Entrepreneurial Mistakes #6: Delivering less than excelllence

Yesterday, the South Carolina Supreme Court listened to arguments in the Milliken vs. Morin case, the final time that this case will be heard in a South Carolina Court.  It was my honor and privilege to be able to participate in this proceeding, and I'm afraid I did not give due justice to the opportunity.

My attorney is a young associate who spent his formative years out of law school as a clerk for this same court.  He knows how it works, and knows the Justices.  He also has a keen legal mind he was able to wrap around the issues in the case quickly and with little help from me.  That being said, he is young and does not have decades of experience to help him navigate the proceedings as they are unfolding, and they unfold fast.

Blake's argument came first, and before he had taken his first breath, he was questioned by a Justice, challenging literally his first phrase.  He was trying to set context, and they challenged whether context was even important for a facial argument.  We are arguing that my employment agreement with Milliken was overly broad and made me unemployable after I had left the company.  They challenged the standard of review--to what standard should this agreement be held?  Could we include context, or must it stand by itself out of context?

Blake answered the questions admirably, only got flustered once, and did not give a single wrong answer.  The Justices came at him hard, challenging the phrasing of a "notice clause" which is buried in the margin of the third page of a finely printed agreement, in 7.5 point font, if that.  The Chief Justice even intentionally (I hope) misread the agreement, acting as if several "ors" were "ands," which for those of us who remember logic class (or digital circuits, in my case), make a tremendous difference in the outcome.

When Blake sat down, the Justices directed their questions just as hard at the opposing counsel.  "Do you mean that he can't test two things that don't work while working for Milliken, then after he leaves discover something that does?  Because of your agreement, he is not allowed to practice that and Milliken owns it?" one Justice asked. "He's not allowed to do anything related to textiles and chemicals?" another asked.

In this proceeding, Milliken acted like the shrewd manager in Luke 16.  Before Blake, I had a fine, experienced appeal specialist; they offered his firm significant business that would require him to drop me as a client.  They hired the best, most experienced lawyer available.  They had three of their own attorneys prepare him for every argument, so that nothing he presented was out of line with their future plans.  They used an out of state attorney, uncorrupted by the USC Law School club, to challenge the sale of the assets, disregarding the statements that had been made by their own attorneys in SC State Court.  In every way, they undermined the value of the assets, the financial stability of the opposition, and my ability to have our arguments presented fairly.  They did not just play well between the whistles, they poured mud near my goal line, repainted the lines, set up a wind storm, and bought my best player.  I'm sure if the refs were for sale, they would have done that, too.
 
At the end of the parable, Luke writes:

⁸ The rich man had to admire the dishonest rascal for being so shrewd. And it is true that the children of this world are more shrewd in dealing with the world around them than are the children of the light. ⁹ Here’s the lesson: Use your worldly resources to benefit others and make friends. Then, when your earthly possessions are gone, they will welcome you to an eternal home.^[c]

I accepted Milliken's bullying.  I allowed them to purchase the services of my law firm, to get away with sending this letter (see the comment below), to claim ownership of the patents after having lost the same ownership in SC State Court without further appeal, to scare off potential bidders on the technology, to place me in the hands of a very competent, but young, attorney.  In fairness, I may not have had the resources to tackle all of their maneuvering.  One resource that I have been given by God, though, is a keen analytical mind, and this is what I failed to apply, and in doing so failed to do as God has directed in this parable.  I did not take the time to go again through the arguments, and help Blake to finely tune his brief, to make sure that he understood the issues with crystalline precision so that he could have absolute confidence in his statements in front of the Court.  In one sense I was trusting God, knowing that He is bigger than any of these issues.  In another, though, I was taking Him for granted, failing to apply myself to what is clearly an important opportunity. This is where I failed, and can only ask for God's forgiveness and mercy.

At the end, one of the Justices asked Blake a direct question that came to the heart of the matter.  "Why are you pursuing this, if the ownership of the patents is not at question?" he asked.  Blake responded that Milliken would not acknowledge that the matter was settled, which is true.  But there is another element, one that was trained into me by my mother many years ago.  She taught me to stick up for the little guy, the person who can't defend himself.  She taught me that doing what was right, and seeking justice, is more important than accumulating wealth and glory for ourselves.

The truth, as is common, is a curious jumble of honor and sin.  Part of the reason for continuing was out of honor for for the court.  Before it was my decision alone, I was faced with the opportunity to put this issue in front of South Carolina's highest court--not the issue of my $25,000, but the issue of whether employers should be able to indenture their employees after they have left the company.  We had asked, and they agreed, to hear and rule on it, and following through was just honoring the Justices, giving them the opportunity to fix broken practices from the bench.  Part of it also was that Milliken would not offer a settlement, even though there was some discussion.  They refused to agree to a release.

I have had the privilege over the last several years to apply myself, in my own small way, to some of the greatest issues facing our world.  With the exit from Milliken, I have been able to play a role in addressing the indentured servitude that is placed on employees by certain companies through heavy-handed application of their employment agreements.  With Innegra, I helped develop a light weight, inexpensive ballistic fiber that, used property, can both save lives and reduce our dependence on fossil fuels by reducing vehicle weight.  (That I am prohibited from helping it go forward solely by the belligerence of the current owners is a big frustration.)  With Dreamweaver, we get the privilege of addressing directly our country's reliance on fossil fuels, and hopefully reduce or eliminate the need for young men to go to foreign countries to die for our right to $3 gas. These opportunities are God's gifts to me, and if I fail to apply myself 1000%, then I am letting Him down.

Entrepreneurial Mistakes #5: Hiring Mistakes

Here's a story I heard recently:  A young MBA student had the chance to meet with a wise old CEO who had taken his company to great heights.  He only had a few minutes, so he chose his questions carefully. 
"What I would really like to know," asked the MBA student, "is how you got to be so successful?"
"Oh, that one is easy," said the CEO.  "It comes from having good judgement."
The MBA student was not going to accept such a short answer.  "Well, then," he asked, "how did you get good judgement?"
"That--oh that comes from experience."
Maybe a little frustrated, the student asked one more, "Where did you get the experience?"
"That comes from having bad judgement."

The mistakes below are not like the big hiring mistake that was described in Entrepreneurial Mistake #2, but rather fall into the category of "bad judgement."  In any case, they are mistakes I'd like to not make again.

Hiring Mistake #1:  Hiring first employees as Vice Presidents
This one is more subtle than it sounds.  There are people who are terrific for a company of 3-5 people, who really are the Vice Presidents of that company and carry a load like could never be described--but who also just are not the right people to lead a group of 5-10 employees, and become seriously challenged with groups of 25-50 employees.  In these cases, hiring the employee was right, making them the leader of their function was right early on, but the mistake was instead in giving them the expectation that they would remain in a leadership role indefinitely.  (I mean, outside of a bank, how many vice presidents can their be?)  All of these people were outstanding contributors when I had them in the right role, and the mistake was in letting them believe that the role would last forever.

Hiring Mistake #2:  Hiring real executives too soon
This one is again subtle.  I have a gentleman that I truly respect, who had been a consultant for the company for some time and had real and genuine enthusiasm for the technology, the industry and the team.  He was so talented that when he sat me down and explained to me, for two hours, that he was ready to join the team, I made room for him by giving myself a promotion to CEO and making him President.  That wasn't the issue. The issue was that he was used to running a company of 80-100 people, and didn't understand when I told him we weren't going to spend money on a cleaning service and where the broom was.  His first acts were to decorate his office, hire an HR consultant, attempt to hire a cleaning service, and tell me that I had to fire my best employee or he would leave.  "Why?" I asked.  "We don't work well together," he said.  "It's him or me."  My response was, "He is a terrific employee and a good friend and I think you should learn to work together."  He quit less than 90 days after he joined, but stayed on as a consultant and board member, and never really got over the scars formed by the right person joining the right company at the wrong time.

Hiring Mistake #3:  Hiring order takers as sales people
In the course of running Innegrity, I hired about a dozen different sales people, and all but two and a half of them stank in the role I gave them.  This was my fault, not theirs, because all of them had excelled in the role of salesperson at different, established companies.  The problem was that, in a big company with established product lines, the role of the salesperson is really to take orders and facilitate communications, but the product has already been sold to the customer.  This is especially true in industries where there isn't much growth, much white space left to conquer.  For those industries, a salesperson might be very successful at winning accounts from customers who were buying from their competitors, but even in this case, the customer is already buying the product, and is now making a supplier decision.  A completely different skill set is required to convince a customer to take on a new product where the primary competitor is inertia and alternatives that perform very differently.  In hiring people who were very effective in the role of catcher, I did them a disservice by asking them to be pitchers.

Hiring Mistake #4:  Hiring some friends
Careful here, because I am not saying don't hire friends.  My very best employees were friends, and I would hire them again today.  In fact, I am desperate to hire two of them, but won't get the opportunity because, frankly, I've used those chips. I love them both and will not disrupt their families or their lifestyles again.  However, the decision to hire friends should be made very carefully, and only with the understanding that either the friendship will survive a quit/fire decision, or that you are willing to give up the friendship if the situation arrises where one of those is necessary.  The mistake and challenge here is the potential to hold onto a friend too long, to have a blind spot for lower performance, and not move to correct it.  The problem isn't with the friend--it is with the person doing the hiring (me, in this case) who may not be objective.  In taking the role of President or CEO of a startup, you are making a bunch of unspoken promises to investors, customers, and other employees that the needs of the company will come higher than everything except your God and your family, and there is not room for compromises that can crop us with an underperforming employee who is also a friend.

Hiring Mistake #5:  Being loyal to underperforming employees
I'm a doggone collie, and will coach, help, cover, extole--anything to keep an employee performing at a level that the rest of us can put up with.  The silver lining to this is that it has earned me extraordinary loyalty from people who have worked for me, and also in several cases helped me to find the right role for employees who were underperforming in a different role.  The mistake was not in keeping employees who worked hard and weren't effective, but rather more subtle.  I kept employees who were relatives of friends/employees, giving them oh-so-many chances to improve.  I kept employees who were started as full-onboard members of the team, but who later checked out. I kept employees who had left comfortable jobs at big companies but couldn't adjust to the dynamics of a small company.  I kept employees who refused to take a leadership role when it was necessary.  I kept employees who were knowingly overlooking serious flaws in the systems they were running (to my credit, I didn't learn of this until after I fired them, and then only as retribution).  "Hire slow and fire fast," is very good advice.

Hiring Mistake #6:  Not praying
While I ran Innegrity for seven years, at our peak we only had 25 or so employees, and so you may wonder how I could make so many mistake in such a short period of time and somehow still achieve what everyone involved would call a technical and marketing success (but financial failure).  The fact is, every one of those mistakes could have been avoided if I had just taken the few short moments to lay them at God's feet and ask for guidance.  In almost all cases, I did not, and suffered the consequences of having made the decisions alone, rather than with the help of the Almighty.  It was arrogant and unfair to the other employees, to the investors and to God not to let Him play a more pivotal role in the day-to-day running of the company.