Are you a member of a kingdom or a meritocracy?
Are you a member of a kingdom or a meritocracy?
What can your firm's structure tell you about politics at your firm?
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Many firms are entrepreneurially rooted in one Key Man. Through majority ownership, The Key Man may unilaterally direct the firm. As firms grow, a founder's influence can be diluted by public shareholders and an outside board of directors. At this stage a meritocracy is possible as impartial third parties can audit the inner workings of the company. The triad of a CEO, Board and Shareholders push and pull against each other, holding each other accountable. Many investment banks are structured for meritocracy, and their public boards and shareholders are slowly driving evolution within the company.
But most Private Finance Professionals (VC/PE/GE) work at a firm still controlled by the founder. If the founder holds the controlling vote, and there is little / no outside board or shareholders, the founder remains the King. "Partners" are often confused to find their title meaningless when it comes to firm decisions around people, promotions and pay.
Are you a member of a kingdom or a meritocracy? When my executive coaching clients get clear on their firm’s structure, it’s incredibly powerful in helping them navigate firm politics.
