Reid Hoffman: 3 types of CEOs

By | May 31, 2017

3 Types of CEO. Listened to a podcast interview here of Reid Hoffman sometime ago, but most distinctly remember his comment about the 3 types of CEOs. As the founder of Linkedin, he enjoyed the CEO role at first, but as the company grew, he enjoyed it less and less. Why? Because it was a different job – even though the title was the same.

Not the same. This definitely resonates with my S-curve view of life, because life is not linear. CEO of a 50 person start up is not the same as a 5,000 person company. Completely makes sense. It’s not an apples-to-apples comparison.

Inc magazine breaks down the 3 types of CEOs here. While it varies by industry, the breakdown by organizational size looks something like this:

1. Small, start up (Less than 100). When you are less than 50 or 100, you know everyone by name. It is a big team. You probably hired everyone. You are in the middle of the work, helping out, and leading by example. This is what Hoffman enjoyed, see the quotes in blue below.

“Like to work on product strategies, fire-fighting things, business strategies, problem solutions. . .do that to make it work”

“I am only interested in the CEO job as it is instrumental to something I seriously want to accomplish” – Reid Hoffman

2. Medium, scaling up (100-1,000). These numbers are approximate, but it is shorthand to say that the company is growing like crazy. You have multiple levels in your org chart. You hired Beth who hired Tommy who hired Brittany. You have not met Tommy OR Brittany.

3. Large, let’s go public (1,000+) This is the role that Reid Hoffman really did not like. At this stage of development, the CEO is focused on the organization (structure, decision rules, hiring practices, and empowering people to get things done), not specific problems.

Listen to a quarterly earnings conference calls, and it’s obvious that most CEOs are playing the role of publicist, not evangelist.

Consultantsmind: Believe there are a few notable exceptions here. Some of the legendary CEOs – Jobs, Grove, Bezos – were notorious for having both a macro (building up the company and culture) and micro mindset (focusing on granular problem-solving). No wonder this crew developed a reputation for control, obsession, and even paranoia. 

My interpretation. Basically, it’s okay to be good at 1 or 2 or 3 or none of these roles.  In consulting and MBA world, we often say “there is not such thing as average“, and that truism applies to CEO roles.  Yes, this will also apply to CFO, CIO, CMO, CTO, and COO.

Don’t fall victim to the Peter Principle. Do what you are good at – and if the company “outgrows you”, do what Hoffman did, hire someone else to take it to the next level. Does not have to be you.

Life is not a straight line. I told this to my students this semester. It is a series of S curves that go flat, ramp, then plateau. The next stage is not just more of the same. Baking a cake 2x as big is not just doubling the ingredients, doubling the bake time, and doubling the temperature. It is a different thing. It’s a different cake – which to me – is a liberating thought.

Note: Hoffman talks about the 3 CEO roles starting at minute 40 here.

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2 thoughts on “Reid Hoffman: 3 types of CEOs

  1. Florian

    Hi,

    Good points.

    Anecdotal evidence can sometimes be beneficial, so I’ll share a bit if you don’t mind…
    Having a similar understanding, namely that different stages of growth demand different types of management, I asked a tech CEO about his longevity. He lead his company’s growth from founding a startup to 700+ employees and an IPO, over the span of 20 years. His answer: “I did what had to be done.”
    I got the same answer from 2 other CEOs in non-tech indutries (FMCG), who started companies and lead them until they had more than 3000 employees.

    Tellingly, these CEO’s sell “the humble beginnings” stories much better than the quarterly reporting, in my opinion. Perhaps it’s because of the strong emotional attachement they had to their teams, or they being younguer, or the sheer ambition… After all, they had less power and less resources.
    The stories of how they started and how they grew their companies, founder-CEOs can talk about those for hours, and you’ll leave the storytelling a believer.

    1. consultantsmindadmin Post author

      Winning. Thank you. True leaders

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