Lenny Rachitsky: The Power of Planning and Performance Reviews

Lenny Rachitsky is an expert in product management and has a wealth of knowledge about company growth, leadership, and technology. 

After his company (Localmind) was acquired by Airbnb in 2012, Lenny was responsible for leading a team of five PMs, and a broad team of 80+ individual contributors (engineers, designers, user researchers, data scientists, and ops) responsible for driving consumer supply growth.

Nowadays, Lenny is the creator and writer of Lenny’s Newsletter – a weekly advice column about product growth, management, and work-related challenges.

In episode 25 of the Supermanagers podcast, Lenny shares a framework to improve your planning processes, inform your team structure, and prepare for performance reviews.

Listen to this episode (or read the transcript below) to learn about Lenny’s “W framework” and the reason why you should spend 3-5 hours preparing for each performance review!

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1 When was the first time you started managing or leading a team?

I started my first management role at a company called Webmetrics, which is a startup I joined in San Diego right out of college. I was essentially their first or second engineering hire, and the other engineer left. I became the de facto engineer of the company, and I ended up leading the team.

We built out the team, I ended up managing about six to eight people, and honestly, I did not like it at all. I ended up giving it up and moving into an R&D role at the company, because I was just like: I just want to code.

So I gave it up and then went to R&D, and then and after that, I started a company which innately requires leading/management. So I came back to it with the company that we got acquired by Airbnb.

I was an IC for five years, and then I got back into management. That was my journey. 

2 What changed in your leadership style as you transitioned from managing a small team, to managing an 80-person team at Airbnb?

One is just realizing that a big part of the role is not to just make sure everything is done perfectly, but instead to hire amazing people, and essentially, unblock them, and let them do what they’re good at as much as possible.

So that means things like, kind of on a high level, thinking ahead, and making sure that they have all the resources and decisions made and budget and questions answered, so they can work and think and execute.

Then, more tactically, just like: is there a decision they’re waiting on? Is there a meeting they need to have? Is there some code that needs to be reviewed?

So a lot of the work I’ve found over time is just like: hiring amazing people and unblocking them. The other thing I’d say is, just thinking ahead a lot more.

As an IC, you have to think like a week ahead or two weeks ahead. If you’re an IC, it’s maybe a couple weeks, if you’re the manager of a small team, maybe it’s like a couple months. And then if you’re a leader of a larger team, or a manager of managers, you have to think six months or a year ahead.

You have to get the right people in place, get the right budget aligned, get other tracks of work moving at the same time… Planning is a big part of it, because it’s in a sense, unblocking their future and making sure that they’re going to be successful with, for example: is the project that they’re working on going to ship? Because… if I didn’t plan this other project is going to block it… it’s going to be delayed six months. 

3 Were you good at planning when you first started? Or is that something that you learned?

I was very bad at it. Looking back, I had no idea what I was doing. I was not a good PM when I started. I think I got better partly by just doing it. And then I’d say more so by having amazing mentors around me that were really good at it.

I had this one manager, Vlad, who’s still at Airbnb, and he taught me a ton about product management and leadership. For example, how to plan and how to put together really crisp and clear strategies that I’ve evolved and relied on over the years. 

I think the root of it is just, humans are not great at long term planning, as we can tell by just looking at the world, and how much is not the way we want it to be.

Then at a company planning together, many people planning with all these micro decisions, they have to make all these trade offs that have to be made that impact people’s careers. I think it’s just innately a very challenging thing.

It’s done so rarely, that it’s hard to really get good at it. It’s like once a quarter, once a year. And then even if you do get good at it. There’s new people coming in, new leaders with new ideas. And so you’re always trying to always change and trying to optimize and improve and so, there’s not like a big feedback loop. 

4 You developed the W Framework (which involves context plans, integrations, and buying). Is that something you invented at Airbnb?

A friend and I were chatting about planning, maybe a year ago at this point. And we found that a certain type of planning worked really well. Then we came up with a name for it called the W framework, because it shaped like a W.

We found that the biggest issue with planning usually is a lack of understanding of who’s responsible for what and when, and it becomes this chaotic experience where: Oh, I didn’t realize this person had to say, or I didn’t realize that was the final decision maker.

What this tries to do is try to make it very clear who’s in charge of the plan, who’s responsible for what, what’s the timeline, who makes the final call. And so the framework is essentially shaped like a W. That’s why we call it that.

Where it comes from is, there’s essentially two big groups in planning. There’s the leadership group, whether it’s like the founders of a startup or the executive team. So that’s like, imagine that in your mind’s eye up top, and then there’s the team that’s actually doing the work. So those are the two rough groups in planning.

The W is formed by just going back and forth between the two groups. So the four steps you’ve covered are:

Step one is the leadership group giving context to the themes of “here’s what we believe needs to happen on a high level strategically for us to win”. And I found that that is really important and often missed. We found that it’s really important for there to be a top down guidance of like, “here’s what we know, and here’s what we believe is important”.

That’s the first the first leg of the W, and then it goes back up and the team delivers a plan, here’s what we think we can do. And here’s what we need to do.

The next step is where the leadership group integrates it. So that comes back down to the teams that integrate all the plans into one big plan. And then there’s a final part of the W where the teams get feedback, tweak. You know, like, if they’re told, “hey, you’re not getting these resources”, they adjust their plan, adjust their impact. So that’s what it’s all about. 

5 Can you tell us why it’s so important to have your strategy inform your team structure, versus the other way around?

A lot of times companies stick to a set of teams and organizational structure just because that’s what they have already. And they’re worried about moving people around or ending a team, because it’s going to hurt people’s feelings, or it’s going to be hard. But you have to do that kind of stuff.

If you find, for example, that like “we had a team that was optimizing conversion for onboarding”. And then this quarter or this year, onboarding is not one of the objectives or key results. It’s not something we want to work on. You don’t want to just keep that team around, as it is, just because you have that team.

That’s the time you decide, “okay, we’re going to pivot this team to some other objective, or we’re going to split them up and put them on other teams.”

I think too often people are focusing on being nice and on hurting people’s feelings versus what do we actually need to do as a company to be successful? And let’s figure out what needs to happen. Vlad actually taught me this lesson…. you want to start with, “okay, let’s take out the emotions and, and how people react first. What’s the best thing we could do? If we were just starting again? And how would we approach that?” And then you figure out how we bridge that gap to help people understand why these changes need to happen. Or make most of the changes, but you know, maybe not the most painful changes.

Sometimes you just have to break a team up and split them up across other teams. People don’t like moving, especially if you’re an IC, and you have a manager and I have to change teams to the manager, but that’s the kind of stuff that needs to happen sometimes.

I think as the company grows, there’s more of a desire to build an empire and take ownership and have a larger domain. And sometimes teams have to be moved to a different part of the org, or dissolved. So those leaders get upset. And so again, you just have to think about what’s the right thing to do for the good of the business, and then work backwards from that.

6 From a practicality standpoint, how often do these re-orgs happen? 

One of my co workers has this joke that if she hasn’t moved teams in six months, something’s coming, something’s about to change. I think it’s not a bad sign if reorgs happen often, like even every six months when you’re small, because you don’t want to stick to the way things are.

You always want to be thinking: How do we go faster? How do we work smarter? I think at a smaller company, it’s much less of a reorg it’s more of a reprioritization of projects. And that should happen maybe every quarter or every month, maybe. 

Don’t assume everyone’s unhappy with change. change is a really good opportunity to level-up in your career to take on new opportunities that arise or new teams that are formed.

Something I always try to do is anticipate where things are going, what do I think is going to happen with with orgs and priorities, and then look for opportunities for our team and myself and our leaders to to embrace it and go ahead of that and almost plan ahead.

7 What are your views on goal setting? How do you know if what you’re doing is too aggressive (or not too aggressive)? 

What I’ve seen in Airbnb, that was really powerful for me is, every year we had our financial team figure out “here’s where we’re going be if we do nothing”, basically a forecast based on all historical data. And then, and then they came up with, “here’s our proposal for the goal for the next year”. And then Brian, our CEO, always doubled it, or increased it substantially. And that’s what ended up being the goal, it turns out, we almost always hit that crazy goal for years and years and years.

I would say, that’s a big reason Airbnb got to where it is. Because of the ambition that the founders had. And this desire to always go bigger, and bolder. So, to me that showed the power of big ambitious goals, and not just settling for something that feels safe.

It doesn’t always work. That’s like, one example. And I’m sure there’s many companies that also have ambitious goals, and don’t hit those goals. But it does show that there’s a lot of value there.

The way I think about goals, is I think of them as a video game. You’re designing almost the video game, There’s three benefits to goals:

1. Measuring “are you on track to achieve a strategy?”
2. Focusing a team on one focus and one outcome instead of all these different goals that they have in their mind.
3. Motivating them to achieve something they may not have achieved. That’s where the ambitious goal comes in.

How do you push the team to do more than they would have normally? Video games are designed to be just challenging enough that you’re like, “Oh, this is fun. I’m doing well. And I’m overcoming all these challenges”. But it’s not so hard that you’re just like, “forget this, I’m going to turn us off and move on”.

I think about that middle ground where it’s challenging, but not impossible. The way Brian at Airbnb described it is: you want it to be improbable, but not impossible.

8 From an accountability standpoint, how do you hold people accountable if something is openly expressed as improbable? 

You should get buy in from the team that, “okay, we’re going to do this”. And there’s a lot of ways you can approach them. But I think it’s really important that the team actually sees that, this isn’t just like, a crazy goal that no one’s going to care about.

The goal needs to be clear to people why this matters. Usually what matters is, here’s what we need to do as a business to be successful this year, next year, etc.

The way Airbnb approached it is, there was this 2025 plan. “Here’s where we need to be in 2025” – and in order to get there, here’s what we need this year, next year, next year, and next year. And then it became clear.

We’re all incentivized to achieve this because it matters to the business… and the options I have in this company are going to be worth a lot. If this goes really well and we’re going to achieve this mission that we’ve all signed up for. So it’s really important to tie it to something that actually matters to people.

Then, a side thing that I tried to do as much as possible, is connect what the person is working on to what their personal goals are. Sometimes the company does really well, but sometimes I just want to learn how to start a company in the future. So, help the person see, “here’s how the work you’re doing is going to help you learn how to start a company”, or let’s say I want to be promoted. And then you show them, here’s how you’re going to move up your career ladder if you work on these things that are really important to us. 

The power of performance reviews

9 Are performance reviews dead? Why do people say that?

No, I definitely don’t think they’re dead. I think that’s a big mistake. I think people say that, because it takes a lot of work – and it should take a lot of work.

It’s really important to take some time, whether it’s every six months, or every year, to just zoom out. And as a manager, look at the person’s career and where it’s going. And what went well over the past six months, what didn’t go well. I don’t know how you do that without this every six months or every year performance review plan.

A lot of times the work isn’t like a thing that happens in a week or in a month. It’s a broad perspective on “Okay, here’s the past six months, here’s all the things that succeed, you succeeded with, here’s all the projects that went well didn’t go well. Let’s collect feedback from your peers”. And it becomes this holistic picture.

I find as a manager, it’s one of the most important things to do for your reports. So I take it super seriously, and I recommend other folks do too.

10 How much time do you spend preparing for each performance review?

I spend like five hours at least per team member per cycle. I think you want to spend probably at least three hours.

The way I think about it is, this might be the most important meeting you have with your report every year, because it so profoundly impacts their career, which impacts their life.

They need to understand what is going well… how do I get promoted? How do I get a raise? How do I be more successful in my job? And that’s what this experience is all about.

If you’re not putting in meaningful time, I don’t know how your reports actually understand what they should be doing. And levelling up. 

11 How do you bridge the gap between feedback that you’re giving on an ongoing basis versus during the performance review?

I didn’t mean to insinuate that you don’t also give ongoing feedback. The answer is you do both. Because people also need feedback in the moment, as soon as possible.

For example: Hey, this meeting didn’t go great, here’s things you could have done better. That stuff’s really important. One-on-one meetings every week are really important. Both are really powerful.

What I do is I keep a document of all my reports, and then I just keep bullet points of things that they did great or didn’t do great. I just dump them in there through the year. Then, I come back to it when I do the performance reviews. I also include compliments they got from other people that emailed me like, “hey, this person’s doing really amazing. You should just know”. So I save those emails.

It’s just like you keep track. Don’t overthink it, just dump it somewhere for now. And then it becomes really useful when you’re trying to put together the whole story, all these little examples and, and actual data points that you can point to. 

12 What is the biggest mistake people make in their performance reviews?

The first is not doing them. Because, like we talked about, I don’t know how else people understand what they should be focused on. Then, number two is not coming back to those things until six months later.

What I do is a monthly check in with the person. First, we come up with the action plan for the next six months.

We do performance reviews every six months, and think about: “Here are five things you’re going to work on. And here’s how they’re going every month”.

Then, you look at the spreadsheet together and talk about how things are going, what’s going well, not well, maybe add new things to the list. If not, keep talking about them.

So you basically transition that performance review into this, what I call an action plan of things you’re going to do. And it’s not like this is an intense meeting every month. I frame it as “the thing we all know we want you to work on to move up in your career. Let’s just make sure you’re doing well, let’s be on the same page about that”. 

Career conversations are one of the most important ways that employees become satisfied with their work. What they’re doing is they understand there’s a future and there’s a path to where they’re going. The meetings I have with all my reports are weekly one-on-ones, monthly coaching sessions, and performance reviews every six months.