How Great Leaders Inspire Action

Jens Karstoft, CEO of Zmags, sent me a link to Simon Sinek’s talk at the TED Conference in September 2009 (posted in May 2010). I think this talk is a great starting point for start-up and expansion stage CEOs to think about and develop their inherent leadership DNA.

I was going to say “develop their leadership skills” but I don’t believe that true leadership is a skill to develop. True leaders are born to lead. And they lead by inspiring their followers with a purpose, an idea, a belief in something that transcends the ordinary. Something that ignites the emotions and passions within each one of us. Something that drives us to take action that we would not have taken otherwise.

So what’s the relationship between a leader and a CEO of software company? There are three kinds of CEOs in my mind:

  • True leadership CEOs: These are CEOs that are able to take the seed of an inspiring purpose behind the existence of their companies (the WHY in Simon’s talk), and use it to fuel the creation and growth of an enterprise. They are able to use that purpose to inspire their employees to be committed, passionate, and to produce the exceptional. They inspire (through their employees) the desire within their market to be part of that purpose (by buying products/services of those companies). And they inspire their customers (by delivering on the promise of their products/services) into becoming evangelists that draw in more customers through word of mouth. An obvious example of these CEOs are Steve Jobs and Barack Obama (although the jury is still out on Barack’s ability to renew and upsell his current customers!)
  • Managerial CEOs: These are CEOs that do not inspire. Rather they execute and lead their employees in the pursuit of exceptional execution and success. Mind you, there is nothing wrong with these types of CEOs. Not every successful company had to have a true leadership CEO. Many companies have become great big companies by out-executing their peers. I put Bill Gates in that camp.
  • Incapable CEOs: In my world, these tend to be founders who landed in the CEO position because of their founding status. These are CEOs who do not have the skills or the rapid learning ability to become effective leaders of their companies. These are CEOs that don’t have the inspirational or the managerial leadership to grow an early stage software company. There is no shame in that. The worst thing that an incapable founding CEO can do is to allow pride to get in the way of the decision to step aside. There is no shame in making that decision. In fact, a founding CEO stepping aside to allow a more capable leader to take the helm is a sign of true, inspiring leadership in itself.

So let’s get back to Simon Sinek’s message. What Simon preaches is that truly inspiring leadership starts with identifying and communicating the WHY of why your company exists. “The WHY is the purpose, cause or belief. The Why is your driving motivation for action.” Only after the WHY has been clearly communicated should the company talk about its HOW, which is the “Guiding principles. The Hows are the specific actions that are taken to realize your Why“. In technology marketing terms, this is what you call your Competitive Advantage. And only then should a company start to talk about its WHAT which is “Tangible proof, results. The Whats are the tangible ways in which you bring your Why to life.” Again, in technology marketing terms, these are the feature/functions of your offering.

Expansion stage technology companies tend to over-communicate the WHAT first and foremost. This is typically because technology companies are started and led by techies. And techies like to talk about the unique features of what they have built. When they run out of things to say about the WHAT, they hire marketers… and marketers like to talk about the HOW. Which invariably means that technology companies end up ignoring the WHY.

As I reflect on OpenView Venture Partners, I can clearly point to the WHY that inspires me to do what I do… the WHY that gets me through a six hour flight delay to get to a portfolio company board meeting (that’s what I’m going through now). 

The WHY of OpenView? Our purpose is to help our portfolio companies grow into great big businesses and, through that growth, to deliver to our investors exceptional investment returns. Our HOW is that we deliver extreme operational value-add to our companies in the form of project work that results in tangible impact. The WHAT is that we have created OpenView Labs as the vehicle through which we uncover operational best practices, and deliver them to the portfolio companies through a combination of advice, mentorship, and project work.

So think about how you’re creating competitive advantage by inspiring your prospects with the WHY of your company’s existence. Without it, you will not be able to lead your company to become truly exceptional.

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