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The economy changes. Consumers’ wants and needs change. The way in which companies fulfill (and in some cases create) those wants and needs changes. Yet the characteristics of effective business leaders don’t really change.

Industrialist and philanthropist Andrew Carnegie outlined 31 of them in 1908, and they still apply. They deal with purpose and vision, motivation and work ethic, self-discipline and self-control. 

It could be argued that the appeal of the best businesses starts right there -- that a company’s worthiness is established from the top down. That will go a long way toward determining its effectiveness, and its allure not only to customers but to investors.

Here is a review of some of the more prominent points Carnegie made about leaders all those years ago, and how they apply today:

They Have a Definite Purpose and a Definite Plan for Attaining It

In other words, they have their eyes on the prize, and never avert their gaze. And yes, profitability is always an important goal, but it goes beyond that. Warren Buffett once said that businesses should look to establish a wide economic moat -- a loyal customer base or product/service that is difficult for the competition to match.

It goes without saying that the wider the moat, the more diverse and secure the future business.

This addendum, specifically in reference to angel investors: William Vanderbloemen, CEO and Founder of Vanderbloemen Search Group, a pastor search firm that helps churches and ministries build teams, wrote on Entrepreneur.com that the goal should be to appeal to investors’ brains and hearts -- that there should be an alignment of cause, and it should be a worthwhile one.

They Surround Themselves With Talented People Who Share Their Vision

Carnegie called it a “Master Mind alliance,” and said a business can’t get anywhere without the “coordination of minds working toward a definite end. The team is key. These days that includes enlisting the services of all manner of consultants, the better to parse all the information now at one’s fingertips.

They Collect All Possible Facts Before Making Judgments

The best leaders know what they don’t know, but also know what to know and where to look for answers, whether by consulting all those advisors they keep alongside them, or by doing the legwork themselves. Either way, they are flexible and careful to make informed decisions.

They Pay Attention to Detail

Carnegie was specifically referring to workers’ responsibilities, but that has taken on a whole new definition in this day and age, when you consider analytics and financial options. One plan for start-ups, for instance, encouraged bringing partners on early and pursuing non-dilutive capital -- i.e., financing that does not require sacrificing any part of an ownership stake.

They Understand Others' Motivations

This is an absolute must -- understanding not only what makes customers tick, but potential investors. The latter, for instance, tend to be attracted to things they understand, such as technology, food and restaurants.

There are several other qualities on Carnegie’s list, but the central point remains the same: Everything starts at the top and is driven from there. The leader must determine a company’s appeal.

About the Author(s)

Henri Steenkamp Saratoga Investment Corp

Henri Steenkamp is the Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary of Saratoga Investment Corporation as well as Saratoga Investment Advisors, LLC. With 20 years of experience in the field, he specializes in financial management, capital markets, restructuring, finance transformation and accounting and financial reporting. 

Chief Financial Officer, Saratoga Investment Corp.
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