The 4 common attributes of high growth companies

“There is no magical profitability formula or alchemy that can be applied to a company – however, success can be linked to a number of key threads that are interspersed throughout high-performing organisations.”

We spoke to Hazel Cameron, Head of Talent at Gresham House Ventures, about how strong boards and leadership teams, and clear communication are key themes that she encounters within companies on a positive growth trajectory.

Hazel is a 30+ year veteran of the private equity industry on both sides of the Atlantic. She sits on the Investment Committee for Gresham House’s Strategic Equity division and plays a key role in strengthening management teams within the Gresham House Ventures portfolio.

A STRONG MANAGEMENT TEAM

Hazel said: "I completed an exercise looking at what makes companies successful, what makes them unsuccessful and why some were flatlining while others were flourishing. It proved to me that a quality management team and an appropriate board is critical. 

"Of course, many factors affect business performance - including differentiation, competition, the economy and world events as has been clearly demonstrated recently but if you have a quality management team and board, they pivot when necessary and ask for the right help at the right time."

THE IMPORTANCE OF BUILDING NETWORKS

A key part of Gresham House's Strategic Equity offering is the strength of its network and the interconnectedness of its people across multiple industries, private and public. 

When it comes to strengthening senior leadership teams and supplementing boards for portfolio businesses, the network provides access to knowledge and insight about sectors, companies, management, and regulation among others.

 It gives the Gresham House Ventures team an edge when looking at new opportunities, with a clearer understanding of the inherent risks and opportunities, allowing them to grow teams and boards appropriately.

 The more insight the team has into management and the journey ahead, the more likely they can get the culture fit right.

Hazel said: "For over 15 years I have had the pleasure of meeting over three hundred new people a year, proactively targeting gaps in my network, hot sub-sectors and new disciplines, and reactively, through the amazing recommendations from my network. 

This network also proves valuable for the Gresham House when it comes to selecting companies for investment or sectors that should become a focus.

Hazel said: "We have built a network of individuals who have lived and breathed the sectors they work in. When you speak to them you get a much more rounded view than from desk research alone. Their knowledge is invaluable.

"You can find out who the real competition is, who you shouldn't touch, which management team is good, and what regulation is likely to come through."

HIRING STRATEGY 

People can make or break an organisation, so getting recruitment strategy right is crucial. Really understanding the risks and opportunities and having insight into the journey ahead to establish what skill sets are needed, but also the appropriate culture is of paramount importance.

We have all experienced the wrong hires. It is a distraction which leads to unnecessary expense, lack of progress in shareholder value, causes all involved emotional distress, and is unfair on the individual and the company. If recruitment can be made more objective, hiring risk can be reduced significantly.

Frontload the hard work, to evaluate those 2 or 3 skill sets that will really make a difference for this particular opportunity rather than the generic list for the role. Recruit against those few attributes, interview against them, and reference against them. 

At Gresham House, we gear up management’s time towards this process and approach, and it has really helped our portfolio businesses make the right hires with as little distraction as possible and allows everyone to focus on the end goal of growing the business.

COMMUNICATION

Communication within an organisation is vital to creating a cohesive culture and ensuring everyone in the company knows how important their role is - something everyone deserves. Communication is even more critical in the period following an acquisition where failure to gain alignment in ethos and processes can lead to disruption further down the line.

Hazel said: "The more communication and clarity there is, the more people can see they are making a real difference.

"It is also important that there is alignment of incentives and if the company does well, then all employees should do well.

"With an acquisition, a large number of people might come into the company at the one time, and this is where it is vital that people have a joined-up view on where the company is going, who is going to do what, and how it is going to work.

"For Gresham House, our success is in large part due to our unquestioning belief that management and quality boards are key. We aim to set Gresham House’s full expertise alongside management, be that our experience of venture capital, of scaling businesses, our listed knowledge and insight, so we can help focus management’s time, introducing our network (for whose insight and help we are ever grateful), supplementing teams with considerable management forethought and recruiting as objectively as possible. 

"For me, one of the wonderful things about private equity is alignment of interest and that everyone is in it together, as one team."