April 2022 – Brad Lynch
Having partnered with founder-led businesses for over 35 years now, we think we have seen most things, but still get surprised on occasions! We have invested across different economic cycles and navigated various opportunities and threats together with our founder and manager partners. But in all this time one observation has been universal – great founders and managers make great investments.
So, what makes a founder or manager ‘great’? Here are our top five traits:
To start something, you need enormous trust in your instincts that there is a better way of doing something or an unmet need that you can fill. The founders and managers we back are optimistic and believe that great things can be achieved. At the same time, they are not deluded – there is a thin line between belief grounded in preparation and solid insight, versus belief that is unsubstantiated by external reality. Great founders and managers are always rational, even in challenging situations.
Our founders and managers thrive in the contest of ideas and prosecuting the merits of a business decision with others. This is not to say they lack conviction, but rather they welcome partnership with others to bring new ideas and challenge current thinking. That is, they are open to other voices to support better decisions and build a better business.
Great founders and managers are able to galvanise their organisations around a central object, a clear purpose, which provides the direction for the road ahead. This cascades down the organisations they lead, and becomes the scaffolding for the team to make business decisions. Great founders and managers empower others to use their own navigation skills to reach the desired end destination.
- Builders of talent
Business builders, much like top sport coaches, ensure that the organisational capabilities required to deliver the plan are filled ahead of immediate need. Often, these roles are filled by ‘over-hires’, that is, people who could be considered over-qualified. You get a multiplier return on hiring the best and paying them well. Great founders and managers ensure team members are not dropping down to cover more junior roles – they ensure people play ‘at level’.
- Action orientated
Great founders and managers establish decision making structures to avoid ‘paralysis from analysis’ – decisions are made, things get done. Data assets generated by their firms are organised to drive actionable insights. Having a clear purpose, team members are empowered to navigate the grey and continue on the journey.
Undoubtedly, leadership and businesses practices will continue to evolve in the years ahead, but we are confident these traits will be timeless. Are there other traits you believe should be on the list? Please share your comments and views.
If you’re a founder and are considering partnering with an experienced private equity investor to support your company in its next phase of growth, please reach out to discuss how we might be able to assist.