One of the hardest things to do in a startup is to come in as the new leader. There are two ways to play it--assert your authority and expect the team members to comport themselves to your standards and policies, or inculcate yourself into the team and lead by example. The former is more efficient, the latter is more effective. In a high-tech startup with people of extreme and irreplaceable skills, the latter is the only way to go. So, once again, honey is better than vinegar when trying to align employees around a vision and lead a team to achieve great heights.

The following is a vignette adapted from my new book, Innovation Breakdown--How the FDA and Wall Street Cripple Medical Advances, to illustrate my point.

Management books speak about two types of leadership--the personal (honey) and the positional (vinegar). The former derives from respect and admiration, and comes in time; the latter comes from fear. When I became CEO of MELA Sciences, a 15-year old high tech medical device company in 2003 year, I needed to lead this group of supremely gifted and tight-knit professionals who had been working together for years. As the new CEO brought in to take the program to the next level, time was not a luxury I had. Investors were anxious to see the final clinical study for FDA approval start, but I did not believe we were ready for that, and I needed the group to help me get the program ready.

Donna, our Chief Scientist, for example, nearly quit almost every week for the first several months, usually after a conversation with me. I was more scared of her quitting than she would ever be of being fired. It was apparent that personal leadership was going to take a long time, and positional leadership wasn't going to be very effective.

I also realized that I wouldn't be able to penetrate the circle of trust immediately. So I decided to stay out of their way. While I was in the office every day, I kept out of their business and focused instead on two things--developing a relationship with the FDA and cultivating relationships with dermatologists who would be the end-users of our product, MelaFind, to detect melanoma at the earliest and most curable stage. I stayed firmly at periphery as the rest of the team finalized the systems and manufactured a few dozen of them for the start of the pivotal trial.

I had joined the company because investors whom I knew were involved, and I believed in the medical importance of the project and the technical credentials of the team. I chose not to take a salary as a gesture of good faith--it was also a way for me to put skin in the game as well. I later learned that the decision earned the team's respect because they had reduced their own salaries a year earlier to conserve cash.

Still, I knew that ultimate success required that I get inside the circle eventually, so I carefully observed the group's dynamics. I attended working group meetings during which the esoteric details of optics and algorithm development were discussed in great depth. Because I was unable to judge the scientific merits of the discussions themselves, I chose to spend much of my time observing the team's behavior and interaction. That's when I realized that Donna was a force of nature. At the same time, I decided to bet on the person that Donna herself seemed to hold in highest regard, a young algorithm developer and programmer named David, who only opened his mouth when he had something intelligent to say, and when he did speak there was little substantive rebuttal to any points he had made.

I began going to David to get the straight scoop on most things. He was excellent with deadlines, and was the kind of person who would work 72 hours straight to deliver on time. I bought him a couch for his office so that he could get at least a couple hours of sleep when he went into non-stop work mode. Did he like me? I'm not sure, but he did develop a tolerance for me. David measured people by what they delivered--he used the word often--and when he saw that I delivered too, he seemed to realize that I probably wasn't as bad as their worst fears had made me out to be. We developed a good chemistry. I was not an inventor of the product--I was not there when the original concept struck the team or when the essential elements were patented and early proof of concept work was performed. However, I joined David and Donna to form the core of the team that took the product to the finish line.

But even those relationships weren't easy. With David, for whom I developed "older brother" if not paternal instincts, emotional ties were a no-no. One day he said to me, "Joseph, I was raised in an Eastern European country, so, I am inherently distrustful of authority." Another day, he said, "You know, it was the nice military officers who you had to worry about." So be it. We would be cordial, but not too much more.

A few years into my tenure, David and Donna stopped seeing eye-to-eye. This happens in all small companies, and a manager needs to manage the situation. My first problem, though, was that I didn't completely understand the technical details of either of their jobs, so I had no basis upon which to make decisions about who was right and who was wrong. All I knew was that the "secret sauce" (Donna) and the "key ingredient" (David) were not mixing well--for 18 long months they only communicated with each other through me. And I couldn't order them to work together in the way a manager can when employees are easily replaceable because my threat would have had no teeth. Vinegar was not the right elixir here. They both knew that I couldn't replace either of them at that critical juncture. So I just kept on reminding them that the three of us needed to get along and deliver the project. Honey was the only remedy, and the honey worked.

And the personal leadership that took so long to cultivate ultimately led to the kind of respect that permitted occasional positional leadership. One day, when I once again brought up a slide presentation I'd been urging him to help me with, only to be continually rebuffed, David looked at me and said, "You realize that if you simply tell me to do something, I will give you what you want." I realized then that David wanted to be treated like a soldier, and he wanted me to be a strong and confident General. So I began doing just that. The results were golden.

What are the main lessons?

  1. You can't walk in the door ordering people around, that is, exercising positional authority;
  2. If you want people to change, you must first change;
  3. Treat others the way they want to be treated;
  4. Personal authority leads to lasting alignment;
  5. When you have proven yourself and when the new team is comfortable with you, occasional positional authority is tolerated, and in some cases sought.


Published on: Aug 20, 2014