The Commonality of Problems . . . and of Solutions

I used to manage a Private Equity fund that had a broad and opportunistic mandate; we did growth equity, buyouts and distressed investing. We built an eclectic portfolio of small companies, including service-based, direct selling, light manufacturing, and covering B-to-C/B-to-B/B-to-G.

I had the idea to bring all six of our CEOs together for a one-day meeting, on the assumption that by sharing their collective experiences — despite their extremely disparate backgrounds and company characteristics — they could help each other in obvious as well as unforeseen ways. There was some question and pushback as to whether those disparities would preclude enough value being derived from group discussions to make it worthwhile.

Part of what gave me the confidence to push for this was that I knew each of these people as the people they were, not just as CEOs of a company, and my belief in the value of gathering them together to share and to help each other was based on that personal knowledge and experience of seeing them operate as CEOs but also from non-business conversations.

The first gathering ended up being so successful and uniformly appreciated that everyone wanted to make them semi-annual instead of annual as I had originally hoped.

One of the most fascinating takeaways was that if someone had been an observer and knew what each of the companies did, but didn’t know which CEO was from which company, it would have been impossible to know for sure, even after hours of discussion — so common were their issues.

One of the most memorable conversations began when one CEO confessed that he had been laboring under the burden of extremely tight liquidity, and the resultant problems in juggling payables, having enough capital for growth initiatives, and making payroll (which he had thus far never missed). In his case this was due to the high growth the company had been experiencing requiring expenses up front with revenues coming later. He shared that he felt extremely alone in managing this difficult issue, primarily because he WAS extremely alone: he was afraid to tell anyone else the full details, even his top managers, for fear that if people knew that the company was tight on cash — even for such positive reasons — then they would worry for their jobs, under-perform and perhaps start looking to leave the company.

When he finished speaking, one of the other CEOs said “I understand, but I think you have it backwards. I went through the exact same thing a few years ago, but for the more common reason of not enough revenue. So what I did was to get everyone in the company (about 50 people) together and lay it all out for them. I began by announcing that I would take no salary until we were in the clear. Then we discussed specifically what things it would take for us to get to breakeven and then to be sufficiently profitable to start some growth initiatives, and so on. Everyone, from the receptionist up through the other company leaders, left that meeting knowing exactly what they — and everyone else — needed to do.”

He continued, “It was remarkable how after that meeting everyone came together and not only showed greater pride and effort in their jobs, but offered to help others across departments in whatever way they could to ensure that we met our now clearly-stated and understood goals. Over the next several days people put up signs and digital counters in the warehouse and in the main office showing exactly where our orders were at that moment and how many units we were shipping. The fascinating thing to me was that I didn’t tell people to do any of that, everyone just did it! We had built a great company, and nobody wanted to see it fail, especially once they knew that there were concrete things they could do — in their area or outside of it — to ensure our success. Over the next months we did indeed exceed our quotas, we introduced some new products, and now we’re doing great!”

This was so counter-intuitive to many of us, and the surprise, the comfort and the appreciation that the first CEO took from this story were clear. Beginning the next day he no longer shouldered the burden of navigating the company’s liquidity issues alone, and I’m confident that the company — and the rest of his management team — were all better for it.

Most importantly, this was just one of many similar stories of a CEO sharing a challenge or asking for advice, and literally every other leader having personal experience that was on-point and tangibly helpful, despite their (apparent) significant differences.