My biggest mistake as a CEO scarred me for a long time. It also taught me to prefer Cats over Casinos. It’s taken me 5 years to gather the courage to share the story. Here it is…
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It’s 2017 & I have been running @321schools for 5+ years. The challenges of the early years are finally over & things are stable. To take things to the next level the board wants me to hire an experienced leader as COO. The team agrees & frankly I do too.
I started the firm when I was 25 & it’s been a 5 year grind. I dream of a COO who will share my load by taking on things like finance, operations, fundraising so I can focus on product + strategy.
—— Soon, a trusted advisor introduces us to a very promising candidate.
He has 30+ years of experience in big companies & is interested in joining our little non-profit startup. Even before meeting this person, I am in love. Anyways we have our first meeting & it’s great.
Actually it wasn’t but I didn’t notice. I desperately wanted this person to be the one who could take my troubles away, so I only heard what I wanted to hear. —— After a few more of these chats, I make my biggest blunder: Decide to hire him without doing our full hiring process.
We were known for our great hiring process: The overlooked secret to build a great company culture: Your hiring process But I felt awkward doing it for someone so much older than me & I desperately wanted this to work. We even agreed to his salary demand which was 3X of mine. I didn’t mind as I saw it as mission over money.
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The warning lights started flashing very early. ‘Inputs that didn’t make sense, jumping to conclusions, talking in a condescending manner.’ So I doubled down on supporting him: touched base regularly, created space for his questions-ideas & reminded the team to give him time
2 months in, we are pitching to a major funder. The new COO volunteers to own this. Finally! Many follow-ups later he finally sends me the deck the night before the pitch. I open it & am shocked: He has copy-pasted our reference doc into the deck, word for word.
He took 2 weeks for this & kept over-ruling his team when they tried to correct him. I stay up whole night to remake the deck, all the while as it dawns on me what a huge mistake I have made.
—— Immediately after the pitch, the 2 senior managers who report to the COO reach out.
They have both been here for many years & I trust their judgement. They share various evidences of the his poor management & decision making. They end with 1 final damning line: “We come out of meetings with him, with more confusion, than what we went in with”
I know this has to end & decide to approach the board. I am petrified but thankfully they are supportive. They ask me to speak frankly with the COO, give him a 1 month probation and if it still doesn’t work, to end it. —— Nothing changes in that 1 month & so we decide to end it.
He is not surprised & makes 1 demand: “Pay me the full year’s salary & we can call it quits”. This is when I lose it. I had not taken a raise in 3 years so we could ensure team members got raises & this person who had done nothing for 3 months wanted to be paid for a whole year.
We refuse, he gets a lawyer & starts trying to intidimate us. I had never dealt with a lawsuit before so it was very overwhelming.
He finally backed off after 6 months but I felt incredibly guilty. My poor decision had led to this & my confidence took a long time to recover.
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A year later we restarted our search. This time I made sure I followed our process & we hired several incredible leaders. They gave me the needed support & added huge value to our work. In fact one of them even took over as the CEO, when I stepped down last year.
For a long time I thought that the lesson was that I need to improve my decision making in desperate situations.
—— I saw myself in that classic Casino scene. The desperate player, agonising over the final call. Win big or lose it all. Till I realised I had it all backwards.
It was NOT about becoming a better decision maker in desperate situations. It was about AVOIDING those situations in the 1st place. This is the secret of the world’s best decision makers & also of Cats with 9 lives: Morgan Housel explains risk & margin of safety using cats falling from buildings I just wish I had learnt this lesson in a less painful manner.