Provided by NZX
  • MFT22.4

    $0.170.76%

  • Open 22.23 High 22.4 Low 22.17 Bid Price 22.2

    Offer Price 22.4 Value 957322.8 Volume 42932

Current as of 24/05/17 07:40PM NZST

Mike Taylor: Why founder-led companies outperform

1 comment
Apple co-founder Steve Jobs. Photo / AP.
Apple co-founder Steve Jobs. Photo / AP.

Over nearly two decades of investing, I've noticed a strong link between founder-led companies and top performance.

This goes beyond just my anecdotal evidence. A mounting body of research indicates that companies where the founder still plays a significant role in the business - such as chairman, chief executive, or major shareholder - have a superior and lasting performance.

Analysis by Bain & Company going back 20 years shows founder-led companies have consistently delivered higher returns to shareholders than other companies.

Well-known examples
I've invested in hundreds of companies and observed many more successful ones from a distance -from the local bike shop, to Four Seasons, to Amazon.

I believe that founders who really care about their customers' experience will lead their firms to ultimately outshine competitors.

Jeff Bezos from Amazon and Steve Jobs from Apple spring to mind as two charismatic chief executives who lead (and led) their companies from the tip of the vanguard.

Locally Mainfreight, managed by long-standing chief executive Don Braid, with founder Bruce Plested as chairman, is another great example of how a founder-led company has outperformed.

Some of the key initiatives that have helped Mainfreight be so successful over the years include a family culture, giving all employees a share of the profit and encouraging their employees to be all they can be.

Mainfreight drivers are encouraged to help other motorists where they can. This conscientious behaviour works and combined with all the other measures has seen

Mainfreight grow substantially over the last 20 years as a listed company, where it now has a market cap of over $2 billion, 6500 employees in 239 locations at last check.

Shareholders have been handsomely rewarded in that time with a total return since its IPO of more than 2400 per cent.

Point of difference

Think of a company you've had dealings with, where their employee goes the extra mile.

It makes a huge difference, right? Well, usually that culture is led from the top down.
I call it 'the founder's touch' - you know when it's there and you sure know when it's not.

Attributes I have observed of founders leading successful companies include:

• Relentless persistence
• Personal investment (money on the line)
• Long-term thinking
• Innovation
• Ability to inspire employee loyalty
• Passion
• Commitment to superior client experience
• Pride

However, let's not forget that plenty of founder-led companies do fail.
But typically, it's because their leaders lack these key attitudes, behaviours, and skills.

Mike Taylor is the chief executive of Pie Funds

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

Have your say

1200 characters left

By and large our readers' comments are respectful and courteous. We're sure you'll fit in well.
View commenting guidelines.

Sort by
  • Oldest

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf04 at 25 May 2017 00:20:21 Processing Time: 497ms