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Don’t let passion override due diligence

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in Leaders & Managers,Leadership Skills

Experts often emphasize the importance of making work fun. While it’s true that leaders who enjoy themselves tend to exhibit more passion, there’s no guarantee that having fun goes hand-in-hand with success. Just ask Herb Greenberg.

Greenberg, 85, founded Caliper in 1987. Now a global management consulting company, it has advised 25,000 companies and earned $50 million in annual revenues.

But Greenberg’s entrepreneurial enthusiasm has sometimes worked against him. In 1999, for example, he lost more than $2 million after he purchased a minor-league basketball team called the Trenton Shooting Stars.

He had spent many years analyzing basketball teams and assessing their players in areas such as competitiveness, discipline and teamwork. He figured that if he could recruit players and a manager who embodied winning traits, he’d construct a championship team. So he tested his hunch by buying the Shoot­­­ing Stars—and the team performed well for a few seasons under Green­­berg’s ownership.

“The kid in me was thrilled,” he recalls. “But the adult in me could not make the venture profitable. I was not able to fill the stands with spectators.”

Greenberg admits that he “lost a ton of money,” but he learned to temper his eagerness to invest in fun business opportunities with a sober analysis of the bottom line.

Had he conducted due diligence be­­fore buying the Shooting Stars, Green­­berg would have questioned the business case for investing in a Trenton-based team. Trenton is halfway between New York and Philadelphia, two cities with rabid basketball fans. Moreover, two colleges in the region boast popular basketball programs (Princeton and Rutgers), leaving few remaining fans in Trenton.

—Adapted from What You Aren’t Seeing, Herb Greenberg and Patrick Sweeney, McGraw-Hill.

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