3 Leadership Lessons that Helped Build a $2.7 Billion Business

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A version of this post was published on LinkedIn.

I first met ExactTarget co-founder and former CEO Scott Dorsey 10 years ago.

In late 2004, the VC firm I worked for had the opportunity to lead ExactTarget’s Series A round of financing. At the time, Scott and his Indianapolis-based email marketing software company had been in business for about four years and the company’s growth was through the roof — generating north of $9 million in annual recurring revenue with only a small seed round (~$200,000) from family and friends. Back then, Scott was — and very proudly remains — a self-described “typical Midwestern guy.” He was polite, level-headed, and incredibly hard-working. In the moment, I wasn’t sure where Scott and ExactTarget would end up (if only we VCs could predict the future…), but I was absolutely certain of one thing: We had bought into a tenacious, intelligent, business savvy CEO who, above all, was a truly exceptional leader.

The True Value of Transcendent Executive Leadership

Skipping ahead to 2012, ExactTarget sold to Salesforce for $2.7 billion. And I wasn’t at all surprised. Scott Dorsey circleAfter all, I’d been able to closely observe Scott’s leadership over those eight years — first as an investor board member for Insight Venture Partners, and then as an independent board member through the Salesforce acquisition. And what I saw time and time again was a remarkable leader with a really unique portfolio of attributes and approaches. Scott was numbers-driven, but approachable and rational. He was confident and laser-focused, but also willing to hear to outside ideas and opinions. And his primary mission was to build a great company that created great value for its customers, employees, community, and investors. As a result, Scott was also universally loved by all of those stakeholders —an absolute rarity for the founding CEO of a business that grew to the size of ExactTarget.

3 Simple (But Critically Important) Leadership Lessons from Scott Dorsey

I can’t even begin to tell how and valuable that kind of leadership is. At a high-level, it makes achieving buy-in from every key stakeholder a much simpler process. When people genuinely believe in you, your mission, and what you stand for, they tend to eagerly fall in line and push the limits of what they’re capable of (and you can probably imagine the impact that has on innovation and productivity). Of course, building ExactTarget into a $2.7B company wasn’t always easy. Like any great business there were bumps in the road, but ExactTarget always managed to overcome them. While there were a lot of reasons for that success (starting with the company’s great product and team), I think Scott’s three key leadership principles played a huge role:

1) Have an unwavering commitment to your people and company culture

From day one, Scott made culture a priority at ExactTarget. When the company grew larger, Scott led the charge to select an official company color — orange — and branded the culture around it. Scott Dorsey – Orange Culture from ExactTarget on Vimeo.   When an employee hit a goal or did something well, he sent emails thanking them for “being orange.” His team created an onboarding program for new employees called “Officially Orange.” And he led the charge in developing best-in-class professional development programs — which the company calls “Slingshot” and “Catapult”— were critical to attracting, retaining, and growing world-class talent in a non-traditional startup ecosystem like Indianapolis. Just as important was Scott’s uncanny ability to remember the names of his employees. He never allowed himself to grow into a “CEO in the ivory tower” (heck, he played pickup basketball with his employees most Wednesday mornings) and always made decisions with his employees’ best interests in mind. For instance, each time ExactTarget accepted outside financing, Scott made sure that every employee had the opportunity to cash out some of their equity. Typically, just one-third of the team took him up on the offer —but the simple act of providing that option had an enormous impact on company culture.

2) Be willing to seek help (with no sense of false bravado)

One of Scott’s greatest attributes was that he knew what he didn’t know, and he understood when, where, and how to ask for help. In fact, one of the primary reasons Scott selected Insight for its Series A was the firm’s operationally-focused value-add model (the same model that we deploy with our OpenView Labs team). “I honestly do not understand why CEOs don’t take advantage of those services,” Scott told my team when he visited OpenView’s Boston offices for a Lunch and Learn last week. “Too often, CEOs feel the need to display a sense of bravado — like they’re immune to mistakes or that they need to know everything. They’re afraid to show weaknesses. But where does that get you? If you can learn and grow from a really smart group of advisors, you’re crazy not to do it.”

3) Make open communication and total transparency a priority

In 2007, Scott started sending out a weekly email to everyone at ExactTarget called “My Friday Note.” Typically, it included a variety of personal notes and photos from his travels, as well as reflections on the previous week, key company metrics (nothing was off limits), and important changes to growth strategy. In five years, Scott never missed a weekly email — even if he was on vacation, or dealing with the rigors of fundraising and scale. When the company sold to Salesforce in 2012, Scott collected all of those emails and published them in a book — 5 Years of Fridays — that he gave to each of his employees and investors. I still have the book in my office and I flip through it from time-to-time to remind myself what it means to lead with transparency and communication. Scott was an absolute master at it — and it came from a very genuine place. He wanted employees to feel engaged, involved, and invested in the company’s growth. And his Friday emails were just one of many actions that helped him accomplished that. (Note: Intronis CEO Rick Faulk is also an exceptional leader and a big believer in business transparency. See this post for his argument on why the benefits of transparency far outweigh the risks.)

Are You the Leader Your Company Needs You to Be?

I’ve written previously about the debate over whether leaders are born or made (Hint: I don’t think it’s an either/or proposition — some CEOs are born leaders, others need to a little nudge to get there). But one thing is undeniable: Great leadership is absolutely critical to a company’s success. If you aren’t a natural leader, you better learn to lead or pass the reins off to someone who can. The good news is that becoming a great leader doesn’t require you to completely overhaul who you are and what you’re good at. In fact, it just comes down to understanding your strengths, identifying your weaknesses, and putting your stakeholders — employees, customers, investors, etc. — at the center of everything you do. Ultimately, doing that will boost employee engagement, productivity, and self-worth, and create a team-wide excitement around generating and executing new ideas. Scott Dorsey was an absolute master at that — and I consider myself fortunate to have witnessed his journey first-hand. CEOs: For additional insight into how to develop and improve your leadership skills (and your company’s vision), I highly recommend reading this eBook: What Really Matters: A Guide to Defining and Realizing Your Company’s Aspirations