This line of thought was inspired by a tweet from Carter Schonwald:
Soo… I guess pre series b companies depend on engineers to over estimate the value of equity In exchange for salary discount? Lameeeeee.
— Carter T Schonwald (@cartazio) October 30, 2014
To which I replied…
— Michael O. Church (@MichaelOChurch) October 30, 2014
— Michael O. Church (@MichaelOChurch) October 30, 2014
These aren’t new ideas, from me or in general. Savvy people in technology have begun to realize that much of what’s getting funded isn’t deep, infrastructural technology, but the audition projects of well-connected, mid-level product managers trying to make their case for “acqui-hire” into a junior executive role at a large corporation, or, better yet, a position in venture capital. No news, right? It’s an old topic. Let’s not beat it to any more deaths than it’s already had.
Yet I realized that, of all the con games going on in the VC-funded consumer-web ecosystem, this insight gets to the fundamental issue. There’s a dishonesty inherent to a “founder” presenting himself as an entrepreneur, doomed to sail or sink with his ship, when his actual priority is shoring up his reputation so that he gets a better job no matter what happens to the company. This means that, if saving the business or his employees’ careers mandates that he oppose the interests of investors, he won’t (and can’t) do so.
The “founders”– at least the business ones who tend to be tracked naturally into the CEO role– are probably savvy enough to know that they’re really mid-level product managers because the VCs are the real executives of Silicon Valley. They also know that most of them are going to get managed promotions (e.g. acqui-hires or VC jobs) rather than build independent companies. They must know that. The odds already tell that story. For the business “founders” and probably some of the technical ones, the job is just a stepping stone. It’s the technical people, who don’t know as much as they think they do about business, negotiation, or the dominant personalities in this game, who believe they’re building the next Facebook and will throw down 100 hours per week to overcome the deliberate understaffing (relative to expectations) of the venture. Most of the work is done by “true believers”, but the power in and over the company is held most strongly by nonresidents (VC bosses) and transients (business co-founders, connected executives) angling for their next bump up. This leads us directly to a six-word compact objection…
dot dot fucking dot
… Leadership is not a stepping stone.
Ethically, I’m fine with people treating their jobs as stepping stones, to be used to get to something better, because most people are in non-leadership positions. In truth, “stepping stone” is how I’ve viewed most of my jobs, as an impatient person at a high level of talent. If I’m not being groomed for a meaningful position or a major role on an important project, I’ve already got my eyes focused elsewhere. That is, on my part, knowing non-leadership. It’s a peacekeeping strategy: rather than fight for the limited advancement opportunities or executive attention/mentoring or top projects in one place, why not avoid conflict and seek improvement elsewhere, at no one’s cost? I don’t see it as disloyal or “mercenary” to keep an eye out for external promotion. I view it as necessary because it prevents and defuses conflict.
That said, people who are expected to be leaders shouldn’t be treating their companies as stepping stones. It’s one thing to be a manager in the reductionist sense– an officer hired to make decisions pertaining to another’s assets– and take that careerist view. That’s not what executives present themselves as being, however. In most companies, they call themselves the “leadership team” (a gag-inducing pair of words, but never mind that). Founders, as well, certainly present themselves as being tied-to-the-mast leaders. This isn’t quite correct, because while a genuine leader may have to oppose the interests of an individual within the group, they ought to be defending the group against external threats. That’s why people give up their power, as individuals, to leaders: to have a more coordinated and quicker response to external or emergent dangers.
Yet, when there is a conflict of interest between their employees and their investors, founders must choose the investors. Founders know that VCs talk and that the influential ones can shut them down with a phone call. They also know that, if they fail, they need references and introductions from their VC backers. A boss can end your job, but a VC can end your career. Founders have no choice but to manage up, and that’s a problem for the whole system, because managing up is generally the antithesis of leadership.
The truth is that there’s very little leadership in Silicon Valley. While the ability to flit about companies does give talented, reputable engineers more leverage than they would have elsewhere, individual Valley startups are often characterized by intense power distances, and holding political power isn’t the same as leading. “Flat” is often a euphemism for “dictatorial”. Well-run larger companies actually require managers to show some of the characteristics expected of a leader, while startups often take a “my way or the highway”: approach, and use “culture” to back-cast departures as “non-regretted”. These startups generally manage up into the founders, who manage up into “investors” (the true executives of the Valley) who manage up into better-connected investors with better deal flow. Everyone is just trying to get a notch or two ahead. There’s nothing wrong with that– I’m the same way– in general, but it’s not appropriate for people who want others to look to them for defense and direction.
Is management leadership?
Corporate executives like to use “management” and “leadership” interchangeably, but they have almost opposing meanings in many cases. A manager is a person who makes decisions pertaining to an asset that he or she does not own, such as a company or a celebrity’s reputation. They’re almost always going to be selected from the top, by owners of those assets or by higher tiers of management. Genuine leaders are generally selected and elevated from the bottom. You don’t get to decide that you’re a leader just because you have authority or resources. The people being led decide whether you’re a leader. Of course, there is a shared interest between owners and employees that the company sustain basic function, but the alignment often ends there, and the pathetic equity slices that Silicon Valley gives to regular employees (like software engineers) are never going to change that. When this conflict of interest exists (and it usually does) to be a manager requires taking one side, and being a leader requires taking the other one.
A leader can be a manager or not, and a manager can be a leader or not. All four possibilities exist. Managers will often say that they are leaders, but their salaries are paid and their performance is evaluated from above, and they know it. Often, they are at best puppet leaders. Some have the genuine charisma or alignment of interest necessary to be accepted as legitimate leaders (that the group would choose if left to its own devices) and others have the moral fortitude to take their reports’ career needs and long-term goals (personal, financial, and career-related) seriously, but it’s not a requisite part of the charter, and it’s not common.
The middle management problem
This problem isn’t limited to Silicon Valley. Middle management is generally problematic, in this analysis. Most companies can find a place for a lifelong individual contributor. For the highly competent, there’s an opportunity to establish credibility and value without traditional organizational ascent. Management has different rules. Just as there are (by definition) no good poker players who lose money, there are no good managers who don’t rise. If you’re a middle manager for ten years, no one will take you seriously. Top executives won’t mentor you, and you won’t get the most talented reports, because you won’t be able to promote them. If you couldn’t bring yourself to rise against any political headwinds, how can you protect and advance others? As soon as a person steps into a management role, the clock starts. Middle management is an up-our-out role.
This is what VC-funded technology’s age discrimination problem, for the record, is really about. Most of these consumer web startups aren’t technology but marketing experiments using technology. There isn’t enough technical depth to them to justify an individual contributor track lasting more than 5-10 years. That brings the acceptable maximum age for engineers to 30-35 (and for “product” people, it’s even lower). Allowing no more than 5 years in middle management, this requires that people reach the executive ranks (venture capitalist) no later than 40. If a 41-year-old VC partner encounters a 50-year-old “founder” who’s still asking VCs for money, he’s going to wonder what the hell happened. By 50, people should be asking you for money, introductions, and resources.
The severe time pressure that is on middle managers tends to compromise their decisions. They need approval from above to get promoted. That’s not negotiable. As for anyone else in the corporate world; if they do their jobs well, but their bosses dislike them and evaluate them poorly, they still lose. Good will from below, on the other hand, is completely optional. Sure, it’s better and easier to have it, but it can be tossed away in a pinch. If they succeed, they won’t be seeing much of those people in the future, because they’ll be a level or two higher in a couple of years.
In sum, there’s an intractable conflict of interest in the concept of middle management. To be honest about it, I don’t think there’s a solution. Performance evaluation in any job where the results aren’t completely objective is, in truth, destined to be gamed. And most of the work that is perfectly objective is being given over to machines, who work more reliably and cheaply than humans do. For the subjective stuff, those who quickly identify influential people and appease them are always going to rise faster than earnest, uniform high performers. Managing up will always be rewarded more than genuinely leading a team. This is no surprise, in the corporate theatre, to the more cynical among us. What’s more irksome, in contrast against the way that world is presented, is that it’s equally true in Silicon Valley. For all the talk about “vision” and “disruption”, anyone who has the political skill to be a founder knows that whether one’s startup succeeds or fails matters only one-tenth as much as how one’s performance is viewed by investors. If you build a great business, but you’re fired and stripped of your equity and can’t get a meeting with anyone to build your next project, you’ve lost. If your company crashes and 180 employees see their last paychecks bounce, but it’s viewed as not your fault and you get a partner-level position at Sequoia, then you’ve won.
Where this all ends up
Most managers aren’t leaders, because they can’t be. They have to manage up. That is, in effect, their job. I don’t think that “360-degree reviews” fix this problem either, because people they have the power to fire aren’t going to honestly evaluate their performance (not if they’re smart, anyway). The effect, for a middle manager, of failing to manage up, is immediate and brutal: loss of reputation, advancement opportunities, and often the job. The effect of poor leadership is insidious and unfolds over enough time that other circumstances (including external conditions and random events that occur in the mean time) can be blamed. By the time there could be macroscopic damage, visible from above, due to poor leadership; the manager has either been advanced, relegated to terminal status, or fired, all for reasons unrelated to his actual ability to lead those below him.
This means that it will be rare that a middle manager actually leads the group he is expected to oversee. It’s not his fault. His job is defined above him by people with almost no concern with the well-being of his reports. In the Valley, we shouldn’t expect this kind of leadership from founders, either. The only people with the latitude to genuinely lead are the well-connected investors whose names can make or break companies. Of course, since that set of people is selected through a process that values “managing up” as well, it’s only by a rare coincidence when a person is invited who actually has the vision, charisma, or moral perceptiveness necessary to lead. Just as in any other executive suite, 90 percent of them won’t have it, because they’re selected based on other criteria: the ability to manipulate and appease the people above them, and to game whatever system of performance evaluation is set in place.
The lesson of this is that truth is anarchy. If you’re a young engineer, don’t look for leadership. Don’t expect the Hollywood depiction of affairs, where a “mentor” just happens to see where you are and “fix” your career, to occur. It rarely works like that. Most young engineers think that, if they work 100-hour weeks on the low-impact grunt work that they’re assigned, someone above them will “discover” them, ask “Why the fuck are they wasting your time on this shit?”, and fast-track them to better things. That’s far too rare to bet one’s career on it happening. Barring the rare stroke of fortune that might happen once every ten years or so, you have to become your own mentor and advocate, because no one’s going to do that job for you. The few people who do have the credibility to clear away political nonsense, and to create small fields of sanity and protection, are going to want to work with people who’ve done much of their work for themselves. Self-mentoring is the rule, and guardian angels are the exception.
The insight that truth is anarchy, in the corporate world, is an important one. As I’ve grown older, I’ve realized that the few people who can genuinely lead aren’t born with the ability. Personal charisma is superficial. Leading others is largely about providing protection against the chaotic and negligent-to-malevolent world outside: from external competitors (who aren’t malevolent, but opposed in interests) to internal cost-cutters (who compensate for their mediocrity and lack of vision by offering ideas that seem to save money in the short term, while harming the company in the long run). Much of whether one can provide this protection relies on credibility and status, and getting those is always more political than based on merit, but an equally important capability is to know how to create fields of sanity and fairness in an insane and unfair world. The first step is to attempt to create such a thing for oneself, and it’s typical to fail a couple of times before getting it right. I think that, 15 years from now, the people in my age group who mI’ll recognize as the best leaders will be the ones who are currently waking up to reality (“truth is anarchy”) and, rather than being blinded by corporate smoke-screens and phony loyalty, learning how to fight for themselves. To lead is to fight for others, and that’s almost impossible to know how to do, unless one has years of battle scars won in fights for oneself.
Of course, most of the people who get to be executives and founders will be the non-fighters and the company police. That will never change. We just have to find a place where we appear out of their way, and outperform them. Silicon Valley used to be the place to do just that. Circa 2025, it’s going to have to be somewhere else.