How Investing in People Revealed About Long-Term Performance About Character

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The Investor-Operator Lens How I Ask About People Before Looking At The Product
Most investment structures are built around a sequence that starts with the market then finishes at the end of the process with a team. It is important to assess the size and structure of the chance first, then the extent to which the product is a good fit within that market, followed by the competitive environment and the sway to the product, then about the time you are at the conclusion your process, you'll need to spend an hour with the founders and their leadership team to make sure they're competent and driven in executing what the earlier analysis has confirmed. I've been working within different versions of this model for long enough that I could understand why it's a norm across the investment industry. It is a systematic approach. It provides a diligence method that can be documented, compared across opportunities, and explained to investment committees and limited partnerships with terms that feel rigorous and scientific. The issue is that it has a structural flaw at its root, which is that it views the person dimension as a validation stage instead of the primary filter, something you look over at the conclusion to confirm what the market analysis suggested, rather than something you test first because it is the most significant factor that determines the outcome. The sequence suggests that great market with a competent team is superior to any market with a subpar team. excellent team. According to my experience, that will often be the reverse.
I changed my strategy after a short period watching the outcomes of the conventional sequence play out in ways that the downstream analysis hadn't anticipated which was hard to understand. Markets that had poor or dispersed leadership teams have always failed to deliver what opportunities recommended they deliver. Poor markets with exceptionally talented teams often found ways to create value which the initial market sizing as well as the analysis of competition had not accounted for. The pattern was clear enough and consistent across different sectors and different deal types, that I was unable it as a result of noise or attribute it to circumstances and not to the skills of the people who are at the in the middle of each company. Once I put aside my explanations what the implications of this for the way I allocate my time in diligence was evident it was that I must spend much more time understanding the people involved, and significantly less of it on verifying the market analyses that a knowledgeable analyst could provide with the same set of inputs.

The questions I ask now when I am evaluating a leadership team are not the same ones that are found in standard investment checklists, or diligence templates. They have to be discussed in real time to consider the answers. What happens when a leader has to react when they are proven incorrect - should you accept the correction or find a way to redirect the situation? What decisions do they make in the event that the information is lacking and the pressure take action is intense? What is the difference or a gap between the way they describe their style of leadership and how individuals who have worked with them describe their experiences of working under them? What does the overall culture of the company look like on the days when the founder is not in the building? How is that particular version of that culture reflect the one the founder describes when asked? They require conversations that go much further than the initial pitch and the formal management presentation. They require reference checks that can be truly exploratory as opposed to perfunctory exercises in confirmation. They require the courage to go into uncomfortable areas that could reveal information that can complicate a deal you have already started to seek.

The operator aspect of my investment process is inseparable from my dimensions of the investor. This shapes both what I invest in and how I get involved. I am not a passive financial source by birth or knowledge. I'm a person that has established businesses, who had to navigate the scaling changes that are more difficult than the fundraising ones and has made the governance and hiring and culture-setting mistakes that you make when navigating those new transitions, and who has cultivated - based on that personal experience - the convictions of what organizations require at different levels of their development not something a simple financial background does not produce. These beliefs make me a different kind of investment partner than a purely financial investor and attract founders looking for something different from what a financial investor will provide.

The founders I am most comfortable with are the ones looking for a partner that can assist them in navigating the transitions in their operations and make decisions in which the investors of their company are not capable of dealing with in the right amount in terms of depth and clarity. Who sits in the room to help when the structure of governance needs to be revamped because it is no longer the version it started with. Who will help guide the leadership of a senior executive at in a time when a wrong decision could cost the company one year of money it would not be able to lose. Anyone who can speak up regarding strategic risks that nobody other person in the room is happy to raise. That's the kind involvement that I believe creates the greatest value for the businesses I back not the capital allocation decision that any investor could make but the ongoing operational partnership that helps the company bridge the gap between where it is and where it was in the beginning, as early figures suggested it could be headed. View James Deller for blog examples including what running organisations taught me about what matters.



What Football Academies Get Right That Many Corporate L&D Programs Do Wrong
The top football academy in all of the globe are if you look at them operationally instead of romantically, extremely highly developed development organizations. They begin taking young people at seven or eight - sometimes even younger – long before those are aware of what they are capable of or who they would like to be. they work with them systematically and thoughtfully over what can be 10 years or more for a period of time, gaining not only the technical abilities that professional football requires but the personality, the mental capability to think and make decisions under pressure, as well as the interpersonal and social sophistication that playing at the highest quality of football requires. The success rate, measured by the proportion of players who go to the level of professional football, is not that high. However, the strategy that best academies use is, on many levels which are essential to developing human capability, more rigorous in its approach, more patient, and more intentional than anything I've experienced in the field of corporate learning and development. The distinction between the work that these academies do and what most organizations do when trying to improve the capabilities of their employees within the academies is enlightening and fascinating after spending time looking at both.
The biggest difference is the connection between time. Corporate development and learning programs have a tendency to focus on smaller interventions. A course that runs for two days, a workshop series which lasts for a quarter, an coaching session that runs about six to seven months. The logic behind this is quite clear and not difficult to defend when it comes to financial aspects. Companies must show the ROI on their investment in development within the timeframes budget cycles and reviews impose and shorter interventions are significantly less difficult justification and measurement over long ones. But the timing on which truly human growth actually occurs - the period of time when new frameworks, new behaviours and new skills are really absorbed instead of conceptually understood and applied does not have any connection to the timeline for a typical Corporate L&D intervention. The top football academies recognize this on a level that is embedded in the structure of their programs of development over the course of generations. They do not think that a child of 14 years old will be able to comprehend a new decision-making framework after one weekend workshop. They expect the process to take years, and they have designed the environment accordingly. years of consistent reinforcement in the form of being put in situations that test the framework and need it to be used in real-time, years of feedback specific enough to actually shape behaviour rather than general enough to be discarded immediately.

Another major distinction is the integration of developmental activities into the operations as a whole, not its isolation from the operational environment. In a properly-designed football academy this is not something you can only do in specific sessions apart from the actual play and training. It is an integral part of the institute. It takes place through the playing as well as the training. The sessions are designed with development objectives in mind, not just performance objectives. The challenges that participants are presented with are selected in part for their value for development, as well as their practicality. The feedback is immediate, precise and rooted in what just happened rather than abstract and generically suitable. The relationship between what happens during training and what will be expected during match situations is made clear and continually made clear. In most corporate organisations, for instance, development and operational work are regarded as distinct processes. You join the training programme. The workshop is attended by you. You are part of the coaching session. You then return to the work you do, in which the incentive structures, cultural norms, the pace of work, and the pressures of delivery are nearly identical to the conditions they had prior to the intervention to develop, and where the new standards and behavior adopted in the development setting gradually erode due to the lack of a process for integrating them into the process of getting work completed.

Organizations that build people most effectively are consistently the ones that have found a way to keep development gradual and ongoing, rather being a series of events and abstract. In those organizations the distinction between educating workers and executing the tasks is incredibly difficult to distinguish, because the operational environment has been designed with developmental objectives incorporated into it. feedback mechanisms are integrated into the daily routine of work, rather than being reserved to periodic formal reviews. the tasks that people face are selected as a result of what it will take for them to master and develop into, and leadership behaviour consistently displays that progress is highly valued and anticipated rather than something that is only happening in certain programs that then end. Establishing this kind a working environment is a different set strategic choices for design and organisation compared to the kinds of choices most organisations make when considering learning and development. Moreover, it requires commitment from leaders over a prolonged period that many organisations find difficult to be able to sustain. However, it yields development outcomes that sporadic programme-based strategies simply can't replicate.

A third aspect that sees top academies are able to outperform other corporations is their willingness to embrace serious the concept of developing character as an explicit organization's goal. Most corporate L&D programs only deal with character. It is not explicitly taught in all that they impart on leadership as well as communication, but it is seldom mentioned in detail and almost never embraced with the rigor as well as the patience that true character development demands. The best football academies do not consider character to be something that players have or don't possess, or as something that'll evolve on its own with enough time. They see it as something that can be nurtured through the right setting that provides the right amount of challenge and adversity, and the right quality of relationships between coaches and players which is characterised by genuine concern for the individual and genuinely high expectations of what that individual is in a position to be. That combination of care and challenge held together consistently through time - is as I've observed as the most reliable technique to develop character that exists. It's effective in football academies. It's also found in tech companies. It's a great fit in any organization that is willing to invest in it with the patience, consistency and endurance it requires.}