December 9, 2004

Excerpts: Herb's Hints - Part VIII

By: 800-CEO-READ @ 1:22 PM – Filed under: Management & Workplace Culture

6: Know When to Walk Away
This rule is simple, but it helps keep you focused on transparency. Know when to walk away from a situation, and remember that lifes too short. You have to know when to say no. This is a skill that a lot of younger executives have a hard time with. But if you practice saying no and turning down opportunities that dont seem like positive ones for you and your company, youll get better and better at it. Its simple: if youre involved in something that just doesnt feel right, cut the cord and walk away. Turn around early, at the first scent of trouble. Trust yourself and your gut instincts enough to know when to draw a line in the sand. I
Ive applied this rule many times in my career, and Ive learned that sometimes youre forced to walk away from deals or people that at one time seemed attractive. And maybe they were at one point, but then it changed. Thats part of anticipating and understanding when terms arent good for you anymore. Sometimes you may be faced with having to walk away from employees who continually let you down or threaten your business, or from partnerships or investments that might be too good to be true. We faced this here at the Dial Corporation when the bankers started calling us to invest in Playtex, a company that makes sippy cups, feminine-hygiene products, and suntan lotion, among other things. The margins in most of their businesses looked good, but the business just didnt fit with our acquisition criteria. We took a close look at the business and passed on it; but later they came back to us with a more attractive proposal, and then we found ourselves faced with a dilemma. The dilemma was that the deal was attractive to the point that we found ourselves wondering if perhaps we should stretch the criteria we had established. Thats called nonstrategic compromise, and ultimately we had the sense to walk away. We decided there was no way we could set outside our defined criteria, and that the deal, as good as it might be, was probably too good to be true. As it turns out, the company wasnt sold, but more importantly, the numbers just werent right for us because they wouldnt have come close to the criteria we set to achieve success. The moral of the story? Know when to walk away.