3.
HOLD ON TO PURPOSE AND VALUES
“He who has a why to live for can bear almost any how.”
One day CEO and founder of architectural and engineering company AE Works, Michael Cherock, came across a shocking discovery – his company was close to collapse. What made it worse was that nobody knew what was happening, even those he had hired to have senior accountability.
“Everything stopped on June 4, 2012. Being the first Monday of the month, it was reserved for financial activities like billing. AE Works, the company I founded in my basement five years before, was a growing firm and I was proud of what we had accomplished.
At 9am, as I settled in our cramped conference room and started to review our financials for the month, a very unsettled feeling started to come over me. My growing concern and mounting questions were halted with the start of the next scheduled appointment, an important meeting to finalize financing for a new office that we were moving into, only two months away.
“Concluding that meeting, I returned to the papers. The new debt I had just created to finance our new office still haunted me. Desperate for answers, I turned to the papers that would tell the story of our billings. I flipped to the final total and lowered my head in despair. What I had been feeling, but hoped wasn’t true, was quickly becoming my reality. My company was grossly out of balance.”
Starting to comprehend the company’s perilous financial situation, Michael turned to his inner circle, the firm’s operations manager, Senior Vice President (SVP) and accountant, all of whom he had known for years. Each individual possessed a great professional reputation, had accrued decades of experience and insight into the inner workings of the industry. Michael trusted them and believed they shared a common vision for the future.
Searching for clarity, Michael first started questioning the firm’s Operations Manager. He didn’t seem to know why the company was in such a situation, and worse, he didn’t see that there was any reason for concern. Anxiety increasing, Michael then called the most senior man in the company besides himself, the SVP and head of sales. As he explained the situation, Michael realized that the SVP knew little of what had been produced on the operations side of the business. He could hear the growing concern in his voice as the conversation revealed that the firm was producing fewer billings and increasing liabilities through spending more on new opportunities. Securing new hires and resources to perform new work was expansive but costly. This abysmal trajectory meant only one thing – the firm was quickly moving into a position where it would not be able to meet its obligations.
“Only one more call stood between me and what now seemed impending failure. As I divulged the situation to my accountant, he told me that based on a quick analysis, the firm, which up to this point appeared stronger than ever, was on the brink of financial collapse. I couldn’t believe what I was hearing. How did this come to be? As I probed his understanding of our business, I quickly came to realize that he knew little of the details in the transactions. My mounting stress became anger. My company took a hit and no one knew why. The people I had paid and entrusted the company to had not done their job. I was mad as hell. That’s when everything I had believed came crashing down around me.”
The clock read 5pm. Still in the same conference room where the day’s events were set in motion, Michael sat in silence. For the first time, the company he had started five years prior was in danger of going under.
“All my hard work, long hours, and financial risk could result in nothing but failure. The increasing probability of this outcome brought tears to my eyes. The hope felt by family, friends, clients, and staff – all those people who believed in me and joined me to create something new – would now be lost due to bad management. Thoughts of their collective disappointment made me feel sick. Of all those thoughts, what devastated me most was that it seemed that I had no idea what was happening in the company.”
Michael felt exposed and more vulnerable than he had ever been. In his greatest moment of despair, he found overwhelming confidence in his purpose and his values. These values had guided his decision-making over a lifetime, and had led to the creation of a company in which they would be shared in the lives of others. He realized how little he knew at that moment, but the clarity of his values gave him a feeling of security. After all, people had taken a big risk to join his fledgling business because of those shared values. He believed that the shared belief system was in fact their greatest potential.
“These values would gain more meaning in our work as we learned to share our vulnerabilities and trust one another to create opportunities and turn the company around. June 4, 2012 wouldn’t mark our disaster. It would be the greatest learning opportunity ever presented! With new work coming in, a new office to support our work and shared values, we could fix the mess I created.”
Over the following months, Michael worked relentlessly to bring clarity to the vision and the collective belief system. Decisions became harder to take. He had to end relationships and incorporate considerable changes into the old structure and systems.
“Today, the company is built upon a culture that prizes open communication as our number-one asset. This builds trust in each other and our team. Championed by our value-based decision-making, this culture has allowed us to enjoy strong performances, both financial and creative. The reason for these successes? It’s simple – the strength of our firm relies on our people and the strength of our connections to one another.”
AE Works has since been recognized as a Pittsburgh 100 firm for two years running, and as an Inc. 5,000 honoree, one of the fastest growing companies in the US.
Purpose and values lie at the centre of our being. They give our lives meaning; they give us joy. In the depth of the unknown, clear values and purpose may be the only things that we can hold on to. They can be the compasses that help us orient and move forward even if we are unsure of the destination. Bill George who teaches “Authentic Leadership” at the Harvard Business School argues that our values help us find our “True North.” They can hold us steady when the winds of change toss us around. Even if we may not know where we are heading, we know why.