A Firm Foundation
A Firm Foundation
Culture is so important in any enterprise. The analogy I would give you would be a building: Your people, how they interact with each other and the health and wellness of those relationships — it’s like the foundation of a building.
The organization performs more productively when people are collaborating than when they are not. It has a significant impact on the rate of turnover, which has a direct impact on actual cost and effectiveness of the organization.
What we’re all seeking is to have a healthy, growing, vibrant organization where people feel safe, people feel respected, people feel that they have the tools to win, and they have winners around them. The inverse of that would a hyper-competitive, winner-takes-all, zero sum game. An effective leader removes blockers who have excuses on why changes or improvements cannot work, but also should not set the bar too high or against unrealistic timlines, or the team could become despondent or unmotivated.
So I just think the right culture is very foundational for any organization to be effective. You need to have a living, breathing, highly collaborative, highly functioning organization, as opposed to one that has weak or overly strong members in that structure, because the building will come down.
It’s a good question.
The starting point is the health and wellness of the category you’re in. If you’re in a category with lots of headwinds, that’s a negative. Whether it’s intellectual property or market position, an investment target’s competitive advantage comes down to math. So, even the best people in the world, if the math is against you because there are lots of competitors or the category has excess capacity — even if the team was outstanding, we probably would take a pass.
That’s an easy one, a layup: field study.
For me, the best part of the UCLA experience was our field study project, because it was really taking the tools we had acquired and putting them into practice in real life. The company was Lear Siegler, a Santa Monica-based conglomerate. You talk about having fun — I didn’t view it as work at all, and we worked hard on this thing. They asked us to set up a framework for what they call seed money, product development capital, market research capital, for each of their operating lines of business.
There were all these disparate businesses, some of them made sense, some of them meshed, some of them didn’t mesh; and before we could come up with a framework for what product lines to focus on, we tried to figure out “where is the strategic focus?”
We ended up saying some things to the CFO that were somewhat critical, suggesting they may need to look at this portfolio and decide how many of these businesses they want to stay in, and maybe to look at divesting some, and then come up with this framework of growth and product development.
Well, the corporate development guy (we reported to) was so mad. I just remember thinking, “God, we put so much work into this and this was a great presentation, and we’re going to get an F.” He said, “You made me look bad in front of my boss, and you didn’t do what I asked you to do. I gave you a very simple assignment, you guys got way off track.”
Anyway it all worked out, because the CFO loved it. He was very intrigued with some of the observations we came up with. So we ended up kind of getting redirected. And instead of focusing on the whole portfolio, we focused on just a few things they knew were keepers. We ended up getting a pretty good save out of the whole process.
When I got invited to join Anderson’s Board of Advisors, reason number one for accepting was what is really differentiated about Anderson, [and that’s] the leading position in entrepreneurial studies.
I’ve always felt like there has to be a better linkage between the education system and the consumer of the education system, which is private industry. To me, the UCLA Anderson Venture Accelerator is just the next leg of that.
I got involved very late in life when I lived in London. We watched a match, we got some beginner lessons. I am an ex-athlete, a football player and lacrosse player in college, and this was back to playing a team sport to win with teammates. I had younger legs in the form of a four-legged animal. I just got hooked pretty quickly, and all I can tell you is, mainly, adrenaline, with speed, power, a little bit of danger mixed in there.
It’s a very good metaphor for business. Part of it is arithmetic. There are different goal ratings for different tournaments, and the higher the goal level, the higher the number of rated professionals you can hire for your team.