9 observations from managing transitions
I’m a technology investor, and so I typically spend my days working with early-stage startups or scale-ups privately held that are looking to have a global impact or world domination. And so it might not be immediately obvious to people why I’d be chipping in today, but I really am honoured to be here. I think it’s incredibly important to support and do more for our local government institutions. So I’m really, really pleased to be part of it.
It’s incredibly important to support and do more for our local government institutions. And if there’s anything we’ve learned in 2020, it’s this indispensable relationship and dependency between our local government institutions and the private sector. The bricks and mortar as well as the digital businesses that really help underpin the economy and drive commerce in all ways. I don’t think we can have one without the other.
Thinking of the transitions I’ve seen, observed or been a part of with privately held companies, some of that can lend itself to what local government institutions should be thinking or considering as well. I wouldn’t be so bold to call them lessons learned because I wouldn’t at all suggest that local government institutions think about following or copying what happens in privately held startups. But when I was thinking about some of these experiences I’ve been through, that I’ve seen in 2020 and even before, I really feel like there’s some challenges or observations that probably lend themselves both to local government institutions, as well as what I’ve seen in the private sector.
What I’ve done is a list of nine takeaways or as I said, observations that I have. Trust me, it was really, really tempting to try and get to a really nice round number of ten. And in some cases, I’m going to talk through some of these that have some sub-points to them. And there you’ll see that I could have made it a list of ten, but I decided I keep it at nine because, as we all know, quality over quantity. And so I hope you don’t mind me leaving it on a really odd number.
1) Mental wellbeing
So with that, I want to start with my very first point, which is something that I think only really became super important and critically important in 2020. And I’m holding my hand up as someone part of the private sector that I don’t think we were as worried or concerned or just mindful about this before this year. But that’s mental wellness.
And I think I have to start the list with that, because even in the private sector, as an investor or board director, I’ve worked with teams or company founders with transitions, either with their teams or themselves or the company. I have to admit, unfortunately, I probably didn’t think about their mental wellness or that of the wider team as much as I have in 2020.
So the good news is I do now, and I think first and foremost it’s top of mind. It’s really obvious that we only get the best out of people, we only get the best contributions and you can only really have people fully aware and fully present in terms of making contributions if they’re also looked after themselves. And I guess it took a global health pandemic for that to really hit home. And for us to ask members of my own team at Passion Capital if they’re looked after, if their family’s feeling alright, if they’ve got what they need in terms of answers about health care, if they know what they have to look out for in terms of symptoms, whether it be coronavirus or otherwise. And thinking about looking after themselves before, then asking them to contribute in a work context.
And so that’s the first point, to look after people and make sure they’re in a good place so that they can actually make good decisions and make strong contributions. We have seen time and time again that the worst decisions and sometimes the worst actions are taken when people are under duress. We need to be mindful about how people are dealing with things and potentially battling things day in, day out in the privacy of their homes that we’re not aware of, but which a global pandemic sort of reminded us does affect everybody. Everyone’s got their own issues or their own challenges and everything that they’re coping with. And the best thing that leaders can do is to make sure those people are looked after first before asking them to go through any kind of transition, whether it’s at work or their place of work.
2) Stakeholder engagement
Number two is thinking about stakeholder engagement or stakeholder management and the priority of those stakeholders. So when I think about startups or scaleups it’s really easy to often think about users, consumers, the team, employees and there’s also the board and investors. Maybe there’s press and maybe in some cases, there might be regulators. And so you have all these different stakeholders and then you’ve got to think about which one is most important if we’re thinking about a transition.
Is it the users in this case? Is it the shareholders? Is it perhaps, unfortunately going to have to be the investors because you need capital to keep going? It’s different in every case. And I think I’m not actually suggesting that it needs to be one or the other in all cases, but that there needs to be real clarity with the leaders of managing a transition about what’s most important at that point in time or because of the situation.
It’s the same with public sector or local government institutions, what are we thinking about, first and foremost? Are we thinking about people delivering services? Are we thinking about the resources they need? Are we thinking about policymakers? Are we thinking about central government? Are we thinking about the citizens and the people that are going to benefit? Who are we looking to serve in this first instance to accomplish what it is we need to accomplish through a transition or responding to a crisis?
3) Diversity of thought
That brings me to point number three, which I think is incredibly important, and that is including a diversity of thought with any transition or any reaction to any kind of a situation or crisis.
It’s not enough to just have, in a privately held company, for example, the chair to be thinking about what it is that’s needed for a transition. It’s not enough for just the chief executive, whether it’s the outgoing or the incoming one. It’s not enough just for a board to be thinking about that. And similarly, at local government level, it’s not enough just for local government leaders or councillors to be thinking about what’s going to be happening or who should be considered. It’s not enough just to have the citizens’ voices. We need all of that, we need diversity of thought.
We need to actually make sure that many voices are consulted. Otherwise, you run the risk of falling short of what I mentioned in my earlier point about stakeholder engagement. You end up with unintended consequences of not being mindful of all the stakeholders you need to be mindful of, of potentially having an adverse impact on certain people, certain constituents or stakeholders. And so you really need this diversity of thought to make sure the quality of what’s being considered for the transition or the reaction in action is really holistic.
Then my fourth point of view is kind of related, which is about accountability for the transition — and I don’t mean just ultimate accountability. For example, bringing in a new external CEO to a founding team at a startup, it’s not just who’s accountable for that transition, meaning the new chief executive, not necessarily. It’s the board that’s accountable for this over time.
I’m actually thinking about talking about the transition itself. Who’s accountable for this change or this reaction? Is it the outgoing chief executive? Is it the chair, or is it the board? Is it the investors? Is it the rest of the executive team that’s going to be inheriting a situation and bringing on, or onboarding, a new chief executive who’s really going to be the person or the group on the line for the specific transition and having clarity about that?
Because even though I spoke about diversity of thought in decision-making and in the process, you can’t have too many people that are being held accountable or ambiguity about who’s accountable. Because ultimately what we’ve seen is that where there’s a will, there’s a way. Who would have thought, for example, thinking about the private sector again, that tech platforms could actually stop disinformation before 2020?
They used to claim that they couldn’t do it. But lo and behold, when we have a global health pandemic and when people’s health is on the line, it turns out that they can add warnings. They can moderate that content more aggressively than they have before. And so we know that there’s a means to an end.
And so what’s really important is who’s going to be the one that’s accountable for ensuring we get that done and that there’s a way to move things forward? Because holding that person or those people accountable will be instrumental in terms of measuring it and getting that change or that transition really through.
5) Near-term versus long-term thinking
My point number five is then thinking about what’s a near-term reaction or a transition versus a longer-term one. And again, just as the people accountable for a near term or longer-term outcome or a transition as well as the stakeholders and the goals that you want. It’s really important to think that getting through the transition, you’ve got to keep people minded about the baby steps that we’re taking towards an ultimate goal, or the near-term priorities and the sort of actions that we’re hoping to achieve. It’s really important to keep that in context and to make sure that everyone involved is aware of what the distinction is between a near-term and longer-term outcome, and how we get from one to the other.
My sixth point is about stability and relates to this near term versus long term sort of articulation or clarification that I was talking about. Obviously, in times of transition, there’s a great deal of uncertainty. I’m not saying people need to know all the answers to everything, but I do believe that for there to be stability through a transition, people that are involved need to have confidence in that process. They need to feel stable footing or secure ground.
They need to know. They deserve to know, what is the process going to tell? How is it going to come about? What are the steps in this process? Not necessarily what’s going to come out, or what the data is going to show or how we’re going to do everything at each step of the way. But what are the steps that are going to be taken? What’s the next step around the corner and what’s the next one after that milestone? That’s really important, so once people have stability or a sense of confidence in a process, they’ll have much more confidence in the outcome as well.
7) Safe spaces
The seventh point, also similar to having security and stability is the ability for people involved in the process to call things out, to call out bad behaviour and bad actors. We’re seeing now in 2020 more than ever that we only have good outcomes when you can actually weed out or ensure that people are going to be held to account. And that people feel safe to make their views known and to actually say, ‘I don’t think this is the right thing’. It doesn’t even have to necessarily be bad, but actually being able to say, ‘I don’t agree with this and I’m not sure that that’s the right thing’, that brings in the diversity of thought. To ensure the diversity of thought and all the thorough stakeholder management that I mentioned earlier, you need to have people that feel safe to express those views.
8) People follow leaders
Number eight is that ultimately through any times of transition or even through stability and simply ongoing momentum, people follow leaders. Leaders are clearly made. They’re really articulate. They’re really stepping forward in times of transition and in times of change. And so when we’re thinking about everything I’ve just said, the process, safe spaces, diversity of thought, ultimately all of this is only as strong, useful and valuable as the leaders who are articulating or communicating it.
We really need to have strong leadership that thinks about the ethos, the process and all the stakeholders, and really takes that to heart. They’re not just following a script because it happened to be on a list of nine things to be mindful of. They genuinely own that, believe it and they’re going to actually emulate that in everything they do.
Leaders are what motivate people to bring their best work, leaders work through the long hours and go through that slog to get any kind of a transition done. To see a successful outcome, it needs to be because of a strong leader. That’s really why people step up. That’s why they turn up. That’s why they bring their best every day.
9) Mission matters
My very last point, and I hope it’s not anticlimactic, is that in addition to people following leaders, they really bring their best work and they’re obviously mission-driven at the end of the day. And again, this is something that 2020 showed us. Whether it’s a startup such as, Deliveroo or any other tech company that’s really trying to increase market share or grow its enterprise value in times of crisis or certainly in times of a global pandemic, what really hits home and what really gets people turning up and bringing their best work and therefore enabling a positive transition, is when they know what they’re doing has great impact or wider-ranging impact.
Maybe it’s helping people get back to work. Maybe it’s helping people get the food they need. Maybe it’s finding the best options for takeaway because, you know, there’s a lockdown situation. We want to support local merchants, whatever it might be. There’s got to be a mission behind what drives people. That’s not to say, there has to be a mission for companies to exist. There will clearly be some companies that continue to exist and trade that don’t have a mission behind them. But if you want the best from people that are involved in those situations or in those companies, they believe in a mission and that’s what drives them.
That’s my list of ten observations I’ve made in thinking about all sorts of different transitions at privately held companies. I’ve thought about them when it’s time for a new CEO to come in. I thought about it when it’s time for a new chair to be brought in, new investors coming in and contributing their capital, new executives that are brought in. Whatever the transition might be, a change in the business model, a pivot, as we call it, in our sector. These are the considerations that seem to come up each and every time. And I fundamentally believe because of how intertwined the private sector is to public sector leaders and governance, that actually these relate also to the public sector as well. And I’ve observed a little bit of that with some of the advisory roles I have in central government and even the board that I sit on for a publicly listed company.
I hope some of that’s helpful. I’m really grateful to have been part of the day and I really appreciate being invited. So thank you so much.