As the old song by Kenny Rogers goes regarding gambling, “you’ve got to know when to fold ‘em, know when to hold ‘em, know when to back away and know when to run.”
This is great gambling advice that is hard to follow when you’re on a winning or a losing streak. There is always the feeling – you know it if you’ve ever been to a casino – that maybe that next round of play will turn the situation around in your favor or that the “lucky streak” will last yet another hand. The city of Las Vegas was built on dumb bets like this. People rarely know when to walk away.
In business, knowing when to walk away is key – whether it means deciding against an acquisition that on paper would create significant synergies, saying no to a deal when the price is becoming unreasonable, leaving a toxic workplace, or simply leaving for a better atmosphere altogether. The true leader needs to be prepared to and knows when to walk away. It is a must-have skill. To walk or not to walk? For the most part, you can go with your gut instincts. But there are other signs you can look for that aren’t as obvious, signs that provide a serious signal of when to walk away.
My company Ariya Capital is an investor in and developer of clean and renewable energy projects in Africa, including large utility scale power projects. The continent has incredible challenges, with over 550 million people without access to electricity. Providing stable, cost-effective clean power to as many people as possible is a key motivator for me personally and my business. One such project seemed very attractive, and we were able to provide development capital for the project through a “Friends and Family Round”, that includes several of my great friends from C200.
However, I am now in a position where, with the full support of my investors, I will choose to walk away from the deal in order to protect key stakeholders and my firm’s reputation.
The decision to walk away is seldom easy and I find it helpful to look for signals that may indicate it’s time to make a change.
4 Signs You Should Walk Away
- Is your company playing revolving chairs at the CEO level or with other C-level positions? That’s a sign either of a contentious board of directors or nearly impossible expectations.
- The opposite can also be a warning sign: is the existing management too entrenched? Has the CEO been in that position for decades without proper succession planning?
- Has your company been trying and failing to raise money – either in a friends and family syndicate round or at a private equity/venture capital level? It could be the CEO’s lack of vision or presentation skills. It may also be that the idea is simply not bankable.
- Are customers responding? If all you hear is a virtual dial tone when you reach out – if there’s no viral excitement happening on social media sites – if customer feedback is a dead zone your warning lights should go on.
This is not to say that it’s always wise to walk away from a failing endeavor, especially if you have the clout or positioning to examine the problem and fix it. In that case, not walking away might be an incredible career step. That is probably why Michael Korda advises to “Never walk away from failure.
On the contrary, study it carefully and imaginatively for its hidden assets.” Try to turn the situation around and, if you do decide to walk away at a later stage, do so from a position of strength – not because it was a rash decision.
I am now in a position where, with the full support of my investors, I will choose to walk away from the deal in order to protect key stakeholders and my firm’s reputation.
Your strongest negotiating position is the willingness to walk away from a deal best refused. The genius behind the Peanuts cartoon series, Charles Schultz, once said that “no problem is so formidable that you can’t walk away from it.” However, don’t walk away from a deal, a company or a project due to personality clashes. So often I see people giving up because they cannot get along with somebody. That is not a good reason unless it is a matter of principle. Try to put yourself in the other person’s shoes, find common ground and understand their concerns.
Successful leaders have an uncanny ability to choose the type and the timing of their battles carefully.
If you decide to walk away, do so under the following circumstances:
- Only after you have tried everything in your power to change the situation;
- If it is a matter of principle;
- Because you have stopped to learn from and properly reflect on the situation;
- Because you have chosen the timing so as to give you the best possible step up;
- When the downside consequences do not justify the risk of continuing;
- After giving consideration to what comes next and to how a subsequent battle could be won; and
- When you are leaving from a position of strength.
Walking away from a situation is stressful at the best of times. Going through the checklist outlined above, can make the departure easier and achieve the intended result.
Also read: What’s Your Walk Away Number?
In business, knowing when to walk away is key! The true leader needs to be prepared to and knows when to walk away. It is a must-have skill.