I’ve always been fascinated by how highly successful people choose to exit their field or end their career. Some “go out on top,” reaching a major milestone in their field, choosing to step away with their legacy secured. Others seem to choose their exit based not on a particular achievement or accomplishment, but rather on the state of their personal level of skill. When they sense that they can no longer perform at the level, they choose to walk away. Still others, seemingly can’t choose to walk away. Even if their skills are diminished and the organization suffers as a result, they just can’t willingly get off the horse.
Early in my consulting practice I remember working with an NFP organization whose founder/CEO ignored three repeated succession exits. He simply “wouldn’t or couldn’t” comply to retire and let a younger leader take the reins. And yes, it got ugly.
We see the aging athlete, body breaking down, but still suiting up for one more game, series, or season. We say to ourselves, “Why can’t that guy just walk away?” We see the out of touch leader or owner, no longer able to connect with their industry or team, but convinced of their necessity to the organization. We say to ourselves, “I hope someone has the courage to tell me if I ever get there.” We see the fledgling team, initiative, or business clearly dying and beyond repair. We see the futile efforts of its owners and stakeholders, sinking resources into something that can’t (or shouldn’t) be saved. We hope that won’t be us or our organization. We hope we’ll know when it’s over, when to call it quits, when to cut our losses and move on.
Unfortunately, most of us won’t. We’re good enough at spotting the signs of death in the careers and companies of others, but most of us simply can’t self-diagnose. We’ll hang on too long, burning up cash, credibility, and relationships until we’re forced out by the board, the bank, or the street. And just as an alert: NFPs can be the most challenging.
If you’ve seen this first hand you’ve likely muttered the same question we all do – “Why?” Why can’t they see it’s time to shut it down? Why can’t they let it go?
Although there are a number of reasons, the “why” often falls into one of two categories: Pride or Identity.
Pride – When every metric, consultant, and confidant indicate that something can’t be saved, pride says, “But I can!” This pride is usually the unintended result of significant success over a long period. When you get accustomed to always winning, it’s hard to believe the scoreboard when it tells you that you’ve lost. And to be fair, it is that same persistence to “not quit” that made up our formula for success.
Identity – I believe work is meant to be a significant part of each of our lives. I believe it was part of God’s original design for creation, and that regardless of what our work may be, there can be divine calling and purpose in it. Our work should be important to us. Where we get in trouble, however, is when specific work – a role, job, or company – becomes so tied to our identity that our ability to do that work or sustain that organization begins to also solely define our sense of worth. This confusion of identity is often the trap that founders and owners fall into. Gordon MacDonald discussed this particular danger in his book Ordering Your Private World: “They can have an increasing inability to separate role from person. What they do is indistinguishable from who they are. That is why people who have wielded great power and enjoyed positions of privilege find it very difficult to give them up and will often fight to the death to retain them.”
How can we as leaders, owners, and founders avoid this fate for ourselves and our organizations? A pilot friend once told me, “You know you’re in trouble when you’re out of fuel, altitude, and speed.” In some cases, you can survive the absence of one, or even two of these things, but never all three.
Fuel = cash. Cash really is king. It’s not just nice to have on hand, it’s necessary for survival. Cash funds operations and makes growth possible. It can absorb mistakes and allow for strategic shifts. When companies are out of cash, or their ability to generate cash is hampered, viability is often at stake.
Altitude = strategy. Sometimes you just get beat. Sometimes you do everything right on paper, and a competitor comes along that’s just better, faster, or stronger. If it isn’t a competitor, it might be a crisis or market condition that can’t be overcome. Regardless, when you’re out of strategic moves, or when your only way out is a low probability home run, you have to seriously consider walking away. And keep in mind that this applies to relationships. Whether it’s business partners, investors, or collaborators, if a relationship has reached a level of toxicity that can’t be repaired, it might be time to walk away.
Speed = market demand. Few companies are truly innovators, capable of pushing the market one way or another. Most are pulled by market demand. They grow because the market exists for them to grow and wants them to grow. If the market demand for your service or product has dramatically slowed or shifted, you have no choice but to shift with it or shut down. Be careful, though, of shifting outside your core competency. If you own a coffee shop and the market is demanding hot tea, you can probably make that shift. If the market wants farm-to-table, fresh pressed, organic juice … that might be a bridge too far. Be honest about your competencies and your ability to shift. Don’t burn resources on things you really can’t do.
Don’t crash the plane. Land it while you still can.