The 3 great traits of management teams

HR professionals who can help nurture leaders to make bold decisions, act like owners, and create lasting impacts will be instrumental in shaping the companies that stand the test of time, writes Lawrence Lam.

Most HR professionals spend their days ensuring teams run smoothly, managing talent, and solving immediate challenges. But what if we take a step back and look at what truly makes management teams successful in the long run? As an investor, I assess companies not from the inside but from the outside – focusing on patterns that create lasting success. This perspective is crucial because many managers, caught up in daily operations, struggle to zoom out and assess themselves against the world’s best.

For HR leaders, recognising and fostering these traits in future talent can transform an organisation’s long-term trajectory. The best management teams share three standout characteristics: they make bold, unconventional decisions, they act like true owners, and they have the power to influence both inside and outside their company. Here’s why these qualities matter and how you can identify them.

1. They make bold, unconventional decisions

Playing it safe doesn’t build great companies. The best leaders are prepared to make big bets – ones that often look risky but have their downside mitigated and protected.

Take Jean-Louis Dumas, the man behind Hermès’ modern success. In the 1990s, while others were pushing for rapid expansion, he did the opposite: he reduced store numbers to make the brand more exclusive. This was a difficult decision in the short term, but the strategy was to elevate the brand cachet over the long term. The decision raised eyebrows, but today, Hermès is one of the most coveted luxury brands in the world.

Amazon is another classic example. Early on, Jeff Bezos ignored calls for quick profitability and instead poured money into logistics and infrastructure. At the time, critics mocked it as “Amazon-dot-con”. Fast forward a few decades, and that same strategy made Amazon a retail powerhouse.

Netflix pulled off a similar feat when it pivoted from DVDs to streaming. Most people still had shelves full of DVDs, and the move seemed risky. But that leap of faith turned Netflix into the entertainment giant it is today.

The lesson? Great management teams aren’t afraid to make bold, counterintuitive moves. If a company’s leadership only makes decisions that please the market in the short term, that’s a red flag. For HR leaders, fostering a culture where teams are encouraged to take calculated risks and innovate is key to long-term success.

2. They think and act like owners

True leaders don’t just run a company; they build a legacy. They care about every detail, reinvest in what matters, and don’t chase short-term financial tricks to prop up stock prices.

Look at Brunello Cucinelli, founder of the eponymous luxury brand. He’s obsessed with craftsmanship, ethical labour, and sustainability – not just because it’s trendy but also because he sees his brand as something that should last for generations. This long-term mindset has helped Cucinelli’s brand stand out in a crowded industry.

In contrast, management teams focused on cutting costs, buying back shares, or squeezing out short-term profits often signal a lack of real commitment. These moves might boost the stock price for a quarter or two, but they don’t build sustainable businesses.

As an HR leader, identifying and promoting individuals who exhibit an ownership mindset – those who think beyond their immediate roles and focus on long-term impact – can be a game changer for your organisation.

3. They influence more than just their customers

Great leaders don’t just sell a product – they create a movement. They inspire employees, customers, and even entire industries.

Elon Musk, for all his controversies, has turned Tesla into more than just an automaker. Without spending a fortune on traditional advertising, he’s built a community of die-hard supporters who believe in the company’s mission.

Lululemon is another example. It’s not just about selling leggings – it’s about promoting a lifestyle of fitness, mindfulness, and community. Lego, meanwhile, has cultivated a fan base that spans generations, keeping its brand relevant even as digital entertainment dominates.

Compare that to companies that rely on aggressive marketing to push sales. If a company is constantly spending big on ads but lacks genuine brand loyalty, it’s a sign that its influence isn’t built to last.

HR professionals play a critical role in developing leaders who can inspire, align teams, and create a strong company culture that extends beyond just business objectives.

Spotting the real winners

So, how do you tell if a management team is the real deal? Sometimes, it comes down to small details. Years ago, I met a founder who took a different approach than his competitors. While others were expanding recklessly, he focused on building a strong culture and making every customer feel like part of a long-term mission.

When I visited his office, there were no flashy perks – just an ordinary-looking office with a team deeply committed to their mission. Employees spoke passionately about their company’s purpose, and customers weren’t just buying a product; they believed in the brand.

At the end of the day, real success isn’t about polished investor decks or well-crafted PR campaigns. Investors like myself see through this facade. Instead, foster leaders who make bold decisions, act like owners, and create a lasting impact. HR professionals who can recognise these traits and nurture them in their own organisations will be instrumental in shaping the companies that stand the test of time.

Lawrence Lam is an author and the founder and managing director of Lumenary Investment Management.