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.

What Comes Before a Fall: Lessons from the Growth and Crash of Zenefits

If you have even a passing interest in the tech industry and start-up culture, you’ve certainly heard about the unfolding crisis at formerly golden start-up Zenefits. The company—a producer of web-based software to help small businesses manage their human resources operations—made big news last year when they raised $500 million in one round of funding, at a valuation of $4 billion. The growth of the company over the past couple of years has been astronomical: they went from a total of fifteen employees at the end of 2013 to a reported sixteen hundred late last year. Perhaps unsurprisingly, the growth has caused some serious issues, and CEO and founder Parker Conrad was asked to step down two weeks ago amid scandalous reports of employees being encouraged to cheat on their insurance broker licensing exams (even being given software to help them do so), overimbibing during the workday from company-provided kegs, and having sex in the stairwells of the office building.

Conrad’s resignation from the company allegedly brought tears of relief—not sadness—from beleaguered employees, many of whom are wholly unqualified for the work they’ve been asked to do (a reported 80 percent of Zenefits’ Washington transactions were claimed to be unlicensed). Strangely for a technology company, Zenefits seems to have attempted to solve its woes by adding even more employees to fix problems manually, rather than fully debugging systems when breakdowns took place.

Some of the details of Zenefits’ (and Conrad’s) downfall may be shocking—drinking on the job as a company norm, disregard for regulations in a company that handles something as sensitive as health insurance—but to anyone accustomed to working with entrepreneurs, especially those operating in the high-stakes pressure cooker of Silicon Valley, this outcome is anything but a surprise.

Certainly Zenefits’ rise and crash was helped along by the trend of outrageous VC funding for Silicon Valley start-ups, but the heart of their problems is nothing new. This is simply what happens when there is not an effective, embedded vision at the crucial juncture where scaling meets speed. Zenefits began as a Software as a Service company devoted to helping small businesses combat the onerous red tape of HR issues, health coverage in particular. An honorable enough mission. But as they scaled with lightning speed, they began taking on businesses with hundreds of employees, long before they were equipped with the culture necessary for handling them and the organization’s scaling to that level. Growth became the only imperative, at the cost of quality, employee morale, and even lawful practices.

The current climate in Silicon Valley prizes the “get big fast” mentality, but it’s worth asking, is growth always the ultimate goal? David Packard, the cofounder of Hewlett-Packard (HP), wrote in his memoirs that over the years he and Bill Hewlett had “speculated many times about the optimum size of a company.” They “did not believe that growth was important for its own sake” but eventually concluded that “continuous growth was essential” for the company to remain competitive. One reason growth was a matter of survival was because HP “depended on attracting high-caliber people” who wanted to “align their careers only with a company that offered ample opportunity for personal growth and progress.” Growth for the sake of attracting and keeping great people would become a factor for virtually all firms in technology-driven fields. When the firm introduced “the HP way” in 1957—essentially a manifesto for its future—it emphasized growth “as a measure of strength and a requirement for survival.” While Carly Fiorina trash-talked the original culture and called it an adorable artifact of an older time, she was no paragon of leadership during her tenure there, and the company suffered under her watch.

Most companies understand that growth is essential for survival for the very reasons Packard put so succinctly above. But few know how to reconcile the need for growth with the external and internal pressures to grow very quickly—especially with a group of big-time venture capitalists breathing down one’s neck. Building any large and sustainable corporation requires a considerable organizational transformation rather than a predictable set of linear stages. Building it quickly diminishes the odds that it can weather the growing pains of that transformation, as we can see so clearly in Zenefits’ unraveling. “More businesses die from indigestion than from starvation,” Packard said.

Start-ups are not just large businesses in miniature, and their trajectories do not necessarily point to either size or longevity. Rather than relying on opportunistic adaptation to exploit niche opportunities, their existence depends much more on formulating and implementing ambitious strategies that prepare the firm for the longer term. Put another way, the transition of a fledgling business into a large, well-established corporation requires nothing less than a series of fundamental yet relatively seamless transformations, nearly impossible to pull off in a period of eighteen months or so as Zenefits attempted to do.

Well-articulated visions guide these transformations so they are not experienced as traumatic surprises. Unfortunately, there are relatively few exceptional entrepreneurs with the capacity to conceptualize, articulate, and relentlessly manage with a vision and survive the steep challenges wedded to accelerated growth.

Maybe—just maybe—there’s a degree of maturity, insight, and future focus that’s not just about EBITA growth. Zuckerberg got that in his twenties, and he turned Facebook into a growth machine. The Google guys got it too, in their youth. They were smart enough to turn the reins over to Eric Schmidt, who would successfully guide the firm’s growth.

But perhaps the real lack of maturity rests with shortsighted venture capital firms and boards. They’re the ones who drove the wild growth and then kept Mr. Conrad in place until the shooting star was crashing back to Earth.

Mark Driscoll: The Teflon Mean Man

Mark Driscoll has been back in the news this month after announcing that he will be launching a new megachurch in Phoenix. Perhaps he’s hoping his new hometown is far enough south of his old stomping grounds in Seattle that people won’t care as much about the trail of wreckage he left there. I originally wrote about Driscoll last summer, but with the unstoppable egomaniac back in the limelight, I thought his misdeeds were worth revisiting. Mark Driscoll started a Bible study class in his home in the Wallingford neighborhood of Seattle in 1996. By August of 2014, he’d grown his operation, Mars Hill, into a megachurch, at its height counting thirteen thousand attendees across five states. He preached to a packed crowd at Seattle’s CenturyLink Field (home of the Seahawks), guested on prime-time national television, threw out the first pitch at Mariners’ baseball games, and turned his brand into a franchise. Brand is Driscoll’s word, by the way, not mine. Among the other Mars Hill pastors, he would often refer to himself as “The Brand,” making it crystal clear that Mars Hill would always be about “me in the pulpit holding the Bible.”

His precision branding, matched with his ability to scale his enterprise, would make any business entrepreneur blush with envy.

Driscoll appealed to the young families who showed up to worship with him in jeans and flip-flops, those disenchanted with more established versions of organized Christian movements. Known as the “hipster pastor” with his charismatic, edgy rhetoric, dressed-down blue jeans style, and family of seven, Driscoll knew and embodied his market. He had a reverence for Jesus and a seeming irreverence for everything (and everyone) else. He enjoyed being outrageous, and it worked for him. Yoga, for example, was “demonic.” Increasingly, his writing and sermons took on strong misogynistic overtones: he famously called America a “pussified nation” and claimed that mainstream Christianity characterized Jesus as “an effeminate-looking dude,” and a “neutered and limp-wristed Sky Fairy of pop culture.”

Driscoll declared that anointing a woman as an Episcopal bishop was akin to choosing “a fluffy baby bunny rabbit as their next bishop to lead God’s men.” He joked onstage that wives who denied their husbands oral sex whenever it would please them were sinful, his unique interpretation of a verse from the Song of Solomon.

His outward style charmed many, but behind the scenes, he was often vicious, abusive, and controlling. Those who disagreed with him were shunned by the church, ensuring that other members would know what was in store if they came forward.

Fearful of his influence, many church members felt forced to complain indirectly or through third parties. But Driscoll’s strategy for defusing the discontent was to claim that he wasn’t sure how to respond since his dissenters remained anonymous.

Singularly, disaffected congregants felt powerless against the megachurch, a dynamic Driscoll was counting on. What he underestimated, however, was what would happen when they banded together.

As complaints about Driscoll reached a fever pitch, a large crowd started protesting during Sunday services, holding signs reading “We Are Not Anonymous.” Others started to directly and openly call for Driscoll’s resignation.

After eighteen years of stunning growth at Mars Hill, the groundswell of disgruntled congregants began to drive other churchgoers away. Within months, attendance and giving had plummeted so fast that church elders announced it would have to close several Seattle branches and cut its staff thirty to forty percent.

Driscoll had a knack, like many mean men, for deflecting blame. In 2013, Christian radio host Janet Mefferd accused him of plagiarizing fourteen pages of his book A Call to Resurgence from another preacher. She pushed Driscoll during an interview to be contrite. He apologized but peppered his concession with indignation.

He got in yet more book-related trouble in 2014 when he was accused of misappropriating $200,000 in church funds to get his book Real Marriage on the New York Times bestseller list via shady marketing tactics.

Each new accusation emboldened more critics, and by August 2014, Driscoll was hounded by the new accounts that emerged almost daily of his bullying, abuse, and outrageous behavior with congregants.

Driscoll resigned in October 2014 amid allegations of emotional abusiveness, plagiarism, and misogyny—with congregants fleeing to other houses of worship or losing faith altogether.

Driscoll ultimately wasn’t taken down by the church’s governing body but by those who—in small groups or individually—found their power in numbers and through their collective voice of public dissent. Driscoll’s charisma and normally effective ability to flip he blame to deflect culpability was drowned out beneath the indignation of those he’d harmed.

Sure, there were Christian media heavyweights calling him out for plagiarizing others’ work and his smarmy misogyny. But what brought him down was his arrogance and abusiveness, as well as those current and former followers who shouldered the risk of condemnation from others and stood together and exercised their power.

But his downfall didn’t last. Much like Donald Trump—who has famously claimed that he could shoot a person on the street and not lose voters—there seems to be nothing that can keep Driscoll out of the spotlight for good.

The folksy announcement video about his latest venture is drenched in faux humility about starting a new chapter of his life and “healin’ up” in Phoenix. The legendary bravado is MIA, but for how long? He’s already received very public support from Pastor Robert Morris of Gateway Church, the fourth-largest church in the country, along with a handful of other A-list evangelical names. Time will tell whether Driscoll will actually change any of his ways, but looking at the history, it seems about as likely as Trump naming Megyn Kelly his VP.

The heart of the problem with mean men like Driscoll is that they don’t truly feel they were wrong in the first place. The only thing they did “wrong” was get caught or called out by their peers. Driscoll can tone down his rhetoric and talk about healing and forgiveness all he wants; rest assured, it’s not about contrition—it’s about getting back on top.