This is the first stab at our “new” format for the On Leadership weekly discussion here at The Washington Post—asking only a handful of experts on our leadership panel to address the weekly question—and they pretty much nailed this one. We asked them about LinkedIn, and life after a blockbuster IPO.
The big challenge for any company that has scored a big success—particularly one that enriches owners and employees alike—is to not let it go to people’s heads, alter their focus, diminish their motivation. Alan Webber and Deborah Ancona have some wise and very specific advice on that, while Seth Goldman recalls how he and his team at Honest Tea dealt with a very similar situation after selling the brand to Coca-Cola earlier this spring. Roger Martin, ever the old BCG consultant, dives right into the numbers to show how disappointed the new outside investors are bound to be, and the difficulty of managing that disappointment inside and outside the company.
From time to time, I enjoy an evening at the blackjack table. Over time, I’ve probably lost as much as I’ve won, but on those evenings that I’m up, I have two simple rules.
The first rule is to keep reminding myself that it’s more luck than skill and that while skill is kind of persistent, luck always runs out. That doesn’t change the way I play and bet very much, but it does help to manage the expectations so that the rest of the evening is enjoyable. After a big win, reminding people early and often about their good luck helps to put things in perspective. Humility is a good characteristic to weave into the corporate culture.
My second rule is to take some money off the table, which is advice that ought to be offered to everyone who has shared in the big payday. By that I don’t mean that everyone should go out and splurge on a new boat or BMW—just the opposite. It’s good for them, and good for the company, if they turn their windfall into their nest egg—the money that they’ll have when personal or corporate fortunes turn and they find themselves short of cash. The leader should set up some sort of mechanism to make it easy (and perhaps profitable) for people to put their new wealth somewhere where it will be safe and unaffected by the fortunes of the company. Having that cushion will help give members of the team the confidence they need to continue to take good risks, even when they are not obvious—not just the next day but over the longer term. By not using the first bonanza to buy the toys they always wanted, they’ll still have that big incentive to score a second time and prove it wasn’t just dumb luck.
And if there is a second time, what should they do? That’s easy. Buy the boat!
Final piece of advice: Announce that there will be hell to pay if anyone is caught checking or talking about the stock price, other than the good folks at investor relations. From that point on, use any and every other metric to keep score and evaluate individual, group and corporate performance.
Click here to see our full discussion page, or dive straight into one of the pieces by following the links below:
Steven Pearlstein | May 13, 2011 11:45 AM