Street Smarts: Get Lost
Taking more vacations increased the value of my company. How cool is that?
Published June 2008
No reader of Inc. needs to be reminded of the challenges of going into business. I wonder, however, how much you have thought about the challenges of getting away from it. I've been thinking about them lately, and not just because I sold a majority interest in my company to a private equity firm last December. Long before the sale, I had set a goal for myself of spending 16 weeks annually -- yes, that's almost a third of the year -- traveling or skiing or simply taking time off. I reached the goal three years ago, and I have continued the practice ever since. Along the way, I have become increasingly aware of the mistakes other people make when they take a break from their companies.
Those mistakes fall into two broad categories that roughly correspond to the age groups of the people involved. The first group is made up largely of younger people who think they are taking a vacation when in fact they have simply moved their offices outdoors. They spend most of the time doing work. The second group includes all those baby boomers for whom vacations are no longer enough. What they really want is a change in lifestyle. But because they haven't done the necessary planning, they wind up alienating their customers, undermining their employees, and damaging their businesses.
Now, I will admit that I haven't always been as strong a believer in the importance of taking time off as I am today. For eight or nine years after starting my first business, I took breaks only when my wife, Elaine, forced me to. She would go to Florida, where we had a second home, and I would join her on the weekend -- maybe. If the technology had been available, I would probably have been one of those poor souls sitting on the beach with a BlackBerry in one hand, a cell phone in the other, and a computer on my lap. Or I would have been doing deals while riding a ski lift up the side of a mountain. It took a long and painful trip through Chapter 11 to make me realize the dangers of becoming consumed by the business. Looking back, I could see that I had gotten in trouble in part because I had lost perspective. My business obsession had clouded my judgment and kept me from asking important questions about what I was doing and where I was going.
I should note that I'm not saying it's always wrong to be engrossed in your business. Until a company reaches viability -- when it can sustain itself on its own internally generated cash flow -- you really can't afford to spend time away from it. (See "How to Succeed in Business in Four Easy Steps," July 1995.) But thereafter, you have a choice. The first go-round, I chose to spend almost every waking hour thinking about my company. By the time I started the second company, I was open to the idea that I would be better off spending less time on it, not more.
But I didn't have a clear sense of how much better off I would be until I actually started doing it. Not that it came easily. It took time and determination to tear myself away from the business on a regular basis. I started out taking one week of vacation per year and gradually worked up to four, timing my breaks to coincide with the periods when business was slow. The more time I took, the better I felt, and the more I appreciated just why vacations -- real vacations, on which you clear your mind and don't think about business at all -- are so important. I would come back from one feeling rejuvenated and able to take a fresh, uncluttered view of the business. I could see issues and problems with a clarity I hadn't had before. It was obvious to me that I was a bigger asset to the company on my return than I had been when I left.
As a result, my thinking changed. I would hear people saying, "I haven't taken a vacation in five years," as if it were a badge of courage. I might once have agreed. Indeed, I might have said it myself. Now, increasingly, I saw it as a badge of stupidity. Though people liked to portray themselves as making sacrifices for their business, they weren't, in fact, helping anybody by not taking vacations.
I was comfortable with my four weeks of vacation until about 11 years ago, when the company reached an important stage in its development, and I realized I had to make a fundamental change in my role. Up to then, the senior managers had all reported to me, and I had my hand in every pie, but I could see that wasn't going to work anymore. The company needed things I wasn't any good at providing -- systems, order, structure, stability, predictability, and so on. In a word, it needed management, and I hate managing. To me, it's boring. But I knew I would wreck the company unless I made room for it. That's what I hadn't done with my previous company, and I had no interest in repeating the experience. I knew I had to get out of the way and turn the operations over to my executives.
But I also recognized that for the transition to succeed, I would have to find new ways to contribute. Stepping back, letting other people make decisions without me, biting my tongue when I thought they were wrong -- none of that came naturally to me. If I didn't have something else to focus on, there was a real danger that I would fall back into old habits and wind up undermining the process. The answer, I decided, was to have new goals that I could get excited about and to undertake projects that played to my strengths. As it happened, Elaine and I had begun thinking about how we really wanted to spend our time. With one eye on my life outside the business and the other on my changing role in it, I came up with the long-term goal of eventually being able to take off four months every year.
These days, I know a lot of businesspeople my age who would like to be able to do that. The problem is, most of them haven't laid the groundwork. They take a vacation in Florida or in the Rockies, and they fall in love with the life there. They want more of it, and they think it's just a matter of taking additional vacation time. They don't prepare their customers or their staff for the change. They leave messages on their answering machines saying, "If you need help, contact my assistant." That's fine if you're gone two to four weeks a year. Customers can accept the idea of dealing with your assistant while you're on vacation. But four months a year is not a vacation. It's a major change in the business. If customers have always dealt with you in the past, and if your staff doesn't have the training and the experience to take care of their needs, those customers are going to be very unhappy. And you're going to pay a heavy price.
From that standpoint, I was very fortunate to have established my goal as early as I did. It took a good seven years for me to reach it, and I had to relinquish many things along the way, which wasn't easy. The last loss was one of the most difficult: I stopped giving tours of our facilities to prospective customers. Understand, I absolutely loved giving the tours. But if I was going to be away from the business for 16 weeks a year, I couldn't have people waiting on me to do tours. What's more, I needed to make sure that customers didn't expect or count on my constant presence. I wanted them to bond with other people in the organization, and the tours were an important part of the process.
So I began training other people to do them. For a year, I made a point of taking managers and salespeople along with me whenever I gave a tour. Next, I had one of them lead the tour while I came along for support. When I could see they had mastered the tour, I stopped going on it. The managers would do it and then bring the customer to my office, where I would make a presentation and do the close. Then I began letting the managers do that part as well while I looked on. Finally I bowed out of the process altogether.
In the meantime, I gradually increased my time away from the business. I added a couple of weeks every year, which meant deciding what else I would give up. By the time I was taking the full 16 weeks, the company could run perfectly well without me. When I was there, I could focus on making contributions that would enhance the business, and yet I could leave knowing my customers would never notice my absence and my staff could handle whatever came up.
All that added up to peace of mind, which would have been reward enough. As it turned out, however, there was a bonus that I discovered during the process of selling a majority stake in the company to Allied Capital, our new private equity partners. I told Allied's people up front about my work schedule. They were both taken aback and impressed. They were used to dealing with founders who couldn't bring themselves to let go. The company's ability to run without me increased the value of the business in their eyes, because it removed any doubt that the business could succeed without me. Unlike other founders, I was not a potential vulnerability; I was an additional asset. So I got a better price for my stock in addition to a lot of free time. That's something you might bear in mind the next time you're trying to decide whether to take a vacation.
Norm Brodsky is a veteran entrepreneur whose six businesses have included a three-time Inc. 500 company. His co-author is editor-at-large Bo Burlingham.