Leaders Need Different Skills to Thrive in Tech

You accept your first job as a manager in a fast growth tech company, thinking: “How much different could this be from my former company—a financial services firm? Management is management, right?”

But by the end of the first month you feel confused and disoriented. A series of jarring experiences have taught you that:

• Your management authority is meaningless in a culture that worships engineers.
• Half of your colleagues worked above, below or alongside each other in previous companies.
• Two of your most senior managers never do a lick of work—and are only on the payroll to keep competitors from recruiting them.
• A tenure of two years makes you an “old-timer.”

The tech industry’s combination of high-velocity competition, complexity, global talent, and interdependence among rivals makes it a truly unique environment, requiring a distinct set of leadership skills. Dense geographic concentrations in regions such as Silicon Valley, Seattle, Boston and Bangalore foster even more cultural idiosyncrasies.

We at VitalSmarts wanted to uncover whether differences between the cultures of tech and non-tech companies are simply a matter of degree or of kind. We wondered if the differences change the physics of management, and which unique competencies managers need to thrive in tech companies.

As we began our research, we limited our definition of tech companies to those that create technology as a product or service. This definition of tech differentiates organizations like Google, Facebook or Uber, from Walmart, Toyota or The Taj Group. All of the latter use technology. The former are technologies.

INSIGHT CENTER

We then interviewed more than a dozen U.S. leaders from across the tech sector. Each leader identified the challenges he or she felt were most important and unique to tech. As the interviews progressed, we developed seven categories that captured similar challenges. We then tested these categories by surveying more than 3,600 people, equally divided between managers and employees, from tech and non-tech organizations. This test revealed four categories that are not just challenging, but uniquely challenging in the tech world. In addition, these four challenges are extraordinarily predictive of both execution and innovation—our measures of organizational performance:

• The cool factor: Elite companies and path-breaking projects get disproportionate access to top talent—while those just an inch from elite status go begging. If their current company isn’t seen as the “coolest,” isn’t on top of the latest technologies or isn’t getting top coverage in the press, people move to companies that are. Similarly, if their current job doesn’t put them on the coolest projects or on the most coveted teams, people move on. As a result, initiatives vital to long-term institution building are often neglected or are perceived as being assigned to those without superstar status.
• Relentless pressure: There are no breaks, pauses or downtime. Tech employees work long days and during weekends and holidays. They must deliver on tight timelines, quick turnarounds and short project cycles. Their jobs are intense, expectations are demanding and the pace never slows. Over time, a “hero” culture emerges that rewards those who maintain few boundaries between personal and work life. Little value is placed on personal renewal and sustainable engagement.
• Consistent ambiguity: Tech employees have to navigate unclear, overlapping and shared accountabilities that can create confusion, misalignment and competition. In addition, these priorities, projects and assignments constantly shift.
• Déjà vu all over again: The tech workforce is one big network. As a result, employees are likely to work with their current colleagues again, perhaps in a different company or in a different role. People who are their peers today become managers, peers or direct reports in another company tomorrow. This dynamic drives people to value maintaining connections over solving today’s problems. Employees are more likely to avoid addressing personal weaknesses, accountability gaps, or profound strategic disagreements rather than risk a future opportunity.

As we shared this list of cultural idiosyncrasies with tech leaders, few were surprised. But what surprised us was that few of them had ever been trained or coached on how to deal with them. And as a result, leaders’ skills at navigating this complex and turbulent context varied widely.

Our interviews suggested two reasons why these challenges go unaddressed:

• First, acknowledging these challenges is like a fish admitting it’s in water. It seems obvious and pointless. But this lapse fails to make conscious a related reality: that the water is a torrent that is hurling the fish toward jagged rocks. There is something in this predicament tech leaders should find worth addressing.
• Second, there’s a heroic cultural norm in tech that suggests real players are too smart or too motivated to be daunted by these realities — sort of an, “If you can’t take it, move to the rust belt” feeling. As a result, these challenges become undiscussable.

While there are specific tactical ways leaders can respond to the four challenges, it is this undiscussability that makes them especially pernicious. As a result, the most high-leverage skill a tech leader can have is to make these undiscussables discussable.

For example, the fact that an organization has a pathological problem with neglecting investments in institution building because top talent is focused on product innovation cannot be resolved if it cannot be discussed. Similarly, relentless pressure, consistent ambiguity, and déjà vu dynamics can only be resolved if they are first surfaced in an effective way.

Our research shows that the long-term health of tech organizations—or any social system, for that matter—is a function of the average lag time between identifying and discussing problems. The longer chronic organizational challenges go unaddressed, the more they feed cynicism, powerlessness and disengagement—three of the most insidious social toxins.

Managers’ best defense against these toxins is to establish two crucial norms:

• Create a culture where anyone can speak up and share his or her concerns when it’s in the interest of the mission. Truth is power, and dialogue is the antidote to elephants in the room. If you can’t talk about a problem, you can’t solve it. We’ve identified four specific elephants in this study, but don’t imagine that these few challenges are the only elephants tech leaders face. The norm across tech needs to be that people can bring up concerns when they have them—even when the concerns involve sensitive, risky and potentially volatile topics. This norm not only creates a robust, elephant-free organization, but one that quickly surfaces the best ideas, allowing companies to better innovate and execute.
• Anyone can hold anyone accountable—for both product and cultural expectations—regardless of role or position. Many of the elephants that need to be addressed relate to accountability—to gaps between expectations and performance. The ability to hold others accountable is the glue that keeps our human enterprises from spinning apart. We have described a few key discussions required to deal with the challenges identified in this research. But, imagine building a culture of accountability—one where people hold their managers, their peers, their customers and their direct reports accountable for the commitments they make. High-accountability cultures are better positioned to address challenges.

The unique nature of the tech world doesn’t appear to be changing anytime soon. What can change—and quickly—is a leader’s ability to manage the idiosyncratic challenges that come with the territory. Together, these recommendations will equip leaders to excel in a world that outpaces even the best and brightest. Leaders who build the norms of dialogue and accountability create organizations that are substantially more likely to thrive in the long term.