A Growth Partner for Good An Interview with Mats Lederhausen

mats

May 30, 2012

The TIO Intelligence Blog is an excuse to engage with individuals that we admire. So, we are very proud and honored to announce our first candidate Mats Lederhausen, founder of BECAUSE LLC, a company that invests intellectual and financial capital in proven businesses with potential to scale. 

TIO Intelligence: Tell us about your background and what motivates you.

Mats Lederhausen: I was born and raised in Stockholm, Sweden. I have spent most of my career leading institutional change in both large and small companies. After successfully building close to 200 restaurants in Sweden, I moved to Chicago in 1999 to become head of Global Strategy at McDonald’s, and to help with its turnaround. I was later fortunate enough to become Chairman and Lead Director of Chipotle, as well as Boston Market, Pret A Manger, and RedBox.

In 2007, I started my own business. My motivation is to harness capitalism towards a true force for good. I want to prove that doing well and doing good are mutually reinforcing, rather than mutually exclusive forces.

Your investment company, be-cause, is very interesting because it places philosophical and social demands on the companies it engages with beyond financial and organizational criteria, namely a “purpose bigger than product®“. Could you tell us a little bit about be-cause, and its current roster of companies. Are you a venture capital firm?

I don’t like labels. I think they are limiting. As a Swedish poet once eloquently expressed, “There is only one race. Humanity. And there is only one religion. Love.” So no, I am not a Venture Capital Firm. Simply put, I am a growth partner for good.

I have three criteria that I take equally seriously. First, PURPOSE. The idea must have a purpose bigger than its product. The company must be a solution to a recognized human problem. Additionally, the successful scale of this idea must be considered a “good thing”. Second, PEOPLE. I only partner with people I love. And I mean LOVE. Life is too short. People that are good want to do good, and they have that beautiful combination of intellectual, emotional, and spiritual conviction and maturity. Finally, PROFIT. If these investments don’t make money, their ideas won’t win. Only when things are both profitable and good, will they scale and “win”. That’s why we have a responsibility to do both.

Currently, I am involved in building a Mediterranean Restaurant Concept called ROTI. We have 13 restaurants open. Our mission is to serve “food that loves you back”. I am also involved in a weight loss concept in Europe, called ITRIM, that we are bringing over to the US later this year. I am chairman of Sylvan Learning, where we are passionate about Personalized Education for K-12 students. I am very involved in LRN, a great firm helping companies with their culture and inspiring towards principled performance. Finally, I am a Senior Advisor to Sterling Partners, and a Special Partner to Cue Ball. Both are investment firms that passionately share my philosophies.

How would you define your own philosophy? And how does it relate to growth?

I believe we often confuse growth and success. Not everything that is bigger is actually better. I believe we need new metrics in our society. The industrial logic helped bring many advances in many fields. But we have now run that logic to its conclusion. We need a new scorecard. We don’t get healthier with more MRIs, eating more food or consuming more oil. We need to introduce more quality to our quantity.

Some companies’ success can and will still be measured in quantitative measures. But we also need to add many qualitative measures. Happiness is one good example. Growth in happiness isn’t a bad outcome. Growth in ethics would also be good. Decline in incarceration sounds pretty good to me. My philosophy is to grow what’s good and reduce what’s bad.

OK, so we need a new set of parameters by which we measure corporate success and achievement. How important is branding in a company’s pursuit of success? Does branding create an identifiable face for companies that the public can hold accountable for their behavior or does branding simply enable them to tell better lies and hide their ugly practices?

Good question. Branding can be both. In its worst form, it is lipstick on a pig. It is veneer. Wrapping up fragmented deliveries of something incoherent. In better cases, it is an honest effort of communicating what you believe it is that you deliver. In the best cases, it is the source of the promise of your company. It signals the intention you have, and every single contact with your customers is like a fractal of that promise. The whole is larger than the sum of its parts. It is credible because it is true.

In the old world, branding was one to many. It was broadcasting. It was about creating impressions. Today, branding is more about creating expressions.

Does it make sense to treat branding horizontally, across the entire organization, as opposed to a function of the marketing department? We have seen brand reputations destroyed or damaged by shady accounting, reactionary human resource policies, and inhumane conditions at sub-contractors and suppliers. Do you think it might be time to redefine branding as a discipline?

Well, this is the problem. We organize and measure our activities based on the old way of doing things. Churchill once said, “We are changing the world faster than we can change ourselves, and are applying to the present the habits of the past”. To me, that is the problem we are facing across many vectors of society.

Branding must start with a clear sense of purpose that is shared, believed, understood, and owned by the entire organization. First then can a brand team execute, since they now have a brief that captures the sum of all intentions. I often reminded my colleagues at McDonald’s that our customers spend 40 minutes per month in the restaurants, but only 2-3 minutes in front of a commercial. Which messaging is more important? Clearly, operations should be considered part of branding as well.

Which magazines and newspapers do you read?

I read a ton, mainly online. I read Fast Company, HBR, The New York Times, Fortune, Time, and then a host of articles from many different sources.

Top five websites that you visit every day?

I am big on aggregator sites that put all my RSS feeds and stuff into one place. Therefore I tend to spend a lot of time on MyNetvibes and Yahoo, where I have my personalized stuff sorted. Other than that, Google, Facebook, and LinkedIn rank high.

Most recent book that you read?

I read at least 5-10 books simultaneously. My latest favorites include The Rare Find by George Anders, Spark by Ratey and Hagerman, and The End of Illness by David Agus.

Any parting words of wisdom?

Minds are like parachutes. They work best when they are open. Wisdom is a journey of accumulated experiences, insights, and relationships.

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