The “People” Factor

Two months ago, I attended the Winnow Software Masterclass together with CEOs and senior executives of the companies Winnow is associated with. Winnow is one of our long-standing clients, an investment vehicle for a small group of investors with diverse business backgrounds.

I have been reflecting on my learnings from that day and have come to the conclusion that it has reinforced a key principle I have learned since I joined Gilligan Sheppard, and more indirectly since starting my career. It is…

What is the most important thing in the world? It’s the people, it’s the people, it’s the people.
Ko te tāngata, ko te tāngata, ko te tāngata
– Maori proverb.

If you get the people aspect in your businesses right, from hiring to the internal team, investors, communication, and customer engagement, you are much more likely to be successful than not. I would go as far as to say people are the most important factor for long-term success.

My key takeouts are:


Simon Challies was the perfect person to speak on “What they didn’t teach you at University”. He spoke about his experiences as CFO growing into one of the top CEOs in New Zealand and then his current journey with startups and charities. What remained with me was the tribute to Simon when he stepped down from his CEO role at Ryman Healthcare. Every team member of every Ryman centre across New Zealand contributed to a ‘goodbye video’ which clearly showed the respect and, dare I say it – the love he had earned from his staff. This was a surprise, as it is not something I had associated with a big corporate CEO.

Simon’s journey from being an accountant to being thrown in the deep end, firstly as CFO and then CEO, was to do with navigating human issues rather than spreadsheets and depreciation. These challenges involved ensuring he was taking his team, and the wider Ryman community on the journey with him. This was especially important as he was never afraid to do things differently. For example, he initiated designing a new uniform by Annah Stretton for Ryman staff, which was featured at NZ Fashion Week. This was part of his drive to improve a decreasing staff Net Promoter Score which he discovered was a lead indicator for the customer NPS. Unhappy staff will translate to unhappy customers. There is no doubt that Simon is highly intelligent, but the definition of his success is based on the deep care he had for the staff and the aged residents of Ryman centres, and ensuring he had a passionate team aligned in that direction.

Finding Investors / Investing

In the masterclass, Nigel Scott presented “An Investor’s Perspective”. I was expecting a “dry” session looking at concepts such as different investment methods, historical return rates, hurdle rates, and key financial metrics. However, we got a refreshing insight with practical, real-life examples of investor and “investee” relationships. He went over concepts such as understanding different types of investors and their reasons for investing when choosing your investors. If you don’t have freedom of choice, it helps to understand at least what you are getting into. Effective, timely and honest engagement with investors can completely change their attitudes to understanding and supporting you through adversity.

After the initial business value proposition assessment, the focus on the “people” factor is aligned with GS’s focus when promoting any investment (wholesale only). Factors such as whether the team has the attitude and aptitude to grow a company, do they put the needs of the company first rather than ego? How good are they at understanding their weaknesses and recognising others’ strengths? How honest are they as to where they are at? And how pragmatic are they when it comes to valuation? Yes, the “dry” stuff matters, but it is much easier to work through this when the people are right.


While presenting to startup fund managers on how we perform trading company valuations, one of the questions I was posed with was – “how do we assess the people and incorporate them into these valuations?”. The fact is, other than startup/early-stage valuations and for purposes other than capital raising, this is not expressly considered. However, the people factor is likely reflected in performance. The better-aligned leadership and teams within these businesses are likely to perform better and have better resilience to risk, leading to higher multiples. However, when looking at listed companies, there is a significant focus on the people on the board and the leadership teams. Any changes can lead to changes in the perception of the future performance of the company, which drives share price.

Pricing strategy

Martin Oxley titled his presentation “The Psychology of Pricing”. One definition of Psychology is “the study of mind and behaviour in humans”. In this case, he noted that how we feel about the price of something is about what feels fair.

Pricing is often thought of as a mathematical calculation based on cost and markup, but this fails to consider what is fair value to the customer. It is important to understand what value our customers get and what their next best alternative is. For example, a software application that saves an office manager one hour per day holds much more value to someone in a large commercial enterprise than in a four-person not-for-profit entity. What seems fair to one, may not to the other based on the circumstances; both, however, can derive benefit. This may be astronomically different to the number you arrive at than in a simple costs-plus pricing model.  

Humans have an acute understanding of what is fair. More generally, we need to understand this human element in pricing and market segmentation.

Employment Decisions

It is now widely accepted that hiring focused on character or other personality attributes rather than only technical skills results in greater hiring success. The following are a couple take outs from the presentation by Glenn Slaughter.

Poor hiring is an expensive mistake. Unless psychometric testing is used, the interviewer makes the assessment of character, who may or may not be the best person to make this decision. Secondly, the character attributes being looked for need to be aligned with the role to be performed.

It may be worth exploring the most appropriate person/people to do the interview/s and ensuring that the required character traits are aligned with the role, rather than being a subjective assessment by the interviewer.  


Christine Smith spoke about clear communication. Step into the other person’s shoes and tell them what they need to know, not what you want to tell them. If you wouldn’t say it as you write it, then don’t write it. That’s it. It sounds so easy, so if I ever email you again with “If you should have any queries, please do not hesitate to contact me”; then please mock me.

In conclusion

The people element is an important factor, whether it is developing ourselves as leaders, hiring our teams, managing people, communicating with them or our customers, and in our day-to-day operations and other interactions.  

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