Monthly Archives: October 2013

Startup CEOs are Born Bad Leaders

Entrepreneurship sucks. I know it’s not cool to say it, but it’s true. And everybody wants to be an entrepreneur these days. That’s probably because they haven’t actually tried it (note: a couple WordPress installs doesn’t count).

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Entrepreneurship is a constant roller-coaster filled with stress and ambiguity and joy and pain. Let’s be honest. If you could be or do something else, you would… Because entrepreneurship sucks.

But you’re different. If you’re the CEO of a budding startup with at least some traction, you’ve probably made it this far because you’re unemployable (and I don’t mean that in a bad way). You just don’t know how to be anything but an entrepreneur.

And, you may not realize it, but you probably have the perfect storm of genetically influenced personality traits that are well-suited to the job of running your own startup.

Unfortunately some of these strengths are also weaknesses when it comes time to transition into manager and leader so you can build your business.

You Were Born to Build a Startup

Some people say entrepreneurship is in their blood. It turns out there is some truth to that.

The flip-side is that you probably weren’t born to lead or manage… There’s some truth to the idea that good leaders and good managers are born as well. Let’s dig a little deeper into the research and what it implies for you and your ability to transition to great manager and leader.

First, it’s definition time. Psychologists have narrowed down the human personality to five main dimensions. Wikipedia has the full scoop, but here are the 5:

  • Openness to experience: (inventive/curious vs. consistent/cautious).
  • Conscientiousness: (efficient/organized vs. easy-going/careless).
  • Extraversion: (outgoing/energetic vs. solitary/reserved).
  • Agreeableness: (friendly/compassionate vs. cold/unkind).
  • Neuroticism: (sensitive/nervous vs. secure/confident).

I’m going to use these definitions and extrapolate meaning from dozens of academic studies on personality through the work of Tim Judge and colleagues at the University of Florida as well as Hao Zhao of the University of Illinois at Chicago and Scott E. Seibert of the Melbourne Business School .

You’re Probably an Introvert (I know. Stereotypes.)

If you don’t understand what it’s like to need to spend a day alone after Thanksgiving weekend  or a week at home with the in-laws, you’re probably not an introvert. If you aren’t an introvert,  you can skip this section and celebrate that you’re having a much easier time with the transition to an effective leader (lucky).

Extraversion is strongly correlated with leadership. It’s  the most important dimension for determining whether someone is likely to emerge from a group as its leader. Extraversion also has some predictive power for whether or not someone will be  an effective leader (Note: Extraversion was more strongly related to leader emergence than to leader effectiveness).

These results for Extraversion make sense, as both sociable and dominant people are more likely to assert themselves in group situation. The most talkative appear the most “leader like” initially.

Have you ever noticed how on Survivor (or any collaborative reality show) the person that is the first to speak up about what to do next winds up being the leader for at least a little while? That’s extraversion at work.

Often the early leader in the reality show becomes the most hated by mid-season. The luster of the energetic leader wears off quickly as people look for substance.

Without  a strong set of interpersonal skills (aka emotional intelligence), it’s impossible to actually be a great leader. Luckily, many of these skills and behaviors can be learned and have little to do with extraversion or introversion, but we’ll get to that later in the series.

Entrepreneurs Rule! Managers Drool!*

The research tells us there are statistical differences between entrepreneurs and managers in four out of the five personality dimensions.  Most of them are awesome. Let’s start with those:

  • In general, entrepreneurs can be characterized as more creative, more innovative, and more likely to embrace new ideas than our manager counterparts (Openness to Experience).
  • We score higher than managers on Conscientiousness (i.e., drive and work ethic).  The main difference was due to entrepreneurs having a higher achievement orientation when compared to managers.  Entrepreneurs and managers do not differ on other aspects of the Conscientiousness factor such as dependability, reliability, planning and organizational skills.
  • We score significantly lower than managers on NeuroticismEntrepreneurs appear to be more self-confident, resilient, and stress-tolerant than non-entrepreneurial managers.  These results make sense given the highly stressful, demanding, and changing  work environments in which we usually find ourselves. Entrepreneurs are able to tolerate a greater amount of stress without anxiety, tension and psychological distress.  This may help us handle ambiguity, take risks and feel greater comfort with failure.

*Except For the One Area That Matters Most When It’s Time to Grow Up

Here’s where the differences hurt our ability to transition from founder to CEO. Entrepreneurs tend to show lower scores on Agreeableness, meaning we are tougher, more demanding, and more likely to use more negotiation and influence skills than managers.

This is a nice way of saying we have a tendency to steamroll people. Instead of asking for ideas, building consensus and allowing people to be their best, we tend to feel more comfortable with command and control leadership styles.

Command and control actually has a place in a leader’s tool-belt. It is quite effective in the short-term and during some dire situations, like when you’re on a sprint to build your company and get that traction before you run out of money. But that doesn’t last forever. Eventually command and control leadership turns into a cancer that can kill your company.

At some point the natural inclinations that got you to where you are today become a liability. Fred Wilson sums it up:

The skills that get you from idea, through initial product, past product market fit, and into a market leading company are very different from what it takes to manage a 200-500-1000 person global business that needs to execute well across a range of dimensions and keep everyone aligned, motivated, and working well together.

Leadership and Management is Hard

The point of understanding your personality isn’t necessarily to try to change who you are. It’s possible, but it’s extremely difficult. Personality, as psychologists define it, are tendencies that live inside you. People don’t see your personality, they experience how you behave…

And personality has a huge impact on behavior, which is why it can be so hard to transition into the kind of person that Fred Wilson describes.

Later on, we’ll talk about how to become more self-aware. We’ll also talk about how to use what you learn about yourself to find ways to counter-act the things you do (or don’t do) that get in the way of being a great startup CEO. For now, rest assured that you’re not alone in your struggles.

*****

This is Part 2 of my ongoing series on the startup founders struggle with the transition to startup CEO (and what to do about it). In Part 1 we introduced the idea that for startup CEOs, it’s important to recognize that the transition is hard, but you need to focus on preparing for it ASAP. The next addition covers career preferences and how motivational anchors trip us up when it comes time to learn how to be a great startup CEO.

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Startup CEOs: Screw Your Strengths

You’ve beat the odds and created a product that people love. You have some traction. Hopefully you’re even growing like a weed and hockey sticks abound.

You built a team to help you scale up the business and seal your success… But secretly you’re struggling.

You know you should be better about delegating, but everything just seems easier to do yourself.

And I bet you hate giving feedback, too. Maybe you’ve been putting off that “your fired!” conversation with that bad hire for weeks, even if it’s hurting your team and their ability to get shit done.

Maybe you don’t communicate or give regular updates to your team (you’d rather do a couple tweaks the product).

Or you forget to ask your team about their weekend and whats going on in their life. You tell yourself its because you have to get the latest numbers out to your investors or calm down that angry customer.

You hope people are happy and with you for the long haul, but you really have no idea. Since you hate giving negative feedback, you probably hate getting it, too.

Leadership and Management is Hard

If what I’ve just said hits home (even just a little bit), you’re not alone.

Fred Wilson Says:

Starting requires an idea/inspiration, a team, some technical skills, the ability to iterate on the MVP and find product market fit. That’s hard for sure, but what happens after you find product market fit is even harder. That’s called building the company and building the business. And that is where I have seen all founders struggle.

Delegation, performance coaching, firing people, consistently communicating your vision and progress and building personal relationships with your team are some of the most crucial aspects of leadership and management…

They’re also friggin’ hard. And the skills, behaviors and habits required to do them well don’t come naturally to too many technical founder/CEOs.

They Say “Play to Your Strengths – Eliminate Your Weaknesses”

If you want to be the best you can be overall, there is plenty of research supporting the idea that you should play to your strengths and minimize the impacts of your weaknesses.

They say that if you focus on your strengths, you’ll have a much better chance of seeing meaningful improvements to your skills, abilities and competence.

If you’re a manager at a fortune 500 company or developer #25 at a startup, the advice makes a lot of sense. But what if you’re the kind of person who took an idea and made it something real that people love?

I Say “Screw your Strengths. Start Developing Your Weaknesses.”

If you’re a great programmer and you love programming, do you really need to actively try focus on being a better programmer? Not really. Doing and practicing things you know and love  have a funny way of earning a spot in the busiest of schedules.

Getting out of the building and talking to customers was painful, but you did it anyway. You did it because you knew that the only way to build a real business was to get feedback from actual customers.

The only reason you’re a startup CEO is because you overcame weaknesses and pushed through the pain to get where you are today. Confronting your weaknesses won’t stop once you get traction.

And it only gets harder as you turn the product that people love into a real, sustainable business.

As your team grows, you also must grow as an entrepreneur, a manager and a leader… But not everyone makes the cut.

The biggest wins come from founders who are able to transition from successful founder to successful CEO.

This post is the first of many in a series on how you can grow up with your startup. In future posts we’ll cover many topics, including:

  • Why is the transition from product founder to business manager so hard?
  • Can I learn how to be a great leader?
  • What is the best way to figure out what skills to develop first?
  • And… How do you know if your company is as strong as you think it is?

I’ll be posting a new article in the series every few days.  Every post will be supported  by a combination of the latest research in the industrial psychology literature and practical, real-world examples. I’ll keep writing until all angles have been exhausted.

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My employees reviewed me, and I kind of suck.

Happy Cog CEO Greg Hoy got some feedback… Here’s what he learned:

Well, the results are in, and you know what? Mine kind of suck. They weren’t off-the-charts horrible (there were a few “best boss ever” comments that gave me a Michael Scott kind of feeling), but there were way more “needs improvement” marks that I ever anticipated. Because I anticipated none. And some of the comments people left was like chewing aluminum foil. My first reaction was surprise. Then defensiveness. Maybe a bit of anger. I thought things like, “Well, Steve Jobs had issues, but Apple turned out just fine. It’ll be ok, Greg. Grab a beer.”

Feedback hurts, but you need it to grow.  Any sort of meaningful change always begins with awareness. 360 Feedback is a great, and safe, way to learn what you need to work on.

Another great way is by doing an employee engagement survey. The results will tell you similar, yet very different, things. 360 feedback is when people you work with all take the same survey to give you an idea of your strengths and “development areas”. Engagement surveys are sort of like 360 feedback on your company instead of you.

I’m giving away a free engagement survey called insight. If you’re interested in what you can do to keep your employees happy and productive, you can learn more about it at insight.greatcompanies.io

Remote Working Works

HP recently pulled “a Yahoo!” by ending their remote working arrangements with employees. Justin Jackson had this to say about the Yahoo move:

The only time a manager should fear a flexible workplace is if they’ve hired the wrong people. If you’ve broken Rule #1, all bets are off. It doesn’t matter what kind of office you have; mediocre people create mediocre results.

A few years ago our lead developer  had an opportunity to move to Australia for a 3 years, all expenses paid. His partner received an incredible job offer in Sydney for a three year contract and her employer was willing to pay for him to go with her (we’re in California).

It was an uncomfortable decision, but I gave my blessing. And then he did everything he could to make sure it worked out perfectly. That meant he had to work mornings and evenings with a break in the middle of the day every day to keep his internal customers happy and the team on track. He made it happen.

He’s back in the US now and everything worked out fine. I agree with Justin. Our team is currently scattered all over the world and it doesn’t bother me one bit. If you have great people, and you’re able give them the support they need, remote working works.

Why Your Startup Needs to Obsess Over Culture

Alex Turnbull, CEO/founder of Groove, gets It:

But we also have unique opportunities that our larger cousins don’t have: we’re agile, company-wide changes don’t take nearly as long to test and implement, we’re working from the ground floor, which puts us in a position to build the entire foundation of a great culture from scratch, setting ourselves up for success as we scale. It’s a lot harder to build a culture at a big company where employees are more set in their ways.

I couldn’t have put it any better myself. This is why I started this blog and developing some tools to help startups establish and build great companies with great cultures.