Ezra Roizen’s Roizen Report column in Always On featured a story today about the Oakland A’s Billy Beane joining the board of NetSuite. Ezra called me last week to see if I had any thoughts as to how Beane’s contribution as a director of NetSuite could be maximized, given the following description of management’s expectations for Beane from Netsuite’s CEO Zach Nelson:
When I asked NetSuite CEO Zach Nelson about why Billy Beane would make a great board member at this point in the company’s development, he had three main reasons.
First, according to Zach, the essence of the challenge for NetSuite is in getting organizations to change how they think about their information systems. SaaS requires re-thinking some pretty widely held and deeply ingrained beliefs about the way corporate information systems should work. As a leading "tipper" of sacred cows, Beane will provide valuable insights into both how to help organizations think differently about the way they manage their businesses, and the importance of questioning conventional wisdom.
The second reason why Zach is excited about Beane’s participation on the NetSuite board is his ability to help NetSuite’s customers understand what it means to run a company "by the numbers." Beane’s use of statistics and metrics in organizational decision making has been central to Beane’s success with the Oakland A’s. According to Zach, once implemented by its customers, NetSuite’s solutions open up a previously hidden world of numbers and data. He’s hoping that Beane will assist NetSuite in helping its customers learn more quickly how to leverage that new-found knowledge.
The third reason is what gave me the idea for the title of this post. Zach said that the core of NetSuite’s customer base consists of middle-market enterprises, often competing against Fortune 500 companies. They’re the Oakland A’s of business up against the New York Yankees in their fields. Zach’s hope is that Beane can help NetSuite’s customers understand the essence of how to take on and beat the big guys—how to punch above their weight.
To dig a little deeper into what it takes to be a world-class board member of a new venture, I put a call into Pascal Levensohn, Founder and Managing Director of Levensohn Venture Partners. Few people have put more thought into the question of startup boards than Pascal, who chairs the Working Group on Director Accountability and Board Effectiveness—a VC industry group of 22 professionals and academics that reads like a "who’s who" of Silicon Valley. …
My response in the article focuses on reconciling management’s expectations with the realities of board service. The most interesting thing to me about Zach Nelson’s description of why Billy Beane was invited to join the board is that his expectations have little to do with the service that Beane is most likely to be called upon to render as an independent director.
The actual basic responsibilities of private company independent directors differ from idealized versions of the celebrity director’s power to charm the outside world and be a rainmaker for the company. This does not minimize Billy Beane’s ability to have a strong impact on the company– as long as his expectations are properly managed up front with regard to the time commitment and the actual business and legal requirements involved with board service.
More on this when we release "A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors" in the next few days.
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