Simon Billsberry: When Should You Step Down as a Leader?

Former CEO of Kineticom, Simon Billsberry, discusses his experience and thought process in deciding to step away from the company he founded. A rare and authentic glimpse into the mind of a great entrepreneur and Extreme Leader. From The Extreme Leadership Summit 2012.

VIDEO TRANSCRIPTION

Steve: A question for you. At your last company, how did you distinguish between the opportunity to continue to lead and the opportunity to walk away? When is it okay to go versus when is it okay to stay?

Simon: When I took over CEO in 2004, I was offered the job of CEO and the first thing I had to do is go online and buy a bunch of books that had CEO in the title because I didn't know what one did. That didn't bring much clarity, so I felt I'll do it anyway. But one of the things that...It goes back to one of the slides that Steve had up there. Do what you love in service of the people that love what you do. I was stunned to find that I wasn't loving as much, doing what I was doing.

The last 14 months of my job I spent on a road show, selling to private equity firms, institution investors, large international strategic buyers. Through that process, I was trying to sell myself out of what I could do there. To be honest with you, obviously, from my perspective this is a bit like...I don't have children, so my company was my child. Like most parents, it was perfect. It just wasn't grown yet and I didn't have the patience to watch it grow. So it was as good as I wanted it to get. I felt there was a need for someone to come in, to love it the way I used to love it. I also didn't necessarily think that I was the right person to do the transition. We were at a point where we needed to be sold into a larger organization, in order to achieve...

At the end of the day, we work for shareholders. We can't forget that we work for our employees, we work for our customers. But at the end of the day, we work for the owners of the business. The owners of the business were due a return on their investment, it had been 12 years. One of the things that became very apparent, and one thing I did well in my job, because I talked about creating enterprise value through a cultural foundation as a strategic advantage. Which at the time, when me and Steve were talking about love, most people were like, "Yeah, right." But the proof comes, when we were getting offers. At the time we had offers, the industry offers on companies were too technical. But they were like three to five times trailing 12 month EBITDA, that's how they valued a company.

We were getting offers on our company of between seven and nine times trailing earnings. So I had definitely done my part in terms of creating enterprise value. But the one thing that was absolutely certain for the next few years post acquisition, I was not going to be able to do much beyond exactly as I was told. There was clauses and it became very, very restrictive in terms of what I could do post-acquisition. I kind of lost my way within the organization a bit, and I ended up going on...After the 14 months, I ended up going on a sabbatical. It was 12 years, I hadn't had a break. So for three months I went surfing and snowboarding and doing whatever it is I used to do to have fun.

When I came back, I found it really...What I was coming back into wasn't something that inspired me. At the same time, there was enough other things shifting around, and I went back to the notes that I had made in 2004. When will I be done? For me, it just wasn't a dollar amount. It was the dollar amount can be achieved. Entrepreneurs, we use the dollar amount because that's how we gauge our success. We make money as a way of gauging our success, just as a runner gets a gold medal. But one of them was if it's no fun, if other things in my life had become more important. If you're going to be successful as an entrepreneur, one thing you need to learn real quick is you're going to get that by sacrifice. You're going to sacrifice relationships with other people.

Because you're going to be working incredible hours, you're going to be focused incredibly narrowly. As a result of that, you will fail in other areas. Or at least you won't come up to the standard that you might hope for. Then other things such as health and I remember going back to that...Just before going back in, I remember going back to that list I wrote in 2004 and I couldn't tick any of those boxes. Then there happened to be a shitstorm, that gave the platform for which we could...

Steve: Metaphorically speaking.

Simon: Metaphorically speaking for which we could gracefully bow out, and that's what we've done. So the company is still doing incredibly well, there are some incredibly talented people there still. They're in the process of now trying to find a new CEO, who will take the company from 50, 60,000,000 to 150,000,000, 200,000,000.