A Blog by Jonathan Low

 

Jun 20, 2022

Why Silicon Valley Is Again Becoming Infamous For Bad Leadership

The Cult of Personal Brand was thought to have been replaced by the benefits of teamwork. But a surprising number of Silicon Valley CEOs appear of late to be embracing the confrontational style exemplified by Elon Musk. It's posture suggests early successes inevitably lead to future ones and that current problems are the fault of working from home or, in desperation, 'woke' culture, not workplace inequities or leadership errors. 

It is an attitude that was bolstered by rising stock prices but which now blames everything and everyone other than leadership for declining ones. Crypto is especially prone to this positioning as fortunes emulsify, but no corner of tech seems immune. It is, perhaps, an inevitable reaction to the relative - and possibly temporary - decline of tech standing in the business firmament, but it is a dangerous manifestation of ego over performance that, if not addressed quickly, markets have demonstrated a penchant for punishing. JL 

Charlie Warzel reports in The Atlantic, image Suzanne Cordeiro, Getty:

Culture war–as–management is confrontational and public-facing, expressed through tweets. The Musk School of Management is as much about cultivating the individual executive’s brand as it is about running an actual company. Its practitioners see themselves as visionaries, and they can often point to the early success of their companies as evidence. Culture warring is a way to dodge hard conversations with actual employees. Why grapple with the merits of your disgruntled workers when you could blame remote work for destroying your office culture? The Musk School doesn’t just model bad leadership; it props up leaders who cling to past successes and who substitute vision with bluster

In the time between me scheduling this article and its publication, Coinbase:

  • Laid off 18 percent of its workforce. Fired employees were given no notice and woke up locked out of their email.
  • Ran an ad during the NBA finals mocking tweets saying that crypto is dead. (Bitcoin has fallen 25.32 percent in the past five days.)


On Friday, Coinbase CEO Brian Armstrong tweeted through a crisis in his workplace. He was reacting to an anonymous petition, supposedly from Coinbase employees, asking for a vote of no confidence and removal of the cryptocurrency exchange’s chief operating officer, chief product officer, and chief people officer. The petition accused those three leaders of “executing plans and ideas that have led to questionable results and negative value” and laid out eight examples of their bad decision making, including: “The failure of the Coinbase NFT platform”; hiring unsustainably while also messily rescinding job offers; poor communication; and instituting a controversial “rate your coworker” real-time feedback system, which led to “a toxic workplace culture”—all of them carried out with “a generally apathetic and sometimes condescending attitude.”

As the chief executive of a publicly traded company, Armstrong has innumerable methods at his disposal to deal with this type of criticism. The option he chose was to tweet the words “This is really dumb on multiple levels.” He followed that up with an additional 15 tweets blaming leakers inside the company, a down market creating incentives to stir up controversy, and, uh, remote work. “If you have no confidence in the execs or CEO of a company,” he wrote, “then why are you working at that company? Quit and find a company to work at that you believe in!

These tweets are straight out of the Elon Musk School of Management. I’m tempted to say that they were part of a strategy, except I’m not sure how premeditated they were. But they were certainly an example of culture war–as–management in its most basic form. This management style is confrontational and public-facing, and it relies on “thought leadership” expressed through tweets. The Musk School is as much about cultivating the individual executive’s brand as it is about running an actual company. Its practitioners see themselves as visionaries, and they can often point to the early success of their companies as evidence. But they also believe that the skills they perceive as having in one area are applicable elsewhere—in particular, the messy art of managing people.

This is a poor and ineffective management style that is usually only thinly disguised by the executive’s cult of personality. Still, it’s now a quite popular tactic among celebrated tech leaders of a certain type.

These leaders seem to want two things: to at least appear as if they have ultimate control or authority over the direction of their company, down to the nooks and crannies of its culture, and to constantly make news with their management decisions. The control part is straightforward—they’re the visionaries, after all! They ought to be in charge! But the publicity bit is key. Staking out controversial positions on zeitgeisty issues is a good way to keep one’s name relevant and to further craft a cult of personality. In the case of someone like Musk, the constant news-making creates a kind of fandom among supporters, many of whom marvel at Great Business Visionaries and/or think workers these days are too coddled or too woke, or that organized-labor movements are misguided, or that there’s no place for politics in the workplace. If you hurl hot takes and piss people off, the intuition seems to go, you’ll deepen the bond between you and your true believers (many of whom are also your industry peers), and they will praise your bad management as radical candor.

Culture warring is also an effective way to dodge hard conversations with your actual employees. Why grapple with the merits of your disgruntled workers when you could instead blame remote work for destroying your office culture? (Because it’s definitely not due to the highly combative communication coming from leadership.)

There are a few glaring problems with this “tweet first, manage later” playbook. The most obvious one is that you will almost certainly end up saying dumb things. Here’s Armstrong from Friday’s tweet thread:

“Our culture is to praise in public, and criticize in private,” is a weird thing to say when you are publicly criticizing your fed-up employees!

Other times, you will end up oversimplifying complicated issues:

I think Armstrong is telling on himself here. Does he not understand that an employee can believe very strongly in a company’s mission but also worry about its direction? Does he not realize that it might be because they believe strongly in the mission that they are willing to protest on behalf of the company? Perhaps his employees are actually trying to tell him something!

But it actually doesn’t matter if he realizes this, because all that matters to graduates of the Musk School is that somebody has challenged the hierarchical order of the executive’s operation, which is not allowed.

This all reminds me of a recent newsletter by the writer John Ganz, who explored the political ideology “crystalizing” among the tech oligarchy—people like Musk, Peter Thiel, and Marc Andreessen. Ganz boils the doctrine down to a simple idea: “bosses on top.” Ganz wasn’t writing about management, exactly, but his explanation of “bossism” elegantly sums up how the political ideology mirrors the managerial one:

In short, it’s a model of the kind of corporate society they wish to secure and reproduce on a larger scale: big bosses, middle-management, workers, all happily coordinated and cooperating. No unions, no pesky social movements, no restive professional managerial-classes with their moral pretensions, no federal bureaucracy meddling and gumming up the works with regulations. The “cancellers” will themselves be cancelled: subjected to harassment and intimidation by the mob if they get out of line.

It makes sense, then, that protecting the hierarchy would be the chief goal of this management philosophy. You can see this at work in Musk’s recent memo to Tesla and SpaceX executives, mandating that the employees must “spend a minimum of 40 hours in the office per week” and that those looking to work remotely ought to find different jobs.

In fairness to Musk, the memo was directed at senior employees and managers. Musk notes that, “the more senior you are, the more visible must be your presence,” which aligns with some research that shows executives are less likely to comply with return-to-office guidance—a behavior that has frustrated employees. There are also elements of manufacturing in Musk’s businesses that are far more difficult to accomplish remotely than, say, software engineering. There is some rationale behind Musk’s decision. But there are also quite a few reasons why remote work makes perfect sense for some Tesla and SpaceX workers—executives or not. (Many jobs do not require a physical presence, and plenty of employees work and contribute better remotely and report higher productivity, a sense of belonging, lower stress levels, a better ability to focus, and higher workplace satisfaction.)

But Musk is less interested in nuance than he is in control, making news, and playing to his fans online. So you get tweets.

It’s a statement dripping with contempt for his own employees, whom Musk clearly believes are expendable (perhaps this is why Musk's employees spoken out against his labor practices and working conditions at his companies). Musk writes in his memo that he doesn’t believe companies with substantial remote workforces can ship a good product, and in the tweet above he lets slip why: He simply doesn’t trust his employees to do their jobs without some kind of watchful authority monitoring them. This isn’t just bad management or an offensive way of belittling one’s colleagues; it’s also an extremely shallow mode of thinking.

Musk is trying to jam the return-to-office debate into a simplistic, good/bad binary, instead of what it really is: a complex management problem.

Over the last two years, I’ve spoken to hundreds of people about remote work—workers in dozens of industries, HR reps, executives, management consultants, psychologists. Anyone who takes this issue seriously will tell you that hard-line positions on The Best Way to Work are facile and usually driven by fear of losing control, fear of change, and lack of imagination. People who take the future-of-work question seriously see that there’s a huge opportunity to rethink the vestigial parts of our jobs and create a healthier professional environment.

They also understand that implementation will be complicated. Smart managers and executives know that everyone works differently, and that people have different preferences for how and where they spend their time. Inequities will be created in any transition to hybrid work. It’s often not fair which jobs demand that employees be present, and without a plan, executives may be biased toward employees who come into the office. And some employees simply may not show up, regardless of the RTO requirements. Inflexible managers and executives refuse to engage with this complexity, or they ignore it in favor of maintaining control.

Last year, responding to a different Coinbase controversy—Armstrong’s memo outlawing discussions about politics in the workplace—I wrote that he and other tech leaders were micromanaging their employees because they didn’t trust them and didn’t want to engage with their ideas. Again, I can't stress enough that these men appear just absolutely terrible at the management portion of their jobs. Ever the salesmen, these leaders framed their bad management strategy as an innovation.

But for men who see themselves (and are hailed by many) as true visionaries and builders, there is nothing disruptive about this style of leadership. It may sound brash and bold, but this posture is actually a defensive crouch masquerading as strength. Viewing one’s company and the rest of the world through this mindset inspires little, outside of resentment. It creates a distrustful, victim mentality in the leader, who feels constantly under siege from competitors, hangers-on, incompetent underlings, and jealous, small-brained critics. And it breeds resentment from those who work for the leader and realize that, once the hype fades, that they’re giving the best of themselves to a person who does not respect or trust them.

It is an awful, shortsighted way to run a company. But it is at least a helpful lens through which to evaluate some of these lauded tech leaders. Because when you cut through the bravado and ego, and the tweets and blog posts, very little remains. The Musk School of Management doesn’t just model bad leadership; it props up leaders who cling to past successes and who substitute vision with bluster. It is the hallmark of an ideas man who is, in the end, out of good ideas.

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