I've been a co-founder a couple of times, but never a CEO. At one startup (not a co-founder, but was around it before it started), we took on a new CEO (new to us, first time CEO to him) to try and get the company directed the right way. For a time we did. About a year after that we hit a snag and things started going south.
Sometime during all of this the CEO took a pay cut, and then simply checked out (BAD BAD BAD). We ended up in a crisis and with nobody at the helm to guide us through it the crisis got worse. Executive decisions were made, but without a corporate officer to direct liability to, things were very "sketchy". Eventually it got so bad the investors decided to sell the company off and recoup what they could, but needed the CEO to stay on for some legal reasons -- they gave him no pay, he provided no interaction with anybody in the company. It was beyond unpleasant.
Talking with him later on he admitted he was embarrassed things had gone the way they did, but justified his behavior that half pay means half time and no pay means no time. There was some realization that with a few simple decisions early on (when it was just a snag) probably would have resulted in no pay cut and full time, plus a graceful exit. But hindsight is 20/20 and it's an experience that he and the management learned tremendously from.
TL;DR The real problem was that when times were good, he was the captain of a proud, well run sailing ship at full sail. When we ended up in a storm, his psychology told him to take cover, even as the ship sank into the abyss.
I'll relate a similar anecote; dot com exploding crisis in the board room, frozen management. I reached out to Scott McNealy and asked how at Sun we had hit rough times and it got painful but it never got stuck. His response changed my whole take on things. He said,
"Chuck nobody knows what they are going to be when the chips are down, they can think they will be a tiger but they sometimes they discover they are the deer, and stare transfixed at the headlights. The best you can do is test people early to get a sense of how they respond and move the ones who can't act in a crisis into safer jobs."
I have found this to be very accurate advice. People who you wouldn't think would freeze up can (and do) and people who you felt were meek and softspoken can suddenly stand up and take charge. Its the fight-or-flight instinct and its wired in the part of the brain you don't have a lot of control over. It sounds like your CEO friend discovered he couldn't take the pressure and ran. It can be a shameful place for a proud person, it has driven people to suicide. Understanding that its not under your conscious control can help.
Reading this I think the CEO is only half of the problem - the board / ownership decided to give him a pay cut, then take pay from him entirely.
Come on. If you don't trust someone enough that you cut their pay, then really you should just fire them and get someone else in - the mixed signals are what killed this place.
No need to add identifiable details, but what sorts of things were part of "we hit a snag and things started going south."
I can imagine someone checking out in the ways you describe, but only in the face of mind-melting obstacles, the kind that cause people to lose all hope and throw in the towel once spotted.
As a side note, the picture at the end shows the last second of the great fight between Diego Corrales and José Luis Castillo[1][2].
Round 10: After being knocked down twice and hardly beating the clock, Corrales turns the match, traps his opponent against the ropes and causes the referee to end the fight.
Amazing write up - quite informative - interesting how non-CEO's do not understand and greatly underestimate the value a good CEO brings to the equation.
It's easy to talk about the CEO when he is not listening or present... but they can't imagine the work behind the scenes.
Most difficult CEO skill? That's a life skill. Not to dismiss how hard it must be to be a CEO because I couldn't imagine it but those lessons apply everywhere. Replace the word CEO with the word life and you have an article about how to manage the stress of everyday life.
Edit: I really really don't want to sound dismissive, that's really not the intent.
"If you focus on the wall, you will drive right into it. If you focus on the road, you will follow the road. Running a company is like that. " and “I didn’t quit.”
I am going to engrave the above mentioned quotes in gold* and put it on my wall.
* - Or just have my young kid write it with a pencil on a paper and put it on my wall.
Haha, it's a great life lesson no doubt. I learned this concept a few years ago when I first started to ride a motorcycle, and they have a phrase for it - target fixation:
What amazed me more was how the fundamentals of riding a motorcycle contained many great life lessons. It's not just target fixation, but rider awareness, maintaining margin, and all sorts of other little things.
[+] [-] bane|13 years ago|reply
Sometime during all of this the CEO took a pay cut, and then simply checked out (BAD BAD BAD). We ended up in a crisis and with nobody at the helm to guide us through it the crisis got worse. Executive decisions were made, but without a corporate officer to direct liability to, things were very "sketchy". Eventually it got so bad the investors decided to sell the company off and recoup what they could, but needed the CEO to stay on for some legal reasons -- they gave him no pay, he provided no interaction with anybody in the company. It was beyond unpleasant.
Talking with him later on he admitted he was embarrassed things had gone the way they did, but justified his behavior that half pay means half time and no pay means no time. There was some realization that with a few simple decisions early on (when it was just a snag) probably would have resulted in no pay cut and full time, plus a graceful exit. But hindsight is 20/20 and it's an experience that he and the management learned tremendously from.
TL;DR The real problem was that when times were good, he was the captain of a proud, well run sailing ship at full sail. When we ended up in a storm, his psychology told him to take cover, even as the ship sank into the abyss.
[+] [-] ChuckMcM|13 years ago|reply
"Chuck nobody knows what they are going to be when the chips are down, they can think they will be a tiger but they sometimes they discover they are the deer, and stare transfixed at the headlights. The best you can do is test people early to get a sense of how they respond and move the ones who can't act in a crisis into safer jobs."
I have found this to be very accurate advice. People who you wouldn't think would freeze up can (and do) and people who you felt were meek and softspoken can suddenly stand up and take charge. Its the fight-or-flight instinct and its wired in the part of the brain you don't have a lot of control over. It sounds like your CEO friend discovered he couldn't take the pressure and ran. It can be a shameful place for a proud person, it has driven people to suicide. Understanding that its not under your conscious control can help.
[+] [-] lifeisstillgood|13 years ago|reply
Come on. If you don't trust someone enough that you cut their pay, then really you should just fire them and get someone else in - the mixed signals are what killed this place.
[+] [-] hkmurakami|13 years ago|reply
Am I misguided to think that people who use this as an excuse would never work twice as hard / twice as long when given twice the pay?
[+] [-] brandnewlow|13 years ago|reply
I can imagine someone checking out in the ways you describe, but only in the face of mind-melting obstacles, the kind that cause people to lose all hope and throw in the towel once spotted.
[+] [-] mduerksen|13 years ago|reply
Round 10: After being knocked down twice and hardly beating the clock, Corrales turns the match, traps his opponent against the ropes and causes the referee to end the fight.
[1] http://en.wikipedia.org/wiki/Diego_Corrales_vs._Jose_Luis_Ca...
[2] http://www.youtube.com/watch?v=imZaiGJgbsw
[+] [-] gadders|13 years ago|reply
[+] [-] Grovara123|13 years ago|reply
It's easy to talk about the CEO when he is not listening or present... but they can't imagine the work behind the scenes.
[+] [-] bpatrianakos|13 years ago|reply
Edit: I really really don't want to sound dismissive, that's really not the intent.
[+] [-] sliverstorm|13 years ago|reply
[+] [-] ccollins|13 years ago|reply
http://news.ycombinator.com/item?id=2396120
[+] [-] 001sky|13 years ago|reply
[+] [-] rehack|13 years ago|reply
I am going to engrave the above mentioned quotes in gold* and put it on my wall.
* - Or just have my young kid write it with a pencil on a paper and put it on my wall.
[+] [-] kirse|13 years ago|reply
http://en.wikipedia.org/wiki/Target_fixation
What amazed me more was how the fundamentals of riding a motorcycle contained many great life lessons. It's not just target fixation, but rider awareness, maintaining margin, and all sorts of other little things.
[+] [-] hasenj|13 years ago|reply
[+] [-] tomasien|13 years ago|reply
Seriously, have without a HUGE network or traction/lots of revenue it's almost statistically a miracle to make it happen.
Great article though, just pointing out the obvious.
[+] [-] 001sky|13 years ago|reply
http://bhorowitz.com/about/
[+] [-] JimmaDaRustla|13 years ago|reply
[+] [-] yeoldestuff|13 years ago|reply
I was thinking someone's conscience finally caught up with them. Only to discover this is just more Internet VC gibberish. Oh well.
[+] [-] buu700|13 years ago|reply