CHAPTER 6

Startup Leadership

Acceptance Is Bliss

As the Founding Father, the first Vice President and the Second President of the United States of America, John Adams, was also instrumental in selecting the Committee of Five, charged with drafting the Declaration of Independence. Adams chose himself, Thomas Jefferson, Benjamin Franklin, Robert R. Livingston, and Roger Sherman but it was his decision later that would forever seal his leadership legacy and statesmanship in the history of the United States of America. Adams persuaded the committee to choose Jefferson to draft the document although it is well known that ­Jefferson is a weaker debater compared to him. This fact was later corroborated by Jefferson when he hailed Adams as “the pillar of the Declaration’s support on the floor of the Congress, its ablest advocate and defender against the multifarious assaults it encountered” (Wikipedia 2018).

Jefferson’s thought, from the very beginning, was that Adams should be the one drafting the Declaration and he pressed Adams to do it. In the recorded exchanges between these two statesmen, Adams gave three reasons for declining Jefferson.

Jefferson is a Virginian, and he believed that a Virginian ought to appear at the head of this business, as another Virginian Richard Henry Lee presented the first formal proposal for independence.

Adams gave authority to where authority belongs. He greatly respected the fact that the idea of independence sprouted from a Virginian, and he wanted the recognition to be given where it is due. A startup leader does not seek the recognition that is undue of him but goes above and beyond to recognize the contribution of his fledgling team members to instill ownership, giving power and authority over their work.

“I am obnoxious, suspected and unpopular. You are very much otherwise,” Adams gave his second reason to Jefferson.

Adams had accepted who he was and wasn’t pretentious in trying to be someone he was not. He knew his limitations and chose another person whom he deemed was better than him, stronger than him in writing the declaration although it would also mean that the recognition will go to Jefferson as the Principal Author of the Declaration of Independence. A startup leader acts the same and surrounds himself with co-founders who share the same belief as he does but stronger in other areas, complimenting him to grow the startup.

“You can write 10 times better than I can.” Adams third reasoning.

While acknowledging that Jefferson was a better author than he was, Adams was also able to impress upon Jefferson, his confidence and trust in him to carry out the task. The impact was automatically felt when Jefferson replied, “Well, if you are decided, I will do as well as I can.” A good leader is not only able to recognize talents in others but also to trust and be authentic when delegating to team members who possess the required talents. In a startup, due to the lack of resource and talents, its leader needs to trust the talents that have gathered around him and be authentic about that trust. With that, the startup can grow exponentially and thrive in the fashion of the fledgling United States of America of July 4th, 1776.

Therefore, the first requirement for a successful startup leader is the ability to accept and be comfortable with who he or she is. Acceptance is a liberating act, allowing the leader to anchor himself, leading to self-confidence and later to self-assurance. A leader who is self-assured is highly critical to creating a startup culture as he would not be afraid to bring in smarter people than he is. Steve Jobs, a classic example of a self-assured leader, once said, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” Only with such a leader, a smart and robust founding team can be built upon and for the startup to grow in winning the market or producing the next breakthrough technology.

Also, acceptance of one’s weaknesses would lead to humility and further on, to valuing and respecting people. Only a leader who can accept that there are things that he can’t do but others can; then he can see value on those talents and not the cost of employment. And it is a universal truth that people who feel valued are those who would be the most loyal, most productive and most likely to stay the longest.

One of the positive outcomes of valuing employees is the respect that you will have for them. It’s a natural transformation whereby when you appreciate someone, you will tend to respect them. Georgetown University’s Christine Porath surveyed about 20,000 employees worldwide, and respondents ranked respect as the most essential leadership behavior. To quote from Kristie Rogers, in her article, “Do Your Employees Feel Respected? Show Workers They’re Valued, and Your Business Will Flourish”, “Employees who say they feel respected are more satisfied with their jobs and more grateful for—and loyal to—their companies. They are more resilient, cooperate more with others, perform better and more creatively, and more likely to take ­direction from their leaders” (Harvard Business Review 2018). Thus, the benefits of having a respectful culture where every employee felt valued are enormous and must be pursued diligently by every leader. That journey, however, begins with the first step of accepting oneself as a leader for who he or she is.

Be the Giant for Others to Stand On

On May12, 1780, a short four years after declaring independence from the British, John Adams wrote a letter to his beautiful wife, Abigail, from Paris. While he was admiring the beauty of Paris with visits to Gardens of the Palais Royal, the Gardens of the Tuileries and more which he described to Abigail, he lamented that it was something which he should have done 25 years ago. Instead, he had exchanged a peaceful and blissful life with “my Head is too full of Schemes and my Heart of Anxiety” to give birth to a new nation, a new hope for Americans.

Adams further added that it was something that he had to do and the reason he gave would allude to his beliefs that a leader must not only be a visionary but also one with a servantship heart.

“I must study politics and war that my sons may have the liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry and porcelain” (John Adams May 12, 1780).

In Adams’ vision of a new America, he was leaving an inheritance to generations of Americans to come, not just for his lifetime. He was building a country with his fellow compatriots that will give sons and sons of America to come, a chance for peace, opportunity to prosper and wealth of choices. The America that we know today, a country leading in startup and technology innovations is built on that vision, giving it a strong foundation to overcome adversity and to reinvent itself time and time again.

Adams did not stand on the shoulders of any giant, but he became the giant for generations of Americans to stand on. His vision was not only for a better America but also one which will transcend generations. His vision had also given birth to generations of American leaders who through their self-sacrifice and service became giants of their own rights.

The key is to have a self-belief system which anchors on service to others, self-sacrificing but yet not without its reward and to be patient while waiting for the fruits of one’s labor to show. Jeff Bezos of Amazon, the second company in the world to hit a market capitalization of US $1 trillion, shares the same belief. Amazon under his leadership since its inception in 1994 has now, on September 4th, 2018, joined Apple in the only two companies reaching the trillion dollar milestone, beating the combined market capitalization of Exxon Mobil, Procter & Gamble, and AT&T. Furthermore, Amazon’s revenue has now surpassed that of the economic outputs of countries such as Hungary and Kuwait (CNBC 2018). Jeff Bezos, undoubtedly is the wealthiest man in the world today with a personal wealth of approximately US $166 billion, with Bill Gates coming in a distant second with US $70 billion short.

What was Jeff Bezos’ belief that drove him and Amazon, which started in his garage, to its unprecedented success today? Bezos had three simple beliefs: put the customer first, invent and be patient (8 percent.com 2017).

Put the customer first—servicing others and in this case customers. Bezos had made it a point time and again that Amazon should obsess over its customers and not competitors.

Invent—Bezos famously said that, “Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it is going to work, it is not an experiment.” In other words, failure is not only tolerated but also celebrated in Amazon to allow Bezos to create “new giants” in his company every day. He is willing to sacrifice the company’s bottom line to enable his fellow employees to push the boundaries of their potential and advertently that of Amazon.

Be patient—Bezos had repeatedly stressed on this point, that the key is to think long-term which ultimately requires a lot of patience. Evidently, this was also spelled out clearly in the Amazons Leadership Principle—“They think long term and don’t sacrifice long-term value for short-term results.”

And just like Adams, Bezos is also building an inheritance that would transcend time and for the benefits of Americans and citizens of the world long after his passing. Bezos had envisioned his latest startup Blue Origin, founded in the year 2000, to colonize the solar system in time to protect humanity in the face of an impending self-inflicted demise.

If ever this book is read by someone in Mars in light years to come, that seed was sowed by no other than the visionary, Jeff Bezos of Amazon, born in Albuquerque, New Mexico on January 12th, 1964.

Leadership Minus 1

“A soldier will fight long and hard for a piece of colored ribbon,” a leadership mantra by the famous Napoleon Bonaparte of Corsica on how proper reward and recognition has an astounding effect on the soldiers he led. By giving the credit they so deserved, Napoleon had inspired his men to trust their lives for a piece of ribbon which carries an insignificant price but of priceless honor and recognition.

At the battle of Lodi on May 10, 1796 during the Italian campaign, Napoleon, then a young commander of the French army led his men in pursuit of the retreating Austrian army of the Habsburg Monarchy to the Bridge of Lodi. Fortified across the bridge were a battery of cannon threatening to destroy any force who dares to attempt to cross. Backed by nine battalions of infantry, arrayed in two lines, the French would have first to brave the cannon fire, then the muskets of the Austrian men with no more than 10 yards of breath to maneuver. The French carabineer (elite light infantry) with great courage, stormed the bridge and took it in a single attack. At one point, when the offense was wavering due to heavy casualty, senior officers rushed to the front and led the attack again. The French won the Battle of Lodi with 1,000 casualties versus 3,200 enemies killed with a further 2,000 captured. Napoleon was generous with his recognition.

In his letter to the French directory, Napoleon wrote, “If we have lost few men, this fortunate circumstance is due to the prompt execution and the sudden effect produced on the enemy’s forces by the immense masses rushing forward, and likewise of the dreadful fire of our invisible column. Were I called upon the designate the soldiers who have distinguished themselves in this battle, I should be obliged to name every ­carabineer of the advanced guard and nearly all the staff-officers” (Romantic Circles 2018).

Napoleon understood the heart of men. It is the personal recognition that inspired and motivated his men to face the volley of fires and certain death. Every individual desires recognition according to Maslow’s 5 Level Hierarchy of Needs (Maslow 1943). Maslow theorized, once an individual satisfies the lowest level of needs, he would be motivated to satisfy the next level of needs. In the 5 level Hierarchy of Needs, the lowest level comprises of physiological and safety needs also known as basic needs, followed by psychological needs; belonging and self-esteem needs and finally the need for self-actualization whereby one needs to achieve his or her full potential as human beings.

Self-esteem, which is placed at the second top level, is a form of needs whereby individuals sense a need to accomplish something and for that accomplishment to be recognized. Individuals need to feel that they are valued by others to build their self-esteem and also basked in the prestige that comes with that recognition. It is innate in us, the strong desire for recognition and we are motivated to fulfill that need even it is of little material value.

And, by giving recognition where it is due, one is not only helping the individual fulfill his need for self-esteem but also the other psychological need for belonging. The need for belonging or social acceptance is an emotional need, and it would drive human behavior to fulfill it. Recognition is a form of testimony that the individual is accepted into the social group and strong emotional ties will be built to the group.

Furthermore, in research conducted by The Gallup Organization in 1999, employees’ engagement and motivation were found to be strongly affected by how often they receive recognition for their work. Thus, it is imperative for organizations to build a recognition culture and to be ­specific about the frequency of this recognition. Christina Bielaszka-­DuVernay in her article, “Are You Using Recognition Effectively.” with Harvard Business Review, suggested one every other week as a guideline. However, the frequency should be dependent on the individuals that made up the organization and managers should make it a point to find that out.

In a startup, recognition is easily given as it is a flat organization. One’s contribution is easy to be noticed in a startup, and after that, to provide an award as recognition. However, in a Fortune 500, recognition system becomes complex. Often, employees are demoralized as they felt that their immediate supervisor or line manager would covet their contribution for personal recognition. This is especially so for functions that are not easily measured quantitatively such as customer service or accounting. Recognition now becomes counterproductive, creating distrust and disengagement.

How would then Fortune 500 create a fair, accurate and ­sustainable recognition system and culture in such diverse markets and a large ­number of employees?

We advocate the concept of “Leadership minus 1” as a more sustainable recognition formula that could permeate all levels, all culture, and all employees. The basis to this concept is for managers to focus their recognition and reward to the next lower level of reports, skipping their immediate direct reports. The managers’ immediate direct reports would then be recognized by their superior instead. The concept of “minus 1” is to get leaders to look into recognizing employees one level lower, bringing transparency to the reward system albeit with some rules and conditions. A simple illustration would be for the Director of Operations to give recognition to the work of Operations Supervisors (Minus 1) while the Operations Manager (direct report) recognizes the work of the Operations Technicians.

The current practice of managers providing the recognition for the work of his direct report and for his direct report to reciprocate the recognition and reward system to his charges has contributed to one major issue; mistrust in management, boss, team, and colleague. In a global survey conducted by Ernst & Young on the issue of trust in the workplace, less than half of the 9,800 full time working respondents have a “great deal of trust” in their current employers, bosses, and colleagues (EY 2016). This phenomenon is seen across national culture, in a variety of companies in Brazil, China, Germany, India, Japan, Mexico, the UK, and the U.S. Ernst & Young also found out that the top factors for lack of trust in employers (management) are unfairness in compensation and unequal opportunity for pay and promotion while the reason for lack of trust in bosses (direct manager) are bosses not providing recognition for a job well done and lack of transparent communication. All factors point to a single root problem, and that’s a broken recognition and reward system.

“Leadership Minus 1” aims to overcome these challenges and to create a culture of high trust within the organization via recognition. What then constitutes the building blocks of this concept?

Concept:

Leaders to recognize and reward the work of one level lower reports instead of direct reports.

Conditions:

  1. The organization must be explicit about the trust that they have placed in their leaders to the leaders’ direct report.

    For example, in a manufacturing environment, the Director of ­Production must take all measures to convey to the Production staff, his trust in the Production Manager to perform to expectation.

  2. Project goals or performance expectations of leaders must be made clear to their direct report.

    3. The Director of Production must also detail out the Production ­Manager’s performance expectations to the Production Staff. And in the process of explaining that to the staff, the Director must show how their personal performances influence the outcome of the ­Manager’s performance.

  3. A clear message must be sent out to the leaders’ direct reportees that their utmost urgent matter is to perform at their work to meet this leader’s performance expectation.

    It’s imperative that the Director emphasizes that the Production Staff most important daily goal is to meet the Manager’s performance expectation through their work.

  4. The reportees recognition and reward are reciprocal to their responses to the Manager’s leadership.

    The reward albeit comes from the Director is reciprocal of the ­Production Staff’s working toward meeting the Manager’s goals. Their responses to that determine the reward that they will receive. To further illustrate, the Manager may be expected to reduce a certain amount of wastage, and the individual who finds innovative solutions to significantly reduces wastage at his station will be rewarded and recognized by the Director.

Benefits:

  1. Effective recognition and reward allowing better engaged and motivated employees. This also results in lower turnover rate. A study by Bersin and Associates (Forbes 2013), showed that companies with ample employee recognition have 31 percent lower voluntary turnover rate than companies that don’t.
  2. Effective informal succession planning program whereby direct reports are encouraged to work toward the competencies and skills required for the next level of position, in this case, the Production Manager.
  3. Increase transparency in the reward system promoting trust amongst the employee, the management and the leaders in question.
  4. Empowering leaders, as the direct reports’ reward are wholly dependent on working toward their leader’s goal. This is also an informal conveyance of trust that the company had put on the leader.

Leadership Developer

Jean Lannes, one of the staff officers who rushed forward to lead the attack again at the Bridge of Lodi when it began to waiver, was Napoleon’s most daring and talented general. Made a Marshall of the Empire with titles of 1st Duc de Montebello and Prince de Siewierz, he was also a personal friend to the Emperor. Napoleon wept when the Marshall was mortally wounded at the Battle of Aspern-Essling, whereby he bore the amputation of one of his legs with great courage. Marshal Jean Lannes, was later interred at the Pantheon National, as a recognition of his distinguished service to France.

What is little known is that Jean Lannes joined Napoleon’s French Armée d’Italie, as a simple volunteer, fighting and distinguishing himself up the ranks. Napoleon was spot on with his remark on Lannes, “I found him a pygmy and left him a giant.”

From a lowly infantryman to a brigade general, to the commandant of the consular guard, to the Marshall of the Empire and finally as the ambassador to Portugal, Napoleon was instrumental in Lannes’s career. Napoleon understood very well the potential beheld by Lance and grew him into those positions with trust.

One of the fundamental strength of a startup leader is his ability to understand his people and to help them maximize their potential as good talents who are willing to throw their lot with a fledgling startup. While startup leaders may not have the inkling of an organizational psychologist but merely striving to slow down the cash burn rate by hiring the right “lesser” people, they may have found the best motivational technique for their employees.

Sitting at the pinnacle of Maslow’s Hierarchy of Needs is the need for self-actualization. Maslow defined self-actualization as “the desire for self-fulfillment, namely the tendency for him (the individual) to become actualized to his full potential. This tendency might be phrased as the desire to become more and more what one is, to become everything that one is capable of becoming” (Maslow 1943). Maslow believed that every human has an inborn desire to self-actualize. Thus, leaders who see, understand and work toward “self-actualizing” his reportees, is motivating and building leaders of tomorrow. In the case of Paypal Mafia, the 14 original employees under Peter Thiel, (who sold PayPal to eBay for US $1.5 billion in 2002) went on to create seven different unicorns with a total net value of roughly US $75 billion in 2015.

However, to be able to do that, leaders need to know the potential of their team members like the back of their hands. And one of the best ways to achieve that is to measure it with psychometric tools such as ability tests and personality questionnaires coupled with the performance at work. Personality questionnaires are in effect behavioral assessment with an output on one’s competencies, measuring it as either strength or weakness. As competency is a series of behavioral traits which leads to the desired outcome, such as leadership or strategic thinking, leaders are able to work with their team members on the area of potential (strength) and to start building a team which could uplift each other (weakness).

Nonetheless, psychometric tools must not be the only source of information in identifying potentials. Performances are another indication on the potentials be held by employees especially through the “Leadership minus 1” concept whereby employees are constantly rewarded for helping to reach not their own goals but of their manager’s, thus showing them the competencies required for the next level role.

Last but not least, is to create a culture of self-discovery, allowing employees space and time to consider their potentials and to weigh in on how they can become the best possible person they are meant to be. The key here is to allow self-discovery henceforth the exercise must also encompass life outside of work. Who they are naturally.

An area that could allude to more information to help employees “self-actualize” is no other than their hobbies. Everyone would have a hobby which they strive to improve themselves to a new level of mastery or in other words to be the best they can be. This process of iteration allows the employee to understand himself better and it can be translated back to work in the form of a self-motivated employee. Hobbies also may help companies discover new hidden talents, abilities, and skills set.

“Know yourself and you will win all battles”, a famous quote by Sun Tzu, a military strategist of the six century B.C. and author of the book “The Art of War,” summarizes aptly the importance of understanding oneself as even in war, it is the key to victory. Therefore, it is imperative for leaders to help their employees to do just that.

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