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Yash Gupta
Business School Dean

Yash Gupta

Yash Gupta is Professor and Dean of The Johns Hopkins Carey Business School.

Seed planters not bean counters

Q: The ongoing privacy controversy at Facebook raises the familiar dilemma of what to do when fast-growing startups threaten to outgrow the management abilities of creative young founders. The Google guys got kudos for bringing in industry veteran Eric Schmidt as CEO, but things didn't work out as well when Pepsi's John Sculley took the reins from a young Steve Jobs at Apple. What's the leadership wisdom here?

An organization goes through a life cycle. When it's a startup, it requires a different kind of leadership than an organization that is mature and established. The entrepreneurial phase is when the idea people -- the inventive and creative types, the risk takers -- are getting the company off the ground. Once success has been firmly established, then more formalized processes are introduced - employee recruitment, marketing, product development, and so on.

The typical entrepreneurs generally don't ponder what their future management structure is going to look like. They're the kind of people who aren't happy dealing with bureaucracy, so they're not likely to envision how the bureaucracy of their own companies is going to be assembled. They tend to be people with big ideas and big passion; they're not very interested in maintenance. They're seed planters, not bean counters. In fact, research has shown differences between the brains of entrepreneurs and the brains of other kinds of business people. They're literally wired differently.

The transition from the more entrepreneurial style of leadership to the more managerial is inevitable, and it must be handled properly. If it's done too soon or too late, then problems occur. Knowing when to make the shift isn't an exact science. The organization just has to be careful not to stifle the culture that generated the initial success. Otherwise, there's a risk of ruining the brand.

The wise entrepreneurs know when to exit. Breaking away is difficult, but they can sense when they should leave operations to the professional managers and move on to the next project. Thus the term "serial entrepreneurs."

As many have noted, Apple is that unusual company that has been able to thrive with its entrepreneurial leader, Steve Jobs, working alongside the managerial leader, Timothy Cook. You don't often see highly successful companies where the right brain and left brain are equal partners. No doubt that helps explain why Apple is one of the most recognizable brands in the world. Facebook could learn a lot from this phenomenon.

By Yash Gupta

 |  June 8, 2010; 12:10 PM ET
Category:  Corporate leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: When a visionary needs a partner | Next: groupthink@facebook.com


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Oh, and another thing. Apple isn't just a exception, it's an argument *against* what Mr. Gupta is stating. Apple has only been successful with Jobs, its so-called entrepreneurial leader. The moment Jobs left and was replaced by more business-minded management, the company floundered for a decade. It was only with his return that it has rediscovered profitability.

Posted by: madmacrae | June 8, 2010 4:49 PM
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A bean counter-type CEO would've sold Facebook to one of its many suitors months, if not years, ago, and potentially missed out on its ever-increasing value and the fact that it's actually generating revenue. If one took over now, it'd probably still be their first step. If the fact that FB remains independent ultimately turns out to have been foolish, then you can advocate for a different leadership style. For the moment, FB may be working out better than it would've under anyone else, though.

This is a boilerplate column that has nothing to do with the specifics of Facebook as a business. I've got tons of criticism for Facebook's leadership, but being not enough of a businessman doesn't come into it. If anything, it's been run TOO MUCH like a business.

Posted by: madmacrae | June 8, 2010 4:43 PM
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Like all business rules, this one is true except in cases where it isn't.

Posted by: bpai_99 | June 8, 2010 4:15 PM
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Give us the number of companies where right/left brain combination of leadership failed and then only one can decide how plausible these theories are. Clearly, the big assumption in such theories happens to be: all else being equal. I highly doubt if that is a reasonable assumption.

That being said, I am no expert in this arena and I could be wrong.

Posted by: cyn0 | June 8, 2010 1:16 PM
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