Explore the critical differences between Founder Mode and Manager Mode leadership styles. Learn why some CEOs thrive while others falter, with real-world examples from Amazon, Uber, and Microsoft—and discover strategies to lead effectively through growth transitions.
Shira Abel is a Go-to-Market Consultant with Alchemist Accelerator, the Founder of leading marketing consultancy Hunter & Bard, the creator of The Perception Formula, and a distinguished Lecturer at UC Berkeley's Sutardja Center for Entrepreneurship and Technology.
Founder Mode vs. Manager Mode: Leadership Strategies for Thriving CEOs
Why Some CEOs Thrive While Others Falter
What’s the best way to manage a company as it grows?
Paul Graham’s ‘Founder Mode,’ breaks down why founders should run companies differently than managers. If you don’t know who Paul Graham is, he co-founded Y Combinator. I respect his views on startups. In this post, we explore Founder vs Manager Leadership Strategies to help CEOs and executives excel during company growth transitions.
Founder Mode introduces the concept of “founder mode” versus “manager mode,” arguing that the assumed transition to manager mode as companies scale leads to failure for founders. Founder mode, while largely undefined and more complex, involves deeper engagement across all levels of the company, and seems to work better for founder-led organizations. Graham suggests we’re just beginning to understand this approach, which could lead to even greater achievements by founders, but warns it might be misused or misunderstood as the concept gains traction.
My favorite parts of this post were the Notes on the bottom:
Regarding his statement that executives are skilled liars, he notes “[1] The more diplomatic way of phrasing this statement would be to say that experienced C-level execs are often very skilled at managing up. And I don’t think anyone with knowledge of this world would dispute that.”
Founder Mode is just being figured out, so there’s time for it to be turned into best practices. However, he also gives a warning:
“[3] I also have another less optimistic prediction: as soon as the concept of founder mode becomes established, people will start misusing it. Founders who are unable to delegate even things they should, will use founder mode as the excuse. Or managers who aren’t founders will decide they should try to act like founders. That may even work, to some extent, but the results will be messy when it doesn’t; the modular approach does at least limit the damage a bad CEO can do.”
What he didn’t do in his post is break it down with examples, so that’s what I’ll do here:
What is Founder Mode vs Manager Mode in Leadership?
Founder Mode is characterized by:
- Visionary leadership
- High-risk appetite
- Hands-on involvement in all aspects of the business
- Focus on innovation and disruption
- Strong emphasis on company culture and mission
Manager Mode, on the other hand, is defined by:
- Process-driven leadership
- Risk mitigation and strategic planning
- Delegation and empowerment of teams
- Data-driven decision making
- Focus on scaling operations and efficiency
Case Studies of Founder Mode vs Manager Mode
Here are some real-life examples of the different Modes in action. Founder vs Manager Leadership Strategies have been a game-changer for companies like Amazon and Microsoft.
The Good Founder: Jeff Bezos at Amazon
Jeff Bezos is practically the poster child for Founder Mode done right. Here’s why:
- Customer Obsession: Bezos famously kept an empty chair in meetings to represent the customer, ensuring their needs were always front and center.
- Day 1 Mentality: He insisted on maintaining a startup mindset, even as Amazon became a behemoth. This kept the company innovative and agile.
- Deep Dives: Bezos wasn’t afraid to dive deep into any aspect of the business, from warehouse operations to AWS technical details.
- Long-term Vision: He consistently prioritized long-term growth over short-term profits, a classic founder move that paid off big time.
- Unconventional Decisions: Remember when everyone thought Amazon was crazy for getting into cloud computing? That’s Founder Mode in action.
CEOs like Jeff Bezos demonstrate why visionary leadership is a critical part of growth-stage success, making it a prime topic for leadership workshops and keynote speeches.
The Not-So-Good Founder: Travis Kalanick at Uber
While Travis grew Uber to impressive heights, his version of Founder Mode ultimately derailed:
- Toxic Culture: Kalanick’s aggressive, “always be hustling” mentality created a culture that eventually became a liability.
- Micromanagement: His hands-on approach sometimes crossed the line into counterproductive micromanagement.
- Resistance to Change: Kalanick struggled to adapt his leadership style as Uber grew, leading to conflicts with the board and investors.
- Ethical Missteps: His “move fast and break things” mentality led to several ethical and legal controversies.
- Lack of Balance: While his intense focus drove growth, it also led to blind spots in crucial areas like company culture and public perception.
The Good Manager: The Satya Nadella Success Story
Satya Nadella thrives in Manager Mode as Microsoft’s CEO. Since taking the helm in 2014, Nadella has transformed Microsoft’s culture and strategy, leading to unprecedented growth and innovation. He is in many ways, focusing on things that Founder Mode appreciates. His success can be attributed to several factors:
- Cultural transformation: Nadella fostered a growth mindset and empowered employees to prioritize customer needs.
- Cloud leadership: He executed and prioritized the growth of Azure, positioning Microsoft as a key player in cloud computing.
- Strategic acquisitions: Nadella’s ability to recognize and capitalize on strategic opportunities has been instrumental in Microsoft’s success.
- Adaptability: He wasn’t afraid to steer the company in new directions, such as launching Microsoft Office across rival mobile platforms.
- Empathetic leadership: Nadella’s grounded, decisive, and empowering leadership style has reshaped the company’s culture.
The Not-So-Good Manager: Steve Ballmer’s Stumble
In contrast, many view Steve Ballmer’s tenure as Microsoft’s CEO less favorably, despite his notable achievements. While Ballmer was an excellent operator who increased revenue significantly, he struggled in several key areas:
- Lack of product vision: Ballmer famously missed the smartphone revolution, failing to recognize the iPhone’s potential.
- Resistance to change: He struggled to adapt Microsoft’s strategy to emerging trends in technology.
- Focus on existing products: Ballmer prioritized protecting Microsoft’s existing business model over embracing new technologies.
- Internal competition: Under Ballmer, Microsoft’s culture became more cutthroat, with product groups competing for attention and influence.
When Manager Mode CEOs Succeed
The success of CEOs like Nadella in Manager Mode can be attributed to several factors:
- Adaptability: Successful CEOs can pivot strategies and embrace new technologies and market trends.
- Emotional intelligence: Leaders who can build deep, trusting relationships tend to excel in managerial roles.
- Learning agility: The ability to apply past lessons to new situations is crucial for effective leadership.
- Balance of vision and execution: The best CEOs maintain a strategic vision while also focusing on operational excellence.
- Empowerment and delegation: Successful managers know how to build and trust their teams, delegating effectively
The Founder’s Paradox: Why Manager Mode Often Fails for Founding CEOs
Manager Mode often fails for founding CEOs, even though it works well for hired executives like Nadella. Here’s why:
- Emotional attachment: Founders often see their company as their baby. Trying to suddenly become a “professional manager” can feel like abandoning your child.
- Risk tolerance: Founders are wired to take big risks. Asking them to suddenly become risk-averse is like asking a cheetah to slow down.
- Visionary thinking: Founders are often big-picture thinkers. Bogging them down with day-to-day management can stifle their creativity and vision.
- Cultural disconnect: The culture a founder builds is often an extension of their personality. Shifting to a more corporate culture can feel inauthentic and demotivating.
- Loss of agility: Founders are used to making quick decisions. The processes and bureaucracy of Manager Mode can feel slow and suffocating.
- Identity crisis: For many founders, their company is a big part of their identity. Stepping back into a more hands-off role can trigger an existential crisis.
- Skill mismatch: The skills that make someone a great founder (vision, passion, ability to inspire) aren’t always the same skills needed for day-to-day management.
The Bottom Line
Founders who channel their mode correctly wield incredible power. Bezos showed us how a founder’s vision and deep involvement can drive a company to unprecedented heights. But Kalanick’s story is a stark reminder that Founder Mode without checks and balances can lead to serious problems.
The key is to harness the passion, vision, and hands-on approach of Founder Mode while also building systems and teams that can scale. Successful leaders balance Founder Mode and Manager Mode, adapting to each stage of company growth.
Remember, folks, there’s no one-size-fits-all approach here. The best founders are the ones who can adapt their style as their company evolves, keeping the best parts of Founder Mode while learning to delegate and build strong teams. It’s a tightrope walk, but when done right, it can lead to some impressive results.
Now go out there and crush it, whatever mode you’re in.
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