Have you noticed how awash the internet is with advice from investors and other gurus about how to build and lead technology businesses? CEOs and other new leaders need good advice – “guidance or recommendations offered with regard to prudent future action” – if they are to stand any chance of building a successful business. There are many core skills that must be acquired, and there is much to be learned from those who have done it before. But to develop truly effective leaders we need to move beyond providing them with more information – telling them what to do and how to do it – to helping them improve how they think, make decisions, and make sense of the world. This is the distinction between horizontal development, which focuses on what you know, and Vertical Development, which concerns how you think.
In a VUCA world, where information and knowledge is everywhere, it will be individuals and teams who develop their ability to think and act in more complex, systemic, and interdependent ways who will be at the vanguard of leadership and business growth. This post dives into:
- What Vertical Development is and considers its application to leaders in startup and high growth technology businesses.
- Unpacks Adult Development Theory and identifies the Forms of Mind that adults can travel through as we grow and develop.
- Provides practical advice to help new leaders transform, including three Habits of Mind that you can develop to help advance your thinking and leadership capabilities beyond what you know to how you think. After all, this is the place where you truly transform and grow.
The difference between horizontal & Vertical Development
As your business grows, so too must your mind. Like a computer, horizontal development increases the size of your mental hard drive, and Vertical Development boosts your processor’s speed and power. Mike Vessey explains the difference in human developmental terms:
Traditional horizontal development focuses on the acquisition of further knowledge, skills and development of specific personal qualities to become more proficient and experienced in a given aspect of leadership. By contrast, Vertical Development transforms the underlying capacity of the leader to make sense of and respond to situations, working directly on their internal ‘meaning making’, rather than just behaviours or actions.
Vertical development complements horizontal development rather than replacing it – leaders still require the knowledge, skills, competencies and personal qualities to be able to perform effectively at whatever development stage they may be operating. Unlike the corporate world, which grooms its leaders over a period of years, startup leaders are often thrust into leadership roles without any real training or experience and must learn quickly on the job. Equipping founders and new leaders with foundational horizontal leadership skills is therefore an essential part of their early development. Afterall, a business that has raised £1 million is a very different place from one that has raised £10 million, which is a very different place from a business that has raised £100 million. In the same way, a business with 10 team members is very different from a team with 50 members, which is very different from a team with 150 members (reaching Dunbar’s Number ushers in a whole new world of complexity).
A lot of leaders really struggle with the transition. Some ultimately fail and find themselves removed from the leadership team or kicked out of the business entirely. Investors struggle too. With the pressure on returns they want to see results quickly and some fail to grasp that leaders must grow just like the businesses that they’re invested in. It’s an opportunity missed for all because new leaders can develop transformationally with the right will and support.
Adult Development Theory, Vertical Development & Leadership
Nick Petrie from the Centre Creative Leadership explains Vertical Development’s foundations in Adult Development Theory and how its different stages play out from a leadership perspective at work:
As children grow, the way they think advances through predictable stages. Piaget [a Swiss psychologist] noticed that at each higher stage, children could think in more complex and sophisticated ways, meaning they were able to deal with increasingly difficult problems. Where Piaget left off in childhood, researchers like Robert Kegan and Bill Torbert picked up in adulthood. For a long time it was assumed that once you reach adulthood, these stages of development would stop – after all you are a grown-up, right? But Kegan and others discovered that developmental stages do in fact continue into adulthood, though something about the way adults develop through them changes. Whereas children move rapidly through the stages, an adult’s pace of development slows dramatically, almost to the point of plateauing. In addition, while a child’s development appears to happen automatically, adults cannot simply sit back and wait; now they need to work to keep growing.
Just like the rate of business growth is non-linear in startups and high growth technology businesses, neither is your personal growth. Says Kegan:
What gradually happens is not just a linear accretion of more and more that one can look at or think about, but a qualitative shift in the very shape of the window or lens through which one looks at the world.
Dependent-Conformers are uncommon in leadership positions across all businesses because they have not yet developed basic leadership skills and characteristics. That said, given the early focus in startups and high growth businesses on technical skills, such individuals can find themselves in leadership roles. Feeling completely out their depth as their responsibilities intensify this can strongly negatively impact the individual’s personal wellbeing, their team’s and the business overall.
The characteristics of Independent-Achievers are the most common attributes that I see in leaders in startup and high growth technology businesses. But what got you here, won’t get you there – helping a leader transform from an Independent-Achiever to an Interdependent-Collaborator is the fundamental role of a development coach.
Forms of Mind
Nick Petrie’s summary provides a helpful introduction to development stages. Jennifer Garvey Berger (formerly a PhD student of Robert Kegan) provides greater granularity on the development stages that adults move through. She details the Forms of Mind that adults can travel through in her book Changing on the Job: Developing Leaders for a Complex World (Amazon UK, US), which I’ve summarised below.
- A combination of a self-centredness and focus on what I want.
- Only perspective a person can automatically take is their own.
- Authority lies outside them and is marked by formal authority of a title. Rules are appreciated because of the direct consequences of them. A rule yesterday is probably a rule today but orientation is to figure out how to get past a rule if it is in their way.
- Aware others have feelings and desires but true empathy is not possible because the distance between their minds and others is great. The thinking and feeling of those around them is mysterious. Unlikely to be motivated by abstract factors like loyalty or commitment.
- Image of self as being at the centre of the world left behind and opinions and perspectives of others taken on.
- Authority is an internalized value / principle / role which comes from outside oneself.
- Rules of society seen as being the right way to be in the world, individual will become devoted to something larger than themselves, loyal to and embedded in a larger system, theory and relationship.
- The larger system though is not for them to make decisions about and when there is a conflict between important others within the system decision making becomes difficult.
- What adults are supposed to look like.
- Can understand the views and opinions of others while maintaining their own, they own their own work, make their own decisions and can mediate among different perspectives. Increasingly question the infallibility of external guides but may use others views or opinions to strengthen their own arguments or set of opinions.
- Authority is found in the self. Individual’s rules and regulations determined for oneself. When others disagree, it can be inconvenient or unpleasant but is not internally wrenching (when one internal value disagrees with another, however, that can cause internal tearing).
- The individual can see multiple layers of every issue and can hold even very different perspectives simultaneously.
- Greatest strength is ability to see connections everywhere.
- More likely to believe that we often think of as being black and white are just various shades of grey.
- Less easy to pin down about a particular opinion or idea, and are more orientated to the process of leadership than to any single product or outcome.
As we gain complexity through development, our mind actually transforms. When we gain new information or skills, our knowledge increases and we fill the container of our mind, but the container that holds the knowledge doesn’t necessarily change it’s form. Whereas, when we change our understanding of something, for example, by taking on a new perspective (being able to see more grey area vs. black and white), or being able to handle more uncertainty or manage multiple decisions, the form of the container that holds our knowledge (our Form of Mind) transforms.
Practical advice to help new leaders transform
Fred Wilson’s post What a CEO does is considered the classic on the subject of leadership responsibilities.
A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.
As astute as this observation is, they are responsibilities that are bounded and learnable, albeit not necessarily easily or by anyone. However, as your business and role increases rapidly in size and complexity, another responsibility gets added to your to-do list:
Know where you’re going and how to get there (so people will follow you) and also be open to the ideas of others (so that others add to your thinking and are engaged in a purposeful way). In other words: be a leader and learner simultaneously.
So you can see that whilst investor blogs will help you acquire knowledge and learn new skills, they won’t necessarily help you navigate complexity and truly grow as a leader. Jennifer Garvey Berger suggests a few things that will.
Develop these three Habits of Mind
1. Ask different questions
If we really want to grow on the job, it becomes vital for us to not simply ask our regular questions again and again, but to ask questions that move us beyond the frontier of our current understanding. This is paradoxical because we are rewarded at work for knowing the answers rather than asking the questions. We are generally not rewarded for uncertainty, yet having the courage and ability to ask different questions, and being open to a wider range of possibilities, is key to equipping us to be able to manage complex issues.To be able to ask different questions, questions that will keep us learning, is a habit of mind that stretches the brain, makes possible new discoveries and new connections, and creates a distinctive learning system.
2. Take multiple perspectives
Taking multiple perspectives enables people to see a wider range of possibilities, be able to empathize, make deeper connections, and understand the views of others. Even with these benefits, taking multiple perspectives isn’t natural for most people. The brain acts as a filter, keeping from view any ideas or perspectives that might be disconcerting – or that might actually teach us a thing or two. Learning the habit of intentionally taking other people’s perspectives stretches the mind and makes it possible to see new options. And when someone has the habit of taking multiple perspectives for herself, others begin to sense the openness and begin to offer information that a person with a more closed perspective and affect might never hear. This means that the multiple perspectives begin to be fed from within and from without, and people have greater access to the broader views they need in order to address complex issues.Perhaps it s not surprising that at every developmental form of mind, it is easier to take the perspective of someone who agrees with you than someone who disagrees with you. Increasing the capacity to cope with differing perspectives is the hallmark of growth.
3. See the system
The human mind is a pattern-making device. We think and see and clump into patterns. We do not have to try to see patterns; our brain sees information and clumps it for us.One set of capacities and perspectives that grows over time is our ability to see progressively more complex patterns. Seeing how things are connected to one another makes the world in some ways seem less mysterious (because we see the interactions between things that once just seemed like an assorted collection of unconnected events). In other ways, it makes the world seem more complex, with tangles threads that go in every direction. It is the progression from simple – but mysterious – to complex – but potentially overwhelming – that is the core growth in this regard.
Stand on the Balcony
Drawing again on Robert Kegan’s work, Jennifer draws attention to the Subject-Object shift that occurs as we move through development stages. Leadership experts Ron Heifitz explains it another way in his seminal Harvard Business Review Article A Survival Guide for Leaders, emphasising the need for leaders to move backwards and forwards between the ‘balcony’ and the ‘dance floor’.
Leadership is an improvisational art. You may be guided by an overarching vision, clear values, and a strategic plan, but what you actually do from moment to moment cannot be scripted. You must respond as events unfold. To use our metaphor, you have to move back and forth from the balcony to the dance floor, over and over again throughout the days, weeks, months, and years. While today’s plan may make sense now, tomorrow you’ll discover the unanticipated effects of today’s actions and have to adjust accordingly. Sustaining good leadership, then, requires first and foremost the capacity to see what is happening to you and your initiative as it is happening and to understand how today’s turns in the road will affect tomorrow’s plans.
But taking a balcony perspective is extremely tough to do when you’re fiercely engaged down below, being pushed and pulled by the events and people around you—and doing some pushing and pulling of your own. Even if you are able to break away, the practice of stepping back and seeing the big picture is complicated by several factors. For example, when you get some distance, you still must accurately interpret what you see and hear. This is easier said than done. In an attempt to avoid difficult change, people will naturally, even unconsciously, defend their habits and ways of thinking. As you seek input from a broad range of people, you’ll constantly need to be aware of these hidden agendas. You’ll also need to observe your own actions; seeing yourself objectively as you look down from the balcony is perhaps the hardest task of all.
Fortunately, you can learn to be both an observer and a participant at the same time. When you are sitting in a meeting, practice by watching what is happening while it is happening—even as you are part of what is happening. Observe the relationships and see how people’s attention to one another can vary: supporting, thwarting, or listening. Watch people’s body language. When you make a point, resist the instinct to stay perched on the edge of your seat, ready to defend what you said. A technique as simple as pushing your chair a few inches away from the table after you speak may provide the literal as well as metaphorical distance you need to become an observer.
When you are a new leader in a startup or rapidly scaling business, it’s very easy to spend all your time on the dancefloor, in the mix of the action, dancing in the crowd. Here you are the Subject of your experience. When you’re the Object of your experience, you’re on the balcony, and you’re able to get a broader perspective of what is going on underneath you. For example, you can other dancers hitting into one another in a crowded spot but that there is plenty of space to move around just a few metres away. Linking this back to Adult Development and its progressive stages, as you develop through them, you are able to become more Objective, and see more and more of the dancefloor, by reaching higher balconies (perspectives) of observation.
If you enjoyed this, you might like:
The Mental Habits of Effective Leaders with Jennifer Garvey Berger [The Knowledge Project Ep. #43] – Jennifer’s conversation with Farnam Street’s Shane Parrish.
Leading on the job: advice for new leaders, in which I pass on what I’ve learnt coaching new leaders in venture capital and private equity backed businesses.