I’m lucky enough to spend my working life meeting very successful people. As a consequence, whenever I’m talking to chief executives, chairmen or investors, I’m always trying to work out what it is that sets them apart from the rest. While there are many different types of leaders and common characteristics that go into the melting pot – ambition, work-ethic, intellect, tenacity, listening skills, communication and leadership skills – the other two that also seem to often come up frequently in conversation are the themes of “timing and luck”.
“Timing is everything” and “success is all about timing” are phrases we hear all the time. But how do you get the timing right? How do you become better at it and how do you bring the elusive themes of “timing and luck” more firmly under your control? These questions became the focus of our discussion at a recent Savannah Boardroom lunch I hosted for senior executives from across the Hospitality, Travel & Leisure sectors.
What follows are lessons and insights picked up from talking to some of the most successful people I know, as I’ve tried to understand both how they master luck and timing and what their guidance would be to other chief executives in a similar position.
1. Learn to trust your instincts
During lunch, one portfolio chairman pointed out that because the current business environment is more volatile than it’s ever been, it is testing chief executives and their leadership teams more frequently than ever before, often with challenges not witnessed before.
Ultimately using your judgement and getting your timing right is an inexact science, so while you learn to trust your instincts over time, it is important to continually adapt your experience and knowledge to new sets of challenges. While you may have faced a similar situation three years ago, you can’t necessarily employ the same tactics again as the market and consumer expectations are changing so quickly. There could be different shareholders to manage, different personalities with different priorities, so alternative solutions are required.
When it comes to people, whether to back a chief executive or to replace them, he felt that this particular decision became slightly easier over time, as you learn to trust your judgement. He has learnt that if you have the feeling that someone is not up to the role, you need to trust that hunch and act quickly. Giving people “the benefit of the doubt” is soon ironed out of you the more senior you get.
2. Understand how everything is connected
Leaders are paid to be decisive. To some, leadership today is often assumed to be about boldness, about having the guts to make the early call.
I remember an interview given by with Sir Rod Eddington who used to run British Airways who said he’d spent the first two years as chief executive just listening and learning – speaking to employees and customers, not making any decisions but getting a full understanding of how everything interconnected.
So, while the chief executives of today may not be afforded quite the same luxury of time and patience, we also talked about the importance of creating time/space for the chief executive to truly understand a new organisation. In this respect “more haste, less speed” often meant better decisions were made.
3. Draw on experience
The chief executive of a FTSE250 hospitality organisation made the point that what you gain crucially with age is the benefit of experience. As you progress through your career, you start to make big decisions, some which work incredibly well and others that fail dismally. Should your career continue to go ever higher and you survive despite the failures, you learn from your mistakes. With regards to people and hiring the best teams underneath you, he believed that you begin to recognise “types” of people, certain traits that are either desired or necessary to steer clear from.
In this respect, you become better at building the very best leadership team around you, at the right time. Organisations evolve and often they need different personalities with different skill sets to help take them successfully through various phases. In this respect, the chief executive’s job is to recognise this and adapt the team around him/her to reflect the challenges they’re facing. Being prepared to make tough decisions and adapt to the market were crucial in factors in maintaining longevity as a chief executive.
Using your gut instinct and drawing on experience also applies when getting involved in assessing M&A opportunities too, whether to invest in a new organisation or not. In this respect, your timing and judgement should tend to improve with age.
4. Hard work improves your luck
A partner from a well known private equity house highlighted the outcome of a recent deal when they sold one of their investments to a large multinational. In any potential sale process, opting when to sell/hold, there will always be factors outside of your control, so all you can do is do enough groundwork and have enough strong relationships to give you options at any given point. By doing that, and building close relationships with prospective bidders you can begin to control some of the variables. At the same time, if luck works in your favour as it did in their recent deal, grab it with both hands and embrace it. As an owner of multiple organisations, you obviously cannot rely on luck to run your investment strategy, but you need to always be in a position to exploit it if presented with an opportunity. It’s rare and infrequent, but you must have always conducted the work behind the scenes so as soon as the opportunity comes calling, you can exploit to the fullest.
In making the most of any unforeseen luck, having an exceptionally high work ethic helps. You have to be prepared to personally commit a lot to an organisation if you want to succeed at the top. There aren’t any short cuts to becoming an effective, long-term chief executive. Over time you hopefully become better at leading and choosing the team around you, become better at delegating freeing up the much-needed commodity of time. As your judgement becomes better, your luck therefore also improves.
5. Make calculated steps –getting the when and what right
Another chief executive made the interesting comment that with many organisations battling with increasing costs, overcapacity and lower consumer spending, when you join an organisation (and to some extent when you leave) is almost as important as who you decide to join. Get your timing right and life can look relatively easy when momentum is behind you. Time it badly and everything appears an uphill struggle – people, suppliers, investors, performance etc. Be careful what you accept but also when you accept it, whether that is a chief executive role, a first NED appointment or a chairman role.
Even in organisations that are trading well, if a PE company overpays during a sale process, any detriment in performance can soon see profits eroding in high debt/interest repayments, and the virtuous circle can quickly transform into a vicious one. Momentum is very difficult to generate and very easy to let dissipate, so getting your timing right vastly improves your chances of experiencing luck throughout your career.
6. Choose carefully
Similarly, while it can take decades to build a personal reputation it can take moments to lose it. It hardly seems fair, but given the intense spotlight of the media when things fail, you can suddenly find yourself with fewer friends than you thought, so think long and hard before accepting a role.
One Chairman spoke about how it has taken him 40+ years to forge a reputation and he’s very mindful it can be lost in an instant.
One ex chief executive I know who took a business in to administration was so deeply affected by the experience that he withdrew from corporate life. In hindsight he admitted the company was doomed to failure and he should have conducted much more due diligence before accepting.
7. Consider the ownership structure & culture of the organisation
The chief executive of a privately-owned casual dining business talked about the different mentality between public and private businesses when applied to the subject of people. His view was that in an owner/managed organisation run by an entrepreneur, there was little prevarication about people. Decisions were often made quickly and on gut instinct, with little debate. While this can be painful, there was also something to be said for the direct and rapid decision making, so be mindful of what type of organisation suits you, your skillset and your values set. If you choose incorrectly you can lose years of your career as you navigate your way out of it.
One PE participant talked about the particular challenges of exiting the founder of an organisation and the huge destabilising effect this can have. If you remove a founder, the person through which all decisions typically flow, a vacuum is often created in their absence and it feels almost like bereavement. The DNA of the organisation mutates, often not in a positive way. These people aren’t irreplaceable, but any action needs to be carefully planned and executed, not done on a whim. If it is, very often both the investor and the business lose ground and come out worse off so timing is critical.
8. Focus on your personal values
One chief executive thought it important not to get too concerned about the winding road of “fate”. Sometimes timing works in your favour, sometimes against and it was impossible to control to any great degree. His advice was to focus on your personal value set, keep abreast of changes, challenges and opportunities in any sector, work hard, genuinely care about the outcome and lead your people well. Age old advice that still applies today and will do so tomorrow.
The chief executive of a particularly successful PE-backed hospitality organisation said the best career advice he could give was to work for a growth business. It doesn’t mean you will be in for an easy ride as leading any organisation these days will be challenging and stressful, but it frames the mood of your day-to-day life and the context of the decisions you’re taking. So they typically might be about launching new products, services or entering new markets, as opposed to redundancies or restructuring the whole time. Usually your role has more latitude for growth too (and more tolerance for the odd mistake that is made). In this respect, choosing to join an organisation at the right time of its cycle made a huge difference to your career and quality of life. Equally important he felt was finding an organisation that shares your personal values – the more engaged and aligned you are, the better the performance and more focused the team.
9. Don’t take it personally
In any situation, you have to back yourself and your judgement and hope you get it right more often than you get it wrong. One chairman of a PE-backed business talked about the sacking of one chief executive, who had actually done an admirable job in many respects and had turned around the profit performance of an organisation. However, when a failed sale process required a reappraisal of the overall strategy, it was felt he no longer possessed the core skills to lead them through the next phase, so he was dispatched, and someone else brought in. It didn’t make him a bad chief executive, luck and timing had conspired against him to some extent and the chairman commented he would still hire him again if the circumstances were right.
