One of the most underrated leadership traps in organizations has to do with different revenue sizes.
Recently, a wingman of mine who happens to run a capital equity firm told me the story of a manufacturing company they purchased several years where a leadership trap occurred. Impressed by the track record of a CEO who had run larger manufacturing companies revenue-wise, this individual was hired to run a smaller company that my friend’s firm had acquired. In the first year with the new CEO at the helm of the ship, it became painfully evident that a leadership trap had developed.
What are some of the visible components of a leader stepping down a few rungs on the ladder to run a smaller organization?
✅ The leader starts filtering information back to the owners of the company based on what they wish to share and when they want to share it. Unfortunately, this happens more than you think prompting yet more challenges for better governance at the board level.
✅ The leader actively transfers processes he/she previously deployed at larger organizations to operationally manage. These processes begin to absorb existing management time; resulting in a new trap that chokes off new business development and monitoring customer relationships.
✅ The leader walls himself/herself off in their office, has meaningless meetings, and fails to visit key customers/suppliers. What results is that key business metrics skid sideways rather than showing some progress, thus justifying the hiring of the new CEO at the outset.
✅ The leader begins rationalizing and justifying his/her team’s approach when directly challenged. Specifically, “this situation is unique, will require more turnaround time than previously thought, and our processes are proven to be successful.”
The trap grows larger each month. How does this story end? The Board of Directors fires the CEO a mere sixteen months into the job. This proves a fallacy of business leadership: those who choose and are selected to run smaller revenue organizations often forget the lessons they learned in successfully building businesses. The notion that a leader can step down and automatically be successful is plain wrong.
My friends, please remember this: respect, consideration, and courtesy matter a lot. Treat others fairly, decently, and equally. Build your moral compasses carefully and always monitor them daily. You know the battle cry: do your best each day. No one can ask more or less from any of us.
All the best/blessings, Mark