Silicon Valley’s Leadership Is Lacking, According to One of Its Most Prominent Leaders

Silicon Valley prides itself on being an iconoclastic, disruptive place, but it’s also a longstanding community with history, institutions, and traditions. At the center of that Silicon Valley establishment might be John Hennessy.

Hennessy, a Google board member since 2004, was president of Stanford University for 16 years and previously served as dean of the engineering school and taught computer science. Perhaps more importantly—in the eyes of the Silicon Valley elite—he’s also a successful founder of a startup: MIPS Computer Systems, a chip design company he sold in 1992 in a stock swap valued at $406 million. In February, Hennessy, 65, was named chair of Alphabet, Google’s parent company.

In his new book, Leading Matters: Lessons From My Journey, Hennessy attempts to distill what he learned from running a world-class university by identifying 10 essential qualities of leadership. The characteristics—humility, authenticity, innovation, etc.—are illustrated with anecdotes from his time at Stanford.

Quartz at Work talked to Hennessy, who still speaks with the accent of his native New York, about the leadership failings of the tech world, what Google learned from Warren Buffett, and whether academics can make good managers. This interview has been lightly edited for length and clarity.

Quartz at Work: Of the 10 leadership qualities you discuss in your book, which is most abundant in Silicon Valley?

Hennessy: It’s a strong innovation-based culture. Clearly, that’s its strength: innovation and a willingness to try new things and fail at them.

And the converse: Which quality is most lacking?

This notion of leadership as service needs further attention in the valley. Remember, the valley is a product of this “let’s move fast and break the current constraints and do something different” mentality. I think that tends to put too much of a focus on short-term results, and it also tends to narrow the focus of who you’re serving in a leadership role. You’re certainly serving the shareholders and the investors, but you’re also serving your users, and that relationship you have with users and customers is a long-term trust relationship. If you break that, then you endanger long-term success of the organization, whether it is a university or a company.

You have anticipated my next question: In the last few years, some of Silicon Valley’s most admired companies have seen their reputations take a serous hit, in part because they seem to have abused the trust of their users. Is that a failure of leadership?

I do consider it a failure of leadership. In some cases I would consider it an unintended failure, of leadership not being aware of the issues.Another thing that’s happening is that these companies are growing so fast, that some notion that a small group of people at the top of the organization know everything that’s going on simply vanishes. Culture starts at the top but it obviously has to infiltrate the ranks of a company, and these companies have now gotten gigantic. I remember looking back when Stanford was one one of the largest employers in the valley. Well, no more. Not even close these days.

In some cases there’s a misstep where there simply wasn’t adequate communication, or perhaps a cultural mismatch as well, where people, perhaps while obeying the letter of the law, weren’t obeying the spirit of the law and the spirit of that trust relationship.

What’s the fix for that? Backfilling certain roles? Better training? Instituting the bureaucracy these companies tend to despise?

I would certainly prefer not to institute the bureaucracy that would slow down decision making. It is education, it is building culture, and strengthening culture, so people really know what the company is about. And it’s really reminding everyone that any leadership role has a whole constituency: It’s the users, it’s the employees, it’s the shareholders, and it’s the longterm relationship that you really want to focus on. Don’t compromise the longterm relationship for short-term gain.

Did you have any formal leadership training? Would university presidents benefit from it?

I didn’t have any formal training. My schooling was the school of hard knocks in starting a company. That experience, because of the pace in which a start-up operates and the roles you get thrust into, probably gave me in 18 months what would have taken 10 years to build up in a university. That was, for me, a real accelerator in terms of learning and being put in difficult situations. Everything from a layoff to being with difficult people to recruiting to cold selling, all those sorts of things.

I became concerned when I was president that we were not doing an adequate job preparing our own people for future leadership positions so we actually started a program called leadership academy. Honestly, people were not prepared, and it included everything from general topics to getting a coach and getting feedback, and that’s made a big difference in terms of the academic leadership of the university.

Does academia suffer because its leaders aren’t adequately trained?

I think sometimes it does, to the extent of where you are in the organization. One of the things you see in  university is often if there’s a difficult problem, it gets passed up the chain because people are reluctant to deal with it.

You’ve worked closely now with Google founders Larry Page and Sergey Brin. How would you describe their leadership styles?

They’re deep, long range thinkers, both of whom focus a lot on innovation and have great admiration for people who are willing to be the pioneers and create something really new.

When you think about the history of Google, before the company started there were three major search engines, and people of my generation—I’m an old guy—we thought they were pretty good. Yahoo, Alta Vista, and Infoseek were a whole lot better than what came before, mostly because they had decent web crawling. Then boom, these guys write the prototype for Google at Stanford and it is so much better than what exists out there. That willingness to approach problems with a new eye, and to think about them differently, Larry and Sergey both deeply embrace that kind of view.

Have they matured as leaders in the time that you have known them?

Sure, sure. They were certainly not ready to run the company early on when Eric (Schmidt) was the CEO. Larry started to take on more of a global leadership role and it made sense for him to be CEO, and then at some time Larry said he would rather focus on the Alphabet aspects and put more time into that, and that is when Sundar (Pichai) become head of the Google subsidiary of Alphabet

Has the reorganization of Google into Alphabet accomplished what you hoped?

I think it’s accomplished what we were after. We were partly trying to learn from Warren Buffett and his skills at Berkshire Hathaway. The problem I’ve seen occur in so many companies in the valley is they have a hard time diversifying. They build one very successful product and they have a hard time diversifying because of the natural competition between investing in the existing product versus investing in new things. As that existing product becomes very large, it slows down the decision making process, and tends to then slow down the rate of innovation in that new technology.A key goal in the Alphabet organization was to take these things that are farther out that aren’t yet major businesses and get them out from under Google and let Google focus on its core business, and I think that’s worked. It’s an experiment in process and it will probably take another decade to figure out if it’s working as well as it can.

It must add to the leadership challenge at Alphabet, when you have many CEOs of the smaller companies—the other “bets”—vying for resources and attention, instead of many vice presidents of one company vying for resources and attention.

It’s given the CEOs of the other bets a little more autonomy, and this is clearly where we admire the organization Warren Buffett has put in place. The quality of people he gets to run the Berkshire Hathaway subsidiaries is incredible. If you’re going to have a focus on a particular area, like self-driving cars, you should get the very best people you can to lead that organization, and if titling that person the CEO of Waymo makes a difference and enables them to work better, so be it.