The CEO, but Not the Founder: How to Lead an Already-Established Tech Company
There are lessons to learn from the missteps of CEOs like Travis Kalanick and Carly Fiorina. Are you paying attention?
There’s a certain dread-inducing inevitability that every company faces sooner or later: the moment the founder of a company no longer leads the company. Founders of successful startups are actually replaced quite often, and that creates an uncomfortable situation for many -- not least of all for the company’s new leader…
I personally had big shoes to fill when Intive brought me on to be CEO, in 2012. The company already had a decade and a half of experience developing and deploying digital solutions for a broad range of clients, in addition to a well-established culture and ethos. Despite the business acumen and entrepreneurial chops I brought to the company, learning to integrate myself and truly establish myself as the leader was no small task.
For those of us called in to steer an already-established tech company, the challenges are daunting; and no matter what your business card says, nobody becomes the leader of company overnight. Here’s how to lead a company that was there before you.
Be humble and listen. Take a page from Uber.
When you become the new leader of an existing company, it’s imperative that you adopt the mentality of an apprentice or an absolute beginner to understand the company and the people that make it go.
Talk with every person in the organization. Listen genuinely and with the intent to understand how each person fits into the organizational big picture. Don’t be arrogant about your past experience and successes; use these things for yourself but don't constantly refer to how you've "done it all" before. Otherwise you will alienate the people you need to make the company work.
Also understand that you will make mistakes, and be accountable for them.
It’s now been more than a year since Dara Khosrowshahi took the reins at Uber. At the time of his hiring, Khosrowshahi was the highly successful CEO of Expedia. Under his watch, Expedia saw the value of its bookings more than quadruple. Uber, meanwhile, was constantly in the news for all the wrong reasons, with turmoil at the executive level and with the company as a whole in the throes of a cultural crisis.
However, Khosrowshahi made a point to talk with employees at every level to better understand the situation he was inheriting. What he repeatedly heard from Uber employees was that they wanted to “do the right thing.” Khosrowshahi said he took the advice to heart.
Uber is now 12 months into a cultural overhaul. Along with taking concrete actions to make Uber rides safer for customers, the company has shed its “growth at all costs” mentality which permeated during its founder and former CEO Travis Kalanick’s tenure. Khosrowshahi also took steps to clean up Uber’s discrimination and sexual harassment issues. And he showed a genuine willingness to cooperate with regulators after the years Uber spent building a reputation of working around regulation for the sake of growth.
The company still has a long way to go, and Khosrowshahi himself has acknowledged that not all of his actions have been effective. But Uber is turning a corner, and the positive change the company is experiencing is due in large part to Khosrowshahi’s humility and willingness to listen.
Prove that you are part of the team.
It’s natural for employees to look at a new CEO as an outsider. This is a problem if it continues indefinitely: Employees simply won’t be performing at their highest level if they don’t believe in the leadership. If you’re CEO, this can be overcome by proving to your employees that you are one of them -- and it all starts with communication.
You will have to make crucial decisions almost immediately, and how you communicate your decisions is the most important part of your job. Understand that with every decision you make, you'll be taking a risk. Finding a consensus among the experienced members of the team you now lead and providing adequate reasoning for your decisions will have a monumental bearing on your success.
So, when is it clear that the team you’ve been called upon to lead is finally “your team”? In my experience, that happy event happens when your team starts communicating your plans to others in a positive way. You know you’ve been accepted when you see the decisions you’ve made being evangelized by other people throughout the company.
Take note of other leaders' past missteps. Think: HP.
As you integrate into your new leadership role, take note that not every CEO who's been hired from the outsidehas been interested in being part of the team. In 1999, Hewlett-Packard hired Carly Fiorina as CEO following the considerable success she had had in executive positions at AT&T and Lucent. As the CEO of HP, Fiorina made history as the first woman to lead a Fortune 20 company, and she made positive impressions with veteran employees at the beginning of her tenure.
But, by the time she was forced out in 2005, the company’s share price had more than halved. In fact, HP's net income saw no gain at all over the course of her tenure, despite the fact that the S&P 500 had a 70 percent gain in net income over the same period. Indeed, HP’s share price went up 7 percent on the day Fiorina left the company.
So, what went wrong? Observers point to HP’s misguided acquisition of Compaq, which Fiorina pushed for despite the deep reservations of board members, shareholders and fellow executives. Some pointed to the fact that Fiorina reportedly attended only 17 percent of company board meetings. Then there were some who said she was more concerned with giving speeches than actually running the company, which is a compelling insight, given her subsequent, 2016, presidential bid.
All of these factors indicate someone -- whether intentionally or not -- who was not fully committed to being part of the team.
Be confident, but also humble.
Even for those CEOs who are committed team members, some decisions -- particularly those involving personnel -- are never easy. At Intive, we recently decided to reorganize our delivery teams around a matrix setup. There was a lot of debate internally not only about if we should do this, but also how. As CEO, I had to make the final decision and take full ownership for the outcome. We moved forward with the, change, which wasn’t easy, but it has made a major impact in our development as a business.
You never know how “B” will turn out when you choose “A.” You need to be confident you are making the right decisions. Also, your actions and direction after the decision is made should allow your whole team to feel just as confident as you are about the decisions you've made.
Related: Real Leaders Own Their Mistakes
Bringing in an outside CEO to an established company is a daunting prospect -- not just for the person that’s called in to run the ship, but also for the employees bracing for the changes that new leadership brings. But with the right approach and a proper balance of humility and confidence, an “outsider” CEO can take a company to heights that could have not otherwise been attained.