“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” —John Quincy Adams
Great entrepreneurs and great leaders have one key characteristic in common: a passion for making a difference in the world and a clear vision for how they want to achieve this. If you have taken the time to really figure out what you want to achieve and you’re able to communicate it to others, you already have the most important skill a leader needs. (If you’re not clear about this critical question, go back and read How to Make Dreams Real and How to Find a Big Problem.)
The other leadership skills you will need can be learned—and the best place to learn them is on the job. I learned everything I know about leadership through trial and error, and through listening to my employees’ feedback. I still have a lot to learn, and I consider developing my leadership skills to be a lifetime project that I’ll be engaged in for as long as I’m in business. At the end of the day, your abilities as a leader, along with your abilities as a communicator, end up directly impacting your ability to make change in the world and inspire others to achieve great things with you.
If you’re reading The Startup Guide, chances are you’re an entrepreneur, or aspire to be one. As such, you’re also likely to be in a position of leadership—at least, if you’re successful. But while you may have the vision, passion, and drive to be a great entrepreneur, you’ll need to learn other skills to be a great leader not just a great hacker, a great salesperson, and a great marketer.
25 Leadership Lessons I’ve Learned
“You work hard to develop your product or service. You fight to solve your financial issues. You go out and promote your business and sell your product. But you don’t think enough about leading your own people and finding the best staff.” John Maxwell
Here are 25 of the most important leadership lessons I’ve learned over the last ten years.
1. Make sure you’re passionate about what you are leading your team toward accomplishing.If you’re not passionate about achieving this goal, you’re leading the wrong organization. I’d say this is one of the most important lessons I’ve learned. If getting up that hill is something you’re not passionate about, it is going to be very hard to get up that hill. If you are not passionate or no longer passionate about the change you are working to making the world, you need to stop what you’re doing and find yourself an organization whose mission and purpose is aligned with your personal mission to make change in the world.
2. Surround yourself with people smarter than yourself, people of high integrity, and people passionate about achieving the same goal as you. It’s possible to inculcate passion, to take someone who is a highly competent, smart person and share with them—through stories and through your understanding of the world—why you’re passionate about what you’re doing. But it is so much easier if you seek out and identify in advance people who are highly competent who also are passionate about the same thing as you. If you can do that and build a team of people who are passionate, smart, and highly competent, you often can achieve things that you cannot even believe.
3. Only hire someone as a direct report if he/she can do the job at least twice as well as you could. If you’re hiring someone to take over as your chief operating officer, make sure they can run the ops of your company at least twice as well as you can. The same principle holds with marketing, finance, product management, customer service, sales, or any other position in your firm.
4. Avoid Micromanagement. One of the biggest mistakes I made as a young manager was being a micromanager. I would give unclear directions and then come back the next day and suggest minute changes, like adjusting the font size on something. I can only imagine that it was a bit frustrating working for me in those early days. If you follow the advice of Lesson 3 and hire people who can do their jobs twice as well as you, you won’t need to micromanage them. Your job is to help them set goals and hold them accountable to those goals, but not to interfere with how they achieve them.
5. Never have more than five or six direct reports. At one point, I ended up having eight direct reports at iContact, plus a five-person board of directors to manage. What I found is that with this many reports I wasn’t able to fill any of my main roles as CEO well: mentoring my reports, building the company, building the culture, developing the product, or running the day-to-day operations. Once I got to about 25 employees at iContact, it would have been very helpful to have a Chief Operating Officer to manage the operations of the company on a day-to-day basis and assure our achievement of our goals and our metrics so I could focus on strategy, product development, understanding the market, building culture, and raising capital—the things that I really enjoyed doing. A good structure (for me at least) is to have as my direct reports someone who runs finance, someone who runs people (HR), someone who runs operations, and someone who runs product, plus a great, amazing executive assistant. Then the rest of the team should be reporting to the chief operating officer.
6. Make sure you and your team are completely clear on what you’re trying to achieve, by when, what the definition of success is numerically, and why what you’re trying to achieve matters in the world. I find, too often, that team misalignment is the biggest obstacle to goal achievement. Sometimes the reason the team is misaligned is that they’re working toward different goals, or they don’t understand numerically what the goal is in the first place. Regardless of where in the organization a person works, he or she should be able to point to a printed out piece of paper that has a small number of clearly-defined numerical goals for the entire company and for their particular department. And those departmental goals should align with what’s necessary for their department to do its part in achieving the company goals.
Personally, I like to define those department and company goals on a quarterly basis. At iContact, we would hold a quarterly kickoff meeting where we rolled out our five key goals for each three-month period. Ideally, you would do that just before the start of the next quarter or on the very first business day of that quarter. Oftentimes in planning cycles, companies end up launching annual plans in February with a counter that starts January 1st. I often find that if you lose that first month, you end up being off track from the beginning. Numerically define what you want to achieve and have your goals align across the different departments so that you can avoid silos of communication and misalignment in the organization.
7. Paint a clear vision with your words and with imagery and communicate it succinctly, visually, broadly, and repeatedly. Know where you’re going, and then lead people there. I’ve seen some leaders who ultimately ended up being ineffective because they simply wanted to guide other people in the direction that people wanted to go. At the end of the day, a strong leader is someone who knows where he or she is going and why, and can motivate and inspire and guide others toward that path regardless of the challenges ahead.
Make sure you clearly communicate your vision for the company, as no one follows a leader who cannot communicate the way in which the company will succeed. At the end of the day, many people need to feel secure and they need to feel like the person or the team in charge has a plan that is well thought through, particularly individuals who join your company as it gets to a later stage and are not as entrepreneurial as the original team.
Your employees’ future—their career and their family’s security—is directly tied to the success of your company, which certainly motivates them to contribute. You want to make sure that your team believes in your company, what it stands for, its mission, its purpose, and its products and services.
To make sure that they know that the hard work that they’re putting in now will likely pay off, you have to not only have a vision but communicate it effectively as well, to align your team toward a common purpose and a common goal.
8. Your job as a leader, as a CEO, is to define numerical, objective success for each of your direct reports, and their job is to define numerical success for each of their direct reports, and so on. At the end of the day, you have to have clear goals that are easily measured on a quarterly, monthly, weekly basis and be able to track progress against those predefined goals.
9. Integrate success for the individual toward his or her own life goals with success for the project and the company. This is one of the most powerful lessons I’ve learned. Take the time to get to know your employees well and understand them personally (not necessarily all of your employees if you have many, but at the very least the ones that report to you) and understand what each of their life goals are. What are the next five years of their life truly about? Raising a family? Saving for college? Achieving an innovation where they could perhaps be listed on a patent?
Figure out what motivates them and what drives them, beyond just financial returns. If you can integrate success for the individual toward his or her own life goals with success for the numerical goals of your project, your company, and your division, you could achieve tremendous results because you’ll have unlocked the most powerful force in human nature: intrinsic desire.
10. Define success quantitatively and track it on a really big monitor. You want to be able to show visually and unemotionally your progress against predefined goals and you want to be able to show it in a place that is transparent to everyone in your company.
11. Make sure your team knows that true leaders make a commitment to ensuring that the person who follows them is better than they were. Ask each team member to identify and train their successor before ever leaving the team, and in exchange you will never surprise them with termination. This describes a two-way commitment between yourself and your direct reports, which you should establish in a conversation with each of your team members at the beginning of their time with your company. Ensure that each team member who reports to you agrees that before they ever leave—whether it’s retirement or quitting or taking a new job—they will identify, hire, and train their replacement. And you, in return, will never surprise them with termination. You’ll provide them with severance; you will give them notice in advance of when you’re even considering letting them go.
I think it’s a two-way street. I find that one of the biggest challenges to companies achieving aggressive goals in the middle to later stages is critical executives leaving during really important times. By inculcating the value from the very beginning that a true leader identifies, finds, and trains their replacement before they leave, you will ensure continuity within your organization.
Good leaders of a company tend to have the following characteristics. Work to develop these characteristics in your team and you mentor the future leaders of your company.
Ability to understand the needs of the customer
Ability to create products that solve the customer need
Aptitude for public speaking
Ability to communicate a vision
Ability to authentically care about employees and customers
Desire to work hard
12. Ask your team to never let something important go unsaid. It’s important to choose words carefully and not necessarily say everything, but it is important to say everything important—not only for you, but for all of your team members. Too often I find that employees are afraid of their bosses or their managers—the very people who are supposed to be leading them and guiding them towards success. If an employee is afraid of the person leading them or the person leading the person leading them, they will leave out critically important feedback.
The best organizations are not ones where the brains are just at the top. The best organizations are ones where the knowledge, power, and ability is distributed across the whole company. The best organizations have systems that drive important feedback about products, product development, market research, and customer experience, all the way from the bottom to the top of the organization.
13. Listen and actively seek out information from your team–especially unpopular opinions. You built a great team and are probably paying a lot of money for your team and you’re probably holding meetings with your management team quite frequently. But oftentimes they won’t tell you something difficult to hear unless you ask them. You need to be actively seeking out information from your team.
While you might hope that they’ll tell you important information without you having to ask for it, it is important to ask for the difficult information and unpopular opinions, particularly the information that might include data that doesn’t necessarily support the conclusion about the strategy that you might be about to spend millions of dollars pursuing. You want to encourage heretics and people who will think differently than you.
14. Always take the time to explain the mental math behind your decisions. People will follow a good leader, but people will follow a good leader even further if that good leader takes the time to explain the reasoning behind what they’re deciding. For example, you could go up to a very talented graphic designer and irritate her by asking her to change the background. But if you ask her to change the background and simply explain why you feel like the background should be changed, she will learn and understand and better be able to predict what you want in the future. Take time to share your rationale and the thinking behind your decisions, particularly with those you are giving direct instruction to.
15. If you want to achieve a difficult goal, create an incentive prize with clear guidelines and publicize itinternally (and if you wish, externally). This is why hackathons and XPrizes work so well. Define periods in which there is a prize at the end for achieving something significant. Prizes have an amazing effect on human ingenuity and it’s often surpising what can get accomplished if you get a good team together and give them an incentive for achieving a result. Why? Because one of the twelve human desires is to impress others, and also to leave a legacy. If you can create a situation in which you can enable your team to create something and get credit for achieving something very difficult, either from engineering standpoint or a results standpoint, do it.
16. Every member of your team should have a significant portion of their pay tied to predefined company success metrics. In order for that to be fair, those metrics have to be predefined, quantitative, and easily measurable. Ideally, you would have chart or a TV monitor on which you could show them in real-time as your company progresses.
17. Every member of your team should have equity ownership. This is the corollary to lesson 15. You want to share your success and make sure your employees share in the growth of your company, and as your company is able, you’ll provide additional benefits like healthcare, dental coverage, stock options, and a 401(k) plan. As your employees’ skills grow and their contribution grows, reward them with better than market compensation. Getting great talent to be committed to you is one of the most important parts of being a leader and building a great company and providing the ability for an employee, a team member, to vest ownership in your company and have the right to purchase stock over time is critically important.
If you’re bringing on a chief operating officer after you have raised a few hundred thousand dollars on your post-seed, that person might expect a 10%-20% stock option. If you’re bringing on an engineer four years into the business, that person might get 0.1%, which in many cases could still turn into hundreds of thousands of dollars if you exit for more than $100 million. The basic principle is that as time continues there’s more capital in a company and there’s more customer progress and more value creation. As more value is created, less equity is provided because there’s less risk. So the earlier you get into a private company, the more stock and the more stock ownership and options you can receive. Make sure every full-time employee (if not every part-time employee as well) receives some ownership or right to purchase ownership in your company.
18. Treat people with respect at all times. This is one of the most important lessons. It’s the Golden Rule applied to business. Treat people with respect at all times whether they be employees, customers, suppliers, or partners. Treat all people within your life and within your business operations with respect at all times.
19. Don’t be too serious. Have fun. Make the business environment enjoyable. We spend too much time at work for it to be boring. Nothing can beat the effects of a company outing or a celebration after reaching an important milestone. Encourage practical jokes; encourage laughing. You want to have your own maker time where the engineers and developers can focus and be in flow, but you also want to have time to celebrate and come together, build community, and have fun. Finding that right balance is the goal of a good leader.
20. Work hard alongside your team. Make sure the employees see you there and working with them. No one likes to work hard for someone who doesn’t work hard him or herself, especially early on. Be the first to arrive and the last to leave, whenever possible. You, as the leader, are likely to have tremendously more economic incentive to make your company succeed. At the very least, make sure you’re there and committed as much as your team, if not more.
21. Make sure everyone knows that they can talk to you anytime. You should be available for your team, and let them know that they can talk to you anytime. Keep your door open, or at least have a scheduled block of time when anyone can come chat with you. Make sure people know you’re accessible and that you’re approachable about any problem that they’re having. One of the reasons that information gets trapped in silos in an organization is because customer feedback from the frontlines is not getting to the people who make the budgetary resource allocations, who can invest in making the product better. If you don’t get the right information to be able to make the right investment decisions, you can’t create a great product that continually enthralls your user base.
22. Build caring relationships with your direct reports. While it’s important to have a professional relationship with your team, you also want to understand what they’ve been through personally and to share life stories. I take time to go out to dinner with each one of my direct reports at least every couple of months. Without understanding at least the basics of what’s occurring in your direct reports’ out-of-office life, it can be hard to truly connect to them even on a professional level. One thing I’ve tried to do is to take that person and their significant other out to dinner the first night of their employment. It serves as a way to both celebrate the occasion as well as learn a little bit about that person and their family that might not come out in interviews or through reading a resume.
I was eighteen years old when I hired my first employee and went from simply being an entrepreneur to being a leader. When we first started iContact, with my business partner Aaron, I was basically nocturnal. My typical working day began at around 2pm, when I’d roll off my futon in the office and sit down at my desk. I’d work all night, go to McDonalds, and then go to bed in the morning. But when we brought on our first employee, Josh, I realized I wasn’t setting an example I would expect or want him to follow. I got an apartment a few miles away and began coming in to the office at the very early hour of 11am. Being a leader means you have to start thinking about people other than yourself, and recognizing that what you do is setting an example for others. This was one of the first leadership lessons I learned. In the years since, as iContact grew from just me and Aaron to 300 employees, I learned many more important lessons about leadership.
23. Commend and praise more than you criticize. Too many leaders are quiet when an employee is doing well, and the second an employee does something wrong, they are all over them. Aim to have a commendation to criticism ratio greater than three to one. Make it clear that you are not only there to condemn and correct. Encourage and praise publicly and create award systems and pure recognitions systems.
Many people thrive on peer and superior recognition just as much as on money, so instituting a program and a process through which you can ensure that you commend people publicly will enable you to motivate people and encourage their own intrinsic motivations to come to the forefront.
24. Consciously build an amazing culture. At iContact, for the nine years we were building the company, we truly worked to build a family culture. When someone was moving into a new house or needed a ride home, we did our best to create a culture where we there to help, particularly in the early years. We worked on building people up. We created five values that we called “WOW ME” which stood for Wow the customer, Operate with urgency, Work without mediocrity, Make a positive way, and Engage as an owner.
Now, even after I’ve left iContact, I still remember what that acronym means off the top of my head. It’s very important to create a set of values that everyone in your company remembers and to take time to celebrate your victories together.
25. Keep learning from people who’ve walked the path ahead of you. It’s too easy, as a leader, to feel like you have to be the one who knows everything. Great leaders recognize that they also need to learn, and they create opportunities to do so. Surrounding yourself with individuals much more experienced than yourself, who have already achieved w hat you want to achieve, is critical to your ability to quickly learn what you need to learn in order to succeed in building your business. Create an advisory board, or form relationships with mentors who have integrity, experience, and wisdom.
Video on Leadership
ˇ Click here to watch a video on Leadership (22:19)