May 21st, 2004
goes my hero
Watch him as he goes
There goes my hero
He's ordinary" - Foo Fighters, My Hero
beginning to understand how Ann Landers recycled a few
columns over her career... This is roughly my 200th
attempt to inform, speculate or rant about the
technology industry from two perspectives, that of early
stage companies and/or British Columbia. How many ways
can you say, "It's very hard to make a big
technology company from scratch"?
further adieu, here is a topic I have covered before.
Hopefully, this time you will benefit a bit from my
evolving understanding of the topic. And three years
from now, when I write about it again, I bet I will have
new insight because you never stop learning in this
biggest motherhood and apple pie statement out of the
mouths of venture capitalists (VCs) is, "Success in
early stage depends on three things, management,
management and management." If you look at the CEO
of any start-up, the trait most scrutinized is that of
leadership. Sure, you want domain knowledge, tons of
experience, charisma, honesty and handful of other
"nice-to-haves", but the critical ability is
leadership. The rest of this thesis is based around the
CEO, but can easily be applied to any level of manager
in an organization. Leading a team requires key
abilities similar to that of leading a company.
now firmly in the camp that leaders are born, not made.
You either have it or you don't. The leadership gene
should be mapped somewhere in the genome so we can
develop a simple blood test early on and save tons of
money and tons of anguish on those that try to lead, but
fail miserably at it. There is a nice cottage industry
in books, seminars and personal coaching for leadership
skills. Head over to Amazon.ca and look at the latest
nest of Leadership books: Five Temptations Of A CEO,
First, Break All the Rules: What the World's Greatest
Managers Do Differently and my favourite du jour, Leadership
Sopranos Style: How to Become a More Effective Boss.
Lesson number one from the Sopranos Style is how to make
cement boots for non-performers.
of the books and seminars should come with a warning
label: If you are not born with it, there is no way you
can learn it from a book. I may be over-stating it a
bit. Those with certain capabilities can learn to become
better at leading. Experience does teach us tactics to
improve upon the status quo. The best leaders have tried
many tactics and by process of elimination have honed
their skills based on what works.
the thing about being a leader… Your employees have a
small neural connection from their nose to their brain
that never, ever fails. They can smell it when you are
not a leader. Independently at first, then in small
groups in the hallways, employees have a basic
instinctual capability to ferret out those who are
merely trying tactics from the latest book and those
that can truly lead. It's not that they can do better,
in most cases. Often times, they can not articulate what
a person is doing right or wrong. It's just that there
is near universality in identifying and rallying around
critical piece of leadership is the ability to inspire.
Some have incredible enthusiasm and charisma, the sort
of "rah-rah" leader that really gets the
juices flowing in meetings or presentations. Some are
quiet inspirers, those that lead by example and action.
Think of the confident leaders in other situations, from
armed conflict to hockey games, the kind of
"follow-me-boys" leaders that we have all run
across in fiction and in life. The quiet leaders are
more perspiration leading to inspiration because they
work so hard and accomplish so much. They can be just as
effective without the adrenaline inducing speaking
capability that others have.
critical piece of leadership is effective decision
making. Once again, there are different styles. The
decision maker vs. the supportive "gather all of
the information and opinion" decision maker who
includes everyone in the process. Naturally, we think
the latter is a better decision maker, but that is not
always the case. Autocratic decision making works. But
only if the decision maker owns the responsibility of
those decisions and takes the heat when things go wrong.
I'll get in to the worst kind of leaders in a minute,
but among the worst are those that make decisions and
then point fingers when things go awry.
last critical piece of leadership is the ability to
think strategically as well as tactically. This is
especially true of the demands of a CEO vs. a manager.
Tactics are what to do when. A kind of litany of
experienced or taught things to do when reacting to a
situation. Strategic thinking is a kind of proactive,
out-of-body capability where the really good ones can
divorce their personal urges and needs from those of the
greater good, i.e. the company. They can think
"laterally" about situations. They can create
new ideas and critically take them apart in their minds
to see if they will stand to scrutiny. This last piece
is important because some of us can spout ideas like a
stream of consciousness... uncontrolled brainstorming so
to speak. The really good strategic thinkers keep and
discard some of the more ridiculous ideas before
to my thesis that leaders are born, not made. These
critical pieces of leadership are really core parts of
your personality. You either have charisma or you don't.
You were born with a love for hard work or you are lazy.
You have self-confidence oozing from your pores or you
have self-loathing. You can take intense scrutiny,
divorcing attacks and criticism of your work from
personal attacks, or you are defensive and easily upset.
You are intuitive, with tons of common sense, or you are
impatient and impulsive. And most importantly, you are
honest with yourself and can see where your faults lie.
like I can really see what makes a good leader, eh?
Surely, with this checklist, I can only pick those that
will win, right? Ah, well, here's the problem. You
really cannot learn about a person in a few short weeks
of diligence and reference checking as a venture
capitalist. More often than not, you don't find out
about a person's full set of characteristics for a year
or more, which is far too long to make a decision in our
game. That's why VCs tend to go back to those individual
leaders that they have worked with before. It's also why
they tend to avoid those that did not work out. As for
the rest of the time, it's a gut call.
have had situations where a person is very impressive in
the first few meetings. Typically these are the very
charismatic types with a good idea and a good team. But
peeling away the onion can reveal some of the worst
types of leadership combinations, like the
aforementioned autocrat that never takes ownership of
their decisions. Or, the leader that demands a ton of
the workers and leaves at 4:30pm to play golf. How about
the leader that flies first class and tells the sales
staff to stay at Motel 8? Did you hear the one about the
CEO that changed strategy about as often as he changed
his underwear? What about the really tough leader that
used only the stick and created a culture of fear and
intimidation, but was generally affable to the public,
kind of like the serial killer that neighbours said
"was really quiet and nice"?
I support a mix of carrot and stick for getting the most
out of your employees and them respecting you. It's sort
of like raising your kids. Bill Gates is the most
notorious screamer ever to be labeled an unqualified
success. What Bill was able to do was temper his
outbursts with back-patting where appropriate and
incredible, charismatic vision about the future, such
that his employees believed they were all going to be
successful. If your style is confrontational and hard
driving, you had better be able to inspire in other ways
or you will lose your employees.
could go on for hours. The common theme here is that
poor leaders will inevitably lose their credibility to
those keenly aware employees. And once that has
happened, it's game over. Investors and Board members
are usually the last to learn that the credibility has
been lost and every VC has a story about the one that
they thought was going well and then imploded suddenly,
when really it was happening slowly all the time.
leaders have differing styles and different tactics they
use for success. But they all have a common set of
elements that allow them to bubble up to the surface and
become CEOs. I have only delved one layer below the
motherhood statements about management here in order to
expose some of the characteristics of successful
leaders. Every situation in every different company
requires a unique set of skills. Often companies go
through a few CEOs before getting to be huge companies.
Without specific case studies, it's easy to generalize
and hard to get a clear answer to your specific
situation. But make sure that if you are the CEO, or you
want to be one that you look in the mirror and ask if
you are the complete package. Were you born with it?
From Last Time –
I just now came back from India and was reading your article
in BC Tech. I agree with your view. People confuse
the size of operation with local vs. global company. I
would any day prefer 5000 people IBM operation in
Vancouver vs. a 1000 people locally grown company. Ego
does not have much place in global economy.
Also, if we can create multiple small companies, grow
them and even if they get acquired, it is great for
local economy. It helps in terms of cash flows in local
economy. Key is how to make BC competitive so that
operations remain and grow in BC.
That is where countries like India are benefiting. Some
of the largest operations in India today are by
companies like IBM, GE, Accenture etc. Some of them have
grown by acquisitions. However, it has helped the
country in any case.
Thought of sharing my views.
Pankaj. You have a unique view as an active BC
technology community member along with your India-based
business. I'm not sure that everyone shared my point of
view that we don't need specific policies to keep
companies in Canada. In fact, I started out in this
business thinking with my heart. But as you experience
more and more of the globalization phenomenon, you begin
to realize that it simply does not make sense to force
the issue based on patriotism.
What Do You Think? Talk
Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
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