It’s the struggle of every start-up leader, across roles, – how to create multilayer, generational leadership to scale through the much longer journey of a start-up than many employees are able to stay around for. Some of the most successful technology companies (witness Twitter most recently) have their founders return to the helm during perilous times.
Should startups care about generational leadership? Absolutely. Generational leadership is not about CEO succession – it is about ensuring that a business can thrive even when great people leave.
The paradox is this: Technology startups are built on the mythical “A-player,” someone who contributes at 10x the normal human being. Suppose you have the good fortune of recruiting such an individual. What happens when they leave? Won’t the business performance in that individual’s domain equally suffer by 90 percent?
Now, that doesn’t work. So what do you do?
- Try to create a business that doesn’t need 10x performers, then try to hire them anyway: Is the sales process unbelievably complex? Are the technical requirements extremely nuanced? Both would require 10x performers. A more scalable approach creates the kind of process or the kind of software that can be built by mere mortals.
- Make it the responsibility of every leader to have a succession plan in place: As a founder or CEO, you can’t step into every possible job – and in an employment environment as robust as Silicon Valley, people are going to leave. But great leaders think of themselves as owners first (because they are with the stock they earn) and worry about what happens to the value of their shares on the day they move on. This applies to every level of the organization. Of course, this assumes you’ve created an ownership culture.
- Actively promote the next “vintage” of leaders: There will come a moment when the people that helped you build the early stage business either move on voluntarily or involuntarily. The key is to create the next vintage – the ones who are not motivated by pure creation at the early stage but rather by the stage of business you are at.
- Hire versatile leaders: Versatile leaders are ones who can, in the worst case, do the jobs of the people who report to them. They might not do it as well as the person they are replacing. In fact, if they are empowering leaders, they will enable their team rather than micromanage it. But when they face an inevitable departure – they can step in.
- Put people in jobs that are tests: The clearest way to test if you have generational leadership is to challenge individuals to take on responsibilities that are beyond their current job function. Do they step up? The best promotions are absolutely obvious.
- Always be recruiting for key roles: Its the transition from key people that is most scary, but if you’re always recruiting, it gives you confidence that the business won’t skip a beat.
It’s important to work really hard to retain the best people. But there comes a time when it’s the right time to let great people go. You might have “saved” them multiple times, persuaded them to stay on with you, but their heart is elsewhere. Perhaps they have turned negative. Perhaps their demands have become unreasonable. To create generational leadership, you have to have the courage to test it. When the moment comes, trust in your grand plan. Trust the next generation.