You may not know Richard Hagberg’s name, but chances are you’re familiar with at least one of the tech companies he’s coached over the past 30 years.
Hagberg has become the psychological backbone for some of Silicon Valley’s most prominent stars. He’s mentored CEOs and founders from companies such as Twitter, Dropbox, Quora, and eBay just to name a few.
Hagberg puts his clients through a rigorous personality assessment process that he promises can predict skills at a “very, very” high level of accuracy. Often times, Hagberg is partially responsible for transforming a chaotic startup into an organised and efficient corporate machine.
We had the chance to speak with the psychologist about his experience guiding entrepreneurs in Silicon Valley, and here’s what he had to say.
Business Insider: You’ve worked with a lot of tech companies over the past 30 years. What are some of the most common traits you’ve seen in tech CEOs and entrepreneurs?
Richard Hagberg: I can’t name individual companies or people, but I can speak to different trends. First of all, I’ve been doing this since 1979 and I’m probably having the most fun now working with these young, high- tech Silicon Valley entrepreneurs than I’ve ever had before. Peter Fenton at Benchmark Capital put it perfectly. He said, ‘I want to invest in entrepreneurs whose need to learn is stronger than their need to be right.’ And these people that I’m working with have a tremendous need to learn.
You know, frequently they don’t have background in business. They either have never worked for anyone else or they have programming in their background. They recognise that they need to learn some pretty basic stuff. And that makes it exciting. It also means that I have to change my coaching approach. I can’t just assume that someone knows a particular skill set. I kind of have to start where they are.
They have to learn how to let go of control; they have to learn to delegate. To delegate, you can’t just toss it over the wall. You have to hold people accountable and then you have to be there to support them and coach them if they need help. And that’s something that most of them have to learn.
BI: It sounds like you’re preparing these entrepreneurs with a lot of business-oriented skills. How does the psychological aspect of your coaching come into play, and how personal have you been with these clients?
RH: So we usually do one year of leadership development, that’s typical. We start with an assessment. The first assessment that they take is a personality test that I develop. It measures 46 different personality traits, everything from orderliness, to energy level, to dominance — all sorts of things.
Over the years we’ve correlated those personality traits with management and leadership and social skills. We can predict those skills at very, very high level of accuracy. I start by helping them understand what their personality will naturally cause them to do if they ley it just have free reign.
What separates me from other psychological coaches is that I realise that with this population, they need some guidance in terms of how they actually going about doing stuff. It’s not just about diagnosis. It’s about helping them understand things like how to confront and deal with a performance problem. How do you address conflict? A lot of entrepreneurs hate conflict.
A lot of entrepreneurs hate conflict.
Many of them are fairly unstructured. A lot of creative people are unstructured. As a result, they have trouble providing the kind of direction and structure that the organisation needs.
They can live with lots of ambiguity. They can tolerate ambiguity; that’s why a startup makes a great home. It’s very ambiguous. Things keep changing all the time. On the other hand, they need to realise that as the organisation grows, they need to put in place a plan. But they might not feel a need to plan, even though the organisation needs a plan.
BI: So you’ve provided these companies with a lot of core values when it comes to organising a business. Without your services, do you feel these companies wouldn’t have been as successful as they are today?
RH: All I can tell you here is, CNN Fortune interviewed Drew Houston at Dropbox and he gave some quotes about that. And I will refer you to that. But I hear that a lot. I hear that people not only appreciate, but give me a lot of credit for helping them do that. Some of them give me stock, not that I ask for it. It’s nice when you get a call and they say ‘We’re going to give you some stock in appreciation for how you’ve helped us.’
BI: I’m interested in how these entrepreneurs react to the feedback you’ve given them. Have any of them been insulted, or have any of your clients had personality traits that interfered with your coaching?
RH: One of the reasons I love working with entrepreneurs is that they’re still struggling to be successful, and the level of self importance is considerably less than in big company CEOs. And I’ve worked with a lot of big company CEOs.
Yes, there are occasionally people who are arrogant and self-important. But they are the exception rather than the rule in the people that I work with now. The thing that gets in the way is a lack of discipline. A number of people really lack the discipline necessary in order to scale.
Sometimes the rebellious, non-conforming kinds of tendencies cause them to feel restricted as the company grows. And they have to sort of play by the rules that the company created — that they were part of creating. And they feel that they’re not able to see themselves in a spontaneous way because everyone is watching them.
One of the hardest things for entrepreneurs to deal with is that when you’re in the role of the leader, there are no trivial acts. Everything you do makes a speech.
When you’re in the role of the leader, there are no trivial acts. Everything you do makes a speech.
Everybody is watching. They may feel that if they roll their eyes or if they shrugged or if they made a joke, or if they have made a comment about something, all of a sudden it becomes policy and everyone is looking at them.
I remember a CEO some time ago. The company had a new office that they were just moving in, and he had been travelling a lot. And he came back, and he was only there for a brief time, and he saw the lobby. He made a comment to one of his subordinates that he didn’t like the decorating in the lobby.
He then went off on another trip, and when he came back they redecorated the lobby. And he was appalled. He said, ‘Cant I express an opinion? You don’t need to act on every word I say.’ So yeah, I think that really hurts people.
BI: How often do you meet to consult with these tech entrepreneurs in Silicon Valley?
RH: I’m here every other week. I meet with people a minimum of one time a month. But often it’s more than that, because more and more they’re wanting to contact me on decisions that they’re facing that come up on a day to day basis. And we’re tending to Skype now.
What’s happening is that somebody will be trying to execute that plan [we discussed], and there’s a situation that comes up. Yesterday I was working with a woman who had delegated to people, but what she got back was really not up to her standards. So we talked about what she could do to transfer her standards and her thought process, and the kinds of things she expected people to do in a more detailed way. Basically, she would train up to a level where she would feel comfortable.
BI: A lot has been written about Silicon Valley being an extremely stressful, and somewhat mentally unhealthy environment. As a psychologist, how do you feel about that?
RH: If you’re thinking of starting a business, you better be prepared to experience a whole lot of stress and work incredibly hard.
You better be prepared to experience a whole lot of stress and work incredibly hard.
You have to have some stress management processes. Whether that’s working out, or meditating, or taking the weekend off and driving up the coast, somehow shutting off for a period of time. I think that in the end your mind needs a rest. And that these people are thinking about their business 24/7. I now have four current clients who started meditating, and all of them have told me that it’s been a godsend. Because the stress is dramatic.
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