The 5 Toughest Lessons I Learned As A CEO

By Richard Goeglein, Chairman of Pinnacle Entertainment and Former CEO of Harrah’s Hotels & Casinos 
  

Some 15 years ago I became CEO and 5% owner of a start-up Company with the purpose to develop a major Resort. It was a development which I had pursued previously -- in fact, 2 different times. I believed passionately in the concept, market, and specific location.

We raised over $850 million - $630 million debt, $250 million of equity with location/ land at over $100 million -- give or take, a $1 billion dollar development. While it was a lot of money, several participants believed

it might be somewhat 'light'.

It was built, it was opened and it employed over 2,000 people --- It Failed!!!! There were a myriad of reasons for the failure, however, I quickly came to realize there were a handful of terminal issues in place from the very beginning.

Hard lessons learned and not to be forgotten:

1. Don't fall in love with your own deal. Objectivity is blunted or actually eliminated.

2. Self-confidence, optimism and being in love is a very dangerous combination -- there is a very high probability of Believing You Will Overcome Any/All Obstacles and thus disregard or diminish the associated risk of failure.

3. A 'deal' thinly capitalized is a 'deal' at substantial risk -- almost nothing works exactly as planned especially if large and complex.

4. KISS -- keep it simple, stupid -- Unnecessary complexity results in confusion and impaired ability to communicate clearly across all sectors/segments. We had been advised at inception that our structure was overly complex.

5. Don't associate with entities, individuals whom you don't like and who do not have shared core values with you. Such associations lead to dissension, total lack of trust and pursuit of personal agendas at the expense of the enterprise/organization.

Reflecting back, it is clear to me there were several warning flags which I chose to ignore -- I actually wrote a note only three months into joining the company which stated " this is the most dysfunctional group of people with whom I have ever been associated -- pulling this off will be the equivalent of "the second coming". Case in point as to point  #2 above.

Sometimes your confidence and optimism tell you one thing and your gut tells you something different. It pays to dig a little deeper before you make that leap of faith into a situation that is fraught with too many challenges.

I do not profess to believe the above list is necessarily set forth in order of importance or priority.  I do know each of the five 'lessons learned' are real and important.

Give me your thoughts and share your wisdom. What were some of your toughest lessons?

What do you think? I’m open to ideas. Or if you want to write me about a specific topic, let me know.