As I procrastinate from going for a run this morning, I started writing a post titled The Pro-Rata Gap Myth. After two paragraphs, I got tired of writing it and hit the “this is bullshit” wall – it’s too complicated to explain a myth that I’m not sure even matters.
So I deleted the post and decided to tell a story instead. This is a story I roll out occasionally with CEOs to help them explain how their words can easily be misinterpreted by their teams, especially as the teams get bigger. But it’s also a way that CEOs misinterpret what their investors or board members (or chairperson) is saying. And it creates endless organizational waste and misalignment when the CEO / investor / board member / leader isn’t clear about what she is saying and who her audience is.
Between 1996 and 2002 I was co-chairman of Interliant, a company I co-founded with three other people. Interliant bought about 25 companies during its relatively short life, helped create the ASP business (the pre-cursor to the SaaS world we know and love today), went public, and then blew up post-Internet bubble and ultimately went bankrupt before being acquired, partly because we created a capital structure (through raising a bunch of debt) that was fatally flawed, ultimately wiping out all the equity value.
While I learned a ton of finance lessons from the experience, I also learned a lot a leadership lessons. Your wall is dingy is one of them.
We had just acquired a company (I don’t remember which one or in which city) sometime in 2000. I was visiting the company post acquisition and wandering down the main hallway with the founder of the company we had just acquired. We were having a causal conversation and I offhandedly said “wow – your wall is dingy.” We kept walking, I did a Q&A thing with the founder and the company, and then went out to a mellow company lunch celebration type thing.
I had other stuff to do in the city so I stayed overnight and came back in early to have some meetings at the company the next day. As I was wandering down the same hall, I saw that there was a crew already in the office painting the wall with a fresh coat of paint. I got my coffee, wandered over to the founder’s office (he was also already in early), and asked why there was someone in the office painting the wall?
Founder: “You told me the wall needed to be painted.”
Brad: “I did?”
Founder: “It was while we were walking down the hall. We were talking about the new car I was thinking about buying and you said that the wall was dingy.”
Brad: “Oh yeah – that was said out of admiration for how frugal you are. You were telling me how this is the first new car you will have, since all of your other cars have been used cars. I admire how thrifty and scrappy you’ve been and thought I was paying you a compliment.”
Founder: “Shit, I thought you were unhappy with how low rent our offices are and were commenting that we needed to make things a lot nicer.”
Brad: “Double shit. I was saying the opposite. Part of the reason you’ve been so profitable is that you don’t waste money on your offices. This is part of what we love about your company. And it’s part of why we were willing to stretch in the deal – we knew you know how to make money and that you value every dollar.”
We eventually both started laughing. It was a good bonding moment. Fortunately, it was just paint and didn’t cost that much, although it was one of 27,393 incremental expenses that helped sink Interliant, especially in a time when rent was skyrocketing and everyone needed fancier and fancier offices because, well, because everyone else had fancier offices.
Ever since that moment I’ve been a lot more tuned into what I say. I still talk the way I did then – plainly and with whatever is on my mind – but I try to add the reason so that I’m not misinterpreted. If I could teleport myself back to that hallway in 2000, I’d say “Wow – your wall is dingy, and I love it, because it reminds me how frugal you are.”
As a leader your words matter. It’s not that you have to necessarily choose them carefully, but make sure you explain them and try to confirm that they are understood.