Why Defending Travis Kalanick Is Lame

In the wake of Uber’s slow-motion implosion and Travis Kalanick’s forced resignation as CEO, some supporters have set out to defend one of Silicon Valley’s more beleaguered “bad boys.” Current and former Uber employees showed an outpouring of love and devotion across blogs and social media; company managers urged their underlings to sign a petition for the board to reinstate him; former Yahoo CEO Marissa Mayor spoke up for him at an event in Palo Alto; and reporter Alison Griswold praised Kalanick’s behavior, calling it necessary to creating a multibillion-dollar ride-hailing empire in such a short timeframe and revolutionizing the way people get around.

Digesting these arguments made me realize how far we still have to go in terms of holding men in positions of power responsible for their meanness. So often we focus on their miraculous achievements—whether it’s a profoundly disruptive innovation or a moment of singular leadership through crisis. And shouldn’t we? Men of great power have pushed society forward and led us in new directions. (Women have done the same; they just rarely get the pass for irresponsible or destructive behavior.) We venerate powerful men for their vision and feel dependent on them to initiate progress.

Far too often, however, we willingly look past glaring pitfalls for the sake of keeping the vision alive. The reaction to Kalanick's ouster demonstrates perfectly this phenomenon. Here is my rebuttal to a few members of the TK Fan Club and their justifications for his brand of mean:

Marissa Mayer, former CEO of Yahoo
Justification: Kalanick was ignorant of sexist and toxic company culture due to Uber’s explosive expansion.
Quote: “I think he’s a phenomenal leader… I just don’t think he knew. When your company scales that quickly, it’s hard.”
Analysis: There are a couple of major flaws to the ignorance defense. Firstly, there is near unanimous consent that Kalanick “built the company in his own image.” His own personal philosophy about always winning, codified in Uber’s 14 Values, was a founding principle that shaped the company culture. While Uber’s extralegal tactics shot the hail-riding service into the Silicon Stratosphere, they also trickled down as an ends-justify-the-means ethos. The way that HR ignored Susan Fowler’s sexual harassment complaint in favor of keeping a “high performer” is merely an extension of this single-minded pursuit of the Uber vision.

Secondly, how can a CEO claim ignorance of company culture when aligning culture to values that support sustainable growth is an essential element of the job? In calling TK a “phenomenal leader,” Mayer sweeps much under the rug. Flouting local laws to get cars on the road faster across cities in the US and elsewhere would—in other situations—be called “law breaking.” What about the inappropriate emails sent to employees about drinking and having sex while at company parties? What about violating the right to privacy of a victim of sexual assault? What about the damning blog post by Susan Fowler calling out HR’s incompetence at handling sexual harassment cases, a sentiment seconded by other female ex-employees? You “don’t think he knew,” Ms. Mayer? While Kalanick clearly has significant strengths—and he may not have gotten the company off the ground without them—his weaknesses are just as tangible.

Alison Griswold, Quartz Journalist
Uber is great precisely due to Kalanick’s brash, authority- defying personality and leadership style.
Quote: “Kalanick’s role in getting Uber into those cities and onto those phones first cannot be understated. Regardless of whether Uber, still a private company, was ever truly worth the $68 billion investors said it was, the company could not have attained that valuation without him.”
Analysis: In her June 22, 2017, article for Quartz, “There Would Be No Uber without Travis Kalanick,” Griswold argues that TK is responsible for Uber’s incredible business success. But she also admits that the very brashness that has given Uber such monumental stature in the ride-hailing revolution is the reason for its mounting troubles. Her argument then rests on a short-sighted definition of success. As I discuss in Mean Men, this short-sighted view is the norm rather than the exception. So willing are the many investors, board members, executives, and the media to see start-ups get big fast, that ignoring predictable, and often dire, consequences of unethical and toxic leadership practices comes at a significant cost to sustainable growth. Since it is just as true to say that TK is responsible for the current state of affairs at Uber, which includes major controversy and law suits, puts the company’s greatness is in serious question, and that too is a reflection on Kalanick’s leadership.

Some Uber Employees
Justification: Kalanick was an inspirational figure who embraced employee ideas and uncompromisingly pursued a brave vision of the future.
Quote: “Uber is fundamentally reshaping people’s transportation habits and how they interact with their cities. This kind of impact would have been unthinkable only a few years ago, but we’ve made it a reality—thanks to your vision. So, thank you. We’ve mis-stepped at times—I’ll be the first to admit that Uber is not perfect. But the positive impact you’ve had on this company, and the world, is truly inspirational.”—Margaret Anne Seger, junior project manager
Analysis: Many employees were incredibly inspired and personally touched by Kalanick’s leadership, as the outpouring on social media after the ousting demonstrates. Clearly, TK had a way of connecting with people that made them want to follow him and invest in him. The employee testimonials almost universally praise this quality, speaking of the former CEO in glowing terms. In fact, a look at the word choice across posts offers some deeper insight. One employee uses the word “disciples” to describe TK’s supporters within Uber; another thanks him for his “guiding light”; several write in a chanting rhythm, beginning every sentence with a thank you; most are “heartbroken” by his departure. Notice the religious tone? Getting a little bit creeped out? It is not uncommon for a leader with mean-man characteristics to also be highly charismatic. Examples abound— from maverick Steve Jobs with his unpredictable temper to instigator Trump and his Make-America-Great-Again rhetoric which captured the hearts of the disenfranchised. Intense charisma—especially that which inspires an unwavering following in a select group of individuals—is a warning sign that we may be in the company of a Mean Man.

Some Uber Managers
Kalanick’s ousting is the result of the board bowing to an unfairly critical press; it does not represent the wishes of the employees, and should therefore be reversed.
Quote: “Uber is TK and TK is Uber. Without him I don’t see any other leader doing a job as good as him, external or internal.”—Uber manager (quoted in Buzzfeed article)
Analysis: Shortly following Kalanick’s forced resignation a number of Uber managers urged underlings to take action in defense of TK with the aim of pressuring the Board to reinstate the ousted CEO. They encouraged employees to email Board members Arianna Huffington, Garrett Camp and Bill Gurley and register discontent in an anonymous petition. Similar to social media posts of employee support, emails sent by managers to employees have a reverential tone toward TK with an additional desperate edge because they are also a call to action. What’s more problematic is the dynamic of people in a position of power arguing for a mini-rebellion from those in their employ against those who employ them (the Board). This act echoes the accusations of a bullying culture leveled against Uber by former employees, including Susan Fowler, wherein a dysfunctional HR department repeatedly fails to provide checks and balances to unduly exercised authority.

Chew on one BuzzFeed reader’s incisive comment about the managerial emails sent to staff members: “Managers are sending petitions to employees. Doesn't that tell you enough about the culture to run away as fast as you can? ‘Oh no pressure, and no worries that this will affect your next performance review, but would you mind signing this petition?’”

We cannot continue to praise the good without recognizing the ineffective, bad, or worse. Continuing to deify the Kalanicks of the start-up world will not bring us better leaders; it just perpetuates the status quo. I have no problem with power, and the amount of it many CEOs hold. But we have a responsibility to hold powerful men fully accountable for its misuse if we hope to see better leadership in the future.



Political Beliefs and CEO Pay

During the creation of my blog post on the next generation of women leaders, I’d expected the dawning of a new era for women leaders, and with this in mind, I wrote about the obstacles that women leaders face after they’ve made it to the top. But, despite predictions, our nation’s highest glass ceiling was not shattered last November. Of course, that post still applies to women CEOs around the world, even if not to our president-elect. Regardless of personal politics, it is obvious that the race to win the position of America’s CEO illustrated some intriguing differences between what Republicans and Democrats value in their leaders. If we wanted to drastically simplify the aims of each party, we could simply look to their candidates’ books. For instance, the title of Hillary Rodham Clinton’s It Takes a Village says it all: today’s Democrats cherish social justice and equality. Likewise, Donald Trump’s titles The Art of the Deal and How to Get Rich could provide a snapshot of what today’s Republicans prize: individualism and free markets. So while some of us were outraged when Trump’s response to Clinton’s observation that he had rooted for the housing crisis was, “That’s called business,” others of us thought such a stance denoted strong leadership.

According to Abhinav Gupta and Adam J. Wowak’s 2016 article “The Elephant (or Donkey) in the Boardroom: How Board Political Ideology Affects CEO Pay,” this diverging of ethos isn’t confined to the political realm. In fact, the business decisions made by a company’s board are just as tied to ideology. And when it comes to leadership and compensation, research shows that conservatives tend to hold the CEO responsible for a company’s success, and so they pay him or her in a way that reflects that perceived worth (i.e.: more). Liberals, on the other hand, tend to believe that the company’s success comes from a team effort—it takes a village—and the company’s spending, including the CEO’s paycheck, reflects that feeling (i.e.: the CEO is paid less). Perhaps this contributes to the fact that, according to CNBC, “the average pay for an S&P 500 CEO was $12.4 million in 2015, or 335 times the pay of a rank-and-file worker, according to a new report from the AFL-CIO,” a wealth disparity Trump’s proposed tax cuts would buoy if implemented.

This finding leads us to why conservatives might have assumed that Trump was the right man for the job: He’s rich (and he’s not afraid to brag about it. Though just how rich is still unclear). And surely he must be rich because he’s a good CEO (“good” as defined by conservatives), and if he’s a good CEO, he must be worthy of not just the corner office but the Oval Office.

Herein lies the double-edged sword—or the potential for just deserts, depending on where you lie on the political spectrum. Unlike liberal-leaning boards, which hold a CEO responsible but also take into account issues of social welfare and circumstances outside the CEO’s control, conservative board members tend to evaluate the CEO on delivery above all else. And since Trump claims that “[he] alone can fix it,” citizens will be expecting the new CEO to deliver on his promises—to make America strong again, to make America proud again, to make America safe again, to make America great again, and to make all of our wildest dreams come true.

President Hillary and the Next Generation of Leaders

No matter whom you vote for today, I think we can all agree that the next four years will challenge America’s perceptions about our country’s elected “CEO.” Today, November 8, 2016, Hillary Rodham Clinton is predicted to shatter the most fortified and multipaned of glass ceilings in the United States, joining the ranks of such leaders as former Icelandic prime minister Jóhanna Sigurðardóttir, former Thai prime minister Yingluck Shinawatra, and chancellor of Germany Angela Merkel. Of course, this otherwise momentous occasion is in many ways just one step along what promises to be a very long and bumpy road. Clinton has already accomplished an extraordinary amount in her career, all while facing challenges that her male peers did not. As they say, Ginger Rogers did everything that Fred Astaire did “backwards and in high heels.” Likewise, women in leadership roles must run countries and companies while managing the extra work created by gender bias, such as navigating expectations around “niceness” or the seemingly never-ending scrutiny of their physical appearance and personal lives. Samantha Bee’s interview of former secretary of state Madeleine Albright, Norwegian prime minister Erna Solberg, Chilean president Michelle Bachelet, Marshallese president Hilda Heine, and Croatian president Kolinda Grabar-Kitarović reveals a glimpse of just what female world leaders have to deal with beyond leading their nations.

Though the United States is a country rather than a company, there is no reason to believe bias would operate differently as our CEO and commander in chief interacts with Congress, a body whose demographics don’t vary much from the Fortune 500 in terms of female representation. On top of that, research shows that women get blamed more for corporate failures than their male counterparts. A recent article in the Wall Street Journal reports that, according to new analysis out of the Rockefeller Foundation and Global Strategy Group, the media cites the CEO as the reason for a company’s crisis 80 percent of the time when that CEO is a woman versus 31 percent when the CEO is a man. Clinton is all too familiar with the blame game, noting in the first presidential debate, “I have a feeling that, by the end of this evening, I'm going to be blamed for everything that's ever happened.”

What happens in the next four years will undoubtedly influence the course of politics and business culture—and inform the lives of women and girls—across the globe. So, what’s HRC to do when “the toll we’ve paid” to get her there “has been the most graphically sexist election in living memory” according to the New York Times, an election too many of us are quick to put behind us? Well, she could continue to name the issue. She could call out the sexism of her colleagues, as former Australian prime minister Julia Gillard did in her famous 2012 misogyny speech. She could call out sexism in the media, as Yahoo CEO Marissa Mayer did. Of course, any of those things would be on top of just being a damn good president.

That’s why Clinton shouldn’t have to do it alone. We, as her delegates, must stand up against sexism in whatever realm we occupy, whether it’s a war room or a boardroom (or a courtroom or a newsroom or a classroom or a kitchen). This is not just the job of women, or of women CEOs and elected leaders, but of all of us. We can all say enough is enough, as Michelle Obama encouraged us to do in her New Hampshire speech. We can engage in self-reflection to ensure we aren’t piling on, criticizing anything less than perfection for our women as role models or in the way they choose to grapple with certain sexism. And, most importantly, we can keep appointing and electing women to leadership positions until it is normalized, until we as constituents, board members, or frontline workers learn to judge our leaders fairly, based on competency and character, and take the “nasty” out it.

Tenure and the Ticking Clock

As of this moment, just weeks before the November election, Ronald Reagan holds the record as the oldest person to ever hold office. In a debate in 1984, he was asked a question about his age and whether he had enough stamina to keep on running the country. His famous answer: “I am not going to exploit for political purposes my opponent’s youth and inexperience.” Of course, age in and of itself doesn’t matter. Yet it is often used as shorthand in terms of that long-standing debate, argued between generations since time immemorial. Though it can take the form of suits and ties versus long hair and bell-bottoms or texting versus Facebook, the underlying clash remains the same: What is more valuable—the wisdom and accomplishment of the experienced, or the creativity and passion of the neophyte?

Now, please don’t misunderstand me—I’m not here to compare the role of president to the role of CEO. Instead, I’m interested in leadership, specifically what keeps a leader effective, no matter how long in the tooth or wet behind the ears he or she is. The question, which I go into at length on Deloitte’s website, is: When a person becomes a CEO, is it just a matter of time before he or she loses the ability to be effective and to keep the company competitive? Do all CEOs inevitably become obsolete?

In 2008, after John McCain admitted that he did not know how to use a computer—or, mind-boggling in light of the current challenges of the Clinton campaign, feel the need to email—Barack Obama’s campaign made a television ad in which they called the Republican nominee “out of touch.” Now, would his technology illiteracy have made him a bad president? Not necessarily. But what’s striking about these interviews is that McCain showed a strong incuriosity about technology in general. In an interview on CNN, he said, “I read my emails, but I don’t write any. I’m a Neanderthal—I don’t even type. I do have rudimentary capabilities to call up some websites, like the New York Times online, that sort of stuff. No laptop. No PalmPilot. I prefer my schedule on notecards, which I keep in my jacket pocket.”

Obviously, that admission was a mistake for many reasons. The fact that McCain’s wife read his emails aloud to him every night was cute, in a Leave-It-to-Beaver kind of way, but it didn’t do much for his image. Now, fast forward to 2016. According to an article published last week in the Wall Street Journal, CEOs are staying longer in the corner office, many beyond the age of sixty-four. And a recent study found that the benefits of a CEO’s on-the-job experience can be offset over time, especially if the CEO relies on go-to behaviors despite changes in the competitive environment. Plus, the negative effects of CEO tenure multiply over time, as CEOs gain power.1 In short, no matter how old or experienced a CEO is, it is up to him or her to stay in the know.

We live in a world where innovation is arguably more critical than ever before, and where advancements occur at a breakneck speed. To avoid complacency and the loss of competitive edge, a CEO must be purposeful about introspection and committed to ongoing growth. She must question her established approaches and guard against the common urge to resist the new and unfamiliar, and build a management team composed of people who value honesty, diversity, and creativity to help her do that. And, perhaps above all else, she must be curious about the people around her, the current business environment, and the future that is fast on its way.

1 Peter Limbach, Markus Schmid, and Meik Scholz of the University of St. Gallen School of Finance, “All Good Things Come to an End: CEO Life Cycle and Firm Performance,” March 31, 2016, updated from July 3, 2015.

The Audacity of Emotion

After the sudden death of her husband, Dave Goldberg, Facebook COO Sheryl Sandberg did exactly what the social networking site encourages its 1.65 billion users to do: she shared her life experience online. In a lengthy Facebook post, she marks the end of sheloshim, a thirty-day Jewish tradition for the mourning of a spouse, writing, “When people say to me, 'You and your children will find happiness again,' my heart tells me, Yes, I believe that, but I know I will never feel pure joy again. 'You will find a new normal, but it will never be as good' comforts me more because they know and speak the truth.”

Over the last year, Sandberg has publicly grappled with her feelings in several Facebook posts, with her colleagues, and even during her commencement speech at Berkeley. In April, Sandberg hosted an event for Facebook’s advertisers and their agencies. As she stood to welcome the attendees, Sandberg disclosed her struggle to find meaning during the dark days in front of a silent room of business executives. She expressed deep sorrow about her husband’s absence during a school event for her children earlier that day. Instead of putting on a good face to get through the dinner, she opened up, and spoke honestly about her pain.

This tragic experience prompted more than deep feeling; it also caused her to rethink aspects of her 2013 book, Lean In: Women, Work, and the Will to Lead. A modern women-in-the-workplace manifesto, Sandberg’s book nonetheless received a fair share of criticism for failing to address the forces of class, race, and single parenting that prevent some women from “leaning in.”

Detailed in another heartfelt Facebook post on Mother’s Day, Sandberg acknowledges how the death of her husband opened her eyes to a whole new perspective. She admitted that her book didn’t properly address the challenge of single parents. “Some people felt that I did not spend enough time writing about the difficulties women face when they have an unsupportive partner or no partner at all. They were right.” She continued by calling for improved policies on paid maternal leave and better support for single mothers.

Sandberg’s vulnerability, honesty, and willingness to share her loss with the public (and shareholders) challenges convention on what we expect from a Fortune 500 leader. While many responded favorably to her handling of the situation (the outpouring prompting Sandberg to begin penning a new book on resilience), this rare moment of emotional honesty also brought out the trolls. I was unsurprised by the detractors. After all, in the business world, success requires checking our feelings—if not our private lives entirely—at the door. We soon learn that mixing personal matters with work is unprofessional, or worse, a sign of weakness. Hold it together, hide your struggle, and absolutely do. not. cry. This mindset affects women the most, for whom showing emotion in the workplace is tantamount to career suicide.

Initially, Sandberg had her own reservations and even some of her Facebook colleagues were concerned by the possible outcomes of such a personal outpour. Would she be viewed as soft, distracted, unfit for the job? If she boldly soldiered on, there was professional risk there too. Is she that cold, heartless, an “ice queen”? Consider other recent examples. When Hillary Clinton choked up during a Benghazi hearing, she was accused of being weak and playing her “woman card” to turn down the heat. On a separate occasion, she was dubbed "Heartless Hillary" for expressing a plan to crack down on gun laws. It can seem like there is no way to win. But when one of the most powerful women in the corporate world reveals her humanity during a time of deep struggle, it makes an important social statement that challenges the future of business leadership.

Here’s the truth: women or men, we are human. A work environment that doesn’t take into account our humanity will be reflected in the health and morale of the company and affect its bottom line. If our business leaders are able to model their humanity gracefully, they create room for trust and connect with employees and customers alike.

The Fall of Theranos: The Gap Between Innovating and Optimizing

The troubles at blood-testing company Theranos continue to mount as CEO Elizabeth Holmes waits to hear if the Centers for Medicare and Medicaid Services will propose sanctions that could ban her from the diagnostics business and stop her start-up from receiving payments from Medicare. With its vision of providing comprehensive health screenings with only a few drops of blood, this former biotech darling was once valued at close to $9 billion. The promise of Theranos, of being able to streamline preventive medical care in ways previously unimaginable, seemed world changing. But after failed inspections and the threat of government sanctions, it’s looking like the dream of Theranos was just that, a dream. The evidence is mounting that the closely guarded process by which Theranos claims to be able to run a myriad of tests from a few drops of blood amounts to a fairly scattershot approach to preventive care.  

In my earlier posts chronicling the downward spiral of HR software start-up Zenefits into the ash heap of former Silicon Valley sweethearts, I discussed how the lack of an exhaustive vision can be a death knell for young start-ups, particularly when their growth goes into hyperdrive. So what’s going on here? Has Silicon Valley just become Vegas for every young wannabe entrepreneur with a half-good idea?

As a recent New York Times op-ed piece explored, the downfall of Theranos can’t only be chalked up to the foolhardiness of youth. When Elizabeth Holmes founded Theranos in 2003, she was a nineteen-year-old Stanford engineering dropout with dreams of revolutionizing health care, but since then, she has curated a board of directors whose faces could make up a veritable Mount Rushmore of business, international politics, and strategy legends. Among them are such heavyweights as Bill Frist, Henry Kissinger, and Sam Nunn. With this combination of experience (although little of it based in medicine), it got me wondering: If the young CEO had the gravitas to put together this board of directors, men who negotiated detailed international treaties and complex legislation decades before she was born, then why did they not push for more attention to detail regarding the scientific accuracy and reliability of their tests? Theranos should have obsessed over these details, when in reality it seems they were sorely neglected.

For decades, big companies thrived and survived by building formidable “castles” to protect their positions. Competitors were thwarted by incumbents exploiting competitive advantages, erecting steep barriers to entry, and building powerful organizations with scope, scale, quality, and efficiencies that could resist disruption. But these castles were not built for today’s rapid and seismic market evolution, and as a result, many have seen their walls breached.

It was in the world of massive, seemingly impenetrable, bureaucratic medical laboratories that Ms. Holmes saw the weakness she could exploit. Small start-up businesses like Theranos thrive and survive by creating discontinuous innovations—sidestepping barriers to entry by creating new markets, wresting customers away from established organizations by offering them compelling new value propositions (like pain-free blood testing). But companies like Theranos have their own Achilles’ heel. They are organized for innovation, but not for efficiency and attention to detail.

While these companies have the ability to pivot more quickly than their larger, more established peers, they struggle with—or sometimes completely avoid—developing the ability to optimize operations by becoming as efficient as possible as quickly as possible once a disruptive innovation has proven successful. The problem here is with Theranos’ “success.” In offering a radically new approach to medical testing that positively transforms the patient experience, Theranos succeeded. But that success matters little if the test results for life-threatening illnesses are unreliable.

A decade plus of academic research is illuminating the fact that what organizations must develop to be successful in the long run is the capacity to become ambidextrous: those who cultivate this quality can optimize organizational efficiencies and quality services for their customers and devote resources to riskier endeavors that become the source of new innovations (experiment). Furthermore, companies that can successfully pull this off once can replicate the process for future cycles of innovation/optimization.

Unfortunately, Elizabeth Holmes is not instilling confidence that she can lead the organization through the tensions in these inherently oppositional activities. If she were hyping a compelling new app or game and it just wasn’t ready for prime time, we probably wouldn’t blink an eye. But the consequences of this business reach much further. She has shown that she can innovate (the experimentation side of the equation) but her ability to optimize seems weak, a catastrophic failing if you hold people’s health in your hands.

One hopes Holmes will learn from this humiliating debacle. After all, the wisdom to innovate and optimize—rather than only innovate—is most often forged by years, even decades, of failing and regrouping. Most start-ups now need to do both. It wasn’t until Steve Jobs was ousted and then returned to his company that the vision of Apple truly blossomed. From what past mistakes in the field of biotechnology and life could Holmes draw upon to improve the process? She and her board members should have been paying obsessive attention to not only disrupting a bloated, byzantine health care industry but also following through on the heady promises the company made to those who trusted them: namely that they would take a commitment to their well-being seriously. Optimizing your company’s processes might not land you many headlines, but failing to do so certainly will—just for all the wrong reasons.

How Myopia Can Stall Your Vision

One reason that many CEOs remain skeptical of the vision process despite copious evidence that it leads to success is because they’ve seen it fail many times before in other organizations they’ve worked for, or perhaps even in their own. So where does the process break down? How can you avoid the pitfalls that keep an organization from successfully implementing a vision? To begin with, let’s consider two data points that seem, at first blush, to be contradictory. One study found that 94 percent of CEOs report “a great deal of discomfort working with the vision process.” A second study, conducted by the Conference Board, polled seven hundred global CEOs and found that, for the past three years, their number one marketplace and management issue was “engaging employees in the vision.” Perhaps what both studies are saying, from the executive perspective, is that “I believe in the need for vision, but I cannot get myself in gear to make it happen.” Connecting the desire to create and implement a vision with the internal energy necessary to get over all the barriers can be immensely frustrating, as I’ve seen over and over again in my work as a management consultant.

I remember a conversation I had at a dinner years ago that has stuck with me ever since. I was seated next to the chief marketing officer of a Fortune 50 company, who confided to me how alone he felt at the top: “We’re hitting our revenue targets, we have obscene share of market in most of the areas in which we operate, but our stock price doesn’t reflect how well we’re doing. The outside world doesn’t understand who we are, why we’re unique, how all our pieces fit together, and what we stand for. On the inside, we’re operating like sixty different silos. My CEO says our vision is to provide shareholder return . . . but that’s no vision; shareholder return is something that we get rewarded for as a result of executing against a proper vision. I’ve got to believe he has some vision of who we are. [long pause] But he can’t unlock his thoughts and feelings about it to us. And if he can’t begin to get us thinking about a real vision, then I’m afraid of what lies ahead.”

When it comes to executing a plan for growth, most CEOs can talk the talk. Vision committees crank out vision statements and post them on their websites and on the walls of conference rooms. Usually, however, this is about as far as the process gets. And that is where the cynicism so many have for the corporate vision takes root. Having a shiny paragraph that articulates a vision is far cry from weaving that vision into the daily fabric of organizational life, which is what makes the difference.

When relatively superficial—what I call myopic—visions are used as a rallying cry for the troops, the vision process isn’t unleashed with the full force and power it’s capable of, and the transformative power of the vision is left untapped.

My experiences with CEOs and executive groups have made me realize that it’s often difficult for them to stretch their thinking toward the future. They’re grounded, realistic people, more drawn to the idea of a mission, which enables them to describe what an organization does, rather than toward a vision, which forces them to describe why their organization does what it does. The former feels comfortably action oriented and masculine, whereas the latter is more thoughtful, vulnerable territory.

My Fortune 50 dinner companion commiserated further: “Just because we’re so obsessed with planning, tinkering with our plans every year, and holding division leaders accountable for achieving their plans, the executive suite has a collective mentality that we’re very strategic. Because the culture has us so focused on planning, they think that’s visionary! As head of marketing, I need to position the corporate brand with a far longer horizon, but I’m clueless how to do that when everyone’s thinking about next year or barely five years out.”

Henry Mintzberg, a management professor at McGill University, found that strategic plans invariably fail when there is no overarching vision driving them. Not only do they fail to motivate those within the company to reach further and be their most innovative, and to pull together disparate parts of an organization, but they also fail as analytic planning documents. (The Rise and Fall of Strategic Planning, Free Press, 1994).

Visions that truly motivate an organization must describe the desired long-term future of the organization, a future that typically feels out of reach in the moment, but also not so fantastic as to seem like a pipe dream. Developing a vision requires imagination, a mental capacity for synthesis, a trust in intuition, and a deep emotional commitment to that desired future. And this is partially why the vision development process is such a leadership balancing act—and another reason why it can be so hard to implement. Visions need to challenge people and evoke feelings that draw them toward wanting to be a part of something greater than themselves.

When a vision is framed as something that is achievable within a set amount of years, particularly less than a decade, then it falls into the terrain of a strategic plan. That is why the overwhelming majority of organizational visions fail to deliver the impact: they are rational, time-bound, and highly impersonal. For vision to inspire, it has to reach—if only ever so slightly—beyond one’s grasp.

Why Having a Clear Vision Is Crucial to Success

I’ve spent lots of time on this blog discussing what makes a bad leader, enumerating all the ways that CEOs can undermine those who report to them by being controlling, manipulative, and undermining. But what about the flip side? What makes an inspiring leader? I’m not talking about charisma, which plenty of mean men possess in spades. Every effective leader I’ve seen in my decades of working as a management consultant has had one huge thing in common that differentiates them from all the others: vision. A confession. Though it’s fairly accepted that vision is a necessary element of leadership now, I didn’t believe in “the vision thing” when it first became a trend in management circles in the 1980s. When the idea first started getting buzz, I suspected the notion of organizational vision might be just another fad. I’m inherently skeptical of any new silver bullet that promises to cure a range of organizational ills, and back then vision was the cure-all du jour. Yet, after a few years as a cynical consultant, I found myself intrigued by the staying power of the idea. However, broad studies analyzing the impact of vision were nonexistent at the time. I still found the idea of vision as a management tool a bit “squishy,” but I didn’t have the data to prove it. A good vision seemed to be something that—similar to the old saying about pornography—one knew when one saw it; the criteria were too vague to be useful.

As a management professor, I decided to take it upon myself to confirm my own suspicions and prove that having a vision would have no noticeable difference on organizational performance. But a year into the first leg of my research project on the impact of vision, I started to see some very surprising data. My hypothesis, I began to realize, was dead wrong. Contrary to my expectations, I found that a well-articulated vision, when implemented throughout an organization, had a profoundly positive impact. Data doesn’t lie, and I found myself converted from skeptic to true believer. As my research continued and I uncovered some of the key characteristics of a successful vision (which I will enumerate in a separate post), I was able to begin testing some of the best-practices results with a range of organizations in the private, nonprofit, and public sectors. Consistently, I found that once senior executives were able to break through the natural barriers of resistance that often bring the process of developing a coherent vision to a screeching halt, they too became believers.

The data is convincing for any CEO invested in the bottom line. Publicly owned firms that use a vision to guide their growth have significantly higher market-cap, top-line, and bottom-line growth in comparison to their competitors who aren’t driven by the vision process. Firms with a vision were twice as profitable as the S&P 500 as a group, and their stock price grew at nearly three times the rate of others. An analysis of average compounded total return found the vision-driven firms earning their investors 17.69 percent more than the S&P 500 overall. A well-conceived and well-implemented vision doesn’t yield this kind of bottom-line performance magically. It results from the ways in which employees are challenged by the vision and remain focused on a clear, yet distant target. These firms had higher productivity per employee, greater levels of employee commitment, increased loyalty to the firm, greater esprit de corps, clearer departmental and/or organizational values, and a greater sense of pride in the organization.

Some executives I meet still regard vision as “squishy,” assuming it will be too difficult to quantify. But my research and experiences over the past decade make a nearly incontrovertible case that the vision process has a profound impact on organizational performance. Better still, that performance is measurable.

So what gives? Why do so many CEOs believe in the need for vision yet fail to follow through on the process to develop and implement one? The reason there is cynicism about “the vision thing” is less about the actual failure of a vision than it is about a leadership failure I call The Believing-Doing Gap: while there’s a lot of talk about vision, few at the helm actually follow through on the work required to bring their vision to life.

The vision process—when fully executed—demands a considerable amount of emotional engagement that I find many executives are ill prepared for. Most become myopic when it comes to vision. A successful vision is not simply a question of crafting a few paragraphs of verbiage that sound snazzy on a website’s home page. A successful vision requires personal passion about how you want to make an impact on the world—whether you run a corporation, a nonprofit, or a government agency. Regardless of the organization’s motive (to make money or provide social good), there must be clarity about what you want to change or create. Without substantive ideas and concrete actions, the process becomes a joke, often backfiring on the leader responsible as others become cynical. As long as the gap between believing and doing persists, no vision will be effective.

So what does a successful vision look like? A guiding vision should be broad enough that it speaks to everyone in the organization, while telling an engaging story that people want to be a part of, one that challenges them and creates a sense of urgency. But the words are not enough. Success comes when the vision becomes embedded in the daily decisions made and actions taken by leaders at all levels of the company. A vision is not merely an extended strategic plan or mission. If a mission is what you do, a vision is why you do it. When we see a vision that is working, guiding an organization to sustained growth, we know that behind it are leaders who are comfortable leading with their hearts as well as their heads.

In the next few weeks, we’ll take a closer look at common pitfalls of the vision process, as well as some secret shortcuts and tension reducers that I’ve used to help executives frame the vision that fits both them and their organizations. I hope to help you hone in on your own vision for the coming year.

Five Reasons Humility Is Key to Being a Good CEO

One popular conception of the CEO is of someone ubermasculine, dominant, and aggressive. From Elon Musk to Donald Trump to Harvey Weinstein, c-suites throughout the world are littered with examples, all compounding our notion that to be successful, you have to be domineering and even arrogant. Mountains of new evidence suggest otherwise, however, and it’s becoming more accepted that good leaders have empathy. But what about humility? Although in many ways, this quality is at odds with how we think of leaders, in some new leadership research, I’ve come across compelling data* that suggests the ability to be humble is not only helpful to good leaders, but also essential to a company’s bottom line. Here’s why:

1. They Put Collective Goals Above Their Own

 Humble CEOs are often just as ambitious as their megalomaniacal counterparts, but they seek success for the whole organization and yearn to be a part of something greater than themselves. This is in marked contrast to those CEOs who are driven by accumulation of wealth, personal adulation, and celebrity status. Humble CEOs have an awareness of their smallness in the grand scheme of things. Unlike some of the characters we see making headlines for their flagrant abuse of power, these CEOs don’t consider themselves above moral laws and deeply value their connection with the larger community.

2. They Can Take Feedback, Even When It’s Negative

 Arrogant CEOs resist being questioned, and anyone who does so is likely to get serious blowback; it’s the entire reason whistle-blower laws exist. Humble CEOs, on the other hand, place a high value on continuing to learn and improve, and therefore seek an honest understanding of their own strengths and weaknesses. They understand not only the humanity and limitations of others, but also their own. This makes them both more open to new ideas and feedback from others, and less likely to lose perspective and destroy a company because they can’t accept their own fallibility.

3. They Value Their Team

 Humble CEOs are more likely to trust and empower their top management teams. Rather than surrounding themselves with yes-men and yes-women who would never question them (I’m looking at you, Dov Charney) and centralizing their power, humble CEOs know that an organization’s success doesn’t hinge solely on their brilliance. They’ll hire smart, capable, competitive people and then involve them in big decisions, sharing power and credit. Companies run by humble CEOs are also much less likely to have outsize pay disparity within their management structure, something that can cause bitter internal battles and spell disaster for a company.

4. They Make for Balanced Leaders

 CEOs must have certain qualities to attain a position of power. Drive, ambition, and other characteristics from the List of Ten are all likely to show up in the personality makeup of anyone who has risen to the top of an organization. But mean men from Steve Jobs to Lance Armstrong show us what it looks like when these qualities run amok—verbally and psychologically abusing others, throwing temper tantrums, and manipulating those around them—it’s not pretty. But the right amount of humility in a leader can temper these other qualities and help a leader keep his or her emotions in check, as well as keep them from taking outsize risks. Because the good of their organization—not their personal glory—remains their top priority.

5. They Play Well With Others

 Studies have linked employer humility to employee engagement and team integration: two defining characteristics of a company’s long-term health and success. Humble CEOs set an example that others want to follow and engender more goodwill than their bombastic, ruthless counterparts. Because they appropriately value their team members (and don’t overvalue their own contributions), humble CEOs can facilitate mutual trust and discourage infighting. Because they deeply value the organization and everyone in it, they’re able to create a shared vision so that when the company succeeds, everyone feels they had a hand in it.

 As scholars begin to look more carefully at humble CEOs to see if they really make a positive difference in organizational performance as compared with their blowhard counterparts, the emerging data points to “yes.” Not only have executive teams been shown to be more integrated when the CEO is humble, but early indicators from long-term studies are pointing to a significantly greater inclination for these senior teams to deal with market disruption and innovation more effectively.

As more hard data comparing narcissistic and mean CEOs with their humble counterparts makes its way through the research pipeline, rest assured we’ll be sharing it here.

*“Do Humble CEOs Matter? An Examination of CEO Humility and Firm Outcomes” by Amy Y. Ou, David A. Waldman, and Suzanne J. Peterson from the Journal of Management.  

The Irony of Accountability: It’s About the Money, Not the Meanness

The best evidence of how much latitude mean men are given lies in the stories of how most of them finally fall. Rarely are they brought down for being mean; often they are ousted only when they stop hitting home runs—or when they take their bat and bludgeon someone so publicly and so badly that keeping them around becomes a liability. Dov Charney is a poster boy for the irony of accountability: he wasn’t forced out of American Apparel because of his well-known and longstanding record of sexist and outrageous behavior; he was forced out because he was driving the company into financial ruin. He is living proof that in today’s era of bottom-line triumphalism, as long as you are making a lot of money for shareholders, investors, and owners, it’s OK to be an ogre.

Peter Arnell heaped abuse on employees for years, and Omnicom—the company that had purchased his entrepreneurial branding firm, the Arnell Group and trusted him to lead it—turned a blind eye. It was only when Arnell began to take embarrassing and costly advertising missteps that Omnicom “suddenly” woke up. What sunk this infamously nasty CEO? It wasn’t his violent outbursts within the office or even the lawsuit filed against him by four former female employees—it was orange juice.

When the Arnell Group won the PepsiCo contract to design new logos for both Pepsi and Tropicana, the design for the former drew mixed reactions, but the design for the latter caused thousands of Americans to practically lose their breakfast. Customers complained that the new labeling was so different they couldn’t find Tropicana on the shelf.

The blogosphere exploded with criticism aimed at Arnell: “Give us back our orange with a straw in it!” One blogger went so far as to call him “the Bernie Madoff of brands.”

Just weeks after the new design’s launch, Tropicana announced it would revert to its old packaging. The company lost millions of dollars.

It was around this time that the infamous Mona Lisa memo Arnell had written to PepsiCo was made public. With its references to the famous painting—and to the Parthenon, the golden ratio, the relativity of space and time, the “gravitational pull” of a can of Pepsi on a supermarket shelf, and the rate of expansion of the universe—some thought the memo was a joke. It wasn’t.

Most people in Arnell’s position would have hidden in shame and embarrassment or offered an apology to the American public, but as is typical of narcissistic mean men, Arnell responded to critics by saying: “What the hell—I got paid a lot of money.”

He was fired soon thereafter from the group that bore his name but has recently resurfaced. We’ll see how that goes.

We know it takes a while for bullies to get their comeuppance. Mean men rarely retract their claws; they dig deep into their organization’s flesh. They possess their company’s culture. Demon, monster, beast, ogre, asshole—there are multiple labels for mean men, and they’ve heard them all and do not care.

Former Sunbeam CEO Al Dunlap, known as Chainsaw Al, was notorious for his mass layoffs, but as long as share prices rose, none of the higher-ups were asking him to stop. Interestingly, Jon Ronson interviewed Dunlap for his book The Psychopath Test, and, though admitting he is not a psychologist, reported that “Mr. Dunlap scored positive in category after category.” Ronson noted: “The morning continued with Al redefining a great many psychopathic traits as leadership positives.”

Longtime business journalist and editor John A. Byrne wrote: “In all my years of reporting, I had never come across an executive as manipulative, ruthless, and destructive as Al Dunlap. Until the Securities and Exchange Commission barred him from ever serving as an officer of a public corporation, Dunlap sucked the very life and soul out of companies and people. He stole dignity, purpose, and sense out of organizations and replaced those ideals with fear and intimidation.”

Byrne knew how Dunlap felt about him too: “He once told a reporter for the New York Times, ‘If he were on fire, I wouldn’t piss on him.’”

What did it take to get Dunlap to leave? Numbers.

Chip Wilson, founder of Lululemon, is best known for making outrageous comments, insulting women’s bodies—insisting some women were not made to wear the clothes his company produces—and claiming it was “funny” to hear Japanese people talk about his brand “because they have a hard time pronouncing their Ls.” Children who lived on the streets or in developing nations, Wilson believed, needed money—so perhaps child labor laws should be loosened.

This inhumane man got away with saying all this until the public had enough. Lululemon made the 2014 Ten Most Hated Companies in America list, and stock prices dropped. Perhaps Wilson’s behavior is less offensive than that of the others mentioned here, but it is still not suited to the top of the C-suite.

Mean men are everywhere, and only a small portion of the worst offenders are in jail. Many, like Arnell, remain dormant for a spell, only to resurface like the undefeatable creatures they are. For a nation fixated on teaching its children not to bully one another in school, we seem to swallow the adult-bully-as-workplace-genius pill whole.

But social media has mobilized power to the people. Non-shareholders, non-investors, and non-yes-men and women can raise significantly more public outcry now than they could in the past—meaning that some mean men are being held accountable sooner than they might have been just five years ago.

Perhaps the tolerance for psychopaths who belittle, berate, harass, and destroy others is decreasing—especially as study after study shows that this kind of behavior is ineffective. But any tolerance for this level of cruelty in the workplace begs the question: Why do we continue to accept it at all?

Risky Business: The Cost of Hubris

Entrepreneurs aren’t hard to spot. They’re the ones out there on a limb, balancing on one toe and pirouetting while spinning a stack of china plates on a stick—fifty feet above a shark tank. Many successful companies wouldn’t exist if their founders hadn’t taken bold chances, but an appetite for risk is yet another entrepreneurial character trait that can backfire in a big way. The chance that a risk taker will bring a company he helped build up straight down is especially high in the case of mean men who think nobody can top them or stop them.

Don Hambrick and Arijit Chatterjee have spent years studying narcissistic CEOs. Their article “It’s All about Me: Narcissistic Chief Executive Officers and Their Effects on Company Performance” is based on research they conducted on 105 technology companies. They analyzed the following:

  • Annual report: How often was the CEO’s photo plastered in its pages?
  • Media strategy: How often did the CEO put himself front and center in the media, and how often did he use pronouns such as I and me in press interviews?
  • Paycheck and bonuses: What was the CEO’s compensation as compared to the next-highest-paid individual in the firm?

Taking into account the above factors, Hambrick and Chatterjee then compared these observed levels of CEO narcissism with the decisions those CEOs made and the performance of their companies.

Hambrick and Chatterjee found that rather than creating a strategy focused on generating long-term sustained growth and meeting the needs of various stakeholders, malignant narcissist CEOs tend to choose options with the greatest potential for garnering applause, favoring grandiosity over stability. Malignant narcissists make larger and more frequent acquisitions than their non-narcissistic counterparts do, and they prefer the big, attention-getting, often-risky deals.

These CEOs may be cocky and mean, but they are crying out, “Look at me! Love me! Revere me!” They want the attention, regardless of the risks.

Risky behavior can place companies in the crosshairs of government regulators, generate devastating press, or both. All it takes to destroy a brand these days is one tweet that goes viral: just look at poor Justine Sacco.

Because of their hubris, mean men are more likely to break laws and expose their firms to legal liabilities. Even companies and CEOs that seem untouchable get caught. In 2010 Apple found itself under public scrutiny as revelations surfaced that the company—under Steve Jobs’s leadership—had conspired with other Silicon Valley firms to forge an agreement not to poach one another’s employees. This move not only kept wages down but also was in violation of antitrust laws.

Herbert Hovenkamp, a professor at the University of Iowa College of Law, called Jobs “a walking antitrust violation.”

This was case in addition to Apple being found guilty of “facilitating and executing” a conspiracy to fix e-book prices for its own gain. Hovenkamp noted that Jobs’s behavior in both cases was “bold,” saying, “You see this kind of behavior sometimes in small, private, or family-run companies, but almost never in large public companies like Apple.”

Clearly, Jobs was a risk taker. Some of the risks he took resulted in the creation of the leading innovations of our time, but others, such as deciding to backdate stock options at Apple and Pixar in order to increase their value, resulted in jail time for executives at both companies. Jobs was never charged.

As is typical of mean men, Jobs didn’t think that rules meant for ordinary people applied to him. New York Times columnist James B. Stewart wrote: “Mr. Jobs’s conduct is a reminder that the difference between genius and potentially criminal behavior can be a fine line.” As Jobs once infamously said, “I’d rather be a pirate than join the navy.”

Research correlating risk taking with narcissism offers further insight into ousted American Apparel CEO Dov Charney. It’s hard enough to trust a CEO who, amongst many other reported vulgarities, once said, “I frequently drop my pants to show people my new product,” but it was Charney’s lies to the SEC and use of undocumented workers that produced the biggest liabilities for the company, which prided itself on its labor force.

The entrepreneurs and mean men out there on those tree limbs may be dashing risk takers, but they can also be self-confident to the point of being dangerous.

As I’ve observed time and time again, mean men exhibit a higher degree of need than most of us in many areas of their lives—it’s part of what drives them. Mean men take risks, in part to get attention, and in part because they believe they cannot fail. Some of the risks they take pay off well, but many have damaging results that ripple across the lives of employees, stockholders, friends, and loved ones.