DOUGLAS CASTLE - SENDING SIGNALSDear Readers (and non-readers who are having this read to them by helpful friends and family members):
Last week I spoke about the downfall of too many ventures -- when creative passion turns to destructive obsession. When we make business decisions regarding our emotional capital invested, instead of regarding the financial consequences, we tend to toss money into the fireplace to heat the mansion. When we become obsessed with "winning back our losses" instead of learning not to repeat the mistakes that led us to them, we are diverted from the path to prosperity and led either to a) bankruptcy; b) hell, or c) careers in federal politics. Acknowledge mistakes and limit your losses.
Yes...this is more easily said than done.
Alec Baldwin and wrote me to thank me for using the "dead tree" metaphor instead of the "flogging a dead horse" metaphor. I was flattered, and touched...perhaps alec is a bit touched as well.
My fellow colleague, philosopher, personal real estate expert, "go-to guy" and author, Yossi Feigenson (also of THE NATIONAL NETWORKER), collected a number a comments regarding the article, and shared some of the best ones with me, so that I might share them with you. This is, in large part, what makes Yossi a superb connector, and an asset to any team. I am glad to have him on mine.
Back to the subject at hand, here is some of the feedback from that last article which Yossi selected to share with me.
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LinkedIn Groups
Group: Leadership Think Tank
Subject: New comment (1) on "EMOTION IN BUSINESS - THE DOUBLE-EDGED SWORD"
Douglas,
Having been involved with small businesses and starting a few of my own I must say yes to your number 5. Ego is an important part of decision making, and every entrepeneur I've ever known has an enormous sense of confidence and puts a lot of stock in his ability to succeed.
When the emotions are high a lot of commitments are made and founders "know" that they are going to make it. The first round of financing is usually spent pretty quickly and usually occurs while the principals are still figuring out their roles. A lot of money is spent building brand and expanding. The prinicipals will start negotiating and arguing about the direction the company should take regarding remaining funds and what to do for following rounds. When the decision is made everyone becomes very personally invested.
A few years ago I convinced my partner, investors, and wife that partnering with a startup company that was providing wireless 802.11g internet access for the San Joaquin valley was a great idea. We would mount the external antennae for them and as an add on service provide the internal networking for the customers. It was a great idea. It was an open market.
Clearwire decided to run our area as one of its test markets. They have wireless systems that only require a small antenna hooked into a USB. No need for external antennas and no need for a 2 year expensive contract. Can you see where this is going?
Stubbornly we pursued this with our partner company. We could even see that it was a throwing good money after bad, but there were lots of rationalizations. We finally folded the business. I still have one of our fleet vehicles, a 2005 Chevy Colorado, as a daily driver. :)
My lesson learned from this situation was to realize that this can happen to anyone, even me. That I should listen to my trusted advisors when they are trying to speak reason. To realize that making the smart decision to pull the plug on a bad or mistimed decision is less painful than trying to avoid looking like a failure. This lesson is still pretty raw but is an important one.
Just a few thoughts from "been there done that." :)
Tom
Posted by Thomas Jacobs
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LinkedIn Groups
Group: Leadership Think Tank
Subject: New comment (2) on "EMOTION IN BUSINESS - THE DOUBLE-EDGED SWORD"
Interesting story that goes the other way. Once Phillips the famous Dutch company was pouring money into a project. Discussions in the board occurred between keeping the money flow or cutting the losses. Actually there where serious recommendations formally made to let go and close the project.
In another year a new industry was created and CDs came to life.
Just to the point that teams and personalities have their way for good and for bad. Some power games kill fantastic projects and products, but other brilliant ones to would never come life if these caracteristics where not there.
Posted by David Russell
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LinkedIn Groups
Group: Leadership Think Tank
Subject: New comment (3) on "EMOTION IN BUSINESS - THE DOUBLE-EDGED SWORD"
Excellent question! I've always wondered why, if blinkers are for horses, then why do so many CEOS wear them? I think you nailed it when you cited ego. I have worked with many leaders who, once hooked onto an idea that they have personally touted as great strategy, simply gallop like crazy not hearing or seeing all the danger signals. They (like a race horse) have no peripheral vision, have a singular goal in mind no matter what, and won't listen to others who are screaming that they're running across a mine field. The answer is difficult. I suggest it requires a leader with the power of self-reflection, trust in others, and who is open to having a personal network of wise advisors who aren't reluctant to ask the wicked questions. Blinkers are great for race horses. Not so much for leaders in a turbulent environment.
Posted by Dr. Eli Sopow
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Gentlemen: Thank you, all three of you for giving me, and for giving our Subscribers the benefit of your intelligence, insight and wisdom. It's indeed times like this that I am especially pleased to have so many LinkedIn Members who have become Subscribers and Members of THE NATIONAL NETWORKER.
By the way, you can get your free subscription to The NATIONAL NETWORKER NEWSLETTER by clicking on http://twitlik.com/OK. And, if you are not already a member of Linked In, you should consider joining -- go to Linked In at http://wwwLinkedIn.com/in/douglascastle, and join up.
I've said it before and I'll say it again. reader feedback and participation are absolutely appreciated and encouraged. When we receive interesting, well-thought-out (hyper-hyphenation!) commentary, we should, all of us, make every effort to share it with all parties who would be interested, and who could be benefitted.
Again, thank you Thomas, Eli, David, and, of course, Yossi.
Faithfully,
Douglas Castle
For more information, please visit Douglas' TNNW Bio.
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