Back in 1990, at a time when I was young, ambitious and living in London, I embarked upon a new start-up adventure with Gunther, a very successful German businessman. I initially met Gunther at an international congress and he took a shine to me because I challenged his views and offered a different perspective. Although he was of a similar age to me, little did I know that he was extremely wealthy. His humble understated demeanour gave no hint of his self-made success and resources.
After a year of getting to know each other, out of the blue he proposed that “I toss in my CEO role and test my mettle by launching a start up.”
Although Gunther was very forward thinking and willing to provide significant funding, the kicker was his expectations of me growing an international business with 45 million pounds of revenue before year five and surpassing a 37% compounded return on investment. If I met this high hurdle rate, then I would benefit greatly. But if I fell short by even 1%, my potential windfall would plummet and I would be required to sell him back my shares for a pound.
Eager to succeed with this once in a lifetime opportunity, I reached out to Jim Slater, a UK legend, and the forerunner of a line of business leaders who achieved remarkable success by simplifying and ratcheting up the performance of bloated and sluggish companies.
By a stroke of good fortune, an intermediary in London put in a good word for me and I can recall being very excited when the telephone rang and Jim Slater asked me how he could be of assistance. I explained my version of Great Expectations and asked if he would rigorously evaluate my Business Plan and give me some feedback, in advance of me presenting it to Gunther and the ‘Newco’ Board.
Yes, I would be prepared to be of assistance, he said. Just send me information about you, your team and Board, and explain in detail how the ‘economic engine’ and high growth process will work in terms of driving revenue and ROI. Also clarify how you will monitor KPIs and keep the business tracking as per your flight plan. I will get back with my findings and recommendations in two weeks and we will meet over lunch at my Club”, he proposed.
And then, just before hanging up he mentioned that his fee for undertaking the evaluation would be £3,000 (at that time equivalent to NZ$9,000 which in today’s money is $15,000). He went on to say that he had no need for the £3,000. “I put it to you that if I don’t charge you what it is worth, then you won’t take my recommendations seriously.”
Given the value I placed on this business opportunity, I immediately gave him the go-ahead and waited keenly with bated breath, counting down the days.
Finally the nominated Friday lunch arrived. I can vividly remember getting there early and watching through the Club window looking out over St James’s Square, waiting eagerly for the iconic Jim Slater to arrive.
An oldish but immaculately kept Mercedes arrived on the dot of 12 noon, and his driver got out of the Merc and went around to the rear passenger door and exchanged Jim Slater’s cardigan for a suit jacket. I clearly recall Jim, a very tall slim man, shaking my hand and then sitting down opposite me at the dining table.
In no time at all he got down to business and said “your plan is perfectly good, and I can offer no suggestions regarding improvement.”
My heart sank!
After waiting for what seemed like eternity as he selected from the menu, he went on to say, “If I was a betting man, I would wager that you will meet all your targets by a healthy margin.”
“I sense that the greatest challenge you will have, is not getting into this deal, or being successful, but exiting the deal on good terms when you reach your five year performance milestone. If I was you, I would get down to the City in quick step and get my lawyer and financial advisor to review the contract in the light of this most likely scenario”, he said. And that is exactly what I did.
I have often wondered if Jim Slater was a clairvoyant. Or whether he used my 3,000 pounds to pay an investigator to do his research. But Jim Slater’s predictions proved to be 100% correct, and he ‘saved my bacon’ in a way that I could never have imagined even in my wildest dreams.
From that time onwards I have always weighed up the value of a mentor, and personal development, in the light of my experience with Jim and the lessons I learned from this experience.
Achieving 37% compounding return on investment over a five year period involved some key success factors around strategy, leadership, culture, and building a High Performance growth organisation – the ones that got Jim’s tick when he was evaluating my Business Plan.
And now, 27 years later, and with the benefit of hindsight, I recognise that the $9,000 lunch was ‘a bargain’ as it enabled me to extract value from the start-up opportunity, and get out with my shirt still on.
So here’s “hats off” to Jim Slater, who was an insightful wise owl who helped me simplify, and integrate my strategic thinking.
A rather expensive club sandwich, I agree; but one that tasted pretty good and paid off handsomely.
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