The Origin Story of The Circular CEO

?? AUDIO VERSION

Welcome to The Circular CEO, the newsletter that's been 26 years in the making. I hope you find the writing enjoyable and practical, and I look forward to hearing your insights and feedback along the way.

I will always be grateful to the people in my first company

I started my first company in 1993, CareWare Software. I had zero experience running a company but I was excited to learn and prepared to put in the hard work. For years I studied business books in the library, worked countless hours, and we grew. Three years later we had an office, 10 employees and hundreds of customers across Canada.

Near the end of a staff meeting in 1996, our Customer Support Manager, Cheryl, asked me why I looked a bit concerned. I'd been worrying about the phone bill which was our single biggest expense. But I was the boss and finances were my responsibility. "Don't be silly," she said. "The team and I would love to help if we can." She nicely insisted until I relented and shared the problem with her. Our phone bill was $20,000 a month, it was growing, and I didn't know what to do about it.

Cheryl and the team took on the challenge. Frankly, I was happy if they could have cut the phone bill by 1/3 within six months. They cut it by 2/3 in just 60 days. I was blown away by the result, grateful to the team, and a lot wiser about how I wanted to manage.

I realized that the traditional top-down management style I had read about in the library was inappropriate for me and my company. From that point on my management style became more collaborative, more open and more inclusive. My journey from Linear Leader to Circular Leader had begun.

Linear leaders use a top-down management style to complete an objective

In its simplest form, a linear leader tells their team what to do and expects their team to deliver it successfully on time.

Meetings tend to focus on deliverables and deadlines. Metrics are hard numbers. If there is any risk of missing targets, pressure mounts.

We've all seen this leadership approach. In the corporate world it's everywhere. But while this traditional style is familiar, it's not optimal. Why not?

1. It places more importance on the objective than on the people who do the work to reach it. People?don't?feel?valued?as?much?as they feel like cogs in a machine. They become demotivated and disengaged.
2. A one-way communication style doesn't allow staff to speak up about problems or improvements that might arise during the project. Creativity and innovation are stifled.
3. The emphasis on metrics and deadlines is more stressful than motivating. It has the opposite effect to what is intended.

Linear leadership doesn't recognize the full potential of its people and is unable to unlock it. Over time it erodes people's goodwill. It leads to workplace frustration, burnout, "quiet quitting" and actual quitting.

Circular leaders use an iterative, collaborative approach to build a team

A circular leader is just as concerned with productivity and deliverables as a linear leader. But their view of the workplace considers three additional factors:

1. People's emotions influence their capacity for work and their willingness to work.
2. People work in teams. Social dynamics are important.
3. Work isn't just about the current objective. Work is an unending series of projects that extends into the future.

Circular leaders know that only by seeing somebody as a full person can you maximize their contribution. A circular leader's approach looks like this:

A.?Just like a linear leader, the circular leader knows that it is important to provide?clear direction?to the team.?However, the circular leader?is more likely to?include their people in the planning exercise?to?benefit from their input and?build their buy-in.

B.?Circular leaders deliberately spend time with?each individual?who reports to them. They want to ensure that their staff feel heard, trusted and valued. They want all of their staff to feel comfortable expressing themselves.

C.?In addition, circular leaders work on?strengthening their team's dynamics.?They know that the team's ability to produce and innovate rises and falls along with the team members' collective sense of psychological safety and belonging. They work hard to foster both.

D.?Circular leaders think about?accountability?differently than linear leaders. They don't see it as a final checkpoint, but as an integral part of a supportive process that empowers people to achieve shared objectives.

Finally, circular leaders know that you can't rush team-building. They know that the current project—no matter how urgent it may be—serves as practice and preparation for the next project. They know that if the current project depletes the team, or reduces its capacity, or causes its people to leave, then the next project will be more difficult. But if this project supports the team, grows its skills, and deepens its bonds, then the next one will be even more successful.

In the 26 years since Cheryl and the gang?solved?the?phone?bill?problem I've run other companies and worked with leaders around the world. Throughout that time I kept thinking about how leadership impacts performance. In the last five years, I have devoted all of my time to study it in detail with organisations on four continents.

The good news is that circular leadership speaks to our best instincts. It tells us that looking after our people is looking after the organisation. It reminds us that people don't need to be coerced to perform well, they want to perform well. Our job, as managers, is to empower them.

I look forward to discussing all of this with you here.

–Alex