Ethan Karp of MAGNET: 5 Things I Wish Someone Told Me Before I Became A CEO

No matter how much I believe in the importance of taking time for myself in my workday, with family, vacations, etc., I just get completely wrapped up in the excitement, the importance, and the urgency of every day at work. I trust my team and empower them to take the organization to new heights, however, I also know that there are many things they do that could go better if I helped. My ego continually tells me that I am important and can make everything better if I just spent more time.

As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing Ethan Karp.

Ethan Karp is the President and CEO of non-profit consulting group, MAGNET, the Manufacturing Advocacy and Growth Network. Prior to joining MAGNET in 2013, he worked with Fortune 500 companies at McKinsey & Co. He received both a Ph.D. and undergraduate degree in biochemistry and physics from Miami University.

Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?

Simple — walking around the office saying hello to everyone. As a McKinsey consultant I would fly around the world every week to a new place or a new project. On Fridays, when many consultants took the time to work from home, I went into the office. I always made time to walk around the office and make small talk. I guess you could call it networking. To me, I was just being friendly.

At the same time, while I loved my work at McKinsey, I was eager to make a contribution to society. So I started looking at all kinds of initiatives going on in Cleveland. Eventually, I found a non-profit organization whose mission was to help small manufacturers; it not only intrigued me but also happened to have one of the people I’d befriended on my Friday walkabouts as board chair. I considered him a friend and mentor, so when he asked me to lead the organization, I said yes.

Can you tell us a story about hard times you faced when you first started your journey?

About eight weeks into the job, bright eyed with great ideas of how we were going to set strategy together, I gathered my new team. Ten minutes into the meeting my marketing and sales leads got in an all-out screaming match. I got them calmed down, but then a few minutes later I had to lay down the law about sexist jokes after one was proffered to “lighten the mood.” Two people sat in the corner and said nothing for four hours. I learned later that most everyone figured this 26-year-old “hotshot” was going to leave — they just had to wait him out. Complacency was rampant. Initiative was non-existent. The organization was disconnected from its mission. The culture was toxic and here I was in my first leadership role trying to unravel it all.

Where did you get the drive to continue even though things were so hard?

I wish I could say that it was undying optimism and belief in the ability of people to change. But in reality, what got me through those early days was blind naivete. I vividly remember telling my Board Chair that “if only I could make these three staff changes, everything would be fixed.” He wisely counseled me that I shouldn’t make broad proclamations as this was only part of the problem, there were no quick fixes. He couldn’t have been more right. It took four years of strategic recruiting, performance management, organizational changes, and culture building until we finally got all the right people moving in the same direction towards achieving our mission. Making those people changes was just the tip of the iceberg to truly changing a culture.

Sometimes I wonder what I would have done had I known what I know now. Would I have even taken the job? Perhaps we all need to enter new roles like this every few years so that we take on the challenges that others with more experience might not. Perhaps a little blind naivete is sometimes helpful in making real change happen.

So, how are things going today? How did grit and resilience lead to your eventual success?

For the first couple of years, you are constantly undoing others’ mistakes — bad processes, bad hires, poor management, etc. But then, one day you realize, they are your mistakes now.

For me, the first big mistake was a hiring one. A senior leader abruptly left, leaving just a single key employee remaining in that function. Another employee, my mistake hire, suggested to the key employee that, in the wake of the chaos of the departure, he should threaten to leave if he didn’t get a higher salary. The suggesting employee was the proverbial bad apple who turned many employees sour and fueled toxic culture. I hired this person against the advice of my counselors and peers. I created the problem.

I owned this mistake (and I did fix it), alongside all other subsequent mistakes that I made. My resilience came from having trusted mentors I could talk to and a team that I had recruited to be the cultural vanguard and to support each other to make change happen no matter how many mistakes we made. My grit came from knowing that I was never going to be the type of person to mess things up without putting them right. Today, MAGNET is on the list of best places to work in Cleveland and our ability to save and create 1,500 jobs per year in manufacturing is a testament to how our team works together to drive impact and success.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

The stupidest mistake I made early on was smiling too much. Not kidding. I was in a meeting with senior leaders and they were talking about a very serious problem that predated me. I wanted them to know that I was engaged. So, I put on an amused slightly upturned mouth that looked like a smile. As I was made aware after the meeting, it looked like schadenfreude — that I was happy about these troubles. In that moment I learned that as a leader, every expression, every gesture and every word must align. It has taken many more years to realize that there is simply no replacement for authenticity. You must tap into your genuine leadership presence so you can truly connect and engage.

What do you think makes your company stand out? Can you share a story?

Our belief in values and their power makes our company standout. When COVID happened, MAGNET could have taken a PPP loan and waited it out, preparing ourselves for when manufacturers were ready to hire us again. Instead, we relied on our values to do the right thing. We worked harder than ever before to coordinate 2,000 manufacturers to create personal protective equipment across the state of Ohio to help save lives while saving manufacturing jobs.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

No matter how much I believe in the importance of taking time for myself in my workday, with family, vacations, etc., I just get completely wrapped up in the excitement, the importance, and the urgency of every day at work. I trust my team and empower them to take the organization to new heights, however, I also know that there are many things they do that could go better if I helped. My ego continually tells me that I am important and can make everything better if I just spent more time.

Here’s the deal — it is probably true that as the leader, you, right now, are best positioned to do many individual things better and faster than the people around you. Your company might perform better if you did them. You likely got to where you are with a huge amount of energy and focus and drive. You might be able to sustain that for another 5 years until you do really burnout and then everything crashes.

But in reality, it’s a fallacy that you can make everything better by stepping in to do it yourself. While you might get better results in the short term, you will burn out. You’ll also leave the team around you feeling disempowered and frustrated. Maybe you’ll avoid the mistakes they would’ve made, but you’ll prevent them from growing and learning from those mistakes.

I don’t have the silver bullet here — I am in that millennial group of leaders struggling to balance everything. The extra boost in performance from taking on more myself might be worth sacrificing sleep or family time. At least now I am aware of that struggle and am actively making my decisions for myself.

No matter how many articles you read that talk about this, nothing is ever going to stick until you really dive into what is driving you. And to do that, you need a therapist/coach. So my main tip is to find someone you like and trust and talk to them every week. Let them help you be the best version of yourself and not let leadership drain you each day. If many people rely on you, your mental health and awareness needs care and attention.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My mentor, Felix Brueck, a man who has spent countless hours with me as a neophyte leader, gives counsel when I ask, but never takes away my agency. He gives me the blunt, straight scoop when I do well or when I mess up. He tells me how to do the hard things and sticks up for me when I make mistakes. But above all, Felix cares about me.

Last year, after multiple years of really strong performance for my organization, Felix went about his normal set of interviews to make my review. The centerpiece of this review was an extremely sincere, yet brutally honest assessment of the way that I had taken care of my health (i.e., my weight). For years, Felix had been sharing stories of how sometimes people let themselves go and how to counter that. I wasn’t listening, so Felix elevated it to the performance improvement goal in my review.

Some might be taken aback at how personal this was. To me, this was the ultimate mentor — someone who truly cares enough to want me to live a happy life, not just a productive one for the organization. This is a lesson I will carry with me forever in the way that I treat others — as people who I care about first, and as employees who have jobs to do second.

How have you used your success to bring goodness to the world?

Our organization is mission driven. Everything we do is to make life better for the people who live and work in Northeast Ohio. And we do that by creating more manufacturing jobs and growing the regional industry. We have also expanded our mission to focus on helping underemployed or unemployed people (most of whom are in poverty) raise themselves up through good manufacturing technology jobs. And we focus on connecting people of color to more opportunities so that our factories will look more like the communities they serve. Every day I get to go into work and know that we are helping change lives and bring goodness to the world. This binds our team and brings the “why” to our work.

What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.

1.) Watch and listen for a long time before you make changes when you first join (three times longer than you might feel is necessary).

• Example: When I became the leader, I spent a few days studying and interviewing (like a consultant) before suggesting changes. As a consequence, it was months and in some cases years before I saw the true colors of some of my team members. Because some people were good at making it look like they were all about the change but weren’t. If I had more patience initially, I could have better observed their behavior and more accurately predicted who would be “with me” on the change journey.

2.) It is okay to rely on others in the organization for help. They will appreciate you asking them and probably have great ideas.

• I relied on one sales team member more than anyone else. He understood our business and the key people. In the early days, I needed his counsel to make any progress with people who didn’t trust me. Now, I rely on him to run a huge portion of our business as the VP of Operations; he and I have been working together for nearly a decade now to turn MAGNET around.

3.) Being the CEO is like being Aladdin’s genie. Sure you can do whatever you want, but there is a catch — the more power you exercise unilaterally the less power you have because you lose people, lose respect, reduce employee empowerment and destroy culture.

• I remember thinking that we needed to fire an employee based on an interaction I had with them. I relayed the incident to their supervisor. Their supervisor thought that she could coach them and told me sheepishly that she didn’t want to fire them despite my damning interpretation of a situation. I could have told her that the person had to go. If I did this, the supervisor would never feel agency over their team. Instead, the supervisor tried their hardest for another year to help this employee. It didn’t work and eventually the employee was let go. But because the supervisor had honesty and authentically tried to help this person, they left on good terms. And now I have built more trust with the supervisor by reinforcing that their decisions about their team are final.

4.) Going from being the number 2 to the number 1 is a tectonic shift, and not to be underestimated. As the second in command you can set strategy, go fix things, be everywhere you want to be. As the CEO, you have responsibility to manage the risks in the company which leaves you limited time to truly do the exciting things you did as number 2. As the number 2 you are leading with your intellect and ability to contribute. As a number 1 you are leading by empowering and guiding others.

• After five years of fielding all of the HR issues and legal issues of the organization, I was frustrated. I was about to give up on filing all of the lengthy paperwork to document everything because it never seemed to help. When an unethical employee threatened to sue us over made-up claims, we went to mediation and settled. I talked to our company’s lawyer and asked why it mattered whether I got all of the paperwork right. “Ah” our wise lawyer responded, “you do all of the paperwork to avoid getting a really good lawyer taking someone’s case and then suing you for millions of dollars (even if you didn’t do anything wrong).” This is a tangible example of a risk that CEOs have to pay attention to that isn’t even on your radar if you are a strategy-focused number 2.

5.) Set your cultural expectations early and make sure people adhere to them. Just because they are “soft” doesn’t mean you can’t coach, direct, teach, and even give performance measures on these cultural elements. A good culture will attract the people you want and help the best come out of those you have. Nothing is more important, so start early with clear expectations.

• It took a few years before we incorporated a detailed set of behaviors associated with our values into our performance review form. This reinforced the importance of culture and values and turned a squishy thing into something that we took very seriously at MAGNET. While their incorporation into our reviews was not the key to creating a good culture, it was a critical accelerant and I wish I had done it earlier.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

So much has been written about being mindful, about having outside counsel, about taking care of yourself in your organization. But this is SO hard. How many bright, ambitious, hard-working business leaders drive themselves into the ground or become mean versions of themselves?

The movement I hope to start one day is the wide acceptance of business coaches who incorporate therapy and psychology into their coaching tools. These people exist today, but they are rare and hard to identify. Helping leaders become their best selves and raise awareness of their impact in the world, awareness of others, and frankly, increase how they bring their own brand of “love” into the world would impact so many businesses, so many people employed by those businesses, and ultimately the world.

How can our readers follow you on social media?

Follow Ethan on LinkedIn (Ethan Karp) and follow MAGNET on Twitter (@MAGNETOhio) and on LinkedIn (MAGNET: The Manufacturing Advocacy and Growth Network).