Brett Hickey, Founder & CEO at Star Mountain Capital, shares with us the secret to building a successful team: a collaborative and aligned ecosystem.
“We must, indeed, all hang together, or most assuredly we shall hang separately.” - Benjamin Franklin, shortly before singing the U.S. Declaration of Independence, July 4, 1776.
Students of leadership become very familiar with the core principle of common interests, or stated otherwise, aligned interests. Whether through case studies or exercises, they learn empirically what most of us understand intuitively; a group that is united via one or more common goals will tend to work more effectively with one another than those fractured by competing interests, particularly over the long term. I always suggest people make things simple and illustrate ideas graphically whenever possible. Draw two lines on different gradients and extrapolate out, what you see is that the two ends, which started at the same origin, become very far apart at the end. As such, we always suggest people work very hard at clear, transparent and aligned objectives.
Virtually any company, of any size, can create a collaborative ecosystem, but it takes time and effort to do so correctly.
Like many such maxims, alignment of interests is much easier said than done. People value things differently and those values often change over time with family, wealth creation, health, etc. As such, we suggest that aligning interests and transparently communicating them is done on a regular basis, not just when entering a relationship. In the business world, determining what will consistently and uniformly motivate a team of diverse individuals can be a daunting, complicated task. Yet find the right mix, and your company will achieve more than you ever thought possible.
Most companies unify the interests of a core circle of senior executives through cash bonuses and option grants, and only sprinkle lesser incentives to the junior team. Far from aligning interests, this type of approach can create wider canyons between a team and its leadership. It rarely takes very long for junior team members to understand that while everyone’s interests are theoretically aligned under such a scenario, some are a lot more aligned than others.
Aligned collaborative ecosystem
At Star Mountain Capital, we’ve taken the idea of shared interest and expanded it into what we call an aligned collaborative ecosystem. In this broader concept, we’ve extended the theory of common interest in multiple ways:
- Sharing financial success with the whole team: If the company makes financial progress, so should the people. We recommend the whole team is included in sharing part of the financial success of investment fund returns (i.e., profits / carried interest) not just the senior team.
- Striving for a higher purpose: We believe fostering a culture that shares a common ethos of paying it forward and working for something larger than just a paycheck. This ensures that non-financial interests are also united across an enterprise. This business-for-purpose mindset pairs a for-profit enterprise with non-profit initiatives and helps foster team cohesion and a positive corporate culture.
- Expanding your network: We believe in the concept of a collaborative ecosystem by engaging with other investors, advisors, business owners and service providers. In our specific example, we aim to thoughtfully engage with all elements of the small and medium-sized U.S. business community by hosting events across the country and engaging with local initiatives.
- Promoting team well-being: Caring about one’s team, including through health and wellness, is essential in achieving a strong corporate culture. Using the “Silicon Valley” example of providing complimentary fresh and healthy food, standing desks and a bright and energetic work environment makes for a fun and healthy work environment.
Virtually any company, of any size, can create a collaborative ecosystem, but it takes time and effort to do so correctly. There must be a commitment to both internal and external communication – many companies agree in principle to create a collaborative ecosystem characterized by shared interests, only to fail in getting the message out to those that need to hear it and help make it a success.
Exploring the Advantages
Among ecosystem members, the system creates a positive feedback loop and a sense of shared challenge and sacrifice that bonds teammates closer together and enhances their creativity when they’re faced with challenges. In turn, this helps build morale, and establishes the perseverance, tenacity and good-old-fashioned grit that pulls successful teams through periods of adversity.
Another advantage pertains to the natural friction that can develop on teams when they work together side-by-side, often under tremendous pressure, for long periods of time. Nerves get frayed, personal agendas come to the fore, and factions can develop. Such dynamics are nothing less than toxic to well-functioning teams, and thus the company. However, once established inside a collaborative ecosystem – characterized by those shared interests, transparent communications and properly aligned incentives – we’ve learned such frictions dissipate, or at least become much easier to address, because everyone has the same goals in mind and is correctly motivated to achieve them.
Most importantly, the ecosystem underscores the basic philosophy that work done today will result in tangible returns down the road, be they financial or otherwise. This helps unify the team across operational silos and focus everyone’s attention on the tasks at hand. Ultimately, the team becomes more dynamic and collaborative, both internally across functions and externally with advisors, consultants and portfolio company investment partners, than ever before.
No company has ever become – or remained – successful over the long term without a strong corporate culture sustaining it.
Note, too, that the ethos of shared interests and common causes seeps into other areas. In recruiting, for example, a reputation of putting our people first and valuing every contribution no matter the size has translated directly into the ability to bring other like-minded individuals and partners into the ecosystem, thus creating a self-reinforcing feedback loop. Moreover, the focus on long-term shared success enhances longevity and reduces turnover, as strategic alignment results in shared strategic long-term visions.
Common Interests Generate Uncommon Results
The defining notion of a collaborative ecosystem relies on the core premise that everyone within it is unified through common interests. It is what motivates all members of the ecosystem to do their respective jobs as successfully as possible, not only because it benefits them personally, but also because the entire ecosystem will benefit. As a result, they will have a stake in that success. It’s what prevents the “what’s in it for me” question whenever extra effort is required.
I’ve learned that it takes not only a tremendous amount of effort to correctly build and calibrate a collaborative ecosystem, but also a significant amount of work to sustain it. However, through my own experiences, I’ve also learned that if you can create it, the dynamic of shared success that arises can be extraordinary. Your company can be transformed into a more effective, efficient and congenial enterprise, which ultimately translates into strategic goals being achieved faster, cheaper and easier. No company has ever become – or remained – successful over the long term without a strong corporate culture sustaining it. Develop a collaborative ecosystem around what you’re doing, and you’ve taken a crucial step towards fundamentally enhancing of one of your most valuable assets – your team.