When someone shows you who they are, believe them the first time

The wisdom of Maya Angelou is often served as a stiff shot of the obvious with a humility backer. This quote has popped up in numerous things I have read or seen recently, and given my last post was about “trust” – it seemed like a good follow-up.

After several decades in the investing/advising world, mainly to smaller businesses, this Maya A. quote resonates more and more with me. Inevitably, how you treat people in life and business speaks volumes. It is your body of work. It is who you are. I am an engineer by background. I love to attack, break down, and try to solve challenging problems. I also really enjoy working with teams to try and hone their focus, their communication, their performance, etc. And for better or worse, I have fallen victim more than once to ignoring this rule.

Certainly, people have challenging circumstances in their career. Some things go well, some things do not. But if you see any pattern of head scratching behavior or past concerns, your radar should light up. Brightly. Success or failure isn’t necessarily the data point. How did they treat people? In the world of institutional investing in small/growth businesses this challenge can be exacerbated. Someone who has built a business up over decades likely has done so with trust and good business practices. How long have they had their customers? Their employees? Their vendors/service providers? The hardest part is often getting them to trust you as a buyer or investor. And to not give them a reason to see something different than who you really are.

As for who you partner with, who you spend your time with – therein has been the challenge sometimes for me. I have been blessed with many extraordinary long-term relationships with individuals in whom trust is well placed. And yet I have also ignored signals and wasted a great deal of time with some who indeed showed me who they are, but I ignored it. I used excuses like “Yes, buy they’ve never treated me that way, and in fact have always treated me with mutual respect…” It felt as if was trust was well placed. Until it wasn’t.

In the world of investing, you come across some very polished characters. Whose financial success precedes them and yet they seem humble, sincere. Any prior challenges, concerns, issues – they are explained away by well crafted, but one sided, stories. Here is what I have learned. Look at the data. What does IT show you? Not what someone says. Anything more than one, and certainly more than two, issues should lead you to move on. Maybe you’ll miss an opportunity, but that is better than waiting for them to really show you who they are. Because more than likely they really already did.