“Marianne, come and talk to our new cohort about leadership,” asks Tom Rippin. He is seating opposite me at one of those trendy co-working places that have suddenly flourished all over Mayfair, and we are catching up after one of my usual trips to Asia.
Rippin is the proud founder of On Purpose, a non-profit organisation developing the socially responsible talent of tomorrow. On Purpose selects about 40 candidates a year and places them in social enterprises, socially-aware companies and commercially-minded charities. Ben & Jerry’s and Innocent are part of the pool of companies, of course, but also Marks and Spencer, some high-profile foundations and the more-and-more-popular impact-investing dedicated funds.
I really like On-Purpose’s project – walking the talk to make the world a different place.
Yes, there is a new world out there looking for a better sense of value.
Yes, everyone is talking about the 99% and trying to bridge financial success with some sort of social good. Yes, this is something corporates do, but Rippin is going one step further. He is going back to the basics, starting from what matters most: Awareness and Education. On Purpose’s intent is to build awareness and to some degree break the complacency of the old boy’s club’s change-averse mentality, which tends to prevail in large corporations. The cohorts are there to learn and observe, but more importantly to bring to the table new ways of thinking about impact.
Rippin’s vision is to educate and help nurture the hybrid leaders the corporate world will need if it wants to survive in the currently emerging enviroment. A real paradigm shift is on the way, calling for a total reassessment of everything once known as common truth.
In a flash I knew the topic on which I could address the cohort – leadership. Investable leadership, just like a precious coin or bottle of wine, is an asset in which to invest.
First, there is an immediate and absolute correlation between leadership and business value. However demeaning people can be in defining leadership as a soft skill, to me it is a performance amplifier. Leadership is what will make people go above and beyond the call of duty and achieve extraordinary things. Examples are Lou Gerstner at IBM, and Jack Welch at General Electric, whose legacy is preserved by Jeff Immelt.
Good leadership creates good business, and bad leadership drives bad business, or businesses into the ground.
Think of the Kodak Story – one of bankruptcy. Kodak was one of the pillars of US history and the film making industry. It filed for Chapter 11 protection last year. How did this happen? I believe it was a certain complacency about the company’s place in the market, paired with lack of attention to new technological development, and completed with a profound aversion to change. The company tried to become something it was not – a product company. In the process it lost its DNA, and its edge.
You can define and, more importantly, assess invest-able leadership using the following criteria.
- Investable leadership constantly thinks about pain and gain: All businesses have one of two purposes – alleviating a pain, internal or external, real or at times perceived, or creating a significant gain for community or society. Without one of those, there is no sustainable business potential. Investable leaders are those who can first observe and then react, adjust their ways of thinking to comply always with the mantra, to stay relevant and be willing to change. Assess this by asking the question – you would be surprised how few people can articulate what pain or gain they are truly addressing, hiding behind sexy market statistics.
- Investable leadership can clearly map out the value equation of the company: How do we make money? What do we offer? Who do we supply from? Who are we selling to? What are our business models? Are we working with strategic partners? How are we going to enter a specific market…and so on and so forth. I am sure you would be more than able to continue the list of questions by yourselves. Yet again, asking the questions, and probing with follow-up questions is a good test, it would also show if the leader is able to put the company in context and grasp, his industry picture and the global picture.
- Investable leadership comes with experience and or credibility: I am not relating this to age, and I can verify that. I have invested in a fund created by two 20-some-things. What they lack in business savvy and personal aturity, they more than make up for with a strong idea – addressing both the funding and services needs of young graduate wannabe entrepreneurs in exchange for equity. They also put together an impressive non-executive board, composed of heavy-hitters in the industry and giving a massive endorsement. If you are clear on the value equation of your company, you can easily assimiliate the required competences and skills, and build a team to complement your own strengths and skillset. Investable leadership is can be highly team-oriented, alleviating the key person risks investors fret about.
- Investable leadership has an adequate network and can build trust: Networking is essential to providing agility, constructive chal-lenges and enhanced problem-solving abilities. It can also play a big part from a commercial standpoint – your first customers are more likely to be people you know and who know you. When assessing investable leadership, asking who a candidate knows can be valuable, and if you happen to find common connections, this can have an immediate halo impact and be a trust builder. How can you assess trust? A couple of things come to mind – credibility, experience as mentioned earlier, but also resilience and resourcefulness, so asking pointed questions about failure, about difficult situations or testing situational scenarios can help. A leader can build trust by researching the investor and what makes him or her tick, what are his or her drivers and adjusting the message to that.
Many investors – angels or otherwise – would shy away if they do not find adequate answers to the check-list above. Satisfaction here helps them to feel confident about the ability of the founders, and their team, to carry the project. Investors are first and foremost human beings, and we are often far from being creatures of reason. Intuition and emotions are not to be underestimated and need to be covered in any funding or investing quest.
Consider a funding exercise as a job interview and apply a similar process of discovery before meeting. Ultimately, if you want to become an investable leader, or find investable leaders, play the person, not the business plan.