There are certain west coast venture capitalists who refuse to finance the CEO dressed in corporate business attire. On the other side of the country, there exist financiers who may have missed out on billions of dollars in capital appreciation simply for discounting the hoodie sporting CEO. While I don’t believe in judging someone based on one’s wardrobe, there is one particular outfit that simply cannot be overlooked. That is the empty suit.
Every investor needs to steer clear of the CEO donning the empty suit. Unfortunately, this obscure garment is difficult to recognize as it comes in many styles, sizes and colors. This brings me to investumer tip number 6: “spotting the empty suit”.
Instead of executing, you will most likely find empty suits to be stalling, misleading and obfuscating – sometimes even tap-dancing. Empty suits frequently employ PR to compensate for their lack of expertise. They place blame when they should be accepting responsibility. They tend to confuse lying for creating, stealing for building, imitation for innovation and sight for vision.
I know of one empty suit who has so mastered the art of the con, he is often seen featured in reputable trade publications as an expert in an industry he has never even worked in. Because his real name differs from the name you’d find on his LinkedIn profile or business card, it’s more difficult to validate his credentials. However, upon learning his actual name, many would-be victims have not only discovered resume discrepancies, but were able to unearth a host of lawsuits. Before coughing up large sums of money, get to know who you are jumping into bed with. Find out if he or she had ever used an alias. You can do this by checking court records to see if the person filed for a name change. You can also try using online people search engines.
I know another empty suit wearing CEO who would consistently miss deadlines for deliverables. And it was ALWAYS the fault of someone else. “This employee takes too many vacation days. That one is always hung over. My investor’s check didn’t arrive in time. This client is so high maintenance and always demanding revisions.” (I know, I know, the audacity of paying customers unwilling to be satisfied with mediocrity.) Ironically, instead of wasting hours venting to colleagues and casting blame on subordinates, shareholders and clientele, that CEO could have been resolving glitches and averting catastrophes. As soon as you hear the deluge of excuses, cut your losses and move on. In my experience, they only escalate.
Other empty suiters possess a knack for masking company setbacks with enticing announcements. When revenues are declining and clients are bailing, what do these empty suits do? They issue press releases pronouncing new hires, office expansion and strategic alliances of course! Upon further investigation, prospective investors may just discover that the new “high level appointment” is simultaneously employed elsewhere; that the latest grand office opening is really someone’s dining room, and that impressive business partnership contains no monetary value whatsoever.
We shouldn’t be looking at the suit, we should always be searching beneath it. This is one doctrine that should extend beyond investing into all facets of our lives.
This article was originally published on LinkedIn Pulse
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