The Ignorance of Arrogance.

"Ignorance more frequently begets confidence than does knowledge." - Charles Darwin

I have worked with leaders and managers who exhibited both ignorance and arrogance. While I find both traits to be incompatible with my own leadership style, I believe that the combination of the two can be extremely detrimental to the organization. This is especially true when the founder of the company is also the leader who is plagued by these weaknesses. In such cases, the overconfidence and reluctance to adapt to changing market demands can pose a significant threat to the company's success and even its survival.

Throughout my career, I have had the privilege of working for seven Founder-led CEOs. These were privately held companies that offered a wide range of professional services and technology solutions to clients across various industries. From global law firms and Fortune 500 in-house counsel, healthcare systems, innovation teams, technology companies, physicians, attorneys, researchers, and computer and data science engineers, these companies catered to a diverse clientele. They ranged in size, with revenues varying from $1 million to $20 million and teams ranging from 20 to 250 members.

Although I have worked with these entrepreneurs, I have never founded a company or been a CEO. Therefore, I cannot fully comprehend what it takes to transition from a founder's mindset to a CEO's mindset. Nevertheless, over the years, I have witnessed some of the challenges, frustrations, and crises that arise when founders undergo this transition.

"In technology, failure is often a precondition to future successes, while prosperity can be the beginning of the end." - Jacquie McNish, author of Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry.

Take the case of Mike Lazaridis, the Co-founder, Electrical Engineer, and CEO of Blackberry. Despite being a highly respected figure in the industry (even today, lawyers reminisce about their Blackberries), Blackberry ultimately failed due to a variety of reasons, one of which was Mike's inability to acknowledge his own limitations. As the company's founder, it was natural for him to feel a sense of ownership and expertise over every aspect of the business. However, when consumers began demanding new features like touchscreens and internet browsers, Mike's inability to listen to his team and reluctance to acknowledge his own knowledge gaps prevented Blackberry from keeping up with the competition. This is in stark contrast to someone like Steve Jobs, who actively sought out new ideas and input from his team while building the first iPhone. *(See note below) Ultimately, Mike's lack of humility and adaptability would be his downfall. During my time working with founder-led CEOs this is what I have learned:

1. Vision: Since they are the ones who founded the company, they may have a strong attachment to their original vision and may struggle to pivot or adjust as the market changes.
   

2. Delegating: Founders may have a hard time letting go of certain responsibilities and delegating tasks to others, which can lead to burnout and a lack of scalability.
   

3. Change: Founders may resist change or new ideas, as they have a deep attachment to the company's original culture and values.
   

4. Experience: Many founders are not experienced in managing teams, scaling businesses, or handling complex financial matters, which can lead to challenges in these areas.
   

5. Networking: Founders may have a limited network of contacts or industry connections, which can make it more difficult to secure partnerships, funding, or other resources.
   

6. Emotional attachment: As the company is often seen as an extension of him or her, founders may struggle to separate their emotions from business decisions, which can lead to poor choices.
   

7. Succession planning: Founders may struggle with planning for their eventual departure from the company, as they may feel that no one can replace them or continue their vision. This can lead to challenges in grooming and retaining talent for leadership roles.

The majority of CEOs who have hired me in the past to run their companies have recognized the need for help in these seven areas, along with some coaching, counseling, and advising. The successful ones understand the importance of acknowledging what they don't know and seeking out the skills, expertise, and experience they lack in order to grow their business. By recognizing their limitations and actively seeking support, these CEOs demonstrate a commitment to their company's success and a willingness to learn and grow as leaders. *Note: In 2004 Apple team members pitched the idea of turning the iPod into a phone to which Jobs responded with, "Why the f@*& would we do that? That is the dumbest idea I've ever heard."

"The only thing more dangerous than ignorance is arrogance." - Albert Einstein

What my mother taught me about values and due diligence.

My mother wanted to be a teacher from a very young age and she was the first one in her family to graduate from college. When I was 8 years old my mother quit her job as a teacher and she never taught again. Whether you're an entrepreneur starting a new company, a CEO leading an organization, or a teacher instructing students, we all hold a set of ethics, values, and principles that guide how we operate our businesses, teach our children and lead our lives. If we're fortunate, we learn these principles from our parents, families, and friends at a young age and continue to develop and refine them as we grow older. Building on that idea, I would like to explore how we can identify whether an organization shares similar values, ethics, and principles before deciding to join them. Throughout our careers, we're bound to make poor decisions when choosing companies to work for. One of my most significant mistakes has been joining organizations that didn't align with my values, ethics, and principles. This became apparent in various ways, from how they handled employee crises to their decision-making processes for promotions and transparency regarding the company's stability.

Back in 2018, I had a conversation with a CEO about joining his firm as an executive. I had gotten to know the CEO well over the previous couple of years and believed that I understood their values, ethics, and principles. He was eager to grow the organization rapidly, and I was thrilled to be a part of that journey. However, I was mistaken. The CEO wasn't necessarily a terrible person or difficult to work with, but he didn't live up to my expectations for transparency. Ultimately, he was less than forthcoming about the extent of the company's issues, his willingness to address them, his own maturity level as a leader, and the overall direction of the organization. During our 3-4 hour-long conversations, I posed difficult questions to the CEO about the leadership team's performance, the company's strategic direction, growth plans, and any employee issues. Additionally, I conducted due diligence by speaking with people in my network who were familiar with the CEO's executive reputation and standing in the business community. Here are some lessons learned from this experience: 1) Do detailed research. Conduct thorough research on the company, its products or services, competitors, and industry trends. This can provide insight into the market, the company's position, and growth potential. Additionally, it's essential to gauge the organization's values, ethics, and principles as a part of this research." 2) Consider talking to people who have left the organization. Talking to people who have left the organization can be valuable, but it's essential to weigh their perspectives appropriately since you'll only hear one side of the story. Nonetheless, this can still provide insight into the company's culture and any potential issues.

In my case, I spoke with someone who had left the organization a year earlier through a mutual connection. While their perspective didn't necessarily change my decision, it provided valuable context regarding what it was like to work in the organization. It's worth noting that talking to former employees can offer useful insight, despite the limitation of only hearing one side of the story.

3) Identifying one of the company's customers and connecting with them can provide valuable insight into their experience working with the organization. In my case, I spoke with people who had done business with them and most reported a positive experience with the leadership and team members. In one instance, a customer explained how the company handled a dispute related to invoices, which offered insight into their organizational ethics.

4) Requesting to review the company's financial statements can provide valuable insights into their financial performance and potential red flags. Look for trends in revenue, profitability, and liquidity. Keep in mind that the CEO and leadership team may reject your request, which is understandable but also insightful in itself.

5) Ask smart, challenging questions. When speaking with the CEO, ask smart, challenging questions that cover a broad range of topics and issues. Ask "why" questions to understand the reasoning behind their decisions, and ask about mistakes they've made and what they learned from them. Direct questions about the company's values, social responsibilities, ethics, and principles as a leader can also provide valuable insight.

6) Case studies and hypothetical situations. Creating case studies or sample situations can be helpful in understanding how the company operates in different scenarios. It can also give you insight into the decision-making process and the company's approach to problem-solving. This can be especially useful if you are considering joining a startup or a company in a new industry where there may not be as much information available. By creating hypothetical scenarios, you can gauge how the company might respond to real-life situations that could arise in the future.

7) Examine their actions. Examining the actions of an organization can be a good way to gauge whether their values and principles align with yours. Look for examples of how they've acted on their stated values and principles in the past, such as charitable donations, volunteering, or sustainable practices. You can also research how they treat their employees, including benefits, pay, and work-life balance, to get a sense of how they prioritize their people. Additionally, look for any public statements or policies that the organization has released on topics such as diversity, equity, inclusion, environmental responsibility, or ethical business practices.

8) Ask for access to the leadership team and board members. Again, not all organizations may allow you to talk directly to the leadership team or board members but it is worth asking. It can be very insightful to have conversations with the leadership team and board members to get a sense of their values, leadership style, and overall direction for the company. It can also help you understand how decisions are made and how different viewpoints are represented in the organization.

9) You may never know. No matter how much research and due diligence you do, there will always be some uncertainty and risk involved in joining a new organization. However, by taking the time to conduct thorough research, asking tough questions, and examining the actions of the organization and its leaders, you can increase your chances of making an informed decision and joining an organization that aligns with your values, ethics, and principles.

In the end, my mother quit her job as a teacher because she had a set of values, ethics, and principles that were non-negotiable. I learned from her the value of integrity, honesty, and transparency at a very young age. I learned that especially during difficult times and situations it is even more crucial that you evaluate your decisions against this set of personal criteria. Finally, I learned that if over time you understand that the organization does not align with your values then it should make your decision to leave even easier.

Think like an owner.

The first job I had out of college I worked for an entrepreneur. I worked for him for 11 years. It wasn’t until I had been there 7 years that he finally felt comfortable allowing me to run a part of the business. I vividly remember that day. We had just sat down to review the monthly financials which usually turned into an intense exercise or interrogation. I recall the session went really well and I left his office feeling pretty pleased with myself. Later that night when he was leaving for the day he stopped by my office. He said that he felt very comfortable with me and that he trusted me with running the department but it wasn’t because I had answered all of his questions successfully earlier in the day. He said, “Matt I trust you because you are finally starting to think like me about the business.” From that point forward in my career I challenged people to, “Think like the owner.” Thinking like the owner is different than thinking like an employee. The ability to be able to see the entire interconnected organization vs. just the individual parts where you play a role. Once you begin to see the organization as a system then your whole mindset will begin to change as you see it from an entirely different vantage point.

In order for people to think like owners we have to create the right environment. Here are some characteristics of those environments: 1) Empowerment+Autonomy+Trust. In order for people to act and think like the owner they have to be empowered. What does that truly mean? It means that as the owner and leaders within the company, we need to give people projects which expose them to all areas of the organization in order to gain new and different skills, experience, and knowledge. In my own experience, I worked in the professional services group and was able to work on joint projects with marketing, sales, finance, and HR. It is also the responsibility of the organization to empower people in the “right way” and then give them the autonomy to execute individually or as a team. Also, a part of thinking and acting like the owner requires us to understand when something doesn’t go as planned and we fail. It is imperative that we have created a culture in which team members understand how we deal with failure both individually and organizationally. We need to have created a culture that emphasizes and makes them feel confident that they will be supported. If team members feel safe to make mistakes and fail at certain projects we can create a sense of trust. The trust that is created as a part of that process also motivates team members to want to do better. Team accountability can be more powerful.

2) Accountability and Servant Leadership. Several years before I joined the business the owner had to file bankruptcy and faced potentially having to shut down the business. During the bankruptcy, the owner promised the entire team that he would not miss payroll. He never did. As the owner and someone that wants to act like the owner, you have to be accountable to yourself and of equal importance be accountable to your team. This means that you are accountable to all of your team members even those that may be outside of your group, division, or department. The owner is accountable for everyone from the boardroom to the bathroom and so should you. If you look up “Servant leadership” this approach puts the needs of the organization, employees, and community above themselves. Servant leaders create a culture of trust, have an unselfish mindset, and promote others into leadership roles. What is the connection between “Servant leadership” and thinking like an owner? I believe that the Servant leader often has the same mindset as a person who thinks like the owner. The majority of the entrepreneurs that I have worked with built organizations that understood the critical nature of trust, autonomy, and empowerment.

3) Incentivize and celebrate. In order to increase this behavior organizations need to determine ways to incentivize and reward people who demonstrate the think like an owner attitude and mentality. Some companies actually formalize this through equity or ESOP programs. In other companies, they incentivize this through bonus programs or salary reviews. In one example, as a leader, I created a cross-functional team in order to review ways for us to reduce companywide expenses. Utilizing a systems thinking framework we outlined the outcomes, criteria for success, and gaps where we need more data and created a plan. I assigned two leads to manage the project and after 3 months they had created a set of recommendations that would have reduced our monthly expenses by 20%. We ended up implementing a portion of their recommendations and each member of the team was recognized at the company quarterly meeting, received a quarterly bonus and a few of the members were eventually promoted. A few of the members asked that we forego a bonus and wanted us to pay for some leadership and professional development.

In the end, the organizations that incorporated the“think like the owner approach or who are able to get their team members to “take ownership of the work” or had “high levels of engagement” all had the following things in common:

• Hired smart people and empowered them to do good work.

• Paid them really well and provided great benefits.

• Created and maintained an environment with a high degree of trust, autonomy, and accountability.

• Provided the systems, structures, frameworks, and tools in order to help their team be successful for the customer.

• Incentivized, rewarded, and celebrated successful accomplishments and learned from their failures, and improved.

• Invested in people’s personal and professional development.

• Built a great product or provided a great service that the customer loved.