How to talk when it’s important
““Don’t speak more than two sentences without offering data”.”
This advice was once given to a successful friend of mine, and he passed it on to me. I am perennially struck by its power.
Recently I started to think about how universally a principle like this – the “two-sentence-then-data principle” - could be applied. At work, we are drawn into exchanges that can seem frustrating and difficult to gauge. I think these exchanges would almost always benefit from applying the principle. Here are three pseudo-real examples that demonstrate what I mean.
Example 1 - The head of engineering is frustrated with obstacles to shipping
They say: “The reason we are not shipping is because everything is completely broken! I know you are not really all that close to it, so I need to tell you that our processes, our team staffing and the new compliance requirements we crashed in have made it so that nothing works and the customers are being affected. It’s serious, BigCorp is going to churn, I guarantee it. And some key people are about to walk out the door and go work for our competitor. At this stage I don't even know if I can fix it anymore. We need to stop everything and start again...!”
Clearly, this head of engineering is alarmed, and that alarm is presumably coming from a concrete problem or problems. But their communication is being spammed by dramatic and hyperbolic statements. If I asked them to refactor the presentation using the “two-sentence-then-data” principle, it would probably sharpen into something like this.
“I project our implementation of the SOC II standard is costing us five times what we thought. In the last year, we have slipped from shipping a release every two weeks to shipping every 6 weeks. A year ago, 60% of our releases closed out customer driven requests; today it’s less than 10%. The biggest drop in both these metrics was in April, when we went live with the SOC II program, and since then it has declined a further 30%. It’s not just us, I have two case studies from companies at our stage on how they dealt with the same issue. I need a mandate to fix this now.”
This is pretty damn convincing. It presents a fact pattern, ties to critical business issues and it lays the groundwork for a clear ask.
Example 2 - The VC / Partner is providing their position on future financing following some lackluster results:
They say: “I hope you know that at Panacea Acceleration Capital Partners LLP we are still very much behind you and your management team and really believe in what you are doing. I don't think anyone is thrilled with the last two quarters of growth so that has to improve, but you should also understand that unlike other investors, we are in it for the long haul and we have significant future capital set aside for you to fuel your growth. So, don't spend your time going to market now for more money. You are one of our most exciting portfolio companies and we have every faith that you and your team will continue to drive better numbers...”
I have worked with some great investors and they don't talk like this. But many do and I don’t know why. None of the statements are bankable, it’s probably not the whole truth and certainly not helpful. The individual is trying to be supportive and be a good partner during a rough patch. But for most companies, it’s all rough patches. As a leader, you need to know what your options are more than you need the pep-talk. If we applied our two-sentence principle to this exchange, we could get something much more useful for both parties:
“Yes, we are prepared to invest more capital if the company needs it. 70% of our portfolio companies take a second tranche lead by us and we think that is great because we have shown it keeps management focused on growth at a critical stage. However, to stay inside our investment thesis for your industry, our IC needs to see a twelve-month average growth rate north of 65% and gross margin of 75% or better. Even so, the net dollar retention can’t fall below 95% or our IC will think there is something wrong with the product-market fit. Here is our latest research on the unit economics. We are prepared to price a round at these levels any time in the next two quarters. Otherwise, we will likely not lead the next round at all.”
Still supportive and most of all clear. They are putting their cards on the table and talking like a partner.
3 - A department head complaining about a senior colleague:
“Bob needs to be dealt with right now. And by dealt with, I mean fired! He is making it impossible for my department to get anything done and he is critical of everything we do to the point of being openly hostile. Half my team will quit and so will I unless you do something about him.”
As a leader, I have no idea what to do with this. Maybe Bob is a hothead, but he was just in my office complaining that meetings with this team suffer from a lack of meaningful outcomes. I need more concrete information. If the department head in this example followed our rule, it would sound more like this:
“Bob sits in on three meetings a week with my team. In the last three weeks he has done over 50% of the talking and we have had to put over half of our normal agenda items on a parking lot as a result. Also, the cross-departmental meetings with Bob are not improving communication as we had hoped. Last week, three major bugs and one minor bug slipped by; all of which we should have caught. This is our worst week in quality in three years as a result. These meetings either need to exclude Bob, or we need to appoint a strong facilitator to keep the meetings on track.”
In this example, the department head has made it easier for both of us to zero in on the key issues. Meanwhile, it’s probable that that while compiling the supporting data points for this two-sentence approach, the department head started to see concrete recommendations that were more effective than a simple call for Bob’s head on a platter.
I like the two-sentence principle. It has kept me on track many times when I needed to communicate something important quickly. It’s easy to describe and implement, so I can use it to set a tone for how I want my team to communicate. And when it’s properly deployed, it can help to make every conversation an effective one.
