What Makes A Startup Entrepreneur A Bad Leader

I am the best bad leader in the world. Not only do I know everything about how to fail as a leader but I also have spent large amounts of time with bad leaders.

This is a unique opportunity for you to hear what the top 11 qualities are of bad leaders.

All of the time I read articles, “Top 10 qualities of great leaders”.

Why do people write these articles? Were they great leaders?

I have no idea. In most cases it doesn’t seem so. It seems like they write a lot of articles about leaders. Study is one thing, writing is the next thing, but doing and then repeat is how you learn.

So why do they write these articles? 

They write them to get name recognition. They write them to get consulting gigs. To be a life coach maybe to other leaders or CEOS. They write them to get speaking gigs.

And that technique works. I know this. If you write enough articles about leadership, someone will pay you to teach them how to be a leader. Try it and you’ll see.

But I have to stick with what I know. I know a thing or two about good leadership. But good leadership is very rare.

I can count a list of good leaders on my two hands. Larry Page is a good leader. Maybe Winston Churchill was a good leader but I don’t know.

Sometimes, to be a little bit better, you just have to avoid the little bit worse.

So let’s get started. The qualities of a bad leader.

A) NOT UNDERSTANDING THE 30/150 RULE

A leader has to follow the 30 / 150 rule or they will be a bad leader.

This rule has worked for 200,000 years. If a rule works for 2 years then ignore it. If a rule has worked for 200,000 years then pay attention to it.

For 200,000 years humans were tribes. Every tribe had a leader but when the tribe got too big for one leader (more than 30 people), it would split in two.

Then, around 70,000 years ago we evolved to handle tribes up to 150 people.

Then maybe 10,000 years ago we figured out how to be above 150 people. But this is so new, an evolutionary blip, that we screw it up all the time.

But for each of these three categories (< 30 people, < 150 people, > 150 people) bad leaders have different opportunities to prove themselves if they don’t understand how the nature of leadership changes based on size of population.

B) UNDER 30 PEOPLE: AVOIDING ONE ON ONE GIVING

If you are a leader of less than 30 people, you have to know intimately the problems of all 30 people (or less) in your organization.

You have to know their skills. What they are good at. What they are bad at. What they want to be good at. What their dreams are.

Each person should be assigned one thing.

That’s their responsibility. Bad leaders give people many things and then those people do mediocre jobs at all of them instead of being responsible for their one special egg they have to carry from one side of the room to the other on a spoon.

When I was running a company with less than 30 people I would take random employees with me to meetings. This way they would see the effect the company had on our clients. My goal: I knew I had limitations as a leader. So I wanted my employees to be leaders.

Bad leaders get jealous of the people underneath them and never hire people smarter than them. This is the #1 most common thing a bad leader does.

Bad leaders don’t want people to rise up higher than them. Good leaders train people to rise up higher than them.

Understand each of the 30 people at an intimate level. Know who their parents are. Know what they do for fun. Help them maximize their skills. Make them succeed and shine past you.

Bad leaders die lonely as the 30 people leave, one by one.

C) ABOVE 30 PEOPLE, BUT BELOW 150: HOW TO SCREW IT UP

When your organization is between 30 and 150, it’s impossible for you to know everyone.

So make sure everyone is talking about everyone else. I want to be able to ask A what B is like to work with and I want a real good answer.

The people reporting directly to you should be giving more than they are getting to the people working for them.

And then thats how the leader, indirectly, gets to know the entire 150 when he or she is putting together teams and assignments and trying to inspire people for a common goal.

D) FAILING THE “VISION THING”

Above 150 people you need to do many things.

But here’s the #1 thing leaders fail at. No vision.

What’s a vision? I suppose a 1000 boring books can be written about this. Let’s hold off for a second on defining it.

But above 150, it’s impossible to know everyone in your organization or even know second-hand about everyone in your organization.

So the most important thing you can do, in fact the only thing you can do, is lead by example. Show that you all share a common story and vision.

For instance, what if 50,000 people are in your organization. Or in the case of the President of the United Stated, 300 million people.

You can’t unify the people by talking to each one and understanding their problems. 
You can’t define roles and fulfill dreams for people by talking to others who know everyone.

You have to unify them with a story. A story everyone believes in and is inspired by and is willing to follow.

So if you and I believe in the Yankees, we’re more likely to trust each other than if I like the Yankees and you like the Mets.

All stories: religions, nationalism, politics, issues, etc are more or less designed to figure out how to unify the greatest number of people with the strongest ties possible.

Because we are not so good at it, often this degrades into wars, or poor leadership, or things just disappear into the furnace of time.

When Tim Cook became CEO of Apple, everyone was afraid the story would change. The stock dropped.

What was the story? It wasn’t that Steve Jobs “gets the most profits”. A story is rarely about money (although money itself is probably the strongest story on the planet).

It’s that Steve Jobs had the greatest combination of “technology + design”. Could Tim Cook keep that story going? Tim Cook’s leadership will be entirely judged on whether he keeps that story going or if he can successfully change the story.

Actually, he has to do both. Because if he tries to turn himself into Steve Jobs then he will be judged on the story of: “is Tim Cook just a bad version of Steve Jobs.”

So it’s a delicate balance. One that has to be dealt with every day in order for him to attract the best employees, keep his customers happy, keep his investors happy, and probably to keep himself happy.

This is leadership.

E) HAVING A BAD VISION

Ok, let’s get closer to defining a bad vision. Good visions are difficult to come up with. It’s pretty rare.

But since I know so many bad leaders I can tell you first an example of bad visions.

I’ve been in the management of at least two companies worth over a billion dollars. In both cases, leadership was horrible.

How did they get to a billion dollars with such bad leadership? Easy. Anyone can do that part. I will tell you how.

They went public on the stock market and then used their shares to buy other companies. If you buy a lot of small companies then suddenly you’re a messed up big company.

Your only vision was: “we just bought a lot of companies that do the same thing and now we have a billion dollars in revenues!”

Ach! Your vision might even be worse than that. It might be “We just bought a lot of companies, fired all of the HR people and accounting people (because we had “synergy”) and now we have a billion in revenues and even greater profits and margins!”

“Synergy” means “bad story”.

Every company that has ever done that has failed.

Some companies did that and came close to failing. For example, Google never had a chance of failing. But they were buying a company a week when Eric Schmidt was the CEO.

They weren’t quite bringing these companies in under the fold correctly and Google was starting to flounder. Divisions were being shut down. Morale was at a low because the vision of Google was starting to flounder.

Larry Page took over and changed the story. He said, “Google is the best in the world at these four things” and he closed down everything that wasn’t part of one of those four silos.

Everyone left in one of those silos can now say, “We are the best in the world at this” and that contributes to the larger vision of Google of having the entirety of world information at your fingertips wherever you are. The first company in world history to do this.

Man, I wish I worked at Google, to be honest. It almost happened once when I tried to sell a company to them. I loved their vision so much I wanted to bathe every inch of my body in it. I wanted to be religious about it.

And that’s what all great religious leaders do. They tell a story. Some elements of a good story:

– We fight an evil force (think the Apple 1984 commercial against IBM. Think Buddha rejecting the caste system. Think Washington rejecting a third term because he didn’t want the Presidency to turn into a monarchy).

– We have something mysterious that nobody else has (a deity, better design philosophy, better technology, etc)

– We think people will be happier if they work with us, subscribe to us, join us. Apple often has inferior products to other comparable products. But people are actually happier with an Apple product because the story is so strong.

– Our leaders have “seen the light” or “come out from the cold”. Steve Jobs had to leave his company for a decade in order to come back a hero. Buddha had to leave his home for seven years to achieve enlightenment. Mandela was in jail for decades.

– Together we are better than apart. The bigger we are, the better we can help people who join us. So..if a company is buying lots of smaller companies, they need a vision that explains why bigger is better.

For instance, we’re able to help people faster because we understand the needs in every city in the world.

– Social proof. A vision should have other stories within it. People your vision has helped. People whose lives became better. People who can stand up and say, “this changed my life”.

Bad corporate leaders will do this: buy all the companies, fire all the waste, report good numbers to the stock market, and then sell their stock, the stock goes down, the company falls apart.

I’ve seen that happen a lot.

F) BAD LEADERS DON’T WANT YOU TO CALL YOUR MOTHER

Every day, the people following a good leader should be able to call their parents and say, “I’m so happy. You won’t believe what I did/ learned/ met today.”

G) BAD LEADERS TALK BADLY ABOUT THEIR CLIENTS OR EMPLOYEES OR CONSTITUENTS

I was giving a talk at one company. It turns out they mostly hated their clients.

I was surprised. How can you hate your clients? They are the ones who pay you money. They are the reason you come into work.

If you hate what your clients’ story is, how you can help them achieve their dreams?

Leadership is not about achieving your dream. It’s about helping everyone else achieve their dreams.

This is NOT the employees’ fault. Everything comes from the leaders. If the leader doesn’t love the clients/constituents then the people below the leader and the people below them won’t.

Trickle-down leadership is the only leadership.

H) BAD LEADERS DON’T WANT YOU TO PASS THEM

I’ve had four mentors in my life.

What do I mean by that?

It means I wanted to be like them. I wanted my life path to mirror their’s. I wanted to mimic their behavior and learn their knowledge so I could be as successful as them.

I’ve had many more teachers than four. But maybe only four mentors.

And here’s what happened to each one of them: they all wanted me to fail at some point. That’s a bad mentor.

I learned what I could from them. I did everything they asked. I helped each one of them with their continual successes.

But at some point, when I wanted to go on my own and learn more and start my own business or direction, they all were angry and they all tried to stop me and none of them talk to me anymore.

In two cases, they actively tried to damage me even though I had never done anything but help them. It even gets worse but I don’t want to put anyone down. I was aware of the dangers and went into it willingly.

A good leader helps the people around them succeed past them. A great example is Stanford professor, Rajeev Motwani.

What!? Who is he?

Well, he was Sergey Brin’s advisor. And instead of trying to keep Brin in a cage, he opened the cage and Brin flew out and started Google with fellow grad student Larry Page. Motwani became a billionaire as a result.

Leadership doesn’t ask the question “How good can I get? How far can I get?”

Leadership asks the question, “How far can the people around me get?”

People always say negative things about Steve Jobs, because of unfair media portrayals of him. But if Steve Jobs was such a bad person he wouldn’t have been as great a leader as he is.

People like Tim Cook, Jony Ive, John Lasseter (from Pixar) and many others (even Bob Iger, the CEO of Disney), Tony Fadell (developer of the ipod, who just sold Nest for $3.2 billion to Google) owe huge amounts of their success, their creativity, the distribution of their creativity, and their freedom and well-being, to the fact that at one point or other they were mentored by Steve Jobs or benefited from leadership decisions made by Steve Jobs.

All of these people were very self-motivated, which is how they found themselves with someone like Steve Jobs as a mentor.

But combine that self-motivation with the leadership skills of Steve Jobs and you end up with great success.

The same thing happened at Google with the leadership skills of Larry Page.

The CEOs or COOs of Twitter, Facebook, AOL, and Yahoo all were at one point mentees of Larry Page and are now successful leaders and mentors themselves.

I) BAD LEADERS DON’T KNOW THEIR NUMBERS

I’m raising my hand. When I ran companies it took me a long time to realize what numbers I needed to know.

For instance, when you run a company you need to know not only your revenues and earnings but also your revenues and earnings per employee, per customer, per square foot, etc.

This applies whether you are the leader of a company, of a meetup group, of a country, of anything.

What are the metrics you need to know to determine success?

For instance, if you are the teacher of a class, come up with a list of things you hope your students achieve by the end of the class.

Not all of them will achieve it. That’s ok.

List each student. Next to each student’s name, list all of the things you want them to achieve. At the beginning of the class, list each item for each student on a scale of 1-10.

Add up all the numbers for all students so you have one final number. This is the number you are starting with.

By the time the class is over, that number should be higher. It might mean just one student succeeded greatly. That’s ok. Then you were a good leader.

If you are having a hard time coming up with the right metrics, just use these: competence, relationships, autonomy.

Help each person get better at those three things.

By the way, it’s important to have metrics. I visited a company recently that I felt had a bad vision for their customers. But even a bad vision is better than no vision.

J) BAD LEADERS DON’T GET RID OF BAD PEOPLE

I was involved with a company once that had a weak leader. He owed his leadership to the largest shareholder of the company.

The problem is: the largest shareholder of the company was hideously corrupt. The good leader should have disassociated himself from the large shareholder, built a vision around his own leadership.

Instead, he became mired in the financial difficulties of the largest shareholder, was unable to unify the divisions underneath him and provide effective mentorship to the people who directly worked for him.

The company fell apart a year after he took over as CEO.

Bad leadership, no matter what the situation, can cause almost instantaneous collapse. The 2008 failures of Bear Stearns and Lehman Brothers are great examples.

When Bear Stearns stock price was falling from $80 to $2 within the space of a week, the CEO was off playing in a bridge tournament. Bridge is a card game.

While he was playing cards, thousands of employees lost their jobs. And the downfall of Bear Stearns triggered the dominos that ultimately led to the multi trilion dollar bailouts of all banks and insurance firms that happened over the next ten months after the fall of Bear Stearns.

Ultimately, the person who had installed him to be leader of Bear Stearns should’ve removed him or recognized his own character defects.

Here’s the problem with that and I’ll mention it in the next point.

K) A BAD LEADER OFTEN HAS ENORMOUS CHARISMA

How can someone who is a bad leader reach a leadership position?

Easy. They have charisma. They are insanely smart and know how to charm the leaders who came before them.

A great example might be the set of a movie production. The director is the leader.

But he has a big problem. Actors are hired because of their enormous (ENORMOUS) charisma. The world loves them.

So when they want something, it’s hard to say “no” to them. A good director has to fight the urge to succumb to the charisma of the people he is leading and stay focused on the vision.

For instance, in the case of Bear Stearns, the intoxication happened the instant the original leader, Alan Greenberg, met the new guy.

Jim Cayne, the new guy, was a professional bridge player. In fact, that’s all he was. To play bridge well (to play any professional-level game well) you need years of study, you need to be able to read people very well, you need to know numbers very well and to calculate many situations in your head quickly.

Alan Greenberg loved bridge also. But he wasn’t that good at it. So Jim Cayne used bridge to charm him.

Many good leaders are successful game players include Bill Gates (bridge), Warren Buffett (bridge), Peter Thiel (chess), and numerous others. Jim Cayne was able to use this to his advantage.

Alan Greenberg was an aspiring bridge player. When he met Jim Cayne he asked Jim, “How good are you?” and Jim said, “if you played me for 100 years you will never be able to beat me.”

That began the road to success for Cayne and then the entire collapse of the American economy.

L) BAD LEADERS SMOKE CRACK

I don’t mean literally. Although if they smoked real crack they probably will never get to a real leadership position.

There’s a cognitive bias that causes people to not see their own failings. They’ve spent so much time, effort, and money creating their particular vision that they have “investment bias” that prevents their brains from saying, “maybe i’ve made a mistake”.

A bad leader will not admit his faults or even think about them. It’s too painful to think about those faults because of this cognitive bias.

One time I was starting a company at the same as a friend of mine. I knew instantly his company was bad but, perhaps I was not a good enough friend, I didn’t tell him his idea was bad.

Instead I would question him: who are the users? Who are the customers? How will you make money?

I wanted him to see for himself through my questions that his idea was bad.

But because I was asking these questions it sort of “woke me up”. Every day I would ask myself the same questions about my own company. Every day I would call my partners and ask them, “am I smoking crack” and I would go over the questions with them.

This process forced me to outline new features every day that could help me provide better services to my customers.

I sold my business eight months to the day after I started it for $10,000,000.

My friend’s business: nine years later he’s still pushing it. It has zero revenues.

You have to step outside yourself and do due diligence on your own organization as if you were an outsider. Come up in advance, all of the metrics of success. Decide if those are the correct metrics.

You have to assume you are smoking crack because often you will be. You can’t help it. We’re all human. So get help from others in your organization. Get help from customers. Get help from people outside the organization.

They won’t always be right either. And sometimes they will lie to you just to avoid being hurtful to your dreams (just like I was with my friend).

The only person who can ultimately prevent you from smoking crack is you. This separates the good leaders from the bad leaders in many cases.

M) BAD LEADERS WERE BAD EMPLOYEES

Leadership starts long before you reach the top of an organization or community.

At any point in your career, you are either a thermostat or a thermometer (hat tip to Jim Kwik who told me that metaphor).

You either define the temperature of the people around you and help them to achieve their goals and dreams, or you simply do as you’re told and be a follower and never inspire.

How do you become the thermostat?

– Every day, 1% improvement on yourself in the areas of physical, emotional, mental, and spiritual health. This 1% compounds very very quickly.

– Every day, do something to help the people around you achieve greater competence, better relationships, and more freedom in their choices.

– Repeat this: help others, then give them full credit. Whether it’s your boss or your colleagues or your friends or family or whoever.

Bad employees and leaders do the opposite of the above. But leadership starts at the bottom, does these three things, and floats to the top.

Leadership is a vague term. Because sometimes the boss is not the leader. Sometimes the king is ruled by his court. Sometimes the artist is supported and driven by the leaders in her entourage.

And there are so many pitfalls along the way. It’s easy to get caught up in ego, money, bad visions, the enticements that flirt with you the higher in the ladder you go.

The feeling of, “Ok, I’ve done it!” when there’s still a long path to travel on. It’s so easy to give up.

That’s why I never trust the articles that say “here’s how to be a good leader”.

Because I know that I have succumbed to all of the above pitfalls over the past 20 years. If I try to just avoid them (or do them LESS), then maybe one day I can be a decent leader.

A leader of what? Well, first, my self.

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