Joshua Motta on Rigorous Measurement, Getting Out of the Way, and Business as Cake
Joshua Motta is the CEO and Co-Founder of Coalition. Before Coalition, Joshua was the CXO and Head of Special Projects at Cloudflare (NYSE: NET), a $25B web infrastructure and security company, following roles at Goldman Sachs, the Central Intelligence Agency, and Microsoft, among others. Coalition is the leading provider of cyber insurance and security, combining comprehensive insurance and proactive cybersecurity tools to help organizations be resilient to cyber-attacks. Josh empowers his team by encouraging measurement within the organization and builds a remote culture through high-quality writing and content. This interview was conducted in 2022 and edited for clarity.
Operational excellence comes from rigorous measurement
I grew up working at large manufacturing businesses like Honeywell. In those industries, operational excellence is required just to survive. A manufacturing business is much easier to measure because you primarily focus on variation from the mean performance.
At Coalition, we don't (and maybe can’t) measure it that minutely because of the differences in our product. But I think in those terms: we should always clearly define what we're trying to achieve. That means working backward from a customer's needs and determining whether we're meeting that need.
And some of them are obvious: are people buying our product because it's not compulsory? They do have a choice, and if they're making that choice, chances are we're doing something right.
Measure customer happiness and profit will follow
There are other ways in which we drill down. We ask what’s the NPS score of our customers? What's the NPS score after they've had a claim with us and gone through some event? We knew we were onto something when we saw that the NPS goes up after someone has a claim with us. Few insurance companies could say the same.
We also look at how many dollars we're paying out. Counterintuitively, it shouldn't be too low. If it's too low, we're not delivering enough value to customers and taking more value than we're giving.
Yes, we want to outperform competitors and build a profitable business, but there's a give and take. So for us, we define operational excellence on outcomes. What are the customer outcomes we're looking for? Sometimes those can be subjective, and other times we put some sort of quantification to it and work backward.
There's a tendency to only look at the KPIs or metrics, which tend to be more outputs of the inputs. Of course, we do focus on some results, but otherwise, operational excellence means focusing a lot on measuring the rate of inputs. We follow OKRs like many other organizations in our space that have made good use of that framework and measure how well we do at predicting, forecasting, and achieving some of those sorts of things.
Trust your employees with data
To be honest, a lot of operational excellence is achieved just by giving people data. In my youth, I worked at some very hierarchical and very big companies, and there wasn't transparency of information across the company—it was very siloed.
We've wanted to build a flatter organizational structure where we push information to the very edge. To do that, we are structured to give practically every employee access to every piece of information so they can do their jobs better. Because of our industry, we can’t be completely transparent because of security or privacy concerns, but we are as transparent as is safe/legal.
And then it's just been, let's focus on hiring great people. Let's give them the data they need to make good decisions and help align people on the outputs we’re looking for so we are all aligned with our customer objectives. I make sure the executive team has a pulse on what’s expected regarding the inputs we're pouring into the business; otherwise, I let the team make good decisions.
Get out of the way of the organism
Our meeting and decision structure has been organic, and decisions are a function of the organism—the company or the team. A lot of making this work is just listening, creating an environment where people can freely discuss ideas and make suggestions. Candor is probably something that we'd score pretty high on as a management team and as a company writ large, and the needs of the company change over time.
When you're five people, you don't need a weekly review of the business. You may need very few meetings because you're all plugged into each other's mental cycles. When you're 700 people, and you have leaders that have organizations that are hundreds of people all organically doing their own things, having the freedom to make decisions gets way more complicated. So as we scaled, we decided to do this meeting called Business Review. It’s on the core topics which happen to align to leaders in the company but also align with KPIs and different objectives that we measure and are important. We rotate through every topic once a month.
The idea is that it puts that leader in a position where they have to have command over their business because they need to be able to report it to their peers and me in an easily understood way. It forces some level of analytical rigor in the business, making people recognize there are aspects we have to track and tasks that must be done.
Getting people right goes beyond recruiting; it means getting highly talented people to work together. The latter part is the hardest part of having a talented team.
Every business unit or every function in the company will have its own KPI dashboard. We're going to design it once, and we're going to track and measure it, and then we're going to automate it. Once we've gotten through the first measurement phase, it should be manageable. And we'll tweak things here and there as we realize, “Hey, this didn't quite measure what we wanted it to measure.” But otherwise, then all that the exec team has to do is stare at it, know it, and understand it.
Not only do execs have access to this dashboard, the entire company has access to it. We invested the time to do the work that could benefit everyone to help us make decisions in a better way. It holds the execs accountable. It gives vital information and unblocks things where different parts of the company are getting blocked. It helps us continually revisit priorities and relitigate them where necessary, which is essential when you have a finite amount of resources.
Cakes have more ingredients than companies
Sometimes I joke that fewer ingredients are required to build a great company than to bake a cake. Baking a cake is flour, vanilla, water, eggs, and sugar. How you combine them, how you add heat, is the difference between a sloppy mess and something delicious. At some level, a company is just a good idea, capital, and people.
That's it. Those are the three things, and just like a cake, how you combine them, in what order, and how you apply friction determine its structure. All these forces that go into holding it together are the difference between a goopy mess and something extraordinary.
People, by far, are the most crucial ingredient, the sugar in a cake. If there's no sugar, there's no cake—or not an edible one. Similarly, it doesn’t matter how good the idea is or how large your bank account is if you don’t have the right people.
Getting people right goes beyond recruiting; it means getting highly talented people to work together. The latter part is the hardest part of having a talented team. Neither dimension is easy, but once you have talented people, you also encounter egos. At some level of company culture, the fostered relationships allow people to check that ego at the door in the pursuit of a greater cause—the company’s mission.
People need purpose. They will play harder if they understand what they're playing for.
If your executive team doesn’t have a relationship, it won't work. You can't have the conversations you have to have, and you can't speak with the level of openness you need to be able to. We're all subject to the laws of gravity and the law of averages, even the best companies. Every good company must continue to fight to innovate and ask themselves that simple question: Can we do things better?
There needs to be a level of trust where you can be vulnerable and acknowledge that you're wrong. How can you possibly have that conversation among individuals, much less as a team or as an organization, if you don’t have trusted relationships?
People are the essential ingredient, and the metaphorical heat is the trust and the process by which those people interact. How those people interact with one another leads to the goopy mess or the magical outcome.
Content as a method of powering company culture
I do annual letters to the company, which have become a tradition that people value. It allows us to look back over an extended period of time, and I thread them all together. This way, even if you weren't at the company four years ago, you can go down the thread and read what we thought a year into the journey, what we felt at two or three years, and see the company's evolution.
The first blog post was about why we founded the company, and it's been fun as a team to reflect on it. We're still on the same mission; we’ve followed what we said we would do.
Podcasts are great, too. I’ve been able to use a lot of the podcasts I've done as tools that people can use internally. It's been great for recruiting. I can't tell you how many people I'm interviewing did their homework by listening to podcasts I was on. It’s a powerful medium to communicate things, and people remember it.
People need purpose. They will play harder if they understand what they're playing for. Everyone knows what we're playing for; they believe the stakes. They know what happens if we fail and how great it is when we succeed.
