THE ANATOMY OF LEADERSHIP

All important business challenges involve complexity and significant uncertainty. While the most difficult ones often tax our capacity, they also offer us the opportunity to engage all of our training and preparedness as leaders. Such challenges may require us to not only contribute, but often to create something new and unanticipated, and each challenge that we overcome is a wonderful opportunity for us to learn. My purpose in this article is to share some of my more difficult experiences, and what they teach me about refining our leadership capabilities and qualities.

I was trained as a scientist and engineer. Science enhanced my inclination to imagine molecules in action; engineering made me a “systems thinker.” I learned to scope a problem, formulate possible solution paths, prioritize and dive in. I was taught to seek the full extent of possibilities and to examine all relevant variables, trying not to leave behind any critical issues that might trap me later.

This broad systems thinking served me well as I entered my PhD thesis work. I was comfortable with the technical complexity, and I welcomed the uncertainty as an opportunity to find pathways others might not have tried and could thus lead to novel discoveries. Anxiety did occasionally creep in as I faced difficult technical hurdles and, in particular, as time pressures (often self generated) bore down on me. But the excitement of scientific discovery kept these concerns in check.

And then I started a company.

The scientific challenges were still there as we tackled ever-more-complex problems, seeking new pathways that would give our company a “raison d’etre.” My colleagues and I handled this quite well, largely because we were fortunate in attracting superb talent. But this was only part of the challenge for me. The scope of the issues I faced increased well beyond my training: finance, legal, personnel, human dynamics… the list went on. We engaged experts in these various domains but, in the end, as a co-founding entrepreneur, I had to “hold it all together.” The analytical thinking that I was so accustomed to did not always adequately address all of the issues I faced, especially those dealing with human dynamics. These unfamiliar challenges created a fertile medium for my anxiety to swell. Most of the time I somehow managed, running more on intuition and momentum than through thoughtful reflection.

It is only recently that I have begun to more fully understand what was going on inside me, to recognize what worked (particularly in times of crisis), and to analyze what I might have done so much better. I’ve shared some of this understanding in two previous posts. (1)(2) Here, I want to offer a summary of what I now recognize as critical leadership capacities, in the hope that those of you who are still “in the trenches” will benefit from considering how you might improve your own leadership efficacy. I’ve distilled these capacities into three essential skills that I believe can make us all better leaders:

  1. Finding clarity in complexity
  2. Creating safe spaces
  3. Acknowledging the leadership covenant

FINDING CLARITY IN COMPLEXITY

In my April 2, 2017 post, I referred to a wonderful quote attributed to Chief Justice Oliver Wendell Holmes: (3)

“I wouldn’t give a fig for the simplicity on this side of complexity, but I would give my life for the simplicity on the far side of complexity.”

The more I think about this statement, the more I come to appreciate my discernment process and the shortcuts I had taken, over the years, in my decision-making.

I boil it down to the following: In order to make fast decisions (and gain the accompanying sense of being in control of the situation), I had often minimized the time I was willing to spend in the limbo of the unknown. As a result, I would avoid dwelling long enough in this uncomfortable zone, failing to soak up the fullness of the complexity and thereby failing to give new pathways a chance to unfold. Perhaps, responding to pride in my engineering agility which made me capable of processing complex technical questions quickly, I would “skim the surface” of the problem and grab the first solution offered by my intellect. Having found a quick solution would make me feel good and decisive, even when the dimension of the issues far exceeded the scientific or technical hurdles and required much more intuition and heart. Fortunately, I often injected just enough intuition and heart so that the outcome was positive — but not always. And even when it worked, I wonder in retrospect if I achieved the best possible outcome or if I had chosen too quickly. Had I simply been settling for the comfort zone that had much less tension rather than the challenge zone where the issues would have lingered longer in an unresolved state?

Holmes articulated the importance of holding within us the fullness of the issues and problems, in all their glory and gore, whether they are technical, legal, financial or human. This requires withstanding anxiety and coping with discomfort in order to make way for the peace needed to allow all of our talents to come to bear in the quest for clarity.

How to cope with this anxiety?

I have previously described the metaphor of the crucible of anxiety, so well characterized by Bob Quinn. (4) Accepting the need to immerse oneself in complexity, with its potential to generate anxiety, is an important first step in subjugating the tendency to skim the surface. For me another step was required. I needed a mind-shift. The metaphor I successfully adopted was to transform the crucible to a chalice. This mental transmutation was, in effect, my way of creating within myself a safe space. I needed to give myself “permission” to hold all the issues in a benevolent domain where nothing was adversarial and nothing was prejudged. The only thing that mattered was to hold my greater purpose in mind: my role in and responsibility to the entrepreneurial endeavor. In this safe space, I was reminded that my task was one of service rather than a burden of office. In effect, I was converting an arduous task into a sacred mission, one that transcended my presumptions and served a higher calling, namely the mission I had signed up for on behalf of my company, a mission that was congruent with my life’s purpose. This safe space also shielded me from the over-intrusion of my ego.

There is an important additional shift that comes with the transformation of the crucible to the chalice: the change from anxiety to anticipation. Rather than dreading the next steps and fearing the next encounters, there is a wave of anticipation for what will unfold and my role in it. While anxiety does not fully disappear, it is softened by an expectation of change, of resolution, of service. Once our attitude of service takes over, we are well on the way to a positive resolution: We have found a safe and meaningful space.

Many years ago, when we suddenly lost a major partner and had to reduce the company significantly to survive, I was actually creating this safe space within myself without being aware of it. My sense of mission enabled me to survive this horrific episode with my integrity intact, my self esteem still more or less whole in spite of the trauma, and an ability to take actions that were consistent with my values. We reduced the company in a manner that everyone supported, both those who remained and those who moved on. It was a terrible experience that I would not wish on anyone — but it happened, and we had to survive. I created a safe space within myself and, without even being aware of it, I also created a safe space within our company for all to express their feelings and to help discover the solutions we had needed to sustain our mission and our company.

More recently, in dealing with a difficult business reality facing an organization for which I served as a Board Member, I much more consciously transformed a crucible into a chalice. This safe space allowed me to alleviate a state of mind so constraining that I had not been able to think straight. Unshackled from my anxiety, I became a positive contributor, able to help the company and the Board to arrive at a responsible resolution that was necessary, albeit disappointing.

CREATING SAFE SPACES

The same mindset that creates a safe space for coping with complexity and managing anxiety within oneself can also enrich the environment for our teams.

My friend and mentor Andre Delbeck often reminded me that the complex strategic decisions we face in business typically have 18 to 30 distinct variables, yet the human mind is capable of handling, at best, only 5 to 6 variables at any one time. This emphasizes that we should not go it alone when attempting to resolve complex situations. While I knew this, my impatience, my ego and my control syndrome often tended to push me to do it all myself, rationalizing that it would be faster, more expedient and more likely to be done “as I envisioned it.” Especially in the pressured rush of the moment, it’s wise to recall Andre’s admonition, lest we forget our human limitations and weaknesses.

Therefore, it’s just as vital to carve out safe spaces for our teams, as it is to create them within ourselves. This ensures that we allow others to contribute their best. A safe space minimizes ulterior motives, discourages criticism of out-of-the-norm ideas and supports brainstorming, free from repercussions either in performance appraisal or job security. The energy should all be directed to solving the problem, not to preserving our self-esteem or our status. Bob Quinn aptly describes this as a place where “the ego’s driven need to be right is replaced by the shared need to learn.” Again, this moves us from anxiety to anticipation.

I often call this safe space a “sacred space.” I don’t intend any religious connotation here. But a safe space embraced by all participants, which is free of ego-driven contamination and does not enable the petty, self-serving motivations of any participants, is sacred in that it honors a shared higher purpose.

Once created and embraced by the team, sustaining the safe space becomes the leader’s task: a responsibility that’s part of the leadership covenant I address below. This can often be challenging, and I have recently found it particularly daunting in several Board situations. At times, I have deeply felt the fraying of the safe space, yet I either did nothing about it or my efforts were weak. This has occurred primarily when the CEO or Chair has held too tight a grip on the Board. By the time the repercussions were felt, it was too late to do anything about it.

The one key factor most frayed in these situations is trust: trust in the leadership and trust in one another. Trust is a critical factor in all interactions. As leaders, we can provide a sort of “trust glue” that holds together the safe space needed to foster productive interactions.

So how do we gain trust?

My friend Steve King, who heads up the University of Wisconsin Business School Executive Program, pointed out to me that trust has two aspects: professional and personal. Professional trust embodies competence in our field and the rigor of our thinking. Personal trust is much more intangible and intimate, perhaps best described as a “warmth,” a sense of simpatico, a connectivity, an openness, a feeling of accessibility. Trust, both professional and personal, grows with time and familiarity: Professional trust grows with our track record; personal trust with our behavior. And both are needed for us to be effective leaders.

Personal trust is more difficult to attain, requiring that a connection be forged between individuals, a linkage that becomes stronger with time and the intensity of mutual experiences. A significant advantage is a trustworthy personality, characterized by a demeanor that invites a sense of ease. If we are comfortable with ourselves and at peace, we will stimulate trust. By contrast, if we tend to be suspicious by nature or overly protective of our personal space, it will be more difficult to generate the trust of those we need the most.

Each of us emanates a certain level of trustworthiness that comes from deep inside and manifests itself even in our facial expressions during interactions. The best advice I can offer, in this regard, is to attempt to be aware of our trustworthiness-emanations and to continue to sharpen that awareness as we pursue our own personal development.
In the end, fostering productive interactions comes down to connections between individuals, hence the need to establish close one-on-one relationships. I have often described these relationships as an exchange of “trust packets,” (5) and each such exchange establishes a “covenant.” This brings me to the last of the essential leadership qualities: the leadership covenant.

ACKNOWLEDGING THE LEADERSHIP COVENANT

When faced with complexity, we gain clarity either by ourselves or, more likely, through deliberations with our team — ideally in a “safe space.” This is the process of discernment. But wading through the quagmire of complexity to glean a clear solution is only part of the process. It reveals an opportunity, but we need to act on it: Discernment has shown us the path; decision steps us into action.

How do we know when to act? We need to feel that the moment is right. And once we do act, it places on us a heavy responsibility. It is what I call the “leadership covenant” and includes two obligations:

  1. The obligation to confirm a common understanding of the action path, and
  2. The obligation to shepherd the process to its conclusion.

The first ensures that there is congruence in everyone’s understanding of the chosen direction and approach. This requires a clear, concise and compelling articulation of the discernment, as well as confirmation that it appropriately resonates with everyone. This allows us to resolve any misunderstandings and improves the chance for a positive outcome. It also makes our job as leaders easier as we navigate the course out of complexity toward resolution, and it permits us to loop back for further help as we face the new challenges that inevitably arise. It ensures that every one of the participants in the process is fully vested in a positive outcome, rather than satisfying any selfish or petty elements that can slow the momentum toward a win for all.

The second is inherent in the trust placed in us by our team. As leaders, we essentially hold, in our hands, the team’s belief in our mission, and we make the commitment to take it the distance. This is part and parcel of the exchange of trust packets. This exchange builds, over time, rather imperceptibly, and pays enormous dividends when it counts. As I look back at the most difficult times in my entrepreneurial career, I am convinced that these trust packets were the only factor that enabled us to survive. I described a clear example of this earlier: When we had to drastically reduce the size of the company upon the abrupt termination of a key partnership, trust was surely what kept us going.

The obligations inherent in the leadership covenant are weighty, which is the reason I use the word covenant. My meaning is best described by Rabbi Jonathan Sacks in his acceptance speech for the American Enterprise Institute’s Irving Kristol Award. (6) He compares and contrasts the meanings of contract and covenant.

“In a contract, two or more people come together to make an exchange. And so you have the commercial contract that creates the market and the social contract that creates the state.

A covenant isn’t like that. It’s more like a marriage than an exchange. In a covenant, two or more parties each respecting the dignity and integrity of the other come together in a bond of loyalty and trust to do together what neither can do alone. A covenant isn’t about me. It’s about us. A covenant isn’t about interests. It’s about identity. A covenant isn’t about me, the voter, or me, the consumer, but about all of us together. Or in that lovely key phrase of American politics, it’s about “we, the people.”

The market is about the creation and distribution of wealth. The state is about the creation and distribution of power. But a covenant is about neither wealth nor power, but about the bonds of belonging and of collective responsibility. And to put it as simply as I can, the social contract creates a state but the social covenant creates a society. That is the difference. They’re different things. Now, what is more, every covenant comes with a story.”

I find Rabbi Sacks’ last point most interesting: every covenant comes with a story. As leaders, the story we live is the shared purpose of our organization. It provides the “bonds of belonging and of shared responsibility,” and is the story that continually recreates the raison d’etre for us to be together in the first place, justifying all the sacrifices we make to achieve our common goal.

Reflections:

  • List the times in your life when anxiety has threatened to paralyze you.
  • Examine how you overcame these crises, be they personal or professional. What do you learn from what worked for you?
  • Have you experienced the liberating power of safe spaces in your personal life? List the times it has served you. What would it take to create such spaces in your professional life? Could you build it into all levels of leadership in your organization?
  • Think about the times when you have entered into a personal covenant obligation in the sense we are using it here, perhaps even in a religious context. Could you see it applied to your relationships with your colleagues? Examine how it would influence your mutual trust.

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(1) From Crucible to Chalice https://ricardolevy.com/2017/04/02/dealing-with-uncertainty-from-the-crucible-of-anxiety-to-the-chalice-of-change-lessons-in-leadership/

(2) From Crucible to Chalice Part 2 https://ricardolevy.com/2017/07/27/from-crucible-to-chalice-part-2-unlocking-our-leadership-capacity-all-we-need-to-do-is-clear-the-path/

(3)  As quoted by Professor James O’Toole in his book The Executive’s Compass, Business and the Good Society (New York: Oxford University Press, 1993), 5.

(4) Bob Quinn https://thepositiveorganization.wordpress.com/2016/07/20/an-elusive-leadership-skill/

(5)  Ricardo Levy, Letters to a Young Entrepreneur: Succeeding in Business Without losing at Life (San Francisco: Catalytic Publishers, 2015), 66

(6) 2017 Kristol Award http://www.aei.org/publication/2017-irving-kristol-award-recipient-rabbi-lord-jonathan-sacks-remarks/

MUST WE BE MUSK-ESQUE TO SUCCEED IN BREAKOUT ENTERPRISES? An entrepreneur’s reflections on Elon Musk’s creativity, capability and character

On December 2, 2011 I posted an article titled “The Steve Jobs Paradox.” (1) It was prompted by the passing of Jobs, an event that touched me profoundly and motivated me to read Walter Isaacson’s Jobs biography, which appeared shortly after Steve’s death.

I am now moved to write about another legendary Silicon Valley entrepreneur who is still alive and thriving: Elon Musk. I became particularly interested in Musk because my grandson, Brent Schroeter, a junior in Computer Science and Engineering at the University of Washington, was taking a quarter off to intern at SpaceX. Since he first began his studies at UW, Brent had been involved with another Musk initiative, the Hyperloop Project. His decision to apply for an internship at SpaceX obviously signaled that he has been quite enthralled by his Hyperloop work and wanted to explore another Musk initiative more deeply. When I mentioned this to a friend, he suggested I read the 2015 book by Ashlee Vance, Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. (2)

I draw eight primary inferences common to both the Musk story as told by Vance and the Jobs story as told by Isaacson:

  1. Every entrepreneurial venture needs at least one individual who is absolutely consumed by a vision. That vision needs to be injected into others, who then catch the fire.
  2. The “injected” fire has the potential to completely engulf doubt. I have proposed in the past that one of the most vital roles of the entrepreneurial leader is to absorb uncertainty (3). Engulfing doubt is one path for doing so.
  3. I use the word “engulf” here judiciously; I did not say “consume”. There has to be enough room for different opinions and disagreement. It seems that Musk allows a limited amount of disagreement, but not much. Not clear how much Jobs did. This puts an enormous onus on the intellectual brilliance of the entrepreneur, something most of us do not have. Is this cult-of-personality sustainable? Scalable?
  4. The entrepreneurial leader needs to strike a difficult balance between transparency and the absorption of uncertainty. I am not sure that either Musk or Jobs accomplished this balance. Their transparency seems limited, yet their endeavors succeed. What does that teach us?
  5. I have long espoused that one of the important characteristics of an entrepreneurial leader is empathic capability, a key component of generating trust within the organization. Musk does not seem to have this empathic quality, yet he seems to be succeeding so far. What does this tell us?
  6. Musk and Jobs both have ground-breaking visions. This is coupled with a style that borders on despotic. Is it necessary to have a despotic edge to succeed in a vision as grand as placing a man on Mars?
  7. Musk and Jobs display an incredible capacity to envision the future and are reported to have a remarkable intellect. Are both ingredients necessary in one individual to accomplish extraordinary entrepreneurial achievements? Can this capacity be a shared characteristic among several people? How?
  8. Finally, both Jobs and Musk evidence an incredible eye for consumer-friendly style in their products: the iPhone and the Tesla. What is it in their own single-minded drive and their intellectual brilliance that enables such remarkable products? What can we learn from this?

This is not the first time I have been touched by Musk. I have witnessed and shared the anticipation of several friends who had patiently awaited delivery of the Tesla Model X, and their enthusiasm when they finally received their cars. And I have been awestruck at the successes of SpaceX launches. Watching the launch of Falcon Heavy on February 6th was, for me, one of the highlights of recent times — especially seeing those two booster rockets return to earth, deploy their legs at the last minute, and land effortlessly.

As I read Vance’s book, many thoughts swirled in my head. At times, I was maddened by Musk’s bizarre and impulsive behavior (spinning out and causing major damage to his million-dollar McLaren F1 sports car, for example). At other times, I was floored by his genius. And I often found myself pondering what Musk’s story told me about entrepreneurship and leadership. It has made me re-examine some of the characteristics that I hold dear in the entrepreneur and form the basis for my book and my teaching.

Perhaps what drew me most to Musk was his uniqueness in the Silicon Valley of today. The overwhelming majority of enterprises born and incubated in this valley over the past few decades have been software oriented — a world characterized by dramatic rises and falls, incredible turnover, and astounding advances possible only in a field fostering the testing of new ideas and their implementation at “warp speed.” Along comes an individual who started in that churning virtual environment and decides to embark on a very different entrepreneurial journey which I am much more familiar with: creating and manufacturing tangible products that require extensive science and engineering, must be produced to very strict quality standards, and have product life cycles measured in decades, not months. This is the entrepreneurial world in which I grew up in and made my minor mark, so it speaks to me.

One aspect particularly intrigues me (or better yet “bothers” me) as I think about what I learn from the Jobs and Musk stories. In many of my writings I place great importance in trust as the KEY ingredient for success in entrepreneurship as well as fulfillment in life. I believe when trust is absent or breaks down, it severely threatens all of our endeavors. Clearly, I only have a limited vantage point into the deeper inside stories of either the Jobs or Musk ventures. Yet on the surface I fail to see the trust element – except as it involves the overwhelming and dominating intellect of both Steve Jobs and Elon Musk, and, in the case of Musk, his financial power. I examine the trust question further below.

Here are some of the references and passages in Vance’s book that stood out for me, and some reflections on what they teach me:

  • Musk seems to be able to engulf doubt through two conditions: his total personal financial commitment and his incredible intellectual mastery of all aspects of his ventures. He proves this mastery by stepping in when his employees question the reasonableness of the goals he imposes. As relayed in Vance’s book:

…the absolute worst thing that someone can do is inform Musk that what he’s asking is impossible. An employee could be telling Musk that there’s no way to get the cost on something like that actuator down to where he wants it or that there is simply not enough time to build a part by Musk’s deadline. “Elon will say, ‘Fine. You’re off the project, and I am now the CEO of the project. I will do your job and be CEO of two companies at the same time. I will deliver it,’” Brogan [Kevin Brogan, one of the early engineers at SpaceX] said. “What’s crazy is that Elon actually does it. Every time he’s fired someone and taken their job, he’s delivered on whatever the project was. (4)

  • Most of us mortals cannot match the combination of business acumen and intellectual capability of Musk. So, for those of us in the “normal” range, what does this suggest? A possibility: If overwhelming intellect and financial dominance is necessary to succeed in monumental visions, it becomes even more important for us regular mortals to live and work in a trust environment since we depend so much more on the intellect and character of those we attract to join us in the adventure rather than just our own super-capabilities. The key is to make sure that these strengths exist among our senior executives and that they are harnessed as if they were one actor. For we need a common purpose and shared values, and deep mutual trust.
  • From the Vance book, I get the impression that Musk shows very little regard for the impact of his decisions and actions on his employees. His visionary fire seems so all consuming that it totally inhibits him from extending his sensitivities to the individual. His business goals, whether micro or macro, dominate his thinking and his actions. His employees seem to be merely his means to an end rather than fully vested co-journeyers.  I have always argued that an important characteristic of a good leader is the empathic capability to relate to his/her colleagues. It is not clear from the book whether Musk has that quality. This then raises a key question: To what extent, when we tackle enormously ambitious and groundbreaking dreams, must we have a hardness of execution that does not allow for empathy? Perhaps to invent and implement a new drug manufacturing technology or a pollution free gas turbine (my old worlds) you can be – and may have to be – empathic, but to shoot for Mars you cannot afford such softness.
  • I have also argued that transparency is a key element in building a resilient team and overcoming the hurdles we inevitably face when growing a company. This is another component of the trust equation. Musk seems to concentrate his “transparency” on one edict: If you are with me you do what I ask, even if you think the request is unreasonable; if you do not agree, “here is the door.” Does this allow for enough doubt to explore alternatives, advance knowledge, and prevent major errors? When I sought my grandson’s impression, he commented, “According to those I have talked with who work directly with Elon, the answer is ‘Yes’ — Musk always welcomes dissenting voices if and only if they are backed by rigorous evidence.”
  • I would argue that in the early creative process such rigorous evidence is rarely available, and the exploratory nature of breakthrough science requires openess to the ideas of others even in their formative stage. That is the secret of discovery, as so well expressed by Albert Szent-Gyorgyi, the Hungarian biochemist recipient of the 1937 Nobel Prize in Physiologyand Medicine: “Discovery consists of looking at the same thing as everyone else and seeing something different.”
  • I pointed out earlier that Musk’s enterprises are different from the typical Silicon Valley companies’ in that his products take years to develop. Thus, the fast trial-and-error possible with software startups is not realistic. However, it seems that the intense, high-speed culture Musk has imposed on his enterprises does breed a spirit of fast trials and quick abandonment of ideas that do not show promise. The rapid timetable and cost-reduction demands in Musk’s playbook foster quick assessment of possibilities. As Vance writes, “Rarely did Tesla get hung up over analyzing a situation. The company would pick a plan of attack, and when it failed at something, it failed fast and tried a new approach.”(5)  We can all learn from this mindset. I will remember the “it failed fast and tried a new approach” description.
  • There seems to be another consequence of Musk’s intense and single-minded focus on the grand goal: He seems to quickly put past failures in context of the larger aim, rather than dwelling on them. This is actually remarkable in an individual who reportedly reacts so harshly to disagreement and failure. It indicates to me a remarkable, multiplex personality, which, when it counts, is able to acknowledge challenges even if they suggest imperfection in the design or execution. And more importantly, while he seems to be quick to criticize employees who do not toe the Musk line or flow with the Musk expectation, he is able to put setbacks in perspective for his teams and picks them back up when we more ordinary leaders might have been overwhelmed. That is suggested in Vance’s description of the failure of the first SpaceX launch in September 2008:

The failed launch left many SpaceX employees shattered. “It was so profound seeing the energy shift over the room in the course of thirty seconds,” said Dolly Singh, a recruiter at SpaceX. “It was like the worst fucking day ever. You don’t usually see grown-ups weeping, but there they were. We were tired and broken emotionally.” Musk addressed the workers right away and encouraged them to get back to work. “He said, ‘Look. We are going to do this. It’s going to be okay. Don’t freak out,’” Singh recalled. “It was like magic. Everyone chilled out immediately and started to focus on figuring out what just happened and how to fix it. It went from despair to hope and focus.”(6)

  • While Musk is the face of his companies, I get the impression that one key to his survival are a few colleagues who provide the approachable bridge between his hard and often uncaring demeanor and his employees. This seems to be the case at SpaceX, as embodied by Gwynne Shotwell. Recruited as the seventh employee, she is described in the Vance book as the “interpreter” of Musk’s edicts, the softener and smoother of the rough spots, and the reinforcer of the culture that Musk has imprinted. She is now President of SpaceX. To succeed, Gwynne has had to park her own ego at the company door. As Vance puts it: “Shotwell has been a consistent presence at SpaceX almost since day one, pushing the company forward and suppressing her ego to ensure that Musk gets all the attention he desires.”(7)
  • When I talked with my grandson about Shotwell, he commented, “I agree completely. Gwynne’s business and engineering instincts would make her an invaluable asset to any organization, and her emotional poise is so perfectly matched to Elon’s style that when one steps back, it is hard to imagine SpaceX enjoying its success today without her.”

The BIG question: Should we teach our students to be like Musk or Jobs?

My preliminary answer is, “Yes, but… not totally.” There are many elements in the Musk story that offer very important lessons for making us better entrepreneurs and better leaders. A total Musk is going to be rare. Not many of us have the prodigious brilliance of Musk’s mind, his ability to absorb and understand facts in so many fields, and his practically photographic memory. However, I contend that even if we did, Musk-ness needs to be tempered by a greater humanity and, in the end, such a combination would be more effective and powerful for the companies we are building.

Some of the other elements we should emulate are well-summarized at the end of Vance’s book:

Page [Larry Page, the founder of Google and a friend of Musk] holds Musk up as a model he wishes others would emulate — a figure that should be replicated during a time in which the businessmen and politicians have fixated on short-term, inconsequential goals. “I don’t think we’re doing a good job as a society deciding what things are really important to do,” Page said. “I think like we’re just not educating people in this kind of general way. You should have a pretty broad engineering and scientific background. You should have some leadership training and a bit of MBA training or knowledge of how to run things, organize stuff, and raise money. I don’t think most people are doing that, and it’s a big problem. Engineers are usually trained in a very fixed area. When you’re able to think about all of these disciplines together, you kind of think differently and can dream of much crazier things and how they might work. I think that’s really an important thing for the world. That’s how we make progress.”(8)

As I re-read my 2011 Jobs post, I am struck by how many of my points there also apply to the Musk story, as told by Vance. There is much for us to learn from both of these remarkable individuals, and, in Musk’s case, this is a continuing story.

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1. https://ricardolevy.com/2011/12/02/the-steve-jobs-paradox/

2. Ashlee Vance Elon Musk, Tesla, SpaceX and the Quest for a Fantastic Future (EPub Edition MAY 2015)

3. Ricardo Levy Letters to a Young Entrepreneur: Succeeding in Business Without losing at Life (San Francisco, Catalytic Publishers, 2015) Chapter 7

4. Vance, Elon Musk, Tesla, SpaceX and the Quest for a Fantastic Future, EPub Edition page 240 of 392

5. Vance, Elon Musk, Tesla, SpaceX and the Quest for a Fantastic Future, EPub Edition page 84 of 392

6. Vance, Elon Musk, Tesla, SpaceX and the Quest for a Fantastic Future, EPub Edition page 57 of 392

(7) Vance, Elon Musk, Tesla, SpaceX and the Quest for a Fantastic Future, EPub Edition page 146 of 392

(8) Vance, Elon Musk, Tesla, SpaceX and the Quest for a Fantastic Future, EPub Edition page 152 of 392

FROM ENTREPRENEUR TO ENTREPRENEURIAL LEADER: KEY LEARNINGS

KEY QUALITIES OF AN ENTREPRENEUR

Over the last several years, while working with my students, I have developed a series of descriptors that profile the entrepreneur. They are based on my experience as a life-long creator of new ventures. Like all “lists,” this is an abbreviated articulation of what is a complex and multi-faceted whole. Yet it serves to highlight some elements of what all entrepreneurs need to consider, as we strive to become better leaders.

My list is split into three domains of the entrepreneurial character: Inner, Outer and Core. I am not attempting to be comprehensive; I mainly want to trigger an active conversation that deepens our understanding of what makes an entrepreneur. Here is the short list:

INNER: -Passionate -Positive -Risk Tolerant -Big Thinker -Visionary
OUTER: -Articulate -Clear -Enthusiastic -Inspiring -Nimble
CORE: -Consistent -Authentic -Persevering -Discerning -Grounded

Clearly, many other characteristics might be added. Here are a few that have been suggested in my class discussions: Salvager (I like this one!), Dreamer, Realist, Courageous, Charismatic, Tough, Resilient, Self-confident, Good Self-esteem, Integrity. I am sure that you can think of others, and I welcome any ideas. My main aim is to take these characteristics and examine what I call the three key habits that an entrepreneur needs to master if he or she is to become a good leader: To Balance, To Breathe and To Trust.

LEARNING TO BALANCE

This may seem to be the easiest of the three, but yet is so often forgotten. The main reasons we entrepreneurs tend to neglect balance are:

1. We do not know ourselves well enough to identify our strengths and shortcomings (or if we do, we are unable to admit them, which amounts to the same thing), and

2. We are impatient. Often, for us, it is so much easier to just plow ahead, figuring that by the time we tell others what we want to do and how we want it done, we might as well do it ourselves. Yet the key to growing a venture is to engage others in the journey, and then deploy all constituents in the optimal way to reach our goal. To do this, we need to find balance, starting with ourselves.

Let’s take another look at the list of domains above, and consider where we sit in the optimist-realist scale. When I ask my students, most identify themselves as optimists. While that is fine (since a non-optimistic entrepreneur will find it hard to gain a following), we have to be very careful not to overlook the criticality of realists in our midst. In my book Letters to a Young Entrepreneur, I mention a number of instances in which having hard realists around me balanced my rose-colored glasses and saved our company.

Perhaps of more immediate relevance to all of us is the balance between leading and managing. For most of my entrepreneurial career, I never really tackled that question. I just did what I thought needed to be done, often resulting in micromanagement, and thus often limiting the creativity and contribution of others. Later, as an “entrepreneur emeritus” and teacher, my course preparation led me to a classic Harvard paper on the subject: John P. Kotter, What Leaders Really Do, HBR December 2001. I urge you to read it. It captures, in a wonderful way, a vital topic. I summarize Mr. Kotter’s concepts as follows:

Where a leader points, a manager plans.
Where a leader aligns, a manager organizes.
Where a leader inspires, a manager problem-solves.
Where a leader produces change, a manager produces predictability.

What each of us should examine is our propensity to lead or to manage. There is no value judgment in this question. Both are essential. The key lies in matching our skill with the need: achieving balance!

LEARNING TO BREATHE

As we grow in responsibility, whether in our own entrepreneurial ventures or in our roles within larger organizations, we expand the breadth of the topics that fall within our purview. We gain an increasingly broad sense of the task at hand, and we take on an increasing span of responsibility and accountability. In Letters, I introduce the concept that a leader’s main job is to absorb uncertainty (Chapter 3.) Presumably, as leaders by definition we have a more comprehensive view of the venture than do others – or at least we should have. Think of what we do when we drive a car: as we approach a sharp curve, our eye is (or should be) ahead of the curve. This makes for better and smoother steering. Also, as we “see” more of the road, we feel more secure in our steering. In the concept of “absorbing uncertainty,” a leader takes on the larger burden, so that others on the team can focus on more defined parts of the task.

To do the leadership job right, we need to encompass as much of the “scenery” as possible. I equate this with taking a deeper breath, as we spread our arms (and our awareness) to a broader horizon. This also requires us to look to the very edges of our field of vision – for threats and opportunities that may be less obvious.

This is the breathing in part.

However, we also need to breathe out, exhaling our breath in a purposeful manner to help our team gain focus and direction. As we breathe out, we point the way.

And this is the toughest part, at least for me: we need to breathe in and breathe out, continuously. My tendency is to dwell in one mode or the other – spending too much time either scanning the horizon or burrowing toward the completion of a particular project. To keep our venture healthy and alive, as leaders, we must sustain a constant flow between the two: breathing in and breathing out.

LEARNING TO TRUST

Both in breathing in to absorb uncertainty and breathing out to provide focus, a key ingredient is the mutual trust between our venture companions and ourselves. That requires us to be vulnerable, so that people can truly feel the genuineness of our commitment. And it requires that others “surrender” their reservations and have faith. That faith is critical. Without it, what we do is just mechanical and lacks the directional vector — the deeper purpose that is so important in providing energy to move toward our goals, whether we are leading or following. In Letters, I speak of trust packets as the vehicles in the exchange of commitments between leader and team member. I also speak of commitment as a mutual covenant, not policed by an outside document or a quality control officer. It is an internal act, upheld only and solely by our inner character.

This trust factor is the essence of the core within each of us. It raises the very fundamental question: can one learn to trust? Look at the adjectives I chose for the Core group above: Consistent, Authentic, Discerning, Persevering, Grounded. Are these innate? Or can they be trained?

The reason that this is an important issue in my course is my desire to leave my students with the tools to expand their leadership capacity. So I ask them to examine all the characteristics outlined at the beginning of this article (Inner, Outer, Core), in terms of whether they are shareable, learnable or innate — a topic of very rich and important dialogue, which touches on all three of the vital habits considered in this article: Balance, Breathing and Trust.

In all of these discussions with my students, something has bothered me: the prevalence of the designation “innate.” It implies that we either have “it” or we do not. It implies finality. Core is, by its nature, deeply internal — you cannot have others “cover for you.” If you do not have it, you are “done-in.”

I have begun to take a different view. I have come to believe that everyone of us has the capacity for integrity, honesty and authenticity. Each of us has a deeply seated spark of goodness. But as we fend off the challenges of living, we tend to develop coping mechanisms that “shield” this spark of light. We grow a “shell” around our spark — a shell of varying thickness, depending on our own personal life journey. Our task in learning to be good leaders and, for that matter, happy people, is to learn to shed — or at least crack — this shell, so that the inner spark can shine through. As others see our light, it becomes easier for them to trust us to lead our entrepreneurial ventures to success.

THE LEADERSHIP COVENANT: DOES IT APPLY TO COMPANIES WITH HIGH TURNOVER?

Last week I had the pleasure of speaking to a group of 13 MBA students from the Ohio State University Fischer College of Business. They are on a six-week internship program at a number of Silicon Valley companies. The gathering was also attended by two well-known and successful Silicon Valley entrepreneurs and by the Director of the OSU Center for Entrepreneurship. One of the entrepreneurs asked an important question, which prompts this post.

The subject of the question relates to my concept of covenant introduced in Letter 3: “Absorbing Uncertainty: the Entrepreneurial Covenant.” The central concept of that Letter is the role the entrepreneurial leader plays in absorbing uncertainty in an organization. The leader, with the broadest understanding of the organization and its business, is expected to have the greatest capacity for absorbing uncertainty. Putting their trust in the leader permits people with valuable skills but perhaps more limited capacity for uncertainty to operate in the inherently risky environment of an entrepreneurial organization. Offloading uncertainty onto the leader frees these organization members to focus on their jobs. They are giving the leader “trust packets,” and each time the leader accepts such a “packet” a covenant is established between leader and team member — an intangible bond that becomes part of the fabric of the organization. While this concept of trust packets and covenant comes from my experience of building companies in technologically complex industries such as pharmaceuticals and energy, where innovation is an intense multi-disciplinary process often taking many years before commercial success, I have generalized it.

So, the question I was asked:

Has the nature of this covenant changed over time, as organizations have shifted from the tradition of a career with a company measured in decades to the standard more typical of today, whereby organizations have a much more fluid employment pattern?

This question applies particularly to Silicon Valley, where annual turnover of 10+% is not unusual, and where engineers and scientists move to different companies every year or two. It brings up a plethora of issues I have wondered about often: How can we build a lasting organizational culture if there is high turnover? How do you harness the energy of a team if the individuals consider themselves temporary? Does the concept of allegiance apply? How do you develop esprit de corps when each employee is more interested in accumulating a ”portfolio of stock options” than in being passionate about the company’s vision? How do you build a company identity when one-third of the personnel turns over every few years?

It seems reasonable to suggest that the special bond between the entrepreneurial leader and his or her team should be different when the individuals are only engaged for a temporary specific mission as opposed to absorbed with a long-term shared vision for a company. The argument is that the nature of the link — the fabric — is different when the employee anticipates a short association rather than an enduring career within the organization. Nevertheless, my answer to the question I was asked is unequivocal: the covenant into which the leader enters is the same regardless of the nature of the organization. Sure, there may be situations where a professional arrangement is short term from the beginning. But even then, the leader expects full dedication that transcends just the details of the transaction, and a special connection needs to be made between the leader and the individual if one expects the best out of the service. I believe this applies to external attorneys and consultants as well, although it is all the more true when we make a full-time hire. The moment I engage someone to join my organization, I am not thinking of that individual’s departure. I am thinking of how he or she can be part of my dream. I describe the concept of the company, highlighting the unique role I expect the individual to play, and enter into a relationship which, at that moment, has only one possible outcome: success. Whether a person will re-consider the decision later is something neither of us can predict at that moment. I am not hiring that person on the basis of doubt, but of positive expectation.

The important factor to realize: the covenant is about “relationship” rather than “transaction.” Of course there are transactional elements in any hiring relationship – after all, there must be clarity of roles, tasks, skills, reporting, compensation. But at a deeper level, it is about the individual getting excited about the mission of the company, putting trust in the leadership, and then diving fully into the action. That is the essence – and the fun – of being in an entrepreneurial organization. And in making this happen, the leader fills a crucial role at the “apex of a pyramid of trust,” as he or she builds this fabric of relationships – both internal and external.

I do accept that people will move on. It has happened to me often in building companies, and at times it has distressed me – especially when I put my trust in someone only to find that a “better offer” woos the individual away. It is a burden the entrepreneur must carry: we cannot expect everyone to be “grabbed” as deeply by the excitement of the dream as we are. But I still proceed as if everyone is fully in the game, even if this sometimes leads to what I call the “asymmetry of the covenant.” When I find I’ve made a mistake in hiring someone — especially a senior executive — and I ask this person to leave, I go out of my way to make it easy. I consider what effect my decision has on the person’s family and career. So, for example, I go the extra mile to give the individual time to find another position. On the other hand, so often when a senior executive is lured by “a better offer,” the notice that I am given is very short – presented with the argument that the other opportunity “needs to know immediately.” I find that to be very asymmetric, but have reconciled it as part of the leadership predicament.

When I hear of the high turnover rate in Silicon Valley I remind myself that there are many companies here and elsewhere that do have long-term employment. The extreme may be Lincoln Electric, a model we might do well to study. See for example Koller, Frank (New York: PublicAffairs, 2010) Spark: How Old-Fashioned Values Drive a Twenty-First-Century Corporation: Lessons from Lincoln Electric’s Unique Guaranteed Employment Program.