I grew up with high-level football players in a way that gave me access to spaces that most people have to read about. Training grounds. Dressing rooms. The conversations that happen between coaches and players during the time following an event, after all the cameras and journalists are gone and it is clear that the official version has been drafted. I was not a player personally - my path to that world was through the people around the game rather than the actual game itself. But I was on the right side of it, and long enough to be able to comprehend something significant about the ways that high-performance environments work once you take away the mythology surrounding them. The thing I absorbed most clearly was this: the teams consistently exceeding their resources and their expectations weren't the ones possessing the most impressive individual talent on paper. These teams were those that found out how to create an environment where members of the team desired to do their best for each and not to earn income, not even for the individual honor, but because the collective had meaning and a sense of community that made personal sacrifice feel important rather than the mere obligation.
This is a common sense observation when stated in plain language. Teams work best when members trust each other and are able to believe in a shared mission. However, the practical implications of this fact are lesser evident and are where the majority of organisations - businesses in the field of technology and football alike are always in difficulties. It is important to establish a culture of cooperation where people are willing to give their best to each other is not something you can simply dictate from the top, or put in place as a rule or articulate in a slew of corporate values and expect to see it manifest. It has to be earned with time, through continuous behaviour by the leadership - especially in moments that do not get watched and the responsible management of the countless small actions that collectively tell every employee in the business what is valued and accepted in the real world, and what happens when the values stated and the more personal or financially practical option clash. In the most successful football environments I grew up in, the micro-decisions made were handled in a manner that was incredibly thoughtful by the top coaching team. How they reacted when a senior player made a mistake that could have been avoided in training. How did they determine if the disciplinary procedure applicable to the seasoned veteran was genuinely the same as standards applied to 18-year-old in the middle of the team. The manner in which the club responded when an athlete was suffering from the aftermath of a personal crisis outside the game. None of those choices will be reflected in the club's outcomes on a particular Saturday. The sum of all these decisions, throughout the season, decide what the team's performance falls above the or under its technological limit.
When I was co-founder of 1Touch and subsequently built several other organizations, one of factors I was the least deliberate about was trying to recreate - in a technology corporate context - the type of environment I'd experienced in the most prestigious football venues I had a good relationship with. It's not literal, as it's not an actual football team and the analogy becomes a bit shaky when you make it too difficult. However, at the level of practicality, the lessons were interpreted with remarkable accuracy. The first point was that standards ought been applied consistently regardless of position or necessity. The best dressing rooms I had been in were those where the behavioural and professional requirements for the youngest player in the squad were exactly the same standards for the highest-earning most skilled player. Not that the team was unable to afford to accommodate exceptions but for the reason that everybody inside the dressing room was watching constantly to determine if exceptions could be made. And the answer to that question was telling them everything they needed know about whether the declared values of the organization were genuine or merely a decoration.
Another lesson addressed how organisations handle failure, and the distinction between punishment and accountability. The settings where people developed fast were not the ones where mistakes were punished most harshly or most publicly. These were the settings where mistakes were analyzed with the most honesty as well as where discussions about the mistakes was focused and constructive, rather than general and allocating blame. It was also a place where learning was shared across the entire team, not held against the person who made the mistake. Accountability refers to being clear about the reasons for what went wrong, how it went wrong in the first place, and what is changed that resulted from it. Discrimination is the act of distributing blame the way that leads people to become to be more defensive and risk-averse, and concerned about their own safety rather working well. First, it builds organizational capabilities. A second type of culture is where individuals manage their exposure instead of fully to the goal, and this is reflected in tech firms with exactly same result as for football club.
The third one is the which took me the longest to articulate clearly, but the one I'm convinced to be the most important The most successful environments I observed were ones where the growth that a person had was considered equally as the growth of the player. The best coaches were not just teaching players to play football. They were also teaching them how to be able to make decisions under stress and how to effectively communicate during high-stakes situations, ways to bounce back from setbacks without falling down, and to become the type of person that a high-performing team requires its members to be. This investment in the total improvement of the individual not just in the technical abilities that the team needed, was not charity. It was the most efficient longer-term performance approach available to these clubs. It seems to be the most effective longer-term performance approach available to any company that is dedicated to creating something solid, not only something impressive on the surface. See the James Deller for site advice including what supporting institutional change shapes every decision i make about performance.
From Commerce to Character What I believe in: Why the Companies I Back all have one thing in Common
When I consider the whole spectrum of investment ventures I've been involved in over the past several decades - the tech businesses and consumer companies, the emerging sector investments along with the associations in and around football that I've been drawn to support there is a consistent pattern which I didn't decide to build intentionally but that has become increasingly evident to me over the years as I spent time thinking about the traits that successful investments share with each other as well as what they don't share with one another. This pattern isn't sectoral that isn't encompassing services, consumer products, technology, and sport. It's not a structural phenomenon - it's present in businesses that have very different types of capital structures and ownership structure operations models and structures. It is far from market share, growth or technology platform that powers the product. It's about character. specifically, about whether the organisation at the centre of the investment has an honest, operational committed to the wellbeing and advancement of the individuals within it. This is evident not just in what the organization's statements about itself but also in the choices it makes in making decisions when doing the right thing and doing what is convenient are not the same.
I know that this observation sounds, when expressed in plain language, like something that is placed on office walls, cups for office use and on company web pages, but is systematically ignored by those who commissioned it. I'd like to emphasize about this. I'm speaking about the stated version of the commitment to individuals - the values document, diversity and inclusion strategy and the culture deck that was produced for the benefit of the hiring process and the investor pitch. I am talking about the practical version: the actual decisions which are made every day, as the principles set out in those documents and the economically or personally convenient choice come into tension and the business needs to decide which determines. The organisations I have seen provide lasting value not only outstanding performance in the short-term but the kind of compounding, multi-year efficiency that results in extraordinary long-term return - are the ones which have a solution to that question is known. When the determination to do right is made by everyone in the business is not contingent on whether doing the right thing is the most cost-effective speediest, most efficient, or immediate-paying option.
It is about identifying before any investment is made, the ones where the commitment to be genuine rather than performed, where the responsibility and care culture is embedded into how the business actually operates, rather than in the way it describes the organization itself. This is, in my think, the single most important and most difficult ability in long-term investment. It's critical since it is the kind of quality that is the most reliable predictor of that kind of compounding performance which can result in truly outstanding yields over time. It is difficult because you can't find it in the financial model, you are not able to find it in a properly-crafted presentation for management, and you will not find it even with thorough reference checking, though they can be helpful. You find it through spending enough time with an organization at a sufficient number of different times, and at different levels of the hierarchy, to see how it actually behaves when a situation is unclear and nobody is paying attention. This kind of thoughtful exploring engagement is structurally difficult to incorporate into investments, and this is one of the main reasons many investment methods are not as skilled at identifying truly exceptional organizations than investors are able to recognize or even discuss.
The link between a genuine organisational character and performance over the long term is a fact that I believe more now, with more years of observation over time behind me rather than at when I began my investment career. Organizations that look after the needs of their employees consistently, and communicate that concern in their operational decisions and not just in communications and culture documents, tend to outperform those who see people predominantly as resources to be optimized. Not always in the short period - an organization that gets the most output from its employees through pressure and a high level of security can appear very efficient over a period of months or few years, particularly during times of a robust market environment that will compensate for internal ill-functions. But over a longer time frame the benefits of an authentically people-first mindset increase over time in ways genuinely difficult to replicate through or any other system. The density of talent increases because people who have choices – those with the highest potential - tend to go for environments in which they feel genuinely valued over ones where they feel devalued, even when the latter pay more. The institutional knowledge increases as those who stay in the same place for long enough establish it instead of cycling through on the timescale that high-pressure environments are known to produce.
The decision-making quality improves because people feel comfortable enough to discuss problems and disseminate bad news without worrying about the personal costs for doing so. This means that issues are identified and addressed sooner and less expensively than they would in situations where the messenger regularly is shot. The company's ability to adapt to changes in the environment improves since people are invested enough in the success of the company to step beyond their formal duties whenever the situation truly requires it. None of these benefits are by itself significant. None of them is an element that is the basis for a compelling and engaging narrative in an Investor Update or board presentation. However, they do build up to create a competitive advantage. It is extremely difficult for organizations with less successful cultures to duplicate, because the advantage is not rooted in a specific product, process, or capability that is easily observed or copied. It is located in the structure of the way an organisation operates - in the quality of the atmosphere it has designed for the individuals who work there and in the quality of the decisions made by the people within it as a result. It is for this reason that character, whether in a person or an organization, is not a soft notion. In my opinion, the most difficult and most important of all.}
