Corporate therapy for Silicon Valley

April 21, 2014: 4:50 AM ET

Execs at Twitter, eBay, and Dropbox have Richard Hagberg to thank shaping them up.

Hagberg started coaching Dropbox CEO Drew Houston (left) in early 2012.

Hagberg started coaching Dropbox CEO Drew Houston (left) in early 2012. "It's sort of like a very powerful mirror that you shine on yourself," said Houston, who is pictured with co-founder and CTO Arash Ferdowsi.

FORTUNE -- At a going rate of $30,000 a year per client, Richard Hagberg doesn't come cheap. But his clients might argue his services are worth the price.

A trained psychologist, Hagberg has spent the last 35 years of his career as an executive management coach training over 5,000 executives to become better leaders. Many of them work at well-known technology companies, such as Twitter (TWTR), Microsoft (MSFT), eBay (EBAY), and Dropbox. And while the skills he has them hone -- delegating, dealing with conflicts, decisiveness -- may sound like no-brainers, they're vital to the long-term prospects of a company, particularly in an era where startups often live and die by out-innovating their competitors.

Entrepreneurs often go to extremes when managing for the first time: They either shy away from making decisions, or they go to the other end and just micromanage, explained Hagberg, who flies from his Whidbey Island, Wash., home to the San Francisco Bay Area every other week to meet with several of his 20 or so clients.

"As a result, they end up burning out, and they end up having organizational chaos," he adds.

MORE: Satya Nadella needs more than one trick to fix Microsoft

Once an executive hires Hagberg, he puts that client through a series of tests. One test screens the client for nearly 50 different personality elements, such as degrees of optimism, independence, and risk-taking. ("It's like a Myers-Briggs personality test on steroids," quipped Dropbox CEO Drew Houston, one of Hagberg's clients.)

Another test, dubbed the "360," involves getting feedback about the client from up to 20 people: company investors, co-founders, and subordinates. All the data Hagberg collects are brought together in a presentation that he gives to the client. It outlines his or her strengths and weaknesses, and offers a customized plan that Hagberg will use to improve the client's management skills.

"The plan needs to accommodate your personality," explained Hagberg. "If you're extremely shy, your company is going to IPO, and you need to go out there and do a roadshow, that may require some work for you to get over your fear of public speaking, or your general social anxiety."


Entrepreneurs often go to extremes when managing for the first time: They either shy away from making decisions, or they go to the other end and just micromanage, Hagberg says.

Dropbox's CEO Houston recalls undergoing a rigorous battery of data-driven tests when the file-sharing and storage company hired Hagberg in early 2012.

"He has this presentation where he starts going through your strengths," Houston explained. "'Oh, you're really, really creative. You like new ideas,' he'll say, and, 'You're really flexible.' And you're thinking, Oh, that's great. This is going pretty well. Then he goes through your weaknesses: You're bored by routine. You're unreliable. You drop balls. You don't like planning. You're conflict-avoidant."

The truth was harsh, but indispensable, added Houston: "It's sort of like a very powerful mirror that you shine on yourself."

Hagberg worked intensively with Houston over the course of a year, shadowing him, observing his interactions with employees and conditioning the Dropbox CEO to improve on his weaknesses.

For example, Hagberg pushed the typically conflict-avoidant Houston to discuss and confront all company issues head-on. He also studied and worked with the rest of Dropbox's management team to understand which skills they excelled at and which skills were lacking. Hagberg's feedback led Dropbox to hire Google (GOOG) veteran and ex-Motorola Mobility CEO Dennis Woodside as its chief operating officer earlier this year. Indeed, Houston continues to check in with Hagberg on a monthly basis.

Houston is one of 40 or so startup entrepreneurs Hagberg has coached since 2009, and the difference between today's startup founders vs. those of 15 years ago is vast, he says.

MORE: What corporate boards can learn from Delaware

Many of today's entrepreneurs build their companies right after college (or in some cases, right after dropping out of college), whereas founders from decades past generally came to entrepreneurship with more experience in the corporate environment -- experience that Hagberg says can be a disadvantage.

"If you come out of a big company, you may already have ideas about which models are appropriate for organizational structure, human resources systems, or budgeting disciplines," Hagberg said.

Many younger entrepreneurs don't come to a company with those preconceived ideas, he added. Rather, "they arrive with a tremendous appetite for learning and minimal ego problems compared with some of the people I've worked with at big companies over the years."

  • Social data as a business is dead. Long live big data services

    Recent acquisitions by Twitter and Apple are changing the game for big data startups focused on social media.

    FORTUNE -- Yesterday morning, Twitter (TWTR) announced it had acquired Gnip, a company which packages, filters, and sells data from social media streams. The deal raised questions about the hot category of "big data" for social media, particularly for a startup called Datasift, which has raised $71.7 million million in funding from a long list MORE

    - Apr 16, 2014 4:59 PM ET
  • Twitter plays defense with deal for Gnip

    Deal follows Apple's acquisition of Topsy, one of just four Twitter data resellers.

    FORTUNE – This morning Twitter (TWTR) acquired Gnip, a social data company, for an undisclosed amount. The deal will likely mint Gnip's early investors a healthy return, as the Boulder-based startup had only raised $6.64 million in venture backing with 85 employees. Back-of-the-envelope estimates say the company had been running on its own profits for some time.

    The deal marks a MORE

    - Apr 15, 2014 11:11 AM ET
  • Secret co-founder: 'If I were Facebook or Twitter, I would watch closely'

    David Byttow, co-founder of the anonymous social app Secret, discusses his company's talks with Facebook.

    FORTUNE -- Earlier this week, it came to light that Facebook was having talks with Secret, a mobile application that lets people share messages anonymously with the contacts on their phone. Rumors quickly surfaced that Facebook (FB) was evaluating whether to acquire the small company, which despite the buzz only officially launched on Jan. 30. Facebook denied the rumors, and MORE

    - Apr 10, 2014 5:00 AM ET
  • In the era of mobile, the web will live on

    People are spending more time on their mobile phones versus their desktops, but the mobile web still has its place for companies to market themselves.

    By Zachary Rosen

    FORTUNE -- Not long ago, pundits were declaring the death of email due to the rise of Social Networks. They were wrong.

    Earlier this week, Chris Dixon, one of my favorite writers and investors, wrote a piece on what he sees as the inevitable MORE

    Apr 9, 2014 12:46 PM ET
  • Map of the day: Apple iPhones in the city, Android in the 'burbs

    Android or iOS? That may depend -- more than you know -- on where you live.

    FORTUNE -- Do the rich tweet from iPhones and the poor from Androids?

    That was Business Insider's takeaway from a graphic of Twitter usage that painted Manhattan island Apple (AAPL) red and Newark, N.J., Google (GOOG) Android green.

    Patently Apple's Jack Purcher didn't buy it. And with series of maps like the one above, he made the case Friday that when MORE

    - Apr 5, 2014 2:55 AM ET
  • What will social media's giants look like in 5 or 10 years?

    Five years ago, Facebook trailed MySpace, Twitter was busy harpooning its Fail Whale, and LinkedIn was valued at $1 billion and turning a profit. Where will they be five years from now?

    By John Patrick Pullen

    FORTUNE -- Imagine a future where you'll be able to physically reach out to poke your Facebook friends (gross), where tweets are the de facto mode of communication for large-scale emergencies (cool), and where people log into Google MORE

    Apr 2, 2014 5:00 AM ET
  • Weibo's IPO: Rough sailing ahead?

    China's Twitter faces real challenges heading into its IPO.

    By Scott Cendrowski

    FORTUNE -- It's impossible to know whether a company's stock will rise or crash after an IPO. Too many variables and emotions influence the spectacle. But you can take a general pulse of things, and for the upcoming IPO of China's Twitter-like microblog Weibo, it's not very encouraging.

    Formerly Sina Weibo, now just Weibo, the company said it plans to soon MORE

    - Apr 1, 2014 7:46 AM ET
  • Apple v. Samsung II: How to follow the case on Twitter

    Get up-to-the-minute developments from any screen connected to the Internet.

    FORTUNE -- Couldn't make it to San Jose for the second "trial of the century"? Made it to San Jose, but couldn't get into U.S. District Judge Lucy Koh's courtroom to watch Apple (AAPL) do battle, once again, with Samsung?

    Not to fear, Twitter is here.

    Tweeting from courtroom are some of the best tech and legal reporters in the business (although expertise in one area doesn't guarantee it in the MORE

    - Mar 31, 2014 4:59 PM ET
  • Can Twitter's new photo features attract more users without losing its ethos?

    Twitter's new features allowing users to post multiple photos and tag people in a single tweet go beyond the service's signature 140-character simplicity in an attempt to boost engagement. Is that a good thing?

    By Courtney Subramanian

    FORTUNE -- It's no surprise that the most retweeted tweet of all time was Ellen DeGeneres's celebrity-studded photo from this year's Academy Awards ceremony, with 871,000 retweets in less than an hour. Before that social experiment, U.S. president MORE

    Mar 31, 2014 12:52 PM ET
    Posted in: ,
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by VIP.