Even for a scale up, a professional board of directors can provide significant added value
Spott is a 5 year old scale up that offers marketing services as an internet service (SaaS).
Co-founder and CEO Jonas De Cooman explains how Spott evolved from a traditional startup/scale up board of directors, where seats on the board are reserved for the capital providers, to a smaller, more professional board of directors, with external directors selected for the diverse input they bring. This allowed Spott to build a strong board of directors that was able to respond quickly and appropriately when the Corona crisis struck.
Jonas De Cooman
Founder & CEO at Spott | Inspire Consumers, Spark Sales| Helping marketing leaders w Intention Marketing *hiring CSM's*
Spott is Young Belgian Marketing Company of the Year 2020 (Belgian Marketing Awards)
+32 498 58 66 80
Could you introduce yourself?
I am Jonas De Cooman, co-founder and CEO of Spott. I have a degree in Bio-engineering with a Master after Master at Vlerick Business School. I then got into marketing, first at Unilever and later at Coca-Cola and have worked in Belgium, Rotterdam and London
In 2015 I ventured into entrepreneurship. From a golden cage to ploughing in the mud was prompted by my personal drive for growth. Growth, both for myself, and for the people around me, and also growth in wisdom. I was not a born entrepreneur, and learned by making mistakes. By surrounding myself with people who know a lot more than I do, I have progressed step by step. I really enjoyed this journey and am also happy that Spott is currently on track to meet the expectations of investors and customers. To take the company to the next level we are building a top team.
How do you deal with governance?
One of the things I have learned the most in is governance. When we started our company, governance was at number 99 on our priority list. Initially, governance consisted purely of formal paperwork performed by lawyers.
Each time the first investors joined, they were offered a seat on the board of directors. Through organic growth, our board of directors had finally grown from 2 to 8 people. The dynamic was one where every other month management had to "come and take their exam" and start defending their policies. It really felt like an exam with heavy preparation, pre-reads and a detailed explanation of the previous month's performance.
Based on outside input, we realised pretty quickly that this was not the right governance model to continue with. Therefore, since June 2019, we have been reorganising our board of directors. In doing so, we went to a smaller board of directors: from 8 to 5 members. A second important decision was to hire an independent chairman. That has become a real revelation for me.
We hired Luc Burgelman, who is a co-founder of Porthus and founder of NGData, among other things, someone who has already earned his stripes in the entrepreneurial landscape and knows the ropes. He brings not only a good knowledge of governance, but also a broad knowledge as an entrepreneur.
For me as CEO, his arrival is a huge relief: you are no longer alone, you have a sparring partner. It also makes my job easier: until then, the 2 founders had alternated as chairman of the board, which was not ideal from a governance point of view.
Now we split the roles much more clearly between executive management and the board of directors. It is the chairman of the board who sets the agenda and makes the minutes. The main dynamic that Luc has brought in is that now we really work as a team. Problems are put on the table and are the problem of everyone, of every member of the board of directors. This increases the accountability of every member of the board and makes everyone co-responsible for the decisions made. From "us" and "them" to "us together".
What competencies and skills do you think are crucial to be a good director?
For me, a good director must bring a certain expertise in a particular field. We try to put together our board of directors in such a way that the different directors have relevant experience, knowledge and a network in the main areas in which we operate. This knowledge and experience allows us to really help set the direction, the strategy. This is the side of the "what".
There is also a "how" side, where especially the power of empathy is enormously important. And here there is an important difference between a large company and a startup/scale up. Large companies typically work with a long-term plan of 3 to 5 years, which is regularly adjusted.
With a startup or scale up this doesn't exist, you often have to make adjustments every quarter because the environment changes so quickly. To be able to respond so quickly, you really need a board of directors that is empathetic, open enough to process this rapidly changing info, to make very "agile" decisions and navigate as one team through this rapidly changing environment.
What topics deserve full attention in the board room?
Partly thanks to Luc's experience, we started working with a scorecard: we built a KPI scorecard. This scorecard contains both the main KPIs related to business operations (turnover, recurring turnover, etc.) and the main costs and specific KPIs related to Software as a Service. The scorecard is always forwarded as a pre-read and is discussed at the start of the meeting, focusing on the issues that are outside the expectations and/or trends of the past months.
By doing this, you are managing time efficiently and also ensure that everyone is speaking the same language, as everyone is looking at the same numbers and using the same definitions. We have learned from our experience that it is important to discuss these financial and operational data as the first item on the agenda because this is the most important info in a company. In this way you also create a sense of overview and a certain calm for the rest of the meeting. The second part of the agenda is devoted to the decisions that need to be taken, e.g. a new capital round.
Then there is possibly a debrief from one of the two committees (audit committee and remuneration committee) to the board of directors. And the last point is varia, within which HR is often the most important point (important decisions, highlighting good employees, what is the feeling among the employees, ...).
What impact does the current Corona crisis have on your role as an entrepreneurial board member?
Luc started as independent chairman in January 2020 and we started feeling the crisis in March. We had a very good first quarter with every month above forecasts. From the beginning of March we have seen the first impact, first with our Italian customers.
The main drop in sales took place in April, including the bankruptcy of some of our customers. I will not easily forget that March 12 board meeting: it was a tough board meeting because we could already predict that the second quarter would be significantly below the business plan because of Covid-19.
We then took a number of decisions as a board of directors, not always the most pleasant ones: among other things, we immediately decided to give up our office and go completely virtual and we had to let a number of people go. These are difficult decisions that also have an impact on the atmosphere of the company. We made these decisions at the board meeting and it was very important to make these decisions as one team, with everyone giving their input from their vision to arrive at a unanimous decision.
I am happy to say that partly because of these quick decisions, we have seen a V-shaped recovery and today are back to the level of the business plan. I feel that as a board of directors team we have come out of this period stronger.
How does the GUBERNA Alumni Network support you in your role as an entrepreneur-administrator?
I strongly feel that an organisation like GUBERNA is needed. In fact, I think GUBERNA is even more needed in the segment of companies we operate in than in the segment of traditional members of GUBERNA. Why? Because I think governance is higher on the agenda of the members that GUBERNA has traditionally had than with a new segment of potential members.
I think the big growth opportunity for GUBERNA is to think about how it can position itself to the group of attractive new growth companies where governance is too often a grey, dusty topic today. The challenge for GUBERNA is to put governance more on the map and also to make governance a more attractive part of the business in such a way that young companies don't make the mistake we did and wait too long to professionalise their board of directors. I now see the benefits this brings us.
My advice to other young companies is certainly to think about independent board members much sooner, to think about what skills are needed on the board and to move away from the paradigm that whoever has put money into the company must also have a seat on the board. I think it's important that these things are discussed and that there is a conscious decision around governance, which too often doesn't happen today in these young companies.
And finally, I would like to make a case for attracting young directors, also in established companies: diversity not only by gender or background, but also by age can be an important added value for a Board of Directors, especially in these rapidly changing times. GUBERNA can also play the role of promotor there.
About the interviewer
The interviewer is Wim Van der Smissen.
With more than 35 years of experience in finance and IT at local and international level, Wim is currently part-time CFO, advisor to SMEs and family businesses and member of an Advisory Board. Wim is a member of the GUBERNA Alumni Council.
Tel +32 473 746 082
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To encourage the exchange of experiences and knowledge, the GUBERNA Alumni have launched an interview series: GUBERNA Alumni Sparkles. Through the stories of experienced directors, we want to inspire our members.
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