Learn why great leaders build organizations that thrive without them. Eric Sager shares COO insights on culture, resilience, and sustainable growth.
Great Leaders Make Themselves Obsolete: A COO's Guide to Sustainable Leadership
Key Takeaways
- True leadership success means building a company that survives and thrives without you
- Culture must be deliberate, not accidental—founders and leaders must actively define and hire for it
- Resilience comes from maintaining spare capacity, not operating at 100% efficiency
- Deep customer engagement is non-negotiable—stay connected to the front lines daily
- Hire for culture fit first, expertise second—expertise can be learned; cultural alignment cannot
Building a Culture That Outlives You
The foundation of sustainable leadership isn't what you accomplish in your tenure—it's what persists after you're gone. Eric Sager, COO of Plaid, frames excellence in leadership as having the conviction to make yourself obsolete.
Culture doesn't happen by accident. Many founders and executives treat it as a byproduct of other business activities rather than a deliberate choice. The first step is to genuinely dedicate time to formalizing the culture you want to build. Once defined, you must hire for it ruthlessly, even in leadership roles. This means making real trade-offs during recruitment. Beyond hiring, your rewards structure—promotions, raises, equity—must reinforce cultural values, not just results.
The hardest moments come when culture directly conflicts with short-term gains. A leader might know a shortcut exists that would hit near-term metrics faster, but compromising on culture rarely stops at one instance. Once leadership allows shortcuts, the pattern repeats, and cultural principles gradually lose their weight. This is where discipline separates great leaders from those who drift.
Managing High Performers Who Violate Culture
Star employees who behave in ways that damage culture present a classic tension. The key is directness and discernment. Often, someone perceived as acting poorly may not intend to do so. A straightforward conversation—"This is being perceived as harmful to our culture; let's try a different approach"—can resolve the issue. Most people respond positively to caring feedback and course-correct over time. In many cases, that "asshole" two years ago becomes a cultural exemplar once they understand the expectation.
Scaling Without Bureaucracy
As companies grow, bureaucracy and slowness naturally creep in. However, size also brings resources to fight it. Plaid has applied several principles to maintain velocity:
Clear Decision Ownership: Even in larger organizations, it's essential to eliminate ambiguity about who owns each decision. In meetings, explicitly state what decisions are being made and who is responsible. One owner is preferable to consensus-driven decision-making.
Minimize Unnecessary Layers: Avoid hiring excessive middle managers. Instead, prioritize frontline talent and senior leadership who can do individual contributor work. This keeps decision-making fast and leaders connected to execution.
Speed Isn't Always Better: In a business like fintech where accuracy matters enormously, speed and accuracy are not equally weighted. A small error in financial data (e.g., reporting $101 when the amount is $101.10) can undermine customer trust and impact life-changing decisions like mortgage approval. In such cases, methodical precision outweighs velocity.
Trade-offs exist across three dimensions: speed, risk, and cost. Being explicit about those trade-offs upfront, and revisiting them as conditions change, prevents false assumptions and enables better execution.
Organizational Design and Scaling Customer Segments
Early-stage companies can operate with a single product and generalized team. As Plaid expanded from authentication to payments, fraud, and credit solutions, customer needs diverged sharply by company size and industry. Startups buying Plaid's products have fundamentally different requirements than enterprise customers like Citibank.
Plaid restructured by creating segments—startup, mid-market, and enterprise—and embedding all customer-facing functions (sales, support, account management) within each. This allowed segment leaders to own the entire customer relationship end-to-end. The benefit was dramatic: improved customer satisfaction, better product adoption, and stronger cross-selling.
However, specialization reduces fungibility. If your organization over-indexes on startup-focused hiring but the market shifts toward enterprise growth, you'll struggle to redeploy talent. The solution is understanding your business trajectory in advance and planning organizational shifts accordingly.
Further evolution added vertical specialization. Rather than treating all enterprise customers the same, Plaid now recognizes that healthcare, fintech, and real estate enterprises have distinct buying patterns and needs. Vertical leaders act as quarterbacks, understanding 80% of use cases in their domain and bringing in horizontal specialists as needed.
Product and Engineering in a Segmented Organization
Multiple customer segments and products create roadmap complexity. Plaid solved this by organizing product teams around product areas (payments, fraud, credit) rather than customer segments. These product teams drive their own roadmaps based on market opportunity and ecosystem impact.
Critically, decisions favor ecosystem health over short-term revenue extraction. A new consumer connection to Plaid benefits all products and solutions. A feature that expands the network—even if it doesn't immediately maximize revenue—often ranks higher than a feature that only serves one segment. This bias toward network expansion ultimately delivers better outcomes for consumers, developers, and the entire ecosystem.
The Discipline of Spare Capacity
Efficient operations at 100% capacity leave no room for course-correction or emerging opportunities. Plaid has consistently maintained spare capacity—both organizationally and at the leadership level. When opportunities like the sudden wave of AI company signups (OpenAI, Perplexity, Replit) emerged roughly 18 months ago, the company could mobilize quickly precisely because teams and leadership weren't already fully committed.
This isn't waste; it's resilience. If every minute of every week is accounted for perfectly, any mistake or unforeseen threat leaves you scrambling for resources. With spare capacity, you can react swiftly to threats and seize unexpected opportunities. It's analogous to sports: playing at 100% intensity every minute leaves you exhausted when the game-winning play is needed. A slightly smarter pace—walking occasionally instead of sprinting—preserves energy for critical moments.
Staying Close to the Front Lines
As companies scale, leaders risk losing direct feel for the business. This feel—gained through direct conversations with customers, engineers, and frontline teams—drives judgment and instinct. The antidote is discipline and genuine passion.
Eric spends roughly 20-25% of his time on ecosystem health, 50% on business health (customer interactions), and 25% on team development. His calendar typically includes customer conversations and frontline team interactions most days. This isn't performative; it's a daily habit reinforced by genuine belief in the products and mission.
A specific ritual: every Monday, his leadership team discusses what they learned from customers that week. This ensures the entire leadership layer remains close to customer realities. The remainder of leadership meetings cover business metrics, but customer insights come first.
This approach requires either deep discipline or genuine passion—ideally both. If you view your business as a financial investment and care primarily about returns, it's difficult to motivate yourself to spend hours daily on frontline activities. Conversely, if you truly believe in what you're building, those conversations energize you.
Hiring for Culture Over Expertise
When hiring, especially for new or uncertain areas, it's tempting to prioritize expertise. A candidate who has built enterprise sales teams before, or who has navigated a similar business model, offers perceived certainty. However, over-relying on past expertise often backfires.
Much of what Plaid builds is novel—it hasn't existed before in the same form. Hiring someone primarily for "they've done this before" can be a mistake because:
- Expertise erodes quickly as the role evolves. After 18 months, anyone in the role will have built similar knowledge.
- It obscures other critical factors—like whether they're genuinely excited about the mission or whether they'll stay and grow with the company.
- Consultants vs. builders: People hired primarily for expertise are often better suited as short-term consultants than as long-term team members.
Instead, hiring for cultural alignment and mission belief, combined with coachability and intelligence, tends to yield better long-term outcomes. Culture and mission alignment are harder to develop than expertise.
Founders vs. Executives: The Irreplaceable Advantage
There's a meaningful difference between founding and joining as an executive. A founder's company is truly their baby in a way no hired executive can replicate. This emotional ownership creates resilience through inevitable ups and downs that would cause hired leaders to leave.
Most companies experience phases of struggle that feel intolerable. Founders like Zach Perlin (Plaid's founder) never quit—not because they're irrational, but because they love the thing enough that momentary hardship never makes them question whether it's worth it. This allows them to develop the skills and perspective only earned through surviving multi-year trials.
As an executive, Eric can afford to take better financial risks and has more optionality. But he will never love Plaid as much as Zach does. That difference in emotional ownership has real implications for decision-making and resilience.
The Paradox of Perpetual Dissatisfaction
After seven and a half years building Plaid through multiple crises, Eric's biggest realization is the challenge of balancing gratitude for extraordinary outcomes with relentless drive for improvement. Most truly successful people share what one observer called "perpetual dissatisfaction"—a restless sense that things could always be better.
This mindset enables continued excellence but carries a burden. It's not a trait everyone should emulate; it requires acceptance that you may never feel a sense of total completion. Yet for leaders committed to truly great outcomes, it's often the secret ingredient.
Growing Your Team to Their Full Potential
The most significant growth Eric has experienced as a leader is in supporting his team. This isn't about tactical skills—it's about creating conditions for people to thrive.
Plaid has developed many individuals from individual contributor roles into leaders of multi-million-dollar businesses. The approach is straightforward but demands commitment: choose the right people, invest in them proactively, and maintain confidence in them even when they make mistakes. If they're anxious about a single misstep costing them their role, they can't perform. If they know you believe in them and will keep them in the game, they often excel after a quarter or so.
This mirrors sports coaching: pull a player after one bad play, and they often never fully regain confidence. Keep them in with genuine support, and they frequently become stars.
The Three Dimensions of Leadership Excellence
Eric frames his own success through three lenses:
Ecosystem Impact: Has the work improved outcomes for consumers and customers? Can it be measured in concrete ways—lower interest rates, reduced fraud, faster access to credit?
Business Health: Is the company capturing fair value for the value it creates? Is the network growing, revenue scaling?
Organizational Resilience: Have you built a team, infrastructure, and culture such that the company thrives without you? If you left tomorrow, would everything continue effectively?
This third dimension is the ultimate measure. If a leader's departure would trigger dysfunction, that leader hasn't truly succeeded. The goal is to build structures, people, and culture so robust that their absence doesn't matter to the company's trajectory.
Selective Involvement: Knowing When to Step In
With a strong team in place, Eric has time to choose which initiatives to lead directly. The decision criteria are:
- Importance: Does it meaningfully move the business?
- One-way door: Is the decision reversible or permanent?
- Internal capability: Are there people with capacity and talent to do it?
If a decision is important and irreversible but talented people are available, delegation is default. If it's a unique opportunity (like early AI deals) that excites him, or where his authority to say yes/no quickly is uniquely valuable, he'll take it personally.
This keeps him sharp and maintains respect from the organization. Stories circulate about the COO joining a call and helping unlock a deal. That's not the intent but a natural outcome of being accessible and capable. It also signals that leadership remains connected to real work, not insulated in strategy.
Conclusion
Great leadership isn't measured by what you accomplish while in role—it's measured by what persists after you leave. Eric Sager's framework centers on deliberately building culture, maintaining resilience through spare capacity, staying connected to customers daily, and investing deeply in people. The ultimate win is making yourself obsolete: building a company, team, and structure so strong that the organization thrives without you. This requires discipline, genuine passion for the mission, and the courage to prioritize long-term culture over short-term shortcuts. It's a demanding path, but it's how truly great companies endure through cycles of turbulence and emerge stronger.
Original source: Why great leaders make themselves obsolete | Eric Sager (COO, Plaid)
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