# How to measure leadership

**Author:** Ali Rowghani
**Type:** Essay
**URL:** https://www.ycombinator.com/library/3j-how-to-measure-leadership


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Are you a good leader? How do you know?

In a startup culture that is obsessed with management by metrics, many founders struggle to answer this critical
question about themselves. It’s tempting to measure leaders simply by the success of their businesses. But even the most
successful founders know how much timing and luck can be confounding factors in this approach. Measuring leadership
through bottom-line company performance also fails to provide any clues as to how someone can improve as a leader. So is
there a better way?

This essay describes a way to measure leadership that I hope will be helpful to those who seek to improve as leaders. It
is based on observations I made when working closely with four leaders that I consider extraordinary: Ed Catmull
(Pixar’s founder), Steve Jobs (Pixar’s CEO), John Lasseter (Pixar’s Chief Creative Officer), and Bob Iger (Disney’s
CEO). To my surprise, these men could not have been more different in style, temperament, and approach. They did not
conform to a single model of leadership. One was an introverted scientist while another was an extroverted artist. One
was a college dropout who had founded a company and was infamous for brash behavior while another was a career executive
who was exceptionally genteel and diplomatic.

Despite their differences, these men were able to create an extraordinary amount of trust in the people around them.
They built trust by doing the same three things exceptionally well, though each in his own way. I believe that these
three traits are the foundational traits of great leaders You cannot be a great leader without them because you cannot
build trust without them. And the trick to measuring leadership is to measure a leader’s effectiveness along these three
dimensions, as detailed in the notes section [at the end of this
post](https://blog.ycombinator.com/how-do-you-measure-leadership/#survey-questions).

### Three Foundational Characteristics of Great Leaders

I believe that people of all temperaments, personality types, and personal/professional backgrounds can be great
leaders, and that they can lead quite differently and still be successful. But to be trusted and followed as a leader,
you must excel in three key areas:

**1. Clarity of Thought and Communication**

Great leaders think and communicate clearly. They describe a vision of the future that people find compelling to work
hard to achieve. If your employees are confused about your mission and strategy, or do not find it motivating or
credible, they will not follow you with the focus and determination necessary to
succeed.<sup id="footnoteid1"><a href="#footnote1">1</a></sup>

Clarity of thought always precedes clarity of language. To improve your communication, the best thing you can do is to
spend more time thinking about what you believe is truly important for your business. Once you’ve crystallized what’s
important for everyone to understand, practice expressing it in simple terms. Simplicity is vital. A great example is
the retail strategy that Amazon’s Jeff Bezos
[communicated](http://www.businessinsider.com/jeff-bezos-brilliant-advice-for-anyone-running-a-business-2015-1) to his
team years ago. He based it on three simple but enduring customer preferences: lower prices, bigger selection, and
faster delivery. To this day, anything Amazon employees do to lower prices, expand selection, and accelerate delivery
creates value for the customer and advances the company’s strategy. As Bezos said, “You can build a business strategy
around the things that are stable in time....when you have something that you know is true, even over the long-term, you
can afford to put a lot of energy into it.”

Taking time to prepare internal communications becomes increasingly important as your company grows. As you scale, your
employee base grows more diverse, and fewer of your employees have a personal relationship with you. Hence, they are
much less likely to just “know what you mean” and more likely to be confused and critical if you don’t communicate well.

Great leaders spend hours preparing their internal communications. They don’t just wing it, no matter how naturally
talented they are as communicators. As an example, Shopify CEO Tobi Lütke and his senior team spend hundreds of hours
preparing for their annual employee Summit. As Tobi says, “We want to be a loosely coupled, highly aligned company. The
Summit is the main enabler of this because it is a grand sync. We spend countless hours preparing because if we
communicate well at the Summit, we achieve great alignment by the end. We can then use our weekly townhalls to keep us
from drifting too far apart until the next Summit.”

**2. Judgment about People**

Great leaders have great intuition about people, particularly when it comes to selecting people to whom they give power
and responsibility. They are able to see hidden potential in people and detect cases where ambition exceeds ability. And
when they make hiring or promotion mistakes, which are inevitable, they have the courage to rectify the situation if the
employee cannot be coached to improve. Nothing does more damage to an organization or to the standing of a leader than
picking the wrong leaders or failing to correct these mistakes when they happen. The judgment around the initial hiring
or promotion decision is the most important, as leaders who fire too many of their own also lose a lot of credibility
and trust.

Not everyone is naturally gifted when it comes to intuition about people, but everyone can improve. Gathering more data
will help you make better people decisions. When looking to hire leaders, try to meet as many of the best people in the
field as possible as a way to sharpen your recognition skills. Spend as much time as you can getting to know executives
that you are considering hiring. In a [2016 interview](http://www.geekwire.com/2016/qa-uber-cto/), Uber CTO Thuan Pham
describes being interviewed by CEO Travis Kalanick for “30 hours straight, one-on-one, over two weeks,” including over
Skype when Travis was traveling. “Throughout those 30 hours,” Pham continued, “I actually forgot it was an interview. It
was just like a discussion between two colleagues.”

It also helps to do extensive reference checks on hires and ask for examples of behavior that shows good judgment and
high integrity because these traits are hard to test in an interview. And try to learn from cases when you hire or
promote the wrong person and are not able to coach them to improve.

**3. Personal Integrity and Commitment**

Great leaders have exceptional personal integrity and commitment to their mission. Integrity means standing for
something meaningful beyond oneself rather than being motivated by narrow personal interests. It means being able to
admit when you have made a mistake rather than acting like you are always right and having the humility to receive
critical feedback openly and work to improve. It means avoiding behavior like favoritism, conflicts of interest,
inappropriate language, inappropriate work relationships, etc., that erode trust. A useful test is to ask yourself: if
your team had full transparency into your private communications and behavior towards employees, would you be
embarrassed by anything you have done or said? This is a high bar, but one that great leaders strive to meet.

Beyond putting in the time, great leaders make their work into their core life mission in ways that inspire others. They
derive deep personal meaning and fulfillment from leading people to achieve a mission. Their personal commitment
translates into high levels of personal productivity and execution, which in turn becomes the foundation for pushing
their organizations to do the same.

### It All Adds Up To Trust

So how do you know you are good leader? You are a good leader if you excel in the three areas described above and
thereby earn the trust of the people around you.

Building trust in this way is both a science and an art; it requires both competence and character. Trust is built when
leaders think clearly about the future and move their organizations to the right place, in terms of product, sales, and
people. Do the predictions you make about the future – about the products you should build, the investments you should
make, and the changes in competitive or technological landscape – prove to be accurate? And do the people you have
chosen to lead in your organization prove to be the right ones? Over time, the answers to these questions become known,
and if you answer a lot of these questions correctly, you earn trust. I consider this the “science” of building trust.
It’s built on clarity of thought, good communication, and good judgment about people.

The art of building trust is more complicated. It is closely tied with a leader’s ability to communicate with integrity.
It is built when you say the right thing at the right time, and show empathy and good judgment. It grows when you stand
for ideals bigger than yourself rather than caring primarily about your personal success, wealth, fame, or position. It
also grows when you are honest with others, admitting what you don’t know, and not trying to be someone else. This is
why you can’t try to copy Steve Jobs or Ed Catmull in your quest to be a great leader. You can only be yourself.

Most leaders understand the science of building trust. They understand that they need to think and communicate clearly
about product and strategy and make good choices when they are hiring and promoting people into leadership positions.
They understand that they have to show deep commitment and get things done. But in my experience, the truly great
leaders also understand the art of building trust. Leaders have to make many hard decisions – firing people, taking
responsibility for mistakes, disappointing people by saying no, etc. Great leaders treat these challenges as
opportunities to build trust. They ask themselves which course of action and which style of communication will increase
the trust that employees have in them. When faced with a difficult challenge, they optimize for trust.

This, perhaps, is the lesson that great leaders teach everyone else. In difficult times, as you evaluate one course of
action versus another, ask yourself which path will generate more trust in you as a person and as a leader. Always try
to choose that path.

*Thanks to Tobi Lütke, Tyler Bosmeny, Daniel Yanisse, David Rusenko, Sam Altman, Michael Seibel, and the YC Continuity
team for reading drafts of this essay.*

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<div id="survey-questions">
</div>

**NOTES:**

<span style="color: #888888;"><strong>Survey Questions for Evaluating Leaders</strong></span>

<span style="color: #888888;">The best approach to measuring leadership is to evaluate a leader’s performance in the
three areas in which all great leaders must excel: clarity of thought / communication, judgment about people, and
personal integrity / commitment. Measuring leadership in this way requires gathering data from employees, but most
startups have never done this in a systematic way.</span>

<span style="color: #888888;">Eventually, all companies need to develop methods to gather employee sentiment and turn it
into structured data. In fact one of the core responsibilities of a good HR team is to gather and document employee
sentiment and use it to assess leadership.<sup id="footnoteid2"><a href="#footnote2">2</a></sup> I suggest that startups
begin to gather this data systematically once they reach about 50 people in size.</span>

<span style="color: #888888;">Whatever set of data gathering techniques is used, it’s critical to ask the right
questions to assess leadership performance. These sample questions are meant to serve as a starting point for a more
thorough employee survey. These questions are written to evaluate a CEO, but can easily be adapted to any leader in the
company. Part of the goal is to see the level of alignment between a CEO’s responses and that of the employees.</span>

<p dir="ltr">
  <span style="color: #808080;"><strong>1. Clarity of Thought and Communication</strong></span>
</p>

<p dir="ltr">
  <span style="color: #808080;"><strong>Questions for the CEO</strong></span>
</p>

  - <span style="color: #808080;">Write down your company’s mission, strategy, and key metrics (“mission-to-metrics”) in
    less than 2 minutes.</span>
  - <span style="color: #808080;">Write down 2-3 themes that you have consistently emphasized in your communications to
    employees.</span>

<p dir="ltr">
  <span style="color: #808080;"><strong>Questions for Employees (current and departing)</strong></span>
</p>

  - <span style="color: #808080;">What is the company’s mission and strategy?  </span>
  - <span style="color: #808080;">What are the most important operating metrics that measure the company’s
    success?</span>
  - <span style="color: #808080;">How does your work contribute to these key success metrics?</span>
  - <span style="color: #808080;">How often has the company’s definition of mission, strategy and metrics changed in the
    past 24 months?  Or has it been the same over this time?</span>
  - <span style="color: #808080;">What do you think is really important to the CEO?  What does he or she consistently
    emphasize in communications?</span>
  - <span style="color: #808080;">How effective and clear is the CEO in the following communication methods: written,
    speaking to a large group, speaking with a small group?  </span>

<p dir="ltr">
  <span style="color: #808080;"><strong>2. Judgment About People</strong></span>
</p>

<p dir="ltr">
  <span style="color: #808080;"><strong>Questions for the CEO</strong></span>
</p>

  - <span style="color: #808080;">Rate the effectiveness of each leader you have promoted or hired at the
    company.</span>
  - <span style="color: #808080;">Write down the name of any leader that you have promoted or hired that you don’t think
    is actually the right person to lead his/her area.</span>
  - <span style="color: #808080;">Have you exited the right employees?  Or have you made mistakes?</span>

<span style="color: #808080;"><strong>Questions for Employees (current and departing)</strong></span>

  - <span style="color: #808080;">Has the CEO chosen good leaders at the company?</span>
  - <span style="color: #808080;">Which leaders do you respect and why?</span>
  - <span style="color: #808080;">Are there leaders that you think are weak and why?</span>
  - <span style="color: #808080;">Has the CEO replaced any leaders in the past year?  Were these good decisions, from
    your perspective?</span>
  - <span style="color: #808080;">What are the strengths and weaknesses of the senior leader (i.e., CEO direct report)
    who oversees your area?</span>
  - <span style="color: #808080;">Have any high performing members of your team chosen to leave the company in the past
    year?  Why did they choose to leave?</span>
  - <span style="color: #808080;">Ask departing employees: are they leaving because of concerns about senior
    leadership?</span>

<span style="color: #808080;"><strong>3. Personal Integrity and Commitment</strong></span>

<p dir="ltr">
  <span style="color: #808080;"><strong>Questions for the CEO</strong></span>
</p>

  - <span style="color: #808080;">Are there actions you have taken which you feel have diminished the confidence that
    employees have in your integrity?  What are they?</span>
  - <span style="color: #808080;">Do you ask for feedback about your performance?  Are there examples when you have
    responded to employee feedback and changed your behavior?</span>
  - <span style="color: #808080;">How do you rate your level of commitment to your job?</span>
  - <span style="color: #808080;">How do you rate the level of commitment of your direct reports?</span>

<span style="color: #808080;"><strong>Questions for Employees (current and departing)</strong></span>

  - <span style="color: #808080;">How would you rate your CEO’s integrity / moral compass?</span>
  - <span style="color: #808080;">Do you think the CEO listens well and is open to feedback?  Are there examples where
    feedback has changed the CEO’s behavior in a positive way?</span>
  - <span style="color: #808080;">Have you seen examples of favoritism, inappropriate relationships, inappropriate
    language, conflicts of interest, or any other unethical behavior in the CEO?</span>
  - <span style="color: #808080;">When asked anonymously, what do employees / direct reports feel motivates the
    CEO?</span>
  - <span style="color: #808080;">How would you describe the level of personal commitment that the CEO shows to the
    mission of the company?</span>
  - <span style="color: #808080;">Have you seen examples of lack of commitment from the CEO?</span>
  - <span style="color: #808080;">Have you seen examples of lack of commitment from other leaders or from
    employees?</span>

<b id="footnote1">1</b> Please see “[What’s the Second Job of a Startup
CEO](https://blog.ycombinator.com/the-second-job-of-a-startup-ceo/#creating-purpose-and-alignment)” for a more thorough
discussion of creating purpose & alignment.[↩](#footnoteid1)  
<b id="footnote2">2</b> Data gathering methods include employee roundtables mediated by the CEO or HR, structured
questions asked as part of employee exit interviews, all-hands or team meetings to gather employee feedback, hiring of
external consultants to survey or interview employees, and on-line or email surveys of employees.[↩](#footnoteid2)

