The One Thing Every CEO Needs to Know
The best piece of advice I ever received as a CEO came during a pretty dark moment in my very first CEO role.
I had just lost a series B lead investor due to some cold feet about our product readiness and I didn’t have a backup. I was faced with equally bad choices of trying to push forward and find a new series B lead with zero prospects, which was doubtful. Or I could pull back and spend six months fixing the product and revisit the fundraise later in the year. I was spending too much in anticipation of the series B and if I didn’t raise soon or cut burn now, I was going to run out of cash in 3-4 months.
When faced with a lose-lose situation, make the hard decision and get busy dealing with the fallout rather than stressing over the unknown.
This is when Bill Nussey, one of my directors from Greylock gave me the most useful piece of advice I’ve ever received.
“Lose-lose decisions don’t get any easier the longer you wait”.
Huh? I was hoping for some form of “hang in there, it will all be ok”, but that’s not what I got.
Bill’s simple but profound point sticks with me to this day, and it’s the piece of advice that I pass along to first-time CEOs more than anything else. From Bill’s short piece of advice, I took away two things:
1) Just as Bill said, lose-lose decisions don’t get any easier if you wait. Actually, they generally get harder and have even greater consequences. As CEOs, we’re always looking to bargain our way out of a particular situation. There has to be a better solution. Sometimes there is, but many times there isn’t.
As a CEO you have to learn to make those decisions quickly and decisively. Articulate your decision and stand firm by it. Making a decision and then wavering shortly thereafter is even worse and destroys the confidence of your team that you have worked so hard to build. Rather, when faced with a lose-lose situation, make the hard decision and get busy dealing with the fallout rather than stressing over the unknown.
Your team will appreciate it and everyone will spend less time spinning. They know it’s hard….that’s why you’re making the decision and they’re not. Which brings us to the second major point.
2) If you do your job right as CEO, these lose-lose decisions are pretty much all you have left.
If you’ve done a good job of empowering your staff and they have a clear understanding of the direction and constraints of the business, all the win-lose decisions should be made by them. My partner John Tedesco expands on this very topic in his “51/49 decisions” blog, which I would highly recommend. Give your team the authority and responsibility to make those decisions and watch how confident they become and how your company scales far faster than you expected.
Don’t make it any more difficult than necessary on yourself or your team by procrastinating and thinking that somehow time will make it easier, it doesn’t.
