Q&A WITH MIKE McTIGHE, INDEPENDENT CHAIRMAN
Mike McTighe has spent his entire career in the technology sector with some of the most successful global companies.
He has held a number of directorships, and is currently Chairman of Phyworks Ltd, Chairman of Red M Communications Ltd, Chairman of Via Networks, Inc, Chairman of Corvil Networks Ltd, Chairman of Alphamosaic Ltd, a non executive director of Pace Micro Technology plc, a director of London Metal Exchange Holdings Ltd, and a non executive director of Alliance & Leicester plc.
Mike also advises a number of private equity partnerships. Previously he was Chairman & CEO of Carrier1 International SA, and before that Executive Director & Chief Executive, Global Operations of Cable & Wireless plc. Prior to these experiences, Mike spent 5 years with Philips in the Netherlands, 5 years with Motorola, and 10 years with GE.
We caught up with Mike McTighe to find out what it has been like to transition from the CEO of a global corporate to becoming a very successful, independent Chairman.
Did you make a conscious decision to develop a portfolio career?
I've always taken an interest in what it's like to be on the other side of the Executive fence as a Chairman or Non Executive Director, and in the summer of '98 had an opportunity to take stock of my life.
I had become jaundiced by the big corporate machine and realised that my personality was drawn towards a more straightforward direct dealing culture.
Whilst I could play the corporate game and play it well, I didn't enjoy big company politics.
Nevertheless, in early '99 I was approached to be Chief Executive of Cable & Wireless Global and was unable to turn it down - I just wasn't emotionally ready to change direction at that time!
I enjoyed very much my time at C&W but, in many ways, it simply reinforced what I didn't like about corporate life.
Given this, was it an easy decision to embark on a portfolio career?
Intellectually, the more independent career and lifestyle were attractive. The prospect of working with VCs, small companies, and entrepreneurs was very exciting. I was also fortunate to have a degree of financial independence to be able to make choices and follow my own instincts.
However, it has certainly not been an easy route for me to become a successful independent Chairman. I've had to carefully consider the pros and cons of going down the portfolio route. One goes through this fear that no-one will call you when you no longer have a big company name on your business card. You also have to be self confident and pretty resilient - the higher the risk, the greater the opportunity, but also the likelihood of failure. No matter how good you are, some of these small company ventures simply won't work and will fail.
Also you lose the trappings of corporate life - there is no pension, employment contract, chauffeur, secretary, and above all, no business card which used to define my identity. Like most other high achievers I was personally quite insecure. I was living a life where success was defined, not by what I wanted - I don't even know if I really knew then - but by what I call 'False Icons', such as very expensive houses, cars, and job titles.
In hindsight, I should have started my portfolio career earlier than I did, but was lured by C&W to join them. I simply didn't have the emotional maturity at that time, and opted for what was the safe and 'proper' option, with insufficient regard as to whether this was in line with my personal values.
The situation is very different now, and I've stepped up to being me instead of what the culture of another organisation wants me to be. I now dance to my own drumbeat and not to that of a large corporate.
People now tend to phone me because they want to speak to Mike McTighe, the person, and not the CEO who just happens to be Mike McTighe.
Now, as a consequence of living my values, I think I'm a much better businessman. By being more grounded in myself and more truly self-confident than before, I have made myself more valuable.
Now that I'm more comfortable with myself, I'm far happier and fulfilled in my personal as well as my business life, and the two are better balanced than ever.
How did you acquire your current portfolio?
Well the first thing I did was to ensure my contract with Cable & Wireless allowed me to take up non-executive posts.
I then let it be known to the executive search community that I was interested in NED roles, and quickly secured NED roles with Pace Micro Technology and Alliance & Leicester.
I learned an awful lot from being on both sides of the fence as Executive Director of C&W and NED at Alliance & Leicester. It helped me develop a good understanding of governance and best practice.
I nurtured my long standing relationships with Providence Equity and Apax. Providence put me into Carrier1 and Apax put me into Red M.
When in February 2002 I decided to commit myself to a portfolio career, my initial focus was in getting to know the wider VC community. This was a mistake because I spent too much time and energy talking to too many people, with no tangible results - the meetings were always great but not much came of them.
So then I focused on a small number of VC's and worked to develop their confidence in me. I've always shown that I am willing and capable of dealing with any problem that their portfolio companies may have.
This focus on earning the trust of a small group of VC's has also led me to my more recent roles at Corvil, Alphamosaic and Phyworks.
Your roles at Alliance & Leicester and the London Metal Exchange would not readily appear to reconcile with the other roles in your portfolio which are all in the technology sector?
To this day I love my role at Alliance & Leicester. It immediately gave me access to a whole gamut of new things, and in return I was able to bring a state of the art technology brain to the Bank.
I joined the London Metal Exchange in November 2002 when they needed to add a technologist to their Board. This was a completely new business with a new group of people and has proved to be tremendous.
How else could anyone at my age and level become familiar with a completely new sector?
How do you know if an opportunity is right for you?
I learned that it has to be a two-way street, with both parties adding value to each other.
I had a bad experience with a French company, which forced me to think through why it didn't work. As a result of this, I have developed a three-point checklist to evaluate what makes a good Chairman role for me. I must:
1. be able to work with the CEO, and there must be mutual respect. I make it clear from the start that I am not a threat - I do not want their job. The CEO has to want a chairman around. Our personalities and styles must gel. I'm very supportive and like to interact informally with a CEO that wants my involvement.
2. believe in the business proposition and the fact that we can implement and have a chance of success. By nature I'm a risk taker, but like my risks to be thought through and manageable.
3. feel good about the investors. They must share the same vision as the management of the company and myself. The investors must give me freedom of action and have trust in me. You are in many ways their proxy. This forces you to work with a smaller number of VC's.
My judgement is based on a balance of all three things but weighted towards being able to establish the right relationship with the CEO. To an extent, the onus is on the CEO to make it work as the Chairman role is interventionist in nature and can only contribute when kept informed.
How do you see your portfolio developing in the future?
My focus is very much on non-listed company chairmanships as I'm not interested in corporate governance-only type roles.
I like to spend quality time with the CEO, and be hands-on to develop strategy without interfering with the running of the business. As a Chairman, you have the option and flexibility to do this. As an NED, it's very difficult to have this same freedom of action. Therefore, I only consider opportunities as Chairman and not NED roles.
Now that my reputation as a Chairman and personal brand have both been established, I've gathered a certain momentum and reached the stage where I'm constantly approached with opportunities. The situation has become viral in that contact has nearly always been made by word of mouth.
Five Chairmanships and three NED roles are enough for me now. For me to take anything else on board, something would need to fall away from my current portfolio.
This said, the portfolio approach requires that you keep talking and keep a hand on the market as you need to keep recycling and refreshing your portfolio. It's an iterative thing.
In comparison to when I was working as a CEO, I'm now working part-time. Some weeks I may work seven days and other weeks virtually not at all. No two weeks are the same.
I spend one week every month in the US with my partner and want to retain this flexibility moving forward. I am, however, very much available and responsive to the needs of my portfolio companies when I'm in the US.
The bottom line is that I love what I'm doing and have a much broader, but less deep remit than when I was an Executive Director. I also have a growing new dimension in that I'm an investor in some of these portfolio companies as well.
I have to say that I consider myself to have been lucky, but then I believe I have also made my own luck!
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