I was debating what this first post would be about. I want this to be an all-encompassing business, finance, and economics blog, but where to begin? In light of some conversations I have been having about leadership recently and seeing news headlines (ie…Elon Musk and Elizabeth Holmes), I have decided leadership will lead (see what I did there) off my blog.
What makes a good leader different from a bad one?
Here are my (current, always evolving) top 5 traits of a great leadership:
Transparency:
The longer I work, the more I believe in “Radical Transparency/Radical Truth.” I have only made it about 1/3 of the way through Ray Dalio’s book “Pinciples”, but the parts that have stuck out for me the most are Ray’s views on radical transparency and truth. Ray isn’t alone, as I first heard about this while doing reports on Netflix and their founder/CEO Reed Hastings. Lately, Hubspot has been in the news discussing their “radical” culture. I have a paragraph at the bottom of the blog regarding Ray and his book in case you would like to know more, but the best concise definition of Radical Transparency I have seen is from Gene Hammett (Gene’s article here) stating, “Radical transparency” is creating a culture that is direct and honest in communication and sharing of company strategies so that all people are trusting and loyal to the continuous evolution of the organization. For leaders, radical transparency is a way to build trust with their employees.” When it comes to the truth part of the equation, in the book, Ray states “I want independent thinkers who are going to disagree. In order to be successful, we have to have independent thinkers, so independent that they’ll bet against the consensus. You have to put your honest thoughts on the table.” The worst bosses I have had are the ones that shoot down the ideas of smart people because it wasn’t “their” idea. Even less effective are the information hoarders. This is an ego play and it is bad for the culture of any business trying to grow successfully. These people should be weeded out immediately and replaced by leaders that not only encourage free thought, but also push the boundaries of those thoughts further than the employee thought they could reach. In addition, the leader should let the idea creator have their moment to shine. The best leaders are the ones that measure their own success on the successful advancement of those under them, not on a specific metric or two for quarterly reporting. Metrics are important, but don’t sacrifice long term growth and big picture success for short term results or you will never be satisfied and will have a lot of turnover from great people.
The cons to radical transparency is that not everyone can operate this way. Employees need to display vulnerability and be able to handle unfiltered honesty. Leaders need to foster the idea that any feedback needs to truly be a learning experience. In this culture there is a loop of honest feedback about how everyone is doing. Ray went so far as to have baseball cards made for all of his employees which listed their strengths and their weaknesses based off the feedback. This also means people might not be right for certain jobs and if they can’t be placed somewhere that plays to their strengths they will need to be filtered out. This can be hard for people who already have self-doubt or just aren’t mature enough to handle tough conversations, but in the end I believe everyone benefits from this system.
Ability to Manage Up/Lead Down simultaneously:
This is probably the most underrated item on this list. When people think of leadership they tend to think of downstream leadership. How does a leader communicate to the people that answer to them? How do they adapt to the different personalities on their team? Far too few people think about the art of “managing up” and how this ability truly makes you a great leader. Anyone can be a “Yes man (woman),” but it takes a special person to play the part of buffer for their team and still be able to satisfy those above them. Harvard Business Review has a terrific article with tips and tricks for managing up different types of bosses (HBR Article). Managing up is having the ability to redirect your boss in a way that won’t upset them. Understanding how they operate and anticipating their needs is key. Being able to thoughtfully push back on assignments if it may overload the team or asking why to get a better understanding of how certain projects are adding value. My favorite bosses are the ones where I have said, “Why am I doing this? Who reads this spreadsheet? I don’t even see how this is adding value other than it’s what has always been done,” (obviously those statements said in a non-confrontational way) then having them talk to their leader and come back and say, “You’re right, this isn’t really adding any value. What can we replace it with that will?” THAT is how you manage up and lead down simultaneously. We are capable adults and should be treated as such! If your boss is too afraid of rocking the boat that they won’t push back above them or take a stand for you then they are a bad boss, full stop. Leading down is the ability to see the big picture and organize tasks (talked about below) while simultaneously updating executive leadership on progress, successes, and pitfalls that may lead to changes which require push back.
Psst…if you want to know the most effective way to manage up, ask your local Executive Assistants. They are PROs at managing up.
Organization:
This one is relatively straightforward. Great leaders are organized. I don’t think it is possible to be a great leader and not be organized. Now, before you say anything I am referring to leadership in the sense of most executive leadership. If you are a true visionary that founded an amazing company, this probably doesn’t apply, but I guarantee they have employed people who are excellent at organization and that is why they were able to scale successfully. When it comes to organization, it is important to understand what everyone has on their plate currently, what the due dates are, and other projects waiting in the pipeline once the current ones are finished. If there is a project missing deadlines, you need to understand why and be able to effectively communicate that to leadership above you (managing up), and jump in and help if the deadline is absolutely static. I will say, when it comes to organization, and multitasking, in my opinion, women are far superior to men. They’re also better at opening up communication so people are not afraid to say this won’t be done in time. This is purely opinion from experience, but there are a lot of statistics that show this to be true (Article here). This is not an excuse for poor organization, if you want to be a great leader it is something you will need to work on. I tend to be singularly focused and use methods like time blocking to organize my tasks and take advantage of my strengths. This is my biggest construction area and has been for some time. It is why I was happy to move out of accounting and into a corporate finance which allows for more flexibility with projects and is less compartmental.
One of my bosses went so far as to have a notebook with color coded tabs and color coded post its. It looked like something a middle-school kid kept in a trapper-keeper, and people would joke with her about it, but guess what? It fucking worked! She had an answer for damn near any question regarding financials or project statuses, on the spot, everywhere she went. It was amazing how dialed in she was and she fully admitted she had a major weakness at one time when it came to organization and this is what worked for her. She was self-aware enough to recognize her weakness and adapted by finding something that worked for her. Great leader.
Big Picture Thinker:
So maybe the last paragraph made men unhappy, but now I will piss the women off too. Let me preface by saying these are overarching personal observations and do not represent anyone in particular, unless I am talking about a boss I have had, you might not be represented in my very small sample size.
I do think women are more organized, better multi taskers, and more detail-oriented. However, a lot of people think you are either a “details person” or a “big picture person.” So if men are not as good with the details, they may be better at the big picture? I have no idea, most of my bosses have been female, but I will say when I am in meetings men talk the most. Men, in my professional experience, are less afraid to share grandiose ideas and less afraid to fall flat on their face at a meeting, which might lead to the idea that they are better big-picture thinkers. Here is a Huffpost article on our different brains as I don’t want this to focus on sex (Huffpost article). Quick side not before moving on, this is why a company with a healthy mix of gender/race diversity will statistically always perform better than a homogeneous one. You need detailed AND big picture thinkers, but these are nuanced topics for another time.
The best leaders have the ability to see the big picture. At some point you need to break away from the data grind of daily activities and zoom up from the top level to see how the big levers move up and down. This also means you need to trust the people below you to do their job efficiently and let them do the heavy lifting while you look far into the future. One of my favorite recent quotes is from Jeff Bezos, CEO/Founder of Amazon, at a conference in 2017, “When somebody … congratulates Amazon on a good quarter … I say thank you. But what I’m thinking to myself is … those quarterly results were actually pretty much fully baked about 3 years ago. Today I’m working on a quarter that is going to happen in 2020. Not next quarter. Next quarter for all practical purposes is done already and it has probably been done for a couple of years.” That is amazing, because while most leaders are thinking about their annual goals to hit their bonus or what they can do quickly to turn around their quarterly earnings in the next 90 days, Bezos doesn’t give a shit about short-term. That was a big example, but anyone can think big picture. Any time you are tasked to something you should not just learn the mechanics of it, but learn the purpose. How does this affect our numbers or goals? Where does this fall in the grand scheme of things? If you can teach someone to do a job, but can’t tell them why they are doing that job then you need to become a better big picture thinker.
Another way to think of this is Left Brain vs Right Brain. A good leader can identify their strengths and weakness here and hirepeople around them to balance them out while fostering those with like minded brains to reach their potential.
Ability to Adapt:
So many people fight change, but in order to be truly successful, you will need to embrace, and encourage change. The world is moving faster than ever before. Your education is no longer finished after High School or College, but life-long learning is the new wave of successful thinking. We are all going to need to adapt to changing economics, evolving technology, and workplace politics. Don’t complain about it. Embrace it, carve it in to something that benefits you before it swallows you. If you have a leader that says you need to do something because that’s what has always been done, run! Be wary of anyone who rails when a new software rolls out. NO ONE likes to learn new software, but the company invested in it and is implementing whether you like it or not. The options are to complain and circumvent using it for as long as possible or to embrace it, because a semi-expert in it, and be the one everyone says you should go to if you have a question. That’s how you lead by example and set the tone for those under you. If you whine and complain, that will give your subordinates and coworkers free will to do the same. Do you think your boss will want to promote you then?
Parting notes:
For those unfamiliar with Ray Dalio (his book, so far, is a must read), he is the founder of Bridgewater Capital, a hedge fund which manages aver $160B in assets. Dalio’s own net worth is around $17B and he is one of the most highly regarded people on Wall Street. Ray has made a ton of money, lost it all, learned from his mistakes, rebuilt it, and in doing so was one of the few firms that successfully navigated the 2008 financial crisis. I will probably allude to “Principles” many times throughout this blog as it appears to be a 550-page masterpiece on Ray’s thoughts about life and work, which will be followed up with a 2nd edition in the future on Ray’s thoughts about Investing and Economics. In addition to the books, he has some great videos that break down some of these principles and some of his thoughts on economics in very cool, easy to understand ways.
When speaking about Netflix’ culture, a new book from Patty McCord came out titled “Powerful: Building a Culture of Freedom and Responsibility.” Patty was the Chief Talent Officer at Netflix during their most pivotal growth stage and I have this on my list to read. If any readers of this blog have read it, I would love to hear your thoughts. I have heard her on a few podcasts and it was fascinating.
What are your thoughts on leadership? Did I miss any? What are some experiences, good or bad, that you have had?
Finessing The GAAP 