Growing Up as a CEO
Lately, several CEOs of troubled businesses have come to me for help, and they've reminded me of an important lesson: You've got to take responsibility for the messes you get your company into. Problems will keep resurfacing until you recognize how your actions helped create them in the first place. That may seem obvious, but most people have a hard time seeing the role they played. It's always easier to point the finger at other people or circumstances or bad luck or forces beyond your control than to admit that you're to blame. I speak from experience. I had a hard time understanding my responsibility for the biggest disaster of my career: the 1988 bankruptcy of my first company, CitiPostal. Sure, I admitted to a key mistake—making a bad acquisition—but that was a way of avoiding responsibility, not accepting it. The subtext was, "We all make mistakes. So don't blame me." What I didn't acknowledge, or recognize, were my own character traits that had put the company in a position where such a mistake, coupled with unforeseen events, could send it into Chapter 11.
Oddly enough, an Inc. article about the bankruptcy forced me to face reality ("Fatal Attraction," March 1989). This was before I wrote for the magazine. The writer of the article, Robert Mamis, quoted an investment banker who had once solicited my business and whom I asked for help when I got into trouble. The banker asked for my financials, and I sent him a package. "I took one look at it and thought, This is embarrassing," he told Mamis. "No company can exist with this capital structure. Here I had tried hard to get a piece of CitiPostal's business, and now when I see it up close, it's a basket case."
That stopped me cold. In effect, the banker was saying that the bankruptcy was foreseeable and avoidable. Could he be right? The more I thought about it, the clearer it became that my mistake was actually a symptom of something else—my habit of courting risk. I like going up to the edge of the cliff and looking down. That character trait, I realized, had cost thousands of people their jobs. I resolved then and there never to make another decision that would put employees' livelihoods in jeopardy. To keep myself from committing the same error in the future, I came up with a variety of mechanisms, such as making big decisions only after sleeping on them, surrounding myself with detail-oriented people, and making sure I heard what they had to say before taking action. I also developed new habits, including insisting on finding out the root cause of problems and asking myself what role, if any, I had played in creating them. It took time, and it wasn't easy, but those changes allowed me to build a great business I eventually sold for $110 million. Without them, I certainly wouldn't be writing columns for Inc.
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Please send all questions to AskNorm@inc.com. Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.
NORM BRODSKY | Columnist
Street Smarts columnist and senior contributing editor Norm Brodsky is a veteran entrepreneur who has founded and expanded six businesses.