CEOs have a reputation of being unempathetic, profit-driven, corporate pigs.
In many cases, CEOs have little care for the mental and physical health of their employees,
and the only thing they care about is overall employee output.
Unfortunately, most of the famous CEOs and founders in the world exhibit many of these
characteristics, and this has caused many people to assume that there’s no such thing
as a good CEO, at least from an employee’s perspective.
But this is actually not the case.
There are dozens of fortune 500s CEOs that are cherished by their employees.
And Glassdoor regularly makes a list of the most approved CEOs in the world based on the
millions of employee reviews on their website.
The executive that tops the list is Shantanu Narayen, the CEO of Abode who enjoys an approval
rating of 99%.
Now, technically Rich Lesser did edge him out in 2021, but if we go back to the 2019
list, we’ll see that Rich Lesser doesn’t make the top 100 while Shantanu is still number
5.
I went ahead and did the math and Shantanu Narayen has the highest average rank since
2019.
So, here’s how Shantanu Narayen became the CEO of Adobe and skyrocketed the company while
being an employee favorite.
Taking a look back, Shantanu Narayen was born on May 27, 1962, in Hyderabad, India.
He was born to a pretty well-off family as his father owned a plastics company and his
mother was an American literature professor.
Despite his parents high status within society, Shantanu didn’t really have any massive
ambitions.
Really, all he wanted to do was become a journalist and play cricket.
This is actually a super interesting point as Satya Nadella, the CEO of Microsoft and
another top-ranking CEO on the glassdoor list, also didn’t have any massive ambitions.
It seems like there’s an inverse correlation between ambition and ego and how good the
individual is as a leader.
Anyway, Shantanu attended a local school called Hyderabad Public School.
When it came to picking a major, Shantanu said that the only real options he had were
engineering and medicine.
And, he was extremely scared of blood, so he went with engineering.
A few years later, Shantanu graduated from Osmania University with a degree in electronics
and communication engineering.
He would then turn around and secure a master’s in computer science from Bowling Green State
University in Ohio in 1986.
After completing his master’s, Shantanu jumped into the workforce scoring a job at
Measurex Automation Systems.
He worked there for a few years before jumping to Apple in 1989 as a senior manager.
Unfortunately, his tenure at Apple was during the worst time period for Apple.
Maybe this was one of the reasons Shantanu was able to score a high-level management
position though, so it might’ve been a good thing.
Shantanu worked at Apple up until 1995 when he left to become a director at silicon graphics.
This didn’t last too long though, and Shantanu would find himself creating his own startup
during the dot-com bubble.
Shantanu and some of his colleagues picked up on the rapid trend towards digital photography.
So, in 1996, they started a business called Pictra.
Pictra allowed customers to share their photos online similar to Facebook and Instagram.
However, after 12 to 14 months in the business, the team realized that the market for an image-sharing
website wasn’t that mature and it was extremely hard to monetize the venture.
So, they decided to try to sell the company to a giant in the creative space: Adobe.
Unfortunately, Adobe didn’t really care about Pictra, but during the acquisition meeting,
Adobe did become extremely impressed with Shantanu.
They wouldn’t offer to acquire Pictra, but they did offer Shantanu an extremely attractive
position as senior vice-president of worldwide product development.
As you would guess, Shantanu ditched Pictra shortly after and took on the role at Adobe
in 1998.
At Adobe, Shantanu’s biggest contribution before becoming CEO was deal-making.
Throughout the late 1990s and early 2000s, Shantanu closed 350 deals for the company,
mostly with media firms like Viacom, CBS, and PBS.
This is why basically every media and gaming website in the world used Adobe Flash in the
late 2000s and early 2010s.
Given Shantanu’s incredible ability to close lucrative deals, I don’t think you’d be
surprised to hear that he was promoted to COO in 2005.
Just two years later in 2007, Bruce Chizen the CEO of Adobe at the time announced that
he would be stepping down, and this allowed Shantanu to become the CEO of Adobe in December
of 2007.
At the time, Adobe was in a rather awkward position.
The company stock had gone sideways for 7 years and it was about to get crushed by the
2008 financial crisis.
On top of this, Adobe had a major piracy problem on its hands and Adobe flash was about to
get squashed.
So, Shantanu had to revive Adobe for the new mobile era, and his first step in accomplishing
this was to making Adobe a subscription business.
Back in the day, Adobe came out with a new Photoshop and a new Premiere Pro every year.
You had versions like Photoshop 2006 and Photoshop 2008.
Adobe sold these versions as one-time purchases that consumers could buy for a few hundred
dollars each and use for life.
The problem though was that most of these upgrades were rather small and incremental,
and Adobe only came out with a major overhaul once every 3 to 5 years.
Given how expensive the products were, most customers simply skipped the incremental upgrades
and only bought the major overhauls which meant that Adobe only made revenue from each
customer once every few years.
Shantanu addressed this shortfall by making all of Adobe’s creative software a subscription.
Most professional customers embraced this change as it actually made more sense for
them as well.
Instead of dropping $500 on Photoshop and $500 on Premiere Pro and $500 on After Effects
every three years, creative professionals could pay $50 per month to have the latest
software from Adobe at all times.
On the other hand, many people complained about having to $50 per month, and many of
you guys may think that this is way too much.
In reality, it’s not your fault for thinking that and it’s Adobe’s fault for charging
that much.
This simply means that you’re not part of the target market that Adobe’s targeting.
So, Shantanu fought piracy by making the revenue that Adobe did make from professionals more
consistent and reliable.
At the same time though, Adobe didn’t make it that much harder to pirate their software,
and this was intentional.
Adobe is a massive tech company, and they could easily make their software unpirateable
if they wanted to.
I mean it literally took the FBI 13 years to simply crack the iPhone’s passcode lock.
So, I’d be willing to bet that Adobe’s 21,000 employees could easily make their software
unpiratable.
However, Adobe knows that everyone who is able to pay for the software does pay for
it.
Here’s the thing, Adobe’s entire customers base is creatives who know firsthand how hard
it is to create and run a business.
And while some of these creatives may complain about Adobe’s pricing, I’d be willing
to bet that 98% of creative professionals who can afford Adobe software do indeed pay
for it myself included.
Now, of course, there’s a 2% who are unethical and immoral, but for the most part, creatives
are willing to pay Adobe $600 per year to legally get the software that makes their
entire career possible.
With that being said, making Adobe software unpiratable wouldn’t really increase Adobe’s
revenue.
However, it would cut off up-and-coming creatives from even trying the software.
So, I think Adobe strategically made their software difficult to pirate but not impossible.
And I think this is perfectly showcased in how they address pirated software.
A few years ago, Adobe launched something called Adobe Software integrity service.
This software comes along with all of Adobe’s creative apps and is able to detect if the
software you’re using is pirated.
If it is pirated, every time you open premiere pro or Photoshop, it’ll tell you that the
software is pirated.
But guess what, it doesn’t actually prevent you from using the application.
It simply reminds you every time that you’re using pirated software.
And I think this approach embodies Shantunu’s entire tenure as CEO and why he’s such an
admired leader.
Shantanu doesn’t lead by force, he leads by integrity and transparency.
Adobe could disable the pirated software from being used right when they detect that it’s
not genuine.
Or even if they don’t want to do that, they could at very least run ads on pirated software
to partially monetize it.
But they don’t even do that.
They simply notify users that they know that it’s pirated software, and they try to encourage
users to pay for Adobe software by appealing to their morals and ethics.
This is the same approach Shantanu uses with all of his employees.
Nowadays, many tech companies are under the false impression that they can buy the loyalty
of their employees.
They pay absurd salaries like $200,000, $400,000, $500,000 per year, yet they’re not able
to hold onto their employees.
Take a look at someone like Mark Zuckerberg.
He pays his employees extremely well and gives them every amenity you can think of.
The median salary itself at Facebook is $240,000 per year.
Yet, Facebook also had the highest turnover rate in Silicon Valley until this year.
Meanwhile, the median salary at Adobe is $134,000 per year.
This isn’t a low salary by any means, but it’s also not absurdly high like their tech
neighbors across the street.
Adobe also doesn’t have free restaurants on campus and they don’t give their employees
company cars, but what they do give their employees is absolute freedom.
There’s no clocking in or clocking out.
There’s no manager nitpicking everything you do.
And there’s no one forcing you to even do anything.
Shantanu believes that great employees are self-motivated and that their output is far
superior to anything that could be forced out of them.
Now of course, if you abuse this freedom and slack off, you’re gonna get fired.
But, employees who use this freedom responsibly love it.
In fact, most of the reviews on Glassdoor and Indeed cite workplace culture as the best
thing about Adobe.
And considering all of this, I don’t think you’d be surprised to hear that Adobe ranks
#2 in North America for best company culture, only beaten out by Google.
And as Shantanu expected, this insane performance in the employee and customer satisfaction
categories has carried over to Adobe’s financials.
When Shantanu became CEO in 2007, Adobe was profiting about $500 million per year.
Today, they’re profiting $5 billion per year.
The company has consequently grown from a $20 billion company to a $320 billion company.
And that’s how Shantanu Narayen blew up Adobe while staying in the good graces of
his customers, employees, and investors.
Do you wish your boss was like Shantanu or if you’re in a leadership role are you like
Shantanu?
Comment that down below.
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