This is the first in a series by Jay Fulcher, Chairman & CEO of Zenefits, about leading and scaling businesses.
If modern business were a book or movie, bravery would be the undeniable hero.
Starting a business is hard, but running and growing one is becoming increasingly more Herculean in the face of global, economic, political and environmental changes which are impacting business more than ever.
The willingness and fortitude to take risks, face fear, and deal with difficulty are not only expected of leaders, it is a prerequisite. In fact, there are countless studies, articles, TED Talks and business books on this very topic. Fierce confidence and conviction are required in order to buffet the inevitable setbacks and disappointments that come with leading a company.
But, bravery alone isn’t nearly enough. An equally important characteristic for today’s successful leaders is humility and embracing a growth mindset. Humility limits bravado and gives leaders the space (and permission) to learn, listen, experiment and not feel they must have all the answers.
No doubt, it takes a certain amount of confidence or “swagger” to inspire, drive and ultimately grow a high-performance company. But words like swagger and bravado can sometimes conjure up images of “brilliant jerks”, a favorite target recently in Silicon Valley’s testosterone heavy “bro-culture” (i.e., leaders who get away with bad behavior because they’re regarded as intelligent and occasionally deliver on disruptive ideas). But, these aren’t the leaders I’m referring to as they’re rarely successful long-term and they always leave lots of broken glass around.
The confidence or bravado I’m talking about comes with a caveat: it’s got to be tethered to something real, authentic and demonstrable: in other words, to a fierce belief and set of solid values versus brash arrogance.
One part of my job is making bold and sometimes aggressive decisions in driving our business forward. Changing our business model, shutting down partnerships, launching new products, or developing a new approach to reach a target market are all a part of this responsibility. These decisions an be foundational to building a truly transformational company. Making these calls are no easy task, especially if you inherit a company with pre-existing relationships, products, technology, values, and culture.
For me, it’s crucial that I believe in every aspect of Zenefits. When I started a little over a year ago, the business came with some brilliant breakthrough thinking around industry transformation, with a clever business model and solid technology. Luckily, it had a passionate co-founder, a motivated team and incredible investors determined to see the company be successful. It also had some real challenges including regulatory compliance issues that were in the process of being addressed.
Fortunately, the challenges were overcome quickly. Through a collective commitment to making the right choices in the face of adversity, we could begin to immediately make progress. This was possible because the company immediately admitted mistakes, worked closely with regulators and investors, and took action to remedy the situation. Very little time went by between when we self-reported the compliance problems we discovered and when we began correcting our mistakes.
During this time we took great care to meet—and exceed—the regulatory compliance standards that were required of us, and in so doing we eradicated previous mistakes. As a result, we set a new bar for compliance in the broader InsureTech industry by developing and then offering a free application called Licensing+ to any company or individual that needed to manage licensing compliance. Today, more than 100 companies use this Zenefits product to manage compliance.
While difficult, what we experienced has made us a stronger, better and more resilient company. We have built strong believers across our organization, our customer base, regulators, and the entire industry.
In my experience, there are a few key ingredients that must be in place to enable bold leadership and great execution, and to inspire a team to build a truly special company.
These ingredients are:
There have been several times in my career when I have seen the entire arc of a business lifecycle: from personally selling and implementing the first few customers, building the early team, seeing the company grow much faster than I ever thought was possible, to eventually realizing huge valuations for what we built. In each instance, we relied on these key ingredients to bolster and sharpen our leadership as we built value for our customers and partners and, importantly, built a company that employees felt was worthy of their best effort. To this day, it makes me incredibly proud when a current or former employee tells me that it was at one of those companies where s/he experienced “the best job I ever had.”
Along the way during this lifecycle, every company has a series of “founding moments.” These moments are when you have the opportunity to either be bigger and braver or to recognize the diminishing effect of playing it safe. Brave founding moments are not always winning moments, and they are not for the faint of heart. When the going gets tough (and it will) it is crucial that you have strong leadership you can lean on and a clear plan to guide your decisions.
In 2010, ESPN engaged our (at the time) small online video platform company with a challenge: deliver a faster and more performant video player than the in-house one they’d developed themselves. In other words, prove you can do this better than we can.
The challenge was simultaneously exhilarating and terrifying. Goliath had invited David to a boxing match. We could throw everything we had at this challenge to win against long odds, or lose it all by falling to distraction —and likely exhaustion— with nothing to show for the effort.
We chose a third option: limit the scope of what we would do, set a timetable, and be 100% clear on what joint success would look like. This way, we could accept the challenge and at a bare minimum learn a ton (growth mindset) without losing our shirts. As it turned out, we exceeded their (and our) expectations, and truly punched above our weight. We were rewarded for being willing to dare to be better than our size and scale suggested we could be. Our success with ESPN — a smart, iconic sports media brand and phenomenal partner — set us on a path with subsequent wins across the global media landscape with customers like DirecTV, Bloomberg, Sky, News Corp, Washington Post, Miramax, Univision, Vice Media, Vox, and so many others. This market adoption was beyond our earlier aspirations, and yet oddly seemed exactly like what we had been preparing for all along.
There is nothing that better catalyzes a team than a situation like this — everyone being “all in”, accepting the challenge and determined to deliver a breakthrough. When it happens, it underscores precisely what you originally set out to do. It is intensely satisfying to prove something to yourselves and to the market.
At that same company, we took other gambles that didn’t pan out. Very early on in the company’s journey we hoped to deliver on some pretty cutting-edge technology that would give users the ability to watch online video and “double click” on any image, person, brand, or product they saw — like an outfit or an accessory on a runway model — and connect to a commerce experience, a website, or some other consumer experience. After a few months, the company realized that this use case, and our take on it, was too expensive and nascent — it just wasn’t ready for prime time.
Because we’d built a culture of working problems together, and saw failure as a natural process of figuring out how to succeed, small and conscious failures became part of our success formula. In this case, instead of being defeated about a failed attempt, our team came away encouraged having learned some hard lessons and looking immediately for the next big problem to solve.
Day-to-day leadership requires a slightly different type of engagement for each of your key constituents. In my case, there have been primarily three core groups to focus on as a leader (beyond customers and partners who are an engagement discussion unto themselves):
As the business leader, you need to cultivate the trust and respect of your investors and board. Depending on the size and stage of your business, this group may consist of respected professional investors, industry peers, key customers, important partners, co-founders, or relatives. Managing these relationships requires clear role definition, a stiff upper lip, and a steel spine to help those not in the day-to-day business be informed about, and engaged in, the progress to date and the journey ahead. If you’re lucky like me, you have a team that has experience and perspective that can help guide you as you steer the ship. Given that your investor’s money is in play, things get “real” quickly, and to avoid unnecessary drama and stress it is imperative that this audience understand who we are (purpose), what we do (value prop), and why it matters (vision), as well as what support you need from them (it is always more than money) to help the vision be realized.
As a CEO I serve at the board’s pleasure. But, I’m just as responsible to the people that come to work with me every day. So it is imperative that I be transparent and forthcoming with them about the business. They deserve this. Afterall, they voted with their feet —and careers, and reputations— to be here and to co-mingle their personal brand with that of the company. Being transparent is relatively easy when everything is going well, and every business metric is pointing up and to the right. Transparency gets much harder during challenging times, and it is precisely then that you’ll be glad you’ve earned their trust and respect by always being transparent and direct with them.
Though each of these constituents is critical to your success, your management team and peer group can be the trickiest one to get right and potentially the worst one to get wrong. These are the key people you rely on to wholeheartedly be in it together with you every single day. They must be aligned and committed to taking on bold, brash and sometimes scary propositions. Ensuring you have this alignment, and testing to be sure they understand the way forward, is critical as you navigate the often topsy-turvy world of entrepreneurship and growing a company together.
Finally, there is no one way to lead. No single formula. No template for bravery. But what I’ve learned in nearly three decades of leading teams and businesses is that you must try to strike a balance. Be bold enough to do something meaningful and take a big enough swing that it fully commands your attention and skill-set. But, do this without being reckless with your time and energy, or ignoring data and facts, or lacking self-awareness. Try to minimize (though not eliminate by any means) your risks. You can’t listen to the naysayers and the so-called “pundits”, as they’ll always be there to criticize and diminish. Instead, believe with your whole heart and trust in what you’re doing, but verify by watching and listening very closely. Don’t look to find evidence to support your views, but rather seek the truth and let it point the way — especially when it doesn’t fit your narrative.
Believe me, no completely rational person would ever start a business given the trials and tribulations that come. But, like a parent who relishes the sweet moments with their child and not the difficulties of child-rearing, or the athlete who exalts in the competition and not the training, injuries and rehab that come before, the entrepreneur is driven by a passion for making a difference and is undeterred by the fear of what might go wrong.
I recently saw a comment from Jeff Bezos that resonates with me: “Optimism doesn’t mean you’re blind or unrealistic; it means you keep focused on eliminating your risks, modifying your strategy, until it is a strategy about which you can be genuinely optimistic.”
Being kinder, humble and genuinely optimistic is not weakness. Just like having a little swagger is not arrogance. It’s in the balance of the two that a great leader thrives.
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