CEOs know that time is their most valuable resource, but they often sense that their teams spend time on things that don't matter or are even counterproductive. This misalignment between company priorities and how people actually spend their time is a massive problem for most organizations. The symptoms of this problem include:
A terse exchange between executives after one asks the other for resources to help with a project.
A team fails to hit their metric because they were derailed by an ask from another team.
A team fails to hit their metric because another team didn't deliver.
A team member quits because they spent many weeks on a project that was ultimately shuttered, to their surprise.
A customer hears different things from different people at your company.
These situations lead employees to ask, "Does my work matter at all?" Customers wonder, "Does this company have its act together?" Executives wonder, "Do I really want to work at a company where I have to constantly battle my peers?” And the CEO wonders, "Why are we burning so much money and have so little to show for it?"
I sat down with Alex Terrien, the COO and Co-Founder of Parable (one of my portfolio companies) to discuss the goal of alignment. The bottom line: Alignment has been an elusive goal for most companies to date, but with AI, we can achieve a new standard. You can listen to the audio or read the refined transcript below.
Or, if you’re feeling impatient, here are the top action items that ChatGPT recommends based on this fireside chat:
Conduct an AI-driven time audit across the organization (respecting anonymity at the individual level)
Visualize data on areas of misalignment with OKRs
Empower employees with context on how their work contributes (or doesn’t contribute) to company goals
Develop a dynamic resource allocation process
Intrigued? Let's dive in!
AP: Alex, thank you so much for joining us today.
AT: Absolute pleasure, Allison. Always great to speak with you. Thanks for having me.
AP: I've been looking forward to having this conversation with you for a while. Specifically, we are here to talk about company alignment, and I'd love for you to start by talking about what you think alignment means.
AT: What we have seen in building and investing companies over the last 15 years is that there are opportunities for misalignment everywhere — due to the complexity of business and the environment that we operate in, the difficulties of being a strong leader, and the natural tendencies of human nature. It is difficult to keep things very, very tightly focused and tied to an objective. Almost always, your team is spending time on initiatives that are not aligned with your company's core priorities. Organizations tend to be more de-coherent than they should be.
AP: It's like a law of entropy in physics, right? The universe trends toward entropy, or disorder.
AT: Absolutely. The second law of thermodynamics is highly applicable here: there is a natural tendency to move towards chaos. It takes a lot of energy to regulate entropy, to create order within that chaos. It takes a lot of leadership, culture, and processes.
The first step is to have a very clear sense of how aligned or misaligned your teams are with your strategy. That starting point gives you a lot of opportunity to create more coherence in the organization.
AP: Before we get into all the nuances of this, would you mind sharing for folks what Parable does? It'll give them a good perspective on how you think about the problem.
AT: We are coming at this from the perspective that time is your most valuable resource. That is true at an individual level. When you have 5,000 people that work for you, your OpEx line (which tends to be one of your biggest cost lines on your P&L) is really your people's time. And that time is your scarcest resource.
Parable helps you understand where time is going in your organization. You can understand how time is mapped to your goals, to the work that we label as KTLO (keep the lights on), and to unplanned work. The question is, what’s getting in the way of you reaching your goals? We map out your company’s time to uncover signals as to how you can create more alignment in your org.
We work with C-level executives and functional leaders to identify what is the top priority in your company, and how do you make sure that you absolutely reach it?
Let's say the company is spending 25% of its time on churn, for example. The reality that we're seeing in the data is that the company is spending 7% to 8% percent of its time on churn. If the company would just double that and spend 16% of its time on churn, we guarantee you you're going to solve this problem.
We want to give you the signal that you need so that you can get everybody focused on the things that really matter.
AP: I'd love to share a real life example of dedicating time to reducing churn. When I was at Gainsight, our customer success team periodically would tell us they're overworked. They were very hardworking people who were very dedicated to their jobs. The managers would not be surprised by this because they could see folks working very hard day to day. But they were sometimes a little bit confused, because they wouldn't know exactly what's causing people to be working late nights. And so once or twice a year on various teams within the post-sales organization, we would do a time tracking analysis. Usually it would be in a spreadsheet, and people would self-report what they were actually doing during the day. "First I was on a customer call, then I had a team meeting, and then I spent an hour preparing for a few other customer meetings."
They would track it and then the team leader would see that overall the team is spending, for example, 30% of their time in customer meetings, 20% of their time in internal meetings, and what have you. This was very helpful.
You can imagine how laborious this analysis was, but everyone felt as though it was very important. It helped us to some degree redirect the team toward, as you said, those priorities that were actually important for the team. In some cases it helped us justify headcount too, because of course a CEO of a big organization, who has even less visibility into what individual contributors are doing, usually might ask why the team is overworked and ask if you really need more headcount.
Then if we shared this analysis, we might be able to justify additional spend. But inevitably that analysis would be woefully insufficient. First of all, when people are spending time in customer meetings, it was almost never clear in the spreadsheet what exactly were those customer meetings about. Were they about the new product that was recently launched, or a bug that was plaguing a lot of customers, or some kind of data quality issue?
The internal meetings—what were they about? Were they important coordination forums or was everyone giving updates? What was the substance of the work? Not so much was known about the nature of the time that was blocked for that hour or half hour.
That was a big gap for us. It was, of course, also a big gap that we didn't have continuous visibility into people’s time. We would do this exercise maybe once or twice a year because it just took a lot of effort for everybody. Team members don't love being surveyed if it's time required from them, even if it ultimately may be to their benefit. And, of course, it's time required from the manager.
The final thing is that when people hear about time tracking, often they have these red flags that go off that someone's trying to figure out what they're doing during the day. They may be getting a “big brother” vibe from the company. They wonder if someone is going to be reprimanding them for some reason—that they're not working hard enough or not fulfilling expectations in some way.
For all those reasons, our time tracking was not as effective as maybe it could have been. I know you have thought deeply about these gaps in traditional time tracking analysis. I'd love to hear how you think about it.
AT: Your experience echoes both the experiences that we have and the stories that we're hearing that time tracking is not a valuable tool. It's incredibly tedious. It's culturally challenging. It's very difficult to do. It doesn't actually give you great data.
That's partly because it's self-reported. Just as an example, we were working with an agency that already had a time tracking method in place. We looked at their data. They get people to fill it in at 11 PM, at the end of the day. They have no time and just fill in it quickly. Some days had like 27 hours of work in it. But it just goes to say that it's not reliable doing it like that, unless you're a law firm and you're literally billing for 15 minute or seven minute increments.
No one else is going to do that. And frankly, I think no one should do that. It is not motivating. I know it because I tracked my time for the last two years in 30 minute increments every single day. And I know it's incredibly tedious to do. It unfortunately places the onus on the individual, which is culturally challenging.
To be contrarian: most of the productivity space is oriented on individual productivity, i.e. how can we take one employee and accelerate their work? And that's fine, but it doesn't move the needle on a 5,000 person organization. This is a systems-level issue. You have to address the way the system as a whole is spending its time.
AP: As you said, there's a whole category of productivity tools — which some VCs focus on. Most productivity tools are focused on the individual, or at best, communication between individuals. But what so many people are missing in describing productivity this way is that it could be that an entire individual's day, maybe for weeks on end, is spent on something that isn't productive. It's not so much how many emails you get through in a day, or how many things you check off your to-do list, or how many customers you meet with, or are you filling the crevices of your day with supposedly productive things. It's really that overall, the week that you spent, was that helpful to the company?
AT: You could go as far as saying that it doesn't really matter if you work six hours a day or 12 hours a day. What matters is, are you working on the right thing?
There's a seminal book by Peter Drucker, written 50 years ago, that is about being an effective executive. The number one thing that he recommends is understanding where your time goes. This is not new. Every founder, every CEO, every C-level executive we speak to, understands this intuitively. Everyone gets that, yeah, time matters.
We also know that the best companies, the Apples and the SpaceX’s, are literally obsessed with where time goes. You look at these stories of Jobs taking 100 top executives on an annual retreat, listing every single priority, then cutting 90% of them. We know about Elon Musk is absolutely relentless about setting priorities and making sure that people are working on those. Another great executive that I love to read is Franz Slootman, who built ServiceNow and is now chairman of Snowflake. He says he has never seen a company that is too focused.
AP: Generally the leaders you mentioned are considered sort of heroes. But at the same time, in the last five to ten years, there's been a backlash against more authoritative forms of leadership. I heard in what you were saying that the authoritativeness of these leaders helped them ensure that the entire organization was focusing on the right things. With the backlash against more authoritative forms of leadership, what's the path going forward for ensuring that companies really are aligned?
AT: Great question. Defaulting to authoritative leadership historically has worked, because the way that you impact a company’s focus today is through culture. It's so difficult to fight entropy, that the way to do it today is to just put your foot down and say, this is what we're doing, you do not have a choice. People sometimes resist that.
But good data on how time is actually spent can create broad-based support for focus. Once you start visualizing that if 5,000 people work at your company and you're only spending 8% of your time on the number one priority that is going to make or break your business in the next year, it doesn't take a genius to realize that this is probably insufficient.
Everybody at every level of the organization can relate to that. Provided that the data is gathered and reviewed as a collective mechanism, everybody can turn around to their own teams and ask what needs to be done.
If you can cut through the noise and provide very clear signals about what needs to get done, it helps to build cultures that are more aligned and more understanding of why this so important, without having to always just put your foot down.
AP: It's such a great point. Often I see the CEO knows that the company is misaligned, because they have a privileged vantage point for observing how time is spent. They're in meetings with customers and the prospects, they're in the product roadmap meeting, they're sometimes joining team meetings or doing one-on-ones with individual contributors. So, they can tell whether the company is focused or not in general on the right things. But most employees only see pieces of the picture. To your point, getting the data out there for everyone therefore makes alignment something that everyone can help solve for.
Something else I've heard you say before is that misalignment is not just a CEO problem. Obviously CEOs care about this, but it's also an individual contributor problem. If you're an IC who's been asked to go do specific things for the next three weeks, then at the end of the three weeks it turns out actually they're not shipping your feature, or they're not launching that marketing campaign you were working on, or actually all those meetings that you were doing were fruitless, that doesn't feel good. That's when individual contributors wake up and wonder if they're even important in the organization. Everyone wants to feel relevant.
AT: This is the root of employee disengagement. The root is not that people don't have organic meals at the office or foosball tables. The root is that they feel like they're not honored. Literally they're working hard, but they do not see how that is contributing to the bigger picture.
AP: I want to talk about the CEO's perspective on alignment a little bit more. Despite CEOs having an information advantage within their companies, I often see that they only find out exactly how things are misaligned and to what extent after it has become a huge problem.
AT: Before I go there, just to bounce back on the point that you're making around context — you and I have spoken a lot about founder mode and what it is. And founder mode is about the reason founders can and probably should get involved in details. It's because they have so much context on the company, on the history of the company, on who is hired, why they were hired, what worked, what didn't work, and which customers the product really resonated with.
There's a great book called Mastery which talks about how masters throughout history have developed mastery of a particular field. Founders tend to be masters at their company because they have developed these intuitive associations around what works and what doesn't, and they can act on that.
So, their input is eminently valuable when they jump into details. That's applicable to any executive provided that they have the right context. Our product Parable gives you that context on what everybody is actually doing and if they are doing the right things. You need that layer of context to understand where you should and shouldn’t get involved.
It’s difficult for executives at large companies to get a consistent flow of information that's relevant to the decisions that they need to make at any given time. The flow of information is constrained to very specific processes, and it's biased. Information flows back to executives through maybe a monthly or quarterly business review, a deck here and there, one-on-one meetings with direct reports, and maybe some skip-level meetings.
Early on in your company, you had 100 or 200 employees; you could walk into a room and get a sense for what's happening. Later on, the complexity is such that it's difficult to get a consistent flow of relevant information.
And information tends to be biased by the person sharing it with you. Note, it doesn't matter whether they're good or not. They might be excellent at their job, and you might have a high level of trust in what they're doing. But they have their own priorities and concerns. They have their own team that they have to deal with, and they're naturally selecting the information that they give you.
Think of a CEO's job at the end of the day as resource allocation. You're trusted by your shareholders with resources. What do you do with these resources to create the most value? We have a lot of high-level data on how capital is spent, such as what types of headcount, but very little data on how that people are spending their time. CEOs need more data on how their resource allocation is actually materializing in their company.
I wear an Aura ring. It gives you great data on how you sleep. But it doesn’t really tell you what to do about it. I don't feel like I've fundamentally changed my behavior because of the small tips they give. But in our product Parable, we're really focusing with the people that we work with on getting the signal from the data and telling them exactly what they need to change. We're seeing tremendous impact in the organizations that we work with.
If you’re a CEO, you have an opportunity to dynamically manage your resources to make sure that you hit your goals and and identify latent waste. We're talking about tens of millions of dollars of misallocated resources.
AP: Alex, in closing, if you have one tip for a CEO as to how to generate more alignment at their company, what would that be?
AT: I'm going to lean on someone like Frank Slootman here, which is focus. So many companies that we speak to have 17 OKRs. No matter how big your team is, I just don't think it's going to work. You need to have very few, clear goals, with everyone understanding how their work relates to those goals.
AP: Perfection is what happens after you erase everything that's unnecessary.1
AT: Exactly. Allison, thank you so much.
AP: It was great to chat with you. Thank you.
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https://www.goodreads.com/quotes/19905-perfection-is-achieved-not-when-there-is-nothing-more-to?utm_source=chatgpt.com
