The majority of investment strategies are built around a sequential process that begins with the market and ends by assessing the group. You analyze the size and structure of an opportunity first, then the degree to which it fits into the possibility, then the competitive landscape and the viability for the business, and somewhere toward the end of the process you spend some time with the founders and their leadership team to ensure that they're well-informed and motivated in executing plans that previous study has proven. I operated inside versions of this model for long enough to comprehend why it is now a standard procedure across the world of investment. It's systematic. It results in a diligence system that can be documented, compared across potential opportunities, and even defended to the investment committees or limited partners with terms that feel rigorous and scientific. The problem is that it has a structural flaw in its fundamentals, which is that it treats the people factor to be a validation rather than a primary filter - something you review at the end to confirm what the market analysis already suggests instead of something you test first because it's the most relevant factor to the outcome. The method suggests that a successful market with a savvy team is more effective than any market with a subpar team. outstanding team. According to my experience, that can be reversed.
I modified my method following a period watching the outcomes of that sequence of events play out in ways that the downstream analysis could not have predicted which was hard to understand. The best markets with leaders who were weak or poorly organized generally did not deliver what the chance advised them to deliver. Markets with exceptional teams are always able to add value that the initial market analysis and analysis of competitive factors had not yet accounted for. The pattern was persistent enough, and consistent enough across different sectors and different deal types, that I couldn't explain it as a blip or attribute it to a particular situation rather than the excellence of the individuals at the top of each business. After I stopped explaining it away what the implications of this for how I should spend my time in diligence was evident: I should be spending much more time understanding the individuals, and much less on confirming the market analysis that any competent analyst could develop with the same knowledge.
Questions I ask when trying to evaluate a leadership team are far from the questions that are listed on standard investment checklists or diligence templates. They necessitate real conversations, and real time to respond properly. How does a leader respond when they're demonstrably wrong - do they engage with the correction or do they find a way redirect the issue? What is their process for making decisions when the information is genuinely incomplete and pressure to make a decision is great? What is the gap, if any, between the way they describe their leadership style and the way the people who have had a close relationship with them describe their experiences of working for them? What does the culture the company look on days when the founder doesn't work in the building? And how is that particular version of this culture look like the one the founder explains when asked? Those questions require conversations which go far beyond the presentation at the pitch meeting, and also beyond the formal management presentation. They need reference checks that are genuinely exploratory rather than superficial exercises in confirmation. They will require you to go into uncomfortable areas that could reveal some information that could complicate the terms of a deal you have already started to consider.
The operator component of my investment philosophy is inseparable from the investor aspect, and it affects the things I invest in and how I engage once I am involved. I am not a passive financial provider simply because of temperament or education. I am a person who has created businesses, who has experienced the challenges of scaling which are more challenging than fundraising ones in the past, who has made hire and governance mistakes that you make while navigating those transitions for the first, and who has developed through this personal experience - the convictions of what organizations need at different stage of their development. This is something not something a simple financial background does not produce. These convictions make me a distinct type of investment partner unlike a financial investor who is purely a financial one and draw entrepreneurs looking for something that is different from the services a strictly financial investor could offer.
The founders I work best with are those that seek out a partner who can help them think through the operational shifts and decisions the financial shareholders aren't competent to handle at the appropriate level in terms of depth and clarity. Who sits in the room with the leadership structure that needs to be revised because there is a need to expand the one it was originally built with. Who can aid in making the senior decision-making process at the point where the wrong choice could cost the company twelve months that it cannot afford to lose. Someone who is honest privately about strategic risks that nobody would be confident about raising. This is the kind involvement I believe brings the most distinct value in the companies I invest in not the initial capital allocation decision that anyone of the investors could make and continue to make, but the continuous operational partnership that helps the company navigate the gap between where it is now and where it was in the beginning, as early figures suggested it could go. Have a look a James Deller for site examples including how working across industries taught me about what matters.
What do Football Academies Get Right That Most Corporate L&D Programmes Get Wrong
The most successful football academies in this world have, if you look at them operationally rather than romantically sophisticated and well-equipped development companies. They enroll young people as early as the age of seven or eight - often younger - way before people have any idea of what they are capable of or what they would like to be. they work with them systematically and deliberately over what could be as long as a decade of consistent engagement, building not just the technical expertise that professional football requires but the character, the psychological strength, the ability to make a decision under pressure, and the social and communication proficiency required to perform at the highest degree of the game requires. The rate of success, measured by the proportion of players who go to the level of professional football isn't that great. However, the system that most successful academies employ is, on many levels that actually matter for developing human potential, more rigorous to be patient, more patient, as well as more thoughtful than anything I've observed in the field of corporate learning and development. The difference between what these Academies do and what the majority of organizations do when trying to enhance the skills of their employees in these institutions is striking and instructive when you've spent time looking at both.
The main difference is how time is viewed. The corporate learning and development programs are usually designed around shorter interventions. For example, a class that runs for two days, a series of workshops that runs for a quarter and a coaching contract that runs over six weeks. The logic is understandable and difficult to dispute when it comes to financial aspects. Organisations have to prove their return on their development investment within the timeframes budget cycles and performance review impose Short interventions are significantly more straightforward to justify and measure when compared to long ones. But the timing on which meaningful human development actually happens - the period of time when new models, new behavior and new skills are real-time internalised instead of just perceived and used for a short period of time is in no way related to the timeline for an ordinary Corporate L&D intervention. The top football academies recognize this at a level that has been incorporated into their operational DNA of programming for development over the years. They don't think that a child of 14 years old will be able to comprehend an entirely new framework of decision-making following attending a workshop over a weekend. They expect the process to take years, and they build the environment accordingly. years of continuous reinforcement, years of being placed in situations that challenge the framework and call for it to apply in real-time, years and feedback specific enough to affect behaviour rather than general enough for it to disappear immediately.
A second important distinction is the integration of development into the operation itself, rather than its isolation from the operational environment. In a properly-designed football academy this is not something that is performed in special sessions away from the actual sport and training. This is what constitutes essential to the work of the group. It is a result of the playing and training. Sessions are planned for development purposes more than just performance-related goals. The challenges the participants are offered are selected in part for their development value, as well as their practicality. Instant feedback that is specific and rooted by what has just occurred rather than abstract and generically relevant. The connection between what happens in the classroom and what is likely to require in match situations is made explicit and constantly made clear. In the majority of corporate organizations, unlike development, operational work is considered to be distinct and distinct tasks. You enroll in the learning programme. You participate in the workshop. The workshop is followed by a coaching session. Then you go back to the work you do, in which the reward structures, traditional norms of the workplace, the rate of work, as well as the pressures of delivery are essentially identical to what they were before the intervention in development, and where these new structures and norms are introduced in the context of development gradually diminish as there is no process for integrating them into the process of getting work accomplished.
Organisations that can develop their staff most effectively are ones that have found methods to make learning continual and contextual instead of an isolated, abstract process. In those organizations it is difficult to distinguish between the development of individuals and doing the work is incredibly difficult to distinguish, because the operational environment is designed with the development goals in mind - feedback mechanisms are integrated into the daily flow of work and not just reserved to periodic formal reviews. the issues that are put before employees are chosen partly for what they will require people to acquire and grow in the future, and leadership behaviour that consistently ensures that growth is valued and expected rather than something that happens through designated programs and then halts. Making that kind of setting requires a distinct set of organizational design decisions from the ones that organizations typically make when it comes to education and growth, and it requires commitment from leaders for a significant time for a period of time that many organizations find difficult to continue to. However, it delivers development outcomes that sporadic programme-based strategies simply can't duplicate.
The third element on which the best schools outperform corporate organisations is in the willingness of their staff to take personal development very seriously, as an organization's goal. A majority of corporate L&D programs do not even bother in character development - it's evident in the things they teach about leadership and communication, however it is seldom explicitly addressed and is almost never pursued with the intentionality and tenacity that authentic character development requires. The top football schools don't treat character as something players possess or do not have or something that will emerge on its own after enough time. They treat it as something which can be cultivated with the right kind of environment as well as the right kind of challenge and adversity, as well as the right interactions between players and coaches one that is marked by genuine care for the individual in addition to genuinely high expectations about what the individual is in a position to be. That combination - care and challenge that remains constant over time - is in my observation, the most reliable mechanism to develop character that exists. It's used in football academy. It's used by technology companies. It works in any organisation that is willing to invest in it and have the patience and persistence it demands.}
