Why Growth Chairs Transform.
Chairs on leading their growth company boards though the crisis and beyond.
Intro.
Growth companies have arguably been through the fight of their lives to survive the COVID pandemic. Many founders have decided now is the time to call in the experienced cavalry to help them re-set, regroup and thrive beyond survival mode.
It may be a cliche to say it’s lonely at the top, but this last year has shown even the most resilient Founders that going it alone is tougher than they thought. Building a board of trusted advisors and finding an experienced, independent Chair is frequently high on founders’ agendas and will be transformative for most. But how do you begin to navigate the field and how will a Chair transform your outlook and company in practice?
We spoke to a range of highly-regarded, notable Chairs of growth and listed companies for their take on how they support and challenge their founders, what they’ve learned over the last year and how to reposition your company to win, not just survive. We hope you find their insights valuable as you take your company, and board, to the next stage of growth.
Our Contributors.
A huge thank you to our contributing Chairs, some of whom have been market-disrupting founders and CEOs themselves, for sharing their insights on chairing across growth and listed companies:
Alison Davis Advisory Board Chair, Blockchain Capital; NED, Collibra, Fiserv, Janus Henderson Group and Silicon Valley Bank
Andrew Fisher OBE Chair, Rightmove; Remuneration Committee Chair, Marks & Spencer
David Tyler Chair, Domestic & General and The White Company
Darren Shapland Chair, Moo.com, Topps Tiles, Aerofoil Energy and Change Management Group
Glyn Barker Chair, Berkeley Group, Irwin Mitchell, Tappit; NED, Transoceon, Various Eateries
Dame Inga Beale Chair, Mediclinic and NED, LondonFirst + Crawford & Company
James Bilefield Chair, SThree; Remuneration Committee Chair, Moneysupermarket.com
Martin Gilbert Chair, Revolut, Toscafund and Co-Founder + former CEO, Aberdeen Asset Management
Melanie Gee Chair, Syncona; Former Chair, Ridgeway; NED, Standard Life Aberdeen
Tim Weller Founder / Chair, Incisive Media; Chair, Trustpilot, Pixomondo, Resi and Sohonet
Richard Pennycook CBE Chair, Boparan Holdings, Howdens Joinery and On the Beach
What we asked.
Why do Chairs sign up for growth companies?
What do Chairs look for in a growth company?
What should Founders be looking for in their Chair?
How do you deploy your Chair for maximum effect?
“Don’t waste a crisis”. How to use lessons learned
Why do Chairs sign up for growth companies?
The top five reasons cited our Chairs for joining growth company boards are:
Mentoring. “Mentoring younger extraordinary people is a wonderful thing. What's not to love about building a business that's useful: hiring people and creating opportunities?”
Purpose. “I’m interested in businesses with a clear strategy where I can be a clear part of implementing that - and delivering great products that will change customers’ lives. As Chair, you get to be fully immersed, without being an executive.”
Pace. “I enjoy the flexibility and lack of bureaucracy on growth company boards, their greatest asset is that things can move quickly.”
Value creation. “I love the ability to create value by introducing ideas, people and skills to help drive a business forward. I enjoy the cut and thrust of business!”
Upside. “It’s never the sole reason for joining, but it’s satisfying knowing I’ve been part of a company’s success and have earned a good share! Of course things can also go the other way - there’s always risk with reward.”
What do Chairs look for in a growth company?
Chairing a growth company can be an exciting roller coaster ride - rewarding but not without risks. We asked our experienced Chairs for their top priorities in selecting a growth or rapidly transforming company to join:
Purpose + Values. “The company’s purpose should be driven out of a need to disrupt a fragmented experience. I’d always look for that and for a CEO who is driven by those values, rather than just being in it to make money.”
High quality leadership team. “What are the Founder and CEO’s aims and aspirations? Do they have integrity? Do they mean what they say and can they listen? Is there personal chemistry? There obviously also needs to be underlying trust.”
Chemistry. “Inevitably, a chunk of the Chair's time will be spent guiding a less experienced founding team so that chemistry is very important. For start-ups, it’s more about a close personal relationship than you’d have in a classic PLC governance environment.”
Board dynamics. “I check out the people around the table, the leadership team and other board members. I’d always ask: can we work together? Can we have fun? Can we have tough conversations - that's key. Life's too short to deal with big egos!”
Commercial runway. “As for the business, I always ask: does it have good growth? Is it in a good sector and does the business have the ability to scale? It’s also important to establish the Founders’ vision and mission - you don't want to get involved with a leader who's got as far as they can.”
Stamina. “I ask myself: do I believe this company has the chops to keep growing and not flame out? The same needs to be true of the leadership team.”
Market due diligence. “I’d always ask about the medium-term viability of the business - could it be totally disrupted by something outside i.e. pandemic? You’ll never know for sure, but you do need to understand the market and it's competitive advantages or threats before you jump in.”
Commitment to transform. “If you’re looking at an established company, I’d say they need to have a transformation agenda and it’s critical that they mean it. The CEO needs to have fully bought into that or don’t join!”
Clear value add. “You need to be sure that you can add value to a transformation or scale-up. You can influence strategy and the people agenda and as a Chair, you can use your experience to bring these things together. From a personal and professional point of view, I also look at it as an opportunity to learn a tremendous amount.”
Don’t forget fun. “You’ve got to be able to have a laugh in a crisis. Never underestimate that!”
What should a founder be looking for in their Chair?
We are often asked by founders and CEOs what experience and approach makes for the strongest Chairs. Clearly this depends on a range of factors including the stage of the company, the Founders’ own levels of experience and their ambitions for scaling the business.
We spoke to our seasoned Chairs to get their take on what they’d advise founders to look for in their ideal growth Chair. We’d advise having these personal characteristics and commercial experiences at the top of your list:
1. Personal Characteristics
Approachability. “Pick someone who you really feel you can trust and would like to pick up the phone to. You should be able to ask them anything: is it time to replace the CFO? Are you having trouble with a particular board director? You should be able to run all these things past them. Find someone who can be a mentor, that you can call easily or have a coffee with.”
Wisdom. “To help small businesses grow and stop the CEO from falling apart, you need a Chair who's been around a bit and can bring wisdom and balance.”
IQ and EQ. “It’s important that your Chair has both!”
Buy-in. “If the founder doesn't think the Chair will share their passion for the business, then it’s a non-starter. They need to believe in your mission and support your goals (albeit they can challenge them!)”
Ability to challenge. “Most founders know they need to be challenged! I’d advise founders to be quite brave, self aware and be prepared to take on someone who won't agree with you all the time. That’s where there’s real value, but you need to tell the Founder to be alert to that. You need to like, respect and trust the Chair. If there is not an openness, then choose someone else. Founders have enough stresses in life without their Chair adding to that. It’s got to be fun, not painful!”
Mutual Respect. “It's enormously important that the person you want, you respect. They must bring something different to you as the founder. Too many times I’ve seen the Chair / founder relationship fall over when someone is not as good as you think, you can get deeply frustrated.”
Ego in check. “You don't want a Chair who wants to be the CEO, a good Chair is not the hero of the business - the founder always should be.”
2. Commercial Experience
Seasoned commercial player. “Real life, relevant experience is important and a good Founder should feel happy to tap into their Chair to benefit from their commercial know-how.”
Growth vs. listed background. “Get someone who's been around high growth before and been experienced in rapid scaling and the pace it requires. Chairs of big public companies may be too heavy on governance for some start-ups, but if that’s what you decide to go for, check them out well to see if they can make the leap.”
New market expansion. “If you’re expanding into new markets, get someone with experience opening up rapidly in new international territories who can share that with you. They can support you around cultural differences or regulatory headaches.”
Strong stakeholder experience. “There can be a lot of investors in a later stage company, you may have difficult or activist investors who need to be listened to and managed. Even in a start-up, it’s important to have someone who can manage a range of stakeholders and investors skilfully.”
And does it help if your Chair’s been a Founder themselves? There are mixed views:
Yes. “It helps to have been an entrepreneur, to have set up your own business and understand what the leadership team are going through. They will be able to learn from the mistakes you’ve made.”
“Sometimes it helps that I can tell founders I have been where they have been and feel their pain!”
No. “If you have done it, it can be helpful but sometimes entrepreneurs have had less breadth of experience and might not be so good at dealing with different situations. Someone who’s been a CEO or senior executive in a global organisation may have had better exposure to a range of issues and dynamics than a founder.”
“I don't think it matters in the slightest! It comes down to empathy: can you put yourself into the shoes of that person? It comes down to the personal chemistry you have.”
How should you deploy your Chair to maximum effect?
It can be hard knowing the boundaries of the Chair role. Some founders want a Chair who will be a figurehead but not get too involved, others want someone who is almost an Executive Chair, very hands-on and heavily engaged in the business day-to-day.
The rules of engagement are different in a growth or transforming company to a listed one, so it’s helpful to be clear at the outset what role you want them to play. They will certainly bring ideas of their own, so be prepared to be open and clear on yours, and the company’s needs.
Here are thoughts from some of our Chairs on the smartest ways to deploy yours:
The Chair’s role - a definition. “The Chair is there to run the board, not the business and mentors the founder or CEO to help them make decisions.”
Whatever role you want your Chair to play, make it clear from the start. “You need to be clear on what you want your Chair to do and you need to find someone credible. Where things go awry is when a founder thinks they want a Chair to do one kind of job, but you realise they can’t deliver as they’re the wrong person for the right role - or vice versa!”
Freeing up founders. “Once you’ve landed a Chair, they can help with mentoring, coaching, driving the agenda forward and helping the team move away from firefighting.”
Sounding board. “Entrepreneurs often have huge energy and ideas. When you’re growing a company fast, you need to control it, fund it and focus it, so you want to bring an ability to prioritise. You’ve got to work out what's really important to bring that focus.”
Coach not a cop. “For growth businesses, the Chair should be a coach not a cop. Good Founders are naturally curious. The most effective role the Chair can play is to prompt them in their roles, asking the right questions and holding them to account.”
Provide a helicopter view. “For a Chair to be effective, you need to have a helicopter view without getting too into the weeds. You’re there to guide the team, it’s not going to work out well for anyone if the Chair is acting like an executive, you’re not!”
More than an industry Rolodex. “Ultimately, you need to be able to get on with the founders or CEO and have mutual respect. Founders sometimes make the mistake of thinking that their Chair is there for their door opening abilities, it’s not just about their Rolodex - ultimately it's about the relationship and complementary skills.”
Team coach. “The Chair's job is to make the team work better together. I think the job of the Chair is to make the executive team successful as a unit by advising, encouraging, challenging and pushing them. The Chair is at their best when she or he brings out the elements of different backgrounds to the organisation - making it a more successful environment for everyone.”
Investor bridge. “There can sometimes be a mismatch between the founders and investors' aims for the business, it happens more often than you’d think. Being an independent Chair, you can support both by being the bridge between the two - getting consensus and shaping a plan that works for both.”
A safe place to say you don’t know. “Part of the Chair/CEO relationship is someone you can go to when you don’t know. Your Chair may not know either (it’s not as though they have the wisdom of Solomon!) but they should feel like a safe harbour to work it out together.”
How has the crisis affected the way you work with your founders? Will it affect your approach and advice from now on?
This last year will have been the making - and breaking - of many growth businesses. How did our Chairs use their varied career experience and lessons learned from previous crises to support their companies? How did they adapt to lead and work with their leadership teams during the last year? And what approaches will they keep in their arsenals for future use? Here we share their most critical insights:
Survival vs. Winning. “It’s been about cash, cash, cash and surviving over the last year. The winners will be the people with the strongest balance sheets. You want to come out as a winner, not just a survivor.”
Planning. “I’ve been through a number of crises: the dotcom crisis, recessions and the Financial Crisis, my advice is: plan for the worst and hope for the best.”
Upping Availability. “As Chair, the only way my role changed was being there 24/7 and 100%. We’ve slowly scaled that back as things have calmed down, but my Founders do know I will always be there when they need me.”
Supporting Founders. “The Chair has a great lens on the business and can reflect on priorities. I’ve found the need to be more supportive and encouraging. There is fatigue among leaders and teams - even the best!”
Staying focused. “It’s important to acknowledge how much effort has been expended and help leaders maintain a level of ambition, keeping focused on the north star. We’re being disrupted by macro factors out of everyone’s control! So focus on what they’re achieving, where necessary be tactical, and help keep that strategic lens.”
Prioritising. “I could bring in my previous experience to help them think through a roadmap, and a project method to focus on priorities like cash, staff welfare, customer welfare and series of project plans to get in place.”
Flexing styles. “For many, it’s been a bit more hands-on and into the detail. I’ve been talking more often with my CEOs, they were looking for help and I’ve been drawn into more conversations but now may need to draw back and be more strategic. Ultimately, I’m there to be the sounding board, so I’ve returned to a more Non-Executive role.”
Positioning for opportunity. “Competitors have been weakened, landlords will be giving better terms than ever before. There will be all sorts of opportunities in terms of talent acquisition for those who are in a strong cash position.”
Continuing Zoom vs. In-person. “80% is the same with Zoom but 20% is missing, the bit that's missing is much more important. With scale-ups and start-ups, as the Chair, you need to be together to build those relationships and trust. I’m sure we’ll keep using Zoom for some meetings, but we now know it can’t replace in-person.”
How are you helping your companies come out on the other side of the crisis?
Get back on the gas. “Once you’ve come through the worst then you need to ask: how do you put foot back on the gas? I have a three stage mantra: stabilise, revitalise and grow.”
Scenario planning. “There’s more time now for planning and the important thing is to plan for different scenarios for example: where can value be created? Where can you invest behind the opportunity? In case of a triple dip, a lot of companies are thinking more flexibly about scenarios.”
Bench strength. “Everything rests on the quality of your bench and organisational structure: what does it look like? Who do you have in your teams? Have we got the right people and are we in the right place to recover and grow?”
Re-focusing. “Focus on what you do and do it well, or don't do it. Give your team time to plan, and think ahead for two to three years’ time when you're out the other side.”
Rebuilding trust. “COVID is not unlike other curve balls, there have often been difficult conversations between colleagues and boards. People were emotional and some bridges may have been burned - so getting communication with teams and boards back on track is critical. It’s important to invest in rebuilding trust.”
Re-adjusting. “We've all been through significant behavioural change and that applies to leadership teams in more established businesses as well as start-ups. There's been an element of Dunkirk spirit which has built relationships but our interactions will certainly change.”
Be realistic. “This most recent lockdown has given many UK businesses the mindset that they can only control what they can control. You need to set reasonable expectations and use your energy to plan for when things are clearer. You can't run a business right now as you would in normal times or people will get burned out.”
Above all - don’t waste this crisis. “Leadership teams need to strike a balance between staying externally focused so they don’t lose the pulse on customers and what competitors are doing, and ensuring the culture and team works well. The crisis has shown everyone what we stand for, so don’t waste it.
© Copyright Rachel Ingram 2021. All rights reserved.
