Evaluating Leaders, Their Decisions: Reflections From Ancient Greece

Leaders are defined not only by their ability to attract and retain followers, but also by the quality of the decisions they make and the caliber of their judgment as they wield their power. Since leaders play highly visible and important roles, their performance often invites critique by onlookers, and deserves critique by stakeholders.

At the board level of a venture-backed startup, members of the board of directors—many of whom may represent institutions with significant ownership stakes in the company—will evaluate the performance of the CEO. In a multilayered organization, leaders will evaluate the performance of other leaders, including that of managers who are junior to them in the hierarchy.

Effective evaluation of leaders is required to unlock sound corporate governance and operational excellence, but leaders often judge the outcome of a decision without taking the time to understand the inputs that influenced that outcome, and the result is sometimes the misjudgment of a leader's capabilities.

Odysseus' Tough Choice

The epic poem of ancient Greek mythology, Homer's Odyssey, tells the tale of the warrior Odysseus as he strives to return home after fighting in the Trojan War. The only passable route requires Odysseus to captain his ship through the dangerous Strait of Messina. On one side of this strait—whose width is reputedly less than the flight range of an arrow—was a monster, Charybdis, that fed by creating a whirlpool that sucked down not just men but entire ships. On the other side of the strait was a second monster, Scylla, that plucked men from the ships that passed by and promptly devoured them.

Odysseus knew that there was no way to avoid these two monsters altogether, so he made the difficult choice to sail closer to Scylla to avoid getting sucked down into the whirlpool. As expected, several of his men were plucked from the ship and were immediately devoured, but the ship managed to pass through the strait and eventually arrived at its destination.

For Odysseus, who was the "CEO" of his ship, this could be considered a story of either success or failure in leadership. How would a hypothetical board of directors have evaluated him?

Knowing The Context Around A Decision

As a venture capitalist, I have been a member of many boards of directors, and evaluating CEOs is an important part of my job. Recently, a fellow venture capitalist ("Bob") approached me, frustrated that a CEO in whom we had both invested ("Sundar") had not responded to an inbound email from a potential investor. "Can you believe Sundar didn't respond to that investor?" Bob vented to me. "What is wrong with that guy? Do we need to replace him?"

While it's possible that Sundar was behaving irresponsibly and didn't deserve to remain CEO, it's also possible that Bob was behaving irresponsibly by failing to gather critical context. It is very easy—and dangerous—for venture capitalists to arrive at snap judgments that, if acted upon, could deeply harm the companies they are trying to help. This is especially true for those who lack operating experience.

Bob had quickly arrived at a negative conclusion about Sundar's performance without any context. Assuming one agrees that Sundar should have responded to the inbound email (which is not a foregone conclusion—the company had a year's worth of runway and was not in a critical cash position, and different CEOs and investors approach building fundraising relationships differently), then it might be appropriate to judge Sundar harshly, but it's also possible that Sundar was in a position much like Odysseus.

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As a former CEO myself, I know that CEOs are constantly being pulled in multiple directions that are often both critical to the company's ongoing success, and urgent.

Although I didn't know what specifically was occupying Sundar's time, there are many possibilities. Perhaps his active help was needed to close the biggest sale in the company's history to a time-consuming, but highly lucrative, corporate customer. Perhaps he was planning his IPO and needed to take off half the day to go golfing with a prospective CFO hire who would be the perfect candidate to take the company public. Perhaps he needed to micromanage product development on the company's flagship product because the engineering leader was underperforming and not successfully fixing all the bugs.

Taking A Holistic Approach

If Odysseus were the CEO of a venture-backed startup, his board members could evaluate his behavior narrowly and punish him because several men died under his watch. Alternately they could evaluate him more holistically by taking the time to ask without judgment or preconception about how and why these men died and about how Odysseus was thinking about the situation. If the board members did so, they would likely conclude that he had made the best possible choice given the options available at the time, and respect that his ship had eventually arrived at shore successfully.

For board members or leaders who are in a position to evaluate the success of other leaders, it is tempting and sometimes even politically safest to loudly champion a zero-tolerance approach when a decision doesn't yield an optimal result.

But such an approach is not always in the best interest of the company because it fails to take into account the context that led to the decision. The Harvard Business Review notes, "When performance sags, boards all too often succumb to investor pressure and fire their CEOs, looking for quick gains in earnings or stock-price returns. But ... company performance following these high-profile dismissals is almost always disappointing."

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Concluding that Odysseus was an incompetent leader as a result of the death of several of his men would have led to the sidelining or termination of a capable leader. When context for understanding a leader's decision is missing, it is important to request it to properly evaluate the leader in whose hands the decision lay.

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