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Why Reddit Needs to Replace Ellen Pao as CEO Reddit's CEO has lost her most important constituency: the company's vibrant community.

By Ray Hennessey Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

How do you successfully manage a community if you've alienated that community?

You can't.

And that's why Ellen Pao has to move on.

Reddit, the popular social-sharing company, has been trying to bounce back from last week's shutdown of many of its most popular subreddits, spurred by a protest over the abrupt and unpopular firing of Reddit exec Victoria Taylor. The protest, which temporarily brought the company to its knees, came amid growing complaints about Pao, the interim CEO who recently lost a multimillion-dollar gender discrimination lawsuit against venture-capital firm Kleiner Perkins Caufield & Byers. Pao was even the subject of a Change.org petition calling for her ouster, which, as of today, has more than 212,000 signatures.

Initially, it seemed Pao and Reddit handled the protest well. She apologized in very strong terms, saying she had "screwed up" and promised a series of reforms meant to quell the discontent. That is textbook leadership: indentify the problem, own up to your failure and fix it.

Trouble is, since last week's apology, two events emerged that suggest that Pao can't possibly be successful in the role of CEO, interim or otherwise, at Reddit.

First, this morning, The New York Times published a scathing op-ed by Brian Lynch and Courtnie Swearingen, the moderators of the popular IAmA program, which is behind the "Ask Me Anythings" that Reddit has come to be known for. Lynch and Swearingen laid out what everyone already knew: They initially took down the forum as a response to the firing of Taylor, who was well-respected, responsive and appreciated.

But, the firing was simply the last straw, they wrote, "just the most recent example of management's making changes without thinking through what those changes might mean for the people who use the site on a daily basis."

The shutdown was meant "to communicate to the relatively tone-deaf company leaders that the pattern of removing tools and failing to improve available tools to the community at large, not merely the moderators, was an affront to the people who use the site."

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It's important to note that Lynch and Swearingen are not employees, but rather volunteers. That's the beauty of Reddit's model: It is true community, a group of dedicated individuals committed to moderating forums based around the needs, opinions and voices of a far-flung, active user base. The actual employees of Reddit are there to support the volunteer work that has made Reddit into the foremost forum for ideas today. All because of the spirit and commitment of the volunteers. Volunteers are the best kind of brand ambassadors, not because they work for no compensation, but rather because their passion compels them to want to work for no compensation. They are gems in any business's crown. The depth of the alienation they feel is profound and should be worrisome to the Reddit board. The trust is gone altogether, and really can't be regained.

What's more, Pao's response right after the apology was also damning to her as a leader to Reddit. In an interview with NPR over the weekend, she said, "We rely heavily on the moderators and we really depend on them. What we learned from this event is that we need to communicate better with them and that we don't take them for granted."

But ponder that response for a moment. To Pao, the company learned from the protest that it needs to communicate decisions with moderators better and not take them for granted. Learning from mistakes is great -- but there was nothing new here to learn. This was something that should have been in your DNA from the moment you joined. The volunteer moderators are your company, at least as far as they rest of the world is concerned. It should never take a protest like the shutdown to make you recognize their importance in the ecosystem. You need to walk in the door every day with your moderators and their underlying communities on the top of your mind. To be so ignorant of that as to need to learn from an event like the site shutdown is simply malpractice as a manager and leader.

It's an inexcusable blunder for a CEO, akin to corporate disasters where so much emphasis was placed on product that leaders lost sight of the fact that their customers didn't want to buy it anymore (BlackBerry, anyone?). I imagine Pao has great plans for Reddit. She is smart and capable. No doubt she has come up with great tools and ideas to move the company forward. But to create strategy and concomitantly ignore your moderators shows a lack of true vision, or even an understanding of the rock on which you need to build your church. It is a failure of leadership.

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That sort of ignorance can't be tolerated by Reddit. If anything, there are tons of internal examples that suggest that only Pao was not in tune with the needs of the broader community. Alexis Ohanian, Reddit's high-profile co-founder, rejoined the company in an executive role last year when Pao's predecessor, Yishan Wong, unexpectedly resigned. Ohanian, who told Time Magazine that his return would provide "a kind of stabilizing presence and vision for the company," always preached the value of the volunteer moderators and had a fairly good relationship with them. Hell, he built the company, and its model, based on volunteer moderators and community. Taylor, whose firing lit the powder keg, was loved and respected by the moderators and was a great bridge between corporate Reddit and the community. One suspects that the kind of commitment to the communities has to be core value for every employee.

Yet, the Reddit community itself doesn't see that value in Pao. Sadly for her, it's unlikely she will ever get that benefit of the doubt. She can design and lead a best-in-class mobile strategy for the company, but she can never be an evangelist of her brand to Reddit's most important constituency. You can't lead a community when you've lost that community's trust.

So Pao needs to move on, either by stepping aside or facing a firing by the board. To be sure, it isn't an easy move to fire her. In this politically charged world, ousting the albeit imperfect and somewhat unfair symbol of perceived gender imbalance in technology companies is not a move without some headline risk. (Of course, Pao didn't seem to hesitate in firing a high-profile female exec in Victoria Taylor.)

None of this suggests Pao is incapable of managing or leading another company. She just can't run Reddit. Reddit is in many ways a mob -- an intelligent, thoughtful and disciplined mob, mind you, but a mob nonetheless. That is its beauty, its strength. It should be a privilege and an honor to bring leadership to such a vibrant constituency. Pao has lost that privilege.

Related: All Entrepreneurship Is 'Social' Entrepreneurship

Ray Hennessey

Former Editorial Director at Entrepreneur Media

Ray Hennessey is the former editorial director of Entrepreneur.

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