Learn from the Best: Former CEO of Black Duck Shares His Leadership Secrets
Interview with Lou Shipley
Recently we spoke with Lou Shipley, Synthesis’ strategic advisor and past client, to learn from him first hand about the do’s and dont’s of executive leadership. Lou is former CEO of Black Duck Software and Vice President of Synopsys. Previous to this two positions, Lou’s career included leadership roles at several other Massachusetts software companies including Avid, WebLine, FairMarket, Reflectent and VMTurbo.
Lou spoke with us candidly about the most important behaviors and personality traits leaders need to be successful (and several to avoid) – knowledge he accumulated during his 25 year long career as an enterprise software executive.
As an experienced CEO, would you please share with us what you think the key traits of a high performing executive team are?
Lou Shipley: First and foremost, you need a culture of transparency. The best executives are honest. They are very good at failure and self-reflection – they might even enjoy failure. There is an eagerness to explore how you can do better as opposed to a culture of optics – when you make things sound better than they really are.
The second trait is a clear opinion of what the vision, strategy and execution plan of the company are. The CEO’s business is creating positive outcomes. The good CEOs rigorously practice what the company needs to achieve: constant learning and constant development.
The poorer leaders tend to be influenced by the people they trust. They suffer from ‘the last conversation syndrome.’ They change their ideas and decision-making after every new conversation. In reality, there are always opportunities to try something new. As CEO, or any leader for that matter, you need to sell to your people that the course you are on is the right one. You still want to be trying new things but leaders who are too easily influenced change their strategy and that affects the execution. You need decisiveness.
Third, an experienced CEO has a really strong ability to hire and retain strong talent. Specifically, they have knowledge in how to keep people motivated while demanding that they get better. Your aim in hiring is to find leaders that are going to be better than you at every single function. And, then, you celebrate that your people are better than you. You don’t feel threatened by people that are stronger than you – on the contrary.
What signs are there that your team is performing well? What are the warning signals that your team is not performing at its best?
Lou Shipley: A team that is performing well has constructive tension. A team that isn’t performing has outright hostility between functions or it shows up as passive-aggressive behavior (people say one thing but do something else). A high performing team is able to reach a balance of healthy, brutally honest, constructive feedback without it becoming hostile or rude. This is hard to achieve since people’s feelings are easily bruised. I worked hard at team activities that made sure that everyone on the team was giving feedback. This type of work is never done.
What is the single most important action a CEO can take to make his/her team high performing?
Lou Shipley: Without a doubt, hiring a great team. At the end of the day, if you do that you will succeed. If you don’t, you will have to do more work yourself. However, there is a bit of luck in that. High performing people try to compensate for low performing. The best executives recognize a failure in hiring. The poor ones don’t recognize the mistake or don’t admit to choosing the wrong person. I have tried to coach people in the past. The bigger issue is that the people who aren’t performing still get compensated for their low performance just like the high performing ones. If you bring in someone that isn’t good you have to get rid of them. When you don’t, it just lingers forever.
A good leader can find good talent to develop into senior leadership roles and to give them a roadmap of what to follow. Successful organizations do this well and build this into their culture. They are able to recognize young talent. And when I say “young” talent, I don’t mean age. Spotting great potential isn’t betting on youth rather finding the right fit. That person can be of any age.
What mindsets and/or ways of thinking are especially helpful for a CEO to have to be a good leader?
Lou Shipley: You need to have a growth mindset. I call this a half-stroke mentality. In golf, you have a handicap. Even if you are the best golfer, you can always do a half-stroke better. You have to improve because the competition is always getting better. In other words, even when things are going well, you don’t sit on your laurels. To become too certain in your abilities is a curse. To become better you need to receive honest and open feedback. That is what Synthesis gave me.
How do you deal effectively with the high uncertainty of your industry?
Lou Shipley: You never have all the right information to make a decision, never. In situations where I have to make an important decision, I call a trusted advisor. I ask for advice. That is why I always put CEOs on the board, people that have been in a similar situation.
We believe that open communication is the foundation for any leader. What do you do in your own leadership to promote good communication within your team?
Lou Shipley: At Black Duck, my third time around as CEO, I created a role called “Chief Culture Officer.” This role was different from Chief People Officer. The Chief Culture Officer was focused just on the company’s culture. Culture is not happiness – we were aiming for open communication. We really wanted our employees’ honest feedback. I wanted to have a senior staff role who had an ear to the ground to understand how our employees felt, and then to take steps to improve how they feel while in the office. By having this role, we got the message across that we really wanted to hear employees’ feedback and to measure employee performance.
For example, we learned that our people wanted a 401K matching. Most venture-based companies don’t have that. We set an internal goal that if we reached certain objectives we would match retirement.
The culture role is really interesting. Companies can be high performing but have a distinctly not fun culture. The companies where I stayed the longest were places I enjoyed the culture. The places I stayed least, I didn’t like the culture or didn’t fit in.
A Chief Culture Officer makes the workplace energetic and brings a sense of togetherness. As a result of the work the Chief Culture Officer did, our metrics rose and we could hire more easily. This is turn made hiring cheaper. We learned what employees really wanted.
Trust is another important trait to have within a high functioning team. What do you do to ensure your team trusts you and each other? How can you tell there is trust?
Lou Shipley: Trust is absolutely huge. I am not sure there is anything more important than trust. You absolutely have to have your employees trust you and believe that you are going to do the right thing. In a difficult period, trust is what will get you through. If you make good decisions, even when there are hard times, if there is trust, people will follow you. You don’t want good people leaving you in the hard times.
Trust is earned by the decisions you make and your actions. As I like to say, “there is never the wrong time to make a right decision.” You build trust by respecting your people – by how you talk about them and to them. Trust comes from many singular events over a long period of time of doing things in good faith and treating people the right way. Morality matters. In the long run, people won’t work for an amoral leader. You can’t have a leader who is successful but not trustworthy.
If I were a new executive joining your team, what would be your two most important pieces of advice for me?
Lou Shipley: Actively listen in your first month. It is easy and tempting to say, “At my last place we did this or that.” What fit another company may or might not be appropriate at a different one. Second, demonstrate performance-based leadership. If you make a mistake own it and talk about it. If you hired someone, and they aren’t pulling their weight, get rid of them and say you made a mistake. Actively set an example through time in the office, doing things yourself and owning your mistakes. At the end of the day, you want your team to say, “Wow that person is great! So glad we hired him or her.”
How did Synthesis help you become an even better leader?
Lou Shipley: It made me realize that I had to put more of my time and effort into building relationships with my team. Retaining excellent people is always one of the toughest problems any company faces. Really good people are going to get enticing job offers all the time. The market will fix it for you so that good people will leave if you aren’t able to make them genuinely loyal to you. That is why mentorship is really key. Mentorship helps employees feel that you have their backs.
Can you give a concrete example of how you put Synthesis into action?
Lou Shipley: Through the process we went through with Synthesis, I discovered that people didn’t think I cared about them beyond the financial component of their job. I was completely unaware of this weakness. It was impressive that after such a short, non-time consuming assessment, such a deep understanding could be reached. After learning this, I changed how I was communicating and spent more time with certain key executives outside of the office. I invested time in building relationships so that it was clear that I was truly interested in their lives and did not view them just as a means to make a lot money.
CEOs need to spend time building relationships – it’s about being genuinely interested in helping people achieve their personal goals and not just the financial goals of the company. While I knew this at some level, Synthesis’ reports brought to my attention exactly how critical overcoming this weakness was and what I needed to do to about it. It really made a difference in my team’s performance.
Describe an example of how Synthesis has helped a team that you are a part of.
Lou Shipley: The fact that I did it and had everyone go through the assessment process set the whole team up for a positive experience because all of us did it together. The method was remarkable and the results were fantastic. It helped my team trust me more as a leader and helped me plan for how I could grow the organization and who to give more responsibility to. I could have seen some of it but I was completely blinded by someone. I was probably more optimistic than I should have been. You may be fooled by someone who appears to be doing well. The reports gave me a more realistic understanding of my team.
Synthesis believes in active experimentation – how do you see this as important for the development of individual leaders and for teams as a whole?
Lou Shipley: Especially in a turnaround situation, you need to move quickly enough so turnaround doesn’t become a long painful mistake. Once, I had this idea for rebranding that included a $100,000 billboard. After three months, I admitted that it wasn’t working and that we were going to cut it. People saw me admitting failure. After that, I saw people were more willing to try different things that we had never tried before and then to admit a mistake if it was clearly theirs. In really big companies, people take credit for successes that aren’t theirs or don’t take responsibility for failures that are. In smaller companies, more people take ownership for their mistakes and understand that it’s fine to fail as long as you learn from the mistake.