We all want to be part of a success story, whether it be to start, run or play a senior role in an organisation that is successful. Which means all of us, no matter where we are in our career, need to wrestle with the big question of leadership: What is our personal definition of success? What does it mean to make a difference and have an impact? And what is the best way to handle problems and obstacles that inevitably arise? If we hope to succeed, we need to understand how we lead.
So what is good leadership? We caught up with Paul Reid, Founder & Managing Director of Sigma Seven and now Founding Partner of Augmentors Partners to ask him what his thoughts were.
Paul has a proven track record of building and leading teams. After founding Sigma Seven in 2000, Paul worked as CEO to lead their growth as an international software product vendor within the utilities sector. Sigma Seven was acquired by a FTSE 100 company in 2015. More recently, Paul has been working as a director, advisor and mentor to tech-focused startups and scale-ups.
What works as a leader for you?
The leadership style that works for me is to build close relationships with the team, and I purposefully go out of my way to achieve this. People sometimes commented to me that having this type of leadership style could lead to people taking advantage of the situation and that it will make it harder for me to have difficult conversations with people – but this has not been my experience.
For me, this leadership style has been at the forefront of setting an open, honest and transparent culture across the business. People flourish and grow in this environment as they know there is implicit trust and they are given the freedom to work things out for themselves in terms of the job: here is the challenge – go work it out! The key factors of this leadership style are honesty, working closely together and regular company-wide review against the business vision and goals. Often big companies don’t communicate effectively with their people, which can result in an “us versus them” culture between managers and those on the front line.
What doesn’t work for you?
Prescriptive, formal, authoritarian culture. When the company has become so big that there are lots of policies and people stop listening and don’t believe what is being said to them.
Of course, their needs to be a core structure and vision for an organisation, however, my experience is that businesses perform better when the organisation is broken down into smaller, nimble teams which have freedom and responsibility. I far prefer an agile approach to work, where the aim is to get the work done with maximum flexibility and minimum constraints – which helps eliminate the barriers to getting work done more efficiently.
Has this always been true or has society changed?
Twenty years ago an open style and trust culture probably didn’t work as so well, as this way of working seemed alien to people – especially in larger organisations. Things have changed. The younger generation don’t expect a “command and control” style of leadership, and in my experience tend to be more driven by working towards a vision – being part of a business where the culture encourages freedom, collaboration and creativity in solving problems.
Look at the tech industry, for example, where businesses typically build a people-focused company culture, with attention to providing comfortable working environments, flexible working, and support in career development. Many people working in this industry are young and extremely talented, with skills that are in high demand – meaning that they usually have a choice of employer, and won’t stay somewhere that the culture is not right for them.
You have met many leaders now, do you see any commonalities?
The best businesses that I know are run by people who have a close, engaging relationship with the staff and care for their wellbeing. Through being authentic and transparent, those businesses generally perform well.
Why did you sell Sigma Seven?
I had put significant time and energy into growing the business over 15 years, and due to our market position, we started to receive acquisition enquiries. The business was at the point where significant change was required to carry on winning against competitors that were 1000x our size in some cases, so it felt like the right time to become part of a larger organisation. And I’d just become a Dad and could no longer afford to commit the energy and long hours that I was used to – so it seemed a natural path.
We were approached by a few organisations but ultimately our acquirer was the right choice as they were very much: “we like your team, we like your customers and we’ll invest in the development of your product”. Of course, it was not plain sailing, as a large company culture starts to creep in and you have to fit into the parent company operating structure. The business integration activity was successful due to being open and communicating regularly with the team; but the structure and company culture inevitably changes over time, meaning that people start to move on.
What advice do you have for other leaders thinking of selling their business?
To avoid an ‘us versus them culture’ post-acquisition, it’s essential to:
- Test the culture fit between the organisations in advance of agreeing to sell.
- Focus on the integration of the entire team and not just what an acquirer may refer to as “key staff”.
- Talk about how people’s roles will change once they become part of the new organisation, so that your colleagues can visualise the future and plan for any changes.
- Communication. Communication. Communication.
Paul Reid, Founder of Sigma Seven and Founding Partner of Augmentors Partners
Linkedin profile – https://www.linkedin.com/in/paulreidedinburgh/