Partners beat bosses. If you tell your people to do things as their boss, the best you can ever hope for is compliance. If you partner with them to serve others, they are far more likely to commit to the work and work product.
Triangle Equities’ Evan Petracca took me through how this mindset shift is changing the way his organization works. Triangle Equities is a family real estate development company. They buy real estate, develop it, and then lease or sell it.
At first, the core group was small. Whether or not people were actually part of the Petracca family, they worked together like a family. They didn’t need to spend a lot of time worrying about how they worked. They just focused on getting the work done and communicated like families do.
As they grew to between 10 and 30 core employees (not counting the various sub-contractors and service providers in their eco-system,) they operated more and more like an extended family. They still knew each other. But it was harder to hear all the voices at the “family” table. They needed more task specialization and internal processes to manage ever more and ever more complex projects.
This all changed as it changes for any organization growing through the 30 person mark. After 30, hierarchy is your friend. You need more leaders to manage discrete groups, functions and projects. Those leaders need to inspire, enable, and empower teams. Empowering requires delegation with direction, resources, bounded authority and accountability.
It was Evan’s approach to accountability that stopped me in my tracks and made me take note.
Accountability is about when and how people are called to account. What Evan added is thinking about to whom they are called to account.
- If people were called to account to Evan, they would see him as their boss, judge, jury and executioner – leading to exactly the relationship you would expect.
- If they were called to account to each other as self-managed teams, their relationships with Evan would be unclear.
- If they were called to account to their projects’ limited partners, Evan could leverage his experience and resources to help them best serve those limited partners.
Real estate development firms tend to set up their different projects as separate legal entities. This way no one project can bring down the entire firm and different people can invest in discrete projects with different risk/reward ratios as limited partners.
Focusing project leaders in real estate firms on the limited partners’ goals and upping project leaders’ reporting requirements in line with those of the limited partners makes all the sense in the world to almost everyone. When Evan says “It’s not about me. It’s about the limited partners,” people get it. Evan describes this as “a forcing function to improve systems and processes within the company.”
And, as a side benefit, Evan notes, “We are also oftentimes leveraging the experience of the LP. As groups with large dollar amounts of investment capital in various projects, they see a lot more deals than we do, and often times have much broader experience and insights to offer as a result, and suggestions too; they are generally very good at keeping the big picture in mind.”
It works in private equity portfolio companies as well. The most effective private equity operating partners operate not as their portfolio company CEOs’ bosses, but as their partners in creating value for their fund’s limited partners (and customers, communities, collaborators and colleagues.)
It also works in large corporations. In these cases, the “limited partners” aren’t the project investors, fund owners, or corporate shareholders. They are the other key stakeholders in a project’s success. These might include the division or corporate leadership team, internal suppliers and customers, or the like. Don’t over-think or over-prescribe this. It’s a mindset change, not a formal methodology.
Implications for you
Look hard at how you delegate, partnering with those you’re putting in charge and providing them:
- Direction/objectives/desired results/intent
- Resources (human, financial, technical or operational)
- Authority to make tactical decisions within strategic boundaries/guidelines
- Accountability and consequences (standards of performance, time expectations, positive and negative consequences of success and failure) – with a focus on the “limited partners.”