Bad CEOS abound in tech. Here’s why that’s bad for the company, your career and maybe your health.
Steve Jobs is a terrible role model for tech company CEOs. Idolizing Jobs with his notorious tantrums and berating of employees sets a lousy example for tech execs trying to build a company – especially a company without the powerhouse sales appeal of a Mac or an iPhone, according to tech company leadership experts.
Taking management cues from Jobs has helped create a Frankenstein monster of narcissistic a-hole CEOs. Case in point: Uber CEO Travis Kalanick who’s recently had to publicly apologize for his bad behavior and pledge to appoint a number two executive to serve alongside him and make key decisions. The expected move followed a string of negative news about the company’s culture and business tactics that damaged the company’s reputation with drivers, employees and recruits, according to people inside and outside the company, as reported in The Information.
Krister Ungerboeck, a tech industry CEO coach says, “The Steve Jobs biography was the worst thing to happen to leadership in the past 50 years. The biographical account of Steve Jobs’s petulant, aggressive leadership style gave an entire generation of young tech founders and CEOs an excuse for being a jerk. Alas, Steve Jobs was not the first. The tech industry is known for visionary jerks.”
Why Bad CEOS Are Bad For the Bottom Line
“Why should I care how my employees think about me? I’m the boss, the top dog. My employees are lucky to work for me and to get their paychecks. Not to mention their stock options.” Is this hypothetical thought train how your CEO would react to any discussion about their leadership? If so, maybe you better take a glance at Paysa’s company rankings to see how the company’s doing. And maybe check out Paysa’s job postings at other companies. Especially if you’re at a start-up.
Your CEO is probably not the next Steve Jobs. And acting like Steve Jobs in a bad way could torpedo the company if tech talent quits and takes their talent elsewhere.
About 50% of all start-ups fail within the first five years according to U.S. Bureau of Labor Statistics data cited in a Tech.Co 2016 analysis. A Harvard Business Review study also cited puts the start-up death toll at 75% of venture capital-backed companies. Staffing problems is one of the top three out of 20 reasons given as why companies fail.
Highly skilled tech workers are walking out on $200,000 a year paychecks and free food perks because of what they perceive as bullying, harassment and other types of bad behavior that teachers would fix in an elementary school playground. But a workplace is not a playground despite the toys and games at many tech companies. And there is no teacher around. Just the CEO who may not have the skills, temperament or experience to be an effective leader. Or as in the case of Uber’s Kalanick, could be part of and possibly the root cause of the problems.
Because there continues to be a tech talent shortage, one that is likely to worsen if the Trump administration follows through on clamping down on H-1B visas, unhappy campers calling it quits is a tech disrupter. And not in a good way.
In fact, a major new study on “tech leavers,” puts the cost to the tech industry at $16 billion annually.
The study, sponsored by the Ford Foundation and the Kapor Center for Social Impact and hailed as the first study on this subject, looked at 2,006 tech or former tech employees who voluntarily left a job in the past three years. In the study population, 63 percent of respondents were male, and 75 percent were white and 91 percent identified themselves as straight.
“Setting aside basic matters of just not being shitty to fellow humans, this is an expensive problem. According to the study, each left job costs an average of $144,000 to fill. That’s where the $16 billion figure comes from,” stated a report on the study by Motherboard.
What those numbers may not include is additional decline in work by those left behind whose project with a team member may be disrupted and/or who may feel demoralized and depressed by the departure of a colleague.
The Vicious Start-up Cycle
Programmers, coders and other tech workers often put in famously long hours. Especially if they are working at a start-up. A toxic CEO may make the work environment too poisonous to endure on a nearly 24/7 basis – especially for someone who has other options. Such as cashing out and perhaps launching their own start-up. But as shown in a funny-but-not-really way in the HBO show “Silicon Valley,” no matter how awesome the product may be and how brilliant the founder is, if they don’t possess good people skills, the enterprise may flounder.
In a post called Why Silicon Valley Has So Many Bad Managers, the leadership education website Lighthouse lays out The Vicious Cycle of Bad Managers:
- A blank slate: You join a startup fresh out of college or early in your career. Exciting, impressionable times.
- Poor management: With a manager only a few years older than you, you have a tough experience.
- The last straw: After months of frustration, you quit and start your own company.
- Traction! With a little luck, your company takes off, and now you’re the one hiring and managing a team.
- Struggles: With no training, and only poor examples before, you may just become a bad manager, too.
- The Cycle Restarts: Some of your staff gets frustrated, and leaves to start their own company…
People Leave Managers, Not Companies
“People leave managers, not companies,” states the Lighthouse article about the prevalence of bad management in Silicon Valley. Other research concurs.
Gallup’s comprehensive 2015 study, “The State of the American Manager,” found that, “The manager accounts for at least 70% of the variance in employee engagement.”
If you are happy at your job, and are engaged; i.e. have a positive connection with your boss and your colleagues as well as your work, there’s a much lower chance you’ll go jump at a recruiter’s offer to go interview somewhere else.
“..a bad managerial fit can wreck morale and productivity—not to mention the company’s ability to retain talent. How many skilled employees have left their current position simply because of a bad boss?” says the Dice.com article Identify a Bad Manager Before You Take the Job
“It’s pretty well documented that when an employee leaves a company voluntarily, they are not parting ways because of what they think of the organization; the correlation is the manager.”
Perks Don’t Work in a Hostile Work Environment
“No amount of free sodas and beer Fridays are going to wash away the taste of bad leadership,” states the InfoWorld article 6 terrible tech managers—and how to succeed despite them
Perks may be great for attracting people – oh and here’s our company game arcade and yoga studio – but they do zilch for retaining them, industry analysts say.
Perks represent an over-investment in a superficial aspect of company culture. But it will not fix a negative CEO. And any good feeling a perk may provide is fleeting and soon becomes routine.
“It’s easy to add another perk. Just ask yourself what the hyped thing is that someone got at Company X and get it, too. Or look at employee surveys to see what perk employees ask for next,” say the leadership coaches at Lighthouse.
“Like a candy bar delivering the next sugar rush, a new perk may be exciting, but it doesn’t make employees happier long term.”
Perks can spiral out of control such as Drobox’s reported $25,000 per employee perk expenditure. But they may not yield good return on investment. And cannot replace a smile and kind words of encouragement and praise.
Praise – The Magic Motivator
“No one wants to go the extra mile at work if it goes unnoticed. Remember when you put in a big effort on a project, and then heard nothing from anyone about it? How did that make you feel?” says the Lighthouse leadership blog.
It’s more than a feeling. Research by Gallup found that praise (or a lack thereof) has a direct impact on turnover, and a company’s bottom line:
- Getting “praise or recognition for good work” increases revenue and productivity 10% to 20%.
- Those feeling unrecognized are three times more likely to quit in the next year.
Harvard Business Review shared similar findings from other research where they found, “teams that are praised most outperformed those praised less across key criteria.”
It makes sense, right? We are all still kids at heart who need a pat on the back and encouraging words. We wilt with criticism but flourish with kindness.
So, when people feel unappreciated or worse – insulted, they leave. They will go somewhere where they feel wanted whether there are free company massages or not.
An article in the Harvard Business Review cited recent research measuring employee performance. The one factor that was found to make the biggest difference between the most and least successful teams, was the ratio of positive comments to negative comments that the participants made to one another. (Negative comments, the researchers noted, could go as far as sarcastic or derogatory remarks.) The average ratio for the highest-performing teams was 5.6 – six positive comments for every negative one. The medium-performance teams averaged 1.9 or about twice as many positive comments to negative ones. But for the low-performing teams, the average was 0.36 to 1, almost three negative comments for every positive one.
“Negative feedback is important when we’re heading over a cliff to warn us that we’d really better stop doing something horrible or start doing something we’re not doing right away,” the Harvard researchers state. “But even the most well-intentioned criticism can rupture relationships and undermine self-confidence and initiative. It can change behavior, certainly, but it doesn’t cause people to put forth their best efforts.
“Only positive feedback can motivate people to continue doing what they’re doing well, and do it with more vigor, determination, and creativity.”
How to Tell if Your CEO is a Jerk
Aside from the obvious – he makes you feel bad, people seem fearful and downcast, there is steady turnover – here are three other indicators that your CEO may be a jerk.
- He/She acts like the smartest person in the room – A good leader has faith in the team and respects their abilities and lets their talents shine.
- He/She doesn’t praise employee efforts – The words, “Good job,” are never mentioned and you’re treated like you’re lucky to have a job.
- He/She doesn’t inspire people to follow – There’s a difference between people feeling inspired and enthusiastic or just working for their paycheck. At the end of the day you need to feel like you are engaged, that your contributions are valued and that you are growing as a professional.
A Word of Advice – Take Care of Yourself
It is important to be aware of the potential full impact of a jerk CEO’s negative behavior on your life. Without realizing it, you may be bringing your frustration home and taking it out on your roommates, your family, or yourself with unhealthy eating and sleep habits. Research shows that a bad boss can have a huge negative impact on an employee’s family life. A job is more than a paycheck – it can affect your physical and emotional health.
Be aware that if your CEO is a narcissist, he is unlikely to change. Narcissists think they’re perfect so why would they want to change? The only person you can change is you. Changing your job may be the best place to start.