I recently attended an event celebrating the 50th Anniversary of Moore’s law and was entranced by some of the old stories from Intel’s founding. Part of what I found fascinating was the virtual passing of the torch from the passionate founder Gordon Moore to Intel’s current CEO Brian Krzanich.
Krzanich clearly loves hardware and technology, and his passion, like Moore’s, has Intel doing interesting things. This return to passion can also be seen at Microsoft with Satya Nadella and products like HoloLens. Suddenly Microsoft innovation isn’t an oxymoron, and people who work at both firms are looking at them differently and far more positively as a result.
Sun Tzu to Andreesen/Horwitz
Often I’m amazed at how much of what I see with regard to leadership best practices is what Chinese general, philosopher and author Sun Tzu saw as well only hundreds, wait no, thousands of years earlier. For instance it appears “The Art of War” author was talking about the right kind of passion when he said: “The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom.”
Andreessen/Horwitz, one of the most influential and power VC firms in Silicon Valley seems to have built this passion and the related need for subject matter expertise into their investment selection process. Though it is interesting to note that Marc Andreesen was instrumental in picking both Leo Apotheker and Meg Whitman, neither of which seemed to have either of these attributes, making you wonder if he has actually read his firm’s written policy.
Why subject matter expertise is important
It should go without saying that having knowledge of an industry and business should be critical to anyone running it. A CEO is the face of the company. Customers, employees and investors trust them to know how to run it, how to promote it and how to set and execute a strategy successfully. If you don’t understand a business and you are new to a company you will fail, according to Sun Tzu.
The Sun Tzu quote that is most pertinent: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
By the way, I find it handy to go back and read some of the Sun Tzu quotes from time to time as it is easy to forget just how useful many, if not most, of them are.
Now you can supplement subject matter expertise with a strong subject-matter-focused board, but with the forced march towards using a lot of investment experts on boards and ex-CEOs the result is often a board that knows less about the business and the company than the CEO does, reinforcing the need for a leader who at least knows the business and perhaps rethinking who you put on a board.
Leading with passion
We saw this in spades with Steve Jobs and Apple. John Scully was certainly a qualified CEO and he was handpicked by Jobs, but he was an administrator not a product guy. Ironically, Scully was convinced to join Apple using the passion argument. “Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?”
It was the same with Steve Ballmer after Gates in regards to losing the passion for the product. Even though Ballmer clearly knew Microsoft, his lack of product passion came back and bit him several times, most notably with Zune.
All of which showcases how pertinent Sun Tzu is, as noted by this quote: “Thus the highest form of generalship is to balk the enemy’s plans, the next best is to prevent the junction of the enemy’s forces, the next in order is to attack the enemy’s army in the field, and the worst policy of all is to besiege walled cities.” Then apply it to Zune (the iPod clearly being a walled city), and you’ll see Tzu predicted Ballmer’s failure with the Zune. A better strategy (balk the enemy’s plans), one that Ballmer’s Microsoft discarded, was to break the lock in between iTunes and Apple users. A strategy Google executed with Android and apps against the iPhone.
Passion focuses people on creating products they think are amazing, that they would use. It is contagious and tends to spread throughout a firm getting everyone excited about doing the best they can to build, market and launch the offering. In motivates them to work extra hours and into the weekend voluntarily, and it helps create the foundation for the pride that results when the effort is successful.
Passionate leaders create passionate employees
So often company leaders lose themselves in their desire to maximize their compensation and keep financial analysts and activist investors happy. The end result is companies that are pummeled with layoffs, can’t execute, and become shadows of what they once were when they still were under their founders.
One quality I’ve noticed to be shared by passionate leaders, though Jobs was likely an exception, is that they tend to care for their people. This also follows Tzu’s teachings: “Regard your soldiers as your children, and they will follow you into the deepest valleys. Look on them as your own beloved sons, and they will stand by you even unto death!”
In the end the ideal company to invest in, work for or buy from should be run by a product-passionate CEO who’s employees, in turn, would follow them anywhere. I think in all cases you’ll be happier with the result, I know I was when I followed this advice.