The beautiful DeLorean DMC-12, with its stainless-steel body and gull-wing doors, represents the risks in the entrepreneurial journey to the C-suite.
In the 1970s, engineer John DeLorean left his job at GM to start the DeLorean Motor Company. His product, the “new American sports car,” was beautiful. His vision was clear. Consumers were excited. What could possibly go wrong?
A decade later, John DeLorean was a defeated man. Desperate to find investors, he was charged with trafficking in cocaine (his conviction was later overturned) and his company was driven to bankruptcy. Today, it’s almost impossible to find DMC-12 on the road.
I’ve frequently thought about John DeLorean and how he failed to make the transition from innovator to CEO. From his tragic story, those of many other successes and failures, and my own career transitions, I’ve identified a few takeaways that may help inform others on that path.
Be conscious of the fine line between being bold and being reckless. In an article about McKinsey’s report on CEOs and the science of success, Michael Birshan noted that, “Fortune follows the brave.” Innovators are used to taking big risks, but CEOs understand the difference between bravery and carelessness.
By taking a gamble to build in Northern Ireland, where unemployment was high and government incentives plentiful, DeLorean thought he could accelerate market introduction. But the decision created unexpected results, and fewer than 9,000 vehicles were built — with a much higher than anticipated price point. The rest is history.
Bottom line: as a CEO, infuse your business plan with boldness and stay nimble, but don’t let risky gambles veer the company off course.
Hold onto the reins, but don’t try to be the horse. Every innovator single-mindedly falls in love with his/her idea, and that’s critical in the early stages of funding and launching. But CEOs are charged with taking that idea, commercializing it, and bringing it to market. To do that, CEOs must hire and partner with the very best people in the industry, step back to lead, and empower them to execute.
When I started my first company in 1984, the ambulatory surgery center (ASC) industry was still in its infancy. Computers were used sparingly, and primarily for billing. The writing was on the wall: surgeries were moving away from the brick-and-mortar of hospitals, and technology was going to be a big part of the change. As an innovator, I had a clear vision of using data and technology in ASCs to facilitate and automate workflows and maximize revenue, both critical elements of the industry’s evolution.
While I knew how to design software, once my idea took the form of a company, I trusted that I could lead, and others would sell my innovation. One of my proudest moments as CEO was when one of our customers said, “We didn’t even have to look at the HST product before it was rolled out, as Tom Hui always delivers on his promises—he hires people who know what they are talking about.”
Don’t languish in early victories. Innovators are focused on the “big idea,” and once that idea takes off it is easy to stay wedded to that idea and lose track of the long-term trends. But CEOs must continually re-invent themselves to keep their organizations relevant and profitable.
When I started in the ACS software industry, most clients wanted DOS and client-server software. When I founded HST in 2005, I challenged the industry with the notion that vertical cloud software would be the next wave of cloud innovation. Since then, we’ve also developed HSTeChart, an electronic health record (EHR) system specifically designed to align with ASC workflow. Innovators know instinctively that stagnation and complacency are the enemies of success, but as CEO, they must understand how to stay focused on meeting the needs of the industry’s future. HST has successfully navigated through three technology changes over its 15 year history.
The DeLorean Motor Company, under new ownership, is working to transform its Houston storage space into an automobile assembly plant, and a new movie, Framing John DeLorean, may pique consumer interest again. Under management of a CEO with roots in innovation, the “Back to the Future” car may yet have its day.