Coaching Founder Mode

Sometimes naming an important but nuanced concept can give that concept real power.  

I would argue that’s what happened when we named the concept of product discovery,  and I’m seeing the same thing now with the product operating model.

The purpose of this article is that just recently the legendary co-founder of Y Combinator, Paul Graham, published yet another of his insightful essays, this time addressing what I consider one of the most important, yet unnamed concepts, in product model companies.  If you haven’t yet read his essay on Founder Mode, I hope you’ll take a moment to give it a read.

Should The Founder Stay To Scale The Company?

The premise of Paul’s article is that as companies grow, the board and others often pressure the founder to bring in a professional manager, or at the least, to bring in a professional manager to “provide adult supervision.” 

While there are some exceptions, we have long argued that it is better to coach and develop that founder into a strong company leader, than it is to bring in a professional manager.  We see all too often the consequences of bringing in those professional managers.

This is partly because of the likelihood of bringing in bad practices that come along with that professional manager, but it’s mostly about what the company loses when the founder leaves, or is marginalized.

So this article is really about how that founder can stay and thrive as her company scales.

The Two Major Management Styles 

There are two very well-known management styles:

• The Delegator (referred to as “Manager Mode” in the essay)
• The Micromanager (which we’ll refer to here as “Micromanager Mode”)

To be clear right up front, neither of these styles of management are what we see in the strongest product companies, and each of these are what fuels the misconception that management is a bad or unnecessary concept.

– The Delegator / Manager Mode

The delegator rarely even tries to understand each area of the business, but rather attempts to lead by a “divide and conquer” approach.  The leader makes decisions, allocates work, and looks at alignment, but the leader treats each area (especially those areas she may not have much experience with) as a black box.  The delegator is trusting that the groups and teams below will do what they need to do.  

Many people confuse delegation with empowerment, but as you’ll see below, empowerment requires far more than the act of delegation, otherwise you are likely setting up the teams to fail.

Yet ironically, these teams rarely feel trusted or empowered; they complain that they lack any real understanding of the larger picture, the product vision, and especially the product strategy, they work in silos, the important decisions were made by the manager doing the delegation, and it feels very top-down.

There are many examples of the professional manager, but in his essay Paul cites one of the most egregious: John Sculley.

John Sculley personified the “professional manager” approach of coming in, in his case, armed with a Wharton MBA and 23 years at a beverage company, to provide Apple with “adult supervision,” and then delegating down the organization without any real understanding of the company’s products, customers, enabling technology, or even the methods of tech-powered product development.

Contrast that with Steve Jobs, who was involved in every detail of his company.  He cared deeply about engineering, he cared obsessively about every aspect of design and the customer experience, he had an exceptional knowledge of marketing, learned about manufacturing, and he studied distribution.  He asked tough questions and demanded solid answers.

Steve Jobs had developed what we call exceptional product sense, and he used this to come up with an inspiring and compelling product vision for his company (twice), and then he was relentless in sharing the product vision with his leaders and his teams.  Further, he knew and engaged personally with the key talent in his organization, even those that were individual contributors many layers below him.

Yes, he had the moral authority of the founder, but he also was there from the beginning, experiencing every success and failure, and learning along with his teams.

Steve Jobs personified Founder Mode.¹

As Paul noted in his article, many smart founders figure out that the delegation model might sound nice, but the negative consequences in practice are hard to miss.

But the big fear, which Paul also noted, is that leaders will swing the pendulum all the way to the other approach, and think they instead need to become micromanagers.  We can already see that the popular press has picked up on Paul’s essay, and some have jumped to that conclusion.

– The Micromanager / Micromanager Mode

At the other end of the management style spectrum is the micromanager who does not trust their people to be able to make decisions, take ownership and accountability, and work through solutions, so the micromanager engages at the task level to make decisions, direct resources and manage milestones personally.  

In this case the teams complain they are not treated like professionals, and feel little sense of ownership, agency or accountability.  If you believe that we need teams of missionaries rather than teams of mercenaries, this is very clearly in the wrong direction.

Most importantly, micromanaging professionals does not result in the innovations our companies and customers depend on.  Especially in an industry where the vast majority of innovations originate from individual contributor engineers.

To come up with meaningful innovations, those engineers, and their product teams, need the interactions and inspiration that come from engaging with the Founder Mode executives.  They need to understand the strategic context.  They need direct access to customers.  They need direct access to data.  This is what Netflix means when they say to “lead with context not control.”

Better Management not Less Management

When I explain the product model to companies, the main thing that senior leaders and product leaders consistently struggle with grasping is this issue of the necessary role of true product leadership, and how different it is from what they have usually been doing.

So many people have been conditioned to believe that the key to empowerment and innovation is to “step back and give your employees room to work.”

I find myself constantly repeating that empowered organizations don’t require less management, they require better management.

Better management means immersing in the details of the business, asking countless questions, pushing to get good answers, coaching and developing their people to pass along what they’ve learned, talking directly with employees at every level, connecting the dots between people in different areas of the company, and relentlessly evangelizing the vision and strategy.

Yet sometimes if you’ve done everything right, the team might still disagree and believe they can succeed, and this is why strong product leaders often agree to “disagree and commit.”  This case study from Spotify is a good example of both true strong founder mode, but also true empowered product teams committed to real outcomes, and especially the power of strong leaders combined with strong product teams.

This is something I have written about often, as have others, but until now I would argue we have lacked a name for the style of leadership practiced at the top, product model companies.

A Legacy Of Founder Mode

It’s important to realize that Founder Mode might be a new term, but it’s not a new concept.

Bill Hewlett and Dave Packard, Steve Jobs, Jeff Bezos, Larry Page and Sergey Brin, Mark Zuckerberg, Reed Hastings, Daniel Ek, Elon Musk, and Patrick and John Collison, are several well-known examples of founders that built their companies with Founder Mode.²

I will never forget being a new software engineer at HP Labs, working in my cubicle early one morning when the co-founder Dave Packard happened to walk by (he was retired by then, but still on the board), and he saw me working, and so he decided to introduce himself, and ask if he could sit and chat a minute.  He then proceeded to ask me questions about what I was working on, what customers I had recently visited, and what I thought about the new technology I was working with.  

That was not my first exposure to the HP leadership principle “Management By Wandering Around (MBWA)” but it was definitely my most memorable.  Another HP leadership principle was “Management By Objectives (MBO)” which was the predecessor to OKRs, and was used to empower product teams with problems to solve and business outcomes to achieve.  Yet another leadership principle was the importance of coaching.  During my ten years there, I always had at least one person assigned to help me get better at my job, or to prepare me for my next role.  

The founder mode co-founders had created an innovation machine to create founder mode leaders and continue to grow the company.³

Or, for a more recent example, consider Amazon’s “Dive Deep” Leadership Principle: “Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdotes differ. No task is beneath them.”

So, one of the most important points of this article is not to confuse Founder Mode with micromanagement.

Founder Mode Should Be Coached In All Product Leaders

Another key point that’s often missed, is that at the strong product companies, the senior leaders coach and develop the product leaders that report to them to be skilled in Founder Mode as well.  

One of the biggest misconceptions about scale-ups and large companies running in Founder Mode is that the CEO is the only one that has this depth of knowledge.  Yet in strong product companies, as you saw in the Amazon Dive Deep leadership principle, every product leader is expected to be immersed in the details, asking important questions, pushing for solid answers, understanding the actual challenges faced and the various approaches being pursued to solve, and more generally developing future leaders.

To this point, many of us were wondering what would happen after Steve Jobs passed away and Tim Cook took over as CEO, but we were all able to see how the very broad and deep bench of leaders at Apple were able to continue their record of success.  The level of depth and breadth that each of Apple’s leaders has is truly impressive.  And I find much the same at Amazon, and at other strong companies.  I argue this is the true key to scale for a strong product model company.

Founder Mode Does Not Travel Well

Just as with product sense, a founder that is skilled and effective at Founder Mode in her first company, is not necessarily able to jump right into another company and expect the same results.  

It takes real time and effort to come up to speed on all the aspects of the new company (products, customers, technology, employees, etc.) to be able to think and act effectively in Founder Mode in the new company.⁴

Developing Founder Mode for Non-Founders

So what to do if you realize you need a founder-mode leader, but you don’t yet have one?  There are two important cases here:

– The Founder CEO Has Left, So The Company Has Hired A New CEO

First, if the actual founder has left, then the company is likely in desperate need of a leader that is capable of effective Founder Mode.  The problem is that this will take real time to develop, but it’s very possible that the survival of the company depends on this.  

If the board selected a CEO that is willing and able to put in the time and effort to develop Founder Mode knowledge, then this starts with the product sense work.  If the new CEO has access to the previous founder, that can help substantially.

If the board selected a professional manager, then hopefully that manager understands enough to realize that he or she will likely need to find an exceptionally strong CPO.  The company, and likely the customers too, are probably starving for the product vision, product strategy and innovations that come from a Founder Mode leader.

In this case, the CPO needs to become that Founder Mode leader, but does not have the advantage of the moral authority of the founder or the CEO, nor the long history of observing the growth and development of the company and its products.  A product leadership coach can be especially helpful here.

– The Founder CEO Has Hired a CPO

Many product leaders know all too well the challenges of joining a company where they already have a Founder Mode CEO.  Moreover, it’s likely (and usually a good thing) for the Founder CEO to remain as the visionary head of product, and the new CPO is there mainly to help make that vision a reality.  There is nothing wrong with this, and it is especially common in growth stage companies.

The problem is that the Founder has likely many years of experience that will be impossible to completely capture, but nevertheless the new CPO needs to do everything humanly possible to learn as much as possible, as fast as possible.  

This is necessary for building trust with the founder, and for establishing credibility with the broader company. 

Summary

Founder mode does not mean hands-off delegation, but it also does not mean micro-managing.  It is a manifestation of the passion for the customer and the problems to be solved, with the goal of collaborating closely with product teams to discover and deliver winning solutions.

The key to scaling successfully for a product model company is to have strong, founder-mode leaders that work to develop other strong, founder-mode leaders.

Special thanks to Mike Fisher and Chris Jones for their feedback on early drafts of this article.

1. Some people mistakenly believe Steve Jobs was a micromanager, but this is not true. To see several very detailed examples of his management style in action, read the excellent book Creative Selection by Ken Kocienda. ↩︎
2. While we all know that historically there has not been nearly enough female founders, if we expand Founder Mode to product leaders as I suggest in the article, there are many exceptional female leaders that exemplify the best of founder mode. ↩︎
3. Unfortunately, several years later the board decided to bring in a “professional manager” from the outside, which marked the beginning of the end of HP’s remarkable 60 year culture and innovation machine.  ↩︎
4. Elon Musk unfortunately demonstrated this point to the world after his acquisition of Twitter. ↩︎