Charlie Munger, of Berkshire Hathaway fame, famously once said

I want to know where I’m going to die so I will never go there.

While humorously expressed, this is a profound example of inversion theory — a mental model that looks to avoid mistakes to increase the odds of success.

When I was looking to hire a CEO for CB Insights, I talked to a number of tier 1 investors (both VC and PE) and asked them what were the most common reasons for failure when a founder stepped down from the CEO role, joined the board and hired an external CEO.

Yes – I finally had an opportunity to use Munger’s inversion theory in my own life.

The most consistent reason for failure they cited was people in the company not knowing who was in charge or the founder didn’t let go (which usually led to the ‘know who was in charge’ challenge).

This, of course, assumed that the CEO brought in was a good hire.

But assuming that, this was overwhelmingly the #1 cited cause for failure.

And knowing this made the transition much easier.

It meant that I had to become a ghost at CBI quite quickly so that the team knew who was in charge (aka not me).

It also meant that I could self-impose some clear rules for how I engage with the broader team or our customers.

And the rule here was that I’m an “invited guest” (by our CEO) to any conversations with customers or the team. Essentially, if he needs my support and wants me to speak to them, I am there. But I am not reaching out directly to the team without his awareness and request.

While it is still early days, I do believe this has made the transition very clear for both of us and our team, customers, etc.

My natural tendency is to think about all the things I should do to make something successful. But thanks to Charlie Munger, thinking about what not to do has been equally powerful.