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Wednesday, June 29, 2011

Take a Stand!

The time will come in every entrepreneur’s company existence when a critical decision must be made about direction of the business.  It may be around deal structure, testing or design of product, new hires, downsizing or firing, how much to spend on a program or some other issue.  The entrepreneur founder may or may not be the CEO, but for sure has put enormous energy, thought, and time already invested in the company. 

Most often the company is like having a child to the entrepreneur.  This can make it difficult to make strategic business decisions because of this conflicting emotion.  Secondly, decisions can be affected by the concerns over having a job and a salary; this even the case for the employees.  The security of having an income to pay the bills is a pretty big issue when it comes to the decision process.  It may cause your team to not provide their best feedback due to fear or concerns of loss of a job.

Decisions of significant level of importance are not made by one person.  The Board of Directors may be involved along with senior management; hence, the problem. Large groups do not always think alike or act alike. This can lead to a group dynamic that does not result in the best decisions or directions in the end.  They may be ok for some, but not for others.  

Sooner or later, the time will come when a decision is being driven toward a final answer where you are not just in disagreement with the approach, but you know in your gut it is the wrong way to go.  This is when all of the factors of income, security, relationships, ownership, and everything else become a variable as to how you respond.

Take for example a situation where a Board Member has become heavily involved in a negotiation on a deal and is sanctioned by the Board to do so.  The deal terms are ones you as the CEO, entrepreneur, or employee know will cause great stress and even the possible demise of the company.  Will you go to battle with the Board and/or management to try and convince them they are wrong?  Will you shy away and just allow things to go the way the Board or management is pushing them?  This WILL lead to a most difficult decision on your part.

A few rules can help guide you, but in the end you have to decide what is right for you.

Review:  Your first step might be to completely review the situation and possible outcomes.  It is critical you understand the ALL issues and proposed directions.  Collecting the data is essential at this point. Don’t skimp on this part in time or information.

Analyze:  Once you have the data and understand all the parameters of the proposed directions, reanalyze the situation.  Keep in mind there is a real possibility you could be wrong in your assessment.  There is always several ways to address directions and sometimes no one is perfect.  Keep in mind that on an occasion the collective does know better, and sometimes they just get it wrong.  Make sure of your facts and the potential results. Firm up your resolve as to what you believe to be the best way to proceed.

Persuade: If you find yourself in this position, clearly you are not the sole decision maker and you are not 100% control; yes, you still could be the CEO.  One of the best ways to persuade people is with facts and thoughtful analysis.  This is why you needed to review and analyze.  You cannot persuade if you do not have adequate information.  Persuading people sometimes may include negotiating; possibly with the Board or management.  Maybe there is middle ground that you can convince them would work equally as well or better.  If you are able to devise an alternative which is superior, this is the time to present it.  In the end, you must convince the Board or Management to change what they propose, or it will likely go the way they originally planned.

Decision Time: This may be where the line “Are You a Man or a Mouse” comes into play.  There may come a time when you have to make a serious decision whether to go against the masses and just say NO.  You recognize it may have an impact on you and your career with the company.  If you are so violently against the impending direction, maybe you should not be there anyway.  You will have the difficult issues of income and stability contributing to your anxiety, but what if you are right and the whole direction leads to a catastrophic event in the company.  Do you want to watch from the outside or inside the company?  That may be important to your decision.

On a personal note: I have faced these issues several times over many years.  The complexity of each situation was different as were the outcomes.  In early years, my decisions were heavily weighted by need to provide income for the family.   As time progressed, greater stability allowed for a greater ability to try changing events.  In the end, there is never a simple answer. But, I have resolved for myself, that I will never again stay affiliated with a business where planned directions are vastly out-of-line with my thinking and what I believe to be right. Or, at least until the Next Time I am confronted with such a decision.

  Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon