You know the story. A lone genius strikes out on his own. No one can do what he does as well as him, so he founds a company to do that thing. He works morning, noon, and night to deliver his magic better than it has ever been delivered before. People find out about it. People pay for it. Fame, fortune, success, and riches follow.
Truth is, there are CEOs that have created fantastic companies using this approach…at first. Walt Disney. Ahmet Ertegun. Steve Jobs. There are hundreds of CEOs that model themselves on these visionaries.
Don’t get me wrong, the tales of how these luminaries started their companies have a lot of great lessons to impart. What small business owners often forget to look at, however, is what people like Disney, Ertegun, and Jobs did to ensure their businesses would outlast them.
As someone who has provide merger and acquisition services for a long time in my capacities as both an in-house and part time CFO, I see a lot of small business owners that get themselves into a whole lot of trouble with this lone genius mindset.
When an entity like a private equity company is looking to purchase a company, it wants to know that the value it is acquiring is not locked up in the head of one person. More broadly, true value is not about what the founder can do—but about how he or she is able to replicate that ability into the capabilities of an organization as a whole.
So if you’re really really good at what you do, be careful. You can easily fall into the trap of performing your special talent all by yourself rather than spending that time looking for ways to build systems that let everyone in your organization do it instead.
Thanks for reading and keep smiling!
The Prophets of Profit