Grit: A Key Determinant of Your Company’s Success
By Brett Hickey, Founder and CEO, Star Mountain Capital, LLC
Finance is an inherently quantitative discipline, at least from the perspective of a portfolio manager, chief investment officer and investment team. Successful investors tend to be organized thinkers, oriented towards data-driven decision making. That’s not to say those with a penchant for management, sales or communications cannot become successful investment professionals, but ultimately, financial performance is measured in numerical results.
In my experience building Star Mountain Capital and Star Mountain Charitable Foundation over the past seven years, as well my observations from being on the boards of the Young Presidents’ Organization (YPO), Harvard Entrepreneurs’ Alumni Association NY and the Small Business Investor Alliance (SBIA), I have observed a common characteristic among highly effective executives across roles and industries. It defies quantitative assessment, and I am convinced it is critical to long-term, consistent success: Grit.
"...grit is among the most important predictors of success, and every individual has the power to increase how much of it he or she brings to bear."
Grit comes in many flavors and has many components – determination, drive, tenacity, etc. – and it means different things to different people. One person’s major challenge is another’s speed bump. In all cases, the concept of “grit” is the innate desire and ability to endure adversity, through perseverance and passion, to achieve a goal. Despite its importance, this quality of grit is not easily measured, yet it is the core trait that will sustainably push your organization through difficult times. Grit is the linchpin of a strong organizational culture. As Angela Duckworth (2007) found in the cadets at the U.S. Military Academy at West Point, grit is among the most important predictors of success, and every individual has the power to increase how much of it he or she brings to bear. In fact, when I reached out to her regarding this article, Angela commented, “"Grit holds special significance for the achievement of excellence. This is true whether the endeavor in question is physical, mental, entrepreneurial, civic, or artistic. When you look at the best of the best across domains, the combination of passion and perseverance sustained over the long-term is a common denominator."
Gritting It Out
As a founder and CEO, building and motivating a team of individuals with complementary talents, passion and purpose is probably the most important job I have. As part of this, I look closely for this hidden element of grit, since it is what determines how my organization will persist when the going gets tough – and to achieve great goals and build a distinctive business, I believe substantial challenges are a given. As the saying goes, ”everyone is a genius in a bull market”, and everyone looks equally determined when things are going well. It’s when the chips are down, obstacles loom and serious challenges await that a leader sees just how much good-old-fashioned grit exists on his or her team. If your team has it, they will find a way to win. Otherwise, your chances of foundering are much higher.
There is an old adage that leaders are born, not bred. I believe this is partially correct; however, I also believe grit can evolve from mental toughness and a developed attitude of trying one’s best and an unwillingness to give up during life’s early challenges. Traits like passion, discipline and perseverance are all difficult to learn if you have not developed them by the time you are in your early twenties. Those with grit have also developed the habit of not blaming others for their challenges and mistakes. I believe it becomes a part of your DNA.
Conversely, technical or administrative skills are much easier to learn and often simpler to apply, and while raw intelligence and talent are great to have, neither are guarantees of success. The lesson from my experiences is that it is the innate ability to push through obstacles that can bring the full power of one’s other attributes to bear, and ultimately what is a key driver of long-term value creation both individually and for businesses. This doesn’t mean everyone in your organization needs to have the grit of an Olympic athlete or a military cadet in order to be valuable or successful, but without it, I believe a substantial portion of one’s talent, education or intelligence will be left on the table just when it is needed most. I also believe that there are key defining moments in life and business where one must choose whether to persevere or give up, and only those with a resilient mindset will stay the course.
"...the most successful business owners I know are the ones that have encountered and pushed through very substantial challenges."
These observations are not just from my own experiences. I’ve seen grit at work in countless of other environments, though deep relationships with hundreds of CEOs through our investment activities, the YPO networks to which I belong, and the CEO-focused program I did at Harvard Business School. In all cases, the most successful business owners I know are the ones that have encountered and pushed through very substantial challenges. Without this concept of grit, I do not believe they would have achieved their current success.
How do you find individuals with the requisite grit to be on your team? At Star Mountain, developing and maintaining the proper corporate culture is of paramount importance, and we believe a direct correlation exists between those who are willing to serve a purpose higher than themselves and those who will do right by our investors when times become challenging. This higher purpose can take many forms – community involvement, military service, volunteering, etc. – but such individuals tend to have a greater sense of duty and obligation to the company’s core mission, and that translates to a more disciplined, loyal team that will not abandon ship in the face of obstacles. Here’s a tip I received from a recruiting expert – ask a candidate about a challenge they faced which was not their fault. See if they blame other people, or if they simply acknowledge that it was a challenge, explain how they learned from it, and focused on how to grow from the experience. I believe that most challenges we can partially mitigate, and therefore there is always something to learn.
In discovering grit in an individual, we also look for those who have overcome some element of personal adversity. A large institutional investor who manages nearly $100 billion once said to me that he would not invest with a fund manager who has not faced challenges, because he believed challenges will inevitably come and he wants to see a track record retaining control and discipline through adversity.
Grit comes in all forms and contexts – it is often not apparent on resumés, which typically highlight one’s successes and rarely focuses on our challenges. Another reason we substantially weight references in candidate selection is because we want to discuss the challenges people have faced and see if there is a trendline of learning and growth from the challenges.
Elements of grit that an interviewer can search for regardless of industry include such things as the candidate paying their own way through school, coming from a challenged background, or whose path to where they are today has not been straightforward. The quality of persistence also correlates to the candidate’s strategic ability to think entrepreneurially in order to improve their situation. Did they have the tenacity to stick with something to achieve a certain level of success in a competitive arena, such as in sports or music? Spend enough time with a candidate and their references, and signals of their determination and perseverance should become apparent.
From a corporate culture perspective, we have also learned that Grit has two additional advantages. First, it tends to create a feedback loop with the rest of your team. When things get hard, it only takes one or two people who refuse to buckle to demotivate the rest of your team to dig deeper. Conversely, strong leaders can motivate and help the team optimize results, particularly managers who are in the trenches with their team and truly lead by example. Secondly, corporate cultures which embody this quality tend to attract like-minded people, creating a steady stream of potential team members with the requisite characteristics. Hiring people who do not have the determination to stick to their goals and promises can be poisonous to a culture, infecting the attitudes and behaviors of others. As food for thought, I do not think I have ever met a manager who wished they removed a negative person from their team later than they did.
Although the demands on a leader’s time can be extraordinary, team building is one of the most valuable uses of it, and it is not something that should be under-allocated time and resources. Team building is a long-term investment, much like technology, and when executed effectively, becomes your company’s most valuable asset. Creating the right team relies on the proper mix of culture, aligned interests, communication and structure to get right, but in our experience, underpinning all of it is this intangible characteristic of grit. Indeed, studies by the U.S. Department of Education have found that managers can aid in the development of grit within their team by providing opportunities to take on long-term goals worthy of an individuals’ efforts, and providing a rigorous and supportive environment to attain such goals (Office of Technology, 2013). Cultivate a culture of grit within your team, and you will find your company ready, willing and able to conquer the challenges that will inevitably come.
My essential takeaways are (i) hire for attitude and work ethic first and (ii) make recruiting a top strategic priority, not something to be overly delegated. After all, team is the most valuable asset to almost every successful business; finding and fostering a team with grit can only improve on that success.
References
Duckworth, A. L., Peterson, C., Matthews, M. D., & Kelly, D. R. (2007). Grit: Perseverance and passion for long-term goals. Journal of Personality and Social Psychology, 92(6), 1087-1101.
U.S. Department of Education, Office of Technology. (2013). Promoting Grit, Tenacity, and Perseverance: Critical Factors for Success in the 21st Century.
