Entrepreneurs Should be Respected, Not Loved

Posted on May 13, 2010 | 86 comments


I’ve been thinking a lot about what it takes to be a great leader and seem to be having this conversation a lot lately about Facebook, Yahoo!, Zynga and others.  I wrote several of the characteristics when I did the Top 10 (11) Attributes of an Entrepreneur.  One thing that I’ve realized over the years is that to be an effective leader you can’t aspire to be loved by everybody.  I think people with this affliction have a hard time being great leaders.  They dither on decision-making.  They fudge on org charts to appease people.  Clarity of purpose in leadership matters.

Think of the decisions we face as countries globally.  How much do we cut back public services to shrink our national debts?  How much do we bail out companies that were culpable of helping create our woes and what moral hazards does this create?  How much health care is the right amount to provide?  Who should be allowed to immigrate into our countries and on which basis?  How does the United States deal with 12-13 million illegal immigrants that are already in our country and came here illegally?  My point is that any decision you “actively” make will affect people.  Doing nothing is avoiding real leadership.  It’s kicking tough decisions down the line for somebody else to deal with in the future.  And for every day we put off decisions things get worse.

Companies are the same.  Tough decisions don’t always make you friends.  By default if it’s a “tough” decision some people will think you made the wrong one.  And when it means a change in somebody’s power, money or stature – or canceling a project that somebody has poured 18 months of their lives into – you’re not going to be popular.  Bad leaders want to be loved too much and their companies (or countries) suffer.

Take Jerry Yang, the co-founder of Yahoo!  I never worked at Yahoo! and I only met Jerry once.  But his role as “Chief Yahoo!” and his personality type seemed to be as the guy who built a wonderful, warm and fuzzy culture of purple at this new-fangled Internet kinda company.  That suited him when he wasn’t CEO.  But his tenure as CEO (and frankly the whole culture of Yahoo! pre Carol Bartz) seemed to be one of fudging decisions.  Not making hard choices in terms of organizational structure or product direction.  This led to the famous “Peanut Butter Manifesto” by Brad Garlinghouse.

I wasn’t in Jerry’s shoes so it’s easy to “Monday morning quarterback.”  So let me in stead paraphrase nearly EVERY single ex Yahoo! person I’ve ever spoken to on the subject.  “We had such a great company.  In the early days it was such a great company to work for.  Everybody returned our calls.  We were innovating.  Google was n-o-t-h-i-n-g!  We were the game in town.  But we failed to adapt.  Other people got strong.  In the same way that AOL dithered and allowed us to become the Internet darlings we, too, avoided the big, company changing decisions.  And over time our best talent left.  They couldn’t take it anymore.  And eventually I got tired of us being the industry punching bag.  Of not taking tough decisions.  So I left, too.  It was a shame.  I really loved Yahoo! in the early days.”

The way “being loved” manifests itself is that as a CEO you build a great team beneath you each with great ideas and big career ambitions.  And yet you still have scarce resources.  Your sales team is pounding the table because engineering won’t ship new features fast enough.  Engineering is pissed off because they need to do some technical infrastructure improvements and the sales team is always pushing them to deliver too many features.  “Sell what we have!!”  And you want us to work yet another weekend while you’re playing golf with clients and getting fat bonuses?  Marketing wants the sales teams to use the materials they’ve produced.  Biz Dev is pissed off because they can’t sign deals when they can’t get commitments from product management to agree to product integration plans.  Your product team is pissed off because they’re making $120,000 / year and some hot-shot 25 year-olds just made millions from the acquisition of XYZ company that we could have built here!

I see the CEO role of a growth company as often consisting of being “chief psychologist.”  You end up spending a lot of time listening to your staff, listening to customers, understanding human behavior / motivations, reviewing financial plans or GANTT charts and then having to make tough decisions because the one factor we ALL suffer from is limited resources.  Yes, even Google has to make these tough decisions about where to allocate staff and money.

By definition tough decisions produce winners and losers.  It’s your job to make those tough calls with the limited information you have and to soften the blow to the side that didn’t get their way.  If engineering got the shaft because “we need 3 more weekends from you to get this release out the door” … then there better be a solution to make this up to them and to explain your decision.  If you’re not going to release the features a large customer is expecting you’d better be prepared to call that customer yourself and take the bullets in stead of your VP of Sales.

In my experience it takes a really self-confident and resilient individual to make all of these tough judgment calls on a daily basis.  But over time if you make the tough calls with no fudges, if you’re fair and don’t play favoritism, if you explain your rationale publicly and clearly, if you help soften the blow to the side that doesn’t get their way … people will respect you.  And it is far better to be respected as a leader than loved.  In the end everybody will thank you much more for having had the courage – as long as your decisions were more often right than wrong.

Do you have a senior executive on your team that isn’t working very hard or producing results?  Afraid to make the hard decision to let this person go?  You think your team doesn’t notice over time that you can’t move non-performing people along?  People resent “dead wood” because when everybody else is working their asses off they hate seeing people who aren’t digging in.  Letting go somebody you like or who’s nice is never easy.  And I don’t say to do it lightly.  But if they’re non performing, they’re non performing.  There’s no place for that in a startup.  And in public companies we used to mockingly rename their titles to CVO … Chief Vesting Officer.  I often found that when people finally let some dead wood go and you explain it to the company most people thank you.

When I think about “respect” I think about Mark Zuckerberg.  I know a lot of people fear him right now and the popular thing to do is rag on Mark.  People fear his intentions and they’re pissed off at the changes Facebook has made to its privacy settings or channel arrangements.  In this post I don’t want to address those topics – I’m not a Facebook Fanboy.  But I do want to address Mark’s decision-making.  I believe it’s what makes Facebook, Facebook.  He has made decision after decision that was unpopular at the time – I’m betting even within his own organization many decisions were unpopular.  But he hasn’t fudged the tough calls.  He clearly isn’t obsessed with being “loved.”

Back in 2006 Facebook made a conscious decision to encourage the platform ecosystem even if it meant creating large businesses like Zynga (Slide & RockYou were the initial big players) that could make a lot of money off of Facebook.  MySpace dithered.  They felt that they didn’t want to create more Photobucket or YouTube successes.  “Why should these guys get uber rich off of our backs?”  Facebook took the long view.

When Twitter rose to prominence Mark made “the stream” the focal point of the user experience.  This pissed off application developers because it became harder to find apps.  This pissed off many users who were used to interacting with apps and easily finding people’s photos, etc.  But Facebook made a call that the stream was the longer-term core of what people wanted to do inside of Facebook and that he had to combat the growing popularity of Twitter.  I think this decision proved to be correct but history will tell us.  A muddled organization could have never turned on a dime like this.

The effed up on the launch of Beacon – they realized it and killed off Beacon – at least for now.  And more recently they have begun to pressure players like Zynga to use their payments platform and have pushed the security model to be more open.  Both of these decisions are unpopular.  We’ll know in 2-4 years whether or not they were the right call.  But they were each a tough call.  No matter how mad some people become – he is certainly one of the most respected figures in Silicon Valley.  He’s most often compared to Bill Gates.  Who else in their 20′s can you say that about?

My message isn’t to love or hate Mark Zuckerberg.  My message is that the best in companies only comes through making clear and decisive judgement calls in your business.  Embrace not being loved.  Don’t be a dick.  But learn to live with the doubters or the naysayers.  Live with the grumblings of people who don’t agree with you.  Let them air their opinions.  Give them their voice.  Show respect to them by having the tough, internal, town hall style meetings.  But stay the course if you believe in your decisions.  If you’re a good leader and if you make more good calls than bad ones – you’ll be respected.

  • http://www.victusspiritus.com/ Mark Essel

    Not every company will be as big as Facebook, or have the path of Yahoo.

    But a CEO/Founder's leadership style is the seed of corporate culture. I agree with many of the suggestions you make here, they show your experience and wisdom. But the best business practices before and after the network economy took hold, have shifted.

    Trust trumps, respect or love.

  • http://www.victusspiritus.com/ Mark Essel

    Not every company will be as big as Facebook, or have the path of Yahoo.

    But a CEO/Founder's leadership style is the seed of a company's corporate culture. I agree with many of the suggestions you make here, they show your experience and wisdom. But the best business practices before and after the network economy took hold, have shifted.

    Trust trumps, respect or love.

    And Mark Zuckerberg is painfully short on trust at the moment, from both developers (Zynga) and users.

  • http://twitter.com/lw Lisa Watson

    Very interesting PoV

  • http://twitter.com/lw Lisa Watson

    Very interesting PoV

  • Jayant Kulkarni

    There are interesting moral dilemmas that ethcists have considered regarding how we perceive the consequences of our inaction as opposed to action. One of the most famous is the 'Train switch problem.' I think that you might enjoy it. Here is a quick link: http://bit.ly/bmLkDM

    Looking forward to the next post!

  • Jayant Kulkarni

    There are interesting moral dilemmas that ethcists have considered regarding how we perceive the consequences of our inaction as opposed to action. One of the most famous is the 'Train switch problem.' I think that you might enjoy it. Here is a quick link: http://bit.ly/bmLkDM

    Looking forward to the next post!

  • http://www.brycemaddock.com/ brycemaddock

    Steve Jobs is another great example of an entrepreneur who is respected but not, necessarily loved.

    Thought of Machiavelli the whole post, and Karmel Allison stole my quote! Ultimately I think you have proposed a different answer to his question. Is it better to be feared or loved? It is better to be respected. (I Came to the fork in the road and went straight! -Jay-Z)

    I'm going to be at Disrupt to. Hoping you defy the odds and come!

  • http://www.brycemaddock.com/ brycemaddock

    Steve Jobs is another great example of an entrepreneur who is respected but not, necessarily loved.

    Thought of Machiavelli the whole post, and Karmel Allison stole my quote! Ultimately I think you have proposed a different answer to his question. Is it better to be feared or loved? It is better to be respected. (I Came to the fork in the road and went straight! -Jay-Z)

    I'm going to be at Disrupt to. Hoping you defy the odds and come!

  • AmericaFYeah

    Actually it's ok to be a dick, just don't be an asshole. Please view “Team America” if you need an explanation of the difference. In general it's also ok to be a pussy, but only as a low or mid-level employee, not if you want to be CEO.

  • AmericaFYeah

    Actually it's ok to be a dick, just don't be an asshole. Please view “Team America” if you need an explanation of the difference. In general it's also ok to be a pussy, but only as a low or mid-level employee, not if you want to be CEO.

  • http://bothsidesofthetable.com msuster

    I'm not arguing that Mark has made the right moves in the community, I'm arguing that Facebook has grown through bold decisions that were mostly right whereas political companies dither and die. BTW, if we want to have a debate about trust … what about Apple?

  • http://bothsidesofthetable.com msuster

    I'm not arguing that Mark has made the right moves in the community, I'm arguing that Facebook has grown through bold decisions that were mostly right whereas political companies dither and die. BTW, if we want to have a debate about trust … what about Apple?

  • Aviah Laor

    The problem (and opportunity) in this industry is that very few decision can kill you. So respect shoul go only to decisions that bring innovation, progress, fast moving forward, or removing the barriers for such progress.
    Does YAHOO make tough decisions with innovation and progress?
    FB is taking a big bet that people will conitinue to do the same but on public. However, if people will no longer like the prev FB usage pattern and start to use fictious nams, avoid cinnections/activity so teachers/employeres/peers will not see it in the future, or quit FB alltogether then Twitter won by forcing FB kill it's core value.
    There are so many examples: MSFT took the decision to go with the Windows line into the mobile space. platform. and so on.

    Drucker said that the three most charismatic and fear-of leaders in humman history (Hitler, Stalin, Mau) caused such a devastating damage to mankind.

    Decision should go with change, progress, innovation.

  • Aviah Laor

    The problem (and opportunity) in this industry is that very few decisions can kill you. So respect shoul go only to decisions that bring innovation, progress, fast moving forward, or removing the barriers for such progress.
    Does YAHOO make tough decisions with innovation and progress?
    FB is taking a big bet that people will conitinue to do the same but on public. However, if people will no longer like the prev FB usage pattern and start to use fictious nams, avoid cinnections/activity so teachers/employeres/peers will not see it in the future, or quit FB alltogether then Twitter won by forcing FB kill it's core value.
    There are so many examples: MSFT took the decision to go with the Windows line into the mobile space. platform. and so on.

    Drucker said that the three most charismatic and fear-of leaders in humman history (Hitler, Stalin, Mau) caused such a devastating damage to mankind.

    Decision should go with change, progress, innovation.

  • http://www.victusspiritus.com/ Mark Essel

    I'd wager Steve Jobs and Apple still has the trust of a good number of fans/customers, but far fewer developers than pre-Adobe shunning. I wouldn't trust Apple with my social data or owning my network connections.

    Steve's a helluva salesmen/pitcher though, whatever he's doing seems to trump my normal buying rationale (magic).

  • http://www.victusspiritus.com/ Mark Essel

    I'd wager Steve Jobs and Apple still has the trust of a good number of fans/customers, but far fewer developers than pre-Adobe shunning. I wouldn't trust Apple with my social data or owning my network connections.

    Steve's a helluva salesmen/pitcher though, whatever he's doing seems to trump my normal buying rationale (magic). Steve could sell salami sandwiches and many would pay the price of prime rib and think they got a bargain, maybe even me.

  • http://giffconstable.com giffc

    I totally agree. Can't dither, and can't be everyone's buddy.

    On platforms, since you hit on that too, you can't hope to be a successful platform via a 3rd party ecosystem and be greedy at the same time. You have to willing to let other people be really successful and not begrudge it. Facebook, Twitter, and even Linden Lab saw a lot of growth because they did *not* get greedy. I won't go into specifics, but in my experience, MySpace *was* greedy.

  • http://giffconstable.com giffc

    I totally agree. Can't dither, and can't be everyone's buddy.

    On platforms, since you hit on that too, you can't hope to be a successful platform via a 3rd party ecosystem and be greedy at the same time. You have to willing to let other people be really successful and not begrudge it. Facebook, Twitter, and even Linden Lab saw a lot of growth because they did *not* get greedy. I won't go into specifics, but in my experience, MySpace *was* greedy.

  • http://twitter.com/eranfiliba Eran Filiba

    What's the limit to how long a CEO chests these criticisms and appeases the critics or unhappy employees/clients? Cause sometimes some of the tough decisions they make are the wrong ones, it happens – we're human beings.

    When do you cross the line and now need to get in to the recovery mood? I guess that's what makes a great leader great, knowing where the line is and being realistic and honest with yourself.

  • http://twitter.com/eranfiliba Eran Filiba

    What's the limit to how long a CEO chests these criticisms and appeases the critics or unhappy employees/clients? Cause sometimes some of the tough decisions they make are the wrong ones, it happens – we're human beings.

    When do you cross the line and now need to get in to the recovery mood? I guess that's what makes a great leader great, knowing where the line is and being realistic and honest with yourself.

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  • davehendricks

    The ramifications of non-decision making manifest themselves in many ways….I bet a portion of job jumpers are leaving not because they have a 'loving' environment, but rather because the top leadership isn't making the decisions that lead to longer term satisfaction and success.

    If you are going to slave away at a startup with the hopes of hitting it big, it helps to have a leadership team that is making the hard/tough decisions that are going to enable success long term, not always the popular crowd-pleasing ones. ultimately people respect – and even love- those managers who challenged them and helped them grow, not the ones who coddled them and didn't make them stretch and achieve. Hugs don't go as far.

  • davehendricks

    The ramifications of non-decision making manifest themselves in many ways….I bet a portion of job jumpers are leaving not because they have a 'loving' environment, but rather because the top leadership isn't making the decisions that lead to longer term satisfaction and success.

    If you are going to slave away at a startup with the hopes of hitting it big, it helps to have a leadership team that is making the hard/tough decisions that are going to enable success long term, not always the popular crowd-pleasing ones. ultimately people respect – and even love- those managers who challenged them and helped them grow, not the ones who coddled them and didn't make them stretch and achieve. Hugs don't go as far.

  • http://bizthoughts.mikelee.org/ Mike Lee

    I've seen this in new managers as well. They come into their new roles with the baggage of an unfriendly manager they didn't like in their past, and resolve to be completely the opposite. “I'll be everyone's friend. They'll love me, I'll love them, and our work environment will be so much fun that we'll be a fantastic high-performing team,” they think.

    Then when it comes time to make a tough, unpopular decision, these managers buckle. They'd rather stall, sabotage, or pass the responsibility onto someone else than to order their team to do something unpleasant.

    IMO, Chief Psychologist is a very apt title for a leader or manager of any organization.

  • http://bizthoughts.mikelee.org/ Mike Lee

    I've seen this in new managers as well. They come into their new roles with the baggage of an unfriendly manager they didn't like in their past, and resolve to be completely the opposite. “I'll be everyone's friend. They'll love me, I'll love them, and our work environment will be so much fun that we'll be a fantastic high-performing team,” they think.

    Then when it comes time to make a tough, unpopular decision, these managers buckle. They'd rather stall, sabotage, or pass the responsibility onto someone else than to order their team to do something unpleasant.

    IMO, Chief Psychologist is a very apt title for a leader or manager of any organization.

  • http://pupeno.com J. Pablo Fernández

    I was always surprised whenever Facebook made the slight design change and literally millons of people shouting “That sucks! we want the old one back”. It must take a lot of self-esteem to take that much shit and hate and continue on the same path. Yes, Facebook has 300 million users, so 1 millon users is a minority but it's still 1 millon users.

  • http://pupeno.com J. Pablo Fernández

    I was always surprised whenever Facebook made the slight design change and literally millons of people shouting “That sucks! we want the old one back”. It must take a lot of self-esteem to take that much shit and hate and continue on the same path. Yes, Facebook has 300 million users, so 1 millon users is a minority but it's still 1 millon users.

  • http://www.hypedsound.com jonathanjaeger

    There have been several times in Facebook's history where people form groups to boycott Facebook because of recent changes or complain for a few days on their status updates. Those attempts at rage have been short-lived. While this recent privacy issue has probably drummed up the most bad press and seems to be the clearest threat to Facebook's potential (and legacy), it might be the best business decision. The path that Facebook is taking is one of maximum profit, not necessarily following some utopian ideal of free-flowing information. Maybe Facebook loses some overly concerned users over this issue, but maybe they stay the course and make more profits despite that loss. I'm not an advocate for Zuckerberg's methods, and I would prefer the default settings to be “private”, but anyone who is aware of the situation to the extent that they can delete their account is also aware that they can change their privacy settings. I guess only time will tell whether the recent changes are make-or-break decisions.

  • http://www.hypedsound.com jonathanjaeger

    There have been several times in Facebook's history where people form groups to boycott Facebook because of recent changes or complain for a few days on their status updates. Those attempts at rage have been short-lived. While this recent privacy issue has probably drummed up the most bad press and seems to be the clearest threat to Facebook's potential (and legacy), it might be the best business decision. The path that Facebook is taking is one of maximum profit, not necessarily following some utopian ideal of free-flowing information. Maybe Facebook loses some overly concerned users over this issue, but maybe they stay the course and make more profits despite that loss. I'm not an advocate for Zuckerberg's methods, and I would prefer the default settings to be “private”, but anyone who is aware of the situation to the extent that they can delete their account is also aware that they can change their privacy settings. I guess only time will tell whether the recent changes are make-or-break decisions.

  • http://twitter.com/kapilpoojari Kapil Poojari

    Mark, Could not agree more. But I think there are good and bad decisions made which could be identified based on the results of that decisions. People should not disrespect a leader just because of their few bad decisions. Everyone take good and bad decisions in many aspects, its not only limited to a leader.

  • http://twitter.com/kapilpoojari Kapil Poojari

    Mark, Could not agree more. But I think there are good and bad decisions made which could be identified based on the results of that decisions. People should not disrespect a leader just because of their few bad decisions. Everyone take good and bad decisions in many aspects, its not only limited to a leader.

  • cindygallop

    Couldn't agree more. And LOVE LOVE LOVE the 'Chief Psychologist' designator.

  • cindygallop

    Couldn't agree more. And LOVE LOVE LOVE the 'Chief Psychologist' designator.

  • http://twitter.com/jckhewitt JC Hewitt

    I have to disagree with you strongly on your defense of Zuckerberg and Facebook in general.

    Changes in a service tend to infuriate customers. Innovation in a customer-facing technology company usually results in more customer service complaints than it resolves. As far as I can tell, Facebook as a service is horrifically unstable, weak as an ad platform (ignoring the scale of the revenues – Myspace was once also impressive), and questionable in terms of its IPO scheduling judgment.

    I like you a lot, Mark, but I'm confused about your evaluation.

    Yes, effective leadership will piss people off. But it's foolish leadership to make decision after decision that infuriates your customers. It leads to a collapse of the company. Every time.

    As a side note, I hardly use Facebook at all, and have always disliked the service. The whole concept of an internet-within-an-internet harkens back to the early days of AOL.

    Your reading of AOL history is also skewed. Perhaps you forget, but they relied on volunteers to handle their customer service. A class-action lawsuit in filed in 1999 (http://en.wikipedia.org/wiki/AOL_Community_Lead…) put an end to that, and crushed AOL's competitive advantages relative to other dial-up providers.

    So… be more rigorous, Mark, you're supposed to be a Venture Capitalist!

  • http://twitter.com/jckhewitt JC Hewitt

    I have to disagree with you strongly on your defense of Zuckerberg and Facebook in general.

    Changes in a service tend to infuriate customers. Innovation in a customer-facing technology company usually results in more customer service complaints than it resolves. As far as I can tell, Facebook as a service is horrifically unstable, weak as an ad platform (ignoring the scale of the revenues – Myspace was once also impressive), and questionable in terms of its IPO scheduling judgment.

    I like you a lot, Mark, but I'm confused about your evaluation.

    Yes, effective leadership will piss people off. But it's foolish leadership to make decision after decision that infuriates your customers. It leads to a collapse of the company. Every time.

    As a side note, I hardly use Facebook at all, and have always disliked the service. The whole concept of an internet-within-an-internet harkens back to the early days of AOL.

    Your reading of AOL history is also skewed. Perhaps you forget, but they relied on volunteers to handle their customer service. A class-action lawsuit in filed in 1999 (http://en.wikipedia.org/wiki/AOL_Community_Lead…) put an end to that, and crushed AOL's competitive advantages relative to other dial-up providers.

    So… be more rigorous, Mark, you're supposed to be a Venture Capitalist!

  • http://www.asparagusgrowing.net Jenny

    I couldn't agree more, especially with the part 'Doing nothing is avoiding real leadership'. Next time before I make some decision, I will think about that. :)))

  • http://www.asparagusgrowing.net Jenny

    I couldn't agree more, especially with the part 'Doing nothing is avoiding real leadership'. Next time before I make some decision, I will think about that. :)))