Great Leaders Make Themselves Obsolete: Eric Sager's Leadership Philosophy

Key Insights

• Build for absence: True leadership success means creating an organization that functions excellently without you, allowing you to focus on emerging opportunities.
• Culture over milestones: Treating IPOs, acquisitions, and major events as single milestones—not end goals—keeps teams focused on long-term mission rather than short-term wins.
• Intentional hiring for culture: Hire people who genuinely believe in your company's mission, not just those seeking financial exits or resume credentials.
• Spare capacity is strategic: Maintaining 20% unused organizational capacity enables rapid response to threats and opportunities without sacrificing existing work.
• Stay at the point of attack: Spending time directly with customers, frontline employees, and partners maintains business intuition and operational feel—essential as companies scale.

Building Organizational Resilience

The mark of exceptional leadership isn't what you accomplish while present—it's what continues after you leave. Eric Sager, COO of Plaid, measures his success by whether the company would "be just fine" if he got hit by a bus tomorrow. This isn't about making yourself invisible; it's about building systems, teams, and culture robust enough to sustain momentum independently.

This principle emerged from navigating Plaid through multiple crises: the pandemic, a failed Visa acquisition, market downturns, and AI disruption. Rather than treating these as existential moments requiring constant executive intervention, Sager views them as "milestones among many." The key difference between companies that fracture under pressure and those that endure lies in how leadership frames these events internally. If you build a culture obsessed with any single outcome—an IPO, an acquisition, a product launch—you've fundamentally weakened your organization. You're asking people to invest their energy in something external and temporary rather than in the enduring mission.

Culture as Competitive Advantage

Defining company culture deliberately separates mediocre organizations from great ones. Sager distinguishes between founders who deliberately craft culture versus those who treat it as an afterthought, letting it emerge randomly from what's happening around them. Once you've formalized your values, three execution steps become critical: hire explicitly for cultural fit, especially in leadership; build reward structures (promotions, raises, equity) tied to cultural contribution, not just results; and maintain discipline when short-term goals conflict with long-term values.

The hardest moments come when a shortcut could deliver better quarterly metrics but compromises cultural principles. That's when truly excellent leaders hold firm. Once you make one exception, Sager notes, the second, third, and fourth exceptions follow. Your culture collapses not in one dramatic moment but through accumulated compromises.

Even high-performing employees who violate culture need direct, honest feedback early. Most people respond well when told their behavior is being perceived negatively, assuming good intent and offering a chance to course-correct. Sager describes multiple cases where "assholes" became cultural champions after receiving candid feedback and believing the leader genuinely invested in their growth.

Organizational Design: Generalists vs. Specialists

As Plaid grew from startup to scale, the company evolved from a single-customer-type approach to specialization by company size (small, medium, enterprise), then by vertical (fintech, banking, wealth), then by product (payments, fraud, credit). Each phase improved customer outcomes but introduced complexity and reduced organizational flexibility.

The trade-off is real: specialists deliver better customer experiences, but generalists provide fungibility—you can move people around more easily. Sager learned this lesson by making both mistakes: specializing too early in some areas (building large teams for zero-to-one products), and staying too general in others (missing important customer divergence). His current approach balances both: maintain some spare capacity, avoid unnecessary middle-management layers, and keep decision-making clear (one decision-maker per decision, not a committee).

The structure must remain flexible. If your market shifts and you've hired 100 startup-focused salespeople but enterprise demand surges, you have a serious mismatch. That's why maintaining some organizational slack—not running every team at 100% capacity—isn't waste; it's optionality.

Staying Connected as You Scale

The greatest risk at scale is losing operational feel. When a company is tiny, everyone knows what's happening. As you grow, you move from personal observation to dashboards and staff meetings, and your instinct decays unless you actively fight for it. Sager's antidote: spend time directly with individual contributors, customers, and partners regularly. He doesn't do this as performance theater; he literally calls engineers, joins customer calls, and negotiates deals himself.

This hands-on approach initially startles new employees who don't expect the COO to phone directly. But Sager sees it as essential—not to micromanage, but to stay sharp and maintain credibility. He compares it to skill-building: brief daily practice (30 minutes with frontline teams, every day) builds capability far faster than occasional deep dives. This isn't rocket science; it's discipline and genuine passion for the business.

His calendar typically splits as: 20-25% ecosystem health, 50% business health (working with customers), 25% team development. His Monday leadership meetings always start with the same question: "What have you learned from a customer this week?" This forces his executive team to maintain the same connection he does.

The IC Work That Still Matters

Even as COO of a major company, Sager allocates roughly 20% of his time to individual contributor work he enjoys—negotiating certain partnerships, closing strategic deals, joining customer calls where he can make decisions instantly. This isn't indulgent; it's strategic. Because he's been at Plaid so long and has deep customer relationships, he can say yes or no to opportunities faster than anyone else in the organization, which unlocks growth.

The remaining 80% focuses on where he can uniquely move the ball forward: identifying one-way-door decisions (where failure is irreversible), assessing whether the organization has the talent to handle something without him, and determining true importance. When you have a strong team executing well, you actually gain spare capacity—a feature, not a bug. That slack allows you to lead a crisis or capitalize on emergent opportunities without cannibalizing planned work.

Hiring for Mission, Not Credentials

When evaluating executives, Sager looks for genuine belief in Plaid's mission first, expertise second. In interviews, he asks what other roles candidates are considering. If the answer is a disconnected list (AI company, fintech, something else), it signals they're chasing perceived momentum, not mission. References help: he calls customers to ask if they actually knew the executive when that person worked at their company. The fact that a high percentage of Plaid's top-tier customers know Sager personally suggests his team stays connected.

The executives who haven't worked out share a common thread: they never fully bought into the culture, or they were hired primarily for expertise (the "I did this before" advantage). That perceived edge often erodes within 18 months because anyone in the role eventually sounds like the person who did it before. Without deeper alignment, that expertise becomes a liability, not an asset.

The Founder Advantage

Sager acknowledges a real difference between founders and hired executives: founders possess an unbreakable emotional bond to their creation. While a hired CEO—even one who's had multiple successful exits—can theoretically take greater risks, founders have something irreplicable: the company is their child. They will never quit, never doubt, never sell out the mission for safety. That's not to say all founders are risk-takers (many become cautious when their net worth is locked in), but great founders have a resilience that stems from deep, personal commitment.

This doesn't diminish non-founder executives, but it's worth acknowledging. Sager genuinely loves Plaid, but will never love it the way founder Zach loves it. That fundamental difference enables founders to endure the long middle phase where startups aren't obviously failing or obviously winning—just grinding. Hired executives sometimes quit in that phase; founders rarely do.

People recognize this commitment and extend trust accordingly. Sager finds himself giving Zach tremendous grace on decisions because he has zero doubt about the founder's underlying intent: to do what's best for the business, not himself.

Developing Your Team Into Your Replacement

Sager's greatest growth as a leader, he reflects, has been in how he shows up for his team. Seven or eight people on his team have gone from individual contributors to running hundred-million-dollar businesses internally. This didn't happen by accident; it happened through deliberate investment, patience, and belief.

The sports analogy matters here: coaches who yank players after one bad performance get players who panic and underperform. Coaches who leave players in the game, who show confidence despite mistakes, get peak performance. Sager maintains a low bar for removing someone from a stretch role—the company comes first, always—but until that bar is clearly crossed, he stays committed to helping them succeed.

Once he decides to invest in someone, he has "very little FOMO." He's not constantly second-guessing whether he should have hired the other candidate. He stays dedicated unless something is clearly broken. This kind of commitment is rare and creates enormous loyalty and performance.

What Excellence Looks Like

At Sager's stage, excellence in the COO role breaks into three vectors:

First: Ecosystem value. Is the broader ecosystem of consumers and developers better off because of Plaid's solutions? This isn't purely visceral; Plaid measures it through tangible metrics: overdue fees declining, trading fees down, average APRs improving. Even seemingly small improvements—say, Prime + 7% down to Prime + 6.5%—represent billions returned to consumers. If you're not doing this, you're just extracting rents, which contradicts mission.

Second: Fair value capture. After building amazing solutions and moving the ecosystem forward, is the company getting its fair share? This shows up in usage growth and revenue.

Third: Team and organizational durability. If you left tomorrow, would the organization crumble, or would it thrive? Sager takes pride in believing Plaid would "be just fine." Every time he's made himself obsolete in a role, new opportunities emerged where his skillset mattered again—he simply shifted where he added value. The goal isn't irrelevance; it's to keep evolving your point of attack so you're always uniquely moving the ball forward.

Conclusion

Great leaders don't hoard power or make themselves indispensable—they engineer their own obsolescence. This means building culture deliberately, hiring for mission alignment, maintaining operational connection as you scale, and developing your team so thoroughly that the organization functions excellently without you. The paradox is that by making yourself obsolete in your current role, you free yourself to tackle the next critical challenge. This is how companies endure multiple crises, adapt to market shifts, and compound value over decades.

---

Original source: Why great leaders make themselves obsolete | Eric Sager (COO, Plaid)

powered by osmu.app