No new venture is conceived without a vision. An idea of what a business must achieve is integral to its forward momentum. The driving force behind its growth. That being said, knowing where the company could go is one thing. Defining how it will get there is a different matter. Indeed, “how?” can often be the toughest question posed to a formative team keen to forge the right path.
Although the answer is almost always the same: Who.
Bringing on board world-class talent can have an inestimable impact on an early-stage business. By way of example, Intramezzo worked with a European company that had developed the next generation of flat screen technology – a spin-out from a global consumer electronics organisation. The business was strong in its IP but needed a CEO with the expertise and contacts to lead the venture through A and B funding rounds, building a global enterprise. In response, a “serial entrepreneur” with a formidable track record in the displays/optics market was appointed. This blend of knowledge and experience meant that the new Chief Executive far surpassed the company’s fundraising objectives; expanding internationally in doing so. This laid the foundations for the business to achieve an exit in excess of £60m.
So, how does a venture go about finding the “right person”? In the past, business leaders would seldom look further than their own network, typically bringing in someone known to them who loosely filled the brief. However, today’s entrepreneurs are moving away from this approach, recognising that the most effective leadership teams are assembled using a more scientific methodology.
The first step in this process is defining precisely who is needed. Having a clear notion of what will be required of this person makes it possible to work back and draw up a profile of the ideal candidate – their skills, attributes and achievements.
Once this is agreed, the question of how is revisited. How will this person be brought in and in what capacity? Taking into consideration the immediacy of the requirement, the budget available for remuneration and the longer-term aims of the business will help inform whether an appointment should be made on a permanent, interim or non-executive basis.
Here, a flexible approach can (quite literally) pay dividends.
Take, for instance, the European venture capital arm of a major, multinational consumer goods company. The organisation had an urgent requirement for someone who could undertake a process of due diligence on a launch plan for one of their portfolio ventures (a developer of green catalyst solutions for industrial markets). The role demanded a domain expert and, therefore, a candidate was found with an extensive track record in both the chemicals industry and in growing early stage companies. Initially appointed on an interim contract, this individual closely examined both the business and its existing plan before developing his own, much more lucrative, growth strategy. As a result, he was made permanent CEO and put the new business plan into motion – eventually leading a £35m exit and 10x return to shareholders.
For ventures like this one, there are three cornerstones to success. The first is strong IP; the third is good investment. The second cornerstone, and the principle that bridges these two elements, is executive talent. Having the right leadership team in place is essential for any business to achieve its vision. It is simply not enough to ask “how will we get there?”, especially when the real question is “who will take us?”.
This article first appeared in Global Corporate Venturing’s PowerList 2013 publication