A Challenging CEO Can be a Positive Leading Indicator for Success: Comparing Behavioral Traits of Private Venture Technology CEOs to CEOs Across all Industries

By: Jenny Steelman

direct-manEverything We’ve Heard and Seen Suggests that CEOs of Fast Growing Technology Companies are Different

We’ve all heard private venture technology boards and executive teams grouse about CEOs with comments like, “He’s too maniacally focused.”  Or, “It’s hard to sway her once she’s put a stake in the ground.”

Think about Steve Jobs (and it’s easy to forget that for a few halcyon years beginning in 1976 Jobs was the co-founding CEO of a fast-growing, private venture technology company bringing disruptive technology to market).   It was no secret that he was a challenge with his “join or get out of the way” style. (1)  Mike Elgan, respected journalist, blogger, columnist, and podcaster, attributed Jobs’ success partly to his “mastery of the art of being a prick.”(2) One can say that Jobs took things to the extreme, but no one can argue that he wasn’t successful.

Brad Stone, author of The Everything Store: Jeff Bezos and the Age of Amazon, says that Jeff Bezos (another garage entrepreneur who founded Amazon in 1995) thrives on confrontation and can also take things to the extreme with comments like, “Are you lazy or just incompetent?”(3) Bezos, driven by his total commitment to improving both customer service and Amazon’s performance, says that one of the things “about entrepreneurs is that they are inherently stubborn individuals.  They’re the natural leaders who like to take charge and have things done their way.”(4)

Jobs’ and Bezos’ behavioral traits are almost diametrically opposed to those esteemed in CEOs across other industries leading larger, older companies.  In a study of the leadership of a particular kind of successful Fortune 500 company (those that transitioned over time from being “good” to “great”), humility was identified as an important CEO behavioral trait.   Psychology Today goes on to say that “while self-centered arrogance and disregard for others may lead to some short-term success, it is quite plausible to think that humility in one’s…approach to leadership is crucial for long-term success as a leader….”(5)

Clearly, founding and leading a fast growing technology company to short term success (i.e., a great exit for its stakeholders) requires a different set of behavioral traits in its CEO than those possessed by a CEO of a larger Fortune 500 company.   While those of us in private venture technology may find CEOs irksome, if not downright maddening, their behavioral traits, like those of Jobs and Bezos, may actually be requisites to founding and quickly building successful technology companies.

ProfileXT Validates that CEOs of Private Venture Technology Companies are Unique

While we in private venture have either observed or heard how difficult it can be to work with CEOs.  Profiles International’s ProfileXT has confirmed and objectively measured the behavioral traits that set private venture CEOs apart.   (See Summative’s White Paper, Improving the Candidate Evaluation & Selection Process for more details.)  The seven behavioral traits assessed by the ProfileXT are below. Underscored in yellow are those that distinguish venture-backed CEOs, by the greatest margins, from CEOs across all industries.

CEO comparison chart

 

 

 

 

 

 

 

 

 

 

 

Profiles International defines and interprets these behavioral traits and the variances observed between private venture CEOs and CEOs across all industries, in part, as follows:

  • Manageability – Lower scores reflect a working style that emphasizes individualized thinking and a willingness to question inefficient practices. This kind of person is not usually willing to blindly do the accepted thing.
  • Accommodating – The high Accommodating person holds group harmony and compromise as important guidelines for behavior.  On the other hand, the low Accommodating individual is willing to express disagreement and defend priorities without compromise when necessary.
  • Objective Judgment – High scores describe an individual who will trust observable facts in his or her problem-solving processes.  Low Objective Judgment describes a person who is willing to follow a hunch or listen to their intuition before acting.
  • Numerical Ability – High numerical ability is often associated with being confident when calculating numerical data. Often, decisions may be made quickly based on such data without having to refer to calculation tools since the work is often done mentally.  Alternatively, low scorers will often rely on calculators or other aids and may not be comfortable with positions that routinely use numerical calculations.
  • Attitude – Lower scorers are willing to question the intentions of others and the feasibility of outcomes. They tend to avoid appearing naïve.  High scorers tend to have a positive and accepting outlook regarding people and outcomes.
  • Decisiveness – A person with a high score will make decisions with the information currently available so processes do not become to mired in deliberation. This also reflects their willingness to risk failure or misjudgment for the sake of timelines. Someone with a low Decisiveness score will require as much information as possible before making a decision.
  • Independence – A person with high Independence prefers to take responsibility for accomplishing goals autonomously. Someone with low Independence prefers to turn to others to guide their performance.

It is no surprise that private venture CEOs display a more independent streak when compared to their peers in other industries.  It is in their nature to speak their minds and take calculated risks.  Looking for low scores in Manageability, Attitude, and Accommodating may seem counter-intuitive, but Profiles International’s ProfileXT now empirically validates that low scores in these behavioral traits are highly desirable for private venture CEOs.

Peggy Thompson, Summative’s Managing Partner and Founder, knows that CEOs with low Accommodating scores are better able to focus on priorities vital to success when making decisions. “CEOs do not have the luxury of accommodating and validating every idea and suggestion. They only have a short window to get the right product or service to the right market.  If they take the time to accommodate and explore everyone’s ideas and suggestions, they could miss that window.”

Instead of focusing on maintaining a hopeful outlook and creating a harmonic environment, a good CEO has to quickly question and accurately assess everything in their fast moving world.  A high Attitude CEO will, for example, trust the pipeline reports of a newly hired Vice Presidents of Sales before that trust is merited, where a low Attitude CEO has a healthy amount of vigilant skepticism that is imperative in order to ask the tough questions about the pipeline.  Otherwise they risk forecasting numbers that they cannot deliver.

Summative has seen the benefits of high Objective Judgment scores in private venture CEOs since they have to quickly make decisions using, in part, intuition to position a company correctly in the market place, bet on the right go-to-market strategies, grow revenues, and outperform competitors without the benefit of a lot of time or historical data.  When working with a company that is defining or entering new markets and seeking to outperform competitors, a low scorer on Objective Judgment will struggle because (s)he doesn’t have the ability to include observable facts and past history in the decision making process.

Peggy has found that Numerical Ability is a reflection of intelligence.   “CEOs who score high on Numerical Ability are smart leaders with an aptitude for working the numbers.   They are quick on their feet and can quickly analyze numbers.   This is essential in an environment that often lacks a deep accounting and finance bench.”

The Unique Behavioral Traits of Private Venture CEOs Can Make Great Things Happen

ProfileXT can be used in the recruiting process to validate that CEO candidates possess the unique behavioral traits required to grow successful private venture technology companies – even if those behavioral traits may, at times, present difficulties for boards and executive teams.   Although Peggy’s heard countless stories about how difficult private venture CEOs can be to work with, she has personally seen the benefits these CEOs deliver to fast-growing technology companies.

“In my first few years recruiting for private venture technology companies, some of the stories I heard about early-stage CEOs made me cringe.  Now, I just smile and reassure stakeholders that CEOs’ ‘unique’ behavioral traits – which are very different than those of big-company CEOs – are likely what will drive the success of the company.  When those traits are channeled with a high degree of intellectual and emotional integrity to the benefit of the company, great things can happen.”

(1)     Austin, Ben, “The Story of Steve Jobs: An Inspiration or a Cautionary Tale?” WIRED, July 23, 2012, http://www.wired.com/2012/07/ff_stevejobs/all/ .

(2)     Elgan, Mike, “In Defense of Steve Jobs,” Cult of Mac, October 29, 2011, http://www.cultofmac.com/126863/in-defense-of-steve-jobs/.

(3)     Anderson, George, “Is Jeff Bezos a Horrible Boss And Is That Good?” Forbes, October 22, 2013, http://www.forbes.com/sites/retailwire/2013/10/22/is-jeff-bezos-a-horrible-boss-and-is-that-good/.

(4)     Bulygo, Zach, “12 Business Lessons You Can Learn from Amazon Founder and CEO Jeff Bezos,” KISSmetrics, https://blog.kissmetrics.com/lessons-from-jeff-bezos/.

(5)     Austin, Michael, “Ethics for Everyone,” Psychology Today, July 2, 2013, http://www.psychologytoday.com/blog/ethics-everyone/201307/surprising-trait-successful-business-leadership.

 

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