Ownership
“Mate, you should get the families on board when you are doing athlete planning. I have seen far too many relationships screwed up by this sport.”
-- Greg Bennett, World Champion Husband
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I had a T-Rex in my kitchen this past Halloween... Mat went to CostCo and bought 300 pieces of candy and 30 "full bars" (for special costumes). We live in a cul-de-sac and hardly any kids came! Dave had sixty kids over to his place and he was giving away breath mints... next year, I am going to ramp up my marketing.
As a personal reminder... we did quarterly evaluations this week at Endurance Corner. It was recommended that I work on three things:
(a) remember that my mood has a direct impact on the team's productivity (the leader needs to lead);
(b) reduce interruptions when the lads are working on tasks that require sustained thought; and
(c) when I start to focus on being "right" rather than my objective... stop talking and take a break.
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My dad describes a blog as… “a collection of ideas, given away for free, that you would normally spend more time developing and seek publication”. I suppose that is a polite way of saying that these letters read a little choppy sometimes.
I am going to share some ideas that came out of the Endurance Corner advisory meeting last weekend as well as recent discussions that I’ve had with some very smart people. We’ll see how this turns out – lots of snippets, hopefully, they make sense.
Before we kick off, Robbie Ventura is going to drop into the last four days of our April Tucson camp. As you may have heard on IronmanTalk, he is preparing to race Ironman
In
The March camp will be set-up to fit with athletes preparing for IM Arizona as well as those looking to jump start early season fitness.
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A few months ago, I asked a friend if he thought that he was operating at his maximum potential. I have been thinking about that question as it relates to my own life. In reading Dead Certain, I was struck by the thought that President Bush has certainly achieved close to his personal potential. Quite separate from his popularity, the man has achieved close to his maximum potential. It is an interesting case study that has me looking inwards.
In my mulling over of this topic, I see a distinction from achieving greatness and achieving honor. A great person need not be honorable – and an honorable person need not be great.
When I speak with my grandmother, I note that she takes comfort in doing her best to have chosen an honorable path. I haven’t had honest conversations with any people that achieved greatness without honor – I imagine that their later years are filled with regret. Something for all of us to consider when we are tempted by the easy way. For this reason alone, be wary of situations (and people) that tempt you to cut corners.
I am kicking all this around because I know that my potential as a “person” is far greater than my potential as an athlete. I sense that when I seek one, I let go of the other. I was talking about this point with Graham Fraser – a guy that has witnessed his share of holding on, and letting go. He didn’t offer any specifics, merely the catalyst of placing the thought on my radar screen.
Why this is so interesting to me is that it is easy for me to see that there is a risk that we neglect our larger potential when we seek our athletic potential. Monica thinks that I do a pretty good job of balancing things – however – that’s because she is on-my-list when I’m hitting triathlon hard.
Still thinking that over while I consider a business opportunity that offers me the chance to do something “great”. When business deals look very attractive, history tells me that I am probably tired.
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Ownership
I have been talking with a few business owners about ownership. The same topics keep repeating:
***Equity ownership should only be shared with people that provide capital essential for business growth – human capital counts, probably more than any other type.
***My preference is to share equity capital with individuals that are essential to the development of the goals of the business founder and increase both the size, and likelihood, of success.
***Within the management team, my preference is to share equity capital with individuals that are fit for leadership. Does someone improve the CEO’s ability to lead and improve the quality of that leadership?
***I’m not keen on 50:50 partnerships as someone needs to be in charge and contributions are never equal. In that situation, I prefer 67:33. This is a neat number as: (a) the two founders can sell 24% of new equity to a third partner; (b) the founders can still control 76% of the company, post issue; (c) the smaller founder retains a veto over special resolutions that require 75% approval; and (d) the larger founder controls >50% of the equity, post issue.
***If you create a business that is a wild success then you should not feel obligated to deal out a stack of money to everyone around you – you’ll screw them up and you have done plenty for your team by creating the business. Even more likely is that you are best person around to allocate and manage capital. During your lifetime, consider if you dilute the power of your money to do “good” by spreading it into the public at large. After your lifetime is a topic for another time – I have an article in my head about inheritance and motivation.
***Remember that equity and bonuses are most appreciated at the time of allocation. Frequent cash incentives are much more appreciated than single long-term allotments.
***If you are the founder of a small business then consider who is truly necessary for the business to operate. When you stand back and take an honest look – you often see that you are the only person holding things together. In that case, it doesn’t make sense to deal people in as shareholders.
***People that increase your personal freedom; require limited management; and work towards your goals – are highly valuable. Do what it takes to retain them – frequent cash incentives based on their performance and skills in managing other people – that is what I prefer.
***Ideally, the individual that is most fit for leadership should control the equity capital of the firm. If you are the founder, and best decision maker, then be wary of diluting your ability to steer the direction of the firm – far easier to place key employees on generous profit sharing. If you are in a human capital intensive business then this doesn’t always work. Still, try to keep control vested in a small group of individuals – the best partnerships are run by a core group of senior partners.
***As a counterweight to the above point, if you have the ability to greatly improve the value of a firm and/or increase the likelihood of success… then be sure to negotiate a deal that rewards you for the value you create. There is often a balance between paying your dues and achieving market value for your services. The best and brightest can be underpaid until they test their market value – be very polite to your senior partners if you plan on playing this game. If you over-estimate your market value then you are exposed to having your bluff called.
***Always remember that bigger isn’t better and that you’ll cut your best deals when you are willing to lose them. Keep a steady focus on what you want from your business. It is very easy to get caught up in growth, for growth’s sake.
***Always consider if a new opportunity will give you more satisfaction – or merely more work. Know your personal goals and seek to align them with your work goals.
Two final thoughts:
1 – always be willing to make a little less money to maintain high personal standards
2 – remember that your most important brand is yourself – invest in that brand
gordo
====Files referenced on Endurance Corner Radio
Recreational Athlete Treadmill Protocol
posted by GordoWorld Team @ 8:45 AM
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