quick reality check. Do you really have time to assume the responsibilities that a principal level of engagement demands? Are you so taken with an idea or a principal that you know you at least want to function as an investor? Are you in agreement with the principals about what the scope of your role will be?

These tiers aren't binding. You might graduate from investor to board member, depending on how events play out. Conversely, you can go from board member to investor, depending on how events play out over time. But as you evaluate new opportunities, accurately assessing your level of potential engagement is crucial.

The right engagements are ultimately what propel your career. You can't say "yes" to everything. But if you assess opportunities through these four tiers, you'll be able to manage your time more effectively – and thus be able to say "yes" when the most promising opportunities arise. After all, you never know when the project a colleague wants some help on might turn out to be the next PayPal.


This article was originally published here on April 9, 2016

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