An inn in East Westphalia, November, kale and sausage on the plates. Across from me sat the founder of a software company. He had read my book and wanted to talk, and you could see it wasn't about the book.
He had built the company decades earlier. Now he was thinking about selling, had asked advisers what it was worth, and received a number that stung. Not because it was small in absolute terms. Because it was smaller than what he had put into this company.
The situation was quickly told. Some years earlier he had hired a CEO who communicated superbly. The man wrote a weekly blog, introduced new ways of working and rapidly won the trust of the workforce. From the outside it looked like modern leadership. Only the company had not brought a genuine innovation to market in six years. The best developers sat in meetings. The infrastructure was not equal to what was coming.
He asked me how you rebuild a leadership team.
I didn't answer that. Instead I asked what he had actually built the company for.
At first he kept talking about valuation multiples. Then, somewhere between the kale and dessert, something else came. He spoke about his fascination with technology, and then about the insight that had stood at the beginning of everything: that solid, reliable numbers from accounting are the core of any company's success. Not because numbers are worth something in themselves. But because only transparency makes good decisions possible and gives an organization its bearings. That is what he had built the company for.
Then he said he could no longer name when his company had last done anything that fit that description.
That was the diagnosis, and he made it himself. I only asked.
The irony didn't strike me until the drive home. Here was someone who had built a company on the conviction that transparency is the precondition of good decisions — and in that company no one could say any longer where it was headed. Least of all he himself. The principle he sold to others no longer applied in his own house.
Only after that did we talk about leadership, and there lay a misunderstanding more expensive than almost any other management error: mistaking visible leadership for effective leadership. The CEO was doing nothing wrong. He was doing part of the job very well and another part not at all. Attention flowed into communication and debates about methods instead of into the product. Decisions came late because no one knew exactly who was allowed to make them — endless meetings are almost always a symptom of unclear decision rights. And the organization was exhausted although it was constantly busy. Nothing drains people more reliably than visible activity without perceptible progress.
What followed was unspectacular as craft. A target picture that grew out of what he had said over dessert — not a mission statement for the wall, but a sentence against which investments can be decided. A quarterly rhythm in which leadership asks itself three questions together with key people: what have we achieved, what didn't work, what is next. And standards for the moments that count: how decisions are made, how progress is reported, how a leadership conversation runs.
Three levels, one rhythm. That is not a method you need me for. It is in the books. What is not in the books is what the north star should point at — and no one can deliver that from outside.
Fifteen months after the kale he started the sale process. He received more than forty serious expressions of interest and found an investor who paid more than twice what his company had been worth a year and a half earlier.
Here belongs an objection I make to myself. A doubling never has a single cause. In that year and a half the market moved as well; there was no product miracle and no acquisition, but there was time in which many things happened at once. Anyone who turns a single case into a law is doing consulting marketing. And the number doesn't prove what a life's work is worth anyway. It only proves what someone was willing to pay for it — and buyers pay for the future, not the past. What had changed was that this future could now be described. Before, no one could have said where this company was headed. Not even its owner.
That is the point at which the case reaches beyond itself, and it applies to more than owners. A division head, too, manages a work. He is not paid for his division being busy, but for it becoming more valuable.
In the end it is the same principle the founder sold all his life. Reliable numbers make decisions possible because they show where you stand. A target picture makes decisions possible because it shows where you want to go. Both are transparency, only in different directions — and whoever cannot produce one of them ends up being managed by their own numbers.
What remains is the part I have carried longest. He sold. He worked for a year and a half to be able to say again what he had built it all for, and then he gave it away. I asked him once afterward whether it had felt right. I no longer remember the exact sentence he said. But I know what had changed: he was no longer merely selling shares. He knew again what he was holding.
Perhaps that is the real return. Not the doubling, but that in the end there was someone who could have said it.