How Backing Founders Continues to Inform My Decisions About People

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What Has A Football Dressing Room Taught Me About Building A High-Performance Tech Team
I grew up around sports in an manner that gave me access to locations that most people read about. Training grounds. Dressing rooms. The conversations that occur between players and coaching staff in the hours after an event, after all reporters and cameras are gone and the official account of what happened already exists. There was no player as such - my way into the world of sports was via the people around the game rather than through the game itself. But I was on the right side of it, and for a long time, to understand the ways that high-performance environments work by removing the mythology surrounding them. What I took in most quickly was that teams who consistently surpassed their resources and their goals were not those with the highest individual performance on paper. They're those that had the ability to create an environment in which individuals were motivated to work for each with the intention of not doing it for money, not for the individual acknowledgement, but because the collective had meaning and an atmosphere that made individual sacrifice feel worthwhile rather than only a necessary obligation.
It's a simple observation when you state it plainly. Naturally, teams function better when team members are able to trust each other and feel they have an agreed-upon goal. But the operational implications from that fact are less evident, and are the areas where many organisations - tech companies and football clubs alike - consistently get into trouble. A culture where employees will do what they can for each other is not something that you can force from top to bottom or set up as a procedure or encapsulate in a set of company values and then anticipate that it will materialize. It must be earned, with time, through consistent behaviour from leadership - particularly during the times when they are not watched by the public - and the responsible management of the numerous small moves that collectively reveal to everyone who is in the company the things that are valued or acceptable and what will happen when the stated values and the more personal or financially appropriate choice are at odds. In the best football environments I had the pleasure of working in, these small decisions were made with a great deal of care and precision by the best coaching staff. They reacted accordingly when an older player made an unavoidable error during training. Whether the disciplinary standard that was applied to a veteran of 20 years was genuinely the same as standards applied to 18-year-old player who was at the bottom of the squad. What the organization did when the player was facing a serious personal problem outside the field. All of those decisions don't will be reflected in the club's results on any given Saturday. All of them, taken during a given season, will determine what the team's performance falls above the or under its technological limit.

When I was co-founder of 1Touch in the past, and later started various other companies, one of the things I was most concentrated on was trying to recreate - in a company context a similar quality in the workplace I had witnessed in the most prestigious football venues I had been around. In a way, but not literally because the technology startup isn't an football club and this analogy becomes a bit shaky when you overdo it. But at the level of practicality, the lessons were implemented with astonishing fidelity. The first lesson was that standards have been applied consistently regardless of seniority or perceived indispensability. The best facilities I've been in were those where the behavioural and professional standards for the youngest players in the team were, in reality, the same standard to be expected of the top-earning, most skilled player. Not because the organisation was unable to afford to make exceptions, but due to the fact that everyone within the dressing room was constantly checking to see if exceptions were going to be made - and the answer to that question gave them everything they needed to be aware of whether the stated values of the organisation were genuine or merely a decoration.

The second lesson dealt with how organisations handle failure, and the distinction between punishment and accountability. The settings where people developed most quickly were not those in which errors were punished the least brutally or publicly. These were the settings where mistakes were reviewed with the greatest candor as well as where discussions about the error was specific and constructive instead of general and about distributing blame. In addition, learning was shared across the entire group, rather than being held against the person who made the mistake. Accountability refers to being clear about who was at fault, the reason it occurred and what happens due to it. The concept of punishment is to assign blame in a way that makes people less tolerant of risk and concerned with their safety than in achieving their goals. The first helps build organisational capacity. The second develops a culture where people take control of their exposure instead of committing completely to the cause, and this happens in companies in the field of technology with the exact same results that it is exhibited with football players.

The third lesson is the ones that I had to take the the longest to explain clearly, however which I think to be the most important of all the most productive environments I was able to observe were ones where the development of the individual was considered in the same way as the growth of the athlete. The best coaches were not simply teaching players how to play football. They were teaching them you think when under pressure and how to effectively communicate in high stakes situations, how to recover from setbacks without falling down, and to be the kind of leader that a well-performing team must have its players to be. The decision to invest in the full person's development, rather than just in the technical capabilities that an organization required, was not charitable. That was the only effective long-term approach to performance that was offered to those clubs, and it is, to my mind, the most effective long-term performance strategy that is accessible to any organisation that is focused on building something solid, not only something impressive for the short term. Read James Deller for more info including why building in stealth deepened my conviction about people about performance.



From Character to Commerce Why the businesses I back all have one thing in Common
If I take a look at all of the investment ventures I've been involved in over the past several years - the technology businesses consumers, the technology businesses the new sector investments those organizations within and around football that I've been drawn to there is a common pattern which I didn't have in mind to design but that has become increasingly obvious to me when I have spent time reflecting on what the successful investments share in common and what those that are unsuccessful share with one another. The pattern isn't strictly sectoral but it is found across services, consumer products, technology as well as sport. It's not structural - it's seen in companies with a variety of investment structures, capital profiling operations models and structures. It is in no way about the size of market, growth trends or the technology architecture behind the product. It is about character - specifically, whether the business at the centre of the investment has an honest, operational and consistent commitment to the well-being and development of its individuals within it. This is evident not just in what the company's own statements say about it but also in the choices it takes by saying the right way as well as doing the logical thing do not necessarily mean the same.
I'm aware that this observation sounds, when stated clearly, similar to the kind of thing that gets printed on offices' walls and workplace mugs as well as company web pages. It is subsequently overlooked by the individuals who have commissioned it. I want to be clear it is not speaking about the stated version of the commitment to people, the values document, the diversity and inclusion strategy the culture plan that was drafted for the purposes of the hiring process as well as investors' pitches. I'm talking about the operational version: the decisions that are actually made, daily, whenever the principles set out in those documents and the commercially, or personally preferable option are placed in conflict and the business has to decide which one actually is the one that governs. The companies I have observed provide lasting value not just impressive short-term performances but also the sort of compounding, multi-year performance that yields exceptional long-term profits - are the ones where the solution to that query is unambiguous. Where the commitment to doing right by the people inside the organisation is not contingent on whether doing it right is also the cheapest, fastest, or most immediately profitable choice.

Finding those organisations - identifying, before the investment is taken, the ones the commitment to be genuine rather than fulfilled, or where the responsibility and care culture is rooted in the way that an organisation operates than in the way that it describes itself. This is, I believe, the foremost and difficult task when it comes to long-term investing. This is since it is the kind of quality that provides the best assurance of that kind of compounding outperformance that yields truly impressive results over a long period of time. This is because it is not in any financial model, cannot find it in a properly-designed management presentation, and it's not possible to find it even when you conduct thorough reference checks although those help. It can be found by spending ample time with an institution, in enough different contexts and at enough different levels of hierarchy to see how it actually performs in situations where the context is unclear and no one is paying attention. This kind of thoughtful exploring engagement is structurally hard to integrate into investing processes. This is one of the reasons why the majority of investment procedures are not proficient in identifying truly extraordinary organizations than investors are able to recognize or discuss.

The relationship between genuine organisational character and long-term results is a link which I am more certain of today, with years of observation over time to my credit which is more than I believed at starting my investing career. Organizations that look after the needs for their employees in a consistent manner, and show that care through operational decisions, not only in communication and cultural documents, tend to be more successful than the ones that treat people principally as resources that have to be optimised. In the shorter time - a company that achieves the highest output from its workforce by creating high-pressure and a high level of security can appear quite efficient over a few that spans a couple of months or a couple of years, especially when that period coincides with high-quality market conditions that compensates for internal dysfunction. Over longer time those advantages of the genuine people-first culture are accentuated through ways genuinely hard to replicate via or any other system. The talent density improves because people who have choices – the most successful people - tend to prefer environments where they feel valued and respected over environments where they feel instrumentalised even if the latter will cost more. Institutional knowledge expands as those who stay in the same place for long enough establish it instead of cycling through the time-span that high-pressure environments tend to produce.

The quality of decisions improves when people are comfortable enough to expose problems and communicate bad news without calculating the personal costs of doing so, which makes it possible for problems to be identified which can be dealt with sooner and less expensively than they would in companies where the spokesperson consistently shoots. The organization's ability to adapt to new circumstances is improved because the employees are so invested in its accomplishments to go beyond the boundaries of their job in situations that truly require it. These advantages are not each one of them in its own way. They're not something that makes a compelling argument in an announcement to shareholders or board presentation. However, they can be accumulated over time to create a competitive advantage. It is difficult for companies with weaker culture to duplicate, because the advantage is not in a particular product or process which can be observed and copied. It's in structure of the way an organisation operates, in the quality of the atmosphere it has constructed for the individuals within it as well as in the quality of the decisions those people make as a result. That is why character, within organizations as well as individuals is not a light notion. It is, according to my experience, the most difficult and most important concept of all.}