When this topic was raised at AAMA Shanghai CEO/entrepreneur workshop this afternoon (thanks Shaowen for the invitation),  serial entrepreneur Nick Yang (founder of Chinaren, Kongzhong, and most recently Wukong Search) affirmed that you must act like a DICTATOR -

You should make decisions all by yourself. And you must not treat everyone in your company as your friend, even if he used to contribute a lot.

“Having someone super smart but also ambitious on your team will be dangerous. If you give them too much decision power, they will start thinking that they are smarter than you and feeling unfair of the status quo, which leads to a resignation,” said Nick.

Though this sounds very aggressive, I have to admit that it is exactly the case in many companies, around the world.

To solve the problem, Nick suggested to hire someone you know or referred by your friends rather than the best one in the market.

According to Ku6 founder Kevin Li who sold his company toShanda, entrepreneurs mostly have “something special”. But I guess what Nick was trying to say is that – you CANNOT hire someone who has “something special”. You need to LEAD and let your staff to FOLLOW, rather than have an open space.

From my understanding,  it’s better to have generalists than specialists within a start up. They can help you solve all kinds of problems. My own little secret is to hire someone quirky and don’t have those boring long-term career plans as most others do But this doesn’t happen very often. If it’s too hard, then simply hire someone less smart but stable and comfortable with an start up environment.

After that, Nick suggested to hold regular meetings with staff, just like what CPC did in Yan’an. This could help remove some negative thoughts among staff. It works like brain washing, as you are the DICTATOR. And when someone isn’t doing his job, you need to fire fast to keep the morale within the company. Nick also suggested to only communicate with approximately five people in the company who lead the sales directly, and don’t need to care about the rest in your company.

I bet most employees won’t like those dark thoughts of the entrepreneurs. But Nick came with the DICTATOR conclusion after successfully exiting from his previous two ventures (Chinaren which was sold to Sohu, and Kongzhong which went public on Nasdaq). He discolosed that he once faced with group resignation at Chinaren, and also became the target of anonymous letters sent to the mass media when Kongzhong was going public.

“That’s how you do business in China,” said Nick, a Stanford graduate.

Then I came to think about Zappos, the shoe seller famous for their happy company culture and was acquired by Amazon for USD$850 million. I do adore their culture. But I also notice that CEO Tony Hsieh always looks serious and seldom smiles even under funny circumstances. I can’t help wondering – is Tony trying to scare his staff and be the DICTATOR?

What do you think?