We’re Going to Double Next Year … No, You’re Not

I love, love love working with entrepreneurs.  I love their indomitable spirit, the reckless relentless optimism.   I choose to spend my time with visionaries, not skeptics – firmly believing that the person who says “It can’t be done” is often interrupted by someone doing it.   And I think you should never doubt your ability to change the world.

That said, when an executive who has not grown their business in any of the past few years tells me they expect to double their business next year, I am skeptical.   One magical hire will not make this happen for anybody.  Venture capitalist Tony Tijan calls this simplistic thinking the “Fallacy of Financial Metrics” in a recent post on the Harvard Business blog.  Tony makes several excellent points including:

“In both entrepreneurial and larger companies, we too often spend time focusing on the desired financial performance target, rather than the inputs that drive those numbers. Because boards, investors and management demand an objective way to measure performance, we often go right to the result without focusing on what caused those results.

Financial performance is a result, a by-product, a consequence of something else. The financial “numbers” ultimately represent the scorecard we care about, but they do not help us understand how to score.”

Executives often tell me they want someone with “fire in the belly” or a “burning desire to win” – they want someone who can “run through walls”, someone who does “not need a handbook” to figure it out.  And once hired, the CEO often tells me they plan to ”set them loose” on these thorny, still unresolved problems.  Except here is the problem.  While the problem is probably old, the new hire is going to be, well, new to the organization.  So the new hire needs to learn how the problem came to exist, and understand all the contributing factors.  And the new hire will not, despite assurances to the contrary, have carte blanche to change the company.  Therefore, the new hire is coming into a company that will constrain their actions in all kinds of subtle and not so subtle ways.   Einstein put it this way “We can’t solve problems by using the same kind of thinking we used when we created them.” More directly to the point – as my friend Jamie Notter puts it – “Culture eats strategy for lunch.”

Top performers know all this.  They are called top performers because they know how to find work environments that give them a chance to shine.  And they often find ways to shine in work environments where others fail – but they never stack the deck against themselves.  So if you want to recruit them, talk to them about your actual challenges, don’t feed them happy talk about financial metrics that may occur once their hard work is done.  (Read:  The Truth is Great Marketing).  If you want to assess their fit to your job, look for the competencies they have to solve your actual problems, their proven track record of relentlessly driving the actions that will get results, and stop looking for “fire in the belly” and other attributes that are nearly impossible to quantify.

And after you do these things?  Yeah…  THEN I believe you will double next year.