We Sadly Have NOT Met a Lot of CEOs Like This. And Another 70% Drawdown and We Might Buy the Stock.
Q. We look at Glassdoor ratings at D1. I expected to see tons of complaints about Frank being a pain in the ass, holding us to unreasonable standards, but what I saw is you have over 95% approval with over 150 ratings. So the question is, how do you think about trying to be the kind of CEO that people like and want to rally behind, but at the same time being tough and making sure everyone is focused on one thing which is winning? How do you balance those 2?
A. I think the little secret here, and I don’t think that people or CEOs, in general, understand this – but this is what employees want from me. They don’t want to be pampered and patted on the back and feel understood — no — they want a leader who confronts the demons, who is not conflict avoidant, they want real leadership, we say what we mean.
I send out a Monday morning message every week. It’s very contemporaneous, it’s not reviewed, it comes straight from my keyboard — it is all types of topics, it could be cultural, competitive, technology, I talk about all types of topics, but not societal — I stay away from that, this is company business only. And I always get reactions from people back. They say thank you for keeping us on the straight and narrow. They want leadership that’s committed and purposeful and serious and all those things I know CEOs more interested in their NPS from employees than customers. I don’t even have employee NPS scores, I don’t manage for employee approval, AT ALL, okay. It’s nice to get an approval rating but it’s a by-product, it’s not something I aim for, I don’t. I aim for the company to succeed and win. That’s what employees want from me. How are they going to succeed in their careers if the company doesn’t? How is their equity going to be worth anything if we don’t win? If I’m not the most serious committed person in the company, it’s totally logical when you think about it. It’s ironic when CEOs try to appease employees, they have much weaker approval ratings. People know when they are being pandered to and when the workplace is toxic and is too weak to get out there and cut that out. It’s what people want. If you do that, there are a lot of toxic situations that happen at companies. The most important thing for execs and particularly CEOs – you CANNOT BE conflict avoidant. You don’t have to be mean, or a dictator, but if you are a conflict avoider, you are not suitable for these jobs, people see right through it, you are an empty suit. You need to have courage in your role. You have to prosecute conflict, that is the definition of your control. Always confronting situations and people. Doesn’t mean we are mean-spirited, we have a lot of empathy, but that is our job to be done. We don’t like it, we lose sleep the night before – but we do it anyway. Because that is what makes good leaders.
Q. Is there a certain level of turnover that you believe is healthy/necessary? Like the bottom 10% of a company should turn over every year and if you don’t, we are missing out on opportunity cost of others? Or is it strictly one-off and employee-by-employee?
A. We don’t have any turnover and again, that’s probably not right (laughing). Here we go again with percentages, can’t be categorical, need to be situational. 10% might not be enough if you suck (laughing).
So I’m not putting a number on it, but we do a lot of reviews to ensure we as a group feel the same way about key people and that we feel congruent. An exec might feel very strongly about a person they have but it might not be shared by the leadership team, and that is a real problem and real shit that happens all the time.
Sometimes they are painful, these sessions, when you find these incongruencies, and then people share their observations. Its very hard but you have to do that — it’s very hard for these things to naturally do it. We always walk away with conclusions we had no idea about and holy crap, now we gotta go and confront it. The transparency keeps everyone honest and also makes people feel like they’re part of this. And btw people don’t just report to me, this isn’t just my own opinion about someone, that’s how I know, the org carries the people.
Q. Of the execs and leaders you’ve worked with or observed, who do you admire the most?
A. I have said this over and over but I am a huge fan of the late Steve Jobs. Not just attitude but as an original thinker, incredibly high standards, if it wasn’t insanely great, it was dismissed. Every detail mattered and that culture is extremely powerful. Haven’t really seen that since. I try so much to be a non-incremental person and have a culture that is non-incremental. So we don’t talk about how we move from where we are to a new place — we talk about if we started with nothing, what would be the best way, and work backward to the present. Those are very energizing and inspiring conversations rather than moving an inch to the left or the right. That makes everyone wanna go and take a nap as you get bigger, you get more incremental, just the nature of things, and I fight that.
Leaders change the conversation, go back to first principles about problem-solving. Always go back to the beginning of possible explanations. That’s really, really important stuff, I can’t tell you how much flexibility, people have far more flexibility in perceiving their future than people think. People think in a very narrow band, need to open that up for them.
