What can business learn from sports? Whether you are a CEO or a team’s head coach, your end goal is to win the championship. And the formula for achieving this is the same: First, you need a coach who has both a vision and a strategy on how to win.
Second, you need a team made up of committed, driven, passionate individuals who share your vision and show up for work willing to work as hard as they can to reach that goal.
And third, you have to consistently train, learn and work harder than the competition. The coach of a championship team will hire and retain the best players. If a player doesn’t have the ability, they get cut. If they have the ability but they don’t show up for practice, they get cut. If they show up for practice but don’t put in the effort, they get cut.
The Egalitarian Coach
Any parent who has a child on a little league team will be familiar with the egalitarian coaching approach. Every player gets a turn on the field. Every player may also get a turn at different positions. At this level, the coach’s goal is clear – to teach his/her players how the game is played and to develop their skills. These coaches are not overly critical, because while it would be a nice outcome, these coaches are not focused purely on winning championships.
I have seen all too often this egalitarian approach applied to business. This is a fine management philosophy, but let’s be clear. These organizations simply will never be best in class. My experience in business has shown that there is a basic conflict in many business leaders between wanting to win and how they manage their team. Most want to win, but they manage their teams in the more egalitarian manner. Those two are in direct conflict. And while these companies may experience wins from time to time, they will never have a championship team. That is why I stress in my recent book, The Power of Positive Destruction, that firing is just as important as hiring. The best players (let’s call them the A Team) get demoralized if they are playing alongside B players that are simply dragging the team down. Players and employees tend to exert effort to the lowest common denominator. The positive corollary to this is that the best players are attracted to the best teams and want to play alongside the best players.
Train. Train. And Train Some More
Continuing the analogy, the way a winning sports team gets to the championships is through constant training. This is something that most companies simply don’t do. How can you even consider winning if you don’t constantly train and push your employees to develop new skills, fine-tune their existing ones, and be the best they can be? You can’t.
Just a couple years after I founded Liquidnet, we launched Liquidnet University (LNU). Even though we employed fewer than 150 employees at the time, I knew that if we were to outperform our competitors, we needed a learning culture focused on continuous improvement. LNU offers different types of learning experiences, starting from the first day an employee joins. Every new hire learns about our products and services, our technology, our organizational structure, and our firm’s unique culture. This is a multi-week program that we have dubbed Swim Camp. Similarly, all managers must go through a people manager program we call PeopleWorks, and all customer-facing employees must successfully complete our SalesWorks curriculum. We offer additional internal programs in a variety of topics: negotiation skills, running an effective meeting, executive presence and presentation skills, new technologies and software, and understanding the financial markets, to name a few.
We also recognize that our internal program is not exhaustive, so we provide every – EVERY – employee with a continuing education budget of $2,500 per year for external courses and conferences. And, over the last few years we have partnered with NYU’s Stern School of Business to create a Liquidnet-specific mini-MBA program for our highest-performing employees around the world.
The Best Managers…Don’t “Manage” At All
Once you have the A team, the best way to get the most out of them is by making sure they have the best coaches. Most employees don’t quit their companies; they quit their managers. Our people manager training is geared toward making sure everyone on a manager’s team has all the tools, training, and resources needed to be successful. Managers learn how to mentor, support, and listen. But more important, managers are expected to push their employees to improve, take on more responsibilities, fail fast, and be accountable for their results.
Just as we don’t expect our employees to need constant supervision, we don’t expect our people managers to give it. Liquidnet is not in the business of “managing” people. We hire people who manage themselves.
Culture By Design, or Culture by Default
Finding the right players and coaches and training them are prerequisites for building a winning team or company. But to create a championship team, you must have a consistent set of standards and expectations. This is not easy and is always a work in progress. Current key employees may leave. New team members join. A company will grow and expand into different geographies. This is where the culture of the company is critical. In The Power of Positive Destruction, I point out that you can either have a culture by design or by default. If you don’t carefully design your culture, practice it, teach it and stand by it in good times and bad, you will have a culture by default. This is one that is out of your control, can shift quickly with no warning, and that leads to much uncertainty and inconsistency throughout the organization. Having a well-defined culture that everyone understands and lives by, creates a common definition of what you expect from your team, and what they should expect from the company and each other. It defines your operating philosophies and makes hiring and retaining the best people so much easier. This is a culture by design.
At Liquidnet, we have condensed our Liquidnet culture down to 10 principles of how we operate when we are at our best. Using the term “at our best” recognizes that adhering to these principles is simply not possible 100% of the time. Yet, we know what we, as Liquidnet employees, should aspire to. If you don’t define your culture and your ideal state of operation, you have nothing against which to measure your day-to-day performance as a company, as a team, or as an individual.
Let me share an example. How many times have you hired an individual who brings all the right skills and expertise, but for one reason or another, just does not seem like the “right fit?” At Liquidnet, our well-defined and understood culture is able to weed out these individuals very quickly. I call it our firm’s “organ rejection system.” Antibodies start building up around the new organ (namely, concerns start filtering up very quickly that this person is not fitting in). We are able to benchmark the new employee’s behavior and actions against our culture’s guiding principles to see clearly where the issues are. This gives us a more rapid response mechanism to directly address the concerns we have with the new hire. We can have a constructive conversation with this employee and clearly define the areas of concern. We can then watch for improvement. And, after time, if there is none, we know that this person has to go. Don’t get me wrong—I hate investing time and resources in hiring someone only to realize we made a bad call. But what I hate more is keeping such an individual on board long enough that he/she causes some real problems and creates significant damage.
As CEOs, we set the tone. Your success is defined by and based on how good your team is. We need to think of ourselves not just as business leaders, but as coaches. It’s our job to set clear goals and expectations and define how to reach them. Our job is to motivate and inspire our teams, to train and teach continually, learn from losses and celebrate victories, and to win the championships we have to get more out of our players than they could deliver without us.
Good luck on building your next championship organization.
Written by Seth Merrin – Author, The Power of Positive Destruction: How to Turn a Business Idea Into a Revolution (Wiley, January 2017).