I’ve noticed in many (but not all) Silicon Valley CEO’s a phenomenon that I’d call Management by Unreasonable Standards. For tech companies, it happens to be an unreasonably effective strategy.
It’s a simple management equation:
Unreasonable Standards + Past Successes = License to be unreasonable in all situations
#1 Unreasonable Standards
Unreasonable standards in tech companies play on beliefs that people in Silicon Valley accept without question as true:
- They (the employee) are smarter, better and more creative than anyone else
- They (the employee and the company) through technology can solve the world’s problems
- Their work is ‘disrupting’ the world – doing things that have never been done before that will totally change the way everything is done
If you believe these things, that you’re basically God’s gift to AdTech or photosharing or whatever, then of course it follows that you can do things that seem impossible.
If it weren’t the case that you could do the impossible, then you wouldn’t be smarter than everyone else or your company could just be one of the millions of other companies out there. And that would shake your world view, wouldn’t it?
#2 Credible Past Successes
As the leader of DisruptCo, you basically tell everyone that your rocket, or your phone, or your chips, will change the world. In the best cases, this is perceptibly true. Intel, Apple, and Tesla are in fact fundamentally changing the way the world works with technology.
Your employees see the change. They own it. They feel motivated by the mission.
These past successes and examples in the outside world show that something is in fact possible that people didn’t think was possible. Nokia? Killed by Apple and the genius of the iPhone. Blockbuster? Destroyed by Netflix.
If your vision is something that people don’t think is possible, you sometimes need to ask them why not? Elon Musk and Jeff Bezos anecdotally do this frequently. In some instances, if engineers say something is impossible, Musk himself will come up with the solution and present it. If that happens twice, the engineer who said it was impossible is fired.
Unreasonable in ALL Situations
So we see that some of the best leaders are in fact brilliant visionaries. They can solve problems themselves that others can’t. They can ‘skate to where the puck is going’ and have been proven to be right in so many ways. The fact that the world has changed as they predicted is proof.
So they learn to think they’re right all of the time. The worst buy into their own genius. They can’t be wrong, or at least no one else is likely to be more right than them.
Culture soon follows. Everyone aspiring to be Steve Jobs or Elon Musk cascades the questions they receive (why isn’t this possible) down the line? They take personal responsibility for not solving the problem.
This isn’t inherently a bad thing. Intel continually produces the best chips in the world. Tesla has made some amazing bets and may shake up the car industry through better technology.
What happens, however, is that this becomes endemic in Silicon Valley. Many startup founders who very clearly aren’t Steve Jobs take the ethos that managing by unreasonable standards is what makes Jeff Bezos great.
It is propagated further by the following logic:
- Great leaders do this, therefore if I do this I will be a great leader
- The best talent will want to join the great companies, and I show that I’m a great company by managing by unreasonable standards
As a result, this kind of belief propagates throughout silicon valley and tech in general. If you DON’T manage by unreasonable standards, you must not be visionary enough or pushing your team hard enough.
This is patently silly, but it creates the culture of the ‘belligerent’ CEO. You have to have an outspoken ‘visionary’ opinion or people overlook you. You can’t accept human limitations or you’re weak.
The above portrayal is a bit exaggerated, but not far from the truth. It’s why many founders seem to have a Messiah complex. ‘Follow me,’ they say, ‘and I’ll take you to the promised land of IPO and incredible riches and fame.’
If there’s just a clear business plan, a great insight and better technology, it isn’t enough. Many SV people don’t want to be part of a good plan based on solid ideas. They want to see around the corners and be the next Apple.
Coda: A Short Story
Imagine you’re managing your local movie theater. A couple walks up to the ticket booth and buys two tickets for the 9:30pm movie. Afterwards, you yell at the employee:
“Why didn’t you sell them 3 tickets to the show??!! We could have increased profits by 50%!”
The employee, reasonably, might quit on the spot, or suggest you go to the loony bin.
The movie ticket buying experience is for the most part solved and defined. Demanding employees sell extra movie tickets won’t necessarily help.
Now imagine you’re Jeff Bezos in 2010, you see the success of Prime 2 day delivery. That was an amazing logistical hurdle, and your employees are proud of the achievement. But instead of resting, you say to the employees:
“Why can’t we deliver within 2 hours?”
These employees are possibly flabbergasted. They’ve moved heaven and earth to get 2 day delivery. But Jeff is insistent:
“What’s preventing us from delivering within 2 hours?”
Well, we don’t have the distribution centers set up to pick orders in < 30 minutes. Well why don’t we build that technology?
It would take forever to train people to do that? How would we balance normal orders? Can’t we experiment and see what works?
How would we handle traffic jams? Don’t we have enough data to make sure we hit 95% of our packages on time? We can’t prevent everything, but we can come close.
One by one the excuses and limitations come down, and the Amazon engineers and analysts get to work…
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