I had just finished a coaching session with my new client, my old client’s son. Dad was retiring and had handed off the CEO position. It seemed like perfect timing, since the company had just closed the books on one of their best years ever.
The father had been grooming his son since the boy’s high school years, starting him in “grunt work.” In spite of these humble beginnings, the son always knew that he was being groomed to run the business one day. And that day had arrived.
En route to my vehicle, I walked past a bright red Porsche, parked in the stall nearest to the front door of the office. Prominently on the building wall was a sign designating the owner of both the parking space and the car: CHIEF EXECUTIVE OFFICER.
As I made my way to my car, I caught the voices of two company employees standing nearby. “Did you see Bob’s new car?” the first asked. “His dad’s barely out the door and the kid starts raiding the company cash.”
The second employee replied, “Well, you know the boss said this was a great financial year. So I guess Junior can afford the Porsche.”
The first guy continued, “As well as the company has done, you’d think that some of the extra cash might have found its way to those of us who made it happen. But the Porsche tells the whole story. I’m polishing up my resume; I’ve been here 28 years, but the future doesn’t look good with Bob at the helm!”
I was concerned with what I was hearing. Clearly, the jury was out on Bob. That’s not unusual, of course. Anytime a newcomer assumes a key leadership role, there will be a “honeymoon” period during which they will have to earn the trust, respect and full engagement of his or her team.
The $100,000 sports car, however, clearly made Bob’s transition more difficult. When we next met, I asked him about the car — and what reaction he was getting from his team. At first, he shared the compliments. Clearly, people were impressed, even jealous. But then he confessed that he had picked up negative vibes as well. He shared these in the form of a complaint: “You know, I’ve worked in this business for most of my life — over 20 years. I’ve looked forward to the day when dad would feel that I was ready for the reins. And I told myself, when that time came, I was going to get the car of my dreams. I’ve earned it. I deserve it, and if anybody is upset about it, tough!”
Over the next year, Bob and I reviewed the Porsche episode from several perspectives. First, we agreed that in many ways, he had earned the right to buy the car. However, it took a long time to convince him that his people’s perceptions were, for the most part, not congratulatory. In the absence of some reasonable and appropriate financial benefit to them, many were disgruntled. The 28-year employee did, in fact, leave the company for a job with a competitor.
Bob also needed to learn the difference between being “rich” and being “wealthy.” Rich is most often demonstrated by the stuff you buy with your money. For Bob, that included the Porsche, along with other niceties that conveyed the message that he had arrived.
Wealthy, on the other hand, isn’t nearly so obvious. It is the cash not spent on outward manifestations. It is often reinvested in the business in a variety of ways, including stashing some away for future needs.
The Porsche met a current need for Bob, and it did send the message that he was rich, at least for the moment. But as for being wealthy, that remained to be seen and the early indications were that he might be inclined to “eat the seed corn” that would be needed for future metaphorical crops.
As Bob came to grips with the implications of the Porsche episode, he realized that he had to address the unintended message that his sports car had sent, make some hard choices that would tell his team that he cared more for the business than looking rich (replacing the Porsche with a Chevy), and that for the company to be successful, he needed everyone to understand not only their individual jobs but precisely how the company makes or loses money. In that regard, he began to help them understand company financial metrics and how their individual contributions could translate into wealth for the company — and for themselves. Morale picked up, and so did profits.
What story do your actions tell?
Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses.