Why the Best Leaders Are Unpopular (At First)

0:03 What's up guys, welcome back to Build. Today, I wanna talk about the shit sandwich of leadership. No, I'm kidding. I wanna talk about making hard decisions as a leader, whether you're a CEO, a manager, a leader in your company, or you just consider yourself a leader, or you're aspiring to be a leader, or maybe you're just trying to make a hard decision about your life.

0:21 I was thinking about this because there's been a lot of hard calls that we've had to make in the company that have for sure been controversial. that I will share because I wanna demonstrate, I wanna show you guys like I make hard calls that I would even think people here watching would be like, I don't know if I support that.

0:37 And I'm like, that's okay because you're not me in my position and I have to make these calls to run the company and to do what I believe is right by our company. So I was thinking about that because in making these hard calls, it's funny because when you fire an asshole on your team, or you make a product pivot that's obvious, or you innovate your marketing, or you like all those things are things that people like, oh my gosh, wow, and they applaud you for as a leader.

1:05 And they say, wow, you did such a great job. And I'm like, that's so amazing. So glad you did that. But those are actually not the hard calls to make because they're actually fairly easy. Nobody's going to resist it. You're not going to get a lot of criticism. You're not going to get a lot of pushback.

1:19 Most of the time, they're kind of obvious. It's not really like something that you have to think long and hard about. in which case I would argue it's not a decision at all. It's just common sense. We definitely want to have common sense as leaders. And so I was thinking about these decisions and how essentially we don't get credit as leaders for so many of the hard decisions that we make.

1:42 And yet that is what comprises so much of the job. And it made me think of a leader I had in my first company And she was, despite not getting credit for it, one of the best leaders I ever had work for me. And she said this, and she kind of like made fun of herself for it, but she would always say, she's like, Leila, I'm a shit funnel.

2:02 And I was like, a shit funnel? And she's like, I'm a shit funnel. Just give me shit, and I'm just going to turn it into gold. And watching her do that, I learned so much, because what I saw is that she tackled every problem that every other person in the company wanted to avoid, And she also communicated the solutions and her decisions in a way that took complete accountability and did not back away from the decision or fear criticism of the decision.

2:31 And I remember thinking like that is what good leadership looks like, because it's really easy to be a leader when people are applauding what you've done and people are supporting it and they're excited about it. It's not easy to be a leader when you know you're making a decision that like, you're probably not going to get any praise for.

2:50 You'll probably have wavering support. And if anything, you're going to have a lot of criticism. And after you announce the decision you've made, you're going to have a ton of people want to follow up, need reassurance, need additional explanation, be concerned with your decision-making, and basically question this very hard decision that you had to make.

3:08 And so it's almost that much of the time as leaders, when we're making these decisions, It's not even that we're not getting rewarded, it's that we're actually getting punished, because you know how much work's going to come after you make that fucking decision. And I just really loved how she said it.

3:23 I'm just a shit funnel. And I kind of took that on. I was like, I'm a shit funnel. Like anytime there's a hard decision in the business to make, I will fucking make it because I need to set the example for everyone else that like, this is how we do things here. That's always motivated me to do the hard but right thing.

3:37 And I think that's, that's what makes a lot of those hard is that a lot of the decisions that are hard, I think that you know the answer, but you also recognize that if you make that decision, You will not have support. You will be criticized and people will not understand on the team. And so there's a lot of friction that gets in the way from leaders making those very hard calls.

3:59 So I'll give you some examples. So firing is an easy one, right? I've had to make some decisions in the last few weeks with letting people go that I knew would be controversial. And it sucks in a firing situation because you can't always tell people many details, especially out of respect to the people.

4:16 when somebody's no longer with the business, but you're just like, I have to do this and I can't tell everyone why. And I just have to be okay with the fact that people are gonna talk behind my back, they're gonna gossip with each other, they're gonna triangulate these conversations and they're gonna make assumptions.

4:32 I've been doing this for a decade. I've never gotten my way around that. No matter how transparent I am, how much I reassure people, there's always people who are gonna gossip and talk because they're scared. That's just part of what happens. And so I just accept the fact that people aren't going to understand all of my decisions around that.

4:50 And if anything, they're going to personalize the fact that somebody that they were close to got let go. And that's scary to think about because then it thinks, oh, gosh, what if that were me? I don't like thinking about that. And I get that. That's very understandable. However, there's other decisions as well.

5:08 I'll give you guys an example of one that's for sure controversial, which is we had a series of unfortunate events two years ago with our finances where they just were not done very well. So there was a lot of ambiguity around where we were spending money as a company, but we were and are very profitable.

5:25 So it's not it wasn't the worst thing in the world. And it's basically because the way things were set up on the charter. So we've been doing a lot of cleanup. And in doing that cleanup, there was a very large expense, like talking almost seven figures, in food for my team that I was not aware of. So to get some context, when I first opened our in-person headquarters, My philosophy was snacks, energy drinks, snacks, energy drinks, special catering on the weekend to reward people who come in and fucking bust their ass, and special meal events.

5:56 But I'm not doing the, like, we order lunch every day thing. The reason why is I worked somewhere that did, and I worked somewhere that didn't. And I saw how much waste there was in the place that did serve lunch, and how many people talked shit about the food that was served, myself included. And I was like, I never want to get into that game of serving people food.

6:21 That didn't ask for it. I also don't think that it's additive to the business. Like I would rather give people stipends, provide snacks, whatever. You can get whatever you want for lunch. So I'm looking at the P&L and I see that we're spending almost seven figures a year on lunch. And I'm like, how the fuck did that happen?

6:39 I have no idea. So I dig in and I'm like, oh my God. So what happened is that we have events nearly five days a week for our clients. Because of that, I had said a long time ago, hey, if there's leftovers, let the team go get it. So I said, you have to be dressed nicely, but you can go get the leftovers to Um, somehow that turned into eventually we ended up just getting the team extra food.

7:03 Again, I don't know how it happened. Seems irresponsible to me, right? I should know better. This shit happens. So that happened. I found the expense. And so I was like, I'm not going to let some cost be why I continue to spend this money. Like to make that much in profit to cover nearly a seven figure food expense.

7:24 That means we had to produce, you know, almost double that in revenue and And then I asked myself, what could I spend that money on that would grow the business and better secure the futures of everyone that works here? And I'm like, there's a hell of a lot that I could. So it would be irresponsible of me as a steward to the business, the team and the clients not to change something.

7:46 Because I think to myself, the clients are why this whole thing is existing, right? The business has to be healthy and secure for people to have a job in the future. And the team has to be in this place where you can trust that they're gonna do their best work. When I'm making a decision, I think about those three things.

8:01 And so as I ran it through my decision-making filter of hard decisions, which I run through this filter, I'm thinking, well, would I be proud to tell my clients, right, some of you watching this are my clients, would I be proud to tell them how much we spend on this food? Fuck no, I wouldn't. I would be proud to tell them that we took that money, invested it into new curriculum, new products, new technology that we're building for them, which is what I'm going to do instead.

8:27 The business. Would I be proud if we're having a bad quarter, which will happen at some point, to tell people that part of the reason we're having a bad quarter is I haven't been able to take that money, put it into innovation, or just save it, rather than apparently buy food that not even everyone eats?

8:42 It's like, no, that's not best for the business. And then is it best for the team? It's like, well, in certain ways, but there's ways that we can supplement this. So, because it's convenient, because people don't have to leave, they don't have to worry about ordering, et cetera. So there is benefit for the team, but it's a negative on the other two.

8:58 So we made the call, we have to make a trade-off. And we said, we're gonna make this decision for the business and announced it. And it was not, you know, received great. As you could imagine, if you're used to something and it's being taken away, that looks like punishment. That is an example of one of the hard decisions that you have to make as a leader to be a steward of the business.

9:20 Because if you're not a steward of the business, you ultimately don't take care of your team. And I am not somebody who frivolously spends. Now, I might like a nice jewelry every once in a while as a gift. And I might like a nice house. with my personal money. But the way I spend my business money, and to be fair, the way I spend a lot of my personal money, is very not excessive in the sense of like, I comb through my expenses, I look at everything, I wanna make sure I'm not wasting money, I don't like waste.

9:51 So when I find something that doesn't completely have a justification and that could be used better elsewhere, it's really hard for me not to make a trade. And I think about that in all areas of the business is like, pretty much every hard call that we have to make is a trade. It's like, you can raise your prices.

10:08 And it's like, oh, I'm just gonna make more money. It's like, you're also going to pressure the clients who don't have the money and you're gonna lose clients who can't afford it. It's a trade, right? And you have to decide if you have enough of the clients who can afford it to make that trade. If you keep a struggling employee on the team too long, it's like, are you kind or are you losing respect from people on the team?

10:30 If you say yes to every hire and headcount and budget request that people bring to you, people might really like you and feel like you're investing a lot in them. But then when you have a bad quarter, you are also the reason you have a bad quarter because you don't have any money or any cushion left.

10:52 So I was thinking about this and I'm just like, easy calls always have a winner and no loser. And hard calls, I really think, have to somewhat balance all groups, but there is a deduction. There's going to be a deduction on multiple fronts. There's also going to be an addition on multiple fronts. And so when I was thinking about this, I was thinking like, easy calls are easy because nobody really loses.

11:25 And so it's just like, it's kind of just preference. Hard calls are hard because... one, if not multiple people will lose in the scenario. And you have to make the trade-off of which one is more important in that, given the context of where you're at during that time. So context for my situation, for example, I've been reeling back a lot of, what do I want to put it, like luxuries that I felt like, Like I did the whole, you know, I hired a lot of people on the executive team over the last year and a lot of them worked out fantastically well.

11:59 But some of them frivolously spent. And because I wasn't keeping a close enough pulse, it's like some of the stuff slip by and some of it just like you're so busy, you just kind of don't notice because you're making enough money. And I realized it's not even about the money, it's about the culture and my values and our values as a company.

12:19 And I don't value spending money on those things. And if people don't like that, they don't need to work for me. They can work somewhere else. I only need 200 people. So that's the way I was looking at it and I was thinking about this. If nobody is unhappy with any decision that you've made lately, you're probably not making hard ones.

12:41 In fact, you're probably not making any at all. And I think that's just the reality. It's really tough to make these decisions. But this is what separates a mediocre leader from a great one. And as I look at my leadership team and I'm looking at who the stars are, I consider the people who will sacrifice their likability in the company for what's best for the company as the best leaders.

13:07 And you know what the irony of it is that oftentimes when you're willing to sacrifice that, people see it, they respect it. They wanna be around it. And so you actually end up being one of the most favored leaders in the company, at least in my company. When you're willing to be unpopular, I think that's the right word.

13:28 It's like, there's no applause. There's no like amazing moment. Everyone's kind of disappointed in the short term. And you feel like you just made this like really hard call that should be applauded and it's not. And that is just a great leader. I don't know if there's any other way to put it. So that being said, I was thinking about this and I wrote down a few notes of, for my team, because this is a lesson that I know a decent amount of them need to learn because I know that they have hard decisions staring them in the face.

14:02 And when I dig down deep enough, I push people to make those decisions. But I don't want to push. I want them to push it to me, be like, here's what I'm doing. I think that's just the difference between like an experienced leader and an experienced leader. And also people who desire to be liked more than they desire to be effective.

14:19 It's just very different. So three things I wrote down that you guys can take and implement to your business. One run through that triangle with every decision that you make clients, team business, right? And if you want to say business, like think PNL, think business, think more of the financial side because that's what I think about with the business is like more of like, is this gonna serve the finances of the business?

14:45 Because that's insanely important. And I would even write down on a piece of paper and then just, does it make it go up or down? I know it's really silly, but I like using arrows because I think point systems are dumb. Is it gonna make it go up or down? Better or worse for this party? And it's just like, whatever's better for two out of three, Most of the time is the right call.

15:08 Now, the only difference will be weighted, which is like, it could be like, oh, we're gonna start this new product line, blah, blah, but like the clients would hate it and probably not think it's good and the team doesn't have the bandwidth to build it. It's like, all right, well, sacrificing those things just for money seems like a bad idea.

15:23 So that feels not aligned. However, most of the times, I think you can reason yourself to understand if you're doing that, run it through the triangle before you make the decision. It's really easy in the moment when you're trying to make a hard decision to just serve whatever group is loudest, whether it be the clients, your team, the financials.

15:44 You can't get wrapped up in the day-to-day. I see it when people are like, oh my God, three clients complained, I need to change my whole product. I'm like, Jesus Christ, three out of 4,000? What are we talking about? It's just that they're loud right now. And so your attention is getting pulled into them.

15:57 Same goes for the team. It's like, oh yeah, two people complained about bandwidth, we gotta hire more people on this team. I'm like, two people complained during a week that was stretched. Wow, it would be weird if they didn't. So we have to be cognizant when we're rating this, Are we having recency bias?

16:15 Are we thinking about, oh, these things that have happened in the last seven days, the last 14 days, or even month, right, because businesses are around for a long time, that are now affecting my ability to make a good decision and weight these things correctly. So I wanna give that to you. That's the first thing that I gave to my team.

16:32 The second thing is that you need to make decisions at the speed of you receiving the information, not the speed that you're comfortable with. Now, why is this? Waiting to make a decision is never good. I don't know what else to put. I remember seeing a stat one time that was like, out of like basically a group of executives who wait to make decisions and groups that don't.

16:59 Of the group that waits, 94% of them were less effective than the group that doesn't wait, even when the group that didn't wait made the wrong call because they were able to even correct and make the right call before this person ever made the decision. And what happened with this group of executives is that they lost trust with their teams.

17:17 So they were seen as ineffective, as not strong-willed, not being credible, and being too slow. Not about being wrong. Being wrong was not the issue. It was all the other things that happened in the time that they waited. So as a leader, your speed of decision-making dictates the speed that the company moves, the team moves, the department moves.

17:38 If you cannot take in information and very quickly act on it, you are the bottleneck of your team. I've experienced this myself. This is why I take it very seriously to make decisions quickly. I hate waiting on decisions. I really just, especially it's kind of funny because if I look back to who I was 15 years ago, I couldn't even decide to start a business for multiple years.

17:59 It's crazy to think about. So like if you're in that position right now, I want you to know there's hope because I used to sit on decision forever. And now I'm like, as soon as I have the information, I'm like, I need to make it because I don't want to even lose respect for myself that I would lose if I wait.

18:16 Because we know what that feels like. Like when you know you've got to let someone go, or you know that something's not right for the team, or you know a product isn't right anymore, or you know that there's like a decision that you've made that you need to change, it eats away at you and you lose respect for yourself if you don't act on it.

18:30 And I would say second to that, no fucking way can you lead a team at scale if you are not at the source making those hard calls yourself. They will not respect you. People do not do what you say. They do what you do. So like they won't do it, right? Or they'll go work for somebody else who does. If they are somebody who does it and you don't do it, they will be like, the moment they find somebody who does do that, that they have more respect for, they're going to go work for that person.

18:59 I've seen it happen so many times with companies that I've worked with. And it's just because they don't have, at the end of the day, enough respect for the leader to stick around. It is what it is. And the third thing I wrote down... is that when you make that decision, you want to explain the reasoning from all perspectives of people that it will affect.

19:23 So what do I mean by that? So when you are explaining, first, before you explain, you want to think, why don't I want to tell the team happened? I'm going to tell them what happened. This is a decision that was made. I'm also going to own it. I'm not going to say, oh, it's a leadership decision or we are.

19:38 I fucking made the decision. It is such weak shit. I'm sorry, but... I've seen it and like, I just have no respect. When a manager or a leader says leadership decided, like you might as well just walk out the door right then. Cause like you've just lost all respect from everybody on your team because you've just blamed an outside party.

19:57 It's like, you are part of leadership. Get it to fucking gather. So never say that. Instead, you wanna announce the decision and then you wanna think, okay, say you're announcing it to sales, customer success, billing, and marketing. What's marketing going to be thinking? What's sales going to be thinking?

20:19 What's customer success going to be thinking? What are they going to be worried about? What are their objections going to be? What are their questions going to be? How's this going to affect their day-to-day? And you want to weave that into your announcement and think, okay, I'm going to announce the change.

20:33 And then... Add in all of this detail that will speak to the individual fears, concerns, objections, so that when I deliver it, it's a one and done. I want to try as much as I can that when I deliver a message, there's nothing less for them to ask. They might not be comfortable. Don't get me wrong. People take a minute to feel comfortable with these kind of changes, and they might not feel comfortable for a while, but they won't have questions because I have taken care of all of those.

21:00 Because if you can do that, then their brain spends less time in the, what about this? What about that? And it just goes straight into like, this is what's happening. And I now need to learn how to cope from an emotional level about it. I might not like it. I might not be comfortable with it. I might be annoyed about it, but I don't have questions.

21:17 So you get to move the team into future facing, moving forward, getting past this. Sooner, the more thorough you are with your why. So the more that you can take other people's perspectives, a faster that you can do that, which I think is a very great skill to have as a leader is like being able to think, what's this person gonna be thinking in this department?

21:38 Like when I make this change. So I will tell you guys the same thing I told my team, which is like, I'm sure as I'm talking through all this, there's a decision that you've had in your head that you've been thinking about. Make it this week. It's going to be hard, but you will earn the respect with yourself and with your team if you make it sooner than later.

22:03 So run through the triangle, decide at the speed of the information, which it may be late now, but guess what? Better late than never. Got to get it done at some point. You're never going to, like, if you're thinking about it right now and now you're like, fuck, it's too late. It's like, no, no, no, it's not too late.

22:18 Like, you're going to have to make it at some point or it will get made for you. So you like, Do it now. And then think through how you can announce it in a way that you get a one and done. And you don't have to continue answering questions for forever. You can acknowledge people's emotions and acknowledge their fears or their concerns or their frustrations.

22:34 But you're not dwelling in the what about this, what about that question, period. You can just get on to the next thing and move forward. And I think what the best leaders do really well is they... make decisions and explain things in a way that moves the team forward. It doesn't keep them stuck in the day-to-day or in the past.

22:55 So anyways, this is what's been on my mind, just making hard calls. I feel like this is something I would like to get better at teaching because I think it's something that I do a lot of and I'm I've just seen and I've just been reinforced, making the hard calls is the only thing that moves the business forward.

23:11 The easy calls are never where the business's growth comes from. It's never. It's always the hard ones. So that being said, I hope this was useful. If so, drop a comment. If not, drop a comment. Tell me I suck.