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Being Hit By A Bus
I've said it a thousand times if I've said it once, "what if you get hit by a bus?"
I have no idea why I chose being hit by a bus as the way I express the fear that the "key man" is lost.
But death isn't the only way you can lose a key man (or woman). Moving on, being poached, losing interest, reaching retirement age are all much more common ways to lose someone than death.
That said, I did once lose a CEO to death. He had a massive stroke and died within a month of our closing on a new investment. It was a terrible tragedy and had a huge impact on me. I wasn't able to focus on things clearly for weeks, if not months.
Yesterday I said to one of my CEOs that we need to develop some additional leadership in the company because he might get "hit by a bus". He laughed - hard.
I wasn't joking. He couldn't imagine being hit by a bus. I could.
I'll tell you a story. It's a true story. And the CEO in this story, like the CEO who laughed, will recognize themselves in this post. That's the way it is. You can't tell true stories without talking about real people. Jerry stopped blogging for a couple months and one of the reasons was he struggled with the issues around talking about real people.
I have enormous respect for both CEOs. One can't imagine being hit by a bus. The other didn't plan very well for succession. Neither issue takes anything away from what they did, which was to build two incredibly great companies.
Now on to the story.
A guy near the end of an amazing career starts a new company in an emerging area of technology, a technology that is now transforming huge industries overnight.
He was a pioneer. Few had the vision that this technology could work. He did.
He built a very large company very quickly. One of his VCs, not me, kept harping on the fact that he had no logical successor in the company. That VC wanted a strong number two.
The CEO did hire a "number two" guy but he didn’t work out. After that failure, the CEO pointed out that any person who would make a good replacement for him would want the CEO job right away and that is why it was so hard to find a good "number 2" person.
In the meantime, the CEO was worried about other things, getting new services launched, revenues ramping, big deals. He had a good team that he felt he could groom over time. And his team was good. But there was no logical successor.
The Company went public, traded for a lot of money. Then the market broke. And while the Company's stock went down, the Company continued to grow.
The stock became seriously undervalued.
The CEO came to realize that running a large company wasn't his skill set nor was it as exciting as the rapid growth phase. He wanted to to retire and turn the business over to a team better suited to the task at hand.
The board and the CEO discussed the issue and decided to initiate a search for a new CEO.
The Company announced the search because it was publicly traded.
A hostile tender offer came within a month from a mercenary competitor.
After months of working on various deals, the Company was sold to a "white knight".
And that's the story.
Would it have turned out different if there was a logical succesor in place when the CEO decided it was time to retire. I think so. I am not saying the investors would have been better off. That's way too speculative. But the story would have played out differently for sure.
And that's why "being hit by a bus" is such a concern. Key men and women make great companies. But they are often blinded by the risks that result when companies become too dependent on them. And they don't see it because they are acheiving great things and everything is going well.
And like the CEO in my story, they don't think they will be able to recruit a really strong successor into the "number 2" role.
I wrote this for the CEO who laughed. Because this isn't a laughing matter.
And to all of you CEOs out there who read this, take it seriously when someone worries about you being "hit by a bus". You may think it won't matter to you, but it will someday and then it will be too late to address it.
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» Subtle and not so subtle insights from biriblog
Fred Wilson of Flatiron, writes of the importance of planning for leadership succession. Specifically CEO succession, and how critical it is for everyone involved to get involved, and how often it is ignored, resulting in some tough consequences. Great... [Read More]
Tracked on Jan 12, 2005 9:10:46 PM
» Subtle and not so subtle insights from biriblog
Fred Wilson of Flatiron, writes of the importance of planning for leadership succession. Specifically CEO succession, and how critical it is for everyone involved to get involved, and how often it is ignored, resulting in some tough consequences. Great... [Read More]
Tracked on Jan 13, 2005 2:57:07 AM
Posted January 12, 2005 in Venture Capital and TechnologyComments
Death by bus is a well established metaphor in the software industry.
See, for example, http://c2.com/cgi/wiki?BusNumber, which defines a software development project's "bus number" as "the number of developers who all have to get hit by a bus to lose some important skill or information from the team."
I can't count how many meetings I've been in where the question "what if X gets hit by a bus?" comes up.
Posted by: bill | Jan 12, 2005 9:51:55 PM
Matt Blumberg (whom I hope is not the CEO you refer to) blogged http://onlyonce.blogs.com/onlyonce/2005/01/sometimes_there.html about a recent experience at ReturnPath that supports this point as well. Finding people for top level jobs is not always easy. Let alone when you don't have a #2 plan and need to fill a hole instantly.
Posted by: Peter Hoskins | Jan 13, 2005 11:15:11 AM
This is a great post that really got me thinking.
One of the most important things you build into any business is redundancy.
You don’t rely on one web server if you’re running an Internet business, and when you drill down and look at each of your web servers (if you know what you’re doing) you’ll find that they don’t rely on just one hard drive, power supply, or Internet connection.
Without this redundancy no one in the IT department would ever be able to sleep at night.
However, some CEOs build into their businesses dramatic—even dire--consequences if they leave the business. They keep their investors, partners, clients, and employees on pins and needles. Is it just ego gratification? In some cases I’m sure it is, however it’s deeper then that.
Also, this isn’t just limited to the Martha Stewart’s of the world. Nope, this goes beyond the people whose personalities are synonymous with their brands. In fact this effect can be seen equally—or more often--with CTO/CIOs and Directors of Sales.
Those positions carry with them the keys to the castle. In some cases it’s the client relationships, and in others it’s the singular knowledge of how something wildly complex was technologically achieved. You loose a director of sales you miss two quarters, and if you loose a tech lead you can loose an entire development cycle. It can sink an entire business.
My perspective on the “bus” issue is that it parallels the delegation issue. Some people can delegate brilliantly, while others either don’t even try or even worse they sabotage the whole process.
Watching these people operate reminds me of adults who struggle with relationships later in life because a parent left them at a young age. They’re so wary of being hurt that they are self-defeating.
In my first serious business, Silicon Alley Reporter, I probably sucked at delegation and moved up to being OK at it. There were some people I felt I could give a whole project to (Gordon, Xeni, Joanna, etc.), and others I felt like I had to keep a constant eye on (let’s forget about linking to those folks :-).
It was a lack of experience on my part combined with some bad hiring decisions. Sometime your 100% correct in not delegating to someone, however if this is the case then you’re guilty of not hiring the right person!
Running Weblogs, Inc. has been so much easier. I’ve pulled together a six-person management team who I don’t tell what to do, and we’ve got almost 50 bloggers who we don’t even edit!
When I start working with someone I make it clear that the reason we’re choosing to work together is because I implicitly trust their judgment. Sure, I know they will makes tons of mistakes because that is what people who make great things do—they fail fast as Esther would say. However, I tell them that we’re also choosing to work together because they are the type of people who identify and rectify the problem in an ego-free fashion.
Heck, I’ve made a half dozen *major* errors in the first year of Weblogs, Inc.
Error one: Most writers want to get a revenue split. WRONG! Most writers want a steady pay check.
Error two: One domain name (i.e. www.weblogsinc.com) with sub-domain names (i.e. http://apple.weblogsinc.com) is better then multiple unique domain names (like http://wwwEngadget.com, http://www.autoblog.com, or http://www.tuaw.com). WRONG! Stand-alone domains do better.
Error three: One common design for all blogs is more appealing to advertisers and users because it builds trust and familiarity. WRONG! People love a unique look and feel above the benefits of a standard design.
I wasted hundreds and hundreds of hours of our time, money, and other resources on those three mistakes alone. However, the team learned hundreds of details of WHY those decisions were wrong and why other ideas were better.
Now, what’s really great about taking yourself out of the day-to-day, minute-by-minute decision making process is that you can focus on the big picture. You can do deep, deep analysis of the actual results of your business instead of second guessing your team members approach. In fact debating which way to go—North or South—takes longer then just going North for a day then turning around and going back South. In fact, all you’ve done is educate yourself as to what’s up North and why the South is better.
I’ve let the sales folks go off and give it their best shot. Then I spend my time obsessing in an Excel spreadsheet with the results of their hard work and creativity. We look at the results together, come up ideas to do make things work better and everyone feel great about the process. Most importantly, everyone learns the secrets of the business in this process—thus building even more redundancy!
Of course, after doing a round of this, I just do it again. Every time you figure out something new—like playing basketball or chess.
The other great thing, is that when you free up your time you can survey the whole landscape of your business and look for the team members who are struggling. You can just swoop in, give them 100% of your focus, and help them solve their problem (or fire them if you have too!). If you do this right you’ve a) helped *them* solve *their* problem, b) built up their confidence, and c) strengthened the trust between both parties. They know you’re only there to help, and you know that they are mature enough to identify (and admit) problems. Solving problems is easy, identifying them and figuring out why they happened? That’s the hard part!
The “metaskill” in all of this, which I’m currently trying to refine, is in empowering your management team to think this way. If the leader on one of our blogs notices that one of the other bloggers on the team is constantly making the same spelling error do they just fix the error and move on, or do they take 10x more time to help the other blogger understand and avoid the error in the future?
I keep telling my team that when no matter how much stuff you delegate, there is always more to do. Working your way out of your job is the goal—that’s how you build a big, sustainable business.
You can spend six months climbing to the mountain top, only to see another taller, more challenging mountain that wasn’t even visible from the previous valley.
That’s what it’s all about… getting to the next mountain top.
Posted by: Jason | Jan 13, 2005 9:13:42 PM
I always say "'something' hit by a bus". I think being hit by a bus would be the funniest thing on earth.
Posted by: PB | Apr 11, 2005 12:38:34 AM
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