A recruiter recently reached out with an intriguing proposition: the position of Chairman of the Board at a burgeoning battery company. Initially, it seemed like a fascinating opportunity, but after careful consideration, I decided to decline. I want to share the thought process behind my decision in this post.
The Company’s Background
The company in question is owned by three friends who founded it over two decades ago. Their primary business revolves around selling lead-acid batteries, imported from China. This product line makes-up 90% of their revenue. Recently, they ventured into assembling lithium-ion batteries, attempting to diversify their offerings.
Two years ago, they brought in new management, aiming to drive growth. However, despite these changes, significant revenue increases remained elusive.
The Chairman’s Mandate
The role of the Chairman came with a substantial challenge: devising a new strategy to propel the company into new markets and triple its revenue within the next five years. This ambitious goal was at the heart of their recruitment drive.
So, why did I ditched it?
1. Market Realities:
The core of my skepticism lay in the market dynamics. The company’s foundation in reselling lead-acid batteries is stable but limited. Transitioning to a dominant player in the lithium-ion battery market posed significant challenges. The local demand for lithium-ion batteries is modest, and existing suppliers hold a strong foothold. It was hard to envision a pathway for this company to disrupt such an established market.
2. Founders' Dynamics:
Another crucial factor was the company’s internal dynamics. The founders have operated without a formal board for over twenty years. Introducing a Chairman into this mix seemed counterintuitive. Power-sharing with an outsider, who hasn’t been part of their longstanding camaraderie and internal battles, would likely be resisted. It’s natural for founders to be wary of diluting their control, especially when the board is a new concept for them.
3. Potential Internal Conflict:
The scenario I foresaw was less about collaboration and more about internal power struggles. The founders might leverage the Chairman as a counterbalance to the CEO, fostering a competitive rather than a cooperative environment. In such situations, the CEO often has the upper hand, given their direct influence over company resources and personnel. Employees, whose paychecks come from the CEO, are more likely to align with their directives rather than those of a new Chairman.
While the opportunity to shape the future of a growing company was tempting, the inherent challenges and potential for conflict outweighed the potential benefits. A successful Chairman’s role requires not only strategic insight but also a conducive environment for change, which I did not perceive here.
In leadership, sometimes the best decisions are those that involve walking away from opportunities that don’t align with one’s strategic vision and values.