Do you ever wonder what makes a CEO lose his/her mind and become a seriously bad manager? You might think you have to be an “a-hole” to qualify as a startup founder if you have been keeping up with the techie gossip.
Or you might think that Uber’s Travis Kalanick, American Apparel’s Dov Charney, Facebook’s Mark Zuckerberg & Apple’s Steve Jobs, are the rare exception.
But I doubt these founders started out that way. In fact, they possessed the key ingredient that helped them reach success —passion.
Passion will certainly thrust your startup into motion. However, the unhinged abandon of founders can also cost your startup its reputation and/or lead to its demise.
Sex scandals, bullying, paranoia, data breaches, and just plain lawlessness char the names of some of our biggest unicorns in the high tech ecosystem.
Once you find your startup here, you can kiss your startup baby goodbye. Either you’re out our your company tanks.
In an environment where only 1 in 10 startups survive, investors and the board will look to the top first. The dead fish stinks at the head first. The same goes for a floundering startup.
Stress and disagreements are perfectly normal. However, if your company’s reputation is on the line, chances are that you went too far.
Kalanick, Charney, & Jobs are the crowning winners as the worst CEO’s. In fact, they were so bad that they were ousted by their very own after endless public scrutiny and countless complaints about their downright bad behavior.
In short, Jobs was known for his “Dr. Jekll and Mr. Hyde” behavior. He used his team as an emotional punching bag in pursuit of developing the greatest American home computer. This behavior cost him his job in 1995. Of course, when Apple started to tank, they went with Jobs’ “think different” approach to life, including his intolerable behavior. Henceforth, we got our beloved iPhone among other addictive products.
Shortly after Jobs was forced out of Apple, Charney founded the clothing company American Apparel. Apparently he enjoyed prancing around the office in his skivvies as if he thought he was the next Marky Mark.
He believed that sex with colleagues was not only permissible, but inevitable. Eventually, he was held responsible for the company’s economic decline and given a throffer (threat-offer) to get out gracefully with a payoff or get thrown out with a public fight. Guess which one he chose. It wasn’t pretty.
Fast forward to the present. Kalanick fosters the company “bro culture” syndrome where women are pieces of meat, has deliberately attempted to thwart law officials who banned his app, and paid hackers $100K to delete the stolen data of 57M people rather than reporting it. Thus it is not surprising that his colleagues finally understood that it was either him or Uber. Out he went.
And now Facebook’s Mark Zuckerberg is marred with #deletefacebook hashtag campaigns against the backdrop of data mishandling accusations. Meanwhile, others are dragging up dirt that he sold out his “bros” unabashedly in the early years and claiming that Facebook was not his idea alone. If you have seen the videos of Zuckerberg, you know he is sweating. His job is hanging by a thread.
But all of this is preventable. You just need to know the psychological pitfalls before you take a nosedive and the company with you.
The startup failure post-mortem a.k.a “why we tanked and how we can do better” spiel has become the status quo. These founders’ confessions have helped identify major underpinnings to startup failure. Many of these takeaways point directly to the founders’ bad behavior.
We can break the recipe of disaster down to 3 P’s: power, pride, and inadequate preparation.
Entrepreneur, author, and professor Steve Blank pointed out in the Harvard Business Review that CEO bad behavior was not as prevalent when Venture Capitalists (VC’s) set the rules. He explains that the VC’s replaced hoodie-wearing founders with “suits,” serious CEO’s who were trained to run a business.
He noted that the initial founders might have been creative, but they lacked the discipline and skill it would take to drive the business forward. The VC’s were the gatekeepers that kept the angry lions out.
When the “founders revenge” started to take over the startup scene in the mid-90’s and founders kept their positions of power.
If you are not familiar with how power takes possession of an unprepared person, just watch Professor Philip Zimbardo’s Stanford Prison Experiment play out. The prisoners became increasingly deferential to the guards and the guards became tyrants. This experiment was so traumatic for the volunteer participants, that he had to terminate the experiment prematurely.
Now, what happens if you put a young CEO in control of a startup that went big fast? It’s not unfathomable to think that someone who has control over the board, the company, and financial wealth will make questionable choices–even if the CEO had no prior history of bad behavior.
But your position of power can also help you create a positive office culture and uphold ethical business standards. Social change agents encourage privileged people to be model examples in their community and to speak out for those who can’t. The same is true for business.
It’s your choice how you want to use your power.
Now you have personal governance problems coupled with inexperience and the pressure to succeed. If you don’t keep your ego in check, your personal or professional shortcomings that you might try to hide may cause you to make choices that you would not ordinarily make.
And guess what, your little ducklings will imprint on you. Just read Blank’s anecdote on suits with sneakers to get my drift. Copying your bosses fashion is one thing, but copying your manager’s bad behavior is another. And as a founder, you have to set the bar. If you think it is ok to scream at employees or customers, make sexual advances at subordinates, mishandle data, or worse; so will many of your colleagues. Sooner or later, that’s going to come back to bite you. Would you like to the be the poster child for the next #metoo war?
Power and ego are two ingredients that don’t mix well.
We had a crazy director in a prior company due whose behavior ultimately cost him his job. One might wonder if he was trained by Jobs, because he had a nearly identical “Dr. Jekll and Mr. Hyde” personality. He ultimately lost his job due to rumors about him inflating numbers in order to appear successful in a starburst project we were launching. However, it was simply the last straw after tolerating his other erratic behavior and intimidation tactics for years.
But the director’s absence hardly changed things. The next director modeled after him and was even more toxic in a snakey, underhanded sort of way. He furtively grew a toxic bully ring under the CEO’s nose, which compromised the work. You can’t exactly develop a project if most of the team is out drinking together aside from the workhorse on a regular basis or refusing to work as a cohesive team with a clear structure. Needless to say, the project tanked and there were litigious discussions afterward.
But things were a bit hairy because they were the CEO’s friends initially. That’s a good case for not hiring your friends, especially for management roles. Anti-nepotism restrictions in the workplace exist for a reason. Your friends might be great, but they may not be prepared to lead a team. Not to mention that they are the people most likely to become bad managers because they may feel safe to abuse their power as the CEO’s friend or feel superior because of their special relationship.
But no matter how you got a C-level position, it is important to learn tools to keep your ego in check as you gain power.
Some people make efforts to remember where they came from. Others maintain a spiritual practice in order to remember their smallness in relation to a god/universe or to confess or get guidance. Some people help others that are less fortunate than themselves. Others mentor other budding startups and share their lessons of failure and success. Others see a therapist or coach.
Whatever tools you use to keep your pride and humility in balance will help you lead more effectively.
Add lack of experience to the mix, and you have another problem. Just because you can write thousands of lines of code, doesn’t mean that you have the skills to lead a team. That’s why VC’s threw out founders back in the day. But things have changed and you get to run your company. So you gotta do your homework.
Luckily, there are mentors stationed in accelerators and incubators who understand how to help you. Because they have been there. They are entrepreneurs themselves who learned how to lead a startup the hard way. Sometimes they will give you money to fund your project too. Angel investors and Venture Capitalists don’t just want to give you money. They want to help you succeed.
They will offer pointers for strengthening your soft skills a.k.a. people skills and hone in on your hard skills like how to crunch numbers. Moreover, there are professional coaches and workshops who prepared to help you maintain your efficacy. You can also get legal advice on the nitty-gritty components of setting up shop.
It is also worthwhile to take extra courses in business management, leadership training, or up your tech skills. Some professionals take extra courses on Udemy or a similar online training or workshop when they are not chasing after another diploma. I have personally started racking up my Hubspot certificates for extra training and updates on marketing skills. And no, they are not paying me to sponsor them.
Bottom line: No matter where you are in your career, a little extra training never hurts.
You don’t have to lose your mind and your startup when you become successful. Just use your passion and power wisely. Keep your ego in check and don’t be afraid to ask for help.
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