“I intend to be ruthless as CEO,” I said to my friend and mentor, Dave.
We were having coffee at Peets in Palo Alto. It was early March, and we had, finally, gotten our Series A funding. After two years, and lots of painful misses, I was rearing to get started.
Dave smiled, nodded his head and said, “That’s good.” Then he paused for what seemed to be forever, but was really about five seconds.
Finally, Dave said, “But don’t lose your humanity.”
You have to make a lot of tough decisions as a CEO.
Dave’s comment was one of the more profound pieces of advice he ever gave me. Fortunately, his advice was consistent with the direction I had been moving in for years.
You see, I had learned how to be a manager in one of the most cutthroat companies in my industry, Maxim Integrated Products. Maxim’s CEO, the late Jack Gifford, was, being nice about it, an extremely demanding person to work for.
Part of the company culture was a concept of challenging everything and everybody. In Gifford’s terms, it was “Do not suffer fools.”
There is one incident that illustrates the Maxim culture better than any other. I was in a forecast review meeting with the other business unit VPs and Gifford.
One of the VPs, “Peter,” was way off his forecast. Gifford asked Peter why his forecast was so incorrect. Peter didn’t have a coherent answer. Rather than just letting it go, Gifford tore into Peter.
Gifford said to Peter, “It’s okay to say you were incompetent at the time. It’s perfectly okay.”
Peter would have none of it. “Jack, I’m not incompetent.” This just infuriated Gifford, so Gifford kept at it.
Gifford repeated himself, except the volume went up. “It’s perfectly okay to say you were incompetent.”
Peter wouldn’t relent. It got really uncomfortable in the room. The VPs and I all started looking down at our shoes, waiting for this to reach it’s inevitable ending.
Finally, Peter gave in. “Yes Jack, you’re right. I was incompetent at that time.”
You can be ruthless without being a jerk.
I made a decision, after that meeting, that I didn’t want to manage the way Jack did. I was going to find a way to be effective without resorting to those type of tactics.
To be fair, Gifford learned to be a CEO in a different era than the one we are in now. His way of doing things wouldn’t work today. Further, Gifford had a softer side that showed he really cared about his employees. But that dark side of Gifford? Look out below.
About six months into my time as CEO of my company, I was meeting with one of my investors. I told “Raul” that I was going to fire, “Randy,” one of my co-founders.
I said, “I’m a little concerned about firing Randy because he’s such a tough guy.”
Raul looked at me, and said, “He’s not a tough guy. You’re a tough guy because you’re meeting your plan.”
Raul was right. I was confusing someone’s personality with the discipline and mental toughness you need to successfully run a company.
You can be tough AND be humane.
Success as a CEO has nothing to do with having a gruff personality. All you need to do is read Jim Collins masterpiece, “Good To Great,” to realize there is no correlation between being mean and “tough” and being a successful CEO.
In fact, the highest level of leadership, what Collins called “Level 5” leaders, weren’t jerks, yet they had incredibly highs standards for their team. As Collins puts it:
“Yet, despite their remarkable results, almost no one ever remarked about them! … The good-to-great leaders never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extraordinary results. …It is very important to grasp that Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to make the company great.”
My interpretation of what Collins is saying is, yes, have incredibly high standards for everyone you work with. However, you can achieve these high standards without being a jerk.
Back to Gifford’s humane side. One of the greatest lessons I learned from Gifford was how he went about terminating someone.
The person wasn’t fired. The person was told that their new job was finding another job.
They were to report back to their manager about their job search each week. As long as they were diligently pursuing finding a new job, the person would be kept on the payroll.
I don’t know if Jack was a Level 5 leader. He had some of the traits of Level 5 leaders, but not all of them. However, his policy about firing people was Level 5 leadership.