What Working with Founders Revealed About Long-Term Performance About Leadership

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The Investor-Operator Lens The Reason I Ask About People Before Looking At The Product
A majority of investment frameworks are built on a structure that starts with the market and ends in the company. It is important to assess the size and structure of the market first, followed by how the product fits within that potential, then the competition landscape, and finally the saftey of the position, and somewhere toward the end your process, you'll need to spend an hour with the founders as well as their leadership team to make sure they're competent, motivated and capable of executing on the plan which the previous research has proven. I've operated within various versions of this model for long enough to be able to understand how it is now a standard procedure across so much of the investment industry. It's very systematic. It provides a diligence method that can be documented, compared across opportunities, and explained to the investment committees or limited partners in terms that feel rigorous and scientific. The problem is that it is flawed at the heart of it, which is that it views the people element as a validation process rather than as a primary filter. It is something one can check at the last minute to confirm what your market analysis has already indicated instead of one you consider first since it's a highly important factor in predicting the outcome. The method suggests that a great market with a competent team is superior to one that is mediocre with an extraordinary team. Based on my experience, this is not always the case.
I modified my method following a specified period watching the outcomes of the traditional sequence play out in ways that upstream analysis hadn't anticipated and was unable to easily explain. The best markets with unorganized or fragmented leadership teams regularly failed to deliver what the market suggested they should deliver. Poor markets with exceptionally talented teams have always found ways to produce value that first market sizing and competitive analysis had not captured. This pattern was so consistent, and consistent enough across different sectors and deal types, it was difficult for me to explain the pattern as just noise, or attribute it entirely to circumstances rather than to the quality of the people who are at the center of every business. Once I stopped explaining it away and began to consider the implications of how I should spend my time in the area of diligence was apparent I needed to spend considerable time getting to know the people, and much less on confirming the market analysis that a knowledgeable analyst could produce given the same inputs.

The questions I ask now when trying to evaluate a leadership team are not those that appear on the standard investment checklists or diligence templates. These are questions that need real conversations and real time to answer properly. How does this leader actually react when they're proved incorrect about something? Do they engage with the correction or figure out a way to redirect it? What are their methods of making decisions in the event that the information is incomplete and the pressure to be a good leader is high? What is the gap that exists between the way they describe their style of leadership and how employees who worked closely with them describe their experiences of working for them? What does the culture the organization actually look like on days when the founder isn't present in the premises, and how closely does that version its culture compare to what the founder outlines when asked? These questions call for conversations that go way beyond the pitches and formal management presentation. They will require references that are actually exploratory rather than superficial exercises in confirmation. They require a willingness for a time spent in uncomfortable places that could yield data that might complicate a transaction that you've already started to pursue.

The operator element of my investment process is inseparable from my investment aspect. It shapes both what I invest in and the way I get involved. I is not a passive provider by temperament or by knowledge. I'm someone who's created businesses, who has been through scaling transitions which are more challenging than fundraising ones but who has also made hiring and governance mistakes that you commit when navigating those transitions for the first time, and who has cultivated - based on that personal experience - various convictions about the things that organizations need at different stages of their growth that a pure financial background does not give. This makes me a different kind of investment partner that a strictly financial investor and are a magnet for entrepreneurs who want something different from what a traditional financial investor can offer.

The founders I do my best work with are those who seek a partner who can assist them in navigating the operational alterations and decisions they face that financial stakeholders are not in a position to make decisions at the proper level of depth and detail. Are you able to be in the room whenever the governance system needs to be redesigned because your company is outgrowing the model it was initially using. Who can aid in making an important decision by senior leaders at the point where the wrong decision could cost a company twelve months that it cannot afford to lose. Anyone who can speak up in private about the strategic risks that nobody else in the room feels comfortable with. This is the kind of involvement that I believe adds the most unique value for the businesses I back not the initial capital allocation decision, which any investor can make rather, it is the ongoing operational partnership that helps to bridge the gap between where it is and where the numbers from the beginning suggested it could be headed. Check out James Deller for more info including how decades in technology has shaped my thinking about building well.



What do Football Academies Get Right That Most L&D Programs For Corporate Companies Get Done
The most successful football academies in worldwide are when you consider them operationally instead of romantically, extremely sophisticated and advanced development institutions. They are able to take youngsters at the age of seven or eight, sometimes earlier - well before are aware of what they're capable of or who they are aspiring to be, and they coach them in a systematic and thoughtfully over what can be as long as a decade of consistent engagement, building not only the technical capabilities that professional football requires but the character, the psychological capability to think and make decisions under pressure, as well as the interpersonal and communicative proficiency that playing at the top standard of the game requires. The rate of success, as measured by the proportion of players who go all the way to professional football, is very low. However, the process that the best academy schools employ is in a lot of the areas that matter in the development of humans, more rigorous with more patience, and more focused than anything I've observed in corporate learning and development. The contrast between what academy's do and how organizations are doing when they seek to enhance the skills of their employees in them is awe-inspiring and instructive after spending time researching both.
The most fundamental distinction is how time is viewed. Learning and development programs for companies generally revolve around short-term interventions. This could be a program that lasts two days, a series of workshops that spans a quarter, and a coaching contract that runs over six weeks. It's logical but difficult to justify in purely financial terms. Businesses must prove the ROI on their development investment within the timeframes that budget cycles and performance reviews demand and shorter interventions are much easier to justify and quantify than longer ones. But the exact timeframe that real human development takes place - - the time-frame when various new strategies, behaviours and new skills are real-time internalised instead of just to be ad-hoc and thrown into practice - bears almost no relationship to the timeframes of a typical company L&D intervention. The top football academies know this at a level that has been embedded into the structure of their programming for development over the years. They don't expect a 14-year-old to learn the new decision-making framework following attending a weekend seminar. They expect the internalisation process to be long-term and create the environment accordingly. years of constant reinforcement or being put in situations that challenge the framework and will require it to be applied in real-time, years of feedback specific enough to influence behaviour and not generic enough to easily be forgotten.

The second major difference is the integration of training into the actual environment itself, rather than its separateness from it. A well-designed football academy and training facility, development is not something you can only do in specific sessions distinct from the actual football or training that forms its core function within the institution. The process is carried out through the play and training. Sessions are planned with the development goals in mind, not just performance objectives. The tasks that players face have been selected in part based on the value they bring to their development, not just for their functionality. The feedback is immediate, precise, and contextually grounded within the context of what's just happened, rather than abstract and generically useful. The link between what is happening during training and what's going to have to be considered in match situations is made explicit and constantly is reinforced. In most corporate companies, it is the opposite. Development and operational tasks are regarded as distinct, categorically separate activities. You participate in the training programme. Participate in the workshops. You participate in the coaching session. And then you return to your work, and the incentive structures, the customs and norms of culture, the pace of work, and the pressures of delivery are nearly identical from what they were prior the intervention by the developer, and where the new structures and behaviors which were introduced into the environment of development slowly diminish since there's no procedure for integrating these into the process by which work gets accomplished.

The businesses that are able to develop people most effectively are consistently the ones that have found the way to make development gradual and ongoing, rather the abstract and sporadic. Within those organisations where the line is drawn between empowering people and actually doing their work can be a bit difficult to pinpoint because the work environment has been designed with developmental targets in place - the feedback mechanisms are built in the daily rhythm that work is not reserved for periodic formal reviews. those challenges are selected primarily based on what they will require people to acquire and grow well-rounded, and the behaviour of leadership consistently suggests that growth is appreciated and desired rather than something that happens in designated programs that then end. Setting up this kind environment requires a different set of organisational design choices from the ones that most organisations employ when considering developing and learning. Additionally, it requires leadership commitment over a time period that many organisations find difficult to endure. However, it yields development outcomes unlike the episodic approach to programme design that can't duplicate.

The third dimension on which the most prestigious academies excel over corporations is the willingness of their staff to take personality development as an explicit organisational objective. The majority of corporate L&D programmes only engage in a peripheral way with character. It is implicit in some of what they cover in regards to leadership and communication, but it's rarely named directly and almost never embraced with the rigor and tenacity that authentic character development requires. The best football schools are not a place where character is viewed as something that players or do not have or as something that could develop naturally if given enough time. They see it as something which can be developed by the right conditions that provides the right amount of challenges and adversity and a positive connection between coaches and their players - - a relationship marked by an honest concern for the person alongside genuine expectations of what the individual is likely to become. The combination of care and challenge held together consistently over time - is, from my experience it is the most reliable strategy to build character that is in place. It is used in football academies. It's used by technology companies. It is applicable to any organization that is willing to invest in it and have the patience and persistence it requires.}