When Leadership Fails: Lessons from OpenAI’s Misstep

Altman’s Return and the Power of Trust in Leadership

Key Highlights & Thoughts of the Week

  • The best leaders inspire deep loyalty from their people — even in their absence.
  • Poor leadership can destabilize even the most innovative companies.
  • True leadership mentality means recognizing your team’s trust as your greatest asset.
  • Leadership development is not just about strategy but also emotional intelligence.
  • Executive leadership development program success depends on having the right leader at the right time.

Takeaways

When Leadership Fails: Lessons from OpenAI’s Misstep

The never-ending story. We’ve never worked on a story we’ve had to change so quickly and so often, but maybe that’s a description of where AI is today – nobody can tell you, hand on heart what the future is, but the board of OpenAI dangerously thought they could.

Mr AI himself, Sam Altman, CEO of OpenAI, has received a harsh and sudden boot. The hottest of tech firms seemed to be taking the world by storm, with ChatGPT in millions of companies bringing in billions of revenues in quick succession. With all this in your favour, it begs the question, why has their leading voice been forced out?

There’s been no further information on the departure, but the rumour of several attempts to reinstate him as CEO is telling. This decision was abrupt and maybe not well thought through – the board may have lost confidence in Altman but completely underestimated what he meant to both the company and the industry at large. It perhaps wasn’t about them alone.

Sometimes the most able leaders aren’t appreciated for what they fully bring, I think this could be one of those times. Sam Altman has been a huge pioneer for AI, he might not have been thought to be the best CEO by the board, but his achievements speak volumes of what he could do if his strengths were backed to their full potential.

The board’s decision left most employees worried and confused as to where they fit in – if the founding leader they trusted and admired wasn’t good enough, were they?

Altman’s Return and the Power of Trust in Leadership

The board of the Microsoft-backed company has shown a lack of leadership and has taken the hit of being a lesson for all innovative companies to learn from. Altman’s biggest strength was seen to be having the contemporary knowledge about AI and what the future might hold to become the face of this nascent industry – almost a match made in heaven, and Microsoft clearly recognised that by investing in and backing his work, which had recently led to ChatGPT reaching 100 million weekly users.

OpenAI has left itself in a vulnerable position, Microsoft was an incredible investor to have, but they could become their greatest competitor themselves with Greg Brockman, OpenAI’s president, also leaving to partner with Altman in AI research.

The sacking leaves investors disturbed and worried. Aware of Altman being the face of AI, a new competitor is bound to form and leave OpenAI with more cost than revenue. Despite these concerns, OpenAI remains confident in appointing Emmet Shear, co-founder of Twitch, as their interim Chief Executive.

Shear has expressed his gratitude in a statement, saying “I took this job because I believe that OpenAI is one of the most important companies currently in existence.”

Both Shear and OpenAI have been open with their plans to reform their management and leadership, considering recent exits, however, it’s not going to be an easy journey – they need to appoint the right person for what’s left of the team, and not the job. Something that hasn’t been considered before.

For a while, we have been seeing top talent being let go due to messy leadership, in many industries. As a football fanatic, it’s hard for me to not compare Altman’s situation to the Cristiano Ronaldo and Erik Ten Haag saga. Manchester United’s best talent and biggest asset was humiliated publicly – a sour end that couldn’t be saved.

Recently showing he’s still got it, still scoring hat tricks for Portugal – it’s not dissimilar to what could be inevitable for AI’s growth, Altman has all eyes on him, and he now has the perfect backing from Microsoft with a familiar team around him.

Although there was a lack of trust and confidence from the OpenAI board, it’s become apparent that their decision hasn’t gone down well for the employees. 500 employees, including co-founder Ilya Sutskever, have signed a letter demanding Altman to be reinstated as the board is said to be “incapable of overseeing OpenAI.”

Sutskever had the unfortunate responsibility of breaking the news to Sam Altman, which in hindsight has clearly made him fill up with regret.

Very late-breaking news – we have just heard that Altman is back as CEO at OpenAI!

Altman’s Leadership Legacy

It’s hard to ignore the admiration that so many people have for Altman – he’s a leader that over 500 employees were prepared to risk their jobs for.

Former Chief Executive of Google, Eric Schmidt, a man who I have had the privilege of working with has expressed: “Sam Altman is a hero of mine. He built a company from nothing to $90Bn in value and changed our collective world forever.

I, and billions of people, will benefit from his future work – it’s going to be simply incredible.” This type of appreciation and idolisation isn’t because you’re an expert, it’s because you’re a great leader.

It’s worth remembering no team of identical people has ever won anything worthwhile.
The best teams are made up of many different people with many different attributes.

Altman’s story is a reminder that even the most advanced executive leadership development program cannot function without trust, team cohesion, and the right leadership mentality at its core.

Final Thought: Leadership Is Knowing When to Let Go

The power of self-awareness, humility, and courage define the best exits. Legacy isn’t built by how long you stay, but by how wisely—and when—you choose to go.

Leadership development programs can teach strategy, but wisdom comes from experience.

Top Tips for Becoming an A-Player

  • Focus on the solution, never the problem
    • Search for those that are left out and bring them in today
    • Learn when to get out of the way
    • Do not let anyone diminish your worth
    • Surround yourself with people different from you

Further Reading & Learning

Learn more about leadership development:
👉 https://www.carayol.com/leadership-development/

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