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Why Being A Founder Doesn’t Make You A Leader

I consider myself lucky for many reasons. Among them is the chance I’ve had to serve as board member, trustee, advisor and/or investor with a number of companies and charities. Their focus has ranged from the spirits industry and other consumer products to civic, educational and charitable institutions. Oversight for an organization from a board’s […]

I consider myself lucky for many reasons. Among them is the chance I’ve had to serve as board member, trustee, advisor and/or investor with a number of companies and charities. Their focus has ranged from the spirits industry and other consumer products to civic, educational and charitable institutions. Oversight for an organization from a board’s point of view — seeing what works and what doesn’t — has taught me a lot.

One truth I’ve learned is that a founder isn’t necessarily the ideal leader going forward. Entrepreneurial invention isn’t the same as leadership skill. It’s important for ANY organization to ensure that the right people have the right skill sets. As a company or institution evolves, its leaders must evolve, too. Sometimes a board has to intervene — that’s its responsibility — to ensure that change occurs for the wellbeing of a company and its shareholders.

Example: Elon Musk — obviously a brilliant guy and a genuine visionary. Not only is he the CEO of Tesla, Inc. but among other ventures, he founded and heads SpaceX to enable the colonization of Mars. He’s also a co-founder of PayPal and more.

But being able to invent and envision doesn’t “automatically” make Musk a leader. Leadership requires many important skills, including judgment — like knowing not to smoke marijuana during a globally available podcast, thereby affecting the public image of himself and his brand.

On September 16, 2018, The Telegraph ran a story for its mostly British readers with this headline: “If Elon Musk wants to save Tesla, he doesn’t have to look far.” It went on to cover Musk’s public pot-smoking. Plus the allegations of unsafe standards at Tesla’s California factory, which came after the death of a motorist using the company’s driving-assistance software. And his “bungled” attempt to take Tesla private. Ultimately, of course, the SEC settled charges with Tesla. Musk will remain as CEO, no longer functioning as Chairman and paying a stiff fine.

Musk is just one example. Some make international news and others are visible only to board members like me. Another you’ve probably heard of involved Travis Kalanick, former CEO of Uber, the peer-to-peer ridesharing, taxi cab and delivery service. Uber has been changing how rides and deliveries can be handled these days.

But Kalanick made news in early 2017 by losing his cool with one of his own Uber drivers. In a video captured on dash cam, the founder — in the backseat as a passenger — exploded with anger when the driver told Kalanick that his employees didn’t trust him anymore and complained about falling rates. Kalanick made a public apology, acknowledging the driver by name as he wrote to the public: “This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”

I give Kalanick credit for acknowledging his own lack of leadership skill and his need to improve. The company has since hired an experienced CEO — Dara Khosrowshahi — who was previously CEO of Expedia Group and is a board member of BET.com and of The New York Times Company.

Again: having a great idea does not equate to being a great leader.

Another exec who learned that lesson the hard way and got fired is Groupon founder and former CEO, Andrew Mason. Mason was once so highly esteemed, he made it onto the cover of Forbes magazine with the headline:

Groupon is the Fastest Growing Company Ever
 The Next Web Phenom

But as Mason admitted to Eric Johnson last year in an interview with online tech journal, recode.net: “What I wasn’t prepared for was the degree to which you enter the big leagues and it’s an entirely different game once you’re a public company.”

There are many examples of excellent thought-leaders whose visions make them effective organizational leaders. Apple CEO Steve Jobs has long been controversial in that regard. Certainly, people can grow. Current Apple CEO Tim Cook has said that Jobs, “matured significantly during the latter part of his career.“

Even if you’re the founder and creative brains behind an amazing innovation, you need to know when it’s time to step away and let the professionals handle management. Successful team leadership requires different skills than dreaming up phenomenal innovations.

Here are a few thoughts I’d offer any founder as your business begins to grow:

1 — It’s clear that even Steve Jobs — as brilliant as he was at technology — was less comfortable with PEOPLE. With more insight into himself, he might have come to that realization on his own. If he had proactively turned the business management over to someone else with proven leadership skill in a larger organization, who knows what else he could further have achieved?

Founder: start with an honest look in the mirror, putting ego aside. If the person looking back at you isn’t as comfortable with leadership as he/she is with creative innovation, give the reins to someone else.

2 — Seek the opinion of those you trust around you … with management experience beyond your own. Be sure they understand that they won’t be penalized for their honesty. There are many options today for “360º Feedback” research tools, surveys that provide anonymity to respondents in order to give a leader truthful feedback. You’ll find proven options in seconds on Google, LinkedIn, etc.

3 — Include on your board those who, themselves, have experienced success in leading large organizations. Then be willing to learn from them!

All I can tell you, whether you’re an entrepreneur or a senior exec, is that everything I’ve learned from my experience on boards confirms what we’ve seen in business news: It’s never “automatic” that a great thinker is a great leader. Ultimately, the board must ensure that an organization is well-run, starting at the top.

My suggestion is to keep this learning in mind, whether for your own career path or for any organization you influence. For me, it’s been a helpful realization.

John is available as a guest speaker, sharing the insights he’s gained with diverse audiences around the world.

Website: http://www.McDonnellSpeaks.com

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