At LAVA, we like to do things differently. From our team’s flat structure to streamlined deal negotiations, we actively seek out ways to challenge traditional M&A practices, so we can be innovative, creative and forward-thinking in everything that we do.
Our recruitment policy is the perfect example of this approach. When it comes to building our growing team, we go against industry protocol, making it our mission to hire talented individuals whose background, skill set and experience is different from ours.
While working as a group of diverse individuals isn’t always comfortable or easy, we’ve found it leads to a better experience for the team and better results for those we work with.
To shed some light on our recruitment strategy and how it benefits both employees and clients, we asked Partner Hamish Martin to answer a few questions about why LAVA adopts a hiring policy that champions difference over similitude.
How does LAVA’s approach to building their team differ from a typical M&A firm?
At LAVA, we’re trying to build as diverse a team as possible, taking into consideration different areas such as gender and culture. Alongside these factors, we also have a real focus on professional backgrounds – particularly work experience and skill sets.
A typical firm will be looking to recruit people from M&A backgrounds, whereas we go wider than that, bringing diverse skills into the team. For example, although we do pure M&A work, our latest hires come from areas such as financial due diligence, SPA advisory work and operational strategy and integration.
By bringing in those skill sets, we’re not going to start selling financial diligence or operational integration advisory services, but aspects of these fields sit across a lot of what we do. So having those skill sets in-house means we can provide a more holistic offering to our clients.
What inspired this less conventional recruitment strategy?
From experience of working in larger firms, LAVA’s founding members – Claire, Simon and myself, have always recognised the need for industry change, leading us to shake up old ways of working, such as recruitment policies. Aside from this, there’s a lot of research supporting the idea that performance and output are enhanced when a team is made up of diverse backgrounds and skill sets.
One article that had a big impact on us is Harvard Business Review’s “Why diverse teams are smarter”, which references a number of different studies, including one from The Personality and Social Psychology Bulletin.
Carried out at an American university, this US study divided people into teams, with some made up of people from the same sorority or fraternity and others from different sororities and fraternities. The groups were then given details about a past criminal case and asked to provide their opinion on the verdict.
Interestingly, the groups made up of people from the same background reached their answers quickly and were very confident in their reasoning and responses. In comparison, the more diverse groups found it a more tricky exercise to do. They felt uncomfortable being challenged by those who thought differently from them and weren’t as confident in the accuracy of their decisions.
But actually, on the whole, the groups from the same sorority or fraternity gave more inaccurate answers compared to the more diverse teams, who performed much more strongly across all metrics.
What this research showed us was that working with people who are different from you will challenge your brain to overcome its stale way of thinking, help sharpen performance and lead to better results.
How has a hiring policy designed around attracting different skill sets and experience led to more diversity in the LAVA team?
Hiring outside of industry norms has meant that within our team, we have a wide range of personalities and individual ways of working.
One of the tools we use to explore this range is the Insights Discovery questionnaire. For anyone unfamiliar with the test, it’s based on Jung’s personality types and generates four key personalities linked to colours. You have fiery reds – people who are competitive, demanding and strong-willed; sunshine yellows – those who are sociable, dynamic and enthusiastic; earth greens – caring, encouraging and relaxed individuals; and cool blues – people who are logical, precise and questioning in their thinking.
These four colours are mapped onto a wheel, and after you complete the questionnaire, you’ll have a mixture of these different colours and end up somewhere on that wheel.
I know from my time working at larger firms that traditionally, M&A teams are made up of red and yellow personality types. There are far fewer blues and greens in the space. In contrast, at LAVA, we have a really widespread mix of people across red, blue, yellow and green colour groups.
How does the variety of personalities impact LAVA’s working environment?
To begin with, working alongside people with different backgrounds and viewpoints can make things slightly uncomfortable because everybody’s thinking in different ways, and you’re not working with people who always agree with you.
But once you get used to that, it’s really rewarding. It creates an exciting environment where you’re constantly being challenged and are supported and driven to be the best person that you can be.
You’re also moving away from conformity and group thinking, which is important because conformity discourages innovative thinking.
At LAVA, innovative thinking is at the heart of what we do. We pride ourselves on being creative in our approach and never following set templates or boilerplate processes. We try to view every single mandate and every single client as completely unique and deserving of a tailored approach. So keeping that innovative spark firing around the office is crucial.
What benefits can clients expect from a more diverse team?
One of the biggest benefits I can think of is our tailored M&A process, which is rooted in a concept we use called the “Beginner’s Mind”.
The idea behind the Beginner’s Mind is that if you’ve done something many times before, you’ll have usually fallen into a pretty set way of how you do that process. Even though the circumstances of each scenario are different, you’ve got into a bit of a rut and have a standard way of doing things. You then just follow that formula again and again.
At LAVA, we really try to avoid this formulaic process. We take a step back and say, “Well, this is how it’s been done in the past but does that mean it’s the best thing to do going forward?”
It’s about looking at the bigger picture and working out if there is another method or process which would be more appropriate.
Having a diverse team really helps with this approach because we can bring such a wide range of viewpoints and opinions to the table. Whatever their business challenge, our clients will know we’ve looked at the scenario from all angles and can present them with the very best solutions for their unique needs.