“The graveyards are full of indispensable men!” — attributed to Napoleon Bonaparte
In his eponymous autobiography, Michael Bloomberg wrote:
I want the loss of anyone in the company to hurt us, but not fatally, including the likes of me. Every job performance review I give my direct-reporting managers includes the question, ‘Who’s your replacement? If you don’t have one now, I can’t consider you for bigger things. If you don’t have one the next time I ask, you may no longer be a direct report.
One of the most important jobs of a great leader is to attract great talent. How adaptable you are as a firm depends in part upon how your company is organized, but most of all it depends upon the people operating it. Internal leaders are sometimes secretly afraid to bring in ultra-talented employees because they fear that these newcomers could challenge their status at the firm. A talented executive whose interests are aligned with the firm’s and is confident in her role will always recruit stars who exceed herself in various ways, but one who is worried about her value to the firm will not.
A great leader should make it clear to her team members that as a matter of culture her job is to replace herself. A new hire should know from the outset that she will ultimately have to bring in new talent to replace herself so that she can personally better herself and achieve loftier goals. A policy of knowing your replacement is one of the best ways to drive a growth culture. It anticipates and eliminates the most harmful politics in leadership for an expanding company, and instantly sets the right tone for a high talent, growth mindset executive team.
Moreover, to craft a truly durable company you have to plan for as many contingencies as possible. Many contingencies are all-too-human variables: injuries, illnesses, changes-of-plans, early retirements and so on. Vacancies in your company’s structure are essentially unpredictable, and can be very costly. The departure of key individuals kills morale, loyalty and productivity among your employees. Great leaders are paranoid by nature and always plan for contingencies. They always ask: “Where are the bottlenecks? Which people can I not afford to lose?”
Questions of management depth extend beyond hardship and transfer cases. For any rapidly growing company vacancies will be a recurring problem. Scaling up typically means hiring new employees to fill lower-level positions as your more experienced team members graduate into more senior roles…although it may also require you to introduce experienced executives directly.
On a personal note, I have always been of the mindset that my most talented friends and colleagues are the critical ingredient in my success. I’ve been proud of my entrepreneurial roles as a leader and builder of company culture, head of product, head of BD, or CEO of some companies I’ve helped to found such as Palantir and Addepar. However, I’ve been lucky to have consistently replaced myself with very talented colleagues in the specific areas needed by our companies. Usually when this occurs I begin building in other areas, or my replacements choose to keep me around to help out with mentorship, strategy, or fundraising in various ways — although some of them are perfectly happy without somebody looking over their shoulder and taking credit for their work! This has helped me expand the range of projects I can channel my energy into, attract an ecosystem of brilliant, talented individuals and foster growth cultures at the companies I have been a part of.
In order for a company to grow, its team members must grow themselves — and this means personal evolution into new roles and more ambitious assignments. We admire Bloomberg’s clarity of thought, and his success as a leader suggests we should pay closer attention when he shares this kind of wisdom.
So, who’s your replacement?