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Earl R. Smith II, PhD

(Read More From My Blog)


The deer in the headlights – we all know the story – the car rounds the bend on a dark night – the deer stands frozen in the glare and cannot move even as its death approaches. Humans sometimes act this way – and sometimes with similar consequences.


Most of my mentoring work is done with CEOs of middle-market companies – by that I mean well established operations with a proven senior team that has worked through most of the big inter-personnel issues and found a way to work productively together. Under the leadership of a CEO who values open communication and camaraderie – and does not tolerate turf battles and information hording.

It’s a real pleasure to work with this kind of company. The challenges may be great but the culture allows the team to address them forthrightly. There is no substitute for ‘adult conversations’ and close collaboration when business begins to throw major challenges at a team.

I focus on middle-market companies for a reason – a recognition that I am more productive dealing in adult situations. A friend recently put it this way, “Chief, you just don’t do well with kids!” I knew what she meant and it is true. My most unproductive efforts have been with other people’s start-ups.

So that you might understand my approach to mentoring, let me relate a comment from one of my very favorite comediennes – Moms Mabley. Moms was prone to putting it this way – “I’d rather pay a young man’s airfare from New York to California than tell an old man the distance.” For me, it is a matter of investing or wasting my time. Teaching a wanna-be entrepreneur how to be a CEO is simply not as fulfilling for me as working with a CEO who already understands the role. I recognize that is my own particular bent and that others relish what I avoid – but there you are – different strokes as they say.

Dissipation Inclinations

One of the reasons that I avoid young entrepreneurs and start-ups is that they are so prone to dissipating opportunities. A recent experience brought that tendency into sharp focus. A young entrepreneur – on his third or fourth attempt to start a company – had finally gotten some traction. Business wasn’t gushing out of the ground to be sure but there was business and all the appearance of more to come.

The company was growing – in fact, outgrowing its founding team. As the pace picked up, there was more need for experienced professionals and less for the amateurish players who had participated in the launch. The investors were pushing the CEO to make the necessary changes. The situation called for decisive action by the CEO. But the CEO just could not bring himself to act in a timely fashion.

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At the core of the CEO’s actions was a feeling of unworthiness to recruit – let alone associate with – professionals who were much more experienced. But it went deeper than that. The motivation of the CEO was to ‘build a company and sell it at a big profit’. Over and over again I have seen this simple-minded construction in startup teams. The company is a road to riches. But such teams tend to have a culture of exploitation and opportunism. And the CEO who heads such a team tends to to lack the necessary vision that will guide the growth of a company through the startup stage and into middle market standing. The threat that new and more professional team members pose is that they immediately point out that such a vision is lacking – they tend to take a much longer view of things and see the company as delivering value to its customers rather than as a ‘quick kill’ opportunity.

The results were of the situation I am describing were predictable. The team was not expanded. Needed professional skills were either turned or driven away. Money was wasted paying the salaries (and eventually severance) of unproductive team members. As the investors became more concerned, additions to the team were delayed because of the scarcity of funds. (Can you see the downward spiral here?) The situation finally did resolve itself. However, by the time it did, it was too late. The company was running out of runway and the investors had decided not to advance any more funds.

The Post Mortem

I conducted the wrap-up interviews with the senior team. The one with the ex-CEO was particularly telling and emotional. We reviewed the history of the failed startup and that of his prior attempts. The question that came up in the CEO’s mind – the elephant in his room – was, “why are you trying to fill a role that you are obviously not good at?” The answer he preferred came down to, “I’m not good in large organizations and couldn’t think of anything else to do. I wanted to run my own shop.”

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