Skin in the Game: The Leadership Lesson I Had to Learn the Hard Way

In 2022, I sat down on the Positive Enterprise Value Podcast to talk about The Hearth Food Garden, which I was building at the time. If you listen, you'll hear how sure I was about one idea in particular. I had hired leaders for each area of the business for their entrepreneurial spirit. I planned to treat them as entrepreneurs, share the burden of leadership with them, and give them a platform to grow into owners. I believed that would make this venture different from the last one, where I had carried everything alone.

I didn't know it yet, but I was describing the biggest mistake I would make.

What happened

I gave my leaders real authority and real responsibility, and I trusted them to carry it. They couldn't. Instead of telling me, they faked it. Balls were dropped, and I was told work was being done when it wasn't. I believed them, and I shouldn't have. When things got hard, as they always do in a startup, they fell apart, walked away and blamed me.

Part of that was my fault. I had assumed that team members with entrepreneurial spirit would act like entrepreneurs: that they wouldn't give up, and would find a way no matter what. But spirit isn't the same as stake. An entrepreneur can't walk away when it gets hard, because everything they've built is on the line. My leaders had nothing on the line, so when it got hard, they lied, felt victimized and left.

When team members have skin in the game, it's a different story. Ingenuity takes over, and problems get solved instead of avoided. Without it, even talented team members tend to give up and look for someone to blame rather than face what's happening.

That was excruciating to live through. It was also one of the most valuable lessons of my career, and it shapes how I advise every client who is building a leadership team.

1. Commitment follows stake.

You can't expect an owner's commitment from someone who doesn't own anything. If you want your leaders to shoulder the burden with you and carry the business through hard times, give them a real reason to. That could be them investing in the company or another ownership structure that ties their success to the company's. A promise of future ownership or benchmarks towards equity isn't the same thing, and it won't hold up under pressure.

2. Hire for what the role demands, not for how the person makes you feel.

"Entrepreneurial spirit" is energizing to be around, and it's easy to mistake for resilience. In hiring, look past the enthusiasm. Ask about a time they had something real on the line and things went wrong. What did they do? Their answer will tell you far more than their excitement about your vision.

3. No stake? Manage them as an employee.

This follows directly from hiring for what the role demands. If a team member doesn't have real ownership, don't manage them as if they do. Set clear benchmarks for success, write them down and don't waver on them. Review results regularly against those benchmarks, not against how committed someone sounds. When someone doesn't meet them, let them go, and do it as early as possible. Waiting and hoping only makes the cost higher for you, for the rest of your team and for them.

4. Trust is earned and verified, not assumed.

I handed over authority based on belief, not evidence, and I didn't check whether the work was happening. Give responsibility in stages, and widen it only as team members prove they can deliver. Build in ways to see the work itself: results, numbers, finished deliverables, not only updates. Pay close attention to how team members handle pressure, setbacks and bad news. When someone hides a problem instead of raising it, that tells you what you need to know. How a person acts in a hard week is the best predictor of how they'll act in a hard season.

5. Blame is information.

When the people around you start blaming, it usually means they never felt the outcome was theirs. That doesn't make it your job to absorb it. Own your part, as I've had to own mine, and let the rest go. Then use what you learned to design roles and agreements where accountability is clear from day one.

6. You still need support of your own.

Even with a strong team, the founder carries something no one else does. Rather than expecting team members to carry that weight with you, build support that's designed for it: an advisor, a peer group or a partner who has no reason to walk away.

7. Design for ingenuity.

The good news is that this lesson works in reverse. When team members have real stake, clear benchmarks and honest accountability, they rise to meet hard moments. That's where some of the most creative problem-solving in any business happens.

How I help

I don't regret the vision I described on that podcast. I still believe businesses are stronger when leadership is shared. What I've learned is that shared leadership has to be built on shared stake, and that trust has to be backed by clear expectations and real visibility into the work. Now I help founders build that from the start. We structure ownership and incentives, hire for resilience, and set benchmarks that don't bend. Along the way, I'm the steady partner who helps you see what's actually happening in your business, and who doesn't walk away when it gets hard.

If you're building a leadership team, or you're already feeling like you're carrying it alone, start with the free Rooted Check-up. Or book a free 15-minute call and let's talk.

Hear the conversation where I described my original plan on Apple Podcasts.