Leadership Lesson: Sometimes, it Sucks to be Right
In response to a recent story on post-IPO disasters, a reader emailed that he once warned a friend about taking his company public. The reader felt that public ownership and an independent board wouldn't be conducive to the company's family-like culture.
As the story goes, the company's owner didn't listen to his friend who was indeed right. Things fell apart and everybody lost their jobs, including the owner and the friend.
The story highlights a situation that virtually everyone has come across at some point in his life, a phenomenon I've come to view as sort of an axiom in the management world: Sometimes, it sucks to be right.
As in life, failure is a critical component of business. It's how we learn what works and what doesn't, how we improve our products and processes, how we make our organizations more effective. Failure makes us better managers and leaders. And, in many ways, failure leads to success.
That said, it doesn't make it any easier on those who have a stake in the outcome, see failure coming, and find themselves in the difficult and often painful position of sitting idly by, watching it happen like a train wreck in slow motion.
Long ago I was a member of the executive management team of a public company that agreed to be acquired by a much larger company. Because of the disparate cultures of the two companies, our CEO argued that we should remain as an independent, wholly owned subsidiary. The CEO of the acquiring company disagreed, and, to keep the deal from going south, our board agreed.
As a result, most of our organization was integrated with a division of the acquiring company. It wasn't long before it became obvious that our CEO had been right. Indeed, the merger was a disaster and everyone involved, employees and shareholders alike, paid dearly.
Somewhere along the line, I had a chat with my former boss and CEO. A typically funny and upbeat guy, he was sullen as he recounted the board meeting where he'd warned them that an attempt to integrate the two companies would fail. He also told me how hard it was to be right.
Whether it's the BP oil spill; Toyota's recalls; or the literally thousands of failed IPOs, mergers, turnarounds, business strategies, or product strategies; in most cases, somebody with a stake in the game got it right. But that somebody wasn't the ultimate decision-maker. And that unfortunate individual got to sit by and watch his prophecy come true.
The lesson here isn't for the times when you get it wrong, it's for those times when you get it right and it sucks. For those times, remember these lessons:
- Not only can't you control other people's actions, but it's not your job. Good managers and leaders know that.
- If you can feel empathy for everyone involved: those who got it wrong, those who suffered as a result, and for yourself, that's a leadership quality.
- Learn from the experience because next time, the situation might be reversed, i.e. you might warn someone and be wrong, or somebody may warn you and be right.
- You're not responsible for the failure of others unless they work for you, in which case you were a good leader by allowing them the opportunity to succeed or fail on their own.