Serge Krancenblum is the founder of IQ-EQ, one of the world’s largest fund administrator and investor services providers. He chairs the group’s supervisory board and leads the M&A strategy. He also serves as an independent director on several private equity funds and family offices and is on the boards of a few private companies and non-profit organisations.
We’ve grown to over 4,000 people within IQ-EQ, and I can confirm that, as businesses get larger, organisational agility progressively gets harder. But it’s not impossible.
One way we’ve managed to remain agile when compared to other businesses of a similar size has been by keeping an entrepreneurial spirit within the group. We were able to complete 19 acquisitions in under five years, which certainly required moving fast when we had to. We’ve never been interested in acquiring businesses just to keep their client book and let their founders go — instead, we want to partner with these entrepreneurs, and turn them into “intrapreneurs”. We give them guidelines, but we don’t micromanage them.
“Apart from ensuring we share the same goals, what is to be gained from interfering?”
Our US operations, for example, get global directions from our group CEO — they know our growth objectives, the values we stand for, the kind of organisation we’re aiming to be, etc. But apart from ensuring we share the same goals, what is to be gained from interfering? The people on the ground know the market better than we do and they were successful before we came in, so it’d make no sense to try to control them through a top-down structure.
For executive leaders who are used to calling the shots, it can be difficult to let go in a similar fashion. But the key to making your organisation agile isn’t asking “How do I make the right calls?”, it’s “How do I give others the right support for them to make the right calls?” Focus your leadership on that — and let the people at the coalface make day-to-day decisions for their part of the business.
We’re not a matrix organisation but we have both country managing directors and transversal “dotted lines” of reporting, with a head of funds, a head of investor services, a head of capital markets, etc., who are there to help the different geographies and market segments connect, talk to each other, cross-sell, and go in the same direction.
To illustrate, it’s not uncommon to have one part of the world where we offer a service not yet offered elsewhere. These heads will spot this, and link that team with others so that we can all leverage their experience and know-how to replicate (and often adapt) what they’ve done in new markets. This way, you’re not giving directives, but support, and you’re helping information and knowledge flow freely throughout the business.
Ensuring the group’s success is the ultimate responsibility of the board of directors. Therefore, you need a board that’s able to keep up with what’s going on in the organisation. And here, two things are critical:
First, documents should come to the board as one batch, and not be drip-fed, one by one, via countless emails over several days. Otherwise, it’s all too easy to end up confused, not knowing which document is for discussion or committee, or not even knowing if the reports you’re seeing are complete. A good board pack is a cohesive whole — one that’s telling a story — and it should be shared as such.
“A good board pack is a cohesive whole — one that’s telling a story — and it should be shared as such.”
And second, documents should be made available more than a day in advance — at the very least. Too often, report writers wait until the very last minute, because they view the start of the board meeting as their deadline. But that’s a misunderstanding of how directors operate and how much preliminary work a good board meeting requires. For effective discussions to take place, board members usually spend much more time preparing for the meeting than they spend in the meeting — and you need to give them that space.
By respecting the board’s time.
The one question I ask first is: “Do the people running the business we wish to acquire share the same values that we do?” People make or break acquisitions, and there’s no point spending the board’s time on reviewing financial metrics before you know for certain that the person on the other side is the kind of business partner that you’re looking for.
“Going deliberately slow on some matters will give you the bandwidth to go fast on others.”
Sometimes, you’ll be convinced that an acquisition is right, but the board won’t share your opinion. So, in the spirit of saving everyone’s time: swallow your pride, drop the matter, and learn to be patient. A year or two down the line, if the business you had your sights on has followed the trajectory that you anticipated, you’ll be able to make an even stronger case and the deal will take very little time to complete. While it may sound counterintuitive, going deliberately slow on some matters will give you the bandwidth you need to go fast on others.
Les Grands Fauves, by Christophe Labarde. The title literally translates to “big cats” but means “the great wild beasts”. It’s a fascinating dive into how a group of French capitalists in the 1980s went, under the leadership of Claude Bébéar, from having informal monthly dinners together to building some of the largest businesses in the world like LVMH or AXA.
Never take anything as given. You can always challenge things — and often should.