Don't Kick The Can Down The Road

I’ve been using this term a lot lately – “don’t kick the can down the road”. There is always a desire to push the hard decisions out. I find myself urging entrepreneurs and CEOs to make that hard call today and take the poison and move on. It’s hard for leaders to make this choice largely because of fear of the other things that will come along with that hard decision.

Bill Gurley, who I find myself agreeing with as much or more than anyone else in the VC business, has a fantastic post up about the danger of the “structured financings” that are increasingly common in the later stage VC market today. In it, he says:

Many Unicorn founders and CEOs have never experienced a difficult fundraising environment — they have only known success. Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. Their own ego is also a factor – will a down round signal weakness?  It might be hard to imagine the level of fear and anxiety that can creep into a formerly confident mind in a transitional moment like this.

This is so true. I have sat in and on countless meetings and phone calls with leaders who are afraid that the whole thing that they just spent three, four, five years (or more) building will come crashing down because they take a down round. I have been through dozens of down rounds in my career. At least thirty and maybe fifty if I really took the time to count them all. They are no different than a public company’s stock price taking a big hit. It is painful to be sure. Some people will leave but they are either weak in the knees or were half way out the door anyway. But I have never seen a down round destroy a company. And I have seen many down rounds save a company.

Another place where leaders tend to want to kick the can down the road is with talented but difficult employees. They cannot bring themselves to remove the person who is providing a ton of individual contribution but is also poisoning the culture. A founder of one of our portfolio companies once told our entire USV CEO group the following story. I am not saying who because I don’t want to expose him to any issues.

We had an engineer who was the most talented and productive engineer on our entire team. But he was also incredibly difficult to work with and everyone disliked him. We couldn’t let him go because we were fearful of creating a “hole” in our organization. Finally, the complaints got so loud that we were sure we were going to start losing people over him. So we did what we were afraid to do and let him go. And we did just fine without him. The morale of the story is you are better having a hole in your organization than an asshole.

Man I just love that one. It is so true and everyone who hears it shakes their head and chuckles and groans at the same time.

There are certainly many more examples of where leaders take the easy way out and defer a difficult decision because of fear of the consequences. My message to all of you out there is “don’t do that”. Kicking the can down the road is more harmful than helpful. Take the pain today and fix your issues and deal with the consequences. You will be better off for it and so will your company.


Comments (Archived):

  1. jason wright

    ‘Yes You Can’

  2. LIAD

    I’ve noticed there’s an incredible compounding effect of being fearless. Taking brave decisions empowers you to take more. Acting boldly begets being bold.— you then get kicked in the ass. fall back to earth and need to start again. no matter. do it.”Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us… Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won’t feel insecure around you… And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others”

    1. jason wright

      – pebble in a pond

      1. LIAD

        i like that.

  3. Mario Cantin

    To paraphrase Peter Thiel, genius is more abundant than courage these days.BTW, this is a *great* line: “You are better having a hole in your organization than an asshole.” I’m borrowing that one for sure.

    1. pointsnfigures

      so true. it stokes fear inside of you to be truly courageous. I have learned that, and listened to real heroes tell me that over and over again.

      1. Mario Cantin

        As Ben Horowitz likes to put it, courageous people have the same fears as everyone else, but they act despite those fears. And that’s food for thoughts my friend.

        1. pointsnfigures

          that is exactly correct. from business people to medal of honor recipients, there are parallel emotional stories. does anyone think Steve Jobs didn’t have fear when he took over Apple the second time? he is human-had to have fear. commitment to something causes you to have fear-because you are assuming risk. what if you are wrong? I even felt that way on my wedding day-good thing my friend drove me.

          1. Mario Cantin

            You know, I had never thought of it until you’ve mentioned it. He did the “Steve Jobs reality distortion field” so well that you’d assume he was in complete control, but I’d wager you are absolutely correct.

          2. Mario Cantin

            Ha ha! Marriage takes courage.

        2. LE

          To me, sounds like the type of things I used to hear when I read business magazines early in my life. Not that phrase in particular but the triteness. And then saw what happened to those business people (as a group) over time. Or those companies.Sorry to rain on a parade but would need examples of a large group of “courageous” people that have failed/succeeded and a a study to prove something like that out. Otherwise it just sounds cute. Just like “better a hole, than an asshole”. If it were only that simple of a decision to make. [1]”Courageous” in some context could be taken as “willing to take a bigger gamble”. In no way is it ever that simple when you are trying to make a decision (and it’s not a business school case study).[1] A pretty good example of the effectiveness on a motivation level of a good catchy phrase is the one that helped get OJ off “if the glove doesn’t fit, you must aquit”.

          1. Mario Cantin

            I agree we can always oversimplify, but as a case in point, I used to work in a 50+ employee company and there was one overachiever asshole that no one wanted there except one of the two owners, as he was the top salesperson. He once told me that I looked like shit and he wasn’t sure he could help me although he’d “try” and that I should kill myself, etc. That was standard talk for him. He was thrown out eventually and never missed.As for your other point, I get what you’re getting at, but sorry, courage trumps analysis paralysis. I’m not talking about when decisive action is in fact gambling with everyone’s outcome. I mean when one knows what should be done but lacks the gumption to pull the trigger.But I’m sure you and I could debate on that one for hours.

  4. Rob Underwood

    When I was consulting, where you need to make accelerated decisions about who to keep on your project team, my mentor Joe P, a hard core Phili guy, always used to say “shoot the wounded.” It was straight talk but a good point – when a relationship isn’t working out, whether it’s personal or professional, you know it in your heart, and there is almost zero chance of repair. The best thing to do for all concerned is tear off the band aid and take action.Corollary: it is important to also have self awareness about when YOU are the wounded and it’s time to take yourself out.

  5. William Mougayar

    Bill Gurley’s post is epic. Wow. He hits every point imaginable & I kept nodding my head throughout.I loved his ending,”More money will not solve any of these problems — it will only contribute to them.”Proves the point that building a startup a bit slower is better than taking the rocket route. Reality is that few rockets make it into space and stay there.I’ve always said that Speed Kills. It was the case in 1999, and is the case now.

    1. iggyfanlo

      Money is the rope that VCs give entrepreneurs… Enough and it gets them out of the hole and allows them to corral the opportunity… too much and they hang themselves

    2. PhilipSugar

      My favorite line is this:”Loose capital allows the less qualified to participate in each market. This less qualified player brings more reckless execution which drags even the best entrepreneur onto an especially sloppy playing field. This threatens returns for all involved.”If I had to quibble, I would replace “reckless execution” with “reckless burning of money to try and achieve the perception of growth at any cost”

  6. JimHirshfield

    I was going to save this to read later, but I read it now. Glad I did! Great post.

    1. William Mougayar

      Good thing you didn’t kick the can down the road and did the hard thing on reading it now versus later 🙂

      1. JimHirshfield

        I see that you see what I did right there.

        1. Amar

          Yup, you were too clever with your joke. You have trained us well with your puns and now you get all sophisticated with us… smh tch tch

  7. Guy Lepage

    I definitely agree with the employee scenario in your post but would like to add a caveat. If you have strong founders that are strong leaders, then cutting off an arm is ok to to save the body. AKA getting rid of a talented but difficult employee to save culture and possibly the company makes sense. But to the contrary, I’ve seen and witnessed very small teams lose a talent early on and the lose of that individual turned out to be the real poison. The company didn’t get off the ground as they had a hard time hiring that level of talent again. They got a bad reputation.No one likes an asshole. But talented individuals looks to go into battle with soldiers and generals that will have they’re back and get things done. I feel trying to work things out with that person and having possibly many conversations is a better approach most of the time than just making a quick decision. This method would leave the founder with a clear conscience and therefore make the decision much easier.

    1. Ana Milicevic

      I agree in spirit with what you’re saying but there are some situations that are simply a bad fit and cannot (or should not) be fixed. Under those circumstances it’s better to take the hit and cut the talented-yet-troublesome individual than to make the whole team suffer.

    2. Matt Zagaja

      If an organization has the expertise and ability to help people with their poor social skills and attitude then that’s certainly an option, but I think most businesses are not equipped for this. It’s a much tougher thing to tackle than teaching someone to code or use a CRM. Ultimately it’s up to every leader to make that trade off and decide if management is able to invest the time to help the person, but in many orgs it is not the case. There are plenty of organizations that will also tolerate people with poor attitudes but live with it because they are talented and the organization underpays compared to the market. The org can work but it’s not fun, and nobody has fun. I’ve seen it and the good people always choose to leave those places, and they never regret it.

    3. JLM

      .The best solution is to have a performance appraisal system which is goals based and which is executed on twice a year. Two sets of goal settings and two sets of performance appraisal.Most companies I stumble on who have problems have NO performance appraisal function and, instead, think it is a discussion about compensation.What we measure, we manage. What we manage, is easier to measure.When you have no clear standards or appraisal system, what is GOOD ENOUGH?JLMwww.themusingsofthebigredca…

      1. Erin

        Love that- what we measure, we manage. What we manage is easier to measure.

  8. William Mougayar

    Having seen a downround situation upclose just recently (as an investor), I’d like to add one point to Bill’s advice in the entrepreneurs section:Surround yourself with people/advisors outside of your board members who might not sense the danger, because they are in the same shit with you. Sometimes you need an outsider’s view to give you a reality check, and you must be willing to listen to them. Unfortunately, this type of lesson is only understood after one makes the mistake. Reality checks aren’t always pretty, and when you’re drunk with money, you don’t want to always hear it.

  9. Joe Marchese

    I don’t worship at the altar of Jack (Welch), but he got a lot of things right. One of my favorites is his 2×2 matrix of values and results. Two quadrants are easy: high-values/high-results are your stars, and God bless them; Low-values/low-results are the slugs, and they have to go. The challenge is the other two quadrants. Jack surprised almost everyone by choosing to keep the high-values/low-results people (they deserve investment and more time… though there are limits) and letting go the low-values/high-results gang as poisonous to the organization. After that happened, GE results accelerated as everyone could see what was most important and raised their game.

  10. Ana Milicevic

    Big part of the challenge here is to know when you’re kicking the can down the road, and when you’re dealing with in-the-moment challenging circumstances. While there are many talented first-time entrepreneurs the serials are much better at spotting and heading this off than first-timers. I found that to be the most valuable acquired skillset from my first time around – along with the importance of advisors who can pull you out of the weeds as @wmoug:disqus mentions in his comment.

  11. Tom Labus

    A lot of these companies will get pounded if the ever make it to the public markets. You can get on a major roll and enjoy every second of it but thinking that it will never end is delusional.and dangerous for co

  12. Mark Watkins

    I very much agree that kicking the can down the road in financing or troublesome employees is bad and to be avoided. Still, there is an art form to “not making a decision until you need to” – preserving optionality can be crucial – so long as it is a conscious strategy rather than fear or an avoidance of conflict.

  13. creative group

    FRED:We will take a leap in faith in saying the majority of intelligent contributors understand the difference between a employee who is a a-hole verses a doesn’t get along with others who works hard and is committed but lacks social skills, etc.Most start-up’s are a club of like minded people that is why the majority talk about diversity but are not diverse and never will. A strong leader will show this high worth contributor the value in his working well with others who are not nearly as talented or committed. Usually the people who are troubled by the a-hole have bake sales with each other, families socialize outside of work, etc. all why the company suffers in real progress. (Not all cases).We don’t know one contributor on this blog personally but are confident via postings and interactions that this blog has resident a-holes who are high maintenance verses the talented who get along well with others. It is amazing that the majority of women contributors we read are talented and get along well with others. (We enjoy supporting our superwoman on the blog)

  14. mattb2518

    Best quote ever. To paraphrase, “a hole is better than an a-hole.”

    1. fredwilson

      were you there that year matt? one of my favorite moments in the annals of CEO summits

      1. Gary Chou

        As I recall, that story was repeated a few minutes later by a different CEO.Everyone has an a-hole story.

        1. iggyfanlo

          Unfortunately, it sounds like most everyone has an a-hole too

  15. Doug Calahan

    If you build a quadrant of cultural fit vs performance, these kind of people (high performance, low culture) are called terrorists. Then opposite quadrant are your puppies, everybody loves them, but they kind of suck. Work with the puppies to help them increase performance. Fire the terrorists immediately.

  16. pointsnfigures

    Interesting post. Can someone send it to Rahm Emanuel and the idiots in the Illinois General Assembly that consistently do this?Timely post for me. Yesterday a company I am invested in laid off 60 employees. It’s not because they are in trouble-they aren’t. Their business is transitioning. Sales are actually up.Seeing term sheets with crazy terms so headline numbers look good but the terms really turn them into smaller numbers.I love this interview. Wish I could have met this guy. He talks about employees.

    1. Tom Labus

      What was it with his personality that put people at ease with him?

  17. iggyfanlo

    Guilty as charged…. I’ve made the above mistakes before… here’s hoping I’ve learned from it… One other nugget I was taught during those times: “You NEVER fire someone too soon”

  18. LE

    There are certainly many more examples of where leaders take the easy way out and defer a difficult decision because of fear of the consequences. My message to all of you out there is “don’t do that”.Abusive relationships (business or personal) become that way because they provide value in some way to the abused party and the feeling (which is actually somewhat correct) that the devil you know might be better than the devil you don’t.As such it’s easy for someone on the outside (adviser, friend, pundit) to say quite rationally (either during or perhaps later on) “get out of this” because they are generally insulated from the downside risks (they aren’t on the front lines) like the abused person.[1] So the fear is real because there are consequences they just aren’t felt the same way by the people advising someone to “get out”.It all comes down to who will clean up the mess for a wrong decision made to terminate (or end) an abusive-esq relationship.[1] Of course they may have skin in the game but the skin they have may be of a different type and the pain is not the same.

  19. JLM

    .Great post, as always.In 33 years of CEOing, I learned a few things about dealing with problem employees.First, don’t hire them. Duh.Second, hire folks on a probationary basis and pull the plug when it is obvious you’ve made a mistake.Third, make damn sure you set norms (job descriptions, company policies, culture documentation) that are recognizable so the situation can fix itself, like a sailboat with a heavy keel righting itself when knocked down by a squall. Know your standards/culture.Fourth, make damn sure that you appraise performance in writing, regularly. In your performance appraisal methodology force the asking and answering of the following questions:Can I get fired in the next 90 days? If so, why?Can I get fired in the next 12 months? If so, why?Can I expect to get promoted in the next 90 days? To what?Can I expect to get promoted in the next 12 months? To what?This kind of straightforward approach smokes out the problems before they become fatal.Fifth, do not give up on your people easily. I see almost no CEOs providing direct training on a regular basis and yet I see the same CEOs observing subpar performance on a daily basis. Training is the antidote to poor performance (sometimes, not always, but sometimes).I once had a problem employee. He was also my best man in maintenance in a portfolio of 15K + apartments. There was nothing he couldn’t do. He was profane, rude, fresh to women, and nasty but he did twice as much work as anyone else and he could, literally, fix anything. Other maintenance supervisors used to beg him to train their crews.I had about 4-500 employees at the time and didn’t have the time or inclination to deal with it but he had been the first such employee I had ever hired when I had two apartment complexes, so I felt some loyalty.I remember the convo perfectly.Says me, “Do you have a problem?”Says he, “No, I don’t think so.”There was an awkward silence.Says he, “Boss, do you think I have a problem?”Says I, “Yes, I think you might be getting ready to fire yourself.”He became a model employee. From time to time when I would see him, he’d ask me, “How am I doing?”I would reply, “How are you doing?”People are shrewd and will go as far as you let them. But, they will respond to a no nonsense correction. If they do not, then you fire them. In 33+ years of CEOing, I fired less than 5 people and only lost one that I shed a tear over. I was never better than anyone else. I was more direct and attentive.CEOs can change things. If you think about it, if you can’t change things then why are YOU the CEO?JLMwww.themusingsofthebigredca…

    1. sigmaalgebra

      A keeper, saved, abstracted, indexed.

    2. William Mougayar

      You are right JLM, but you are describing a mature CEO, and many startup CEOs are not as mature, and many VCs aren’t either. So, they loosen up on each other and let it be, until reality hits. Then they learn something the hard way. We’re all guilty of learning the hard way.

      1. JLM

        .I will have to disagree with you.In almost everything we do in life, we play above our heads. We play up. We read up. We learn up. We act like the job we want not the one we have. We dress for our next job, not our current job. The smart and ambitious ones do.In sports, we practice the way we are going to play. We play the way we practice. We play to win the championship.The first time I was ever a CEO, I was investing (in my company) gobs of money. The people who were writing the checks had ZERO tolerance of my learning on the job.This is the classic problem with recent American Presidents — low time, low mileage, no executive experience Senators who were counted on to learn OJT. Good luck with that.I can tell you that when I work w/ a CEO to fashion a Vision, Mission, Strategy, Tactics, Objectives, Values, Culture, business engine graphic, business process graphics, dollar weighted org charts, elevator/taxi/boardroom pitches, onboarding process, etc. etc. etc. — you can watch CEOs grow up before your eyes.When a CEO has their formative docs down tight and then briefs his/her team, has an off site — suddenly they are in charge and under control.A CEO does not GET power. A CEO TAKES power. Until a CEO takes power, it is an idea. When the CEO takes power, it is a reality.It is a crutch to suggest that the world will wait upon a CEO (or a VC) to learn the business. The world is unsympathetic to your personal circumstances when it comes to divvying up marketshare.And, that, my friend, is how the cow ate the cabbage.JLMwww.themusingsofthebigredca…

        1. William Mougayar

          You’re describing A players and an ideal world. But not everyone is an A player, and even if they are, they may not be A players at everything. The startup venture funding business is full of traps and unexpected turns, even for the smartest people.

          1. JLM

            .Haha, everyone should aspire to be an A player. Therein lies the problem — not having lofty enough ambitions.Stonewall Jackson: “You may whatever you resolve to be.”There is magic in life but you can only conjure it up if you pick up the wand.JLMwww.themusingsofthebigredca…

          2. creative group

            JLM:Our experiences and drive drag our mind to agree with your acute views on business.

        2. cavepainting

          Yes, but you need people willing to learn, let go of their assumptions of what they are and what they are not. The mind and the ego plays tricks on even the smartest people and makes them less open to learning.In many circumstances, it is not so much that the individual is not capable of stepping up. They want to and also act like they are. Just that not everyone has the same level of awareness of their blind spots and weak areas. A coach and a boss who is direct can help but nothing changes until it gets internalized.

    3. creative group

      JLM:the post is certified as Platinum.What you share on the business operations side is invaluable.We really view it when dealing with employees as just plain common sense.When a CEO is cultivated right out of MBA school or one year of college they don’t have people skills or operational skills just to deal directly with people who don’t play well with others.

    4. Dan Moore

      @JLM:disqus>Fifth, do not give up on your people easily. I see almost no CEOs providing direct training on a regular basis and yet I see the same CEOs observing subpar performance on a daily basis.What do you think about this post?…Is training (from the CEO) only for non executives?

      1. JLM

        .There is a huge difference between building the sixteenth eCommerce platform and developing a unique company which is doing something that has not been done before.The sixteenth such enterprise benefits from having a lot of talent which can be rightly viewed as “plug and play” and therefore you CAN access external talent much like a professional baseball team hiring a good closer because it is the only missing ingredient in their bullpen.But, let’s be realistic here — most startups don’t have that kind of money or that kind of allure. Why does a world class marketing guy join a fledgling enterprise and at what price?One other pointed observation — the very best folks are coming on at the founder level so the pool of talent — the hirelings — is not likely to be truly world class.Not only are you developing talent, you are also developing a team. In elite military units, once everyone knows their jobs (which they do before they even arrive), they spend all of their time on process, battle drill.I think that training is the mark of a mature enterprise and that training has to be lead at the CEO level to be effective.JLMwww.themusingsofthebigredca…

  20. awaldstein

    Simply the truth.And as someone who is still operating and building companies after a career of doing so, I’m really better at doing this but still catch and kick myself into making the hard call at times.

    1. JLM

      .The honesty with which you admit the difficulty of adhering to good practices is the voice of both authenticity and experience.Respect.Well played.JLMwww.themusingsofthebigredca…

      1. awaldstein

        Thanks my friend.I hold my experience, my authenticity and my innate human vulnerability as core to who I am.

  21. Matt Zagaja

    Also reminds me of Bezos Type 1 v. Type 2 decisions nugget of wisdom he dropped in his annual report (….

  22. Chris Johnson

    The biggest regret that my little company has has been doing just this.Kicking the can down the road hurt relationships.It got us out of alignment.It created balance sheet problems (unearned revenue).

  23. creative group

    BLOG:Prince Rogers Nelson (June 7, 1958 – April 21, 2016), known by his mononymPrince has died.…Dove’s are crying!

  24. sigmaalgebra

    Right, so, there is the observation “no pain, no gain”. And some good medicine tastes bad. So, from that we draw the conclusion that anything that causes pain and tastes bad is beneficial? Hmm ….Yes, firing the best worker is a hard decision. But that is poor justification for firing them. We had an engineer who was the most talented and productive engineer on our entire team. But he was also incredibly difficult to work with and everyone disliked him. Amazing.In academics, business schools, and social sciences, there is a subject organizational behavior with a topic goal subordination where people do things for their own goals, subordinate the goals of the organization, and hurt the organization as a whole.Example:There was an organization with a guy, say, Joe.(1) Joe was working on a project that needed some random numbers, looked at the recipes in one of volumes of D. Knuth’s The Art of Computer Programming, took the recipeX(n + 1) = ( 5^15 * X(n) + 1 ) mod 2^47from R. R. Coveyou, R. D. MacPherson, “Fourier Analysis of Uniform Random Number Generators”, Journal of the ACM, Volume 14, Issue 1, Jan. 1967, Pages 100-119. from, right, one of the shops with the most need for random numbers, US Oak Ridge National Laboratory, for calculating the critical mass of nuclear chain reactions, coded the calculation using 64 bit arithmetic in assembler callable from all the standard higher level languages, used the code in his work, and offered it to others in the group.Some others used the new source of random numbers to rerun some important old work and got some significantly different results.(2) The main customer asked for some important analysis with a short due date. Joe took responsibility for delivering. But, unknown to Joe, the organization also assigned a parallel effort with another person. Joe delivered good work on time as planned, and the other project made nearly no progress.Soon, another major customer bought Joe’s work and software for that analysis. Joe could have said who bought the work, but then Joe would have had to ….(3) Another major customer had a question. Arriving at work, Joe was told about the question, and in about 90 seconds thought of an answer, explained the answer, and then returned to his usual work. Soon another person, Sam, in the organization took Joe’s answer and used some integer linear programming software to get the answer for the customer. Sam was impressed with his integer linear programming software. Talking to Sam, Joe explained that due to some cute, special properties of Joe’s answer, the special integer features of the software never got used because just ordinary linear programming would give the desired integer answer for no extra effort. Sam was surprised that such a thing could be true.(4) From some good work, Joe had become a leader in computing for his group; soon the whole company also wanted such computing; and Joe was appointed to a committee with Sam to plan for the whole company.Due to (1), part of Joe’s group got afraid of Joe. Due to (2), another part of Joe’s group got afraid of Joe. In particular, one person, Paul, kept making some serious technical mistakes Joe had to correct. Paul did not like being corrected. Due to (3), another part of Joe’s group became afraid of Joe. Due to (4), all of Joe’s group became afraid of Joe.Soon, Joe, just a part time guy, was no longer welcome.The situation is quite general: Due to goal subordination and gang behavior, it can be true that good deeds can become punished, one who sticks out can get beaten down. With poor leadership, it can be that it is in the interest of everyone less good to attack the person who is doing the best work.So, in”the most talented and productive engineer”is also”incredibly difficult to work with”or is, instead, that engineer just attacked by less good engineers?There is another common line of attack: In an organization, skill A is important. But suddenly skill B also becomes important and some Joe has skill B. So, to attack Joe, the claim goes up that, “Sure, Joe has skill B, but he is poor on skill A” with the unspoken assumption that being good on skill B somehow makes a person less good on skill A. E.g., skill A might be being good as a manager and B, good technically. So, to be more competitive in the organization, a non-technical manager will try to argue that being good at technical work inevitably means being less good as a manager. Nonsense — it’s just goal subordination, to try to trip up the person ahead in the race.Managers who fall for such goal subordination nonsense stand to get rid of their best contributors.

    1. Stephen Voris

      I tend to think of this as the Incompleteness Theorem as applied to management: no finite humanly comprehensible set of rules can be simultaneously universally applicable, universally correct, and universally obvious.Or, the short version – people make mistakes. Some of those mistakes will be due to politics (and in those cases, man does it suck).

      1. sigmaalgebra

        > Incompleteness TheoremCute!

    2. cavepainting

      You nailed it. The bullshit that goes on sometimes in companies is unbelievable. And, every time, someone calls someone else an asshole, I always wonder what really is happening. But, it is no different now than in the courts of kings in ancient times. People can be demons or angels based on what’s happening around them. Good CEOs and good kings can minimize dysfunction in their companies or kingdoms. How they make decisions, what they value, and how they build the culture makes all the difference.

      1. sigmaalgebra

        Sure. So, manager Joe has several subordinates including Pete and Sam. So, Pete mentions to Joe that Sam is not doing well, needs a better project.Presto, bingo: Joe has to ask, who here is not doing well, Pete or Sam? It looks like Pete is trying to sabotage Sam, say, to enhance Pete’s status by hurting Sam, that Pete “has his own ax to grind”. Maybe Sam is on the way to doing something pretty good, Pete sees this tries to get Joe to take Sam off his good work.Pete tries again: Pete comes to Joe and has a project for Sam. Pete suggests that Joe assign the project to Sam. Pete knows that, technically, the project is poorly selected, guesses that Joe won’t notice this, and hopes that Sam will be told to do the project and will fail. But if by some miracle Sam is successful, then in front of Joe, Pete can claim to have suggested the project. So for Pete, the situation is “head, Pete wins; tails, Sam loses”. In any event, Sam has had his professional status reduced and made partly a subordinate to Pete — bummer for both Sam and Joe. Joe let it happen.Maybe a more fundamental cause is that Joe doesn’t really have enough important work to do so lets is group drift into nonsense, and that has to be in part a failure of Joe’s manager.A level or two higher in the organization, the organization can become arrogant, inwardly-directed, and process-oriented. So, the second is to fight with the people down the hall inside the company and ignore the competition outside the company and is enabled by the first. Then, from such dysfunctional behavior, when the roof starts to fall in, use the third to defend and cover your ass (CYA).If the next level of management and/or the CEO permits this sewage, then they stand to suffer the consequences.

  25. David C. Baker

    Great post. It really resonates with me. I was trying to come up with some “bumper sticker” like phrase for this recently and tried this one out: “Employees will forgive a bad decision, but only if you make them.” In other words, leaders are charged with making decisions. Waiting too long or over-deliverating or worrying too much about the consequences is worse than the bad decision every once in awhile.Thanks for the good post.

    1. JLM

      .In my work with CEOs and having been a CEO for 33+ years and in the Army before that, I like to ask CEOs:What percentage of your decisions are great?What percentage of your decisions are good?What percentage of your decisions are awful?I do this not so much because I want to know but because I want them to know. I want them to be fair and realistic with themselves.Being a CEO is a very tough job. That is why CEOs should have a mentor or a coach or a pal who has actually been a CEO and knows what it is like to make a really bad decision.When I was in the Army the shrinks used to ask officers: How many of your decisions have cost men their lives? How many bad decisions did you make that got men hurt?The real test of leadership is not how many bad decisions are made but what you do when you make a bad decision and how you fix it and what you admit to yourself and others.It ain’t easy.JLMwww.themusingsofthebigredca…

      1. cavepainting

        That is very true. The biggest lies are the ones people tell themselves.How people respond to a question like “what has been the worst decision in your professional life” or “what was that you thought you knew, you really didn’t know?” reflects a lot about their ability to lead and nurture a team.Leadership is a lot about humility, the willingness to admit mistakes and the openness to being vulnerable. These are critical attributes to help you get to the right decisions, build strong relationships with your team and get people to jump off cliffs for you.

        1. JLM

          .I have just returned from church and heard a good sermon, so I am filled with introspection which will wear off shortly.A leader is not a weakling who must somehow display or admit vulnerability or justify their weaknesses by being “nice’ about things. Those are good personal traits and are likely a sign of a fair sense of things, humility included, but they are not essential to being a leader.On the contrary, the most effective leaders are those who let their mistakes stand naked, correct them, have the confidence they did the best they could under the circumstances with what they had, and just drive on having learned something in the process.I am a huge fan of team after action debriefs. I am not a fan of self-flagellation and confession and penance for leaders.In many instance, the press of reality — as an example, combat in the military — requires a leader to move forward with those who are still breathing without having the luxury of stopping to assess what went wrong.Leaders are their own toughest critics and will benefit from being serious students of their own shortcomings.JLMwww.themusingsofthebigredca…

          1. cavepainting

            That’s very true. Love “Moving forward with those who are still breathing”. Constant forward motion absorbing the real learnings of the past, but letting go of all baggage is a very big deal. In love, war, startups and everything else.

          2. JLM

            .I believe it is the kind of lesson that separates those who have actually been CEOs or other leaders from those who are on the informed sidelines even in the courtside seats (VCs) who never really know what it’s like to be the one to say, “Follow me.”JLMwww.themusingsofthebigredca…

  26. Prokofy

    I came here today to see what you were saying about Bill Gurley’s post, which I read about here http://www.businessinsider….– and I wasn’t disappointed.But I do wonder about two other points that were in Gurley’s piece that you didn’t appear to comment on directly:1. The culture of “burn” versus “profit” — I’ve always marvelled at how different the culture of the much-celebrated Silicon Valley start-up is to other industries in America, where you really are expected to make a profit to cover costs and simply be in business. The outright scorn of profit and of charging customers money always seemed to me to contain the seeds of doom for the entire tech world or at least some of its bubble. Can you comment on this? It seems extraordinary that the thought of making a profit would spell *panic* for a start-up owner when it should have been his original driver. But it isn’t because of the coddling of wunderkind by VCs and the culture of one VC acquiring the product of another and just passing them around until finally the hot potato gets dropped.2. The importance of the non-tech press in quality control on companies like Theranos. The tech press is entirely untrustworthy, not only because they get “payola” in the form of free gadgets to review and free tickets to events but because they help perpetuate the “unicorn” fetishization and the belief that profits are somehow to be disdained and only VC socialism to be embraced.Yes, Gurley’s post seems to be one of the smartest I have seen in a long time.

  27. cavepainting

    Fred, I have a quibble with the no assholes rule. There is a nuance that is often lost.There are real assholes and then those who are made to look like assholes. Let us call the latter apparent assholes.A real asshole represents a cut and dry case where the individual is completely misaligned and disruptive, and there is near-unanimous consensus that he or she needs to be taken out. Do not delay actions here.An apparent asshole is one where the individual is saying things that may not be politically correct and causing discomfort to people in positions of authority. Some times, they may be closer to the truth and shutting them down does a great disservice to the company. I have also seen cases where the person became an apparent asshole, when reacting to unpleasant situations created by some one else or the environment. These situations need to be handled more carefully and can usually be remedied.Of course, the challenge is to know the difference between the two. There is more than one story behind any situation. People are human, not machines hired to do a job and humans are complicated.If the founder / CEO has taken care in building a positive and open culture, where all points of view are actively encouraged, it is a lot easier to get to the truth.I wrote recently about what it means to create a culture of truth.

  28. ptanthos

    Don’t forget anti dilution protection on down rounds. Not the same as a drop in stock price – which can go back up and restore you whole. Adp pounds the common pretty hard if it’s in place.

  29. Jordan Elpern-Waxman

    Fred I totally agree it’s time to swallow the pill and move on, but isn’t the difference between a public stock taking a hit and a down round in a complex cap table with layers of VC-style preferred shareholders ahead of you that the public stock doesn’t have ratchets?

  30. Erin

    I know some people think Rav Berg’s Kabbalah Centre is a cult (I tend to agree), but he’s got a “universal principle” that I just love, and I think it applies here: “When challenges appear overwhelming, inject certainty. The Light is always there.” He tells this story of the Israelites escaping from Egypt — I don’t know where he got this version, but I like it– the Israelites have been walking through the desert and they have this sinking realization that they’re sandwiched between the Red Sea and the the oncoming Egyptian army behind them, and they panic. They consider surrendering to the Egyptians, but Moses is certain it’s their lot to escape, so he raises his staff and leads the Israelites into the waves… and according to Berg’s version, the water was up to their nostrils before the Sea actually started parting. The point being that when you inject certainty into a panicky moment, the universe kind of respects that libidinal, gut decision and parts a way for you. As Goethe said, “boldness has genius, power, and magic in it.”

  31. Erin

    Emotional Intelliegence is just as important as competence on the job. If an employer has EI problems on a team, wouldn’t you recommend EI coaching? I mean, as long as they agree to it… was this guy aware that nobody liked him? That awareness, and the fear of losing their job can be enough to get them to agree to coaching…

  32. Luis

    Hey Fred, thanks for this post.. in fact I’m currently on a down-round to reduce the cap table and have a controlling group to make better decisions. As founder and major individual stakeholder of the company I’m taking the hit with the idea of becoming stronger and with more incentives for the potential growth ahead in the Accelerator and VC investing community in Mexico City…

  33. Matt Gallant

    Lovely blog post. Already bookmarked this one. As an entrepreneur, i’ll give this article a two thumbs up!

  34. LE

    Kissinger was one of the earliest nerds that I remember when growing up that scored with the ladies because of his intellect.

  35. Richard

    You mean power and influence. There are many poly sci professors who wish intellect was the as alluring as power

  36. LE

    Yeah but the intellect was what led to the power and the influence.

  37. jason wright

    he excelled at war crimes

  38. JLM

    .Henry Kissinger was a brilliant man.At the end of the 1973 Yom Kippur War, he pried the Egyptians out of the hands of the Russians in a coup of monumental proportions that would not be undone until Obama turned Egypt over to the Muslim Brotherhood and thereby setting off much of the tumult that reigns there now.Before Syria spun out of control, he cautioned that the Syrian mess had the potential to give the Russians an opportunity to expand their rented naval base into a new client state in the region.Almost everything he has warned against has come to pass.I heard him speak in a small group and he speaks so low while looking at his hands, that it is impossible to follow him, sometimes.We should have listened to him a bit more.JLMwww.themusingsofthebigredca…

  39. sigmaalgebra

    Yes, every car much be replacedultimately so, sure, every carshould be replaced immediately.Every marriage must end ultimately,so, sure, every marriage mustbe replaced immediately. We cancome up with more such examplesfaster than we can type them in.One of the things I remember about Kissinger is that he was supposedly thebrains behind the Nixon promise of”peace with honor” in Viet Nam. Hmm ….

  40. kidmercury

    +1 for calling that out

  41. JLM

    .Nah, not even close.Now Wm Tecumseh Sherman, who made war against cattle, pigs, smokehouses, root cellars, springs, wheat fields, cotton, plantations, and Southern women — that firebrand was a war criminal.Ask the American Indian whether Cump was a war criminal.JLMwww.themusingsofthebigredca…

  42. Tom Labus

    You mean in Viet Nam? They were playing serious hardball.

  43. JLM

    .There are few things as essential to long term success in business as posture.JLMwww.themusingsofthebigredca…

  44. jason wright

    perhaps then the US should get on with ratifying its membership of the ICC. then we’ll see how people like Kissinger are regarded by the world beyond your shores.

  45. Twain Twain

    Somewhat appropriate given Fred’s post ..”Whatever must happen ultimately should happen immediately.” — Henry Kissinger.”The absence of alternatives clears the mind marvelously.””A leader does not deserve the name unless he is willing occasionally to stand alone.”

  46. Prokofy

    Well, so brilliant he said that even if Soviet Jews were massacred en masse, the US should do nothing for the sake of “world peace”. Not to mention his role in enabling Suharto in Indonesia leading to the deaths of East Timorese. I don’t demonize Kissinger crazily the way the angry and hysterical left does. Because he’s bad enough that you don’t need to. He was right about Syria back then, but given that his advisors actually still play a role with the Obama Administration, you wonder why none of them piped up about Obama’s terrible idea to cave to Putin on the “red line” chemical weapons issue and Assad — which has prolonged the war in Syria and enabled the deaths of tens of thousands of people. I might point out here that the problem is originally “the Russians” then as now and not “Kissinger” or even “Obama”. Its the unwillingness to deter the Russians, the end — and to the extent Kissinger becomes evil it’s because of his unwillingness to do this to the end.

  47. JLM

    .K has his own book just out. I have both of them but I haven’t turned a page yet.…JLMwww.themusingsofthebigredca…

  48. jason wright

    Vietnam was an agrarian response to being carpet bombed and invaded they chose to resist. What else would any native population do, lie down and die?I would like an academic historian to inspect the accounts of the DOD and the Pentagon between 1964 and 1975. the number of invoices submitted by Japanese zaibatsu and Korean chaebol industrial conglomerates will be huge, and the total bill enormous. all paid for by the US taxpayer to serve US corporate interests.When analysing the reasons for wars just follow the money.

  49. Tom Labus

    We keep doing it too.

  50. Lawrence Brass

    I like corporate cultures that deal with controversy, many times it is the only way to detect something wrong about someone in the team, the project or even the corporate culture. Blaming someone and firing him o her fast is too easy. Before doing so it is very important to deal with the root causes of controversy, to discuss, to understand.As far as I have experienced, AHs in upper managment or toxic corporate “cultures” are far more damaging to a company than a single, hard to deal with employee.On topic, I agree with that it is better to take hard decisions earlier than late.

  51. PhilipSugar

    No it was the power.