CL and I were talking about GN. I had said that I thought he had great potential and could play a major role in her company. “Yes, but he’s got a lot to learn about marketing,” she said. “We are always arguing about how to price and position products.” She gave me an example. GN wanted to charge $1,700 for a service CL figured was worth $1,000. I figured CL was right. “So what did you do about it?” “What would you have done?” she asked. “I’d have given him enough string to hang himself. Let him learn on his own,” I told her. “That’s just what I did,” she said.
Almost. What she had done was tell him he could market the product at the price he wanted — but that if he didn’t hit a certain target by a certain date, she’d change the pricing. I told CL I thought her solution missed the mark. “The problem you have now,” I said, “is that if he fails to hit the target you set, he’ll believe the target was unrealistic. He’ll still believe he was right about the pricing and will resent you for changing the price when you do.”
It would have been better, I suggested, had she offered to test his price against hers. “Maybe you are right,” I would have told him, “but in case you are not, let’s test my price against yours and see what happens.” That would have given us all a chance to better understand the marketplace. When you are dealing with top talent — grooming them to take on major responsibility — the last thing you want to do is dictate their decisions.
Decision-making is certainly the most common and most-important quality you want in your top people — and you don’t want to stifle it when you have the chance to improve it. There’s nothing that sharpens a smart person’s decision-making ability faster than failure. But now, that’s not going to happen. If it turns out that CL and I were right, we will not have to worry about GN anymore. He’ll never forget his humiliation and will forever be afraid to “fly” on his own. If it turns out he was right, CL and I will have missed a valuable opportunity. Either way, we all lose. The only way for everyone to win is to give your heir apparent the chance to fail.