Why our understanding of what leadership should look like is totally backwards
Very successful people tend to be surprisingly ordinary.
The average millionaire entrepreneur you meet will tend to be highly competent, no question, and generally fairly talented in some manner too. However, they rarely match the image people have in their head of someone unusually insightful, or brilliant. Typically, in their role of management, they’re quite normal, and won’t have much more wisdom than the next fellow, and will be the first to tell you so.
This reality clashes with our belief that successful companies are created by someone with a deep insight into the market, who designed a product or service accordingly, and then expertly piloted it to riches and glory. We might call this the “visionary myth”.
Although there’s certainly an element of this that goes on, a more accurate understanding of how companies emerge lies in basic statistics:
Thousands of entrepreneurs throw semi-random ideas into the world, some work, and some don’t, and nobody really knows which will do which.
The quality of thinking behind the ideas certainly doesn’t tell you. Plenty of clever ideas fail, and plenty of unimaginative ideas succeed. The fact is that no level of thinking can accurately predict how a business will interact with the market when you release it into the real world. The only certainty is that it won’t behave exactly as you expect.
Understanding this idea is extremely important, because it leads you to the realisation that businesses have minds of their own. Businesses are, to a large degree, “self-willed”, and will follow paths which their management neither expected nor intended.
Just like a child, you can give birth to them, and try and guide them, but ultimately they will do what they want to do – or perhaps more accurately what the market wants them to do. The decisions of the founder – provided they aren’t too radical and destructive – actually make surprisingly little difference.
Sound implausible? All over the world there are thousands of profitable businesses that are ticking over very nicely despite average governance. No doubt you will have come across many in your career. Has every employer of yours been had brilliant managerial oversight? Unlikely. Do you think that every billion dollar corporate is run by a team of gurus and savants? No way.
Businesses like these aren’t guided by the decisions of management – they absorb them. Management are often like a flea riding an elephant; believing they are controlling it when in reality it merely tolerates them indifferently. In this world “impotent management” is the safest course of action, not bold decisions. Just play it safe, keep things ticking over, and everything will be OK. Which of course, is how most management is. Business evolution selects for the timid leaders; the ones who don’t upset the elephants.
So, does this mean management doesn’t matter? Not quite.
Just because it’s less significant than we think, that doesn’t mean that terrible management can’t sink a business, or that brilliant management can’t accelerate it.
What it does mean however is that the role of management is somewhat different to what we think it is. Rather than management’s job being to “lead” or “control” or “pilot” a company – the visionary cliche we typically associate with the process – management’s true job is to listen to it, and follow it.
Great founders are servants of their creations. They listen to what it “wants” to be, and adapt their policies accordingly. They know that this path is extremely unlikely to be the one they initially anticipated, or wanted to follow. Eventually however their vision and that of their company will synchronise, and accelerated growth will begin. That is brilliant management; where the “leadership” shape themselves to their company, not their company to them.
The classic example of this which I’ve mentioned before on these pages is Facebook, where Mark Zuckerberg allowed things to evolve radically away from his initial idea. He never led his company, he only followed it, and eventually in his role of management, he learnt what it was for, and adjusted his management accordingly – the opposite of “visionary leadership”.
We can say then that the essential quality of good management, and good corporate governance, is humility. It is resisting the temptation to believe that you have the power to dictate how a business will operate, and what precisely it will become.
This is why the greatest entrepreneurs don’t need to be the greatest thinkers, or business strategists, or forecasters. They just have to be flexible and responsive. And, at least at the start, a bit lucky.
History will always celebrate the outliers; when a brilliant vision did indeed come to pass. When a plan did indeed prove to be perfectly predictive. But the fact that these are celebrated should prove just how rare they are.
In the real world you should lead your team, lead your employees, lead your peers. But don’t lead your business. It already knows where it’s going.