They’re Not Out of Sight. They Don’t Even Know Where to Look.

A large part of the success I’ve had in the companies I’ve built comes from taking an approach completely opposite to how most think about things. I don’t take these approaches simply to be contrarian. I believe in them. And that belief has only been reinforced by the value created in the companies I’ve built. It’s the same thinking I use to help create value for the companies and funds I advise.

Let me explain one of those core beliefs.

Think of a CEO like a tree in a forest. You see the tree above the surface; it is the face of the company. But underneath, there’s an entire network of roots reaching into the ground, taking in water, nutrients, and everything that gives the tree life. Those roots are the core, not the CEO. They provide the sustenance that makes the tree grow. The only thing that matter is the symbiotic relationship between the tree and the ground beneath it

A company grows, scales, gets sold, scales further, and the cycle repeats. But eventually, many of these companies fail.

Why? Because somewhere along the way, the person at the top loses sight of the ground.

We call these CEOs “out of touch.” That’s not quite accurate. They’re not simply out of sight. They don’t even know where to look.

The person at the top needs to understand every aspect of the company, literally. And yes, that’s a lot of work.

I’m not talking about micromanaging or approving every purchase. I’m talking about understanding the consequences of decisions, especially for the people who actually have to live with them. There’s a big difference between making every decision and understanding what happens as a result of those decisions.

Take a health system onboarding a new technology. The salesperson pitches the CEO on savings, analytics, efficiencies, and all the nice, lofty things that look great on a spreadsheet.

But what about the person actually using it? Does the technician like it? Does it make their job easier? Does it actually work?

The CEO sees savings. The CFO sees efficiencies. The investor dreams of a higher EBITDA. But what if the technician now takes 15 steps to do something that previously took five, repeated hundreds of times a day across hundreds of employees?

What looked like value creation at the executive level is actually value destruction at the operational level. Eventually, that destruction finds its way into the P&L.

And therein lies the problem. The folks who are doing and the folks who are deciding are completely separated.

We always hear the cliché, “Keep your ear to the ground.” But how many actually do it as their companies grow? It’s hard, because the ground has gotten so far away from them.

How do you fix this? You have to work harder.

Conventional thinking tells us that as companies grow, CEOs should step further away from day-to-day details. I believe the opposite. As the company gets bigger, your responsibility to understand those details becomes even more important, not less.

That doesn’t mean doing everything yourself. But you can’t lose sight of how it’s done.

Elon Musk has slept on the floors of his factories. Think about that for a second. The world’s richest man has slept on the floor of his factories, alongside the people actually doing the work. And is it any surprise that Tesla became one of the world’s most valuable companies?

Like the cycle of life, a company can eventually be brought down by a startup, where the founder knows everything happening and the people making decisions remain close to those doing the work.

So how do you extend the life of your company? You keep it in good health, like longevity medicine.

Think about working out at the gym. As you get older, maintaining muscle becomes harder. You have to put in more effort. Why should running a company be any different? As your company gets bigger, you have to work harder, not less, to keep it healthy.

You have to stay connected to the people doing the work and make sure those roots are still bringing life into the company.

Growth shouldn’t mean the ground gets further away from you. The moment your head gets so high in the sky that you no longer understand what’s happening on the ground, you may still have a very big tree.

But you might not realize that underneath, it’s already starting to die.

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