July 23, 2020

Startup CEO, Second Edition Teaser: The Importance of Authentic Leadership in Changing Times

As I mentioned the other day, the second edition of Startup CEO is out.  This post is a teaser for the content in one of the new chapters in this edition on Authentic Leadership.

As I mentioned last week, the book went to press early in the COVID-19 pandemic and prior to all the protests around racial injustice surrounding the George Floyd killing, so nothing in it specifically addresses any of those issues.  In some ways, though, that may be better at the moment since the book is more about frameworks and principles than about specific responses to current events. Two of those principles, which are timeless and transcend turmoil, uncertainty, time and place, are creating space to think and reflect and being intentional in your actions. In a world in which CEOs are increasingly called upon to deal with more than traditional business (pricing, strategy, go-to market approaches, team building, etc.) it’s imperative to approach and solve challenging situations from a foundation that doesn’t waver. 

At Return Path our values were the foundation that provided a lens through which we made every decision. Well, not every decision, only the good ones. When we strayed from our core values, that got us into trouble. The other principle, outlined in Chapter 1 of the Second Edition, is leading an organization authentically.

Let me provide a couple concrete examples of what I mean by “Authentic Leadership” since the term can be interpreted many ways.

One example is to avoid what I call the “Say-Do” gap.  This is obviously a very different thread than talking about how the company relates to the outside world and current events.  But in some ways, it’s even more important.  A leader can’t truly be trusted and followed by their team without being very cognizant of, and hopefully avoiding close to 100%, any gap between the things they say or policies they create, and the things they do.  There is no faster way to generate muscle-pulling eyerolls on your team than to create a policy or a value and promptly not follow it. 

I’ll give you an example that just drove me nuts early in my career here, though there are others in the book.  I worked for a company that had an expense policy – one of those old school policies that included things like “you can spend up to $10 on a taxi home if you work past 8 pm unless it’s summer when it’s still light out at 8 pm” (or something like that).  Anyway, the policy stipulated a max an employee could spend on a hotel for a business trip, but the CEO  (who was an employee) didn’t follow that policy 100% of the time.  When called out on it, did the CEO apologize and say they would follow the policy just like everyone else? No, the CEO changed the policy in the employee handbook so that it read “blah blah blah, other than the CEO, President, or CFO, who may spend a higher dollar amount at his discretion.”

What does that say about the CEO? How engaged are employees likely to be, how much effort are they willing to devote to the company if there are special rules for the executives? You can make any rule you want — as you probably know if you have read a bunch of my posts or my book over the years, I’m a proponent of rule-light environments — but you can’t make rules for everyone else that you aren’t willing to follow yourself unless you own the whole company and don’t care what anyone thinks about you or says about you behind your back.

Beyond avoiding the Say-Do Gap, this new chapter of the book on Authentic Leadership also talks about how CEOs respond to current events in today’s increasingly politicized and polarized world.  This has always felt to me like a losing proposition for most CEOs, which I talk about quite a bit in the book.  When the world is polarized, whatever you do as CEO, whatever position you take on things, is bound to upset, alienate, or infuriate some nontrivial percentage of your workforce.  I even give some examples in the book of how I focused on using the company’s best interests and the company’s values as guideposts for reacting (or not reacting) to politically divisive or charged issues like guns or “religious liberty” laws.  I say this noting that there are some people who *believe* that their side of an issue like this is right, and the other side is wrong, but the issues have some element of nuance to them.

Today’s world feels a bit different, and I’m not sure what I would be doing if I was leading a known, scaled enterprise at this stage in the game.  The largely peaceful protests around all aspects of racial injustice in America in the wake of the murder of George Floyd — and the brutality and senselessness of that murder itself — have caused a tidal wave of dialog reaching all corners of the country and the world.  The root of this issue doesn’t feel to me like one that has a lot of nuance or a second side to the argument.  After all, what reasonable person is out there arguing that George Floyd’s death was called for, or even that black Americans don’t have a deep-seeded and widespread reasonable claim to inequality…even if their view of what to do about it differs?

I *think* what I would be doing in a broader leadership role today is figuring out what my organization could be doing to help reduce or eliminate structural racial inequality where we could based on our business, as opposed to driving my organization to take a specific political stand. I know for sure that I wouldn’t solicit feedback from a select group of people only, but I would create a space where voices from across the organization (and stakeholders outside of it as well) could be heard. That’s not a solution, but a start, and in challenging times making a little bit of headway can lead to a cascading effect. It can, if you keep the momentum.

And, in line with “authentic leadership,” it’s okay to admit that you don’t have the answers, that you might not even know the questions to ask. But doing nothing, or operating in a “business as usual” way won’t make your company stronger, won’t open up new opportunities, won’t generate new ideas, and won’t sit well with your employees, who are very much thinking about these issues. 

So, in today’s challenging times I would follow my own advice, be thoughtful and reflective, and intentional in searching for common solutions.  I’d try to avoid “mob mentality” pressure — but I would also be listening carefully to my stakeholders and to my own conscience.

In the coming weeks, I’ll write posts that get into some of the other topics I cover in the book, but none of them will be as good as reading the full thing!