The title of this blog is a direct quote from a venture capital investor when referring to a founder/CEO of early stage companies, but I believe it has a much wider connotation.
An early stage investor in a company bets on the founder/CEO to lead the effort to have their “great idea” fulfill its ultimate potential. At the first sign that the company is faltering, the investors or board do not hesitate to take quick action to replace the leader with someone who has a proven track record of achievement. Why? Savvy investors know that there is a short window to take an idea to market and produce a “home run” or at least a break-even result. True, most early stage companies do not reach that high potential, but if the problem is with management, that is something that can and needs to be addressed quickly.
How do you address leadership shortfalls at your company? Here are several situations that you might be encountering:
- Customers give you feedback that “your company is not easy to work with”
- Customers leave you for competitors and don’t communicate the reasons why they left
- There is a lack of connection with agreed upon strategic direction and implementation
- You miss quarterly earnings by getting negative “surprises”
- There are “meetings after the meetings” behind closed doors
- Your direct reports do their communicating by email and text
You get the picture. Something is not right with your team, your approach, and your results. The first thing a good leader will ask is “Am I the problem or can I identify the root cause?” Football coach PJ Fleck asked that question toward the end of the 2018 college football season when his Minnesota Gophers got crushed by lowly Illinois 55-31. His answer: the defense is not performing up to its potential, and he replaced the coordinator. The result: two out of three Big 10 wins at the end of the season, a bowl victory, and an 8-0 start in 2019 (as of this writing). Clearly, he accurately diagnosed the situation, took dramatic action, and the results are readily apparent. Could you do that with your company?
Diagnosing the Problem
This step is critical in affecting positive change. As a board member, can you gather enough information to oust the CEO, as just happened with WeWork? Or as CEO can you, working with your board, be self-critical or do you need outside assistance to help you see things more clearly? If you, as CEO, are the problem, can you see beyond your blind spots, and be self-aware enough to change your behaviors and approach? A city manager who had been in the same position for 25 years told his second in command that “next year someone new will be sitting in my chair. Either a new me, or someone else.” The result: he left for a new opportunity that energized him and gave his deputy a chance to fill the spot that he vacated. Can you make that same statement and back it up with action?
Deciding on the Solution
During a crisis, tough transformational decisions need to be made in a hurry, and they can’t be just incremental changes. Can you assess the changes that need to be made including your part in the new environment? Again, you need to seek counsel from board members, and other outside advisors to ensure that the changes you plan on making are enough to gain the results desired. Are you able to fire or reassign a trusted lieutenant or friend if that is required?
Once you have announced the change, then the hard work of implementation starts. That work includes ensuring that the reasons behind the changes are communicated effectively at all levels, and making sure people know where they stand. Your job as the leader is to protect the long-term sustainability of the firm, and all potential solutions need to be on the table when things are not going well.
Accountability is a word that is not used enough in today’s lexicon. It is a concept that is crucial to understanding how to fix situations “if you think you have a problem.” Don’t be afraid to step up to the challenge, because if you don’t, your successor with be more than happy to do what is required.
If you are facing similar challenges, send me an email. The Bailey Group would love to help.