- In many businesses, judgment can depend less on algorithms and quantitative analysis, and more on people.
- An effective way to mitigate the risks concerning people is to grow talent — but insularity can also be risky.
- New blood brings in different perspectives, and talent management requires a careful strategy of diversity, listening and reverse-mentoring.
In 2022, Investcorp celebrated its fortieth anniversary. The question on everyone’s mind was: How can we ensure that we’ll be around for another forty years?
Our business is all about measuring and managing risk. Many people assume that “risk” means external risks: a pandemic, a recession, or a geopolitical crisis. Certainly, we’ve seen all three over the past three years. All of them burst upon us with little or no warning.
You can’t predict when life will throw you a curve ball. What you can do is prepare for how you will respond—because the only certainty is that external factors magnify and amplify internal issues. That means identifying and remediating internal risks.
People are the biggest risk in our business. Despite all the talk about algorithms and quantitative analysis, investment management is, at heart, a judgment business; and judgment depends on people. They are not just our most important asset, they are our only asset. Losing people in key positions is a risk. Putting people into positions where they don’t work out is a risk. Hiring the wrong people is a risk.
One way we have tried to mitigate the risks concerning people is by growing our own talent. Most of the senior people at Investcorp today grew up in the firm and are steeped in its culture. They exemplify our principles and demonstrate the possibilities associated with a career here. But we’ve also seen—and not too long ago—how insularity can be a risk. It can lead to bias, to blind spots, to a “not-invented-here” syndrome of settling into habitual ways of seeing things and doing things—and of dismissing ideas from outside.
That’s why we need a combination of people from a variety of backgrounds. If our homegrown talent serves as the firm’s spine, new people are the muscles that give us the strength and flexibility to try new things. We need new blood to challenge ourselves and bring in different perspectives.
Because this is a people business, we have to attract world-class talent or else it will be impossible to become world-class investors. I will say, though, that while we always want to upgrade our talent, we want to do it the right way. Stars and “rainmakers” aren’t part of our culture. We can’t afford the risk that they will arouse envy and demotivate their colleagues.
How can we become a talent magnet? In this industry, top performers and high-potential talent are typically driven by financial compensation and accelerated career progression. I’m not going to discuss the former here, but I can certainly attest to the latter. Fortunately, this is one area in which Investcorp stands out because of how we approach career development.
Really smart people don’t just demand intellectual engagement; they need the opportunity to learn and add value to themselves as individuals. They want to do things they haven’t done before, preferably in a collaborative and respectful culture. There’s a bonus if they can help build something that’s bigger than themselves. That’s a common denominator, whether they’re recent university graduates or people with years of experience.
We’re looking for junior people who want to explore a world of possibilities. And we’re looking for senior people like Jan Erik Back and Pete Rommeney, both of whom were content enough at their previous companies but were getting a bit bored. “To see a firm that really wanted to go somewhere and to be part of that journey was something that really attracted me,” was how Jan Erik put it. “Investcorp presented a firm with global aspirations that combined a forty-year track record of success with an entrepreneurial mindset,” said Pete. “It was a unique opportunity that I couldn’t find anywhere else.”
That’s the message we want to put out there: This isn’t a place to be content. It’s a place where you can grow and be part of something special.
What further differentiates us in the global talent competition is the opportunity to have a truly global perspective. We literally operate around the world. A statistic we’re all proud of is that our nearly 500 employees come from fifty different countries of origin. Over one-third are women.
We aim to mirror our present markets and reflect future ones. The future is diverse, and both employees and investors want to be part of something they can relate to. Jordana Semaan, our DE&I champion, likes to say that unless you have all twenty-six letters of the alphabet, you can’t string together full sentences; if you’re missing letters, people won’t understand you. We want the full complement of talent, from A to Z.
Because the markets with the greatest growth potential have predominantly young populations, we’re pushing to hire younger people. At the same time, however, we know that Gen Z and Millennials have been the cohort driving the post-Covid “Great Resignation.”
How, then, can we persuade them—and all our top talent—to stay? One of my major preoccupations is removing the roadblocks from our teams to ensure that people continue to grow. We don’t generally send people on supplemental courses or subsidize MBAs. Instead, we like to think of the firm itself as a dynamic catalogue of learning opportunities that offer an ever-changing range of ways to challenge your brain, build experience, and add value to yourself. By pursuing our growth agenda and moving into different geographies and lines of business, we can pretty much guarantee that our people will be constantly exposed to new and different things.
However, we know that while Investcorp is full of exceptionally bright minds who can sum up a company’s financial situation in seconds, we also know that we’re less experienced in assessing the whole person behind the brain. Fluency in reading an Excel spreadsheet is fine, but understanding what makes people tick and addressing all the things they need to grow in their career is a skill set that can always be strengthened. And it’s one we should apply everywhere: internally and externally, among our own team leaders, and when we build relationships with the management teams of our portfolio companies.
We have plenty of IQ; as we grow, we all need to nurture our EQ (emotional intelligence) abilities. That’s one of the reasons I encourage our high-potential people to engage a personal coach, whom Investcorp pays for. Coaching is a reliable way to identify blind spots in how we engage with others and, more important, offer solutions.
I also try to model the behavior I’d like to see more of. For example, people like to be listened to, so I try to set an example by listening to everyone. I encourage people to contact me if they have a question about something. Every quarter, I ask our Human Resources folks for a list of new joiners, and I make sure to have a one-on-one meeting with each one. They are the next generation, and the generation after that at Investcorp, so it’s very important to encourage their inputs, get them energized, and make them feel they are the future of the firm.
When people feel they are part of making things happen, they get more involved and are more engaged. To accomplish that means assigning them to work on different projects, inviting junior people to join committees and conference calls, and asking them to do things they’ve never done before. It means demonstrating that we genuinely want to learn from different generations and geographies and genders by instituting reverse-mentoring and partnering with senior leaders. We’re already doing this, but we know we can do more. To reflect the future, we have to adapt today. If we don’t, we won’t attract the right talent that will ensure we have a future.