"You've Got To Be Comfortable With Being Uncomfortable In Order To Learn And Grow"

Michelle Noon, founder and managing partner of Clearhaven Partners, shared her key leadership insights in my latest "Art of Leading" interview. Subscribe here to receive future interviews.

Q. If you were recruiting a new CEO to run one of your companies, how does that conversation go? What questions do you ask?

A. I always start by asking, why are we having this conversation? I want to understand their motivations, what they believe they know about the opportunity and what’s interesting to them and why. People are often surprised when I ask that. They might think, “Your recruiter reached out to me.” And so I’ll say, “I know we reached out to you but I really want to understand why you took the call.”  

I’ll also ask about their thinking behind the decisions they made in their career. It's not just about the jobs you had and what you accomplished. But why did you leave those roles? Why did you make that transition at that point in time? What was compelling to you? That provides a richer texture of someone’s motivations. And I’m comparing that to our opportunity and trying to assess whether that could be a good fit.  

And I also want to know who were important influencers for them. Did they have a great mentor? I know from personal experience that you can learn from people who do things well and also from people who don’t do things well. Both are valid, but I do look for leaders who feel like they've learned a lot from a great mentor or leader along the way.  

A lot of it comes down to their motivation and level of conviction because these are hard journeys. Businesses are built through a lot of blood, sweat, and tears, and there's a lot of things that go wrong. So I want to make sure that the opportunity that we're presenting—we're helping smaller businesses become bigger businesses—matches with their characteristics and motivations. 

Finally, because we're investing in companies that are below $100 million in revenue at the outset, we need leaders who can be both strategic and drive the company in a very clear direction while at the same be very focused day-to-day on execution and the operational aspects. It's hard for many people to flex up and down between the macro and the micro.   

Q. What are the patterns among CEOs and C-suite leaders you’ve seen in terms of ways they can trip themselves up and be less effective than they could be? 

A. As a private equity investor, we truly partner with our management teams. We’re bringing something to the table, they're bringing something to the table, and we are set up for a “win together” outcome. We sometimes see less experienced leaders second-guessing what we say and looking for some subtext that's not there. We're very straightforward. We say what we mean, we mean what we say, and we do what we say we're going to do. It can cause delays when they overthink or try to read too much into a board conversation.  

A second factor that can trip people up is coming to the board with problems without bringing potential solutions. We're perfectly comfortable brainstorming and figuring out ways in which we can help. But we also want to see initiative from the management team first and some constructive thinking about solving a problem.  

The last pattern I’ve seen is that, with the private-equity dynamic, there is the potential for an us-versus-them mentality to emerge. That makes it easy for a CEO to say to their team, “Well, the board told me that this is what we need to do.” Or, “I would have done it this way, but the board told me to do it that way.” In most cases, we're not making any heavy-handed calls. It's usually a dialogue. We decide together, and then the CEO carries out the decision.  

But if the CEO is always pointing fingers at the board, that creates two problems that are very insidious. First, it creates a rift where there should be a partnership. Second, it actually diminishes the credibility and the authority of that CEO in a way that they may not appreciate, even if at the moment it feels like an easy out.  

Q. Beyond what we’ve discussed already, what values are important to you as a leader? 

A. I always appreciated leaders from early in my career who gave me a pretty long rope to make some mistakes—not fatal or repeated mistakes, of course—to really figure things out. So I tend to give a fair amount of latitude at the outset of a relationship with an employee. We align on what the objectives are and make sure there is clarity on the role, but then I tend to give a fair amount of latitude. If I don't see the level of performance or the detail orientation or the depth of the understanding of the work, then I'm going to get more involved. 

But I tend to start with a little bit of a lighter hand. That's important in the investment business, because as we're creating great investors, you need to get out there and figure things out to some degree on your own, and you need to have a lot of repetition and exposure to different ways of thinking. The way I invest and the way I assess opportunities is not identical to any other individual, and that's okay. There are multiple ways to do things right and there are multiple ways to do things wrong. So I start with a fair amount of latitude and a fair amount of autonomy.  

We have a shared value system here that is very important to me. We are stewards of institutional capital, and we are partners to management teams to build businesses, so there needs to be a shared level of respect for the role that we play and how we play that role. We're looking to bring people onto this team who have diversity of experience and background but no diversity of values.   

Q. What were important early influences for you? 

A. I’m a first born, and I probably have a lot of characteristics of a first born. I tried hard in school and performed pretty well, and that was expected of me in my household. I grew up with parents who have incredibly strong work ethics. My dad's an entrepreneur and my mother is incredibly creative, and that was just sort of in the water in our household—you work really hard and have a do-it-yourself mentality.  

Q. What was one of the biggest challenges of starting your own firm? 

A. The biggest thing for me is that it's okay to be uncomfortable. In fact, you've got to be comfortable with being uncomfortable in order to learn and grow and do something different and new. For me, doing something different and new was more important than the uncomfortable feeling along the way. So you power through initially and then, as you become more mature, you actually embrace that feeling in your stomach of, “What am I doing? Do I know what I'm doing? I didn't do that right—how am I going to fix it?”

You embrace that moment because you know that that's going to be a big source of learning. This is something I'm trying to instill in my kids—the sooner you get comfortable with being uncomfortable, the faster you're going to learn to grow, and that's pretty fun when you get there. 

Q.  How would you complete the sentence, "The hardest part of leadership is…"? 

A. As a leader, you have to take ownership and responsibility for the outcomes, which means you give praise to others when things go well and take the blame when they don’t. That part is not hard for me. The hard part is dealing with the challenges and then also digging deeper into the well so that you can maintain the enthusiasm and energy and help other people with the problems and roadblocks they’re facing in addition to your own.  

You’ve got to go to that deep well quite often and maintain the resilience and grit to keep doing that day in and day out. As you get into a senior leadership position, that's a lot of what you're doing. You're managing through the challenges and you're breaking down not only your own roadblocks but also those of your team along the way. To me, that's probably the hardest part of leadership.

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