I am not an expert on leadership. However, I know that the leadership ability of the chief executive officer is perhaps the single most important element to operational success in an entrepreneurial venture. I know this because, as an investor in startup businesses, I have been slapped in the face vigorously by this market reality.
What is leadership in the context of entrepreneurship? I believe that the most important ingredient in a CEO is his ability to get his employees to follow him to the ends of the earth, if necessary. He needs to be a Pied Piper.
I have been inspired by CEOs whose employees will literally do anything for them in order to make the company successful. Unfortunately, I have also experienced CEOs whose inability to cultivate good relationships with employees has led to such disdain that the employees take pleasure in the failure of the CEO and the failure of the company especially if that means they can get rid of the CEO.
Let me explain what I'm trying to say through a few experiences:
• The Egotistical CEO: Some time ago, a new CEO joined a fast-growing entrepreneurial venture. In my view, she overcompensated for her own insecurity by feigning superiority. For example, while everyone else in the company had inexpensive, practical desks, she demanded a mahogany desk and a nicer laptop than everyone else. It set her up for failure, because she would have had to perform at extraordinary levels to persuade employees to follow her.
• The Abrasively Shallow CEO: One founder-CEO with a good idea managed to fund his company and have a great start, attracting top talent to surround him. Over time, however, his annoying personal habits, traits and style wore thin, to the point that employees were ready to mutiny. In hindsight, I can see that he expected Herculean performance out of others but was not willing to lead by example, and the employees saw through the words and judged by the true performance of the CEO.
• The Decisive CEO: One CEO I know is extremely decisive. After a reasonable amount of time to study the options facing him, he takes in all the advice and makes a decision. He may not always find the best answer, but he makes an adequate decision that moves the company forward. I would put Ray Noorda in this league. In reading about the "winter of six presidents" during the early 1980s, when Novell churned through six company presidents in about six months, Ray Noorda (president No. 6) arrived on the scene with some capital and made a decisive move. He opted to place all his bets on local area networking, and the rest is history.
• The Pied Piper CEO: There seems to be no limit to what a group of humans can accomplish if they are all moving in the same direction. One CEO, faced with the gutting of all his financial resources in the dot-bomb implosion of 2000, gathered the employees together and persuaded most of them to work for a year without salary, and instead receive stock options. This was at a time when stock options were considered valueless. But those employees trusted this CEO. In the end, they all made a lot of money when the company weathered the storm and became a cash cow that was sold to a public company. This CEO may not have had any particular expertise in the normal business areas of marketing, finance, sales, etc., but he was able to lead the team out front, and they were willing to follow. That is pure magic.If you are the founder-CEO or hired CEO of an entrepreneurial venture, its success rests squarely on your shoulders. Think long and hard about the type of leader/CEO you are or can be. If your employees will go to the mat for you, then you will be successful.
John E. Richards is associate director of the BYU Center for Entrepreneurship. He can be reached via e-mail at email@example.com.