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HOUSEKEEPING 📨

I had an interesting week last week with a couple of speaking engagements; something I’m pushing myself to do more of. I dropped in Tuesday to Stone & Chalk, Melbourne’s premier co-working space for tech, for a quick fireside chat. I also ran a session on people-first equity plans at the Startup People Summit, run by a friend of the newsletter, Matt McFarlane.

It’s really weird. I get anxious speaking with 1-2 people at a co-working space, but feel no pressure whatsoever speaking in front of a crowd. Anyway, it was a good step forward. I’d like to keep putting myself out there, as it’s a great one for winning friends and allies, which—aside from being generally just a positive thing—helps drive my companies forward.

BUSINESS STORY 🗞️

The Four Types Of Managers & How To Manage Them

Managing people is not for everyone. And managing managers is certainly not for the faint of heart. How your managers behave, how they lead, and whether they hit their goals reverberate through the entire company. Put simply, if your managers suck, your company probably does too.

And in 2026, they matter more than ever. Amazon, Google and Meta have spent the last two years quietly torching layers of middle management. Andy Jassy told his people to flatten the org. Sundar cut a chunk of manager roles outright.

Which means the managers you have left are carrying a lot more weight. A great one is worth their weight in Nvidia stock. A bad one can take a whole department down with them, and you have fewer people around to notice before it happens.

So today we are going to take a deep dive into the manager. We will look at everyone from Elon Musk to everyone's favorite in Ted Lasso, figure out which archetype they fit into, and work out how, or in some cases if, we can help them. Let's dive in.

Welch’s Performance x Values Matrix

The infamous Jack Welch was one of the most successful CEOs in history. The first true rockstar leader. It's not surprising, as he was able to raise GE's market cap from $14 billion to $410 billion dollars by the time he left.

He ran GE for 20 years. Fortune named him Manager of the Century. CEOs copied his haircut, his acquisitions, and his habit of firing the bottom 10% of the company every year. They called him Neutron Jack, because after he walked through a building, the building was still standing, but the people were gone.

Philosophy aside, the man knew how to assess a manager, and we are going to be using one of his tools today: the Performance x Values Matrix. Welch first laid it out in a letter to GE shareholders in the early 90s. He split his managers into four types based on two questions: do they deliver on their commitments, and do they share our values? The interesting part was what he did with each. The ones who hit the numbers but trampled the culture were, in his words, the hardest call of all.

It’s a very simple framework. Managers are marked as either a yes or a no on two elements: do they hit their goals, and do they add to the culture? The four possible combinations span the breadth of managerial excellence, or lack thereof. Let’s look at each one individually and figure out what to do with each of them.

The Star Manager

The Star Manager excels in both performance and culture. They crush their goals while building a positive, engaging, and supportive work environment for their teams. These managers are priceless. You'll know one when you see one. Their team's Slack channel is the loudest in the company. Their attrition is basically zero. People from other departments keep asking to transfer in. And the numbers go brrrr.

Market cap around $300 billion, a culture famous for infighting, and a stack-ranking system that pitted employees against each other (a Welch import, funnily enough). Nadella's fix was almost embarrassingly simple: swap ‘know-it-alls’ for ‘learn-it-alls.’ A decade later, Microsoft is worth north of $3 trillion. Empathy, it turns out, compounds.

Take a look at the traits list above. Strong work ethic and honesty top the chart, sure. But sense of humor is third. Kindness is in there. ‘Cares about me personally’ is in there. Stars aren't just good at the job. People like being around them.

Benefits of a Star Manager

If you want high employee morale, low turnover, and strong business results, recruit, develop, and nurture your Star Managers. They create a beautiful work environment where employees feel valued and motivated. They also make your life easier, because they're the one part of the org chart you don't have to think about at 2am.

How to work with a Star Manager

The mistake most founders make with a Star is to leave them alone. They're fine, right? They're crushing it. Wrong. Neglect is how you lose them.

• Autonomy and empowerment: Let them make decisions and lead their teams with minimal oversight. Trust their judgment and get out of the way.

• Challenging assignments: Put them on high-impact projects, strategic initiatives, the thing keeping you up at night. Stars get bored, and bored Stars start taking recruiter calls.

• Opportunities for growth: Advanced training, industry conferences, executive education. Back their development so they keep getting better on your dime, not someone else's.

• Mentorship and coaching roles: Have them develop your next generation of leaders. It builds your bench and keeps them invested in the company's future rather than their own exit.

Once you know you have one of these managers on your hands, you need to keep them happy. Give them raises before they ask, offer extra equity, and create buy-in however you can. Hell, give them a kidney if they ask. You will kick yourself if you lose a true star.

The Nice Manager

This next manager is tough. Nice Managers are those who create a positive culture but struggle to hit business targets. You know the type; everybody loves them, but they add very little strategic value. Their teams may be happy and loyal. But they lack results.

And worst of all. Getting rid of them means the culture will take a hit. Having a Nice Manager on your team can counterintuitively be a real ball-ache.

Challenges of a Nice Manager

The patron saint of Nice Managers is, of course, Ted Lasso. Yes, I know, I wrote a whole piece on his leadership genius. Stay with me. Beloved by the players. Baked biscuits for the boss every morning. Turned a dressing room full of egos into a family. And at the end of season one, AFC Richmond got relegated.

That's the Nice Manager in a nutshell. The vibes are immaculate. The scoreboard is not. The good news is that Ted didn't stay there, and the rest of this section is about how you get your own Ted to season three.

Interestingly, Welch had a soft spot for this type. In his framework, the manager who shares the values but misses the numbers gets a second chance, maybe a third. He figured you can teach someone to hit a target a lot more easily than you can teach them to give a shit about people.

How to work with a Nice Manager

Nice Managers usually don't have a motivation problem. They have a hard-conversation problem. They can't tell Dave his work is bad, so Dave's work stays bad, so the team misses the number. Fix that and half the battle is done.

• Coaching on critical conversations: Training and role-play to build their confidence in delivering tough feedback. Help them find a style that's direct but still feels like them. Kind and direct are not opposites.

• Goal setting and visibility: Clear, achievable targets with action plans, tracked somewhere everyone can see. Nice Managers read the room well and the scoreboard poorly. Put the scoreboard in the room.

• Skill development: Training focused on strategic thinking and decision-making, not just people skills. They've already got those.

• Accountability partnerships: Pair them with a mentor or a more results-driven manager. Some of it rubs off, and it means someone other than you is holding them to the number.

This type of manager will challenge you as a leader, especially if you are high on empathy. You will forever see the bright side. 'If only they can figure it out,' you'll tell yourself. And maybe they will. With the right amount of support, you can move this person from a Nice Manager to a Star, but not always.

The Taskmaster

Many pundits would say the most famous example of this management style is Elon Musk. And after reading Walter Isaacson’s 2023 biography, I find it hard to disagree.

The hardcore email went out at midnight. Click yes by 5pm tomorrow or take three months' severance. Hundreds of engineers looked at the button, looked at their families, and quietly took the severance. Twitter kept the lights on: barely. Tech startups with a growth-at-all-costs mentality have managers who fit this profile. They deliver results but create a stressful work environment. In a simpler framing: a shit place to work.

Yes, Elon is an example of someone who has conquered the business world with this management style. But for every Elon, there are a thousand managers working on less innovative, world-changing products that simply lose the team and tank their company by operating this way.

Welch, for what it's worth, called this the hardest call of all. The manager who delivers the numbers but doesn't share the values. His conclusion, after years of looking the other way, was that GE couldn't afford to keep them. Every manager you tolerate tells the rest of the company that the values are optional.

Impact of a Taskmaster

Having a demanding manager can lead to high turnover, employee burnout, and potential long-term brand damage. That said, if you can align them with the company's values, they become an asset. They can move straight from a problem to the ultimate solution for you and your team.

The tricky part is that Taskmasters are often your best individual performers. They got promoted because they shipped. Nobody checked whether anyone wanted to work for them.

How to work with a Taskmaster

The Taskmaster's problem is almost never competence. It's that they don't see the wreckage because they're already three miles down the road. Your job is to make the wreckage visible and make it cost them something.

• Address issues promptly: When their behavior hurts the team or clashes with your values, deal with it fast and be specific. Not "work on your people skills." More like "two engineers told me they're job hunting because of Thursday's review." Taskmasters respect data. Give them data.

• Align incentives: Build retention, team engagement, and employee satisfaction into their metrics and bonus. Watch how quickly a results-obsessed person starts caring about results you actually measure.

• Coaching and training: Guidance focused on communication and how to deliver feedback without leaving a crater.

• Model good leadership: Lead by example. If you're sending 11pm Slacks and sighing in meetings, you've lost the argument before it starts. They're watching what you reward, not what you say.

Remember, as a leader, fostering a positive culture and retaining top talent is your job. By actively managing and developing all leaders, including demanding ones, you make sure the entire organization is aligned and set up for success.

1761, London Stock Exchange

There was a term that rose to prominence in the 18th century at the London Stock Exchange to describe a stockbroker who defaulted on his debts. First heard in writing in 1761, it bemoaned someone who had fallen behind: the laggard. Someone who was failing; a person of ill repute.

Defaulters were named on a board at the Exchange and barred from the floor. Which is roughly what we're about to recommend, minus the board.

_{*The following image actually has nothing to do with the London Stock Exchange. Looks like it does, though, right?}

The term was 'The Lame Duck'. In the literal sense, the term refers to a duck which is unable to keep up with its flock, making it a target for predators. This will be the unfortunate moniker of our final manager archetype.

The Lame Duck

When working with a Lame Duck, there will have been a time when you thought they were going to work out. A hot recruit you have brought in from outside, with all the potential in the world. But then it all started to move in the wrong direction.

The classic version goes like this. You hire a manager from a company with a logo everyone recognizes. Great CV; great references; great at running a 40-person team with a budget, a recruiter, and a PMO. You have 30 people and a Notion board. Six months in, they've hired two people who report to nobody; the team is confused, and the number hasn't moved.

And then one day you wake up, and you realize: 'Holy shit, Bob is a Lame Duck.' If and when that day comes, you know what has to be done. Speak with HR, follow the processes, but for God's sake, get that person out of your organization as fast as possible.

The reason founders don't is sunk cost. You spent four months recruiting Bob, told the board about Bob, and told the team Bob would change everything. Firing Bob means admitting you were wrong about Bob. Do it anyway.

Consequences of a Lame Duck

The presence of this manager type can lead to low employee engagement, high turnover, declining overall business health, not to mention a lowering of the organization's standards as a whole.

That last one is the killer. Every week a Lame Duck stays in their seat, your best people are watching and quietly recalculating what the bar actually is around here.

How to work with a Lame Duck

Be honest with yourself about the odds first. The Nice Manager has a fixable problem. The Taskmaster has a fixable problem. The Lame Duck has two problems and usually no idea they have either. You owe them a real shot. You don't owe them a long one.

• Intensive coaching: Focused sessions on specific deficiencies, with clear milestones and dates on them. If they're going to turn it around, you'll see movement inside a month.

• Performance Improvement Plan: A PIP in writing, with defined goals, timelines, and success metrics. It protects them as much as you, and it means nobody is surprised when the conversation comes.

• Reassignment or termination: If there's no significant improvement, ask whether there's a seat in the company where they'd be a Star. Sometimes there is. Usually there isn't, and you need to let them go.

Welch, for the record, called this one the easy call. Misses the numbers, doesn't live the values, out. Nobody at GE lost sleep over the Type IIs.

Our final management archetype is, in many ways, the easiest to manage. If you have a Lame Duck on your hands, and you've done what you can but you cannot help them, there is only one thing left to do. It's time to send them waddling off into the sunset.

Good vs bad managers: the data

As we move towards the end of today's piece, I would be silly to not add some data to the conversation. The Predictive Index conducted a 2018 people management study in which 5,103 employees took part. It's getting on a bit now, but nothing I've seen since has contradicted it. First and foremost, great bosses give just the right amount of feedback.

Too little and people feel invisible. Too much and they feel micromanaged. The sweet spot is a 9 out of 10 rating. Everything else drops off a cliff.

It also showed that people’s energy towards their job was hugely affected/effected (I can never tell) by how they viewed their manager. It was also really important that their managers were not only respected, but liked.

Another key finding is that bad managers are typically self-centered and also lack any self-awareness. Which tracks. Nobody in the history of management has ever described themselves as a Lame Duck.

Gallup has been banging this drum for a decade. Their number is that managers account for about 70% of the variance in team engagement. Not the CEO. Not the perks. Not the mission statement on the wall. The person you report to. And in their latest global report, manager engagement itself dropped, which is a worrying thing to read if you've just cut a third of your management layer.

But other studies have shown that although bad management can have a real impact on retention, leadership matters more. Take a look at these stats from Culture Amp.

So it's clear: managers matter, but leadership matters even more. A great manager under a poor leadership team only keeps 38% of their people. A poor manager under great leaders keeps 60%. Read that again. Your managers can't out-manage a bad executive team, and that team is you.

Interestingly, the most important thing that trumped all was development opportunities. Culture Amp's research shows that employees without access to consistent development opportunities are twice as likely to leave within a year.

How you can apply this

• Categorize your managers: Get a whiteboard, draw the matrix, and put every manager's name in a box. Be honest. If you hesitate on someone, that's your answer.

• Tailor your approach: Stars get room and harder problems. Nice Managers get coaching on hard conversations. Taskmasters get their incentives rewired. Lame Ducks get one honest shot and a deadline.

• Model the right behaviors: Your managers manage the way you manage them. If you want balance, show them balance. If you reward output only, don't be surprised when you breed Taskmasters.

• Prioritize growth: Development opportunities beat everything else in the retention data. Invest heavily here, for the managers and for their teams.

• Embrace the journey: A manager's growth is not always a straight line. Someone may start slow but become a Star with the right guidance and support. Ted got there. Bob might not. Your job is to find out which one you're dealing with.

Summary

Managing people is hard. Whether it's your new VP of engineering, a decade-long rusted-on CFO, or the reluctant but true Heir to the Kingdom of Gondor, you need experience stewarding people through different stages of their careers. Some leaders might start out looking like deadbeats, but go on to do great things. Others will take time to understand and fit your culture. And then there are those whom you love but simply refuse to hit their goals.

And in a world where everyone is flattening the org chart, the managers left standing carry more weight than ever. Fewer of them, more riding on each one. Which means the matrix isn't a nice-to-have anymore. Your job is to enable people and to help them get the best out of themselves. For your sake, the company's sake, and most importantly, their sake.

Extra reading

• How to Make Employee Development Part of Your Culture - April, 2022

• 20 management books to read - January, 2023

• How to give effective feedback - March, 2024

And that's it! You can follow me on Twitter and LinkedIn, and also don’t forget to check out Athyna while you’re at it.

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