The Master Funding Equation - A Winning Team (Part 6)
We've been looking at the Master Funding Equation (MFE) for some time now. Most recently we spent a lot of time on the five questions investors ask about a winning business strategy, including whether your business will scale or not. Now, we are ready to move on to the final two parts of the Master Funding Equation. In this post, we will review team composition. But first, I'll post the equation again to show you where we are:
- a Trustworthy CEO +
- a Viral Vision Statement/Elevator Pitch +
- a Powerful Pitch Method +
- the Correct Pitch Content +
- a Winning Business Strategy +
- a Balanced Team +
- Understanding the Mind of the Investor
Here are this week's key takeaways in video form. When entrepreneurs follow the advice in this article. Investors will...
This week's post will be brief because I have written extensively on the subject of team composition in previous posts here and in my ebook Born to Star. But for those of you who have not read that material, I want to highlight the key relationship that has proven again and again to produce great results in business. Briefly, the magic happens when a visionary pairs with a manager. The visionary is most often in the role of CEO and the manager in the role of COO, though that doesn't have to be the case. I call this pairing the Vision Master and the Execution Master. The reason it works so well is that the complete skill set of the two comprises all that it takes to guide a company from start-up to growth, yet very rarely does one person possess all of those skills.
The essential skill-sets of the Vision Master and Execution Master were assessed quite well in On Becoming a Leader, by legendary organization consultant Warren Bennis, who composed a complete list of the differences between “manager” and “leader”:
- The manager administers; the leader innovates.
- The manager is a copy; the leader is an original.
- The manager maintains; the leader develops.
- The manager focuses on systems and structure; the leader focuses on people.
- The manager relies on control; the leader inspires trust.
- The manager has a short-range view; the leader has a long-range perspective.
- The manager asks how and when; the leader asks what and why.
- The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.
- The manager imitates; the leader originates.
- The manager accepts the status quo; the leader challenges it.
- The manager is the classic good soldier; the leader is his or her own person.
- The manager does things right; the leader does the right thing.
Reading this list of skills and mindsets, it's easy to see why this type of pairing can lead to business success. Investors want to see that your leadership team contains each of these attributes, as well as the dynamic interaction of Vision Master and Execution Master that most often leads to positive outcomes. The important point is that there is a healthy relationship between these very different styles. Often, that requires that you, the Vision Master, place enough trust in your Execution Master to allow them to manage the day-to-day operations of the company, while you focus on its long-term goals, vision, strategy.
So, once you've established trust with an investor, you'll have the opportunity to have your pitch truly heard. That's when you start going through the proofs, the numbers, the sustainable competitive advantage you believe you have. The investor is now listening, but also wondering who it is in your organization that will guide the company day-to-day to see that these projections and objectives are realized. They want to know that you have your Gene Kratz.
If you've been reading this blog for some time you may remember the post I wrote about Gene Kratz, the NASA Flight Director for Apollo 13. You see, Gene wasn't an astronaut, never went to space. But without Gene's management, Apollo 13 would have ended in complete disaster, after a part of the sspaceship exploded in outer space. Investors know that your company faces critical junctures when "explosions" are apt to happen. They want to know that someone is in charge of Mission Control when that happens, to minimize collateral damage, then sure that the company can stay on track to complete its mission. Krantz won the Congressional Medal of Honor for his work on Apollo 13. Your Execution Master needs to be someone capable of that kind of performance when things get hairy, as well as being the steady captain during times of calm, while you, the Vision Master, scan the horizon for uncharted, potentially valuable new shores.
That's the combination that investors know leads to success. The visionary that has a big, audacious dream, paired with the manager that guides the business day after day to consistently move towards that dream. Some time ago I wrote about the successful pairing of Facebook founder Mark Zuckerberg and COO Sheryl Sandberg, as well as the partnership between Steve Jobs and Tim Cook at Apple. Both are examples you can model as you develop the Vision Master -- Execution Master relationship in your company.
What made the Jobs/Cook pairing succeed (after the Jobs/Sculley pairing had failed) was that Jobs finally learned that he needed to trust his counterpart. He never trusted Scully, never really let Scully do his job, partly because their styles were so different, partly because Jobs simply couldn't let anybody else take the reins. Trying to play both roles (execution and vision) led to failure for Jobs. When he was asked to come in again as CEO of Apple, now paired with Tim Cook, Jobs and Apple blossomed.
When Tim Cook joined Apple in 1998 Jobs turned over management of its supply chain to Cook, who was, after all, an engineer. “I trusted him to know exactly what to do,” Jobs told Walter Isaacson, the author of Jobs’ official biography. ““He had the same vision I did,” Jobs continued, “and we could interact at a high strategic level and I could just forget about a lot of things unless he came and pinged me.” In a nutshell, Jobs trusted Cook and that came from shared business values — unified vision between the two men of what Apple was out to do and why.
The Zuckerberg/Sandberg partnership also succeeded wildly. By 2007, Facebook was growing fast and the 23-year old Zuckerberg knew he needed help. He felt ill-equipped to manage the business he had founded. He met Sandberg at a Christmas party. She had already had a successful career at Google but was ready for a new challenge. To Zuckerberg's credit - this is important for all of you Vision Masters out there! - he recognized his own limitations, realized he needed a counterpart who could manage the company day to day to ensure it reached its goals. Key to the successful Zuckerberg/Sandberg partnership was a set of shared values. For Zuckerberg, Sandberg handles the things he doesn’t want to do and he trusts her to handle them well because he recognizes that she is a lot better than he is at those things.
For success with an Execution Master, you must have shared vision and values along with complementary leadership styles and work preferences; and, mutual respect and trust are essential to making such a relationship work. Investors love to see this kind of pairing because they know it takes both vision and day-to-day management to build successful companies. That's why the Vision Master/Execution Master pairing is so important to your success with investors, as well s your future success in company building.
- Investors can listen to the details of your pitch once trust is established
- They'll be looking to see that your team has both vision and management skill sets
- Very few people can successfully embody both skill sets
- Trust and shared vision between Vision Master and Execution Master is the key
- When investors see that you have that kind of dynamic on your team, they'll feel even more trust