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The evolution of a business leader

The evolution of a business leader

The founding chief executive was clever and charismatic.

He saw opportunity and grabbed it by the throat. He inspired followers and dismissed naysayers.

Within years, that confidence led to outsized success. Investors flooded in and employee numbers swelled.  

Then the music stopped.

It became clear that the boldness that was once so attractive translated into ill-advised (if not illegal) transactions, outrageous self-dealing or a toxic corporate culture.

As the excruciating details of the founder’s foibles came to light, billions of dollars in market value evaporated.

If this storyline sounds familiar, it is because it is.

The personality traits that make top entrepreneurs so good at launching companies are also the ones that can inhibit them from sustained success.

As a result, the rise and fall of the brilliant-yet-flawed founder is a narrative that plays out regularly, particularly as the population of unicorns, or start-ups valued at $1bn (£0.8bn) and above, grows.

Groundbreaking founders typically embody four core qualities that are essential to exceptional leadership: they are disruptive, unafraid of risk, have a heroic streak that inspires followers and an ability to galvanise those followers into action.

What many founders lack, however, are four opposing and equally important ‘quiet’ traits: pragmatism, caution, humility and a propensity for collaboration.

These characteristics are not necessarily exciting or headline-making, but they provide valuable ballast for fast-growing organisations.

Deployed properly, these qualities set up an business for sustainable growth and healthy cultures.

The best leaders – and the ones who are often hired to clean up the mess after the founder is ousted – know how to draw on both types of qualities as business conditions change.

Most importantly, these ideal leaders can seamlessly move with a company as it grows and evolves.

When it comes to start-ups specifically, they help create the structure and consistency a mature company requires without squashing the heady excitement that got the company off the ground.

When assessing executives, we use the phrase ‘leadership span’ to describe this ability to move between loud and quiet qualities.

While valuable, it is relatively rare.

Fewer than 40 per cent of today’s C-suite leaders have robust levels of this ability, and the proportion drops when it comes to executives at lower levels.

This helps explain why founders, who often rely heavily on a single set of leadership traits, may not be able to adapt as their companies grow.

Spurred by discrimination allegations against a number of high-profile chief executives, we are also increasingly measuring executives on their ability to create inclusive environments.

Our research shows inclusive leaders are strong on humility, accountability, empowering others and leading innovative collaborations.

They are also more likely to see top performance from their employees.

What can boards and investors do to prevent the next entrepreneur-led disaster? We suggest three steps.