Forging Leaders At Startups

Character cannot be developed with ease and quiet. Only through experiences of trial and suffering can the soul be strengthened, vision cleared, ambition inspired, and success achieved

Helen Keller

Some of the questions I have been grappling with for over a decade are: ‘How should startups forge leaders’? ‘What is a good leadership framework for startups’? ‘Are there some universal competencies that leaders in startups need to demonstrate’? The second and third questions have been addressed in a different article.

People in startups are starved for bandwidth and time. Putting them through traditional development programs that large companies put their employees through simply doesn’t work. Therefore, the fundamental design feature of a leadership model for a startup should involve building leadership capability on the job and hence integrating learning into work. One can argue that this is true for large companies as much as it is for startups. The only difference is that in mature companies, people are not so constrained for time, and these companies can afford to put their people through other fancy interventions, whose outcomes and effectiveness have always been under question.

If you speak to anyone on what has been the biggest influence in their lives or what helped them to get to where they are, very few are likely to say that it was some training program they attended or a certification they acquired. Almost everyone will tell you that it was an individual they worked with closely (either in a professional or a personal capacity) or a real-life experience they went through (either on the job or in their personal life).

Leaders are forged through tough experiences. Leaders are shaped by other leaders. This is true in companies as much as in real life. Some situations make men out of boys (or women out of girls). Life presents these situations to individuals mostly by accident, and when presented with these situations, individuals often curse their misfortune. However, after going through these successfully, they figure out that they are much stronger after the experience and much better equipped to deal with similar situations in the future. In some parts of the world, this is also referred to as “the school of tough knocks”!

Smart startups create tough learning experiences by design.

Let me recount specific examples:

In one of the companies that I am familiar with, the Monthly Review Meeting (MRM) was a forum for forging leaders. The MRM could be pretty intimidating if you were attending it for the first time. The questioning was brutal, there was no mincing of words, no room for niceties, and the orientation towards facts and data was unrelenting. You had to hold your ground and had to fight back with your own point of view. Disagreement was respected (and the respect was multiplied multifold if you could substantiate your point of view with data, facts or insight) and mute acceptance evoked disgust. If you survived six of these in a row, you could write a new CV. You learnt to develop a point of view and defend it. You learnt how to handle three questions that haunt everyone: “so what?”, “Why?” and “what if”. You learnt problem-solving. You learnt to handle aggressive environments. You develop internal customer orientation. No amount of classroom training in a leadership institute in a beautiful locale can ever substitute for this. In addition to shaping and forging leaders, these are great forums to spot potential leaders. Hence succession planning and internal deployment on key projects become much more objective and unbiased.
In addition, the way these MRMs were structured, they helped spot talent. The executive team sat through the full review. Each member had to present how their business or function did in the month that just went by. Each member was accompanied by her team during her presentation, after which the team left but the concerned executive stayed on. This was a great opportunity for the entire executive team to observe individuals that they would otherwise never get to see in action. See how they responded to difficult questions, check out their depth and clarity, their customer-centricity, their ability to communicate and influence etc. Quite frankly, you could judge a leader by the competence of her team, which was now visible to others. Some leaders were lone wolves. They turned up alone for most meetings. Some of them were even brilliant, knowing every detail, but one never knew who operated behind the scenes in their teams – who were the numbers guys, who created the beautiful decks, or who put together those wonderful insights. One tended to be suspicious of the reality and durability of the strength of the teams that such leaders led. An unconscious consensus got built in the minds of the executive team on the capabilities of the next line of leadership. This helped in smooth succession planning.
In some of the other companies, I have seen leaders being encouraged to invite some of their first line or second line team members, who may not be directly involved with the issue under discussion, to meetings and reviews. These individuals are invited to sit through these meetings to observe and learn how disagreements are resolved, how consensus is built, how choices are made, how problems are solved, how execution issues are foreseen and addressed, how plans are made & communicated etc. All these skills can be learnt by seeing people demonstrate these in a live setting and relevant context.
Companies also place calculated bets and give difficult roles to people who demonstrate potential. And the potential is assessed based on how this individual comes across in some of these intense forums like the MRMs. It is not left to a manager to be the sole judge of potential. This individual is then provided with some initial support and sponsorship during her teething period. The learning that this individual goes through and the character she develops as a result of being thrown in at the deep end (with some support) can never be substituted by any leadership development program.
The last tool for forging leaders is setting stretch goals and allowing them the freedom to imagine how they could be met. Tough goals and stretch assignments are mechanisms to throw people into the deep end and see how they manage. Some of the leaders that we saw were very good at this – they pushed their people hard and pushed them right to the brink but provided just enough support to prevent them from toppling over. Individuals who went through these successfully soon shaped up into seasoned leaders. The beauty of this is that if you do this, the individuals concerned would nominate themselves for the right kind of leadership programs and show serious interest in learning some of the leadership techniques and frameworks that these programs intend to impart!

I am a great fan of the 70:20:10 model for creating leadership capability – which essentially says that 70% of learning and character-building comes from tough assignments & difficult situations; 20% from insightful conversations and straight talk (mostly with your manager), and only 10% through classroom training.

Some managers leverage this model unconsciously for forging leaders. Equipping them with a toolkit on how to go about this more systematically helps them hone their skills. Managers who leverage this are good at having insightful conversations and straight talk. Incidentally, these are precisely the managers that thrive in a startup. There is another category of managers who say the right things but just do not demonstrate the skills of insightful conversations and straight talk. Without these two skills, the 70:20:10 model totally fails. You might get taken in by such managers for a short while before figuring out that they are not doing it right. I had seen one such person at a startup. All his life he had worked with large companies with one failed stint at a startup. He was soft-spoken and came across as very collaborative and cooperative. He had points of view on people and people management. His constructs were all copybook style – nice to listen to for two minutes but lacking in depth and detail. He made grand claims of providing tough feedback to his one-downs, especially the ones that weren’t performing well. However, it was evident after a while that his feedback was a watered-down version, and he wasn’t himself personally doing anything to fix issues. It took a long time for most people to figure this out.