Leadership, the most important investment criterion
Leadership, the most important investment criterion
Duco Sickinghe is an investor and former CEO of Telenet. Through his organization, he supports European software companies. Surprisingly, he considers leadership to be the most important criterion when deciding to invest. He reveals his analysis method through nine checks. "Stay in the mode of conscious incompetence."
Duco Sickinghe works as the managing partner of Fortino Capital, which manages a private equity growth fund of 242 million euros and a venture capital fund of 80 million euros. Target audience: European companies active in business software. They provide support through capital, management expertise, and people development. "Regardless of the products of the companies you invest in, the team, the people, and the leadership are the most important. If those are in place, you'll succeed."
Nine leadership checks to mark off
What is the profile of the CEO or founder? Is it a visionary like the late Steve Jobs of Apple, a genuine people manager like former YouTube CEO Susan Wojcicki, or a technical engineering leader like Sundar Pichai, CEO of Google? It doesn't matter what the CEO's profile is, as long as they surround themselves with the other two types. Vision, people, and technical operations: leadership is needed in all three domains.
Is the leader sufficiently aware of your company's starting point? It determines the course you take towards the desired goal. If you want to go to Brussels, the course is different when starting from Paris than from Amsterdam. So, know your current USP (unique selling proposition), make an accurate assessment of the talent you currently have, and most importantly, know your digital footprint. Companies used to be literally visible; in a digital world, they're not anymore. Therefore, clearly map out the organization's digital footprint.
Are the right people on board? And are they in the right jobs? Dare to reject people if there's a risk of a suboptimal team. Duco Sickinghe conveniently categorizes people with A, B, C, D, and E labels. "A-people are confident and dare to recruit the same top performers as themselves. B-people tend to recruit less qualified individuals, C and D-people. C-people recruit D and E-people. If a CEO works at a B-level, you typically find C and D-people. Not a top team.
Use wisdom and energy. Real good leaders, like Barack Obama, actively listen, consciously and curiously participate in the conversation, and make their point. They unleash energy in people.
Do leaders always question themselves enough? This reflection is necessary for three reasons: the chance of an unexpected event is always real, so flexibility is needed. Secondly, only paranoid people survive: their radar is active, they are aware of risks, and have a plan. Thirdly, stay in the mode of "conscious incompetence", nobody is perfect, keep learning.
What things do you get right the first time? What is the real core activity you engage in every day? That tells you something about efficiency opportunities and better cost control through planning, delegation, and clear role allocation.
Short-term goals do matter. Make a long-term plan, but break it down into weekly goals and achievements. What are you doing this week to help achieve your five-year goal? This means people are not led by their mailbox or unproductive meetings with colleagues.
Decision-making processes. How does leadership make decisions and how long do they remain valid? Dare to challenge or revoke decisions when new information emerges. Agility means re-challenging conclusions. A strategy must be flexible, data-driven, and constantly evaluated.
How does a leader know they still have everything under control? Are you sure your organization is doing what needs to be done? For example, how sales deals with customers when leaders are not around? There are financial reports available, KPI dashboards, and HR data: to what extent do these elements reflect reality? To settle that discussion, relevant data should be maximally available to everyone. This way, stakeholders have the right discussion.
Duco Sickinghe shared his insights at FTI Supernova in Antwerp, an event for technology entrepreneurs, investors, and innovation enthusiasts.