COMPANY:Star Mountain Capital
HEADQUARTERS: New York City, NY
YEAR FOUNDED: 2010
Fall has arrived and, as always, the media, as usual, is abuzz about football. Recent events show teams sticking together over issues not even directly related to the sport. Fans often place the responsibility for teams' success or failure on the individual players. But if leadership is lacking at the top, nothing gets done, not even with all the raw talent money can buy. In business, where high-functioning teams are often desired but not always required, it takes meticulous effort to get all of the individual parts working together.
YPO member Brett Hickey attributes the success of his fast-growth company, Star Mountain Capital, to its very specific approach to building teams and culture. With approximately a half a billion dollars under management, Star Mountain Capital handles complex investments in a variety of lower middle market companies. With many moving parts and super high stakes, Hickey understands the painful consequences of even so-so team performance.
With that in mind, Hickey prioritized team building from the very start: "I told myself when I launched Star Mountain that building the best team and stakeholders (an extension of the team) is one of my most important missions. It is a long-term investment, similar to technology, and often starts with a large upfront cost, but I believe it results in a substantial long-term competitive advantage to your business."
Here are the 10 actions that Hickey believes winning leaders must take to build teams that dominate the competition and achieve great success.
- Define the Plan
"If you don't have clear goals, how can you attract the best talent and inspire them to help you ?" Hickey asks. A well-defined business plan, executed as early as possible and continually updated, will clarify who you need and what they should do.
- Find the Purpose
Hickey believes that successful businesses solve real problems in a unique way that creates distinction from the competition. He argues that this is important not only for your customers but your partners: "Both top-performing employees and the best strategic partners want to know that they are putting their time and effort into creating something meaningful and of which they can be proud." You will find you get the best efforts, flexibility, and responsiveness from your people when goals are mutually aligned.
- Align Financial Interests
At Star Mountain, there is intentional effort to give all players some skin in the game. "100% of our employees participate in the investment profit sharing of our business," Hickey explains. "Also, senior team members have an ownership stake in the business. Many senior staff also have meaningful personal capital invested in what we're doing, too." If the company makes financial progress, so do the people.
- Diagram Everything
"That includes your organizational structure. Chart everything an ongoing basis to develop your team and have it tested against the various workflow constraints of your business," he advises. Star Mountain diagrams in a combination of areas: fundraising, sourcing investment opportunities, analyzing investments, monitoring and managing portfolio investments, as well as reporting to investors. Charts should be reviewed and updated periodically. Continue to evaluate the structure--they do so quarterly--discussing what is and isn't working.
- Treasure Your Assets
Great players and solid teams are any business's best assets. Hickey recalls the wisdom of his mentor Robert Kaplan, Vice Chairman of Goldman Sachs and currently head of the Federal Reserve Bank of Dallas: "Once someone comes to you unhappy, it's too late." He has never forgotten this advice. In fact, it convinced him to develop a human resource asset analysis process where Star Mountain's senior leadership gets together to analyze the happiness of their teams and what needs to be done to maintain or increase levels of satisfaction.
- Cultivate Culture
Your company will develop a "personality" even if you do nothing to cultivate it. But anything healthy and strong takes effort. When teams work well together, it is because they share history and values that leadership has worked hard to nurture. Hickey advises four areas of concentration:
- "Start young! We have a year-round internship program that helps us develop and evaluate young talent over a longer period. This allows our full-time team to invest meaningful time and effort into interns as they view them as long-term resources. For the interns, they get staffed on more meaningful projects with longer time horizons than simply a couple of summer months. The interns love this level of focus and exposure, which keeps the best ones wanting more."
- "Invest in tools for collaboration and healthy energy. Star Mountain provides employees resources that promote energy, health and wellness such as standing desks for all team members (including interns), a bright vibrant office, new technology, healthy snacks, open/communal kitchen and eating areas for collaborative lunches and even reimbursements for a gym membership."
- "Solve your employees' pain as well as your customer's. Identify tasks people don't like to do, and figure out ways to solve for them. For example, we have four full-time offshore analysts who support our entire team - even our interns - with data analytics and contact management."
- "Promote those team members who exemplify and spread your culture. Not all high performers will fit the corporate culture. If they can't be coached, the negatives outweigh the positives over the long term, and such personalities should be removed from the team."
- Keep Communicating
Hickey knows that it is trite to say that communication is key, but it is still critical to success... and easy to let slide. "Careful vertical and horizontal communication enhances the productivity and efficiency of your team (and thus its value)." Strong and consistent communication keeps everyone focused on the company's strategic goals and the tactical steps necessary to get there.
- Accept the Inevitable
Some things can be controlled, but others are just part of life, insists Hickey. "Business and people change. Conduct fluid team structure charts. Analyze how team members' career evolution matches the current and future needs of the business. Remember that tomorrow is not the same as today for your business, and neither is it for your employees." If you accept that some change is inevitable, and measure it in real time, you can respond with greater speed and accuracy.
- Know Your Role
Every leader has strengths and weaknesses. Often founders have too many roles, and not necessarily the right or most efficient ones, so they don't optimally perform anywhere, especially over the long term. For Hickey, a leader's necessary discipline includes defining your role and sticking to it. "This means getting specific about what you will focus on, not just what your title is. As investors, we often see founders who get something off the ground but then become their own worst enemy by not getting out of the way. Take time to develop the structure and workflows necessary to scale with auditable accountability."Concentrating on what you do well will keep you in your highest value role.
- Lead By Example
"Grit or hard work can sometimes be more important than raw talent," he argues, "Work ethic is key." Most can think of several talented people who do not succeed in life. Those who get to the top have generally worked harder than their equally gifted peers to get there. With that in mind, as both player and coach, a leader must be prepared to shoulder many heavy burdens. Those who can execute and go to battle shoulder to shoulder with a team, rather than commanding from an ivory tower, earn respect. He also warns that respect is a fragile thing: "It takes tremendous effort to establish, build and maintain, but can be easily shattered by leading from the rear, seeming too aloof, or coming across as too senior to get into the trenches."
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