As we come closer to the end of the financial year 2021 or FY21 - a year marred by COVID shutdowns, increased spends, lowering cash balances, shorter runways, mass layoffs, existential crisis, down rounds, and what not; this is a critical time to take stock of the year and hold 'end of year board meetings'. These board meetings will be the most important meetings of the year. And more often than not, a lot of these end of year board meetings will be strategic than tactical in nature. These end of year board meetings will set the tone for the upcoming year for your startup.
We've sourced a checklist of top 5 things that we've seen founders do, and things we like founders do. These things will set the company up for success in the coming year.
Try to answer questions like:
This post-mortem is created by the top-level management including founders to share their inputs to explain the position of the company from the inputs of the entire company. After collating the details and views from all parties concerned, the most successful founders share this with every employee in the team to be transparent.
Call it what you want- team evaluation, performance evaluation, 360-degree review- anything. But at the end of the year, the team evaluation is important, and annual reviews are essential to honest cultures in startups. This is the best time to evaluate the performance of the team versus targets, reward the top performers, give a pep talk to the slackers, and set compensation for the coming year. The best founders share ones who share reviews transparently with their board.
We are strong believers in OKRs (Objectives & Key Results), a model where the management sets up the top 3 measurable, quantitative goals for the company, and strongly encourages each business line, team, and individual to do the same. It can flow both top-down and bottom-up in the organizational hierarchy. These OKRs are publicly shared in the company, measured at specific intervals, changed or altered over a period of time in accordance with the direction of the company. OKRs align the interest of all efforts of the company towards the common goal.
This is the most important part of the checklist. The board, founders, management, and employees have different issues that they are concerned about. But is it possible that they are worried about the same issues? If that is the case, directing a common effort to find common ground and prioritize communication and solution is the best thing the company can do to succeed.
Every review should end with the planning for the next one. Where were you, where have you reached, and where do you want to go. End of year board meetings are also held to approve the direction and budget for the coming year. This includes the business lines, P&L, action plan for sales, hiring plan, cash flows, runway, and planning for the next fundraise when necessary. This will help with scenario planning, goal setting, and team measurement.
For founders, investors, startups, this is a very good time to introspect, evaluate and communicate. We urge all our portfolio companies to do the same which can help them become more productive. The end of the year is about 11 weeks out, and starting early will help companies be more productive. As always, request the founders to share board meeting materials a couple of weeks in advance so the board can be better prepared, and have intelligent discussions.