Entrepreneurial Power Could Contribute to Your Startup's Demise. Here's How to Stop It.
Entrepreneurs who let power cloud their judgment risk running their ventures into the ground.
Lone wolves make riveting film protagonists. In real life, maverick styles fueled by unchecked power regularly lead straight to disaster.
Consider the recent revelation discussed in the Washington Post about a top Google executive. His misdeeds, including colleague sexual harassment and assault, were buried for years by the tech giant. Thanks to a shareholder’s lawsuit, the public has been alerted to his shocking abuse -- and the equally stunning lack of repercussions from Google. Not only did the offender get away with his activities, but when he retired he was fêted with a $90 million exit package.
This tale proves that seemingly all-powerful leaders can fall. They are not heroes or uber-smart mavericks. They are humans, no more or less, whose habits and mentality can sneak up to bite them.
Related: 8 Ways My Ego Killed My Business
Spotting and analyzing power-hungriness.
I once worked with a power-focused CEO of a tech company who exhibited all the attributes of someone who thought he was above the rules. He tossed the F-bomb liberally and threw fits meant to scare and intimidate employees. No one could stop him, or so he thought. After a mass exodus of top talent, the board confronted the CEO -- and founder -- and threatened to fire him. He realized at the eleventh hour that he was in trouble and that bullying would no longer work in his favor.
That CEO fell for the common lie that entrepreneurs must be the sole reason for their firms’ success. Forget about collective intelligence. Those types of people believe in their own mental shortcuts, snap decisions and personal biases. Others are mere means to an end, not contributors to the cause. Fortunately, not all leaders treat co-workers with such contempt.
Researchers at the University of Toronto's Rotman School of Management discovered that individuals who have strong moral identities are immune to the corruption of power. Only those with weak moral identities succumb to self-interest in the presence of perceived power. Consequently, self-awareness and the ability to objectively consider how we view the world might be the key to making better choices as leaders, as corroborated by evidence presented in an American Psychological Association study.
Acknowledging the signs of power abuse in ourselves can be tough. Power-hungry people tend to be set on their visions rather than the needs of a client or problem. Their large egos block out voices bringing in different perspectives, ensuring they never receive input or advice. Consequently, they feed off of out-of-control entitlement, burning through relationships and resources, thoroughly unable to pivot out of rigidity and self-preservation.
Is it any wonder so many startups fail? CBInsights investigated the reasons new businesses go under. One of the top culprits was a poorly arranged core team. But perhaps the lack of member diversity and fit had more to do with mismanagement coming from the top than it did from a dearth of available A-list players.
Changing a power-fueled mindset and coming to grips with our own weak points can be difficult. If you want to be the strongest entrepreneur on the block and lead with authority and integrity, you must face the mirror. Push aside your ego and focus on improving your skills, starting with three recommendations:
1. Create a board of directors.
Amass a group of people who can guide your business and personal decisions and actions. Bring together individuals you know will give you honest feedback. Ask your colleagues, supervisors and friends for insights on what you are doing that could be causing problems. Brace yourself, though: Hearing the truth can be difficult.
Andy Katz-Mayfield, the CEO and co-founder of Harry’s, reportedly dived headfirst into a special Stanford University MBA course geared toward teaching founders how to accept criticism and improve emotional intelligence. What he discovered was a “rude awakening.” He noted of the experience, “You realize you’re the one whose calibration is off sometimes.” Yet he credits the opportunity for improving his willingness to be vulnerable.
2. Build trust.
People feel safer taking risks, innovating and speaking their minds when doing so in trust-based environments.
Research by Adam Galinsky shows that accountability curbs power taken too far. When you have people you admire and respect who are willing to hold you accountable, you're more apt to keep the focus on others and gain insight into your blind spots.
The Wales Institute of Social and Economic Research, Data and Methods surveyed teens to figure out what they most wanted out of their friendships. The results revealed honesty as a top-valued trait, along with a sense of humor and kindness. In fact, forthrightness ranked several times higher than popularity.
Leaders should also cultivate relationships with tell-it-like-it-is friends. People often avoid conflict, but some conflict is normal and healthy and results in problem-solving. People are often afraid to give feedback, so ask for it and let them know it's wanted. As long as the information is given for the right reasons from people you respect, you can use it to improve decision-making and better solidify your own values.
3. Own your mistakes.
Leaders immersed in a pool of power rarely admit to errors. More commonly, they try to cover them up. Sweeping them under the rug only diverts valuable attention from more important tasks. Eventually, the mistakes surface and are usually more difficult to deal with at that point.
Is it tough to admit responsibility? Ask Mark Zuckerberg. The CEO of Facebook has had a rough couple of years. Still, at Facebook’s F8 event, he took charge and took responsibility. As reported by The Verge, Zuckerberg vowed to step up his social platform’s privacy, all the while admitting that the company he built had suffered serious reputation problems. However, he held his ground as the face of an organization that had withstood serious peril, a good indicator he sincerely wants to make improvements.
Entrepreneurs rose to positions because of personality, passion and gumption. They need to make sure the power they innately enjoy from their top-rung position does not cloud their judgment. Otherwise, they might run their ventures aground rather than navigate them safely to the open sea of success.