The Most Successful Investment Partners Create a "Secure Base" for their Teams
Coming up in the investing industry, you were likely expected to figure things out on your own and back into what your Partners wanted. Sometimes your Partners were focused and demanding and other times they may have been nearly absent.
Now you’re the Partner, but the optimal way to manage your team has changed from how you were likely mentored.
The world has changed — and your Leadership style needs to evolve!
1. The best Partners create a “Secure Base” for their teams.
As a Partner, there is nothing more annoying than:
a Principal/VP who can’t think for themselves and seems to just populate templates without considering the bigger picture. (Anxious)a Principal/VP who does their own thing and doesn’t really bring you along. (Avoidant)
Ideally, you’d like your team to curiously explore, use their best judgment and boil up to you their concerns and conclusions with just the right balance.
I hear a lot of Partners lament “I want to empower people to create leverage for me and develop, BUT my team can't seem to get anything right so I have to spend a lot of time managing them or just do it myself.”
A great Partner provides refuge for their team — like a “Secure Airforce Base” to return to during battle to get help, re-up supplies or strategize. Knowing the Partner is there to provide nonjudgmental assistance when things go pear-shaped, VPs & Principals can go off and work through deal issues using their best judgment while posting the Partner on key issues along the way. These securely attached teams work through problems collaboratively and grow closer and more effective with every rep.
In contrast, old-school Partners who react with disdain when midlevels make an error create an IN-Secure Base. While fear of a moody and unpredictable authority-figure at work can be a powerful short term motivator for some, it creates burn out and team inefficiency over time. Rather than turning to the Partner in key moments, the fearful VP/Principal keeps a tight grip on every detail and manages downwards with similar energy — alienating juniors and fragmenting the team. Symptoms of Insecure Teams look like:
Juniors are afraid to exercise their best judgment
Juniors do exactly what the Partner wants
Partner doesn't get any leverage
Juniors don't develop
2. A lot can be learned from the research on good parenting.
It turns out that kids (and your team-members) have an evolutionary instinct to seek connection with and guidance from you. Back in the day (1920-1970), behaviorist psychologists espoused TOUGH LOVE like “don’t pick up a crying kid or you’ll get a crybaby; don’t reward undesired behavior.” The tough love philosophy created a generation of traumatized kids who may have grown up to become your parents or managers. It’s time to break the cycle and create leadership which brings out the best in human behavior.
3. It all comes down to HOW YOU REACT when a team-member indicates distress or uncertainty about a key issue.
(a) Partner can jump right into the fixing.
(b) Partner can question the thinking of the junior and make junior feel awkward that they couldn't figure it out on their own.
(c) Partner can acknowledge difficulty of situation, thank junior for bringing it to their attention, and ask how they can help.
Option A is the most common: helpful, but it misses a powerful relationship opportunity to make your team member feel they have a “Secure Base” in you. By just going into fix it mode, you don't give them a sense that you appreciate their diligence and that this is an ok way of proceeding going forward. They are left to wonder - are you annoyed, mad, see them as incompetent?
Option B is old school - tough love. This is corrosive, burns people out and demoralizes the staff. While many of us grew up on this tough love (our Partners eye rolling, screaming, silent treatment, throwing objects, slamming desks), it's not helpful to creating a functioning team of thinkers - you just create a bunch of scared hostages (like a former version of yourself).
Option C is the choice of the Most Effective Partners today. While you may have high standards, you're accepting of reality. You are available to talk through difficult issues, then be available for guidance (not jumping into problem solving) as the team plots their next move — allowing them the ability to arrive at the answer through their own thought. Even though you likely know the right solution, you are not overly prescriptive as to suffocate their exploration and creative process. This is how you establish a “Secure Base” for your team.
It's not easy managing a team at a Private Equity / Direct Lending firm. You have a ton of pressure on you.
While you may have been raised on tough love, creating a healthy, thriving, winning team today requires a different approach: establishing yourself as a 'Secure Base' for your team.
Additional Reading
A Secure Base, by John Bowlby.
An Ethological Approach to Personality Development, by Mary D. Salter Ainsworth & John Bowlby.
Becoming Attached, by Robert Karen.
Andy Grove on the Right Kind of Fear
How Leaders Create Safety (and Danger)
Safety Is a Resource, Not a Destination, by Ed Batista.Attachment Theory In Practice, by Sue Johnson
