A Case Study in Managing Co-Founder Conflict

Assessing when the leaders pull the business in opposite directions.

This case study deals with the a series of complex social conflicts arising from a precariously established company culture at the new and rapidly growing company, Box, Inc. in 2015.

Box specializes in online file sharing and personal cloud content management, founded in 2005 with the company motto of Simple, Secure, Sharing from Anywhere.

Recently, the top executive team at Box was faced with the issue of preserving the efficiency and culture of their start-up in the expansion of their business to accommodate one thousand new employees in new locations: San Francisco, London, Paris, and even some increases in employees at the company headquarters, Los Altos, California.

The relevant individuals in deciding how to approach this issue relating to company culture are cofounders of the company, Aaron Levie (29) and Dylan Smith (28) along with Chief Operating Officer Dan Levin (50) who sought to reproduce the conditions that lead to their own success, what they termed a “secret sauce” in the organization and administration of these expansions.

Historically, Box rose to prominence through the strong leadership and creative efforts of the above individuals, along with a few audacious moves to acquire funding and to breach the market. This captures the brief background information surrounding Box’s current situation and past.

To begin, the initial problem manifests in the range of different visions and the diversity of approaches or management styles present at the executive level administration for Box during this time of expansion. However, the major issue came with the unyielding and uncompromising personality of Aaron Levie.

The study notes the positive aspects of Aaron’s dedication and commitment, but also the negative impacts on the company’s decisions arising from his refusal to compromise:

“He consistently made, and was celebrated for, smart strategic choices in an evolving and rapidly changing technological climate, which he tried to reinforce while not automatically winning every argument” (9).

One of Aaron’s colleagues Sam Ghods elaborates on the issue:

“Aaron is one of the most stubborn people I have ever met, He has an unshakeable will to do what he thinks is right. Because of it, we are pushed to our eights and miss some opportunities…” (10).

Ghods goes on to say how Aaron’s negative behavior is reinforced when his adamant refusal to compromise leads to a success for the company, and this vindication that Aaron receives drives him further away from others as he believe that the opposition of others was resultant of their not being in line with the company vision as much as he is.

Though Aaron’s lack of cooperation in some instances has not significantly damaged the culture or business of the company, it has the potential to turn into a more serious organizational issue. In one of the descriptions concerning the rapid growth of the company, Ghods notes how it is easy for very competent and qualified individuals to become alienated:

“He had to dismiss a VP of engineering who was liked but isolated and secluded. The VP had created his own fiefdom and did not value aligning with the rest of the organization. This created tension, because he saw his role as protecting engineers from managers…” (8).

Aaron may be at risk for a similar alienation should the circumstance present itself, and a leadership failure at that level could be seriously detrimental to the stability of the company.

Maintaining a quality culture and a sense of cohesion and unity among this group of rigorously selected individuals across multinational boundaries at all organizational levels appears to be the primary problem resulting from Box’s rapid growth.

In analyzing the company and its problem from a social perspective, it is important to understand how Box stands with regard to its organizational culture and how its leadership aligns with such culture.

Theory surrounding organizational culture defines organizations first as

(1) social entities that

(2) are goal-directed,

(3) are designed as deliberately structured and coordinated activity systems,

and (4) are linked to the external environment

The organizational frame which with the approach Box, Inc. is through the interpretation of the organization as a complex adaptive system, since Box is currently attempting to adapt to the consequences of international expansion and the administrative and cultural adjustments that must be made as a result for the company.

Moreover, the complex adaptive system is perfect for characterizing the behavior and motives of Box because it centers on how organizations must interact and adapt to the environment in order to survive, calling on elements such as learning and evolving, self-organization, and interdependence to achieve this adaptation. Aaron Levie’s intentions for his company culture and organization are in line with this model of the complex adaptive system as the case study describes:

“Although Levie was extremely wary of becoming bureaucratic and ossified in order to remain responsive to changes in the market, he did not want to ignore the need for discipline and operational excellence” (6).

With regard to this framing of organizational culture and how organizations address problems, Box must have the four features mentioned above. These features of the organization are addressed in the ideal set of values envisioned by the executives of Box:

“Believe your epic ideas are possible. We hire the best: trust each other. Blow our customer’s minds in everything we do…” (4).

The majority of Box values follow the theme of doing good work and embracing one’s individuality and contributions to the team. This culture is especially effective in supporting the company’s mission and vision of safe, secure and speedy delivery of information over cloud networks, as it promotes individuals to strive for excellence and to trust each other in that each individual will put forth their best work and ideas.

For the organizational culture of Box, the challenge is a balance between the rigor of the standards to which they hold their employees, and the flexibility of the company itself during periods of rapid growth in the ability of the company to change and restructure itself in accordance with any particular set of circumstances.

Yet, this analysis of organizational culture does not fully capture the problem. The problem actually lies more closely with the company’s leadership, especially with Levie’s personal leadership style, which places him as domineering and stubborn in the eyes of some of his colleagues, generating tensions. Again, there are no real issues to the team in terms of individual style due to Box’s rigorous screening standards:

“One thing we do is train our managers on the Box hiring bar. New managers take six months of kicking and screaming because we say no to particular hires they way” (6).

At the lower levels of organization, individuals concerned with the technological advancements and research for the company experience no issues with the team, because their individual excellence functions as their strength when considered in combination with the accomplishments or advancements of others. There is a spirit of collaboration for individuals at this level, because of Box’s valuing of trust.

However, at higher management levels, such as the ownership and major leading role that Aaron Levie plays within the company, individual styles have the potential to drastically affect the team dynamic.

The issues with Levie have already been documented above, so an analysis of his problematic leadership behavior with regard to an analysis on leadership styles is given. Levie’s commanding and unyielding leadership style follows a power distance orientation when his vision or goal does not match with those of other individuals or leaders.

Ghods refers to this issue, citing how difficult it is to work against Levie’s position. Levie’s unwillingness to accept the ideas of other violates some of the values under which Box is founded, such as the one which stresses the mutual trust of individual abilities to be the best.

Though Levie expects others to trust his decisions, he does not extend that level of trust to the decisions of those he believes are wrong. Levie himself even points out this issue:

“Most of my time is spent fighting with people here! The first three months of a new person, I can get my way. Then they see a culture where people can push back, so they don’t passively go along” (11).

Levie’s philosophies regarding interactions with his employees, colleagues, and other members of Box are troubling, because his frustrations with others ostensibly stems from his inability to control them or “have his way”. There is an authoritarian glint and desire to Levie’s leadership style when dealing with others. With regard to the effects of leaders in their relational capacity, Levie engenders dissonance, creating interpersonal discord (as with Ghods) and negative emotional tones in his frustrations over how some individuals “don’t passively go along” with his ideas and leadership.

Furthermore, some features of Levie’s response to Ghods’ claim that he is stubborn and difficult to oppose or compromise with indicate signs of power stress.

Levie has an obsession with making Box the best possible business, to the point where it appears overbearing even to some of his close friends and fellow executives: “Jeff Queisser, another long-time friend, had his own take on Levie and the pressure Levie imposed on the organization through his aspiration, as well as his belief that the market was vast and they had to compete on almost every front” (9). Levie himself states that he values the ends over the individuals in some cases:

“Most would say I like to micro-manage… What I really care about is to implement a process to stay attached to the ground…” (11).

These negative behaviors that Levie expresses are resultant from the stress of leadership, such as being faced with complex decisions and communicating under uncertainty, show through how Levie constantly worries about if Box is on top of their game in competition with other companies and through Queisser’s comment that Levie wanted to compete on almost every front.

In order to truly make Box a successful business, change must take place on several fronts, but with Aaron Levie’s attitude in particular. As it stands, only Levie’s enthusiasm and drive to improve are aligned with Box in their commitment to excellence. However, in this enthusiasm, Levie does not effectively lead because he solely follows his own convictions with little consideration of the perspectives of others once he is committed to a course of action.

This pattern of dissonant leadership is dangerous and may lead to losses in the company due to incivility, a reduced efficiency in the work ethic of Box employees. Levie must begin to reconcile the strength of his drive with the organizational needs of his business and aspire to be a resonant leader that seeks to persuade and engender feelings of positivity rather than to rule and convince others of their mistakes.

Being able to channel his passion for Box in a way that can be shared by others around him would make Levie a much greater asset to the company, as his enthusiasm and expertise would be more widely accepted and appreciated. Once Levie begins to treat his employees with more respect, he may feel better and less frustrated as a leader through renewal, as well as being a more effective leader than he would be opposing those with different perspectives or visions than him.

On another level, Box should not be afraid of the ossification that greater bureaucratization may bring, as it may be a necessary step for the transition of their company to a global stage. Box should worry less about compromising its company’s values and allow for a brief, transitory period of increased bureaucratization in order to efficient establish themselves, before reintroducing company ideals and culture to sustain and thrive in their new environments.

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