A few years back, a new venture firm took shape with 3 like-minded co-founders. They came from eclectic backgrounds and shared a vision that venture investing could solve large scale human and planetary problems. They recruited a small staff with skills such as finance, software development, and product management. Their capacity to pursue projects grew quickly. Early results proved promising, but day-to-day operations started to look anarchic.
The co-founders introduced systems and processes, but they nonetheless missed deadlines while staff retreated to silos and managers failed to collaborate. The team recognized that they were headed for disaster.
Enter Ned Herrmann, the “father of brain dominance technology.” As the head of education at General Electric, he created the Herrmann Brain Dominance Instrument (HBDI), which he based on the research into multiple intelligences pioneered by developmental psychologist Howard Gardner at Harvard.
The team took the HBDI assessment and had an important revelation.
My shorthand way of explaining how this “instrument” works is to call up the leadership team of the Star Trek series. In the four quadrant analysis results, the three founders discovered they each had the same Captain Picard mindset (boldly pursuing the mission). What was missing were the balancing influences of Data (objective, analytical), La Forge (running the engine room), and Dr. Crusher (tending the crew’s well being). Depending on your preferred Star Trek vintage, that line-up could also be Kirk / Spock/ Scotty / Bones, or others.) That data was a big revelation to the founders and led to considerable changes at the firm in question, which I will explain further down.
1 – The firm’s three co-founders’ scored averaged
Data insights worth sharing
I’ve spent ten years at SOSV assessing and coaching 4000-plus founders from 1000-plus start-ups using HBDI. This decade of data provides insights and lessons that are critical for all start-ups and their investors. It’s important to remember that 60% of all failures in new ventures are due to team conflicts, and SOSV’s experience across our 1000+ company profile confirms that reality.
Any tool that helps reduce that risk is incredibly valuable as a means to pick winning founders as well as scale the leadership team in the early years. We’ve found that HBDI provides highly insightful results. In fact, SOSV requires its employees as well as portfolio company founders to take the HBDI assessment.
When presented with HBDI, many of our founders cry out, “Oh, I’ve done one of those before,” meaning a “personality test” such as Myers Briggs, DISC, the Enneagram, 16PF, or, more recently, StrengthsFinder.
The truth is nobody wants their personality assessed and judged—and potentially ridiculed–by their peers. At SOSV, we avoid the personality tests, preferring to start the conversation by laying bare the differences between the various tools and what they measure. First, we distinguish between levels of human operation: behavior (what we do); skills and competencies (what we’re good at); values and beliefs (what’s important to us); and a sense of identity (who am I). These are actionable distinctions which, when applied, help us build great companies as well as great CEOs. Identity is the invisible driving force behind all we do, triggering our reactions to people, including investors, and the products we come into contact with.
The power of HBDI is that it gives founders insight specifically into their values, partly by answering the question, “which of the multiple “intelligences” available to me have I come to rely on over the years, and what are the consequences?” This takes us beyond assessing mere skills, but stops short of diving deeper into personality. Values trump skills every time. I agree when YC’s Sam Altman says, “Attitude is more important than experience” in his Stanford Start-up talk on team & execution. And in HBDI we have an actual tool to identify and develop it.
How do we identify winning CEOs and founders ?
There is overwhelming evidence that cognitively diverse teams have the advantage when it comes to solving problems, boosting innovation, and delivering better results, and that’s what we help founders capitalize on from the outset.
The HBDI framework provides insight based on a founder’s preference for each of four critical mindsets (value clusters, if you will). For those of you with a working knowledge of Star Trek, I’ll make this easy. Think Captain Picard (leading a space exploration mission); Data (objective, analytical genius), La Forge (engineer keeping the machinery running), and Dr. Crusher (doctor, maintaining the wellbeing of the crew). For those of you who are not Star Trek fans, think Optimist, Analyst, Realist, Therapist. Or if you prefer, consider different types of “smart:” Street smart, intellectual smart, practical smart, social smart.
The insight comes in the form of scores from 0-150 for each mindset.
The SOSV data below was gathered from over 4100 founders, representing 75 nationalities, and a variety of functional roles (CTO, CEO, CMO etc). When we average the scores across that group, the front runners are Picard/85 and Data/76, followed by Dr. Crusher/63 and La Forge/62. The higher the score, the more “attitude” is displayed in that direction. Clearly, founders are very Picard-like, which means they are visionaries, stubbornly committed, and optimistic. And they are not all that in tune with La Forge in the engine room, fussing over the Enterprise’s engine room, or Dr. Crusher in the sick bay, looking after the crew.
2 – Average HBDI outcomes for SOSV founders
What if we look at only the 455 CEOs in that dataset? These may be founders as well, but certainly not all founders are CEOs. What the data reveals is the early stage startup CEO is a 13 point jump in the Picard HBDI score. And the CEOs at our top 50 companies (those with the highest valuations to date) score a further 2 points. Clearly, the winning set of values for early stage leadership is the stubborn visionary. It’s also worth noting that the realistic mindset represented by La Forge drops 10 points, which can mean trouble for the COOs tending the “engine room.” But that’s not the full story either. These leaders don’t ultimately succeed without compensating values in play across the rest of the leadership team, which is really the heart of what’s important in HBDI-based team analysis.
3- Average HBDI outcomes for startup CEOs
The second most pronounced score among founders is the analytical Data. When we slice the data to look at 190 CTO founders in our data sample, the Data score jumps 17 points. And you can see where this is going. The analytical CTO tells the visionary CEO that the big vision is not attainable by any known means. We all know about that conversation; in fact it happens in every episode of Star Trek. At the same time, it’s worth noting the ten point drop in the CTO founder’s Dr. Crusher-like qualities. The CTO is below founder average in terms of relating to people (Dr. Crusher), just as the CEO founder is below par when it comes to the realistic management expectations (Scotty).
4 – Average HBDI outcomes for CTO founders
As the saying goes, “Simple awareness is often curative,” so the act of simply laying this data on the table begins to impact the way we develop the culture of a team. If we can coach the optimist (CEO) and the analyst (CTO) to reach genuine awareness and appreciation of their different values, we’re off to a solid start. Often it’s the elementary things such as differences in communication styles, realistic versus optimistic decision making, and a clash of fact versus fiction in presentation styles that cause conflicts between key players. HBDI results also help others around the quadrants in terms of what to expect from their colleagues. It also helps the founders strengthen their first generation team by consciously seeking out senior talent that balance the leadership’s values.
Scaling the team with HBDI in mind
The seed stage CEO is a “jack of all trades, master of none.” But as the team grows from a family of 3 to 6 to a tribe of 15 to 20, the Series A CEO role becomes increasingly a people management role. At that point, street smarts need to be tempered with a good deal of social smarts, one of the less preferred mindsets of our original top CEOs. The role also becomes more outward facing, engaging with investors, customers and partners.
That usually means the founders need to recruit someone socially smart into the founding family, likely as head of sales and marketing. It’s important to recruit not just on skills or experience, but to keep their HBDI values front and center as well. At SOSV, we encourage the use of HBDI as part of the interview process.
The other common gap in an early founder team is the lack of Scotty’s practical, responsible mindset. That’s why startups are famous for delivering late and over budget. Optimism needs to be balanced with realism if trust is going to be established with investors and customers. Unkept promises add up, and the firm’s reputation is at stake. So an early, important recruit is sometimes a COO, chosen again as much for their skills and experience as for their cultural fit.
There is a lot more behind the HBDI curtain of course that we’ve worked on over the past ten years, but that’s the core of what we’ve learned.
Taking this story back to where it started, the unnamed company with three dangerously Picard-like founders was SOSV itself. Their encounter with HBDI helped them understand what they were missing, and they got the company on track by carefully making senior hires in legal, finance and operations. SOSV has scaled to more than 100 by taking into account the principles Ned Herrmann worked out over four decades ago.
(Editor’s note: This piece in a more truncated form appeared in TechCrunch on April 4, 2023.)