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What Happens When Founders Are Fired

Replacements face a daunting task.

Jeff Hyman

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When a founder steps down from the company following its acquisition – as David Karp recently did at microblogging site Tumblr – it creates an urgent need for a leader who can bridge two worlds: digital native and corporate. It’s a rare combination that, in my studies of “rock star” talent in high demand these days, won’t be easy to find: a leader who can guide the company forward and, equally important, prevent other key people from leaving.

Entrepreneurial-minded founders don’t enjoy spending their days in meetings, corporate presentations and strategy reviews. This talent tends to be action-driven and hard-headed and is likely to lose patience with playing the corporate game. (I know from personal experience, having left six months after my first company was acquired.)

Karp’s departure from Tumblr, which he founded when he was only 20, follows a well-established pattern. Harvard Business School research has shown that founder-CEOs are often replaced precisely because their companies are successful. While Tumblr’s data is closely guarded, its revenue is believed to be substantially in excess of $20 million.

Related: 4 Lessons From The Pivotal Group Founders On Growing And Disrupting All At Once

On a broader level, Karp’s decision to step down is part of the scope of leadership challenges that occur as entrepreneurial firms transition from one phase to the next. Founders who are so used to doing everything themselves – product creation, sales, pitching to investors, managing stakeholders – often need support in knowing how to navigate these transitions. That’s why they need “hugs and kicks,” as I call it: Tough love and guidance from board members and advisers who help them stay motivated and understand the reality of what they’re facing.

That might have changed things for another founder, John Schattner of Papa John’s, who recently stepped down from the CEO role, while continuing as chairman, after linking a sales slump at the company to NFL protests during the national anthem. The company later apologised for his comments.

Although it’s well-known that startups benefit from having a board (typically, outside investors will insist on this), many entrepreneurs delay bringing in advisers. When a startup is successful, there’s little incentive for the founder/CEO to undertake the time-consuming process of recruiting board members. Then there is the need to compensate board members in some capacity, which may mean giving away equity stakes, which founders tend to guard jealously.

Trusted advisers, though, can make all the difference. As a serial entrepreneur, I was fortunate at the age of 27 to have management consultant and bestselling author Patrick Lencioni as my executive coach – it was literally life-changing. Now as an adviser myself, one of my key points for entrepreneurs (and for employers, in general) is about finding the right talent – especially those who are stronger in areas where the founder and other key leaders are weak (for example, recruiting a strong No. 2 as a chief operating officer). I’ve found it’s much more efficient for leaders to focus on their strengths than to expend so much energy trying to shore up their weak areas.

While some companies such as Google and McKinsey are strong recruiters, most employers are “sloppy buyers” of talent. Some 50 percent of new hires don’t work out, a degree of inaccuracy that is inexcusable for anything in business. Compounding the challenge at digital/internet companies, it’s a seller’s market for talent today, particularly for highly in-demand specialties such as artificial intelligence. The most qualified “rock stars” can basically name where they want to go, what they want to do and how much they expect to earn.

Related: Listen And Learn: Why Podcasts Aren’t Just For Start-up Founders

When the talent market gets really tight – as it is now, the tightest we’ve seen since 1999 – employers often default to hiring someone who is deemed good enough, rather than operate with an open position while continuing to recruit the right person. The problem is that hiring a “warm body,” who is only a B- or C-player, undermines team performance. The existing rock stars will be the first to leave (and will find themselves in demand), because they want to be part of a winning team. It seems counterintuitive because maintaining a vacancy – holding out for a top performer – means the slack must be taken up by everyone else. But, the rock stars on the team will love it because they know their employer is being highly selective.

For entrepreneurial firms everywhere, the challenge is always building a pipeline of talent: Qualified candidates need to be developed ahead of time to succeed key players in leadership roles, as well as to manage functions such as sales and technology. No matter how many other “priorities” entrepreneurs have in growing their business, having the right talent must always be at the top of the list. Without the right talent, even leaders with the best ideas will be severely hamstrung in executing strategy.

This article was originally posted here on Entrepreneur.com.

Jeff Hyman is author of the bestselling book Recruit Rockstars, a professor at Kellogg School of Management, host of the 5-star-rated Strong Suit Podcast, and chief talent scout at Strong Suit Executive Search.

Leading

Albert Einstein: An Influencer To This Day

Say the word genius and immediately Albert Einstein springs to mind. To this day his influence remains across not only science, humanity and education but popular culture too.

Glenn van Eck

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Albert Einstein had the same mentality as an entrepreneur; he was a discoverer, an educator, a revolutionary and incredibly creative. Below are some of the few more reasons why entrepreneurs can learn from him:

1. Even geniuses get it wrong

Einstein wasn’t always right. The best example of Einstein getting it wrong, was when he had trouble accepting that the universe is based on probabilities, not absolutes. In a famous Einstein/Bohr debate, Einstein stated, “God does not play dice with the universe,” with Bohr retorting:

“Einstein, stop telling God what to do!”

2. One should read

When you find the right book, at the right time, it can have an incredible impact on your mindset. I have learned so much from books, and many have helped me as an entrepreneur. Not only does reading give you quiet time and space to look after yourself, but it’s also exciting to keep discovering incredible insights, and being surprised by their impact.

Now I don’t think I will ever dream up a concept that will have world-changing implications like Einstein did, but reading can open new doors for you and your mind, and take you places you never thought possible.

Related: 10 Leadership Quotes From The World’s Most Influential Leaders

3. Enjoy the challenge

Einstein didn’t pluck remarkable theories out of thin air. He made many mistakes, he persisted and proved his theories worked.

Einstein would ask challenging questions and ask them in different ways. By doing this, he was able to address the unknown from different angles and eventually unveil some of the most perplexing universal secrets.

4. Your weaknesses are your strengths

Experts such have hypothesised that Einstein might have suffered from Asperger’s Syndrome; a condition where sufferers are described as socially aloof, emotionally detached and exhibit inappropriate social behaviour. But on the flip side, those with  Asperger’s Syndrome can display an obsessive interest in a single topic or object. So, while Einstein wasn’t the best at socialising, he relished solitude and made incredible use of his mind.

By embracing his playfulness, curiosity and laser-like focus, Einstein decoded the universe. Not so much of a weakness when you think of it like that, hey?

5. Find your tribe

His professors often criticised Einstein’s ideas; professors who were accustomed to conformity. It was only when Einstein worked as a clerk at the patent office that he made significant strides in his thinking within physics, mathematics and philosophy.  The point being, make sure you surround yourself with people who get your creative juices flowing and fuel rather than deplete you.

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Your Narcissism Is Killing Your Employees’ Productivity. How To Avoid The Pitfalls

The key is to understand how your narcissism is affecting others and actively work to adjust and adapt your behaviour.

Joel Carnevale

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Narcissism appears to be on the rise among today’s business and entrepreneurial leaders, if you read the business pages and academic research on a regular basis. And this isn’t always a bad thing: Narcissists can be compelling leaders capable of executing grand strategic visions.

But all too often they are described as highly self-absorbed individuals who believe they are superior to those around them.

And while successful entrepreneurs tend to have high levels of self-confidence and an intense drive for success, often they’ll fall prey to the problems associated with the darker aspects of narcissism: Specifically, they take unnecessary risks, hold too tightly to their vision when change is needed and fail to recognise the work and sacrifices of those around them.

In our new study, which was published in May in Organizational Behavior and Human Decision Processes, my research partners and I sought to gain a better understanding of just how problematic narcissistic leaders are, and what they might do to lessen the negative outcomes. We surveyed 262 employees and their (262) direct supervising managers over a four-week period at a large Chinese technology company.

Related: 14 Of The Best Morning Routine Hacks Proven To Boost Productivity

Overall, we found the harmful consequences of narcissistic leaders to be wide-ranging.

Just how harmful is a harmful narcissistic leader?

We began by asking leaders at the tech company we targeted to complete a widely used Narcissistic Personality Inventory test. Employees, meanwhile, were asked to report on their organisation-based self-esteem, meaning the degree to which they felt they belonged in their organisation.

As researchers we were operating on the understanding that the need to belong is a fundamental human need and motivator, but that narcissistic leaders fail to satisfy this need among their employees because of their high levels of self-concern.

Those high levels mean leaders like these ignore the feelings of others. Former Yahoo CEO Marissa Mayer, for example, was often described as highly self-absorbed and inconsiderate of others. She was often criticised for being habitually late to meetings and dismissive of her constituents’ ideas and suggestions.

elon-muskElon Musk, CEO of Tesla Motors and SpaceX, is also said to be highly abrasive, and to tend to berate employees who fail to live up to his impossibly high standards. One former engineer at the company referred to critical interactions with the SpaceX CEO as an “Elon ass-kicking” and said some employees felt “crushed under the weight” of those interactions. Not surprisingly, both Musk and Mayer have been recognised as some of the most narcissistic CEOs in the tech industry.

Our study found that 51 percent of employees with narcissistic leaders disagreed or strongly disagreed with statements asking if they felt valuable in the workplace. Moreover, this diminished sense of belonging had wide-ranging consequences on these employees’ behaviour. Specifically:

  • 34 percent of employees surveyed disagreed or strongly disagreed with statements asking if they helped other group members with their responsibilities
  • 31 percent of employees disagreed or strongly disagreed with statements asking if they spoke up to their leader about their own improvement-oriented suggestions
  • 37 percent of employees agreed or strongly agreed with statements asking if they badmouthed their leader to their coworkers
  • 18 percent of employees agreed or strongly agreed with statements asking if they intentionally tried to disrupt task completion by ignoring their leader’s requests.

Such behaviours are troublesome enough for established companies, but for start-ups – whose survival depends on quick action and cooperation from all employees – the consequences can be dire.

Related: 5 Work Productivity Hacks Used By Rockstar Entrepreneurs

How can narcissistic leaders avoid the pitfalls of their personalities?

We asked employees to report whether their leader consulted with them before making decisions. While this kind of consultation is an influence tactic leaders use to gain employee support, it can also signal to employees that their contributions are valued.

We found that among narcissistic leaders, 27 percent frequently consulted with employees while another 43 percent consulted with employees to some extent.

Importantly, we found that when narcissistic leaders consulted with employees, the detrimental outcomes stemming from such leadership were not simply reduced, but eliminated completely. Here are three takeaways:

Actively listen

Active listening means that you concentrate on the message being communicated; you don’t just passively “receive” the message. Unfortunately, most narcissistic leaders have difficulty focusing on what others are saying and often ignore their advice.

One classic example of a narcissistic leader who altered his behavior to more attentively listen to others was Steve Jobs. Much of Jobs’ success upon returning to the helm at Apple in 1997 was attributed to the drastic change in his interpersonal behavior from his prior tenure in 1985.

Not only was he more willing to listen to his employees, but he was described as someone who “seemed to relish other people’s ideas.” Our research indicated that employees are likely to discount their narcissistic leaders’ more abrasive qualities when those leaders take the time to actively listen to their suggestions.

Invite involvement

Don’t just listen. Invite employees’ involvement in the making and development of decisions. Our study demonstrated that when narcissistic leaders invite employees to participate in leadership processes, those employees experience a sense of ownership in the process that can help alleviate the leader’s more harmful tendencies.

In particular, such behaviour signals to employees that their narcissistic leader is not only willing to listen when they, the employees, have concerns or suggestions, but actually desire to receive those employee contributions.

Related: 7 Productivity Beliefs That Get You Nowhere Fast

Be accessible

According to Jack Welch, former CEO of General Electric, the best leaders “make a religion out of being accessible.” Likewise, our research emphasised the importance of narcissistic leaders making themselves accessible to individual employees.

Despite his narcissism, Welch often sent personal notes to his executives and met one-on-one with employees at all levels. Such behaviours were part of the programs Welch instituted to enhance employees’ “feelings of ownership and self-worth” in the GE culture. We found that the individual attention employees receive when they’re consulted provides the interpersonal interaction they crave, but rarely receive, from their narcissistic leader.

Due to the dynamic environment of the typical entrepreneurial venture, communication and cooperation from employees is a necessity for continued growth and survival. Although entrepreneurial leaders may be more narcissistic than their counterparts in non-entrepreneurial vocations, the pitfalls associated with their tendencies may be avoidable.

The key is for such leaders to understand how their narcissism is affecting others and actively work to adjust and adapt their behavioir.

This article was originally posted here on Entrepreneur.com.

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How Can Scholars Prepare Themselves For The World Of Work?

Make A Difference – Young Leader’s Launchpad.

David Hatherell

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The narrative that we have expanded on over the past few weeks has highlighted the importance of considering the fundamental principles of entrepreneurship and not the general definition of just “starting a business.” Furthermore, we have emphasised that South Africa is fortunate to have a diverse range of perspectives and skill sets that we can use to benefit society, and allow the youth of this country to take a leadership position despite their age, circumstances or financial means. Through the various topics that have been discussed, we have hoped to expand on your knowledge through a range of insights, perspectives, and lessons learned. Which leads us to the topic of what it takes, as a scholar, to prepare yourself for the world of work.

Make A Difference Leadership Foundation (MAD Leadership Foundation), in partnership with their fellows, have launched a diverse initiative which aims to prepare our scholars for the world of work in the general sense. We will expand on some of these learnings below, highlighting the four key lessons we feel are most applicable.

Work Becomes Our World – Lessons Learnt

Lesson one – Create a Community of Support

When entering the working world, it is easy to get caught up in the pressure of your nine to five position. This may mean that you leave your dreams behind and focus all of your attention on the role you have within the company you are working for. Creating a supportive space, with your peers, where you can discuss your dreams and/or goals which are not directly linked to your workspace will continue enforcing a sense of achievement in your private life without neglecting your work. In creating a community of support, it will allow you to explore your “dreams” in a way that will make them feel more achievable and obtainable.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

To encourage this concept of a supportive community the MAD Leadership Foundation fellows have implemented a concept called Dream Enabler. This initiative aims to select a “dream” or initiative that the MAD Leadership Foundation scholars would like to pursue. We review these dreams and find ways to convert them into actions for the next year. The initiatives chosen are presented back to the alumni forum and implemented in the year after each Annual Leadership Summit.

A little collaboration will go a long way in giving each dream that little something extra.

Lesson two – Bring Focus to Different Aspects of the World of Work

The working world can be subdivided into three broad sectors which include those who enter the workforce, those who start their own businesses and those involved in the creative arts or cultural sectors. You can focus on these different sectors by creating two main archetypes, letting your goals fall into two broad categories:

  • The Career Driven Professional
  • The Independent Creator

By highlighting the importance of both archetypes, we can develop into well-rounded individuals. For example, an actuary in the corporate field may grow by focusing equally on his/her career as a “career-driven professional.” Once qualified, he/she may benefit by attending workshops aimed at the “independent creator” archetype. It is essential for scholars who are soon to be entering the working world to allow themselves the flexibility of focusing their attention on both archetypes and to strategically plan their time given to each respective archetype.

Lesson three – Learn to Face Failure

Many individuals are funneled into a particular career path and then experience challenges that they would have never thought of. That being said, every challenge brings an opportunity, and every failure has a learning curve. The compilation of these challenges and failures will form our world of work. It is important to consider these failures as an integral part of your journey through the working world. If you are not failing are you genuinely pushing yourself? The MAD Leadership Foundation alumni have learned that vulnerability is a strength and that you will show the most growth by failing and trying again.

Lesson four – Fail in a Safe Space

Highlighting failure as an integral part of your journey to success doesn’t mean that you should throw yourself into unplanned, risky ventures. This just means that when you are entering unknown territory, you are bound to encounter some failure. This is a testimony to you having the wherewithal to push yourself. However, there are some areas you can explore further, and find out more information on, with your community of support, to allow your journey to run a little smoother. Areas to consider further:

  • Financial and Time Management
  • Building and Maintaining Your Personal Brand
  • Influencing Others
  • Knowing Your Value and Making Your Environment Work for You.

MAD Leadership Foundation has created a safe space for their scholars, through the creation of a simulated gaming and learning experience. Where scholars can explore the concept of failure by addressing potential hurdles in their day to day lives, and how these would impact them personally, professionally and otherwise. Together as a cohort, they can address these hurdles and how they would overcome them, with the support of the experienced alumni. This helps to ensure that we are prepared and aware of some common pitfalls that one may encounter when leaving university.

Earning money and supporting yourself is tough and many experience difficulties in getting up after each failure. For this reason, it is important to create a culture of “failing forward” in that you need to learn from your challenges and continue on a path to your dreams and successes.

Related: The Kindling Of The Entrepreneur Spirit

Bringing It Together

These core lessons will allow you to have the foresight to plan and prepare for the world of work. Many might be known or assumed, but until you delve into each lesson, you might not be as ready for this journey as you might think.

We aim to prepare our scholars as best as we can with the knowledge, ability, and power to enter the working work as prepared as possible. Many youths, however, do not have the structure that MAD Leadership Foundation offers, and we, therefore, encourage you to be that support structure to each other. Lean on your peers and share insights through shared learning and support, through this the youth of South Africa can be assured of their readiness for the world of work.

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