Address mistakes
One of the things that Aronson is proudest about at Roark is that in any given week, two or three of his CEOs will call and tell him what went wrong that day or week, and that’s a testament to how he treats his people when they make mistakes.
“They only do that because they know we’re going to be supportive and sympathetic and potentially helpful in how do they solve some of their problems and challenges,” he says. “If they thought they were going to get beaten up, they wouldn’t be calling.”
Making people feel comfortable bringing up the bad news is another challenge that Aronson has faced, but the key to overcoming it is to know how to act in those situations. First, you have to recognize that people will make mistakes.
“We don’t think you can be successful if you don’t make a bunch of mistakes because you have to try a bunch of things, and if you try a bunch of things, you’ll make some mistakes,” he says. “Nobody has ever gotten successful avoiding mistakes.”
Recognizing that people will make mistakes prepares you for when they actually do. When that happens, be a good listener.
“We try to ask questions like what did they learn.” Aronson says. “We try to ask questions how they would go about something differently, and we make sure we understand how long it went on and how painful it was before that mistake was admitted. Then, in the end, we try to be supportive and encouraging.”
It’s also important to communicate to people that you want them to come forward with their mistakes.
“We deal with bad news really well, and we deal with surprises really poorly,” Aronson says. “So by articulating that to people, we say, ‘We don’t mind, tell us all the bad news — it’s no problem,’ but we really discourage surprises, because if you don’t know about it, you can’t fix it.”
Then, you have to let your actions gradually make people feel comfortable coming to you with those mistakes.
“In the end, I think it’s about, you can talk about it, but people will follow your actions more than your words, so I think it’s being consistent and uniform with everyone and having everybody have a good experience when they come to talk to you about what went right and what went wrong and trying to be balanced about the goods and balanced about the bads,” he says. “We try not to get overly excited about some good news and try not to overreact to the bad news.”
You can also work to educate your people about how to make better decisions instead of trying to make every decision for them. Aronson printed out a two-sided paper that had the firm’s values on one side and its investment strategy on the other. He gave one to each person and asks all of his employees to read it every day when they come in. If people can make decisions based on those values and that strategy, then it will help Roark make better decisions more frequently and lessen the amount of poor decisions.
“We’re certainly not perfect and try to learn all the time,” he says. “But if we can get people to think about what’s the right thing to do and make sure it’s consistent with what we’ve all agreed we believe in, then we have a better shot at making better decisions.”
How to reach: Roark Capital Group, (404) 591-5200 or www.roarkcapital.com
