TBM 258: "Just Hire Talented People and Empower Them"

...and hold them accountable, and challenge them, and push them, and, and, and, and...

🙏I am incredibly humbled to have filled up the first cohort of my workshop. Thank you. There is a waiting list, and I will open up more cohorts for January and February in the next week or two. 

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There is an interesting section in the Brian Chesky episode on the Lenny's Podcast. 

Chesky says:

People think that a great leader's job is to hire people and just empower them to do a good job. Well, how do you know they're doing a good job if you're not in the details? And so I made sure I was in the details, and we really drove the product.

This quote caught my eye because 1) it is a rather narrow but popular definition of leadership and empowerment, and 2) it assumes a certain reason for getting into the details (knowing if they're doing a good job).

In Silicon Valley, especially, there is a popular sentiment that you "just" need to hire the "best" (or "strongest" or "people who have done it before") and generally "empower" those people by getting out of the way and giving them hard problems to solve and lots of money. Smart, competent people will figure out how to get the job done, and if they run into trouble, they'll tell you how to fix it. 10x-it-up. Don't worry about processes or systems—the geniuses have got this!

Without getting into whether this is the "right" view or not, consider where this view predominates AND is potentially applicable:

1. Startups where you can generally fit everything into your head, cause and effect are fairly visible, product surface area is minimal, and you rarely have more than a couple of layers and "hops" for information to travel.

2. Large tech companies with lots of established support structures (and resources). These environments are more like a "factory" for taking qualified hires and turning them into "units" of productivity. They have invested tons of money and time in that model. Remember, Amazon spent ten years creating the structures that support two pizza teams. The Microsoft "transformation" has been years in the making, and they were no slouch before. Talk to anyone who works in big tech, and they'll highlight all the challenges with this approach, but suffice it to say many of these companies are doing okay in the grand scheme. 

3. $. Until recently, both enjoyed the benefits of low-interest rates

In the interview, Chesky talks about needing to (or dreaming that he should) return to #1 from some sort of no-person's land between #1 and #2:

So then the pandemic occurred, and I had this image in mind. It's like I have this dream that I could run a company much more like a startup.

Despite its size, Airbnb was thrust back into startup mode. Airbnb faced—and still faces—an existential crisis. Until then, it was lapping up the benefits of low-interest rates—not a startup or an established tech company (#2).

The company was hiring many people from #2 environments (and #1 environments) without necessarily having the evolved structures and systems of #2 companies. Remember, just because someone worked at [Big Tech Co] and enjoyed those systems doesn't mean they know how to transition a company in the #1.5 middle-ground to that state. "Well at [Big Tech Co]..." should be taken with a grain of salt unless the person saying that thing was around to make it happen. 

The part of the interview that exposes these challenges is the discussion of dependencies and incentives. The "hire smart people and get out of the way" approach breaks down when you experience the NP-complete problem of untangling dependencies and juggling competing incentives.

"People (ostensibly these very smart people) were describing working 80 hours and getting 20 hours of productive work done, which is just a crazy ratio a week," explains Chesky. 25% productivity! As mentioned, Amazon spent ten years architecting for two pizza teams. It sounds like the "smart people" at Airbnb were being asked to act as human load balancers for competing dependencies and competing incentives at Airbnb. Your choices in this case are either to:

1. Attempt the Sisyphean task of untangling those things

2. Spend political and social capital "pushing back."

3. Locally optimize around being very metrics and data-driven but ultimately losing the thread of the complete product.

Deal. Fight. Or find a smaller pond. If your comp relies on hitting goals, and you are reasonably scrappy, you opt for #3 (locally optimizing).

As an organization gets taller and more complex, the challenge becomes harder and harder. Information degrades. Even the slightest amount of "spin" makes bad news and challenges turn into "we're monitoring that" by the time it reaches senior leaders. Even the most knowledgeable, skilled, and motivated person will struggle. Highly motivated people will die a million times every time they must navigate the growing bureaucracy and either check out for sanity or leave.

So here's my analysis.

People think that a great leader's job is to hire people and just empower them to do a good job.

…is highly context-specific and largely possible because empowerment in these contexts is a simple (or highly supported) affair. I'm not sure it works why people think it works, but something is working. It either works in very startups or in bounded units of much larger, established tech companies (where the work of creating support systems has had a chance to take hold).

This is not to say that skill is irrelevant! Chops do matter. However, leadership's role in unlocking skill and talent changes depending on context. Chesky's claim that he's running a big company like a startup is more like: we're running a medium-sized company like a medium-sized company, NOT a startup, and NOT pretending to be a big tech behemoth.

He is repudiating the mantra of "just hire talented people and get out of the way," so prevalent in Silicon Valley, and accepting that it doesn't work at a certain scale. He's doing the "prioritization council" or "big room planning" that people make fun of in large enterprises but at a company known for being a startup.

But I'll leave you with this thought.

First, how many companies truly meet the criteria of #1 and #2 I described above?

Next…

What if, at a certain scale (and assuming certain leader strengths and traits), the leader's job shifts in how it views empowerment? At a certain scale, empowerment involves organizational design. At a certain scale, empowerment involves clarity, coherent strategy, and repeating the same things over and over. At a certain scale, the leader's job shifts from delving into the details to solve specific problems to assuming that problems will always surface and that the systems to address those problems are crucial. At a certain scale, you have to believe you are not seeing or hearing about reality, and you need to consider an approach that doesn't rely on your ability to get into every detail. At a certain scale, you need to realize that you can hire the best and brightest and still face challenges that only you can untangle, and you have to do so in broad strokes. Or, that in many cases the best approach is not being reactive and holding the course.

It is a different set of leadership skills. 

It’s not “just hire the best and empower them”. And it is not “focus only on process and systems and be a figurehead.” It’s somewhere in between, and that’s what makes it so interesting and difficult.