Palingen is About People: Employees
Palingen is an evergreen holding company because this structure allows us to make the kind of investments in people that prioritize their long-term physical, emotional, mental and spiritual health. As founders, we share an incredibly important and fundamental belief that thriving employees are central to the success of any business. We spend a lot of time passionately discussing how to lay a foundation for an environment both at Palingen and within each of our future portfolio companies where employees will be valued, can develop and mature, and where they will ultimately flourish.
The Palingen Talent Model is the result of that effort and represents concrete ways that we will invest in our employees. Our Talent Model also represents a key way we are different from the typical private equity model of investing in businesses. Due to the defined term of traditional private equity funds, decisions are made to optimize short-term performance, be it in the use of aggressive leverage, cost-cutting initiatives, or rashly implemented M&A strategies. Not us. We are committed to delivering strong economic returns through long-term growth, including long-term ownership and long-term investments in our employees. Our employees are our core economic creators, and thus, they have to thrive in order for the business—and its customers, partners, and communities—to thrive.
Our employees are our core economic creators, and they have to thrive.
As business leaders and managers, we want strong teams that produce excellent results. We know that strong teams are not simply born. We believe that strong teams are built—intentionally and with much effort. They are invested in, developed, mentored and given agency. And that means spending time with our teams—managers and employees alike—helping them with both their weaknesses and their strengths. This is rooted in our shared philosophy that investing in people reaps long-term rewards, a philosophy developed over years in both healthy and unhealthy cultures, seeing the power of caring for employees and the pain caused by not.
Sometimes good people find themselves in jobs not suited for their strengths. We once worked with a junior employee with a growing reputation as an underperformer. It soon became obvious that he could not produce at the same level of excellence that the rest of the team expected—even worse, because he was responsible for providing foundational pieces relied on by the rest of the team, his shortcomings were impacting everyone else. The easy answer would have been to transition him off the team, and have his hiring manager show him the door. Instead, we chose the harder answer—we spent time helping him learn from his mistakes, had a tough conversation with him about his long-term objectives, and created and then implemented a plan that empowered the rest of the team while treating him with dignity. Our philosophy values the employee as a whole person with unique, innate talents and individual giftings. When one’s giftings are not growing in a job, it may mean it is time for that person to change jobs. It is up to us as managers and stewards to encourage our teams to explore their giftings and talents, and to communicate a corporate vision that allows employees to see where their giftings overlap with that vision.
At another prior company, the remote-work policy was very restrictive. One member of the team wanted to work remotely, and though her work product was top-notch, the policy stood in the way of her success. We realized how this was going to impact her growth over the long term, and we tried and failed to change the policy, leaving us with a choice: should we give an ultimatum, or could her talents be better deployed in another way? We chose to ask her talent-based, rather than policy-based, questions and opened a door for connection and flourishing: Is this the best fit for you? Is this job using your talents and influence? Her answers were no, and after a series of conversations, she decided it was time to move on. She went on to launch a remote assistant company which, in 2020, grossed over $1M. Looking back on her manager, she says, “He took the time to identify my unique skill set and put me in positions in which I was able to thrive.” Had the company been able to look past the policy and see the person, all that talent may well still be inside the organization.
People are key to the process. Our process matters, because our people matter.
We have also seen executives make bad situations worse by alienating their own teams. When a business crisis arose at one company, we saw the senior executives react by hiring external consultants to uncover the root problems and suggest solutions. The external consultants were motivated to “prove” their worth. However, the employees, feeling devalued, were at best uncooperative and at worst motivated to undermine the entire process. Junior team members noticed the lack of cohesion, and began to leave the firm. We believe that if the executives had seen their own employees as stakeholders, they would have first worked with the internal team to assess and problem-solve. The lesson we learned was that developing buy-in with employees is critical—and not just when a crisis arises. People are key to the process. Our process matters, because our people matter. Our philosophy is that all employees can be change agents, and that developing buy-in takes intentionality and authentic leadership.
All these lessons went into the creation of the Palingen Talent Model. Our model recognizes the employee as our strongest asset, prioritizing four key areas to foster employee engagement and growth resulting in the flourishing of the employee as a whole person:
Personal & Relational—programs that show our employees we value their personal growth and the health of their relationships; for example, sponsored leadership development or mentorship and financial support for marriage conferences and family camps
Community—programs that recognize companies are always operating within a community; for example, paid leave for community service, ministry and humanitarian work
Human Resources—HR policies that are about more than just compliance; for example, generous maternity/paternity/adoption leave and addiction/substance abuse support and prevention
Mental/Spiritual Health—programs that prioritize the mental and spiritual health of employees; for example, sponsored chaplaincy and/or counseling services and resources for employee-led spiritual study
When we conduct ourselves with honest and empathetic leadership, we believe that employees will replicate that within their teams, with customers, and within their communities. This type of leadership will pay dividends for employees and investors alike.
When we conduct ourselves with honest and empathetic leadership, we believe that employees will replicate that within their teams, with customers, and within their communities.
If you are thinking about selling your business or are an investor for whom this approach resonates, we would be thrilled to connect with you!
Wednesday, April 28th, 2021
Special thanks to Elisabeth Wadsworth for her help with this article