What Management Changes Happen When A Company Goes Public

coupa ipo Earlier this year, Coupa went public. Making the determination to get public was something we considered very carefully and we were very pleased with the reception we received from investors in the market. Simply, there's not a whole lot that has changed since our IPO, other than that now we publicly study our earnings.

Probably the biggest thing that's changed is that instead of constantly being asked, "When are yous going to go public," now I'thousand constantly asked, "What'southward it like existence a public company?"

For some people, information technology'due south just a polite question, like "How was your holiday weekend?" But for others, they're really trying to understand something deeper. I call back in that location are at to the lowest degree five things that are perhaps actually on their minds when they ask that question, particularly if they themselves are considering an IPO for their companies:

1. Corporate politics

One affair that people may exist wondering is if their entrepreneurial civilisation will exist crushed by corporate politics. Volition the company become processes-heavy? Volition compliance, budgeting and blessing processes boring everything down? As teams abound, will consensus building compromise innovation? Will office politics become a cesspool of blame shifting and not-my-jobism? Maybe in that location is a greater likelihood of these viruses infecting your organization as information technology grows. But, that is not just a public vs. private company matter.

Startups are certainly not allowed to these kinds of problems, but equally companies grow, in that location's undeniably a greater tendency for people to engage in those means, so y'all accept to be vigilant. The CEO and leadership team have to double down on efforts to ground everybody in the long-term vision, culture and values that led to your success in the first place. Those are what should deport you forward.

2. Talent

There's a high likelihood that the type of people that would be applying to work at a public visitor rather than a startup visitor are different. But, that doesn't mean that one is necessarily better than the other.

You may be tempted to attempt to go along things every bit they were by continuing to simply recruit scrappy, highly agile, very ambitious kinds of people, the kind you were probably seeking when y'all were initially building up the visitor. But really, the company is different--not just because it's public but because it'due south bigger and more mature--and the talent mix should reflect that.

At the aforementioned time, don't overcorrect and bring in people just considering they have big company experience. That too can certainly stifle a developing civilization. Be equally mindful as you were in the by about getting the right mix of individuals equally the visitor continues to evolve.

3. People changing

The coin and the glory associated with an IPO volition definitely alter the mode some people see themselves, and the mode they interact with others. It's critical that leadership rein in people that start interim similar hotshots, and fast.

This is no fourth dimension to get self. If anything, it'southward fourth dimension to get humble. If you made it this far, the branch you're holding up is nearly to become heavier. It'southward time to build up your forcefulness, not rest on your laurels or lord it over the newcomers.

A newly public company with several hundred employees and a few hundred million in revenue is an ant on the world stage. Whenever alter happens, people need new perspectives. It's up to leadership to provide them.

The other thing leadership needs to be on the lookout man for are people who have reached their level of incompetence. They were VP of XYZ in a 60-person startup, and at present they're VP of XYZ in a 600-person public company and they're potentially in over their head.

In a high growth company, yous automatically have a Peter Principle dynamic happening. You should be continually on the lookout, at every level of the company, including all key players on a management squad, even the CEO, to make sure you have the correct people in the job. If not, somebody else should come in. In that location'due south no room for ego.

four. Brusque termism

In some newly public companies, some people sit and lookout the stock ticker all the time. They have this new dashboard in front of them, and it'south addictive. Their outlook becomes driven past their sense of how well the company is doing based on this single external measure which they can't command.

If the stock is up they're patting themselves on the back. If it'south down, they're hunting for a new job. They become short term-oriented, focusing purely on that next quota at the expense of edifice for the long-term. They become myopically focused on the money. You don't have to be Colombo to run into that coming, and you take to constantly be on guard against that.

At our first all easily after our IPO, I showed a stock chart and told everyone, "I'one thousand not going to become up here every time the stock goes down and tell you nosotros're okay. And if it goes upwardly, I'm non going to tell yous everything is so, so bully. We're trying to do something special and build long-term value. The stock is going to get upwards and down all along the way."

I also asked for a show of hands of those who were in it for the long term. Everyone raised their hands, but maybe some not so fast or enthusiastically equally others. People need to remember well-nigh whether they really want to be there, and leadership needs to take hold of disengaged ticker watchers earlier they poisonous substance the culture.

5. Pressure

Everything you practise now, y'all do in public and that seems like a college level of pressure to some people. I don't meet information technology that fashion. As a startup, we made a commitment to a pocket-size group of investors to do certain things and run the business concern in certain ways. Equally we grew, we made more, like commitments to a bigger group of investors.

You do what you lot commit to doing with the resource you have to create the most value possible for shareholders and stakeholders. Expanding that commitment to an even broader base of operations of people doesn't change the force per unit area nosotros experience to meet it. It's like adding another zero to the digits in the numerator and denominator in a fraction. The proportionality remains the same.

If you stumble, it volition definitely exist more public, simply everyone who's congenital a company to the point where it could go public has stumbled publicly many times, has overcome many setbacks and has been called on the carpet on more than than one occasion and survived. You tin handle the pressure.

These are some of the things I retrieve people are really asking when they ask me, "So how is it being a public company?" The easy answer information technology's the aforementioned. Nothing actually changes, because the reality is that in a high growth company, things are constantly changing. Going public is simply a big alter that happens in i day and anybody notices. Yeah, there may be some specific challenges that come up out of that, just if you've been doing your chore all along, and y'all've made it to this point, y'all have nothing to worry about, across what you lot've always worried about: How to build a groovy company!