As a leader, my job comes down to one thing: choosing the right people for my private equity team, whether that be executives and front-line staff or our bankers, lawyers, accountants and investors.
The interaction, trust and camaraderie of your teams can make or break your business.
I’ve made hiring mistakes. Each and every time I did, I found the poor performers were not team players nor were they decent or honest people.
As a leader, I can’t do everything in the organization. I need to delegate. I need to ensure that the people who do the work are good, decent, hardworking, smart, dependable. And most importantly, honest.
In my more than 13 years as a leader of Lynx Equity, I have found it helpful to keep these six principles in mind when choosing the people with whom I am going to build my team and expand my business.
1. Aim to be obsolete
Every single businessperson should know that the key to the success of his or her business is the staffing within the organization. I strongly believe that a good president makes himself or herself obsolete. Delegation allows for a president to focus on the growth of the organization, not the day-to-day operations. When I’m buying a business, one of the most important factors I look at is the company’s reliance on the president and how strong the team is behind them.
2. Align your goals
Aligning the goals of the management team so that everyone is in sync is also instrumental to a company’s success. This can be simple or complex. I always prefer a simple approach. Give bonuses based on the company’s bottom-line profit or earnings before interest, taxes, depreciation and amortization. There will always be ways to manipulate aspects of a bonus structure but if someone attempts to do that, then he or she shouldn’t be part of the team.
3. Get everyone on the same team
External factors in business are tough enough. A successful business cannot have constant internal management team disputes if there is a chance for success. I’ve had people on my team who were strongly opposed to the approach that I have for private equity – and they were exceptionally difficult to manage. They disrespected what I and the other managers were trying to build. Meetings were dysfunctional. There was always tension in the office. Once the naysayers left the group and the ones onside could focus on the business instead of the politics, our company’s growth exploded. Now we have a team with everyone shooting at the same target.
4. Train the team to look out for the greater good
Business culture in a successful company requires the team to understand “all for one and one for all.” This, by no means, is intended to mean a socialist approach to business. But what it does mean is that as people work toward a common and clear goal, everyone will be better rewarded. In order to train people for this, a president needs to build a culture that is friendly, jovial, and helpful – not selfish – and is farsighted. The management team should see success when the company does well, not only when they do well individually.
5. Find good team players
I’m a firm believer that people should play sports. In baseball, every player has to support the pitcher during the bad innings, the same way that the pitcher has to support a second baseman after an error. In solo sports, there is also an aspect of camaraderie as training can require coaching – an aspect where support is key. I have spent time training for fighting – boxing, jiu jitsu and mixed martial arts – and I have always shown trust and respect for my coaches. When I was in the middle of the round, I always felt like I was in the fight with my coach. Look to see the leisure interests of potential employees. I’d be wary of anyone who didn’t have an interest that required some form of teamwork.
6. Fill your team with decent human beings
Have someone else in your office meet them before you do. See how they treat the administration. Take them for a dinner before hiring them. See how they treat other people around them – the waiters, the people at the table next to you, the busboy. Manners go a long way in business. It is easy to be nice to people in higher positions but people don’t always show the same respect in the other direction. In my view, simple and plain decency is fundamentally important.
At the end of the day, I’ve come to rely strongly on my instincts. I’ve met people I knew right away were a perfect fit for our team. I’ve also learned to trust that if something seems off, or someone is making me feel uncomfortable, there is probably a good reason. My business is a significant part of my life, and my team is like family to me. And don’t rush. It took me 13 years to build the strong management team I now have.