Integrity, diversity and playing as a team: what we learned from Highland Europe’s leadership conference
“Everyone makes mistakes - it’s how you recover from them that counts. And as a leader, make sure you don’t overreact to mistakes.”
You didn’t have to be a golfer to appreciate Paul McGinley’s honesty and authority on the subject of leadership. Paul held the audience of Highland Europe entrepreneurs and chairs captive for more than an hour with his advice about leadership, learned over his Ryder Cup captaincy and vice-captaincies. And the lessons from the fairways chimed well with the business problems and challenges the Highland Europe entrepreneurs had tackled over two days. Paul had strategies for dealing with the unexpected: keep your options open; tips for handling big stars and their egos: allow them to play as individuals; and valuable lessons for teams: winning is nothing if you don’t have integrity.
Paul, who grew up in the same parish in Ireland as Fergal, has played competitive golf for more than 26 years but his career reached its pinnacle in 2014, when he captained the European Ryder Cup Team to victory over America at Gleneagles. McGinley, who is now a leadership fellow at London Business School and has several business interests, explained how he applied meticulous planning and preparation over the two years in the run up to the tournament. McGinley admits that he was never a truly top star of the PGA Tour, like a Seve Ballesteros or a Rory McIlroy, but as a leader he really shined. Leadership set him apart. It was his ability to bring together a group of diverse players from different backgrounds and cultures that created a winning team and elevated McGinley to star status.
When he returned home after winning in 2014 there was a case of champagne sent by a friend on the Friday night, in other words before the tournament began. When asked why he’d sent it before a victory was certain, McGinley’s friend said: “You were a winner irrespective of the result.” Paul told the Highland Europe leadership conference: “My goal was to do it with the most integrity. Of course, if we won it along the way that was great.”
Shortly after being picked as team captain, Paul reached out to Sir Alex Ferguson, former manager of Manchester United FC who he did not know at that point, to ask for his advice on building a team. In particular he wanted to know about handling the mega stars - the David Beckhams and Cristiano Ronaldos.
Ferguson advised him that big egos were not a great problem, but you have to play to them. This gave Paul the confidence to let his big players play their natural game. He chose to keep them in their individual mindset. He summed this up by stating: “The best teamwork comes from men and women who are working independently towards one goal in unison.”
Ferguson also gave him advice on body language, particularly when facing the media.
“How you come across is much more important than what you actually say,” Paul was advised by Sir Alex.
Like other sporting leaders, Paul has become known for his attention to detail, his reliance on data and the theory of marginal gains. In preparation for the 2014 Ryder Cup McGinley built a full-time data team and had statistics on all of the players. But while he believes in preparation, he reminded his audience: “Never lose sight of the examination paper.” Having a plan for every eventuality allowed him to change things, keep his options open and respond to the challenge in front of him on that day. As for marginal gains, he accepts they can make a difference but warns that people should never forget that the big things are big things. “It’s easy to get caught up the smaller things. But what about the really big stuff? Make the big thing, the big thing.”
Finally, he had some words about humility. In the Ryder Cup for many years, the US was out in front and were expected to win. Then Europe won three on the trot from 2010, so when McGinley led his team out in 2014, there was an expectation that they would win. McGinley’s way of dealing with the expectation was to be humble: “It’s very important to be humble. Have a lot of respect for the competition. Be absolutely confident, but be on the edge because this guy is capable,” he said.
Day One - Keep your options open
Stan Laurent described Highland Europe’s successes and performance in 2017, including three significant exits. He described the market as “vibrant” with lots of VC activity and investments being made in Europe. The consumer market, in contrast, is a little more “subdued.”
Jean Tardy-Joubert said it was important for founders and chief executives to keep their options open. “The world is becoming more complex than it used to be. Where M&A might have been a certain route for exit for a B2B supplier 15 years ago that’s no longer the case.”
Tardy-Joubert, who joined Highland from boutique bank Qatalyst this spring, said it was not just the Valley that was interested in putting equity into Europe: “Asia is becoming increasingly important - just look at Softbank or Ctrip buying Skyscanner.” He also said that private equity firms were behaving more like strategic buyers: “No one would imagine that they’d become the largest buyer of software companies in the world.”
As far as cash burn is concerned, Fergal Mullen said that directors and investors needed to decide their tolerance for cash burn on a company by company basis. “Going public without any sign of short term profitability is tricky in today’s markets,” he said.
Make sure you have the right people on track to support the business
Guy Dubois, chairman of NewVoiceMedia, talked about the challenge of chairing a board. Picking your team is crucial: “Make sure you have the right people on track to support the business, because at the end of the day the only thing you [the chair] can do is sack the CEO,” he said.
YS Chi, who chairs lots of boards in Asia, said the Asian and LatAm worlds were starting to adopt Western board principles increasingly. “We are now seeing external board members - not just family members of investors - being adopted. They are putting in place board structures with teeth.” Startup boards sometimes can have similar problems, YS observed: “Their boards can be either too owner orientated or too shareholder invested. There needs to be balance.”
Guy Dubois said: “People underestimate how difficult it is to chair and in VC backed companies it can be very situational. The chairman’s role is helping and containing the private equity [investor] and protecting the CEO. Chairs need to have gone through the urge to operate. They need to have very strong emotional intelligence.”
Dom Loehnis, who works in Egon Zehnder’s technology and communications practice, says that since hiring is such a big risk, corporates now spend more time looking at their own people and working out how to develop them. “To show leadership potential you need resilience, insight, engagement, curiosity, including curiosity about oneself. Candidates need to be able to say they are still learning.”
Day Two - We unconsciously pick people who resonate with us: the same schools, the same subject choice
With diversity of the workplace very much in the headlines, particularly following the publication of gender pay gap reporting, Clare Laurent spoke about her academic research into the impact of mentoring on diversity. Her research looked at the evolving relationship between 100 female mentees who were paired with largely male FTSE 100 chairs as mentors. She advised startups to begin thinking about how they find candidates for jobs, because the pressure to have a more diverse workplace will trickle down to small companies. “Women are not as visible. Challenge your preconceptions. Where do you go to look for female candidates? You are in a unique position - this gives you some power to make female entrepreneurs more visible.”
Dom Loehnis said that some large companies, like Unilever, were beginning to interview candidates in their 20s without looking at CVs, to overcome the fact that we unconsciously pick people who have had the same experiences and background. “We unconsciously pick people who resonate with us: the same schools, the same background.”
Johannes Reck at GetYourGuide explained the steps that he had taken to hire more female engineers. “If you are a visible and positive employer of female tech talent, you will get more applications. Ask yourself what value you place on having women in your companies? Do you host female developer meetups? Do you mentor at tech schools? Do you have female advisors? Do you overpay females? We did all of that and 30% of our engineers are female.”
Cherry Freeman, CEO of LoveCrafts, said that it was more expensive and harder to have a more diverse organisation and asked whether it could be justified on business grounds, for startups. There is an increasing amount of research that shows that when companies approach complex problems they do better with a more diverse team.
Giles Palmer, CEO at Brandwatch, described the anger his female staff showed when the company reported its large gender pay gap internally. “Our female staff said you have to do better, you have to help us as young women to feel that we can rise up in this company. We didn’t realise how affected the younger women would be. It has had a huge impact on the psychology of our business.” However, the outcome was a positive one because now Brandwatch has an opportunity to make changes and its female staff feel listened to.
In summary, Brandwatch’s CEO realised he needed to listen closely to his staff, if he was to retain their support. As Paul McGinley said of his experience of leadership: “It is very important as a leader to be trying to achieve something bigger than pounds, shillings and pence.”