Symptoms of Toxic Leadership in the Tech Industry

A strong leader with a clear vision and capability to implement it is essential to the long-term success of any company. Effective leadership is particularly important important for new businesses and startups. But too often braggadocious and counter-productive leadership style is mistaken for strength. An informal, shoot from the hip culture may seem edgy and innovative when it is really just masks disorder.

Of course, entrepreneurs do have different traits than senior leaders. Entrepreneurs tend to be more involved with the details of their own company and business while senior leaders tend to be more strategic and delegate the details. Both need to have a big vision.

One could argue that being aggressive, disorganised, informal and vulgar doesn’t matter as long as the leaders are leading their company to success. But as Dan Lyons writes in the New York Times about failing and flailing leaders in the startup tech industry: “the real problem with tech bros is not just that they’re boorish jerks. It’s that they’re boorish jerks who don’t know how to run companies.”

“Bro Culture”

It’s often referred to as “Bro Culture”, a problem has been an issue in workplace, particularly startups and the tech industry increasingly over past years). Somehow, younger entrepreneurs have managed to revive what used to be referred to as the “old boys club” and combine it with frat house culture. It refers to a culture that is aggressive and impulsive, full of bravado but typically with an ambivalent relationship with the truth. It’s about inflated stock prices and aggressive business decisions based more on personality and showing off than sensible or responsible decision-making.

The leaders in this culture tend to be characterised by immature and reckless decision-making. Businesses are run with a focus on short-term profit and aggressive growth, irrespective of the long term consequences and also without attention to regulations, good business practice or the effect it has on other employees (especially those outside of the inside “bro” group).

When the leadership has an attitude that their company should be run for their own entertainment, that attitude filters down and across the company and is contagious. These companies tend to have serious problems with unethical behaviour, including a preponderance of misogyny, groping and sexual harassment complaints.

The example of the tech industry

There are a multitude of examples of “bro” culture from the tech industry in Silicon Valley. Its an industry with many inflated valuations, braggadocios marketing strategies and massive amounts of investment money poured into projects, many of which never materialise. That’s not to say this is true of all tech startups, but it is an industry than has an astounding amount of money poured into vague and often fruitless ideas.

Take the example of Quirky, a “social product development platform” (whatever that means). It was founded in 2009 by Ben Kaufman who raised $185 million but the company managed to get through those millions in relatively short order and went bankrupt because of fundamental problems with the business and mistakes by the leadership.

Uber, too, has been reported to have a similar cultural problem. The problem, again, has manifested as a culture that has been said to tacitly allow and protect sexual harassment.

The problem of harassment goes beyond just the victim of harassment (although that impact should not be minimised). A culture of discrimination, harassment, impulsive decision making and bravado over substance and sound business decisions is toxic. Certain industries have managed to reinvigorate tired, old and fundamentally counter-productive culture where the company is run for the enjoyment of senior leadership and their inner circle.

The bottom line is that this type of culture and management style is not good for productivity, profit or the bottom line.

What to do about it

The Guardian, with PricewaterhouseCoopers offers a few tips for digital startups to deal with “bro culture”. The recommendations can be generalised to any startup, and indeed any company.

1. Ask honest for honest feedback. Be open to hearing both positive and negative feedback, and don’t argue with what employees say in response to feedback.

2. Institute zero tolerance policy for harassment. Harassment and sexual harassment have no place in the workplace. Make sure there is a formal zero tolerance policy for sexual harassment and it is enforced in practice.

3. Ask former employees. Check with former employees to understand why they left and what the company was like when they worked there. Ask for honest opinions and be receptive to what former employees say. If necessary, pay them for their time and honesty.

4. Hire a proper HR expert or team. Startups and small companies often skimp on HR. Entrepreneurs, leaders and other within a small company may be good people, but are no substitute for HR professionals in a growing business.

5. Grow with the business. Businesses grow as they change, as should leaders in the company. The best people who start a company are unlikely to be able to fill all of the necessary roles in an expanding company, so people need to grow within the business and hire people to fill the needs of an expanding company.

What makes a good leader

Companies, industries, sectors and the economy may change, but the traits of a good leader remain consistent. Along with intelligence, knowledge, motivation and ability there are six fundamental traits that leaders exhibit as described in detail in High Potential: How to spot, manage and develop talented people at work (Bloomsbury, 2018).

Conscientiousness. High conscientiousness means strong planning, goal-directed behaviour and discipline. Strategic thinking is impossible without high conscientiousness. Low conscientiousness leaders are those whose organisations will be governed entirely by strategy.

Adjustment. Being able to cope with high levels of stress is a useful trait as a leader, but is also relative to the demands of the organisation and situational factors. Greater work demands, more intense pressures and hostile climates demand greater levels of adjustment.

Curiosity. Curiosity is essential for strategy: the desire to learn and explore information is foundational for the strategist. Good strategy is rooted in a rich understanding of the company, the people in it, and what is going on outside of the organisation. Continual learning informs the top-down strategy, helps to discover successful emergent strategy and to make informed decisions.

Risk Approach. Risk approach is how willing someone is to confront and solve difficult situations. The leader as a strategist must have the courage to explain why strategy is important, even in the face of opposition. They must have the fortitude to stand by and explain their own values. Those with higher risk approach have a more proactive approach to dealing with problems.

Ambiguity Acceptance. Ambiguity acceptance is how someone approaches uncertainty and complexity. The oversimplified solutions are often the most appealing and the least successful. Those with high ambiguity acceptance seek out more information, even when there are conflicting opinions. Leaders must have the capacity to listen to unpopular or dissenting opinions, and those with low ambiguity acceptance have little tolerance vagaries or complexity.

Competitiveness. Competitiveness is instrumental, but in moderation. Useful competitiveness focuses on the success of the organisation, competitive advantage of teams, departments and the company. The moderately and adaptively competitive leader can channel their desire to succeed into realistic objectives.

High Potential: How to Spot, Manage and Develop Talented People at Work by Ian MacRae, Adrian Furnham and Martin Reed (Bloomsbury, £25)

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