Leadership Is Fluid: An Entrepreneur’s Guide to Overcoming Growing Pains + Accelerating Growth

By Jeffrey Hansen

An entrepreneur faces a range of management situations as the enterprise moves through five different phases of growth and development. Each phase is most effectively managed using a particular management approach that champions certain decision-making structures, cultural priorities, and organizational controls.  Therefore, the entrepreneur must shift management approaches over time to remain effective and to take full advantage of their opportunities for growth. 

Since most people have a preferred mix of management approaches, often called our management style, one can inadvertently over-apply one's preferred management style to situations that would respond better to other approaches.  One can also inadvertently delay making needed shifts until the need for change is great and a crisis develops, which makes change more difficult and the future options more limited. 

Founding entrepreneurs tend to have a management style that is creative and promotes organizational focus and agility, which accelerates progress in the first phase.  With a successful innovation, the enterprise shifts to a phase in which growth is accelerated by focusing not on innovation but on improving efficiency and making work processes more transparent and rational.  This shift in priorities is challenging and is the source of reduced growth and growing pains that must be overcome.  If done quickly and effectively, the second phase is temporary and the enterprise moves on to other growth phases based on its scale and the maturity of its product.  The leader and management team must keep pace with these changes in order to accelerate growth. 

While it may not be easy to change one's management style, one can consciously change management priorities and practices to suit the current growth phase. Leadership is Fluid outlines the specific practices and priorities – the mode of operation - for each phase.  These modes of operation reflect the priorities, practices, and controls of the ideal management style for each of the five growth phases. 

Entrepreneurial leaders who have experienced various growth phases and modes of operation can navigate the growth path more quickly.  They know the blind alleys to be avoided.  Yet, wisdom about the growth path is often obtained from earlier failed experiences on the growth path.

A mental roadmap of the path ahead makes a difference.  Without a mental roadmap, an entrepreneur might move through the five growth phases in a trial-and-error fashion and ultimately reach a desirable level of stability and strength in, say, six years.  If one can reduce the trial-and-error aspect of navigating the path by knowing likely blind alleys that should be avoided and the appropriate mode of operation for a particular growth phase, one can navigate the path and get to the same status in, say, three years.

Leadership is Fluid provides a roadmap for entrepreneurial growth that includes the growth phase and the appropriate mode of operation, which takes the guesswork out of deciding how management practices and priorities should change over time. 

It provides descriptions of thirteen classic growing pains that can indicate that deeper fundamental change is needed.   One can use the appearance of the thirteen classic growing pains as early warning signals that a certain mode of operation should be reduced and another enhanced.   Change can be initiated sooner and more alternative courses for the future can be considered. 

Leadership is Fluid will help you develop growth acceleration strategies right for your enterprise. It will help you take fullest advantage of your enterprise's innovation. 

• Language: English
• Publisher: CPM Investing
• Release date: Dec 14, 2018
• ISBN: 9780578435589

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Leadership Is Fluid: An Entrepreneur’s Guide to Overcoming Growing Pains

+ Accelerating Growth

Copyright by CPM Investing LLC

All rights reserved. No portion of this book may be reproduced in any

form without permission from the publisher, except as permitted by U.S.

copyright law.

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Cover Design: CPM Investing LLC using Optimus Princeps font designed by Manfred Klein.

About Jeffrey Hansen

Jeffrey Hansen has over 30 years of professional experience advising enterprises on managing growth and in investment management. He has consulted to small and large companies around the world on maintaining an innovative edge and doing so as the business grows. He is the author of books and articles on entrepreneurial leadership.

Jeffrey is also a professional investment manager and has used his research on visionary leaders and insight-driven businesses in the selection of professional investment management firms for institutional investors.

As a professional investment manager, he has managed hundreds of millions of dollars for high net worth individuals. His specialty is asset allocation and adapting portfolios to different phases of market resilience and vulnerability.

Acknowledgments

This book is the result of my mission to help innovators and entrepreneurs reap the full benefits of their creations. Michael and Ellie Sheldon diligently helped shape this work over many years of use with investment management firms. Millie Westley dedicated many hours transforming the manuscript into a compelling narrative. Kyler South thought through the work with care and focus and made refinements. Doug Williams polished the final product to meet his high standards.

Many people from diverse backgrounds lent their critical eyes and professional experience to bring key points to life. Special thanks to Carolin Zeitler, Brenda Clemons, Megan Oliver, and Judy Ann Michael. Their contributions made the story more vivid.

The website www.LeadershipIsFluid.com is an important part of my interaction with readers. I thank Andre de Bonk for his contribution to making it useful and attractive.

I appreciate my relatives who helped shape the message for this book over its long evolution. Some of the most compelling phrasing came from Kyle Hansen, whose wisdom and insight helped crystalize my concepts. Eric Hansen provided consistent personal support and guidance on the overall concepts.

My deepest gratitude goes to my wife and children for keeping our family forever connected and moving forward while I pursued this and other projects of passion. Gabriela, Hillary and Annika patiently reviewed early ideas and drafts, and provided their support through many of life’s ups and downs.

Thank you to all my generous partners, both personal and professional!

- Jeffrey Hansen

Contents

About Jeffrey Hansen

Acknowledgments

Part 1 - Know the Roadmap, Know Yourself

Chapter 1: Success in Visionary-Led Enterprises

Growing Pains

My Perspective

A Focus on Growth

How This Book is Organized

Growing Pains: Undesirable Legacies of Past Success

Chapter 2: Building Blocks of Management Style

Influences on How we Manage

Four Decision-Making Approaches: Building Blocks of Management Style

Observed Behavior

Common Mistakes Using Management Style Information

Chapter 3: The Roadmap for Entrepreneurial Growth

Changes in Customer Class Reinforce Growth Phases

Development Doesn’t Come Naturally

Effective Leaders Change Modes of Operation Over Time

We Can Change Our Management Practices and Priorities

Boredom, Interest, and Temporary Phases

Long-term Success Requires Being Deliberately Fluid or Having Money

Management Style Is Often More Important Than It Should Be

Part 2- The Yang and Yin of Early Entrepreneurial Growth

Chapter 4: Growth Phase One: Concept Development

A Trial-and-Error Process

Customer Class: Pioneers

Ideal Management Style: Commanding Visionary

Victor’s Story

Implications of Successful Commanding Visionaries

Chapter 5: Ideal Mode for Concept Development Phase: Innovating

Effective Mode of Operation: Innovating

Most Effective Structure: Focused Team of Generalists

Alternate Structure: Team of Focused Peers

Preconditions for Pursuing the Innovating Mode

Watchpoints of the Innovating Mode

Signs of Success and that It Is Time to Move Forward

The Innovating Mode for Those with Other Management Styles

The Feel of Arrested Development

Summary

Chapter 6: Transitional Phase: Foundation Building

Developmental Objectives of Transitional Foundation Building

Ideal Management Style: Collaborating Engineer

The Ideal Management Styles The First Two Phases are Opposites

Awareness Stages

Aligning the Mode to the Growth Phase

Relocate Enterprise to Sweet Spot for Preferred Mode

Wise Leaders

Chapter 7: Ideal Mode for Transitional Foundation Building Phase: Retooling

Effective Mode of Operation: Retooling

Preconditions for Pursuing the Retooling Mode

Rationalize and Solidify Work Processes

Standardizing Your Product or Service

Initiate Hierarchy

Initiate Broad Controls

Control Levers in Transitional Foundation Building Phase

Anticipate the Needed Changes

Select the ‘Kingpin’ Market

Vulnerabilities

Timing the Beginning and End of Foundation Building Phase

Summary

Chapter 8: Growing Pains of Early Entrepreneurial Growth

Battles Over Turf and Titles

Reluctance to Demystify the Magic

You Had to Be Here at the Beginning

Office Manager Crisis

Perpetual Innovation

Part 3: The Stepping Stones of Middle Entrepreneurial Growth

Chapter 9: Growth Phase Two: Exploiting Rapid Market Expansion Using the Producing Mode

Developmental Needs: Dominate the Expanding Market of the Early Majority

Ideal Management Style: Engineering Commander

Effective Mode of Operation: Producing

Impact of Control Levers

Preconditions for Pursuing the Producing Mode

Summary

Chapter 10: Growth Phase Two - Rapid Market Expansion: Watchpoints and Limitations

Common Errors Related to Rapid Market Expansion

Common Limitations

Assessing Where You Are

Responding to Changes in Your Market

Chapter 11: Growth Phase Three: Exploiting the Crowded Marketplace Phase Using the Planning Mode

Customer Class: Late Majority

Internal Developmental Goals

Preconditions for Pursuing the Planning Mode

Ideal Management Style: Engineering

Effective Mode of Operation: Planning

Impact of Control Levers

Summary

Chapter 12: Growth Phase Three: Crowded Marketplace: Watchpoints and Limitations

Signs of Success and that it is Time to Move Forward

Transition to the Next Growth Phase

Chapter 13: Growth Phase Four: Exploiting Niche Development Using the Adapting Mode

Developmental Needs: Targeting Features for Sophisticated Customers

Ideal Management Style: Collaborating Visionary

Effective Mode of Operation: Adapting

Impact of Control Levers

Preconditions for Pursuing the Adapting Mode

Summary

Chapter 14: Growth Phase Four - Niche Development: Watchpoints and Limitations

Limitations and Watchpoints

Signs of Success and that It Is Time to Move Forward

Vic and Sparrow Are Ready for a New Breakthrough

Chapter 15: Growing Pains of Mid Entrepreneurial Growth

Crisis and Rescue Cycle

Early Diversification

Indecisive Teams of Capable People

The Sequel Is Not as Good as the Original

Part 4: The Dynamics of Late Entrepreneurial Growth

Chapter 16: Forces Influencing the Position on The Roadmap For Entrepreneurial Growth

Four Quadrants of the Roadmap for Entrepreneurial Growth

Making Transitions From One Quadrant to the Next — Center

Chapter 17: Common Ways of Getting Off Track

Operating in the Wrong Mode

Failing to Achieve Any Successful Mode

Chapter 18: Growing Pains of Late Entrepreneurial Growth

Defiant Innovation Becomes Defiant Isolation

A Flotilla of 100 Rafts

Repeated Revolutions with Little Progress

A Well-functioning Management Team Is Not a Succession Plan

Part 5: Conclusion

Chapter 19: Conclusion

Survival Tips

Part 6: Appendices

Appendix 1: Growing Pains: Undesirable Legacies of Past Success

Appendix 2: Four Decision-Making and Problem-Solving Approaches

Commanding Approach

Engineering Approach

Envisioning Approach

Collaborating Approach

Appendix 3: Academic Review of the Hansen Model of Growth and Development

Executive Summary

Chapter 1

Success in Visionary-Led Enterprises

To be successful, you must accept all challenges that come your way. You can’t just accept the ones you like.

— Mike Gafka, Senior Worldwide Business Strategy Manager at HP

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

— Charles Darwin

Many of the legends in the business world built their enterprises on vision and passion. Henry Ford, John D. Rockefeller, Bill Gates, Jeff Bezos and others created disruptive innovations, pushed new frontiers, and changed the business landscape while experiencing phenomenal success. Their visions and their companies affect our lives every day. But their most astonishing feat is that they built on their initial startup success to lead their companies to industry dominance. They realized the dreams of growth and long-term success that so often elude entrepreneurs.

The far more common experience is that the entrepreneur with a disruptive innovation achieves initial success and then falters as the business grows. At first, the enterprise grows nicely and seemingly quite naturally. But then it hits a wall. Many entrepreneurs may convince themselves that they are experiencing typical growing pains and will simply grow out of them — that they are climbing over the wall — but the wall has in fact stopped them cold. The thrill and camaraderie of early success give way to anxiety and panic. The cohesive team fragments, the leader fears losing control, and business opportunities are missed. Internal management issues consume ever-larger shares of management attention. Poor decisions are made; the business weakens and then ultimately fails under competitive pressures.

Growing Pains

I believe that many of the classic growing pains that are passed off simply as something to outgrow are actually conditions that have a message for the leadership of the enterprise. Many growing pains have roots in management practices and priorities that made significant contributions to earlier successes, but have outlived their usefulness. These practices live on to become part of the way the organization works, enshrined in the culture of the enterprise.

Within the enterprise, they are not identified as problems and, in fact, are considered strengths rather than weaknesses. They are allowed to persist, despite continuing to sap growth and inhibit the enterprise from developing practices and priorities better suited to current circumstances.

I call these growing pains undesirable legacies of past successes. With greater awareness of these thirteen undesirable legacies, you will be able to recognize earlier that they sap growth and therefore make decisions to reduce the management practices and priorities that are no longer effective.

Three of the thirteen classic growing pains are:

#8. Indecisive Teams of Capable People

Without the direct involvement of the initial leader, what was once a decisive and responsive organization stagnates. Despite being capable, people avoid making decisions. Required information is collected and assembled, but no one brings the issue to the point of resolution or determines who will do what to make something happen. Weakness arises not so much because wrong decisions are made, but because few decisions are made, and little action is taken.

#10. Defiant Innovation Becomes Defiant Isolation

When the company’s early disruptive product innovations become part of the conventional wisdom that the company helped create, the enterprise does not listen to or value information the industry can provide to it. Once the groundbreaking innovation has been accepted and integrated into the marketplace, the market will give ample feedback about the product and how it can be improved or customized to meet more specialized needs. Companies suffering from defiant isolation don’t listen. If they do, they do not take it seriously. As a result, they can miss significant opportunities for continued growth. Over time, the leadership becomes isolated from the industry they helped create.

#11. A Flotilla of 100 Rafts

A company that is especially good at adding more staff and introducing new products and business units experiences little coordination and cooperation among the various businesses. The organization and its business become fragmented and none of the lines of business are developed to their full potential. The only coordination comes from informal agreements between the heads of the individual businesses. Few of the units are sufficiently supported and most unit leaders trust only members of their own teams.

My Perspective

Years ago, a colleague who had frequently invested in new companies said to me, Nothing leads to failure like success. This comment had a twisted sound to it. It differed from the more common statement about having to experience many failures before you experience success — an encouragement to get up after being knocked down. This new statement implied that success produces failure, which seemed counter intuitive. Yet, at the same time it resonated with what I had seen in my own family’s business.

My father started and led an oil and uranium exploration company in the late 1970s, when the oil crises spawned what appeared to be an insatiably high demand for new sources of energy. His team of 17 people was innovative, flexible, thoughtful, energetic and aggressive. He had conceived of and developed what they believed was a disruptive innovation. The company’s reputation was strong and they attracted all the business they could handle.

All work done for customers was innovative, focused, and highly customized. The entire team analyzed rock and soil samples using their innovative approaches before making the best guess of where to drill the next exploratory well. If the well didn’t locate anything useful, everyone packed up and moved together to focus on the next potential drill site. Where they went next depended upon what they found in the first well.

As I learned the business, it became clear that, not only was the work done for customers innovative, but everything the organization did was also innovative. The accounting system was non-standard, personnel policies were unusual, and planning was ad hoc. Innovation thrived in nearly every aspect of the business.

Technical decisions and business decisions were handled in essentially the same way. Everyone was involved in figuring out the next drill site for a client, and everyone was involved in ordering office furniture. Even more telling, Dad’s role was the same in both technical and business decisions — he had the final say. He decided where to drill the next exploratory well and when to order new stationery. Everything was painted with the same brush.

Whenever the business tried to grow past those 17 people, problems arose. When someone new was hired to share the workload, more problems were created than solved. After every new hire, the company would begin to falter and experience problems that were simply passed off as growing pains. A typical example was the hiring of Bert, who had several years of prior experience. The on-boarding process consisted of showing him where pens and paper could be found and shadowing Dad for a few days. Then Bert was on his own to meet directly with clients and prospects. After a few weeks, clients began calling Dad to say that Bert was selling a service more similar to what Bert’s prior employer provided, rather than what Dad’s business offered, and that was not what the client wanted.

The company hired consultants and advisors to help it through these challenges. They suggested the company do better planning, which was not well-received by Dad. He said, You can’t plan where you are going to strike oil! You’ve got to be responsive!

Dad’s team resisted new ways of doing things because they seemed like trivial management techniques proposed by people who knew nothing about the essence of their business. It was management consultant mumbo-jumbo.

He had a better all-purpose solution to problems. When a problem became severe, he would simply call an all-company meeting. Everyone gathered to listen. After impassioned words about how the company got started and the ultimate vision of finding new and cheaper sources of energy, the meeting ended with everyone agreeing to work harder, bury disagreements, and to pull together in order to overcome the immediate issue.

The answer was always the same. Work harder and focus more on the ultimate goal. There was never a decision to do things differently. My father believed the current way of doing things was the right way — it worked and had helped him create the success that got the business to where it stood.

Things would improve temporarily after every companywide meeting — everyone pushed aside disagreements they had with one another. Everyone did indeed pull together to resolve the immediate issue. But the fixes were always temporary. The root cause of the problem was never addressed, so it would inevitably reemerge. No fundamental improvement took place and another growing pain soon arose. It seemed that the harder they worked, the more impenetrable the wall holding them back became.

Ultimately, the company did not achieve the long-term success that many had thought was possible with the energy, insight, and innovation of the people involved. Business weakness didn’t arise from laziness and ignorance about what they produced or about their customers’ needs. The people in the company worked long hours, were fully dedicated to the company and its success. But the company did not build on its initial success. It never overcame its growing pains and management spent too much time putting out fires. The company weakened and, ultimately, ceased to grow and became vulnerable to market forces. Prices for oil and gold experienced large changes at the time and the company failed to adapt itself to the inevitable expansion and contractions required by those changes.

What caused these problems? Had the Dad and the leadership team become poor leaders? Perhaps. Had the staff become a collection of malcontents and misfits? Maybe.

Our family’s business is not unique. Most of us can think of a business that is successful and perhaps even comes to dominate its particular market and then encounters growing pains, stumbles, and fails. This occurs even when the product goes on to be successful for another firm.

Since that time, I have worked with many companies around the world and considered these questions:

If their products are successful in the marketplace, why can’t innovating companies keep growing?

Why do so few management teams overcome the internal impediments to moving to the next level of growth?

The answers began with this observation: An enterprise and its leader each react differently to success. After a period of success, an enterprise grows and moves on to encounter different circumstances. It becomes a different enterprise and has different developmental needs.

In contrast, the leader typically becomes emboldened by early success and continues with greater vigor and intensity the enterprise’s way of doing things that has been effective in the past. I call this way of making management decisions, the enterprise’s practices and priorities its mode of operation. The leader seeks to execute the same mode of operation more aggressively to get even more of the same success. The leader feels validated and seeks to champion even more vigorously the practices and priorities embedded in the ongoing style of management.

A key factor that creates this situation is that issues and problems of a particular character tend to cluster together in time. At first, the most important issues relate to making sure the enterprise is offering something compelling to the marketplace. Once that has been confirmed, the most important issues then relate to getting people to buy the product, and to being able to produce it efficiently. As the nature of the most pressing needs change, the priorities of the leadership team should also change.

Few leaders have the perspective to see the divergence between what the enterprise needs in order to grow and what the leadership team currently provides. And, of those few who do see the diverging paths, even fewer know how to reconcile them. Those who attempt to bring their style of management into alignment with the needs of their enterprise are confronted with an enormous and very personal challenge.

The purpose of this book is to help you as the leader of an organization to understand where you are at any given moment in the growth of your enterprise so that you will be able to move through future phases of growth, not by accident and luck, but by thoughtful and intentional leadership.

Leaders Endorsed By Venture Capital Investors

In the early 1980s, I conducted a study of high-tech and high-growth businesses that had sought venture capital funding. I wanted to see if a group of several venture capital investors favored Chief Executive Officers with particular management styles in companies at different growth phases.

If the CEO succeeded in obtaining venture capital investors, I identified them as favored. All CEOs completed questionnaires designed to determine their management style and provided information about their enterprises. The CEOs were grouped as follows:

CEOs who obtained venture capital investors.

CEOs who sought venture capital investors but failed.

The founders who originated the disruptive innovation on which the company is based.

CEOs brought in at later phases of growth by venture capital investors to promote future growth and development.

In companies that were not successful in obtaining venture capital investors, there was little difference in CEO management style from one growth phase to another.

However, in companies endorsed by venture capital investors, CEOs with particular management styles were found in companies at different phases of growth. These findings suggest that an enterprise needs different types of leaders during different phases in order to maximize growth.

As part of this research, I met with management teams of high growth companies to discuss their management priorities and practices. My access to successful leaders provided a more detailed narrative of what effective management means during different growth phases.

The CEOs and their enterprises could be grouped into five different phases based on the priorities of the management team, the size of the enterprise, and whether the CEO was the original innovator or someone brought in by investors to accelerate growth.

Starting at the youngest and least well-developed, the five phases are:

First, innovative founders working within a small team to develop the innovation. Their priorities were to survive, refine their product and business concepts, and obtain validation of these from a small set of customers. In management-style terms, which I will expand on later, the CEOs were Commanding Visionaries. I call this the Concept Development growth phase.

Second, CEOs brought into slightly larger firms and more established enterprises to correct internal limitations and prepare for future growth. Their priorities were to make processes and structures more rational, transparent, and efficient. These CEOs were Collaborating Engineers. I call this a Transitional Foundation Building phase.

Third, CEOs of firms larger than 25 people with a narrow focus on increasing sales and production capacity. Their priorities were to dominate a growing market and to build financial strength. In management-style terms, the CEOs were Engineering Commanders. This is the Rapid Market Expansion growth phase.

Fourth, CEOs of firms larger than 25 people focusing on refining manufacturing processes and procedures. Their priorities were to increase efficiency and enhance product reliability. The CEOs were Commanding Engineers. This is the Crowded Marketplace phase.

Fifth and last, CEOs of firms larger than 25 people focusing on customer service experience and the supporting processes. Their priorities were to increase margins by providing targeted features and premium pricing. In management-style terms, the CEOs were Collaborating Visionaries. This is the Niche Development growth phase.

A key benefit of looking at venture-capital-funded companies is that venture capital investors will quickly change leaders if they believe a change will promote growth more effectively. Thus, I could reasonably infer an enterprise’s most important management priorities and practices from the management style of its investor-favored leader for their current phase.

Further, evaluating a number of companies could provide a good indication of the shift in management priorities that should take place as a company grows and develops over time. My research was recognized by the National Association of Small Business Investment Companies (NASBIC).

Implications of Research on Venture Capital Funded Companies

Through this research, I first identified different growth phases and the most effective leaders for each phase, based on the leaders that venture capital investors believed to be well-suited to future growth of the enterprise. We can think of these favored leaders as being the most effective or ideal leader for that growth phase.

I then described the ideal leaders’ management priorities and practices. These are reflected in the ideal mode of operation for the growth phase they were in. The descriptions of the modes of operation can help us recognize what the ideal leaders do to be effective. We want to understand them and to emulate what they do so we can be more effective when we are in similar situations.

I described the transitions between phases. Even the ideal leaders for each phase have trouble letting go of the phase of growth they are currently mastering. They too have trouble with transitions. They too have trouble moving away from their own sweet spots in the growth cycle. Some resist transitioning the enterprise to the next growth phase, which may be in the best interest of the enterprise. Some overcome these understandable attitudes in favor of continued growth.

I analyzed typical growing pains and other signs that the enterprise is making a transition to the next growth phase and that it is time for the leadership team to adopt an appropriate mode of operation.

Finally, I observed that the changes move in cycles. One phase is expansionary and produces growth. It builds business momentum. The next is a transitional phase that makes important processes and structures more rational and transparent. While the transition does not itself produce growth and consumes business momentum, it makes growth in the next momentum-generating phase much more vibrant and efficient. Thus, the repeated waves of expansion and consolidation are like yang and yin — they are very different, but one feeds on the other.

The quotes at the beginning of many of the chapters highlight the fact that too often people focus on a narrow management approach to be successful. They advocate that a particular way of doing things, a particular mode of operation, is the essence of progress and growth. The reality is that all growth phases can be important to managing growth successfully. Your success in leadership will be influenced by how you navigate your growth path through the phases and then navigate your enterprise through all that each phase entails.

The Evaluation of Professional Investment Management Teams

For many years, I evaluated professional investment management firms (firms like JP Morgan and Fidelity) and their investment decision-making teams. I did this work at the Russell Investment Group, which pioneered the field of evaluating professional investment managers. Russell is known for developing the Russell 2000 Index to measure the performance of stocks of small companies in the US. I have evaluated hundreds of the most successful investment teams in the United States, Asia, and Europe.

These teams consist of investment professionals who invest billions of dollars of retirement assets on behalf of their external clients. Some of these investment teams were in large shops. Others were in their own small boutique investment firms.

Regardless of whether these investment teams represented a single firm or resided in a larger firm alongside many other investment teams, they typically start as an entrepreneurial effort by someone with deep conviction that he or she can beat the stock market — or at least competing investment firms. If this vision is right and does produce investment success, the business will experience growth just like any other successful entrepreneurial enterprise.

The goal of my work was to identify investment teams that would perform well in the future. This was done by first identifying those generating meaningful insights about the workings of the capital markets that enabled them to beat the competition. Second, within that group, identify those that were also skillful in managing the growth of their businesses and would likely be successful in the future. Growth is challenging for many businesses, and it is difficult for an investment team to maintain its insightful edge as an investment innovator as it become large.

Certain features of investment teams make them especially good subjects for determining effective approaches to managing people, their insights and efforts, and the processes needed to produce a desired outcome on an ongoing basis.

Investment teams are pure decision-making organizations. Their main purpose is to collect data from a wide variety