Jeff Maggioncalda had an expedited route to the top. At the age of 27, he was offered the role of CEO at Financial Engines, a software startup that aimed to disrupt the pensions industry. That company’s founders, Nobel Prize-winning economist William Sharpe and Stanford Law professor Joseph Grundfest, were impressed by the business cases Maggioncalda had written and his interest in technology. But being parachuted into the role with no prior management experience proved a challenge and Maggioncalda had to do a lot of learning on the job.
As CEO of Coursera – a business that works with universities to offer online courses – learning remains a key part of his role. Here, Maggioncalda shares the leadership lessons he’s learnt along the way and explains why he’s always wary of hiring an executive who hasn’t fired people before.
Did you always want to be a CEO?
I don’t recall thinking about becoming an entrepreneur when I was in college. But by the time I wrote my application for Stanford Business School in 1993, I was thinking about it. I remember that my essay was about the impact of software and its ability to help entrepreneurs solve problems. Looking back on it now, it was very quaint.
After completing my MBA, I was given the opportunity to be the founding CEO of a fintech startup called Financial Engines. I was 27 years old, I’d never hired or fired anybody before, I didn’t have experience of management, I hadn’t worked my way up through the ranks. I didn’t know how to do the job of a CEO – I didn’t even know what the title really meant. So I had to get good at learning on the job.
What do you think makes a good leader?
CEOs must earn the right to be the boss every day, not just by demonstrating great performance and working hard, but by learning as fast as they can. The rate of change happening within the company determines the rate of learning required.
Good leaders also hire the best people. As CEO, you should allow your team to set high standards for you and give feedback on your performance. It’s then up to you to respond and figure out how you can improve. Your executive team is the best mentor you can have.
What do you look for when you’re hiring your leadership team?
There are five traits that all executives at growth companies show. They need to be collaborative and good problem-solvers. They also need to have strong leadership skills, an urgent drive to create an impact and, finally, a growth mindset. This requires a lack of hubris and ego. Business growth is not about individuals, it is about building a company that serves its customers.
I’m very wary of hiring an executive who hasn’t fired people. I have seen people hang onto talent when things aren’t really working. While it’s wonderful to coach people, sometimes the business changes and you need different talent.
I have fired many execs over the years, which clearly means I’m doing something wrong. I can’t spot the talent right away, although I wish I could. But I have found that being really clear about what you’re looking for and listening to a diverse range of views during the interview process is critical.
I’m looking for people who show respect, honesty and integrity. They also need to be smart and capable of processing a lot of information quickly. It’s important to identify those traits and find out what people’s values are early on.
What’s the biggest challenge facing your industry at the moment?
Coursera was very successful during Covid. We saw demand increase across every facet of the business. This allowed us to go public and raise a lot of money during this period.
However, as with many ed-tech companies, this growth slowed as lockdowns ended, businesses opened up again and people started returning to in-person classes. Although we’re still growing, the rate of growth has slowed, and the whole ed-tech sector has had a really tough time.
What is your main focus for the next five years?
Our focus is on improving growth again. Growth comes from having a really good product/market fit, which requires a thorough understanding of your customer, their problems and how you can deliver value against those problems.
Generative AI is going to be the next tidal wave we face and will have as great an impact on us as Covid did. A lot of my attention is focused on creating a really good GenAI strategy, on nailing that package of content, teaching and learning, so that when this wave really hits, we are the undisputed leader in this space.
What do you enjoy most about your role?
I love creating things that no one’s ever seen before. We created some amazing algorithms to do portfolio trading with Financial Engines and at Coursera we’re using technology to create opportunities for people to learn. Now with generative AI, we’re making those learning experiences far more effective and personalised.
And doing this with a team I admire is also really great. Working with smart people who are passionate about a mission, are honest, who have good integrity and who respect other people is very rewarding.
What’s your proudest achievement?
It’s a combination of having built two very successful companies. One went public on the NASDAQ and the other on the New York Stock Exchange.
But beyond being successful, they were companies that did something I thought was really important for the world. At Financial Engines, we worked to help people plan for a secure retirement and at Coursera I want to provide educational opportunities to everyone, so that we all have an equal chance at economic prosperity and access to opportunity.
But pride starts with good fortune. I also feel very fortunate to have had two chances to be a CEO and, in both cases, work with an amazing team and amazing founders. I feel very lucky.
What’s the most challenging aspect of being a CEO?
When you become a CEO, your family goes on the ride with you and it can have a big impact on them. Your partner needs to believe in what you’re doing in order to provide the support you need and to stick with you through the twists and turns.
A lot of people think being a CEO is similar to being a celebrity but, speaking from my own personal experience, it has been an absolute grind for 25 years.
As CEO, you are trying to figure out how to build a successful company that delivers on a mission and you’re accountable to the stakeholders, the board and the founders. I felt a personal duty to make their business grow, thrive and be successful.
Then, as a public company, there are institutional investors who are putting money into your company, employees whose livelihoods are linked to the success of the company and customers who are paying you money to deliver value. So there’s a lot of responsibility to create success.
Which book do you think every business leader should read at least once?
One of my favourites is The Advantage by Patrick Lencioni. It’s not a fun book to read but it provides an excellent guide on how to run a business.
Another book that I read recently, which I think is important, is called The Coming Wave by Michael Bhaskar and Mustafa Suleyman. It’s about generative AI and it makes for ominous reading.
There’s another one that I read seven years ago that made a big impression called Thank You For Being Late, by Thomas Friedman, that talks about the notion of acceleration. As a business leader in a world where everything is accelerating, you have to adapt rapidly.
What do you do outside of work to protect yourself against burnout?
It’s really important to have hobbies in order to stay healthy and have a more open mindset.
When I first became a CEO, I had three young children, so I spent a lot of time taking care of the kids, playing Barbies with them and making up games. I’m convinced that playing games with my kids was really valuable for my business, because it let me get distance and I got to spend time with my children too.
You don’t want to regret not being there for your kids. Do not miss those moments because you’ll never get a second chance.
Later in my career I’ve realised the importance of having a regular exercise routine. I also have an interest in music theory and I’m currently designing my dream home in Santa Cruz, California.
