Published in UT San Diego, June 24, 2013
If you put 100 chief executives in a room and asked them what is the single biggest mistake they made in their career, 99 of them would say, “I waited too long.”
I waited too long to hire, to fire, to buy, to sell, to innovate, to cut, to merge, to whatever, forever — I simply waited too long.
On a personal level, I waited too long to see the doctor, to get married, to get divorced, to buy insurance, to fix the car. I just did not want to deal with it, so I waited.
This phenomenon of waiting too long has deep roots in psychology and is common in startups. We do not want to admit we were wrong, we hope the situation will improve, we don’t want to deal with it because maybe it will just go away. It is hard to act both rationally and quickly. And by acting, you are also admitting to the mistake, you are admitting the failure, the disappointment, and the loss of hope, trust and the error of your ways. No one likes to do that. We humans are conditioned to avoid aggravation and discomfort at all costs if we can.
Sigmund Freud said that the goal of psychoanalysis is to turn neurotic, hysterical misery into normal human unhappiness. One of my personal themes has been that all CEOs should have at least two years of psychoanalysis so that they have a better chance to maximize their rational man behavior. And the place I see this most in startups is in hiring and in market analysis.
The best CEOs will tell you that they spend 40 percent of their time hiring, interviewing and working the room in the relentless search for talent. The corollary is that when they have made a mistake, it takes them too long to cut the cord or, said more directly, to fire someone.
This firing thing is really hard to do. And even if you have done it 15 times, the next time is no easier. You are dealing with people’s lives and you are also subtly acknowledging that you could not bring out the greatness that you thought you saw when you hired this person. A double whammy.
As to market acceptance — which is code for “who cares, who will buy this, what problem am I solving, am I headed down a dead-end road?” — I often see companies execute the classic pivot. This does not feel like a failure. Changing the product or the target audience is perceived as responding rationally to an economic stimulus — as in, no one will buy our green widgets, but if we make them in blue and if they are waterproof and open with one finger, we have customers. The pivot is externally motivated.
In contrast, firing is internally motivated. It is the recognition of loss and disappointment. Just stop a minute and talk to a friend who has gotten divorced. No one enjoys it.
So how can you recognize symptoms earlier? The answer is to use your external advisers, your mentor and your consigliere. Every CEO from young to old (like me) needs and must have an external go-to person to check his reality. Because any rational person, when faced with a tough decision, will be haunted at least for a moment by “maybe it’s me — maybe I am the problem.” And there is no way to be sure without checking in with your mentor. This mentor is not the one who helps you with the capitalization table or the license agreement. This mentor needs to come with psychological skills, with strong listening skills and with the clear mandate to tell you the truth — even when it hurts (and it will).
Rule No. 147: If it were easy, everyone would do it.