In an effort to maximise profits, businesses in the past have sometimes forged questionable models that serve the few but let down the many. From factories at the time of the industrial revolution to the institutions responsible for the 2008 financial crash and most recently overinflated billion-dollar startups, we have repeatedly witnessed what happens when investors fail to recognise the importance of responsible capitalism.
Gates Capital Management's Excess Cash Flow (ECF) Value Funds have returned 14.5% net over the past 25 years, and in 2021, the fund manager continued to outperform. Due to an "absence of large mistakes" during the year, coupled with an "attractive environment for corporate events," the group's flagship ECF Value Fund, L.P returned 32.7% last Read More
In today’s fast-paced world it can be easy to neglect the bigger picture. But as many businesses look towards their post-pandemic futures, a different approach to leadership and investing is emerging. In practice, it’s all about sustainability, but what leaders who implement this way of investing are finding out is that it’s also about profitable longevity. Those getting it right, like CG Tech’s Niall Carroll and group CEO Jason English, are proving that playing the long game isn’t just good business but smart business.
The purpose-driven approach isn’t a new concept. In Jim Collins’ 1994 book, Built to Last he found that companies with a strong purpose were able to generate shareholder returns that were six times higher than those of their profit-driven competitors. Collins also delves into something he calls the “Genius of the AND.” This refers to visionary companies who are able to be distinctly idealistic whilst also being profitable.
“Instead of being oppressed by the ‘Tyranny of the OR,’ highly visionary companies liberate themselves with the ‘Genius of the AND’—the ability to embrace both extremes of a number of dimensions at the same time. Instead of choosing between A OR B, they figure out a way to have both A AND B,” writes Collins.
Purpose isn’t just something leaders are thinking about either, as research shows employees and consumers also gravitate towards businesses with a strong vision. A 2019 study by McKinsey found that 82% of employees think it is important to have a purpose, while 72% stated this should receive even more weight than profit. Likewise, the 2020 Strength of Purpose Study by Zeno concluded that consumers were four times more likely to purchase from a brand they believed had a strong purpose and six times more likely to protect that company in the event of a misstep or public criticism.
For over three decades, Niall Carroll has been honing a different method of investing. Drawing on his experiences within the corporate banking world, as well as his time heading Royal Bafokeng Holdings (a community-owned investment company for the Royal Bafokeng Nation), Carroll’s views regarding social capitalism and the importance of re-defining long term goals led him to establish CG Tech in 2014.
Sustainability Is About Promoting Longevity
“Sustainability often gets conflated to the environment, but it’s not just about that, it’s about promoting longevity. I realised early on that I wanted to do more than just make a quick buck in the short term. While a lot of venture capitalists subscribe to the ‘get in early and get out quick’ formula, that’s not always in the best interest of the company. Creating something with long term horizons and being able to serve the community and people around the investment is more attractive to me,” explains Carroll.
With interests in oil and gas, construction, virtual reality, sound stages and more, the CG Tech portfolio is diverse but cleverly interlinked. Utilising a unique ecosystem approach, owner-operators of the CG Tech subsidiaries make up the group’s senior leadership and governance team. Chairman Niall Carroll and his team, including Chief Ecosystem Officer Jason English, have created an environment of transparency and a solid company culture that’s proving productive for all.
“For me, the real value in teaming up with owner-managers is that they are already invested in their companies. They’re excited to grow and eager to learn new things. Inviting them to be part of the senior governance structure only encourages this curiosity and drives a willingness to see not only their own business success but also the others within the portfolio. A shared sense of purpose is the driving force behind our success,” says Carroll.
While Jason English might come from a different background than Carroll, the former member of the South African Police Services and present Chief Ecosystem Officer of CG Tech follows the same purpose-driven approach to business, with a focus on building teams that understand a company’s vision and long-term goals.
Whether it’s developing a platform to virtually train oil and gas engineers, or giving teams a meaningful way to work by getting involved in community projects, English’s distinct brand of leadership is proving to be a perfect match to Carroll’s.
“We want to infuse our people with a strong sense of purpose in a way that also promotes autonomy. We understand there will always be challenges,” notes English. Adding, “but what we hope for is that our teams learn something from every situation, good or bad, that then helps them power success in the future.”
Utilising Disruptive Technologies
While many businesses were ground to a halt during COVID-19, CG Tech saw the pandemic as an opportunity to promote what they do best – utilising disruptive technologies to help solve emerging issues within traditional markets.
“The pandemic gave us the perfect chance to make integral changes. Overnight, the disruptive technologies we’ve been using within the group suddenly became essential to businesses around the globe. Because the companies in the CG Tech portfolio already operate with a clear vision and purpose for the future, we were able to pivot and quickly mobilise our teams to not only survive but, in many cases, thrive during what was a challenging time for many businesses,” says English.
For CG Tech a strong purpose is what gets you through the tough times, and perhaps more importantly is what allows you to emerge even stronger. While many people might focus on the innovations and results, it’s important to recognise success didn’t start there. It was the purpose that made it all possible.