Which Way Do You Run?

The plan was to drink until the pain over.
But what’s worse, the pain or the hangover?
—Kanye West, “Dark Fantasy”

When you found a company, it tends to get wired into your nervous system. I used to become physically ill whenever there was something wrong in the company — even if I didn’t know what it was. Even if I couldn’t see it, I could feel it. It wasn’t a pleasant feeling. Most good founder/CEOs that I know have this same, gnarly experience. Unfortunately, feeling it turns out to be the easy part of the job.  

The hard part is what do you do when you feel that dread? Do you run towards your fear or do you run away from it?

Six months ago you hired a head of sales and you’ve noticed that his understanding of some of the deals in the forecast is pretty thin. You’ve heard a couple of comments about him being an empty suit, but he’s made the number in his first two quarters. In your gut, you can feel the issues, but the last thing in the world you need to do right now is run another executive search. What do you do?

Your last round’s valuation was high and valuations have fallen. Your topline growth is a bit lower than expected and your spend rate is as planned. You can feel that’s going to be a big problem. Do you intellectualize it away? “We’ve got a great new product release coming and we’ve gotten great press lately. We can make it up this quarter” or do you run towards the terrifying situation and try to figure it out now?

When I was CEO of Loudcloud, we were growing so fast that the Fire Marshall called to warn us that he would shut down the company if we didn’t find more space for all the people we had. I told my controller to find us some space right away, but it somehow didn’t feel right. It felt like darkness. Somewhere in my body, I knew that the end of the dot-com boom was on the horizon, but I couldn’t logically articulate it, so I delegated the decision. I ran from the fear. 

We signed a new lease for what would become known as “The Maude Building” because it was located on Maude Avenue around the corner from the original building on Mathilda Avenue. It gave us room to grow for the next several years. It required $30M in restricted cash.

The dot-com crash came, we lost nearly half of our customers, and we never moved into The Maude Building. The lease we signed was for $10 per square foot per month. When we tried to rent it out, we found that post dot-com crash, the market price was $0.90 per square foot per month. But given the number of companies that had gone out of business, there were no takers even at that price. I ran away from my fear and lost $30M. Thirty million dollars that I badly needed. Yet somehow, some way, we survived—and maybe we survived because I never ran away again. To this day, every time I feel fear, I run straight at it, and the scarier it is, the faster I run.

Which way you run is often the key differentiator between effective and ineffective CEOs. Almost all CEOs know where the problems are, but only the truly elite ones run towards the fear.

On October 29th, Ben has a new book coming out, What You Do is Who You Are, which tries to answer a question crucial to every organization: how do you create and sustain the culture you want? Ben explains how to make your culture purposeful by examining four intriguing models of leadership and culture-building well outside the usual business case studies. Go here to learn more and pre-order, or you can find it online wherever books are sold.