Dither and Suffer
Having run a venture-backed company or two, I have vivid memories of chaffing at our investors sometimes neglectful apathy and and other times their misguided micromanagement. Outside investors can be challenging, especially when times are tough. Just ask Citigroup (#8 on the 2008 Fortune 500). They are suffering the same plight with the US government. Vikram Pandit, Citi’s CEO, recently pled with the Feds:
“Don’t give up on us. Give us a chance to execute.”
As the government dithers, Citigroup suffers. The government has a panoply of groups providing oversight of Citigroup, each with different levers to pull, varying degrees of authority, and mostly missing strategies. It is this lack of a coherent strategy and the almost unlimited power the government wields that is Citi’s biggest risk.
My message to outside investors: Having a goal for your investment is not enough. You need a strategy to guide your choices and action. Without one you can’t help but be mercurial and wield your power in ways that may devastate your portfolio company.
My message to companies with outside investors: If you don’t know what to do right now, you don’t have a strategy. If you do, execute on it with confidence. Ask your investors to share their goals and strategy for their investment with you.
Remember we can only expect a chance to execute when we have a plan worth executing on. If not, dither and suffer!
Good luck Citi.