Silverbonde Lotions

Most young companies that enjoy early and rapid success have growing

pains, and Silverbonde Lotions was no exception. By then a multibillion

dollar enterprise with a Board of Directors and profit expectations from

shareholders, the Board had grown a bit impatient with what they perceived

as young Max’s lackadaisical approach to his CEO role. They rightly

perceived that Max was more interested in formulating and developing

additional products than he was in the day to day activities of running

Silverbonde Lotions. However, they underestimated Max’s ability to

multitask. Especially now, with the support of Honey, Max was beginning

to contemplate the possibility of other world changing products that his

polymer chemist skills could create. Nevertheless, the Board wanted a

“professional manager”, and they wanted it now! They insisted that he

bring in a CEO who could make sure the company was run the way a

multibillion dollar enterprise was supposed to be run.

A nationwide and international search ensued, with Silverbonde Lotions

looking for the individual who could both harness Max’s entrepreneurial

genius and deal with the business aspects that the Board demanded. The

first four of the five finalists for the job were either taken aback at the

challenge, or felt that they wouldn’t lower themselves to take direction from

young Max. The last finalist was a man named John Scuddy, who at time

was the CEO of a large consumer goods company that made among other

things, packaged snacks and soft drinks. The onsite visit to Silverbonde

Lotions went well from Max’s perspective. He felt that he could work with

John. John’s meeting with the Chairman of the Board went equally well.

They had their man! When the day ended, Max was to accompany John

back to the airport in the company limousine. On the way to the airport,

John was unusually quiet. Max told John that everyone was happy with

how things went and that they would be preparing an offer. John was

silent. Max asked what was wrong. John said he was unsure whether he

should make the move. Max was shocked. Silverbonde Lotions was

already nearly as large as John’s current company, and had unlimited

growth potential. Max struggled for a minute or so for what to say. After

all, if they couldn’t convince John to join Silverbonde Lotions, they would

have to start their search all over again. Finally, Max said to John "Do you

want to spend the rest of your life selling flavored water or do you want to

moisturize the world?" Those were the magic words! John saw the

potential of Silverbonde Lotions versus his current company and told Max

“You know, you’re right. We can moisturize the world together! I’ll await

your offer!” Silverbonde Lotions indeed had their man!!

Flash forward two years:

Silverbonde Lotions is experiencing phenomenal success and Max has

been recognized worldwide for his polymer chemist skills. The success of

the company, however, has led the Board and CEO John Scuddy to think

that they no longer needed Max at the helm. Instead of correctly

recognizing her as Max’s muse, they mistakenly believed Honey to be a

negative influence on Max. Besides, John and the Board were the ones

who had marketed Silverbonde Lotions worldwide. The product was what

was important, not Max. What did they need Max for now? There was only

one problem … Max still owned 49 percent of the company shares which

would allow him to partner with any other institutional shareholder to take

full control of the company if the Board moved to oust him. So instead,

John and the Board decided to make an effort to buy Max out. A meeting

was held. John and the Board Chair offered Max a price substantially

above the current value of the shares. Since Silverbonde Lotions initial

success, Max had always lived a comfortable life, but it had been far from

lavish. This buyout would make Max one of the 5 wealthiest in the world at

the ripe old age of 32. How could he refuse! Wait … there was a catch.

Max would have to relinquish the patent on his groundbreaking formula for

Silverbonde Lotion and also sign a non-compete agreement to never

attempt to make or market a skin care product that would compete with

Silverbonde Lotion. John and the Board felt this deal would at last get Max

and Honey out of the way. On the other hand, Max felt that the deal would

at last free him to create the other products that his current duties with

Silverbonde Lotions had prevented him from working on. And with Honey

at his side, he knew they would be unstoppable! The deal was done!! Max

and Honey were billionaires!