Throughout my career, I've learnt that no investment looks the same. Each business is unique, its people are unique, and its circumstances are unique. What does look the same, however, are the steps I take during the first 30 days. The order might differ in each scenario, but the approach remains the same.
This newsletter explores all the elements I've learnt to consider throughout the early stages of stepping into a new business. For this first edition, I have focused on an important, yet underrated, initial step: asking the right questions to the right people.
Questions come first, whatever the deal
Here's what I think. There isn't a right or wrong order for approaching the first 30 days of stepping into a business. It depends on the state of the business, the industry, its finances, and a whole host of other factors.
I have my own view on the most 'sensible', blueprint route, but regardless of the path you take, there is usually one thing that comes first: asking questions. And a lot of them.
Whether it's a disposal, carve-out, special situation, or indeed, a growth investment, you should never stop asking questions. I know it sounds obvious and perhaps rudimentary, but in the early days of entering a new business, interrogation and scrutiny are often among the first items to be pushed aside.
Start with the management team
So, the first step I take is working out the right people to ask. And being at the top of the pyramid, I usually start with the management team to address the fundamentals: the intricacies of the business, its place in the wider industry, how it operates day-to-day, and where they think the business could do better, among others. Of course, this is all in conjunction with my own research.
Simultaneously, I also gauge the management team's opinions of one another. Organisations are, by nature, political -- and understanding the political dynamics can, from experience, paint a base picture of how that business arrived at its current position.
How well do they function as a group? How well do they perform individually? What are their strengths and weaknesses? What initiatives have they pushed forward? What are their successes and their mistakes? A sense of their dynamic often tells you more than their responses to your questions.
The wider team is often most revealing
But what is often most revealing is the perspective of the wider team. Employees will often expose issues that the management team would otherwise prefer to stay hidden, and yet one of the biggest lessons I've learned is the importance of creating an environment where people feel safe giving honest answers. Especially as a 'stranger' stepping into their own company, employees will naturally be cautious. Gaining their trust is imperative.
That means listening receptively, following up on concerns, and proving that candour will not be punished. Sourcing their perspectives provides you with a much more holistic view of the company, rather than relying solely on the personal views of the management team.
You can't hedge risk if you don't see the full picture.
Clients give the most honest feedback
Finally, ask the clients. They are the people most likely to give you unfiltered, honest feedback. It's their money on the line, so they won't waste time protecting internal politics. They're closest to the product or service, and they are one of your most valuable, truthful assets during this critical information-gathering stage.
As I said at the start, the first 30 days are not linear. There's a lot to think about, and often, you're taking multiple steps at once, but that should never come at the expense of asking questions.
After all, you can't hedge risk if you don't see the full picture.
Keep reading. It's free
Drop your email to keep reading and unlock every issue of the archive. One click to unsubscribe.