Matt Calkins | Crain's Washington D.C.

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Matt Calkins

Background:  

Matt Calkins is CEO and an original founder of Reston, Va.-based software development company Appian. Calkins launched the company in 1999 with three friends, all of whom have remained with the company as it has evolved from a startup to a publicly-offered company. 

The Mistake: 

When I started Appian, I felt obliged to hire qualified people when I first hired a circle of executives—people to run critical departments like marketing, professional services, sales and other key departments.

It was a disaster. I hired people who had done this job at other, bigger companies, and at the time I felt like I had really made a good score. I found people who had done the very same thing I was looking for at another company; unquestionably they were qualified and they were all older than I was and were even more experienced.

I thought “This is just what Appian needs, we’re going to grow up in a hurry!” What we got were people who thought they knew how to run their own department well enough that they didn’t want my advice.

They generally thought they could run the company better than I could. I was not able to push my strategy into their departments; instead, they were resistant. If anything, they tried to push their ideas onto my office.

As a result, we did not coordinate as a team and rifts developed in between departments. I’ve always emphasized cultural harmony and mutual respect, which might be one reason four [founders] can remain friends after being in business for 18 years.

While I pushed that value, [some people on staff] didn’t have it. They were used to places where bitter in-fighting could happen between the departments and they went ahead and did that. Marketing and sales couldn’t stand each other, and professional services didn’t listen to anybody.

People should be judged ... by their aptitude, not their experience.

The Lesson: 

After a couple years of this, I remember looking around the organization and thinking, "I have to replace my entire management team." 

It took a couple years, but I replaced my entire management team. I went back to my philosophy, the belief that led me to start the company in the first place: people should be judged by what they’re capable of doing, not by what they’ve already done; by their aptitude, not their experience.

We’ve got our own opinion at Appian about what makes someone qualified, and even if it is wildly different from what someone else or another company would have done, we hold to our definition steadfastly. We are a software company founded by four people, none of whom has a science degree.

We hire people because they have the aptitude to do the job, not because they have the qualifications or the experience to do the job. As a result of that approach to hiring, I try to do as many of the interviews as I can. We’re 800 people now and I can’t do all the interviews anymore, but I still meet most candidates and get involved because I think this is one of the key secrets to the success of the company.

Most of [the founders of Appian] worked at a company called MicroStrategy and it was a dynamic, fast-moving hot stock kind of a company and three of us were still willing to get off of that rocket ship to start our own firm. The core of that decision came down to a disagreement between ourselves and our employer as to what we were personally capable of.

It’s very personal for me to recognize talent and understand what talent can do. My judgment on whether someone would be the right person to lead one of Appian’s departments or teams is so divergent from what it would have been in another company.

[When I reorganized our management team,] it might have been one of the most important turning points in the history of the company. It happened totally behind the scenes. You can’t see it on a balance sheet, but aligning our executive personnel and values with my values and my direction was one of the most important steps we ever took on the way to becoming what we’ve become.

Follow Appian on Twitter at @Appian.