Is "Being A Jerk" Good For Business?

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show that solves entrepreneurs' toughest problems. I'm Jason Pfeiffer, Editor-in-Chief of Entrepreneur Magazine, and each week I take a problem that you're probably dealing with and get tactical solutions from people who have been there and solved that. So let's get solving. Steve Jobs, Larry Ellison, Bill Gates, Jeff Bezos. What do these people have in common? Well, they're all known for being very successful and also known for being the genius jerk. This has become a story we tell in business that the world's greatest and most impactful leaders are genius jerks, or they had to be jerks, or they just are jerks down to their core and that they built transformative things because they were jerks.

2:27That maybe when you're so good at business, you don't need to act human anymore. And maybe to drive teams to greatness, you must be abrasive and inconsiderate and demanding. And this story, this story of the genius jerk has empowered many other leaders to embrace their own inner genius jerk to think, hey, if those guys were jerks, then I can be one too. But there is a problem with this story. And here it is. The data just does not support it. I mean, these people succeeded because of their drive and their vision, and it wasn't their bad behavior that was the secret sauce. That's Rich Hagberg. He's a consulting psychologist who has done executive coaching work for decades with thousands of founders and executives.

3:12And he turned his experience into data sets that he could study and look for patterns within. And like I said, the data just did not support the myth of the genius jerk. When we looked at the data on successful leaders, those who got a 10x return on invested capital, they didn't look like that. I mean, they are impatient, for sure. And they can be demanding, for sure. But the successful ones knew how to work through others, not micromanage. They didn't yell and scream at people. they were more measured and grounded. Recently, I had a really interesting conversation with Rich and also one of the founders that he has worked with.

3:57My name is Teen Zwo. I founded a company called Zora. I started working with Rich about 15 years ago. I was hitting my limitations as a first-time founder and leader. And Rich has really helped me through that time and really grow as a founder and leader over the years. And recently, Rich and Teen co-authored a book called Founders Keepers, Why Founders Are Built to Fail and What It Takes to Succeed, in which they really dig through the data on what qualities and actions drive success and drive failure, because there is a lot to avoid. It sure seems like every day there's more and more founders, and then every day there's more and more founders that get in trouble, you know, criminal offenses and stuff like that.

4:41And so we basically said, it sure feels like founders are ticking time bombs. But when they get through, they create amazing innovations, right? Like the iPhone, like electric cars and whatnot. And so we really want to get Rich's framework of how to diffuse a time bomb and turn founders into successful founders as a template out there for all to use. Can you unpack what you mean a little bit more about the founders are a time bomb? founders have certain characteristics that help them be successful. I mean, they're creative. They're willing to take risks. They can live with ambiguity. And there's certainly a lot of ambiguity and chaos in every startup.

5:21They're good at coming up with ideas and rallying people and inspiring them and persuading and selling their story. And they're terrible when it comes to the disciplines of execution. And what happens as a company gets bigger and gets more complex is that begins to cause the time bomb to tick. And one of the themes of the book is that, you know, what got you here won't get you there. And so if you don't grow as a leader or surround yourself with people who compliment you, right, who are better at those execution disciplines than you are, You'll ultimately fail. And today on Problem Solvers, we are digging in specifically in one of these areas, the myth of the genius jerk.

6:15Why do founders become jerks? Why do they think they need to be jerks? Is there a better way to operate? Rich and Teen have a really interesting, nuanced perspective on this, and we have a really fun conversation about what drives jerkiness, what creates jerks, and how do we avoid it for the betterment of us all. Because, as we already have established, the greatest founders are not jerks. So, why do we have so many jerks? Coming up right after the break.

6:51All right, I am back with Rich and Teen, the co-authors of Founders Keepers, why founders are built to fail and what it takes to succeed. And to start this conversation about the myth of the genius jerk, I asked them to take a look at these famous jerks, people I mentioned before, Steve Jobs, Bill Gates, and so on, people who were known for being very, very tough when they ran their companies, and asking, well, what exactly were we seeing? It looks to us like what happened to those well-known people is that they had a transforming event. Jobs got fired, and he said it was the best thing that ever happened to him.

7:34Now, he was never a saint, but our data would suggest that you don't need to be a demanding asshole in order to be successful. So why are there so many demanding assholes? I think because they get the press. There are a lot of people out there who are quietly creating companies that are successful. We looked at 122 people of the 200 I worked with where we had financial results. They didn't look like that. there's certainly the aspect of a founder where there's a spirit of obsession so if you look at the founder movies whether it's a social network or steve jobs they really bring out the founder obsession and sometimes the founders get so obsessed they get tunnel vision and they're just relentlessly pursuing their goal to the extent that you know bad behavior comes out and the bad behavior makes for great stories great headlines and we know about steve jobs throwing the chair or whatever it was and things like that.

8:33But it doesn't tell the second half of the story that those things all hit their limits. Steve Jobs had to go and have some failures with Next Computer and get invited back. And during that phase, he learned how to be a leader. He learned how to harness a broader group of talent and learn how to tap into Johnny Ives and tap into Tim Cook. And he was a transformed person. So we wanted the second half of the story. While we were writing the book too, there was a phrase that was making his rounds inside of Silicon Valley called Founder Mode. Yes, I remember it. Yeah, something that Chesky had said.

9:08And we were worried that people were interpreting it. People were interpreting Founder Mode as a permission to be the negative side of Steve Jobs. And what we saw was, no, Steve Jobs wasn't successful because of that. He was successful because he learned how to work through people. He learned how to, you know, the ingredients necessary for scale. He took a lot of walks with Bill Campbell, the coach, to understand and tame his nature. And ultimately, those are the things that you have to do to diffuse a time bomb and make sure that the company that you founded really lasts a test of time. That founder mode debate, which maybe we just put into some context, you can fill it in better.

9:50But as I remember it, the debate over founder mode was whether or not a company needed a founder that would push through all obstacles, that was not concerned about being liked, was mostly concerned about results. And pro-founder mode people were arguing that business is complex, that startups are ever-changing, that growth requires a leader who is unafraid to upset people, unafraid to ruffle feathers, and that can keep the company focused on getting things done. and then, of course, can point to lots of the people that you described. Elon Musk, I don't think has been mentioned yet, but a classic one.

10:33But what you're saying is like, these are actually outliers that just get more attention because their way of working makes for good stories. And those stories get lots of attention. And that attention creates the perception that this is the way in which to get things done. Am I right about that? Not quite. I mean, so the ability for a founder to get to a level of detail is really, really powerful. The obsession of the founder to break through obstacles and create the electric car and get it on the market and get everybody buying it is necessary. But at the end of the day, there's another side of the story that's not told.

11:16Elon Musk, there's no way he can run five companies without being able to delegate for people on a day-to-day basis. If every single decision at SpaceX and every single decision Tesla had to come to Musk, those companies would have just stopped. They would have just slowed to a crawl. And that didn't happen. So Elon Musk must be good at identifying great talent, must be good at pushing them, certainly. but must be good at delegating to them. So saying, you've got this and I'm going to trust you to build these systems. That doesn't mean I'm not going to be in the details, right? But there's a need to get people to buy into your vision, right?

11:52And these are sort of the prosaic day-to-day management techniques that all these leaders must have learned that doesn't get discussed. And so we're just visualizing, you know, younger, newer founders out there that don't see the other side of the story and are just throwing cheers at when they're mad. And that's not an ingredient for success. You know what this reminds me of? I got an email a little while ago from a reader who was telling me about this really frustrating problem that he had at work. He's not a founder, he's just an employee of a company. What he was saying was that he's in sales and the top performing sales guy in his company is an absolute jerk and hard to work with and despised by all and had done something recently that was really offensive.

12:43And this guy who wrote me said that he brought it up with management and nothing was done. And the reason he believes that nothing was done was because the guy's a high performer. And if you're a really high performer, then people tolerate a lot of garbage from you. And, you know, he asked me what to do about it. And I was a little stuck on the answer because I think that what he's describing is basically true, that when people are high performers, that they are given more leeway to engage in bad behavior than others. And that, in fact, when that happens, it creates a terrible feedback loop in which because they behave badly and we could hypothesize where that comes from or if the two of you have some insights in where that comes from, I'd be fascinated to hear it.

13:31But let's just say for now that it's just something inside of them, that some people are naturally jerkier than others. And so maybe we all try to modulate ourselves and try to be less jerks. But then the more and more in which we accrue power and influence and the more in which we are given an open road to behave however we want because we perform well, the more in which we will just lean into and in fact be rewarded for our jerky behavior and therefore will become even larger jerks. who also becomes somewhat untouchable, basically the origin story for the jerk who is also leading a giant company and is successful and maybe is the thing that then creates this myth of the genius jerk.

14:14And I wonder what you guys make of that. Well, successful founders are demanding. Successful founders are impatient. Successful founders have very high standards, but the successful founders are not reactive. They're not impulsive and they're more deliberate about what they do. One of the items on the personality test says, I frequently reflect upon my past successes and failures. The successful ones agree with that statement. The unsuccessful ones strongly disagree with that statement. And what we see is that the level of self-awareness among the successful founders is much higher. So that's the first piece.

14:59The second piece is the creation of a toxic culture. You can be demanding and push people and challenge people to get results and still be supportive of them. Think about great sports coaches, often very demanding, but they're also supportive. The other thing that was really interesting in the data was that the successful founders were higher on emotional intelligence than the unsuccessful, but they were only average compared to all executives. It's just that the unsuccessful ones were very low. So they had blind spots and were clueless about it. Do you think that reflectiveness can be taught?

15:47I think your story really hits on this because in the early days working with teen, I have a personality test that actually predicts the 360. And he took that test. And today we use machine learning to make those predictions really accurate. He took that test and it got his attention. Then he got a 360 where people took a look at. A 360, his direct reports and his board and other employees rated him on about 46 different dimensions of management and leadership and social skills. And he got some harsh feedback on that, and he paid attention to that. And then he did a culture survey that I used, and it reflected the same stuff.

16:32And that got his attention. In other words, if I can restate it back to you, I asked, can reflectiveness be taught? And the answer that you gave me is, you know, it's not like you can sit down with a workbook and learn to be more reflective. But if you are put in a position, you have to volunteer often to be in that position. But teen, you did to have something like a 360 where you're now hearing really true, critical, valuable feedback from the people who work with you every day. It's hard to not be reflective after getting a real understanding of what the people around you think. Is that right, Rich?

17:07Yeah, whack on the side of the head. It was a whack on the side of the head, certainly. When I talk to other founders that are going through something similar, and I try to appeal to, look, if the success of your venture is important enough. And you can see that your ability to lead and your ability to develop that self-awareness is going to swing whether your company is successful or not, then invest in the time. You're absolutely right. Not everybody does. I mean, a big, big group of folks that are fascinated by Rich's structure are the venture capitalists that invest in these founders, right?

17:40Because Rich's system is predictive. It could take a personality test and it could predict what you're like, and it can almost predict whether you're successful or not successful. So you can imagine that VCs really love this system. Let me add one thing to that, and that is that one of the most, well, the number one characteristic to differentiate it is adaptability. And that factor is made up of listening and openness to input and understanding how to create buy-in. doesn't mean you always, it's not a democracy. You don't always create consensus, but it means you listen because the facts are ultimately going to win.

18:18And if you're in a leadership role, your job is to face the facts. And if the facts is that your behavior is getting in the way, you need to pay attention to that. The other thing I'd say, Jason, is you gave your example and you said, is that sort of, you know, story one or page and zero or the origin story of a founder jerk. And we think the data shows otherwise. We think the book starts off with listing all the criminals that are in the Fortune 30 under 30 list. And it seems like every month, another founder gets in trouble for falsifying data or making stuff up. And if you had that founder mode taken a negative way and taken to its extreme, that's what you get, right?

19:00You get founders that believe that their behavior is fine, that believe it's okay to be unethical, I believe they can just make stuff up and just make it, you know, fake it till you make it. And that extreme view creates a lot of failures. And, you know, the VCs are very, you know, guarded against that, right? Because they've invested billions of dollars. And the last thing they want to see is they've invested in a founder that's unethical in falsifying data. And the successful founders were higher on being a model of values than the unsuccessful. The unsuccessful ones were, a lot of them were at best narcissistic and some sociopathic.

19:38This is a funny question, but as a final one, I'm imagining somebody listening to this right now and then wondering, am I the jerk? Am I the genius jerk right now? I don't want to be, but maybe I am. What would you say to somebody to kind of action the thing that we are talking about right now? Be open to input. Recognize that being successful means learning to work effectively through others. Recognize that abusive behavior creates a negative standard and undermines trust and morale in the company. Chances are the data is all around you. and I instantly remember I had a sales leader pull me aside one day and say, look, your office is on one side of the floor and your CFO's office on the other side of the floor.

20:32And every day I know you, you have something in mind and you march through the pit where all our young sales folks are to get to the CFO's office and you never say hi. And people are talking about that. And so I was like, wow, I never even noticed. And so listening to that feedback and being able to being open to it. Next time, what happens? I'm walking through the pit, I sit down and I strike up a conversation and it had an amazing amount of impact. And so the data is all there. And what I love about Rich's system is he does break it down. There's 46 specific competencies. Your board, your investors, your executives are saying, look, these are the ones that you're no good at.

21:12For me, it was you're terrible at praise. You need to learn how to build teams. We don't know how to prioritize an organization. And so you wind up with a template of three, four, five things that you can actually work on. And this is not a one-time thing. I've been working with Rich now for 17 years and the competencies that are important might change from year to year, but it gives you this template to work on to say, this is how I can shape my company. And so for anybody that's interested, founders-keepers.com is Rich's website. And I encourage everybody to one, embrace that founder spirit and embrace the spirit of innovation and start something.

21:47But two, as you scale the organization, know that there's resources like Rich out there to help you succeed. And the book is also called Founders Keepers. Rich, teen, thank you so much. This was really insightful. Appreciate the chance. Thanks, Jason. And that's our episode. Now let's keep the conversation going. I write a newsletter called One Thing Better, where each week I offer one new way to be successful and satisfied and build a career or company you love. You can find it at onethingbetter.email. That's a web address. just plug it into a browser, one thing better dot email. And if you get one of those emails and reply, it goes straight to my inbox and I will get back to you.

22:30Problem Solvers comes out every Monday morning. So make sure you're subscribed so you don't miss an episode. The show is produced by Emily Holmes and Money News Network. My name is Jason Pfeiffer. See you next week.