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The Shrewd Madness of Crisis Leadership

By Denis Pombriant
Jan 17, 2012 9:00 AM PT

There is an interesting discussion brewing about the nature of Silicon Valley companies. Are they "tech" companies, as Zuora CEO Tien Tzuo asserts, or are they "... companies in other industries that happen to make heavy use of technology," as CBS Money Watch blogger Erik Sherman says?

The Shrewd Madness of Crisis Leadership

The gentlemanly disagreement started over the appointment of PayPal President Scott Thompson as the next CEO of Yahoo. Many people have questioned Thompson's selection for lack of direct experience in content or media. But as Sherman accurately points out, "If exact industry experience were a requirement for chief executive success, Lou Gerstner would have taken IBM right down the tubes." There is gold in that observation.

Thompson has been on Tzuo's board of directors, and it says something that Tzuo is willing to be so public about Thompson's qualities and qualifications. For his part, Tzuo believes that the key to success is to remember that Yahoo and the highly successful and iconic brands from the valley like Apple, Google, Salesforce and Facebook are all tech companies. But I think the meaning of "tech companies" gets lost between Tzuo and Sherman.

For Tzuo and for me, a tech company is less about being a technology user or developer and much more about being an innovator. The companies he and Sherman agree are iconic (and someday we'll have to add Zuora to the group too) are leaders precisely because they are innovators and because they were first in their fields. But even more importantly, they have been successful because each in its own way was founded and led by a person who is what I will call a "crisis leader."

Crazy Like a Fox

I make the distinction between a crisis leader and someone who can lead and manage when the sun is shining, the birds are singing and all is well with creation. At times like that, everyone looks good. A fence post can lead an organization because there is relatively little to do. A crisis leader is someone who thinks outside of the box or, better yet, does not see the box at all. I can't think of a more crisis-oriented situation than running a startup.

I bring you these findings not from my head but from the mind of a very perceptive professor of psychiatry at Tufts University School of Medicine, Nassir Ghaemi, and his new book, A First-Rate Madness: Uncovering the Links Between Leadership and Mental Illness. Just to set your perspective, mental illness doesn't mean totally out of control and in desperate need of rubber walls. Think instead of the phrase "crazy like a fox" and you get much closer to the meaning.

War and Peace

The book focuses on leaders in political settings and is most revealing, and entertaining in my opinion, in comparing Civil War generals William T. Sherman (Sherman's march to the sea) and George McClellan, who may have coined the phrase "snatching defeat from the jaws of victory." Sherman was crazy now and then, McClellan was the poster boy for a successful general -- at least in peace time.

What does this all mean? Well, for starters, if this is interesting, read the book. But related to the Thompson as CEO question, I'd say that as president of PayPal, helping to significantly grow that company's business in a new market that has required great insight and innovation, Thompson might have the crazy-like-a-fox idea well in hand. His first job is or ought to be trying to figure out, as Erik Sherman suggests, what business Yahoo is in today, not where it started, and what business niches Yahoo can invent using its innovation and technology chops.

Over time and in other contexts, I have been fond of surprising people by telling them that Edison was not an engineer and neither was Jobs, that Gates didn't graduate college, that Zuckerberg is sometimes portrayed as a social misfit and that the Wright Brothers were, in fact, bicycle mechanics. Each was technical enough but not so much that their training blinded them to new possibilities. And each possessed a spark of creative craziness that is what I believe Silicon Valley is all about.

Scott Thompson, CEO of Yahoo. Why not?


Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant's research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and website. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at denis.pombriant@beagleresearch.com.


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