Don’t Panic!

I was recently talking to someone about an issue in one of their portfolio companies (this was not a Foundry or Mobius company). The issue was pretty serious (it related to safety standards at the company that were being ignored and a resulting accident at the business) and the person relating this story was (understandably) pretty worked up and asking me what I thought they should do.  My advice?

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I can’t say that I come by this naturally (I can be pretty excitable) or that I was a particularly good practitioner of my own advice earlier in my venture career, but I’ve managed to reign myself in and strongly believe that the priority in any interaction is simply to not panic or over-react. Every situation is better viewed from a calmer perspective and without question your judgment is more solid and reliable when you’re thinking with a clear head. It’s not just that things are often not as bad as they seem (in the example above I think they were actually worse than they originally appeared) or that everything will eventually work itself out (sometimes it doesn’t) but rather that with a little perspective and by giving yourself enough time to assess the situation and consider your options you’re almost always going to make a better decision.

  • What they should do? I agree with your advice about being calm. After that, obviously depends on the level of risk. I recall an interesting article about what the former Treasury Secretary Paul O'Neill in the NYT Sunday Magazine describing how he first addressed safety/accident issues when he took over ALCOA. It not only impacted the bottom line, but increased employee moral.

    I couldn't find the article, but here's a quote from one of his speeches on the topic:

    When I joined Alcoa in 1987, we employed 55,000 people in 13 counties. When I left at the end of the year 2000, 140,000 people worked for Alcoa at 350 locations in 36 countries. Our shareholders’ value increased eight-fold during that time. But even more than the growth and profit figures, one statistics stands out as a measure of our values. During the time I served Alcoa, we reduced our workplace injury rate by 90 percent. Let me explain the importance of this fact….

    http://www.treasury.gov/press/releases/po3558.htm

    If a serious safety issue, I'd recommend your friend take his advice.

    • sethlevine

      Clearly this company needs to address the safety issue – immediately. I completely agree with O’Neill.

      My advice to my friend was not to “freak out”, which is what she was doing. Take a step back, get the right information and then take decisive action.