Purpose, Goals and Measures of Success

We’re in the process of mid-year performance reviews here at the Equality Fund. I want to use this as an opportunity to write about purpose, measuring success and applying Goodhart’s Law to profitability as a measure of success of businesses. But first, let me share an experience I had with my daughter and the seemingly never-ending bag of Hallowe’en candies.

I dread Hallowe’en every year. More accurately, I dread the haul of chocolates, candies and treats and the incessant requests for candy every day from my ever persistent daughter. But as the years have gone on, she’s started to learn and practice the concept of waiting and savouring. She sometimes complains about her stomach hurting after eating too much candy. She’s talked about having enough candy to last until December. Today she announced she would have one candy each day. I encouraged her to write it down on the whiteboard to help her stick to her strategy.

Now, mind you, having one candy each day IS NOT the goal. The purpose here is for my daughter to eat healthy things (one could argue that the even bigger purpose is to be healthy and happy). The goals are to not have stomach aches from eating too much candy and to stretch her candy haul a few weeks longer. The strategy for achieving these goals is to allocate one candy each day. The way to measure whether she’s been successful is to track how many candies she’s had each day and compare it to the target in her strategy. She should also track how she’s feeling and how long the candy lasts.

I noticed a parallel with a process I employed with respect to the performance reviews in my workplace. I made an effort to distinguish amongst purpose, goals, tasks, and measures of success. Although I recently read a different perspective whereby goals were described as the measurable tasks that could help lead you and your strategy to success, place too much emphasis on the tasks themselves as goals and you risk losing sight of your purpose and what the big goals are. I made a point of describing the goals in words – often in a qualitative way to evoke a feeling of achievement, followed by “Success will be measured by:” The goals then have an effect of propelling us forward and helping us envisage ourselves and our team in the future. Goals lead, measures of success or tasks keep us on track.

I should also note that incentives – like extrinsic or monetary rewards – suffice for repeatable, mechanical goals, but are horrible for motivating people when it comes to creative, innovative work. Daniel Pink wrote in his book, Drive, about purpose, autonomy, and mastery as being the primary things that motivate people where critical thinking is needed. You start to see how purpose, goals, and measures of success complement and connect with each other to inspire action and accomplishment.

The traditional measures of success of business – profitability, I’m looking at you – have become goals. People think the purpose of business is to maximize profits for its owners or stakeholders. Even in the impact investing space, purpose and profit have become inextricably linked. Although the Business Roundtable has attempted to broaden the commitments to all business stakeholders including customers, employees, suppliers, the community, as well as shareholders. Businesses are a way to connect people to the essential resources they need to survive, thrive, and be happy. Profit is simply a statement of the excess of resources and energy generated over resources and energy consumed. Our accounting systems are a proxy for the allocation of resources. But it’s become so abstracted that people believe profit or accumulating assets are the goals, in and of themselves.

When profit becomes the goal, we lose sight of the purpose. We start to generate profit at whatever cost. We start to not pay people properly. We start to extract natural resources and push the cost of regenerating those resources onto someone else. We start to coerce people, with threats and violence, into handing over their land, crops, or time and labour. Profit is no longer sufficient for measuring success. In fact profit can obfuscate failures, especially when not everything – particularly costs – are not counted.

This is why being profitable is not the goal. It is only a measure of how resources are allocated. Goodhart’s Law says “When a measure becomes a target, it is no longer a good measure.” Now that profit has become a target, it is no longer a good measure of resource allocation.

The big purpose of business is really about the well-being, health and happiness of people. To achieve that, our goal is to ensure that everyone has access to the essential resources they need, a concept which I wrote about in my book, Integrated Investing. Success is measured by the extent to which resources generated exceed resources consumed. We should be mindful about how that success is realized. Is it really success if resources are extracted or distributed unequally or unfairly? Reinvigorated by a recent conversation on Twitter, we should consider tracking a measure for energy and how long resources will last. Ultimately, well-being, health and happiness would help us keep our eye on our big purpose. I see the parallels with curbing my daughter’s stomach aches and helping her savour her candies a little bit longer, and ultimately helping her be healthy and happy.

We need to remind ourselves of why we’re doing what we’re doing in the first place. We can recalibrate our goals, be clear about how success will be measured, and be mindful not to let the measure become the goal itself.

The Great Reset

This op-ed was originally published on June 28, 2020 in The Toronto Star.

It has become apparent that the COVID-19 pandemic disproportionately and negatively impacts women. Among workers in the core working age demographic of 25 to 54 years, women represented 70 per cent of all job losses in March in Canada.

Most schools and childcare facilities remain closed, placing an even greater burden on working mothers. As COVID-19 restrictions ease, a greater proportion of the job losses experienced are being recovered among men compared with women.

What needs to change to help women in the workforce?

This is not the great recession, it’s the great reset. It’s an opportunity to do business differently and value women’s contributions, focusing on these three areas:

  • Accommodate women in the workforce

COVID-19 has forced flexible work arrangements into the spotlight. Author Sylvia Ann Hewlett has written about the need for flexible work schedules, flexible career paths and removing the stigma of flexible work arrangements as strategies for retaining and advancing women in the workforce.

Now would be the time to advance these objectives and nurture women’s ambitions.

We must also reduce the gender pay and wealth gap and give women the opportunity to earn their full value.

  • Promote women in leadership

Women are celebrated at the forefront of the global response to COVID-19 as leaders of nations and as public health officials.

They are leading with facts and empathy. This combination is needed for decisiveness because it’s not one or the other that is the foundation for good decision-making, but analysis and emotion working together.

Unusual allies have emerged. Tom Peters, business management leader and author, wished for a future with more women in leadership. On Twitter, he mused about his “top 2 post-coronavirus dreams: (1) Never again a promotion of anyone to management who does not have a truckload of empathy (high EQ) [and] a demonstrated “people first” track record. (2) More more more women in senior leadership roles ASAP.”

  • Give women access to capital

Women are at risk of facing even greater barriers raising capital for their ventures or funds. Investors may focus their efforts and capital on entrepreneurs and fund managers with longer track records and with whom they have established relationships.

At the Equality Fund, we see an opportunity for investors to double down on gender-lens investing and take informed risks on female entrepreneurs and fund managers. It’s this forward-thinking lens, rather than hanging onto old ways of the past that are clearly broken, that will be rewarded in the future.

The traditional approach to business, entrepreneurship and innovation has cracked under pressure and left many people behind. It is my hope that we’ll see the emergence of new ways of doing business that ensure everyone along the whole spectrum of entrepreneurship can access the capital they need to survive and thrive.

Let’s embrace the great reset and make businesses work for women.

Canada’s competitiveness rests on diversity and equality

This op-ed was originally published on June 12, 2019 in The Toronto Star.

The Canadian government wants Canada to be more competitive. The World Economic Forum ranks Canada 12th among 140 countries in overall competitiveness.

Factors considered in the WEF’s ranking include exports and trade, attractiveness for investment, innovation, productivity, and tax reform. Competitiveness is typically measured by factors affecting economic growth. However, we mustn’t forget the role of having a social safety net, having a more equal society, and creating conditions for diversity, inclusion, and belonging in making a country an attractive place to have the life, lifestyle, and livelihood that people want.

For Canada to be more competitive, policy-makers need to do two things:

1. Make it possible for family life to be more compatible with professional life and

2. Reduce wealth inequality.

Before we explore that further, let’s take a look at the economics of growth. Thomas Piketty, a French economist and author of Capital in the Twenty-First Century, breaks down growth into two components: population growth and per capital output growth.

“According to the best available estimates, global output grew at an average annual rate of 1.6 per cent between 1700 and 2012, 0.8 per cent of which reflects population growth, while another 0.8 per cent came from growth in output per [capita].”

In many developed economies, populations are aging and women are having fewer children, later in life. The counterpoint to this is the rise in women starting businesses and perhaps the recognition to enable more women to join the workforce.

In Canada’s budget announcement in 2018, it was noted, “Having more women in the workforce has driven economic growth, boosted family incomes, and helped families join the middle class. Yet there are still too many missed opportunities caused by gender gaps in a number of areas, including education and career options, full participation in the economy, and leadership.”

“RBC Economics estimates that if men and women participated equally in the workforce, Canada’s GDP could be boosted by as much as 4 per cent, and could partially offset the expected effects of an aging population.” (Government of Canada).

The Wharton Social Impact Institute conducted a scan of private equity and venture capital firms globally that invest with a gender lens. These are firms that are allocating capital to women entrepreneurs, women-led businesses, businesses who are creating products and services for women or have other gender diversity considerations in their investment strategy. Their scan captured 87 firms of which only 3 are Canadian — Pique Ventures is one of them (Wharton University of Pennsylvania).

If Canada wants to be more competitive, to grow, and have more women contributing to the economy, we need more than just job creation. Productivity growth and population growth are linked and so we need products, services, systems, and policy decisions that dedicate resources to making growing families compatible with growing businesses, such as funding education, care, and enabling men and women to share in family responsibilities.

In addition to getting income into the hands of women, we need to get more capital to women — we need more businesses and investors that make decisions with a gender lens.

Gender balance and equality isn’t the only factor that will get us on a path toward economic prosperity for all. We need to get income and capital into the hands of the least wealthy.

Piketty says, “the hoarding of wealth — increases in wealth, when the level of wealth is significant — does not lead to corresponding increases in spending and does not lead to a proportionate increase in demand for products and services.”

“The poor catch up with the rich to the extent that they achieve the same level of technological know-how, skill, and education, not by becoming the property of the wealthy,” says Piketty.

If we could allocate resources — and wealth — optimally across all people, including the least wealthy, this increases demand for products and services and increases productivity.

At the core of Pique Ventures’ impact lens is the conviction that improving access to essential resources helps people survive, thrive, and be happy. The sole impact we should be measuring is well-being. And so, to achieve more impact, we need to get better at how resources are allocated and by resources, I mean physical resources as well as knowledge, information, and interpersonal relationships.

In considering economic prosperity for all, we must also think about Canada’s social safety net, equality, diversity, inclusion, and belonging, and the ease in building relationships. Economic prosperity, family life, and equality are interconnected.

The Trouble with Gender-Blind Investing

This op-ed was originally published on May 17, 2019 in Next Billion.

As an impact investor interested in gender equity, I was glad to see a recent Harvard Business Review article on gender equality and investing by Karen Firestone, President and CEO of Aureus Asset Management. In response to the article, I shared a call to action on LinkedIn that encouraged LPs (limited partners, such as high-net worth individuals, family offices, foundations and endowments) to invest in women-managed funds. also urged organizations to incubate these funds, and journalists to write about them.

Shortly thereafter, another impact investor responded to my call to action, saying that women shouldn’t just invest in women. Women should invest everywhere, he said.

That might sound like good advice. But in reality, it’s not that simple.

A Broad Base of Exclusion

I started Pique Ventures because I observed that women were being left out of key decision-making roles in impact investing. Pique Ventures invests in a diverse community of impact-focused entrepreneurs in British Columbia, Canada, and we’re growing to invest across Canada and the U.S. Pacific Northwest. One thing we’ve seen in our work is that it’s impossible to call for gender-blind investment without taking the broader context into account: The fact is, women are underrepresented as startup investors, as startup CEOs and amongst VC-backed businesses. The statistics back this up.

In her HBR article, Karen Firestone noted that women manage only between 1% and 3.5% of capital in the investment business (including investment management, mutual, hedge, private equity and venture capital funds). Those figures are drawn from a report by Bella Private Markets, released in January 2019. Firestone also noted that this low percentage of assets under management wasn’t due to poor performance: Bella Private Markets found that women-managed funds performed just as well as funds managed by their male counterparts. Earlier research on women in alternative investments by Meredith Jones, while at Rothstein Kass (now part of KPMG) found that women-managed hedge funds out-performed their counterparts with predominantly male leadership. However, the research also found that women managed smaller funds, and on average took longer to raise their funds.

The lack of women managing capital is only the tip of the iceberg. There is also a lack of diverse perspectives more broadly than just along gender lines – both in influencing investment and capital allocation decisions, and in defining and measuring success. This lack of diversity amongst investors means many problems go unsolved, or in some cases, more problems are created – for instance, because issues such as safety, sexual harassment and violence, poor working conditions, and job precariousness get overlooked. Only 2.2% of venture capital goes to women-led ventures, and around 13% of partners at U.S. venture capital firms are women.

A Glimpse of What Could Be

The proportion of women in leadership positions in venture capital has not improved in the past 5 years, but impact investing offers a glimpse of what could be. In 2013, using the ImpactAssets 50 as a representative sample, I found that women made up 34% of the leadership teams of impact investing organizations. And Tim Freundlich, CEO of ImpactAssets noted in a recent Forbes article that, “as of year-end 2018, 39% of companies funded by ImpactAssets were led by women founders or CEOs,” and that “asset managers in the impact investing space have significantly higher percentages of women.”

It is predicted that $30 trillion in wealth will change ownership in the next three to four decades, and women are anticipated to inherit a large proportion of this from their spouses and parents. But this wealth transfer won’t realize its potential for impact unless there is diversity among the asset managers and CEOs stewarding that capital. This diversity won’t happen by accident – and it won’t happen if the existing community of women investors fails to lead the way through their own investment decisions. There needs to be an intentional and conscious shift of capital stewardship into the hands of a diverse community of women to rebalance where the control and power of money lie.

Making the Case for Action

Fortunately, a number of investors and advocates are working to draw attention to these gender disparities – and to direct capital to help change them. For example, Carta is a technology company that helps private companies, public companies and investors manage their cap tables, valuations, investments and equity plans. #ANGELS is an investment collective founded by six women who are current and former executives at Twitter. The two organizations issued a report titled #TheGapTable in September of last year, analyzing data on the cap tables ( the documents that record who has ownership in a startup) of more than 6,000 companies with a combined total of nearly $45 billion in equity value. Starting with founders and employees, they found that women make up 33% of the combined founder and employee workforce of startups – but they hold just 9% of the equity value, with the other 91% belonging to men. They also found that women face barriers accessing equity and building capital in their own startups. They are being excluded from the opportunity to invest in – and to be on the cap table of – most startup companies.

Carta and #ANGELS intend to extend their research to include angel investors (just 22% of U.S. angel investors and 16.7% of Canadian angel group members are women). They also plan to include board members, advisors and other entities, and VCs (in the US only 11% of check-writing VCs are women, and in Canada, only 15.2% of partners in VC firms are women). Their work shines an important light on these gender imbalances – and brings us back full circle to the representation of women in managing capital. Family offices and foundations should respond by helping get more women on the cap tables of companies by investing in emerging funds managed by women – a goal they can achieve while still benefiting from strong investment returns.

Addressing these disparities will take time and concerted effort from stakeholders throughout the industry. But in the meantime, Pique Ventures is working to challenge these industry statistics in our own work. In our first impact venture fund, 32 out of 41 investors are women, representing 75% of the fund’s capital. We invested with our impact lens in seven women-founded early-stage technology ventures, and six continue to have female CEOs. We aim to continue to serve a diverse community of investors, including women, and we will continue to focus on impact-oriented, women-led technology ventures as we build our second impact venture fund.

Our work has shown us that it’s not enough to simply say that women should invest everywhere. In fact, we’d turn that formulation around: Everyone should invest in women, and women should be given the opportunity to participate in all aspects of the economy – in the workforce, as CEOs, on boards, as investors and as capital managers. Our economy and society need diversity to thrive: It’s up to all of us to deliver it, and it’s up to women investors to take the lead.

“Sorry, but you can’t come in.”

This op-ed was originally published on April 23, 2019 in Business Insider.

“I’m sorry, but you can’t come in.”

I had decided to venture out to a networking event to reconnect with colleagues, to talk to them about the second venture fund I was raising, and to show off my 8-week old baby. The event staff turned me away because I had my baby with me. Perhaps it was so unusual to see a woman with a baby at a networking event that no one thought to challenge that decision nor the potential biases behind it.

This incident was minor in comparison to some of the other stories I’ve heard  —  such as an investor telling someone to prioritize their baby over their startup or, on the flipside, investors changing their minds about investing because they were worried that a CEO would prioritize their baby over the startup and abandon their company. The response — “You can’t come in” — feels fitting in an industry where family and business don’t mix well in some people’s minds.

But that may be changing. Increasingly I’m hearing stories about people persisting in raising capital while raising children. They are doing so by seeking out investors who are demonstrably values-aligned and who understand that it isn’t work-life balance at issue, but instead building businesses and families at the same time is simply life.

Before I had children, I was a fierce advocate for people who were building startups and families at the same time, especially women. I had heard stories about women being turned down for investment because they had young children. Few women dared to raise capital while pregnant. I wanted to make sure parents  —  especially mothers or expectant mothers  —  were not discriminated against in the venture ecosystem. I wanted to ensure they had access to the resources they needed to start, build, and grow.

Of all US venture capital investment in 2018, only 2.2% goes to female-founded startups, as reported by Fortune. The field of venture-backed businesses continues to be an unforgiving environment for women entrepreneurs, especially when upwards of 75% of caregivers are women, according to the Institute on Aging.

I was pregnant with my first child while raising my first fund at Pique Ventures, the impact investment firm that I founded. I delayed telling investors that I was pregnant because I felt uncertain and anxious about how they would react. It turned out to be no cause for concern. Many of my investors had either “been there and done that,” or they felt so highly aligned with the values and investment strategy of Pique Ventures that my pregnancy was a non-issue. Pregnant with my second child, I felt more prepared and confident enough to present the investment opportunity of Pique’s second fund to investors in person and by video-conference well into my third trimester.

The following are some of the themes I heard across different conversations I had with a number of fund managers and founders when I asked them about their experiences of raising capital while raising a family.

1. Speak your truth

Eric Bahn is co-founder and General Partner of Hustle Fund, a venture capital fund investing in fast-executing teams at the pre-seed and seed stages, and is part of a new breed of emerging venture capital managers that is challenging the status quo. Eric welcomed a second child into his family shortly after Hustle Fund launched. He shared his perspectives on Twitter, stating that kids are terrible for careers, but having children was also the best decision he’s ever made and as a result, he feels richer. Eric told me that his posts attracted a lot of passionate responses, revealing that mixing family and business is still contentious to some. Others still, like myself, saw it as bold leadership as rarely do I hear of people – let alone VCs  — share their experiences of raising a fund (or starting a venture) while raising a family with such candor.

2. While raising, seek aligned investors

Investors that asked Elizabeth Yin, Hustle Fund co-founder and general partner, how she was going to manage having a baby and managing a fund at the same time, yet didn’t ask Eric that same question, essentially signaled to Hustle Fund that such investors were unlikely a fit for them.

Lally Rementilla, Pique investor and president of Quantius, a private debt provider focused on technology ventures backed by strong intellectual property, is another example of a fund manager who integrates family and business. She said, “conversations [with Quantius investors] often include family.” She tells them how proud she is of her daughters and takes pride in talking about her work with her daughters.

3. Build strong support systems and structures

Juggling business and family is possible only with solid support systems personally and professionally. What helps is, “Having a really good network and that starts at home. If there is strain at home, then there is strain at work,” said Jessica Regan. She is the CEO of FoodMesh, a technology company that reduces food waste by getting surplus food into the hands of people who need it (and a Pique portfolio company).

When Jessica had a baby two years into building FoodMesh, she found that having a supportive and understanding team was critical. Jessica had raised a seed round from external investors and knew she had a responsibility to her shareholders as well as her staff. “I took it very seriously and didn’t want to let others down,” she told me. “Having a baby made me perform even better. I’m more focused and am extremely structured with my time.”

4. Prioritize and get ready for a mind shift

A key lesson for Jessica was to moderate her expectation and shift her world to accommodate what’s important. Elizabeth echoed this. She too had to prioritize, and called it a “mind shift.” If it meant abandoning cloth diapers and not breastfeeding beyond the fourth trimester, that was fine with her. It meant she could define what success of running Hustle Fund and raising her children looked like.

5. Take a long view

In the impact investing field, we’re often focused on long-term sustainability. At Pique Ventures, I talk about investing in companies that are built to last. Eric is thinking long-term in venture capital as well. “We think about growing old together with our [investors],” he said. Likewise, Lally notes that building a firm and raising a family are both marathons, not sprints.

More and more leaders are demonstrating that it is possible and perfectly acceptable to start a fund or business and raise capital while raising a family. But it’s not just up to parents to drive this change. The people and organizations around them and actors within the venture ecosystem also need to shift. They need to recognize that the participation of parents in the venture community is an important contribution to how problems get solved. At Pique, we believe impact investing is about taking care of the village and ensuring that everyone has access to the resources they need to survive, thrive, and be happy. And as Lally reminds me, it certainly does take a village to raise capital and a family.

What is Essential?

I’m going to try something different with my writing. As I write this, we’re in the midst of a global pandemic. Like many other people, I’m feeling more tired than usual, my sleep is disrupted, and I’m doing whatever I can to keep anxiety at bay. One of my go-to things is writing. But I’m really short on time. I don’t have the time to synthesize the information I’m reading and receiving. I haven’t had the time to reflect and contemplate ideas thoughtfully. I certainly don’t have the time to edit and format my posts well. So I end up not writing.

So I’ve decided to try to write, think a bit, but not over-think and to try to get the ideas down in one sitting. I’m going to aim for 30 minutes of writing each day. Let’s see how that goes. This is my first post, written with this approach, so please forgive me if it’s not very polished and doesn’t flow well. I’m working on getting better and faster at doing that with the limited time and brain capacity on a given day.

I’ve been thinking about what is essential. For years, I’ve been referring to Access to Essential Resources. It was a concept I developed as a way to think about what startups we needed. In March 2020, due to the COVID-19 global pandemic, only essential businesses were permitted to continue operating. It included things one might expect such as supermarkets, banks, and businesses providing transportation and telecommunications. But it also included liquor stores. And more notably for working parents, schools and organizations providing childcare were mandated to close.

Undoubtedly, with a global health crisis, the first thing we have to attend to is ensuring people are kept safe and reducing the risk of exposure to this virus. It isn’t just about individual health, but rather the stability and capacity of the healthcare system. When I wrote my book, Integrated Investing, I wrote about six categories of Essential Resources and one of them is Essential Resources for Managing Change. And that’s the category under which healthcare falls. Healthcare is essential for managing changes in our health and also changes in our environment, ecosystems, and community that impact our ability to do other things – like interact in person with others.

Isolating at home has challenging impacts as well. People are social creatures. We need connection. For some, connecting digitally or virtually has sufficed. But for the most part, not being able to connect in person has been hard and disorienting at times. Resources for Connection – such as restaurants, cafes, parks and playgrounds – are also essential. To leave them off the list of essential businesses and activities is a misnomer.

It’s May 2020, and we realize that wearing a face mask when interacting with others helps reduce the risk of spreading the virus. I wear one whenever I go out and expect to cross paths with other people. Aside from my breathing into the mask causing my glasses to fog up, it also feels awkward because people can’t see my expression. I feel hidden, erased, expressionless. Which made me think of another Essential Resource I wrote about – Essential Resources for Expression. But until we know more about the virus and have a vaccine, face masks are going to be commonplace.

The need for Essential Resources for Connection and Expression got me thinking. Here is a thing that I didn’t cover in my book – sometimes Essential Resources are enablers for other Essential Resources and sometimes we have to prioritize. Essential Resources for Managing Change takes precedence here.

In the meantime, let’s not forget that we also need Essential Resources for Connection and Expression. We just need to find alternatives and make sure that they are accessible to all.

Creativity, Movement, and Intuition

Most of us are feeling stressed out these days. In Canada, we’re in the middle of week 8 of working from home and physical distancing. Non-essential businesses – many of them service-based and small businesses – have shut entirely. Schools, playgrounds, and amenities such as libraries, art galleries and museums all remain closed. Supermarkets are limiting the number of people in their stores at a single time, creating long queues at all times of the day. Millions of people are out of work. Renters are anxious about how they are going to pay their rent. The stock market has been down. Working parents must work from home while caring for their children and maybe continuing their education if they can.

I find that when my brain is overloaded and overwhelmed, it’s difficult to think clearly. It’s not something I can think my way through to resolution. Instead I need three other remedies.

Our travel is limited, our creativity is limitless

Since my young child has been home from school, I have done a lot of drawing. I’ve been commissioned by my four foot tall boss to draw babies, fairies, and her favourite cartoon characters. We have graduated to doodling after discovering a small book of doodles I had started over 10 years ago. The requests for drawings started well before COVID19, but during this pandemic I’ve been forced to practice – a lot. To the point of me actually enjoying drawing again.

We have dance parties. We sing along to our favourite songs. I’ve learned four chords on the ukulele.

My child is missing her school friends and we’ve both really had to use our imaginations to escape the monotony of shelter-at-home life. I’ve witnessed her play make-believe with her stuffed animals and invent adventures with her imaginary pets. I’ve engaged my imagination too. I’ve made up games and stories. I conjured up a magic gate down the road that zapped us to her grandparents’ house.

A friend sends me and five friends a poem a day.

With shelter-at-home protocols in place, my surroundings and sources of stimuli are more limited than usual. We are coping because of our imaginations and limitless creativity. At first, being creative took effort. But like any muscle, using it repeatedly, through training and practice, creativity and imagination become the regular go-tos. It keeps boredom at bay. It soothes my restless 5.5-year old who longs for fun and social connection. It eases the tension and believe me – there is a lot of tension.

Move forward

In the first week of work-from-home, I head outside for a walk around my neighbourhood every morning. There was one day that I didn’t do it and I was very irritable by the time 5pm rolled around. I ended up going for a late-afternoon grumpy walk.

There was a writing tip I once saw. It was something like, “If you can’t write, get up and move.” Our bodies are not meant to be sedentary. Cabin fever is described as irritability, listlessness, and similar symptoms resulting from long confinement or isolation indoors. We need to move and ideally do it outside. It gives my eyes a break from the computer screen. I get fresh air.

And when I’m not outside, I’m moving inside. I can go long bouts, glued to my computer. I take my phone call standing up, while pacing the room. The dance parties I noted above? They’re part of this movement.

Studies show that moving helps us be more creative and generate new ideas. When the world is changing rapidly and with great uncertainty, new ideas help propel us forward.

No future facts

Past performance is not always a predictor of future success. That couldn’t be more true that in a situation where there is a lot of uncertainty. As Jason A. Voss, an investment manager and author of The Intuitive Investor, wrote, “There is no such thing as a future fact.” The future is very uncertain. It is challenging to analyze our way forward when we cannot analyze things that haven’t happened yet. We need to cut out the noise – through meditation or walking or whatever the practice for silencing the chatter in our minds – and listen to our intuition to guide us through this pandemic and global crisis.


None of these ideas are rooted in analysis or left-brain thinking as a way of coping or dealing with the disruption we’re facing. Instead, their roots are emotional. I wrote previously about how emotions, empathy, and empathetic leadership are at the forefront right now.

Creativity, movement, and intuition help us channel our emotions, express them, and apply them to make decisions at a time when making decisions feels challenging.

How It Feels to Be a Leader

I was feeling frustrated, angry even. I launched into a tirade of complaints about how I had been wronged and how I needed to be given something to make me feel better. If you were on the receiving end of this, how would you feel? Would you feel like listening to me, thoughtfully hearing my concerns, and giving me what I wanted? Probably not. If anything, you might dig your heels in some more and hold your position. Maybe you’d lash out at me about what I had done wrong.

This equally describes a business relationship that had gone sour, as much as it describes me trying to convince my 5 year-old child to stop pushing on a door that was squishing her younger sibling’s fingers.

I had presented the above scenario to a friend of mine and she recommended I read Never Split the Difference, written by Chris Voss, in which he shares techniques he used as an FBI agent negotiating hostage situations and how to apply them to business and life negotiations.

In parallel, a friend suggested I read How to Talk So Little Kids Will Listen, written by Joanna Faber, a book for helping parents empathize and negotiate with their kids aged 2 to 7 years old.

In their simplest sense, both books talk about acknowledging the emotions being felt by others (that is, the party I’m negotiating with, whether it is a challenging counterpart in business or my 5 year old child). In both books, we’re encouraged to show understanding rather than telling by saying, “I understand”, and to do it authentically. In Voss’ book, the technique is referred to as “tactical empathy”. In Faber’s book, she builds upon the principles of dealing with feelings like frustration, disappointment, anger, expressing anger without being hurtful, and encouraging positive relationships. At the root of her book is emotions and empathy as well.

This isn’t new science. Before I say more about emotions, empathy, and negotiating, let me mention Antonio Damasio, a renowned neuroscientist whose research of people with brain damage showed that emotions drive decisions. 

Eliott and the Orbitofrontal Cortex

Eliott, one of Damasio’s neurology patients, had a small tumour cut from his cortex near the brain’s frontal lobe. Prior to the surgery, he had a successful career and a management position in a large corporation. He had a family and healthy relationships with his spouse and children. After the surgery, his intellect and logic remained the same. He was able to apply logic in analyzing choices he faced, but he had trouble making decisions. Even the simplest of decisions such as what to wear in the morning, whether to use a blue pen or black pen, and what appointment time to choose to meet with Damasio took hours of analysis and deliberation. 

Damasio observed Eliott’s dispassionate responses and his friends and family soon confirmed that Eliott appeared to be devoid of emotion. Damasio discovered in Eliott and in other patients with similar such struggles, damage to the orbitofrontal cortex, found in the frontal lobe of the brain, just above the orbits in which the eyes are located. It’s the part of the brain that affects emotions and Eliott’s inability to experience emotions meant he couldn’t make decisions. He lost his job. His relationships deteriorated and his spouse divorced him. The damage to his brain, and the resultant inability to make decisions, ruined his life.  

Emotions in Negotiations and Decision-Making 

Whether we’re negotiating with someone in a business relationship or our children, emotions drive their decisions to agree or disagree with us or to comply with or oppose our request. We’ve been led to believe that emotions are irrational and that if we leave out emotions, we’ll make better decisions.

When a person is drawn to a particular piece of clothing, or an object like a pen, or has a preference as to time of day to meet, the orbitofrontal cortex is trying to tell them that they should choose that option. We can gather information and analyze our options, however our emotions are an important and necessary input. Our emotions steer us in one direction or another – breaking any impasse that may result from balanced analysis of all options. 

Successful negotiations and effective decision-making require a high degree of empathy. Listening deeply to how others feel, understanding those emotions, and expressing our empathy authentically creates a positive feeling and could be the key to a decision we’re trying to influence. When others feel as though their feelings are not heard nor understood, it leads to a negative feeling that becomes a barrier to reaching agreement on a decision.

Empathetic Leadership

I’m writing this in the era of the COVID-19 pandemic. Countries with the best coronavirus responses have one thing in common – women leaders. Here in my country, Canada, women are leading our public health response. The empathetic leadership style of Jacinda Ardern, New Zealand’s Prime Minister, is being praised.

Influential men in business are jumping on the bandwagon.

To lead in this day and age is not to shut feelings out of our decisions and actions. Effective and inspired leadership goes beyond emotional intelligence and awareness. It leans into emotions and values vulnerability and empathy.

What are other ways to cultivate empathy? What are the emotions driving your decisions right now?

Stakeholder Capitalism: Investing as Taking Care of the Village

We’re nearing the end of week 6 of shelter-at-home and physical distancing orders in Canada in response to the global COVID-19 pandemic. On March 26, the Province of Ontario announced that only essential businesses could remain open. Amongst essential businesses, beer and liquor stores could remain open. Even as of April 23, nearly a month later, schools and caregiving businesses are considered non-essential.

I’ve spent a lot of time thinking about what are essential resources. In particular, I’ve wondered about what makes us happy, what the purpose of business activity is, and how these two things may be connected. For people to survive, thrive, and be happy, there are certain things in life we all want and need. We need food to eat and clean water to drink to satisfy our hunger and thirst. We need shelter and clothing to protect us from the elements, and care, treatment, and remedies to protect us or treat changes in our health such as injury, illness, and disease. We need stories, images, and sounds to express ourselves. We need places where we can connect with others, technology to connect us when we’re apart, and transportation to connect us from place to place. We need information from all sorts of sources to make decisions.

I took stock of all these things and summarized them into six categories of what I referred to as essential resources:

  1. Sustenance: Essential resources to sustain ourselves
  2. Expression: Essential resources to communicate and express ourselves
  3. Connection: Essential resources to connect and develop relationships with others
  4. Managing Change: Essential resources to prepare for or experience change or for managing change
  5. Making Decisions: Essential resources for making decisions
  6. Exchange: Essential resources for exchange

Some essential resources show up in more than one of these categories. Food is an essential resource of sustenance however we also use food to express ourselves. A building could be viewed as an essential resource of sustenance as shelter. Physical spaces are also resources for connection (where we gather) and expression (how we decorate and adorn them).

Essential resources are the things that we must access, process, and synthesize to survive, thrive, and be happy.

When I first developed these categories, I was challenged by a colleague to ensure the six categories of essential resources were mutually exclusive and collectively exhaustive. I endeavoured to be as all-encompassing as possible. I tried to think of essential resources from different perspectives to help us find common language and goals around the kinds of essential resources we wanted to be able to access in the world. For example, I focused on essential resources such energy (an essential resource of sustenance) and transportation (an essential resource of connection) instead of making judgements about specific forms (for example, energy from solar, wind, or fossil fuels or transportation in the form of cars, bikes, or mass transit.)

Back to my comment above, I found it curious that schools and caregiving services were not considered essential. For working parents that rely on schools, daycares, and caregiving businesses to be able to juggle work with family, these services are essential resources for managing change.

Stakeholder Capitalism

Writing about responses to COVID-19, Byron Loflin, Global Head of Board Engagement at Nasdaq, wrote in Fast Company recently, “Executives atop [global] companies and many others are acting for the community at large, not just on their shareholders’ behalf.” He went on to wonder whether this marked the end of shareholder primacy. “Thanks to a mix of technological advancements, increased and sustained efforts to improve corporate culture and employee inclusion—combined with the global nature of business—the last 30 years have paved [the] way for a more inclusive concept: stakeholder capitalism.”

Nasdaq CEO Adena Friedman, a signatory of the Business Roundtable’s letter, said recently that “the best path to sustainable earnings growth and corporate success is to attract and retain great talent, to provide value-added products and services to our clients, and to have positive and productive supplier relationships. Therefore, the two concepts–creating shareholder value and creating community value – go hand-in-hand.” Friedman’s thesis was simple: companies are not left to choose between their shareholders or society. They must serve both.

In the Economist, Mark Carney, former Governor of the Bank of England, shared his predictions for the future post-COVID-19. He also remarked about a potential shift from value investing to values investing. “When pushed, societies have prioritised health first and foremost, and then looked to deal with the economic consequences. In this crisis, we know we need to act as an interdependent community, not independent individuals, so the values of economic dynamism and efficiency have been joined by those of solidarity, fairness, responsibility and compassion,” he said. “All this amounts to a test of stakeholder capitalism. When it’s over, companies will be judged by “what they did during the war”, how they treated their employees, suppliers and customers, by who shared and who hoarded.”

People-Focused, Capital-Enabled

Instead of maximizing shareholder returns being the singular goal of investing, I believe we should optimize “taking care of the village”. By village, I mean ourselves, our families, our neighbours, our communities, our planet, and future generations. “Taking care of the village” means ensuring that all the members of the village – stakeholders if you will – have access to the essential resources they need to survive, thrive, and be happy. It is the idea that to have a happy, thriving life, we really do realize that we are interdependent and that operating in isolation is not good for our well-being. It takes a village to do the things that matter. This concept of investing as taking care of the village was a focal point of Integrated Investing, a holistic approach to investing that I developed and wrote about almost half a decade ago.

In a village, there are multiple stakeholders whose interests must be met, and there are future generations who will inherit the village from us.

This means making investment decisions with the village in mind. It means evaluating whether the people we invest in have the same aim and mindset, and it means assessing whether the businesses we invest in serve the goal of taking care of the village. In this approach, we choose to invest in businesses that meet our needs and those of our families, our neighbours, our communities, and future generations, while also taking good care of our planet.

Cost/Benefit Analysis for All Stakeholders

Integrated Investing is a holistic methodology for investing that encapsulates the “why” of investing, mindsets and values guiding investment activities, decision-making that integrates information from analysis, emotion, body, and intuition, and practical tools needed to put all these components into practice.

One of the practical tools from the Integrated Investing toolkit for evaluating investment opportunities is extending the analysis of costs and benefits beyond the walls of a business, applying the analysis to all stakeholders, and doing so in reference to essential resources.

From Integrated Investing: Impact Investing with Head, Heart, Body, and Soul (2016)

Investing as taking care of the village is a focal point and guiding principle of Integrated Investing. It recognizes the village is made up of far more than just shareholders, just as stakeholder capitalism aims to do.

Pandemics, Downturns, and Emerging Managers

It’s been really hard to write. Everything routine has been disrupted by COVID19 and things have become more uncertain, ranging from the macro in terms of global economic and social systems to the micro like what is my 5-year-old going to ask me to draw today (first it was “water babies”, then fairies briefly, now a range of endangered and exotic animal friends from Yoo Hoo to the Rescue. My drawing skills are improving greatly.) I found comfort in knowing that I wasn’t the only person having trouble focusing and thinking.

Part of me knows that the road to cognitive recovery is to take small steps forward. Nurturing a habit of writing (or of exercise, good sleep hygiene, gratitude or whatever it is for you) helps make a daunting task or significant change more doable. It’s not even so much about breaking down a big goal into smaller goals but rather putting in the effort and building momentum through the accomplishment of smaller, aligned and appropriate tasks. In this case, it’s writing and getting in the word count. This might not contribute to the books I want to write or the cases I need to make to influence decisions related to my work, but getting words out of my brain and onto the screen is exercising my thinking and writing muscles. I hope one day my thinking and writing brain will be strong again. 

When things are stressful or I’ve experienced something disruptive, I find that sticking to routines and daily habits helps me get through it. Others have given me this advice in the past: make those calls, write those emails, thank people in your network, and help others if you can.

I’ve been in a transition from emerging fund manager to investment manager. I have the potential to launch a new fund investing in private equity and venture capital funds. I hope to write more about that in the future. But in the meantime, my attention has been on the pressing challenges experienced by emerging fund managers due to COVID19 and the resultant economic downturn.

Emerging fund managers might not seem like an urgent area of need, but my theory of change has always been about who makes decisions about capital. COVID19 has most negatively impacted under-resourced and under-capitalized people and communities. The intersection of new fund managers, women, and people of colour is where change is needed and my fear is that it is these fund managers – emerging ones – that will also be most negatively impacted by COVID19, thereby deepening the cycle of under-resourcing and widening inequality gaps.

There are two very striking issues I’ve seen: 1) emerging managers on the cusp of first or final closes that have experienced their fundraising momentum and timeline interrupted and 2) emerging managers with valid concerns of being completely denied investment. 

In the Middle of Closing

People are overloaded and overwhelmed with decisions right now. If you’re trying to close your fund, keep structures, terms, and information simple. Make it easier for investors to say yes. This has always been true, but couldn’t be more true now.

In times of uncertainty, I think people will double down on what’s familiar to them. COVID19 introduces risk that is global and incredibly uncertain. This is more than investors losing confidence in one particular industry or asset class. This is more than part of our economic system – like financial services and credit – being disrupted. This is a health crisis AND multiple industries are impacted. Entire ways of working, living, learning, and connecting are interrupted. The divide isn’t between equities and fixed income nor between technology and real estate. The divide is between capital and labour. There is so much uncertainty that people are retreating to low-risk situations and that may mean focusing on the familiar. 

Investors with capital appear to be taking one of three approaches: 1) wait and see, 2) doubling down on the people they believe in and 3) open for business, but cautious. If you need to get a fund launched, you need to segment your potential investors even more diligently, so that you may concentrate your efforts on those investors that believe in you and your thesis.

On the point above about investors doubling down, investors are focusing on existing portfolio funds – the people they know and believe in. Some may double down on areas such as gender-lens investing perhaps because this is where they have been investing (and therefore is familiar). Some may be very future-oriented and looking for new (and possibly bargain) opportunities – this may very well be their default mode of operating during volatility and crisis. Anyone that was on the fence about an entirely new endeavour, risks little by saying “No” at this time.

Samir Kaji of First Republic Bank remarks about family office and high net worth individuals investing in venture capital funds, “Emotional anxiety remains high, particularly with those that started investing in VC post 2009.  I’m seeing soft commitments from this group dissipate VERY quickly with GPs I’ve talked to.”

For fund managers that are approaching a first or final fund close, if viable, close on whatever you can even if it is less than your target. Stay in the game, stay alive.

Asset Allocations

Large institutional investors have asset allocation targets meaning their private equity and venture capital strategy, if they have one, should fall within a percentage range of their total portfolio. The impact of COVID19 on public markets means allocations to public equities and fixed income are likely lower than their targets and allocations to private equity and venture capital is higher than targeted. This will also have an impact on funds currently raising and it’s worthwhile reconfirming the availability of capital to invest in this sector (and your fund).

Samir Kaji notes, “Institutional investors have asset allocation targets to deal with, and are generally unlikely to make any 2020 investments outside of A) Existing managers B) Those they have been tracking for some time C) NO Brainer funds (i.e. top GP from a good firm, or top .1% operator, etc.)”

Emerging Managers – Leading Edge or Death Knell?

Angelo Calvello wrote in March 2020 in Institutional Investor, “As could be expected, large, established managers will weather the storm. Many independently owned active managers, however, will be forced out of business — some because of poor performance, but others who generate good returns will also shut their doors because of cash-flow problems.”

In January and February 2020, the British Private Equity and Venture Capital Association surveyed more than 40 global institutional investors and family offices to get their perspectives on emerging markets. 96% of those surveyed felt that there were advantages to investing in emerging managers over established firms. Respondents cited innovation, ambition (hunger to outperform), focus on unique investment strategies, greater ease to align economic incentives and negotiate terms, and greater likelihood of forming meaningful strategic partnerships as being the key benefits. 

Likewise, Cambridge Associates published a report on venture capital in January 2020 noting that top returns are not confined to a few dozen firms. New fund managers (managing their first or second fund) and developing fund managers (on third or fourth fund) consistently rank as some of the best performers.

Both studies were conducted before the World Health Organization declared a global pandemic, so whether or not these views continue to hold true have yet to be seen.

Near-term Focus on Grantmaking

Foundations are facing a lot of demand and pressure from the grantseeking side of their organizations. When there are communities around them struggling to stay healthy or to keep the roofs over their heads or are facing increased violence or precarity, attention must go towards current spending.

It makes sense to me to focus heavily on spending during a time of crisis and once new routines and some new sense of stability, foundations and other capital holders can think about planting the new seeds for the future. We have to plant new seeds, as investments, to rebuild surpluses and resources, and the thoughtful application of capital is needed to weather these kinds of storms in the future.

The current health and economic crisis feels very different to me than the dot-com and the 2007-08 financial crisis. Our health is at risk. Our main streets are ghost towns. Our ability to connect in-person with each other is disrupted. The inequality gap is exacerbated. Yes, there are opportunities, but close to a million Canadians filed for employment insurance in the first week of the COVID19 lockdown (more than 30 times the number in the same week the previous year). Our way of life is severely negatively impacted and that requires a pause and thoughtful reflection about what’s next.