“When are you going to hire new people to take this company to the next level?” This is the question I was asked after crossing the two hundred employee mark and after winning a series of national accounts like Ralph Lauren, Polo, E*TRADE, Chick-fil-a and Alcoa. I listened this time because I had stretched the company too far. For us to grow more, we needed additional systems, structure and hierarchy, and really none of us knew how to do that. No doubt, we needed help at the senior level. Here is the education of a lifetime – where, when and how do you find these people to take the company to the next level and what do you do with the people who brought you to the current level?
For the first time, I was looking beyond myself and my team as we had started to experience our first ever customer service issues. For us to have customer complaints was demoralizing because we were the company that invented the customer service industry for IT and set the gold standard. Those large accounts had simply overwhelmed us. At the same time, we experienced a near fatal disaster while upgrading to an enterprise accounting software system. The problems all started rolling as we had our first ever leadership defection when the controller walked out. People were leaving the company!
Also, for the first time, we were tired and our confidence was shaken. With no known educational training or any knowledge base available on how to upgrade your people, I listened when the bankers and consultants said, “This Company could go public if you brought in heavy hitters.” Where do you find those heavy hitters? They advised me to go hire people who had run $250 million divisions at mega corporations. It sounded right. If these people had run $250 million divisions at companies like HP, then they certainly could be leaders in a $35 million company going to $50 million. Better yet, I could convince my current leadership to become # 2s and learn from the heavy hitters. So we hired a senior level Controller from MindSpring who came in and immediately got our new accounting system working. Then as I watched him resolve our massive accounting issues with clarity and function, I decided to go for broke, and I hired a “Dream Team” to take us to the new level – a new CFO, COO and four national sales directors, all coming from multi-billion dollar corporations. I felt important and relieved as I had the C-Suite executives accept my offers.
Well, we got off to a good start as my current team were all highly professional, and they welcomed the Dream Team onboard. The first two weeks were not bad as the Dream Team had lots of opinions on what we needed to do. However, I started feeling uneasy when they expected a 6-month analysis period with no urgency for action. Then, the problems started when it came to the “doing.” They weren’t leaders who could work in the trenches in the morning, talk to CEOs of major corporations in the afternoon and rally the troops in the evenings.
Let me explain how and why the Dream Team became a nightmare. Growing is a culture of doing. For example, I noticed a large growing receivable on our books from a Fortune 50 company. As I inquired about it multiple times, the Dream Team CFO told me, “I will have Mattie call them.” When it exceeded $140,000 with no collections, I asked him to call the CFO of the company to get the receivable resolved. He replied, “You want me to make a collections call?” Yes, I did, but he couldn’t do it. Worse yet, he always accented the negative and focused on worst-case financial scenarios which put everyone on edge. Up to this point, I had been the sole voice of our company. I did not think of this before hiring them, but the senior level Dream Team had the “walking around” authority to discuss their domain and general company business. A growth environment is a fragile ecosystem of thin ice. You don’t need people jumping on the ice.
Next, the national sales Dream Team was an even longer nightmare. All they did was ask us to do stuff for them all day long while they pontificated about how they did things at Oracle and IBM. Instead of hard-hitting sales people, they were more like actors who needed a supporting cast, special lighting and all the right angles to close a sale. They were truly baffled why they had to make their own copies when we had people who could do it for them.
Then we had a culture clash, and surprisingly it was not with the # 2s and the Dream Team. It was with the Dream Team and my long-term technical employees who saw the Dream Team as doing less and making more than anybody else. The last group that you ever want to get mad is your technical folks because they are highly employable and are an instant hurt to the company if they leave. The Dream Team made them feel unimportant. In return, the technical people made them feel inadequate and technically challenged, offering them books such as Computers for Dummies.
When I realized the Dream Team was a mistake, I wondered why the Controller had been such a big success. Important lesson learned – he had been with MindSpring as they started from scratch and had gone through building, branding and scaling the enterprise. The folks I hired from the mega corporations did not know about the urgency of growth, Getting Stuff Done (GSD) and leading with positive attitudes.
When I terminated the Dream Team, it went from a bad dream to an even worse nightmare. Why? Although they had not accomplished anything, they expected large severance packages like they had gotten in the past. Quite frankly, they were angry at the culture of doing. Next important lesson learned – we could have reduced the severance packages by 50% if we had a “prenuptial” agreement when we hired them. Always leave yourself an out when hiring high level, high priced people.
So once the Dream Team was gone, how did we make it on the Inc. 500 for the next 3 years? We regrouped as I took the entire company for a weekend work retreat where we renewed our roles and responsibilities, talked about why we existed as a company and discussed our shared values. We re-energized our passion to succeed but did not turn inward. We realized we couldn’t do it without some new blood, but only if we hired people that had done it – gone from scratch to scale to success. The answer is simple. Don’t necessarily look all the way at the top for new blood. Instead, look for people that have gone through it and done it.
Here was our plan of action. We decided to hire no more than two senior leadership people at the same time instead of the crazy five that I did. In fact, we hired a CFO who had taken a company from scratch to a sensational public offering then through a bankruptcy. He had really been through it all. We also hired a national sales manager, and then reorganized the original leadership team, making some # 1s again, others # 2s and even a couple # 3s.
Was the Dream Team comprised of bad apples? No, they were just misplaced apples by an entrepreneur who didn’t know better. That experience was definitely a lesson learned the hard way.