- In an online post, Binance CEO Changpeng Zhao outlined how he runs his crypto exchange.
- Zhao explained why he ignores rumors in the firm and gives employees feedback in front of others.
- The CEO said he avoids complimenting his staff, but confronts them if they make mistakes.
Changpeng Zhao, the CEO and founder of the world’s biggest cryptocurrency exchange, published a 6,000-word document on Thursday about his management style.
Binance employs thousands of staff members across engineering, marketing, business development, and other roles. The company has been the center of both acclaim and frequent controversy, as it faces concerns from authorities on whether it can be used to transfer illicit funds.
Zhao himself has become a household figure in the blockchain industry. Worth $28.5 billion, the Chinese-Canadian mogul is the world’s 37th richest person, according to the Bloomberg Billionaires Index.
Here are nine takeaways from Zhao’s principles for running his gigantic crypto exchange.
1. Shuffle teams frequently
Zhao believes that Binance’s products and services are dictated by how the firm is organized. If the structure of his teams become “stale,” so will their work, he wrote.
“We don’t want our software to go stale, we need to change team structures often,” he wrote.
Changing up his teams also gives opportunities for new leaders to grow, added Zhao.
2. Give feedback in large group settings
Zhao said he gives feedback “whenever and wherever,” regardless of whether he’s speaking to employees one-to-one or in a large group.
“I in fact prefer to give feedback in large groups, so that other people can learn too and I don’t have to repeat myself many times,” Zhao wrote.
“Many people told me they were shocked the first few times when receiving feedback like that, but got used to it eventually,” he added.
3. Get rid of low performers
“It’s not pretty to hear, but an organization is a little bit different from a family. We care about each other, but we will not carry low performers with us,” Zhao wrote.
“It’s irresponsible for the other members on the team,” he added.
4. Focusing on titles is a red flag
“Don’t hire people who are worried about titles,” Zhao wrote. “It’s not a deal breaker, but definitely not a good sign.”
5. Don’t try to motivate people who aren’t self-motivated
“It’s like dragging a dead horse,” wrote Zhao. “It’s impossible. It’s not worth it. It’s also impossible to motivate people who don’t share your mission or values, or don’t like you as a leader, or are just lazy.”
If an employee in Binance isn’t motivated, their work will naturally suffer, Zhao wrote.
“People can slack off for a day, a week, or maybe even a month. But after a couple of months, they won’t have the results to show for it, and you will know,” he said.
6. Measure results on performance, not experience
“Use ‘years of experience’ only during the recruiting process. After a person is on the team, use results to measure performance,” Zhao wrote.
7. Don’t sign exclusive contracts
“Long-term mutual win-win relationships don’t need exclusivity,” Zhao wrote. “People asking for exclusivity are typically insecure about competitiveness or the value they can provide, at least in the long term.”
“Don’t sign exclusive contracts. Don’t lock ourselves in. Don’t expect others to be locked in,” he added.
8. Don’t spend your time chasing big clients
Chasing a big client would involve “hand holding” them through legal processes and teaching them about cryptocurrency, Zhao wrote.
“Conversion time is too long. And they often demand unfair terms. The return on investment is too low,” he added.
“Instead, I like to spend time working with the top firms that come to us,” Zhao wrote. “They would already have the intention to get into crypto, want to work with us.”
“Even though they may not be an Apple or Google, if we consistently build small wins, large partners will come to us sooner or later, mostly ‘on their own,'” he added.
9. Ignore rumors between employees
“Rumor is when you complain to me 1:1 about someone else, and have not told the other person about it. Rumors are bad. I don’t manage rumors. I just ignore them,” Zhao wrote.
The CEO said that he marks down employees who do this, instead of the counterpart they’ve complained about.
However, if an employee arranges for a three-way meeting between themselves, Zhao, and the offending party, Zhao said he would attempt to handle the situation.
“More importantly, it forces you to have a candid conversation with the other party before you talk to me,” wrote Zhao.