Chapter 54 – Here is a timeless phrase about evaluating business opportunities: “Either you bring the experience and leave with the cash. Or you bring the cash and leave with the experience.”
Let’s expand a bit on the ignorance theme. The history of mergers and acquisitions is littered with debris piled so high that it is unfathomable that such value-destruction is still allowed, and not banned from the universe.
Let’s assume that egos are not at play. Although it’s likely they account for a fair portion of what is going on here. After all, size does matter for most men, so the Short Man syndrome is pervasive, too. Many underperforming CEOs distract attention from a lack of organic growth through the excitement of size – by purchasing market share.
Let’s also assume that the target entity is known, that all the incompatibles are past the ironing board stage, that the holes are plugged and that mysterious quality of a good fit is creating a dense cloud of pheromones in the boardroom.
It’s decision time. This will, of course, lead to consequences. Both intended ones, and that old foe of the ego: Murphy’s Law of Unintended Consequences.
The extent of your experience will determine your degree of success. Like your first attempt at getting a girlfriend, these things take a bit of time and practice to generate wisdom. New business? New product line expansion? Expanding abroad?
All these are subject to what I call “Geffen’s Law of the Two Ways”, named after the wizened, stone-hearted and bloodless woman I served in my first CEO position as a tender 29-year-old.
First do your homework. Do it well, or you may pay school fees. Either you bring the experience and reap rewards, or you suffer the humiliation of the novice. Learning expensive lessons through those many ‘mistakes’ you will subsequently want to label as ‘experience’.
The Unconventional CEO offers succinct, compelling advice from one successful CEO Mario Pretorius, to you The Cape Messenger reader.
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