When I was starting my second company, Sparkbuy, I was fortunate to meet a host of terrific technologists while shopping for a CTO. One of them was a brilliant guy named Adam Doppelt, one of the three co-founders of Urbanspoon.
Adam told me that Urbanspoon never had a traditional CEO. They hadn’t raised money and never found the right intersection of need and opportunity to hire someone. He asked me about my experience as CEO, and challenged me with one question I still remember clearly: “Dan, when do you play the CEO card?”
This immediately conjured up an image of high-stakes Texas Hold ‘Em Poker, with me sitting steely eyed across the table from my nemesis, laying down a card with a flourish and a smirk.
I think I told him something about collaborative decision making and team dynamics and then changed the subject as fast as I could. Not a great answer. But the question stuck with me.
Does the CEO have a “card”? If she does, what does it say?
If you’ve ever had the experience of managing people, then you know that the obvious answer is the wrong one. There’s no Ace of Shut Up And Do It. You can ask, and the person may listen. But whether they do what you tell them or not is entirely up to them.
I’m lucky enough to have learned this very early on in life. My mom, Professor Elayne Shapiro, studies organizational dynamics. She explained to me that there are only five ways that you can get people to do things:
1. Because they like you (“Referent power”).
2. Because they defer to your expertise (“Expert power”).
3. Because you can reward them for doing it (“Reward power”).
4. Because you can punish them for not doing it (“Coercive power”).
5. Because they think it’s their job to listen to you (“Legitimate power”).
The last one, of course, is the one that we’re getting at with the “CEO Card.” But this isn’t any special prerogative of the CEO; it’s just that in business, when your boss asks you to do something, you try to accommodate her. Usually. But there’s no guarantee, and there’s definitely no magical trump card.
I think the CEO actually has three cards to play. And understanding what they are makes the CEO a better leader.
—Hire
—Inspire
—Fire
And that’s it. Those are the three absolute powers you possess to affect the direction of your company.
This sounds a little grim. If there’s a problem, those are your only solutions?
Well, yes. Mostly. Early on, you’ll be doing a lot of the work yourself. But as time goes on, your job will be to delegate wherever possible. You should be offloading nearly everything. And as you delegate, you limit your abilities to play those three cards.
Understanding your limitations is freeing. Your first job is to put the right person in a role. Your second job is to inspire them to do great things. Your third job is to remove them if they’re not doing great things. There is nothing else.
Adapted from Shapiro’s forthcoming O’Reilly book, Startup CEO Secrets.
