“All Star vs Average”… Applied To Top Leaders

A couple of recent HBR posts by Bill Taylor  (author of Practically Radical) caught my eye.  They were brought on by Zuckerberg’s justification of FB’s recent FriendFeed acquisition at a value of roughly $4M per acquired employee.  An energetic debate followed via blog comments about whether an “all star” worker can really deliver exponentially more than a “good” worker. 

In context, the original discussion was about technical people like engineers and developers… but I’m intrigued by the application in the leadership realm… In fact I think it may be truer of leadership roles than technical roles.  Let’s set aside the topic of executive comp; here’s a personal example of the actual business results that an “all star” leader can deliver v. just an “average” leader.

Early in my career I worked at two different financial software companies… and they were a perfect example of the difference that the leader’s capability makes. Consider:
    > Both were founded at roughly the same time, each by a really smart guy
    > Both thought “I bet I can write software that makes accounting & taxation stuff way easier.”
    > Both were classic B-school studies with founders growing businesses beyond themselves.
    > Both (arguably) had access to the same supply of labor, capital, etc.
    > And, it’s a fair generalization to say they had the same basic opportunity. You get the point.

The Results?
After ~20 years in business, Company A topped out at less than $40M in revenue.  It was ultimately acquired by Company B which had exceeded $1.5B in revenue over the same time horizon.

The Difference?
I had an inside view to both companies and I believe that the leadership capability of the top guy made all the difference. In Company A the founder couldn’t figure out how to distribute leadership authority in a way that left him confident about the company’s direction.  In Company B, the top guy figured out that letting go was the only viable path to growth.  But the way he let go is actually the key: He figured out how to develop a robust leadership factory, teaching a common set of leadership values & methods, which led to a robust leadership infrastructure: a broad group of unified, high-performing leaders all running the same direction.

Bottom line:
There is little doubt in my mind that an “all star” leader v. a “good” leader will drive exponentially better business results.

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