First, reference Leadership vs Management
For years, I’ve been repeating the same things about the job of the CEO:
1. Set the vision and communicate the hell out of it 2. Get the right people on the bus and hold them accountable 3. Don’t run out of money
It sounds nice, doesn’t it? Definitely holds up…I mean I’ve literally said it 100x over the last decade. But, is it the job of a Leader? I don’t think so. In fact, I actually don’t think most CEOs I know are actually good Leaders. To put it bluntly - you can be an excellent CEO and a terrible Leader.
I’m still working through the definition, but I think Leadership is something like:
1. Tell the truth
2. Fight entropy Keep it simple Simplify
3. Don’t run out of trust
Let’s take them one at a time.
First, the struggle of being a CEO and telling the truth. Sharing a reality-distorting vision isn’t usually true, per se. It’s mostly just directional. Then CEOs get praised, raise money, close candidates while bending the truth and all of a sudden, they’re believing their own bullshit and lose track of what’s true in light of what could be true.
The bigger the gap between what a CEO says externally and what’s actually happening internally - let’s call it the Vision Gap - that’s the failure mode. The bigger the Vision Gap the more trust is lost, the more trust is lost, the worse the culture, the worse the culture, the worse the performance, and it spirals from there.
So why not just tell the truth? Well, first off, because for most CEOs the answer would be “I think this is the best way to make money.” Second, because everyone - the media, candidates, investors, etc - everyone wants them to tell a story. A story about a Noble Mission.
No one wants to hear the CEO say, “look this company is a trade for me, I own the majority of the company and I try everyday to figure out how to sell it or get to a liquidity event for myself!” But this is the truth for 90%+ of CEOs I’ve met. Sample size is something in the thousands…
Ok so that’s the tradeoff between vision and truth telling. Let’s tackle the second one - hiring vs simplification. A CEO loves to hire and “grow headcount” because it’s correlated with growth, success, and it feeds the ego. “Look at all these people that want to work for me!” or even worse “If we can hire more people then we can do more MORE THINGS!” Meanwhile, Leaders know that more people = more problems and try to fight entropy / complexity at every turn.
Last difference. Hang in there. A CEO thinks about money as the fuel for their organization whereas a Leader thinks about trust as the fuel. I’m not going to get stuck in Capitalism vs Ethics, but boy, this tradeoff is perhaps the most stark. Most CEOs are forced to play Finite Games - get to the next milestone, the next quarter, the IPO, etc. Meanwhile, Leaders are focused on the people in the organization and building and maintaining trust. An infinite game.