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.

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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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