I’ve been thinking a lot about what it takes to be a great leader and seem to be having this conversation a lot lately about Facebook, Yahoo!, Zynga and others. I wrote several of the characteristics when I did the Top 10 (11) Attributes of an Entrepreneur. One thing that I’ve realised over the years is that to be an effective leader you can’t aspire to be loved by everybody. I think people with this affliction have a hard time being great leaders. They dither on decision-making. They fudge on org charts to appease people. Clarity of purpose in leadership matters.Think of the decisions we face as countries globally. How much do we cut back public services to shrink our national debts? How much do we bail out companies that were culpable of helping create our woes and what moral hazards does this create? How much health care is the right amount to provide? Who should be allowed to immigrate into our countries and on which basis? How does the United States deal with 12-13 million illegal immigrants that are already in our country and came here illegally? My point is that any decision you “actively” make will affect people. Doing nothing is avoiding real leadership. It’s kicking tough decisions down the line for somebody else to deal with in the future. And for every day we put off decisions things get worse.
Companies are the same. Tough decisions don’t always make you friends. By default if it’s a “tough” decision some people will think you made the wrong one. And when it means a change in somebody’s power, money or stature – or cancelling a project that somebody has poured 18 months of their lives into – you’re not going to be popular. Bad leaders want to be loved too much and their companies (or countries) suffer.
Take Jerry Yang, the co-founder of Yahoo! I never worked at Yahoo! and I only met Jerry once. But his role as “Chief Yahoo!” and his personality type seemed to be as the guy who built a wonderful, warm and fuzzy culture of purple at this new-fangled Internet kinda company. That suited him when he wasn’t CEO. But his tenure as CEO (and frankly the whole culture of Yahoo! pre Carol Bartz) seemed to be one of fudging decisions. Not making hard choices in terms of organizational structure or product direction. This led to the famous “Peanut Butter Manifesto” by Brad Garlinghouse.
I wasn’t in Jerry’s shoes so it’s easy to “Monday morning quarterback.” So let me in stead paraphrase nearly EVERY single ex Yahoo! person I’ve ever spoken to on the subject. “We had such a great company. In the early days it was such a great company to work for. Everybody returned our calls. We were innovating. Google was n-o-t-h-i-n-g! We were the game in town. But we failed to adapt. Other people got strong. In the same way that AOL dithered and allowed us to become the Internet darlings we, too, avoided the big, company changing decisions. And over time our best talent left. They couldn’t take it anymore. And eventually I got tired of us being the industry punching bag. Of not taking tough decisions. So I left, too. It was a shame. I really loved Yahoo! in the early days.”
The way “being loved” manifests itself is that as a CEO you build a great team beneath you each with great ideas and big career ambitions. And yet you still have scarce resources. Your sales team is pounding the table because engineering won’t ship new features fast enough. Engineering is pissed off because they need to do some technical infrastructure improvements and the sales team is always pushing them to deliver too many features. “Sell what we have!!” And you want us to work yet another weekend while you’re playing golf with clients and getting fat bonuses? Marketing wants the sales teams to use the materials they’ve produced. Biz Dev is pissed off because they can’t sign deals when they can’t get commitments from product management to agree to product integration plans. Your product team is pissed off because they’re making $120,000 / year and some hot-shot 25 year-olds just made millions from the acquisition of XYZ company that we could have built here!
I see the CEO role of a growth company as often consisting of being “chief psychologist.” You end up spending a lot of time listening to your staff, listening to customers, understanding human behaviour / motivations, reviewing financial plans or GANTT charts and then having to make tough decisions because the one factor we ALL suffer from is limited resources. Yes, even Google has to make these tough decisions about where to allocate staff and money.
By definition tough decisions produce winners and losers. It’s your job to make those tough calls with the limited information you have and to soften the blow to the side that didn’t get their way. If engineering got the shaft because “we need 3 more weekends from you to get this release out the door” … then there better be a solution to make this up to them and to explain your decision. If you’re not going to release the features a large customer is expecting you’d better be prepared to call that customer yourself and take the bullets in stead of your VP of Sales.
In my experience it takes a really self-confident and resilient individual to make all of these tough judgment calls on a daily basis. But over time if you make the tough calls with no fudges, if you’re fair and don’t play favoritism, if you explain your rationale publicly and clearly, if you help soften the blow to the side that doesn’t get their way … people will respect you. And it is far better to be respected as a leader than loved. In the end everybody will thank you much more for having had the courage – as long as your decisions were more often right than wrong.
Do you have a senior executive on your team that isn’t working very hard or producing results? Afraid to make the hard decision to let this person go? You think your team doesn’t notice over time that you can’t move non-performing people along? People resent “dead wood” because when everybody else is working their asses off they hate seeing people who aren’t digging in. Letting go somebody you like or who’s nice is never easy. And I don’t say to do it lightly. But if they’re non performing, they’re non performing. There’s no place for that in a startup. And in public companies we used to mockingly rename their titles to CVO … Chief Vesting Officer. I often found that when people finally let some dead wood go and you explain it to the company most people thank you.
When I think about “respect” I think about Mark Zuckerberg. I know a lot of people fear him right now and the popular thing to do is rag on Mark. People fear his intentions and they’re pissed off at the changes Facebook has made to its privacy settings or channel arrangements. In this post I don’t want to address those topics – I’m not a Facebook Fanboy. But I do want to address Mark’s decision-making. I believe it’s what makes Facebook, Facebook. He has made decision after decision that was unpopular at the time – I’m betting even within his own organisation many decisions were unpopular. But he hasn’t fudged the tough calls. He clearly isn’t obsessed with being “loved.”
Back in 2006 Facebook made a conscious decision to encourage the platform ecosystem even if it meant creating large businesses like Zynga (Slide & RockYou were the initial big players) that could make a lot of money off of Facebook. MySpace dithered. They felt that they didn’t want to create more Photobucket or YouTube successes. “Why should these guys get uber rich off of our backs?” Facebook took the long view.
When Twitter rose to prominence Mark made “the stream” the focal point of the user experience. This pissed off application developers because it became harder to find apps. This pissed off many users who were used to interacting with apps and easily finding people’s photos, etc. But Facebook made a call that the stream was the longer-term core of what people wanted to do inside of Facebook and that he had to combat the growing popularity of Twitter. I think this decision proved to be correct but history will tell us. A muddled organisation could have never turned on a dime like this.
The effed up on the launch of Beacon – they realised it and killed off Beacon – at least for now. And more recently they have begun to pressure players like Zynga to use their payments platform and have pushed the security model to be more open. Both of these decisions are unpopular. We’ll know in 2-4 years whether or not they were the right call. But they were each a tough call. No matter how mad some people become – he is certainly one of the most respected figures in Silicon Valley. He’s most often compared to Bill Gates. Who else in their 20’s can you say that about?
My message isn’t to love or hate Mark Zuckerberg. My message is that the best in companies only comes through making clear and decisive judgement calls in your business. Embrace not being loved. Don’t be a dick. But learn to live with the doubters or the naysayers. Live with the grumblings of people who don’t agree with you. Let them air their opinions. Give them their voice. Show respect to them by having the tough, internal, town hall style meetings. But stay the course if you believe in your decisions. If you’re a good leader and if you make more good calls than bad ones – you’ll be respected.
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