March 17, 2023
CEO roles are hard to do well. Like any dance, for everything to go smoothly, it requires all participants to be in sync but especially requires the lead to pay attention to how their leadership is being received. Will you be stepping on toes or surprising your partners who aren’t ready for the move you’re expecting? Or will you be in rhythm and telegraphing your expectations so they can keep in step with you? The music seems fast now, but it can be faster.
This message goes out to the leaders of smaller companies who keep finding themselves struggling because everyone around them can’t keep up, can’t hold up their end of the implicit bargain you’ve made. You care deeply about these people, but you feel disappointed with their work, and the company needs them to meet your expectations, or it’s going to fail. If you’re trying to build a new company and your investment runway is running out, or you’re running a business that has to grow or be destroyed by a new competitor, you probably feel like you’re trying to do an impossibly difficult start-up dance and the dancers you’re working with don’t get it as well as you, aren’t driven quite as strongly as you, or simply aren’t keeping up.
But you want them to succeed! You hired them because you believed they could succeed, and you’re a caring and reasonable person, and you like—or at least at one point, liked—these people.
We’ve known several CEOs who were in this position, where every time we spoke to them, they found fault in a different team member’s performance. Let’s examine one CEO in specific. We’ll call him Jack. Over the course of a year, Jack went through a similar pattern with 6 key people he’d hired. With each hire, he’d cycle from certain happiness that he had found the best possible person to fill a key role in the company to bitter anguish that this person was incapable of doing the job. They made the wrong choices, they clearly were missing key skills, they mixed up or forgot about their role or company goals, or they generated confusion in the team. Sometimes all of the above.
And there was a certain truth to what Jack was saying. It’s tremendously hard to hire key employees for early startups. Sometimes people think they can do it, but it turns out they really can’t. Especially for the employees who had not been at an early stage company before, some of them discovered that it wasn’t right for them, or others discovered it about them.
But another, deeper truth is that Jack failed them.
His focus was on how people were failing him as well as impacting the future growth and opportunities for the company, so he kept saying things like:
Like most CEOs of young companies, Jack was moving from meeting to meeting, reviewing and commenting on each new hire’s choices, trying to do everything he perceived they couldn’t as well as he could while trying to put every fire out. He regularly put in 80-hour weeks and let the team know it.
He wasn’t giving these employees the support to grow their skills, believing that the system he’d put in place to specify the high-level goals for the company, plus hiring self-motivated people, would be enough. He met with them weekly or when they asked, and he pointed out problems that he was seeing, and yet in each of these 6 cases, they weren’t working out. Sometimes other employees were complaining about them, sometimes it was just that he would see major problems that weren’t being addressed, and eventually, Jack made the difficult decision to let each of these 6 go.
The value of any company is its people
The impact on the rest of the company was significant. Those that were still there were afraid to make a mistake. It was safer to be told what to do. Plus, they wondered if they were next and if the company was running out of money.
The truth is that a huge chunk of the value of any company these days is the people. For certain kinds of companies, like tech companies, the people are the company. Others have so much tribal knowledge of how things are done that even though the company has factories, warehouses, or stores, the people are still more than half of what makes the company work. When you hire people, it’s your job to set them up to be able to make that happen.
Although the interview process was rigorous, Jack was sure that it was because he was hiring the wrong people. Some of those 6 may well have been the wrong people, but a pattern is a pattern. Even if he’d managed to hire significantly better people, he was missing a key element: properly setting each new person up to have the best chance they can of success.
Onboarding plans, 1:1s, setting goals, effective delegation of decision-making, these tools aren’t there to make HR happy. They’re there because they’re tools that help an employee succeed, but the outcome—employee success—is what tells you if you’ve got the right tools or are using them wrong.
Every hire is imperfect, especially in a startup environment where you need a magical fairy unicorn to fill 3 sorts of overlapping roles, doing them just well enough to keep going without burning out. It was Jack’s job, a job that he failed to do, to find a way for each of those 6, or at least most of them, to be successful. Maybe he could have helped them to better understand the roles he needed them to fill, or better understood their gaps so they wouldn’t become landmines for the company, or helped them focus better on the most important problems to solve, or better set up the context so they could solve them.
Hires fail if you set them up for failure, and the same goes for success
When your employee fails, you can choose one of two paths: either tell a story about why it’s their fault or figure out what you could have done better to help them succeed. The first path doesn’t help you, even when it feels true.
Ian Black, the Cannes-winning founder of the ad agency New Vegas, understands this well:
Knowing that I’m responsible for everything that happens in the company helps me see problems in a new light. When something bad happens, I ask myself, “What did I do, or fail to do, that led to this outcome?”
Of course, Mary, one of the 6, didn’t know product management perfectly. She was never a startup product manager before, having come from larger companies and done roles that were similar but not quite the same. But did she have some skills that could have been harnessed to help the company? Either she did, and Jack didn’t make effective use of them, or she didn’t, and Jack’s hiring process failed to figure that out.
Sure, Ed doesn’t know about startup strategy. That wasn’t what he was hired for. He had deep intellectual strengths and subject matter expertise that could be a critical asset for the company. Patents were filed. Did he need help to bolster his business experience, or better demarcation of what he didn’t need to worry about, or something else to ensure that he was an asset and not a problem?
The philosophy of self-management, or less controlling management, is creating a cover for CEOs who hope they can worry less about the people they hire and just trust them to get on with the job. The thinking often goes that if you just stay out of the way, the team will coalesce and become a fighting force on its own. Just put the problem in front of them, and they’ll go grab it and solve it. Except that’s not how it works. Self-management comes out of strong teammates who have enough safety, trust in each other, and confidence to be able to drive the team collaboratively, and it’s rare that it just magically happens—usually, it happens because carefully thinking leaders set up the context to allow and encourage the team to succeed. You have to actively work to create safety, confidence, and alignment if you want people to be effective, whether you call that management or something else.
Don’t do the work, and, predictably, all you get is chaos.
To put it another way, CEOs often talk about how much they need everyone in the company to focus on outcomes. Goal lists, clear focus on the most important priorities, paying attention to what works—these are all great things. Now, take a step back and do the same thing while paying attention to the success or failure of the people you’ve hired as the outcome you’re looking to achieve. If you keep hiring people and discovering they’re not succeeding, that’s your outcome. They don’t live up to your expectations because you didn’t set up the situation so they could. Something about how you’re setting those people up to succeed isn’t working and has to change. They say when you meet someone and decide they’re an asshole, you might be right. But when everyone you meet is an asshole, you’re the asshole. So if everyone is failing, maybe the commonality is not what’s wrong with all of them, but what you haven’t done for them.
You’re the lead. Every time you step on toes, you can ask why your follow was standing there. Either they’re a bad follow, or you put them there, but there’s only one answer you can improve for next time.