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CEOs: put ego aside and join the crowd

February 4, 2013

For many of us one chief executive is more than enough. Yet some companies – both public and private – build their top-level management teams by hiring multiple former CEOs. How do such driven executives work together for the good of the company and is there lesson for the rest of us in managing our egos?

Some companies bring in chief executive talent through acquisition. In some cases, this may be a deliberate strategy to replenish the bench of succession candidates for the top job. However, there are also start-ups that have deliberately set out to build a leadership team of CEO peers.

Actifio, a copy data management company, based in Waltham, Massachusetts is one such company. I can almost see their building from my own office window. Inside lies a technology start-up with seven former chief executives in the c-suite. Over on the west coast, an IT security company called Zscaler boasts three former CEOs in their management team.

Actifio’s founder and chief executive Ash Ashutosh believes working with former chief executives makes it easier for him to run the company. “I don’t need to micro manage them. I don’t need to worry about the tactics they use.”

The chief executives say they also enjoy the peer-level interaction. Mr Ashutosh says: “When I trip up they point it out. I don’t need yes men. I purposely put people in for diversity of opinion – there are no shrinking violets. We can have candid conversations which is less stressful than figuring out for hours how to position a message so as not to upset people.”

Former chief executives also bring a more holistic, less departmental perspective to their work. Jay Chaudhry, the founder and chief executive of Zscaler says: “A former CEO looks at things very differently. They look through the lens of CEO building a company. That is different and refreshing.”

Mr Chaudhry also cites the performance benefits: “If you are around good seasoned people, you raise the bar for each other and you learn things from each other.”

Having a strong bench in the c-suite also attracts other. David Meiselman who recently joined Actifio as VP of digital marketing tells me: “Seeing the strength of the team was a real draw. It showed me how much others believed in the opportunity because they were willing to play down a level to do it.”

Before becoming president of Actifio, Jim Sullivan was president of XIV, which was acquired by IBM. He says customers benefit from an CEO-laden c-suite. “It adds huge credibility for the strength of the company and helps them get over us being a start-up,” he says.

The leaders of Actifio and Zscaler knew each other before they worked together in their present companies. The web of relationships meant that at one time or another they have invested in each others’ companies, sat on each others’ boards and worked together for other leaders. That familiarity breeds content.

Mr Ashutosh says: “You need people with similar culture and values, passion and energy. I could easily be working for them tomorrow.” However, Mike Troiano, Actifio’s Chief Marketing Officer and former founding chief executive of Ogilvy & Mather Interactive, thinks that such situations are unique to perhaps “three or four markets, like Boston, where there is a critical mass of entrepreneurial talent.”

But why would a chief executive step down to work for another CEO? Zscaler’s chief operating officer Lane M. Bess, formerly chief executive of Palo Alto Networks, says: “I would encourage other executives to consider this because you should always be open to understanding and appreciating that you can learn more. If I do the CEO role again I’ll be better at it, but many former CEOs fear they will screw up their resume.”

If working with multiple chief executives is such a positive experience why don’t more companies do it? First, the size of the opportunity must be attractive enough to put ego aside.

Zscaler’s chief executives, Mr Chaudhry says that for his team, “the opportunity is so great that they would rather be number two here than number one somewhere else.” Mr. Bess agrees: “Both of us have a key attribute for this work which is we didn’t need to prove anything to ourselves or others any more. It was about winning for the company.”

Second, a high level of collegiality is required. Actifio’s Mike Troiano points out: “No one here puts the company to hostage. We understand the rules and operate under the yoke of humility.” His chief financial officer colleague, John Pearce, most recently the chief executive of Demandware, warns: “You have to be careful to let others do what they need to do, not imposing your views on them.”

Third, despite collegiality, there also has to be clear accountability. Mr. Ashutosh says: “The buck has to stop somewhere. It can’t all be in a committee of five. I will take the fall if it doesn’t go right. I need people who see that. I ask them to check their CEO badge at the door.”

To make this all work takes one final ingredient: servant leadership, a concept first popularized in 1970 by Robert K. Greenleaf. As Greenleaf’s Center for Servant Leadership, a research and conference organisation, notes: “The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.”

Zscaler’s Mr Chaudhry explains, “I come from a tiny village in India and my dad was a farmer. In India, we start being humble. One of my heroes is Gandhi. If you believe you are here to serve, ego will not get in the way.”

Even those of us who work in companies with just one chief executive can appreciate just how powerful that idea could be.

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