October 8, 2020
At Saltwater we are focused on buying profitable companies. In most cases those companies have leadership teams that function well and are ready for scale with Saltwater as a partner. In other cases, we bring in new leadership to set up the organization for the next 10 years of growth.
We structure our search by focusing on three areas. At a high level, we evaluate the quality of the individual, how well they fit with the team, and the skills they bring to the business needs of the team:
Self-awareness is everything. Deep dives within each category are important and each has their own nuance based on the role, the company, and the industry you're hiring into, but the awareness of the individual and the awareness of the company's needs is the only place to start.
I have a strong personal and business philosophy that all potential begins with self-awareness. How can you ever improve if you don't know where to start? In order to evolve your organization, you have to know what your organization is missing. Where can an individual double down on a strength or buoy a weakness? This challenging level of honesty about who you are as a company is required. If you're not ready to face the music on that reality, you're likely to not make the best possible hire. I repeat: Self-awareness is everything.
We first focus on character fit. This area is less about fit within the company and more about having strong character, period. Is this a person you want to inspire, influence, and impact you and your team as people?
The classic framework by Jim Collins, author of "Good to Great," is a great place to start your understanding of what a great leader looks like. In studying his leadership levels framework, which culminates in "Level 5 leaders," I was surprised how many of these traits fall into the character category. The simplified leadership levels Jim outlines progress as such:
Level 1 — you make high-quality contributions with your work
Level 2 — you use your knowledge and skills to help your team succeed
Level 3 — you're able to organize a group effectively to achieve specific goals and objectives
Level 4 — you're able to galvanize a department or organization to meet performance objectives and achieve a vision. (most leaders fall here.)
Level 5 — you have all of the abilities needed for the other four levels, plus you have the unique blend of humility and will that's required for true greatness
The key takeaway is that these leaders have a unique combination of fierce resolve and humility. They were the first to own up to mistakes and the last to take credit for success. At Saltwater we find that this aligns very well with the previous point around self-awareness. Nobody is perfect, and it takes a certain level of comfort with one's self to admit where they are weak, unable, or just need help. You want a leader who can translate these personal attributes into your organization.
With Collin's inspiration, we use these character traits as a foundation for what we'd like to see in our leadership hires.
This focus area is summed up in three simple words... Team, team, team.
We start here by understanding our own cultural values. The company which we are currently recruiting for has set these values for themselves.
Honorable Operators — We operate with respect for our customers, our colleagues, our partners, ourselves, and the quality of our work. We hold the integrity of our actions on a pedestal as they serve as quality assurance for everything we put out into the world.
Gritty Allies — We’re scrappy, tenacious, and as a team, we’re determined to solve our industries' hardest problems.
Customer Driven — The road we’re on is lit by our customers. We stay focused on raising “customer capital” and this can only be accomplished by listening closer, caring more, and serving our customers responsively.
Life-long Learners — We celebrate constant improvement and find learning to be a joy in and of itself. We push ourselves and our team members to always raise the bar and keep trying out “the new.”
Working with the team, Saltwater supported an exercise to implement the Entrepreneurs Operating System with the book Traction by Gino Wickman. It is a simple strategy to understand who you are as a business and follow simple steps to implement tools to support your scale. Our vision-setting exercise from Traction helped our teams work to articulate elements of our team's "character" that already existed, and sprinkled in some aspiration. We believe strongly that your company's cultural values cannot be wishful thinking, they need to be easily followable, then supported to be applied consistently. We're very proud of the values followed here.
Now, we have to determine how to ensure they have the most impact on the company. That starts with using them actively, not just putting posters on the wall, after all, the very first cultural value at Enron, was "Integrity".