Leadership
Below is an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here.
“Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.” – Peter F. Drucker
What is Leadership?
This topic is challenging for a number of reasons. First, the formal definition of leadership, “the action of leading a group of people or an organization,” is pretty obvious but not really useful for our purposes. What we usually mean by Leadership is really Good Leadership where somebody leads a group of people or an organization effectively.
Further, good leaders get consistent results and Leadership is getting other people to Execute effectively on the Vision (and every leader should have a Vision). Almost everything you read about leadership is a tactic of doing that.
But that leads to the issue of how you define “effectively.” If there’s one thing that’s been a constant source of contention since business and other organizations were invented, it’s that the business owners, shareholders, management, and employees don’t usually agree on what Good Leadership is because it depends on your perspective. (Think unions vs. management.)
Does a shareholder care if the Leader is inspiring, gets their hands dirty, or has empathy (commonly mentioned traits of good leaders)? Employees may love these things, but a shareholder would be wondering why the CEO is cleaning toilets, working on the assembly line, or crying their heart out about their employees’ problems instead of executing on the company Vision.
In another example, imagine there is a very laid back and jolly CEO who never really demands much from his staff. There’s little accountability, he pays them well above market rate, gives great benefits, and has almost no expectations or demands in regard to how things are run. Now, this company won’t last long in my opinion (unless they have some “secret sauce” super-profitable business model), but there are many employees who would absolutely love to have a boss like this and would think the CEO was a great leader because their lives were easy and they like the CEO. It’s like the sports team who loves the old, friendly coach who doesn’t demand much from the team, but has never come close to winning a championship.
On the other hand, you have dozens of famous military generals who are considered great leaders simply because they won battles and wars. It didn’t matter if the troops even remotely liked the general (more likely feared or respected); the fact was that the general won, and that’s what matters in war. After hearing that Ulysses Grant (the ultimately victorious Union general in the Civil War) was a drunk, Abraham Lincoln famously offered to send him and his other generals a barrel of their favorite whiskey. Lincoln (and most presidents, I assume) liked people that won and didn’t necessarily care about how they did it or if the troops thought their general was cool.
Are Most Great Leaders Jerks?
“There are no wishy-washy rock stars. No wishy-washy astronauts. No wishy-washy Nobel Prize winners. No wishy-washy CEOs.” – Karen Salamansohn, author of Ballsy
As I mentioned in the beginning of this chapter, there’s a big disconnect between what people imagine to be a great leader and the actual leaders that get consistent results. The more I research this topic, the more I find that many of the great CEOs you read about every day are actually pretty insufferable and difficult to work with, not quite the inspirational leaders portrayed in the media. Sure, there are examples of friendly, warm types, but I’m finding out a lot of that was only public relations. It seems most of the greats had what most would consider a pretty demanding demeanor or outright personality flaws.
Almost every new bit of information, even when I was specifically looking for information on the kind-hearted CEOs, ultimately showed that these people, again speaking in generalities, are hard-driven and demanding at the least. Many are, counter to stereotypes, extreme micromanagers. My company deals with entrepreneurs all day, and let me say that they can be very challenging because they’re usually very demanding by nature.
Here are a few examples, and remember that most of these are founders that started small.
- Jeff Bezos, founder of Amazon.com (these are just a few from the book The Everything Store by Brad Stone):
- “As many of his employees will attest, Bezos is extremely difficult to work for. Despite his famously hearty laugh and cheerful public persona, he is capable of the same kind of acerbic outbursts as Apple’s late founder, Steve Jobs, who could terrify any employee who stepped into an elevator with him. Bezos is a micromanager with a limitless spring of new ideas, and he reacts harshly to efforts that don’t meet his rigorous standards.”
- “Jeff Bezos fit comfortably into this mold. His manic drive and boldness trumped other conventional leadership ideals, such as building consensus and promoting civility. While he was charming and capable of great humor in public, in private, Bezos could bite an employee’s head right off.“
- “Bezos was prone to melodramatic temper tantrums that some Amazon employees called, privately, nutters. A colleague failing to meet Bezos’s exacting standards would predictably set off a nutter. If an employee did not have the right answers, or tried to bluff the right answer, or took credit for someone else’s work, or exhibited a whiff of internal politics, or showed any kind of uncertainty or frailty in the heat of battle, the vessel in Bezos’s forehead popped out and his filter fell away. He was capable of both hyperbole and cruelty in these moments, and over the years he delivered some devastating rebukes to employees.”
- Steve Jobs, founder of Apple:
- Fired people in the elevator and fired people in front of other employees on a whim
- Screamed at underperforming executives and chewed out employees at all levels of the company
- He threw a fit about the color of the vans at his company NeXT
- There are stories of him berating reporters, doctors, and others for various reasons
- He was so demanding and persuasive that people have called his mindset a “reality distortion field” meaning he could basically convince people that anything was possible
- “Imagine that your boss told you straight to your face that your project is dog shit. Next, imagine that this boss is Steve Jobs. Thats what happened to me when I was working as the principal engineer of iPhone software during Apple’s golden years.” – Ken Kocienda
- Bill Gates, founder of Microsoft
- Got into shouting matches with other tech CEOs
- Has been described as an “office bully”
- Argued with his co-founder Paul Allen so badly that Paul described it “like being in hell”
- His successor, Steve Ballmer, was famous for throwing chairs across the room
- Daniel Ek, founder of Spotify, has been described as “patient yet fueled by an internal intensity that can border on ruthlessness.”
- Meg Whitman, CEO of eBay, got into a shoving match with a subordinate because she felt she was not prepared properly for an interview by the subordinate.
- Andy Grove, founder of Intel, “was known to be so harsh and intimidating that a subordinate once fainted during a performance review”.
- Elon Musk, founder of SolarCity, SpaceX, and Tesla, has been described as “thin-skinned and short-tempered” and that his version of reality is similar to Steve Jobs—completely distorted. He’s been quoted as saying “not enough of you are working on Saturdays.”
You may be thinking surely this is just a few random CEOs, this is not how most other great leaders operate, right? However, as discussed in the book Who: The A Method for Hiring by Geoff Smart and Randy Street, a thorough analysis of 313 CEOs demonstrated that:
“Boards and investors have a tendency to invest in CEOs who demonstrate openness to feedback, possess great listening skills, and treat people with respect. These are executives who have mastered the soft skills. We call them “Lambs” because these CEOs tend to graze in circles, feeding on the feedback and direction of others. Boards love Lambs because they are so easy to work with, and in fact, in our study Lambs were successful 57 percent of the time.”
That’s a great success rate, well over 50%! This seems to contradict what we’ve discussed, but then there’s this:
“The second dominant profile that emerged from our analysis was of CEOs who move quickly, act aggressively, work hard, demonstrate persistence, and set high standards and hold people accountable to them. We call these CEOs “Cheetahs” because they are fast and focused. Cheetahs in our study were successful 100 percent of the time. This is not a rounding error. Every single one of them created significant value for their investors.“
So I think my point is clear: Some of the most effective founders and CEOs in the world aren’t exactly the nicest people, and at the least, are pretty demanding. Again, not an excuse to be a raging jerk, but something to keep in mind if people want to guilt you into changing your ways that have proven to be consistently effective. The key is that you must be effective and deliver results to even think you can get away with outrageous behavior. Also, keep in mind that many people that worked for the above-mentioned CEOs absolutely loved them so a lot of the complaints about these people may include a healthy dose of “sour grapes” or even people who were poor performers.
That said, in modern business, a jerk or someone who is constantly firing people is very unlikely to get consistent results. An egomaniac who can’t communicate or make good decisions is unlikely to get consistent results. Someone who has no idea what they’re doing doesn’t get consistent results. I say “consistent” because anyone can get lucky or bully their way to one accomplishment. But someone who demonstrates leadership does it consistently year after year. They consistently lead their team to achieve the results they aimed for.
Many Entrepreneurs are Not Natural Leaders
“If you are a highly charged, hard driving, highly successful entrepreneur, then, quite a bit of the time, you aren’t going to be a lot of fun to be around, especially for the thin-skinned. But you should not change. I’ve come to appreciate that the successful entrepreneur is a unique and delicately balanced combination of dysfunctions, bad habits, and personality defects as well as incredible genius, daring, and drive. You don’t want to tinker with that. What works for you works, and you need people around you who can adapt to the strange creature in their midst; you shouldn’t be adapting to suit them.” – Dan Kennedy
Related to the previous topic, I’m just going to come out and say it: A lot of entrepreneurs, including myself, are not great natural leaders, and frankly, can be pretty disagreeable if not outright insufferable. They vastly prefer working on the Vision of the company and working with ideas, products, or customers instead of managing the mundane day-to-day of the business, especially dealing with the management of employees. I want to reiterate that this is not a license to be a jerk (there are a lot of failed jerks out there), just a notice that many entrepreneurs need to be careful when taking leadership because it might be difficult for them because others usually don’t think like them and that tends to cause frustration.
The good news is that even the most aloof entrepreneur can learn the basics of leadership, at least until they can hire a “people person” who can take the day-to-day management of the company to the next level. Personally, it took me way too long to pick up the basics, and I still struggle, but after 17 years of consistent profits, growth, and making the INC5000, I’ve realized that I’ve reached the limits of my leadership abilities and need to step aside to focus on what I’m good at and hire someone who actually likes running the day-to-day of the business. Great serial entrepreneurs know this and will hand off their startups as soon as they can.
The book Rocket Fuel by Gino Wickman goes deeply into this dynamic by separating what he calls Visionaries from Integrators. The Visionary is almost always the entrepreneur who founded the company and typically gets overwhelmed or impatient with the management of the company and dislikes “chasing squirrels” and managing people. An Integrator, on the other hand, absolutely loves managing people: motivating, coaching, and holding them accountable. If this situation sounds familiar to you, then you’ll want to look into hiring an Integrator sooner rather than later, certainly before 17 years go by. Some people are both a Visionary and an Integrator but this is extremely rare.
So What is Great Leadership?
For our purposes in a startup, I think we need to consider both perspectives when defining a good leader: the consistent desired results they achieve (which is what the owner and shareholders care about) and how effective they are at getting their team to want to achieve those results. If the team admires or even likes the leader, than that’s even better, but none of those things really matter if you’re not getting results (and especially if you go out of business because then nobody has a job). Or to put it simply, we need results, but we need to remember employees are real human beings, and their opinion and motivation should matter if you want to build a great company.
Also, there are so many effective leadership styles that it’s important you find your own that works best for you. There’s the stereotypical outgoing “people person” leader who can rally the team to a great cause, the general who gives the rousing speech to the troops. Then there’s people like myself who realize I’ll never be that “people person” but work with what I am good at and try to focus on solving problems, creating clear goals, and removing roadblocks for my team. I think many different styles of leadership can be effective, so don’t limit yourself to the stereotypes you see in media or read about in books.
So, where am I going with all of this? I’m defining Leadership so that it is clear and also identifying the Leadership Superpowers so you can effectively learn them. If you struggle with some of them, then you may need to hire someone else to manage and lead your company at some point.
That said, I believe these are the Leadership Superpowers:
- Superpower #13: Good Communication Skills
- Superpower #14: Accountability Mindset
- Superpower #15: Team Development and Motivation
- Superpower #16: Courage to be Disliked
This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.