The Best Outcome was the Worst Outcome

Many years ago, I was fortunate to have worked with a tremendously talented young team. This group inherited a poorly run company that had continually tried to sell itself all along the way to no avail. Fortunately, because others who were approached saw how poorly run the company was, we were all given a chance to run the company instead of that initial team.

This young team accomplished an amazing turnaround! They took the company from the 10th percentile of performance to the 85th percentile within 5 years. The stock went from below $4/share the day they were put in place, to over $16/share 5 years later. For those with calculator at home that is a 33% annual compounded return for 5 straight years.

Where is the misfortune? That is where I come in. As the CEO, I had not infused the board with the confidence in the team and me to keep it going. I did not present a plan of action with the requisite returns that would satisfy the board. I let the wonderful, young team down.

The board sold the company (at $24/share) at the end of that 5th year of exceptional returns, and 70+ people (about 40% of the employees) who had turned that company around and made it what is became lost their jobs because of the sale. Worse yet, the company that bought it allowed the local presence to become a mere shell of what it had been almost overnight.

This failure on my part still haunts me to this day. How could I have been a part of such an exceptional team that showed great returns and great promise be auctioned off to the highest bidder? Yes, it was a great success for the shareholders, but it was not for the team that created that success. It was a failure of leadership and vision that made the board unwilling to allow the team to keep going forward. That is on me.

The lesson? You cannot rest on your laurels. You always have to keep striving, keep getting better, and keep laying out the vision and strategy that captures people's heart, as well as their heads.

Maybe next time?