And yet a huge gulf exists between Manchester United, and the other top-ranked clubs in the Premier League, and every other football team in Britain. The vast difference in crowd size is illustrative of the way that in football, as in almost every other organised activity, the fruits of triumph are concentrated in a few hands. Manchester United might fill their stands with 75,000 people for every game (as befits a stadium that is as much an international house of worship as a ‘theatre of dreams’), but drop down 15 teams to West Bromwich Albion, and average attendance is 25,000; drop down to the league below, the Championship, and the crowds can dwindle to under 15,000. So, while Manchester United may appear easy to operate, it is, as with other organisations, another matter entirely to operate it well. It is even more of a challenge to keep it operating at a very high standard for a protracted period. Maintaining that standard of excellence is no fluke.
That same disparity, between the winners and the also-rans, exists in the technology world. Here, the market-leading company will sweep up the lion’s share of the spoils–measured in customers, profits, free cash flow and market value. Think of IBM at the peak of the mainframe business; Intel, when the demand for microprocessors was unstoppable; Microsoft, as personal computer software spread into every business and home; eBay, when online auctions were all the vogue; Google, as it became synonymous with ‘search’ and Facebook with its hammer-lock on social networking. Then of course there is Apple which, without the monopoly characteristics of these other companies (making its accomplishment even more staggering), has outstripped them all.
The rivalries that exist in the English Premier League, while heated and often profane, seem quaint and gentlemanly compared to the competition that exists between the founders of technology companies where vicious barbs, lawsuits, theft of trade secrets and targeted assaults on one another’s payroll are the order of the day. Perhaps this is only natural since the winner in technology races (where so often the leaders are monopolies in all but the eye of the law) mops up not just a share but the equivalent of all of the Premier League’s television, ticket, merchandising, beer and hot dog money (including the ketchup and mustard). Microsoft, Intel, Amazon, Bloomberg, Google, Apple, Facebook, Oracle, Qualcomm, Alibaba, Baidu, Tencent, Cisco and eBay all illustrate this point, and if anyone thinks the competitive atmosphere in California is hot, they should go to China to sample the invective with which technology CEOs greet a rival’s move. The founders of many of these technology companies would sooner share a pint of turpentine with one of their arch-rivals than sit down and mend fences with a glass of Tignanello, one of Sir Alex’s favourite red wines. Larry Ellison, the founder of Oracle, was probably only half joking when he said he wanted to shoot the CEO of PeopleSoft, a company he acquired after a bitter two-year takeover battle in 2005.
Despite the difference in tone that exists between our two worlds, writing Leading with Sir Alex made two things apparent. The first is that a manager of a professional football team, and someone who works in an investment partnership with a fondness for the venture capital business, share the same pursuit–they are both transfixed by the possibilities of eternal youth. While both need to make sure their own house is always in order, their pursuit of success and market leadership is not constricted by the straitjacket that eventually fells every technology company–a slowing growth rate, some caused by sheer size, but most by a massive market change. We also have another enormous advantage which for a football club means fielding young players and, in the case of a venture capitalist, constantly striking up partnerships with young founders eager to make a mark with a new idea. Both manager and investor are largely insulated from the challenges posed by old products or ageing workforces. We have the wonderful luxury of always being able to stay on the young side of life.
The second point that became clear was that the principles of leadership are timeless, and that the opaque jargon found in so many management books is little more than a marketing ruse. The trick lies not in memorising some list of the rudiments of leadership (which any intelligent 14 year old can do) but, rather, having the stamina, knowledge and skill to consistently implement them. Press Sir Alex to choose three words to summarise his approach to leadership and he would pick three that begin with the same letter–preparation, perseverance and patience. Compel him to select one word and he would fasten on–consistency.
There are plenty of attributes that separate the great leader from the good manager. Both may put their work before family and friends, survive on little sleep, endure a lifetime of red-eye flights. Look more closely and you will find that the great leader possesses an unusual, and essential, characteristic–he will think and operate like an owner, or a person who owns a substantial stake of the business, even if, in a financial or legal sense, he is neither. It is extremely rare to find this trait among people like Sir Alex who are hired into a company, although in Silicon Valley this sense of long-term proprietorship is the distinctive hallmark of the best company founders. These sorts of people will never be oblivious to the pressing exigencies of their business, but they will always have a larger purpose in mind. Their attitude and approach is a world removed from that of most of the handsomely paid retainers who find themselves at the helm of an enterprise.
The great leader will embrace audacity and the unthinkable, will not shirk from making controversial and unpopular decisions, and will have unshakeable confidence in his convictions. He will have a clear sense of his ultimate goal and will be able to communicate that articulately to others. While his business may be complicated, he will be able to strip things down to their essence. The great leader will not compile endless lists of marching orders but, rather, will have a preference for keeping his followers’ eyes on no more than two or three objectives. He will have the patience required to assemble something superlative while simultaneously curbing his own impatience. He will survey his colleagues with a clinical detachment and, regardless of their past contributions, will not hesitate about bidding them farewell if they miss too many beats. The great leader is prepared to trust the judgement of others, is unafraid of delegating authority, refrains from micro-management, and will not be impelled to dominate every conversation or insist upon always having the last word in a debate. The great leader knows that most success comes from making a few large decisions correctly rather than trying to be involved in making lots of small choices. He will understand that there are others in the organisation capable of doing things that he himself cannot do or would not do as well. He will derive more satisfaction from the achievements of his organisation than from his own accomplishments, will not demand outlandish compensation for himself, will treat the organisation’s money as if it were his own and will have no particular need to be singled out by the spotlight. He will probably watch and listen more than he talks, will not radiate anxiety when the chips are down, will have a keen understanding of what he doesn’t know and a fetching sense of humility. If he does his job well, people will see him as being tough but fair rather than capricious and mercurial. He will definitely not feel the need to be universally loved. At the end of his tenure, knowing that his time has ended, he will relinquish authority with grace and will not sour the life of his successor.
Compare this with the capable manager who has attained his position by virtue of attrition, by being politically acceptable or by being a faithful, long-suffering servant. Having achieved the position that he has sought for many years he will concentrate on making sure that nothing goes wrong on his watch, will be wary about offending others, will shy away from making difficult decisions, will be at ease with the imperfections of compromise, will allow his strategy to be dictated by others, will find refuge in appeasement and court the affection of those around him. When he eventually retires, his organisation will be little different from the one he inherited. It will definitely not have achieved anything remarkable.
The great leader has two other traits that separate him from other helmsmen. The first is an obsession.
Obsessives, those who cannot imagine doing anything else with their lives, always find their work more fulfilling than those who find themselves in a profession because it was expected of them or because they did not have a calling that tugged at their emotions. For people, like Sir Alex, who are obsessed by a pursuit, there is no separation between life and work. They are leading their life, rather than feeling compelled to seek respectability from their work.
The obsessives will find it far easier to maintain their enthusiasm for their calling than the person who clambers up an organisation and survives the Darwinism of the workplace. It is much more natural for the obsessive to achieve the consistency–of effort, determination, drive and ambition–that is the foundation of leadership. It is much easier to endure all the setbacks, reversals and frustrations of management when you deeply enjoy your work–a sense that most ordinary managers rarely, if ever, experience.
The second trait of the distinctive leader is his capacity for dealing with people. These leaders will be able to extract extraordinary levels of performance and commitment from their employees and colleagues. Some of that will just be by setting a personal example, but the bulk will come from having a keen understanding for the character of their employees and an empathy for them when they are weathering difficult circumstances. They will be able to blend intimacy with ambition.
Listening to Sir Alex, and watching him with others, made it clear that there is an uncommon resilience about him and the mainstays of his United teams. The need to succeed ran deep. This is the inner fortitude born of adversity, shaped by setbacks, reversals and the fear of failure, burnished by the sense of social inequity common to outsiders, underdogs and immigrants, by the stubborn refusal never, ever, to give up, and the personal shame associated with disappointing colleagues. These are the same constitutional underpinnings required of entrepreneurs, and have been the characteristics of the sort of people I have always admired. About ten years ago I added a piece of copy to the Sequoia website that tried to summarise the character of the people with whom we seek to work. It reads: ‘The creative spirits. The underdogs. The resolute. The determined. The indefatigable. The defiant. The outsiders. The independent thinkers. The fighters. The true believers.’ Reading it now makes me think it could also serve as instructions for Sir Alex’s United scouts.
Silicon Valley teems with examples of these types. Jerry Yang, the co-founder of Yahoo!, is one. His father died when he was a toddler and Jerry arrived in the United States from Taiwan, with his mother and younger brother, at the age of ten unable to understand English. Sergey Brin, the co-founder of Google, and Jan Koum, the co-founder of WhatsApp, share some of the same lineage as Jerry, though they arrived from the east. Sergey and his family fled religious persecution in the Soviet Union, as did Jan and his mother when they left Ukraine in 1992. There was much poignancy to the symbolism associated with the spot where, in February 2014, Jan signed the papers to sell his company to Facebook for $19 billion. It was outside the former welfare office in Mountain View where he and his mother had queued to collect their weekly food stamps. I’m not saying that childhood privation is a prerequisite for entrepreneurial success, but the children of middle-class parents–Microsoft’s Bill Gates, Facebook’s Mark Zuckerberg and Snapchat’s Evan Spiegel–are among the minority of successful technology entrepreneurs. The most successful start-ups will, almost inevitably, have an immigrant or first-generation American or someone who has emerged from tough circumstances in their starting line-up.
Most entrepreneurs, especially in Silicon Valley, are self-made. They are not the product of business schools, and the majority of them have not spent any time working inside a large company being fashioned by others. They are what they have made themselves. Nobody has trained them to be what they become but they are, like Sir Alex, the products of their obsessions. The reason baby-faced leaders emerge in Silicon Valley is because they trip upon their obsession before the rest of the world wakes up to its potential. For these teenagers, or 20-somethings, their areas of interest develop wickedly fast, and either have not hit the radar screens of the big companies or are dismissed as fads. That’s been true of personal computer software, short-form messaging, file-sharing software, music streaming, the use of black cars in place of taxis and the rental of spare bedrooms. Like Sir Alex, these founders were learning to be leaders on the job–which, in most cases, was their very first, full-time occupation.
By contrast Sir Alex, who happened on his calling before he was old enough to wear long trousers to school, chose a field–football–where changes occur slowly and the tricks of the trade are well known. This meant that, for him (and all the top-flight managers), it took far longer to accumulate the experience and knowledge required to lead than it does for a young Silicon Valley founder who has leapt on a new breakthrough before it has aroused notice elsewhere. By the time he arrived at United, Sir Alex had already served a long apprenticeship as a professional footballer, and had earned his coaching ‘badges’ before going on to manage Scottish clubs for 12 years. He had spent 30 years preparing for the opportunity that he earned at Old Trafford. Yet, whether it is in Manchester or Cupertino, mastery of a particular field remains a prerequisite for leadership, because it is the breeding ground for inner conviction and the foundation on which authority, and ultimately the respect of others, comes to rest.
Like Sir Alex, the Silicon Valley founders rely on their eyes, ears and instincts. For them it tends to lead to a desire to figure things out from first principles and a disdain for all conventions. They will harbour contempt for the structure and hierarchy of larger companies though, eventually, their own companies will take on these same habits. Early on, these founders will fire a relentless barrage of questions aimed at those who know a lot about a particular topic. They will also tear through piles of books or, these days, delve into the nooks and crannies of the web and late at night fall asleep listening to TED talks. As these small companies become larger and attract attention, the boundaries of the worlds of the founders expand. Accomplished and experienced people will take their calls or meet them. Warren Buffett is famous for entertaining the founders of some of Silicon Valley’s younger companies at his favourite lunch spot in Omaha. Retired CEOs are usually happy to welcome these adventurers to their vacation homes in Florida or Palm Springs. Whatever form it takes, the underlying propellant is an inexhaustible thirst for knowledge.
These characters aren’t afraid of adopting what makes sense for them and ignoring everything else, which is why their companies become the corporate expression (like United under Sir Alex) of themselves: Apple a product of a ruthless, poetic perfection; Oracle of a ferocious competitor with a tendency to vacuum up assets; Google an extension of Stanford University writ large; Intel, in its heyday, a triumph of engineering precision, and Amazon an expression of mathematical prowess. Along the way, there are usually lots of mistakes, much confusion, considerable management turnover, failed products and close encounters of the worst kind.
Growing up, while simultaneously building a company and trying to develop as a leader, is a tall order. Bill Gates, Mark Zuckerberg, Larry Page, Jeff Bezos, Larry Ellison, Elon Musk–and plenty more–all became chief executive officers when they were a decade younger than Sir Alex was when he took his first managerial position at East Stirlingshire. They are the products of their childhood and the hobby that turned into an obsession and became the seed of a business. None of them had built a management team, called on customers, dealt with suppliers or negotiated contracts. Their first customer is often themselves (since many of them build a product to satisfy a personal need); their initial hires are usually friends or schoolmates (since nobody with a well-polished CV is inclined to risk going to work for somebody whose voice has barely broken); their early suppliers will be wary; their landlord will demand cash up front.
For these founders, the challenge of becoming their own person is exacerbated by the demands of a young company, which will only become more taxing as it
grows. Since they are rowing against the tide, these people are suspicious of those who don’t share their interests, or are of a different generation. Their task is made no easier by the fact that many of them do not share Sir Alex’s gregarious disposition and ease in the company of others. On Myers-Briggs personality tests, plenty will be classified as either introverts, or extreme introverts. For this cadre of founders, eye contact, public speaking and small talk are painful activities. They will prefer the companionship of a computer, a technical paper or a book to that of a fellow human being. For them, overcoming their natural reticence is the first of many accomplishments.
Leading: Learning from Life and My Years at Manchester United Page 30
