Ben Horowitz, of Andreessen Horowitz, explains how to minimize politics in your company:
A CEO creates politics by encouraging and sometimes incenting political behavior—often accidentally. For a very simple example, let’s consider executive compensation. As CEO, senior employees will come to you from time to time and ask for an increase in compensation. They may suggest that you are paying them far less than their current market value. They may even have a competitive offer in hand. Faced with this confrontation, if the request is reasonable, you might investigate the situation. You might even give the employee a raise. This may sound innocent, but you have just created a strong incentive for political behavior.
Specifically, you will be rewarding behavior that has nothing to do with advancing your business. The employee will earn a raise by asking for one rather than you automatically rewarding them for outstanding performance. Why is this bad? Let me count the ways:
- The other ambitious members of your staff will immediately agitate for raises as well. Note that neither this campaign nor the prior one need be correlated with actual performance. You will now spend time dealing with the political issues rather than actual performance issues. Importantly, if you have a competent board, you will not be able to give them all out-of-cycle raises, so your company executive raises will occur on a first-come, first-serve basis.
- The less aggressive (but perhaps more competent) members of your team will be denied off-cycle raises simply by being apolitical.
- The object lesson for your staff and the company will be the squeaky wheel gets the grease and the political employee gets the raise. Get ready for a whole lot of squeaky wheels.
Now let’s move on to a more complicated example. Your CFO comes to you and says that he wants to continue developing as a manager. He says that he would like to eventually become a COO and would like to know what skills he must demonstrate in order to earn that position in your company. Being a positive leader, you would like to encourage him to pursue his dream. You tell him that you think that he’d be a fine COO some day and that he should work to develop a few more skills. In addition, you tell him that he’ll need to be a strong enough leader, such that other executives in the company will want to work for him. A week later, one of your other executives comes to you in a panic. She says that the CFO just asked her if she’d work for him. She says that he said that you are grooming him to be the COO and that’s his final step. Did that just happen? Welcome to the big time.
As he developed as a CEO, he found three key techniques to be extremely useful in minimizing politics:
- Hire people with the right kind of ambition.
- Build strict processes for potentially political issues and do not deviate.
- Be careful with “he said, she said.”
The last is the most interesting:
Once your organization grows to a significant size, members of your team will, from time to time, complain about each other. Sometimes this criticism will be extremely aggressive. Be very careful about how you listen and the message that it sends. Simply by hearing them out without defending the employee in question, you will send the message that you agree. If people in the company think that you agree that one of your executives is less than stellar, that information will spread quickly and without qualification. As a result, people will stop listening to the executive in question and they will soon become ineffective.
There are two distinct types of complaints that you will receive:
- Complaints about an executive’s behavior
- Complaints about an executive’s competency or performance
Generally, the best way to handle complaints of type 1 is to get the complaining executive and the targeted executive in the room together and have them explain themselves. Usually, simply having this meeting will resolve the conflict and correct the behavior (if it was actually broken). Do not attempt to address behavioral issues without both executives in the room. Doing so will invite manipulation and politics.
Complaints of type 2 are both more rare and more complex. If one of your executives summons the courage to complain about the competency of one of their peers, then there is a good chance that either the complainer or the targeted executive has a major problem. If you receive a type 2 complaint, you will generally have one of two reactions: a) they will be telling you something that you already know or b) they’ll be telling you shocking news.
If they are telling you something that you already know, then the big news is that you have let the situation go too far. Whatever your reasons for attempting to rehabilitate the wayward executive, you have taken too long and now your organization has turned on the executive in question. You must resolve the situation quickly. Almost always, this means firing the executive. While I’ve seen executives improve their performance and skill sets, I’ve never seen one lose the support of the organization then regain it.
On the other hand, if the complaint is new news, then you must immediately stop the conversation and make clear to the complaining executive that you in no way agree with their assessment. You do not want to cripple the other executive before you re-evaluate their performance. You do not want the complaint to become a self-fulfilling prophecy. Once you’ve shut down the conversation, you must quickly re-assess the employee in question. If you find that they are doing an excellent job, then you must figure out the complaining executive’s motivations and resolve them. Do not let an accusation of this magnitude fester. If you find that the employee is doing a poor job, there will be time to go back and get the complaining employee’s input, but you should be on a track to remove the poor performer at that point.