Understanding Investment Strategy, Leadership, and Flexibility in Today’s Environment

In a recent Workforce Cohort session, members had the opportunity to learn from Grant Jackson, Managing General Partner at Council Capital, in a conversation with Chris Nichols. The session explored how today’s healthcare companies can successfully navigate the intersection of capital strategy, leadership hiring, and market dynamics. Through real-world examples and practical insights, Grant offered a candid view into what Council Capital looks for in executive teams, how their investment model is structured, and why adaptability—both in leadership and strategy—is critical in today’s environment.

Mapping the Capital Landscape: Venture, Buyout, and Growth Equity

Grant began by unpacking the spectrum of investment capital, illustrating how different types of investors approach risk and reward.

• Venture Capital sits at one end of the spectrum—characterized by high risk and high return. Venture capitalists often bet on early-stage companies that may lack profitability but have outsized growth potential. These investors are comfortable with failure in many investments as long as a few generate exponential returns. In healthcare, these bets often center around innovation, disruption, and scale.
• Buyout Funds, on the other end, focus on acquiring mature companies, often using leverage to drive value creation. These funds typically prioritize operational improvements, cost efficiencies, and steady returns rather than dramatic growth.
• Growth Equity exists in the middle. By taking a minority stake, you aim to support and participate in the company's success without taking full control. 

Council Capital invests at the intersection of buyout and growth equity, doing micro-buyouts of profitable companies that are growing fast. Instead of using a lot of debt, Council prefers to adequately fund the companies it invests in with equity to maximize growth.

This middle ground, Grant explained, is especially relevant in today’s shifting economy, where businesses need more than just capital—they need strategic alignment, operational discipline, and leadership maturity.

Risk-On vs. Risk-Off: Adapting to Market Cycles

In today’s economic climate—what Grant Jackson describes as a “risk-off” environment—venture capitalists and all private equity investors are prioritizing financial discipline. That means startups are expected to show a better balance between growth and profitability, rather than chasing rapid expansion at all costs. When the market shifts to a “risk-on” mindset—typically during booming economic times—the focus flips, and investors are more willing to overlook high burn rates in favor of aggressive top-line growth. Jackson notes that one of the biggest challenges is knowing where you are in that cycle. If you bet on fast growth during a downturn, you may end up needing to pivot quickly and cut costs. In contrast, if you get the timing right during a growth-friendly market, you can significantly increase your company’s exit value.

What Council Looks for in Executive Teams

Chris posed a critical question: What characteristics do you think matter most in the CEOs Council chooses to back?

Grant’s response identified four qualities that distinguish great leaders:

1. Resilience
   Inspired by Nassim Taleb’s Black Swan, Grant noted that human nature tends to project the future as a straight line, but the past—and reality—show unpredictable ups and downs, so leadership teams must recognize these risks, accept they can’t perfectly predict outcomes, and be able to adapt and roll with the changes.
2. Trust & Transparency
   Trust is critical but often overlooked, and it’s built through transparency and straightforward communication. Being plainspoken—clearly saying yes, no, or when something isn’t working—eliminates confusion about what someone is thinking. People quickly form reputations based on whether they are consistently optimistic or cynical, so maintaining a balanced, honest approach helps others know where you stand. This straightforwardness fosters confidence in your words and makes it easier for those around you to trust and rely on you.
3. Accountability
   While charisma can attract attention, sustained performance comes from leaders who hold themselves and others accountable. Looking for leaders who set clear expectations, define measurable goals, and rigorously track progress.
4. Team-Oriented Decision-Making
   At the executive level, effective decision-making means being team-oriented by focusing on solutions and advocating for the team’s best interests while encouraging respectful disagreement. It’s not about groupthink, but about thoughtfully considering different perspectives. Once a decision is made—after incorporating all viewpoints—it’s important to support that decision fully and avoid harboring resentment, ensuring unity and forward momentum within the leadership team.

Building Better Teams: A Rigorous, Respectful Approach to Hiring

At Council Capital, resilience isn’t just a desirable trait—it’s a critical lens that guides a deeply intentional and structured hiring process. Adapted from Jeff Smart’s Who, which Managing Partner Grant Jackson calls “literally a blueprint for how to hire,” the process begins by tailoring each role around the specific knowledge, skills, and attributes needed. From there, interviews are designed to build on one another—each with a distinct focus, such as technical expertise, cultural alignment, or leadership experience—allowing the team to collect a layered, objective view of each candidate. As Chris Nichols explains, this avoids the common trap of redundant interviews that yield thin, fragmented insights. Instead, it creates a cumulative dataset that surfaces meaningful traits, especially resilience. That attribute is most evident during the topgrading interview—a multi-hour deep dive into every stage of a candidate’s career—which, as Jackson notes, is difficult to navigate without resilience truly showing. Even reference checks are treated with rigor, guided by insights gathered throughout the process. For candidates, this level of diligence often stands out as a mark of respect, especially in high-volume hiring environments where thoughtful engagement is rare. As a result, Council’s approach not only helps avoid mis-hires but also ensures a stronger, values-aligned match for both the firm and its portfolio companies.

Founders vs. Hired Executives: Evaluating Different Leadership Journeys

Grant Jackson emphasizes the unique nature of evaluating founder-CEOs compared to outside hires. Founders often possess the grit, irrational optimism, and risk tolerance needed to build companies from the ground up. However, the same traits that drive early success—especially the ability to ignore naysayers—can hinder introspection and limit their effectiveness as the company scales. Jackson points out that great founders are those who recognize when they’ve reached their leadership ceiling and either develop to meet the next challenge or step aside thoughtfully.

Stages of Growth: Leadership Needs at Different Company Sizes

As companies scale, so do their leadership needs. Jackson breaks down the evolution of executive traits by revenue stages—$3M to $10M, $10M to $50M, and beyond. He notes that company needs can vary not only by size but also by strategic goals. For example, a tech firm may need a visionary CEO focused on strategy and growth, while a more established operational company may need a leader skilled in execution. Matching leaders to the specific stage and strategy of the business is critical to long-term success.

First-Time CEOs: Often a Smart Bet

Contrary to conventional thinking, Jackson expresses enthusiasm for first-time CEOs. Backed by Harvard research, he argues that first-time CEOs often outperform repeat leaders because they have something to prove and bring heightened energy and focus. Council Capital evaluates these candidates not just on general CEO traits, but on how well their strengths align with the specific needs of the business at its current stage.

In Closing

This Workforce Cohort session offered valuable insight into how investment firms like Council Capital evaluate healthcare organizations and executive leadership. In today’s complex environment, resilience, transparency, and adaptability aren’t just buzzwords—they’re survival skills.

Whether you’re leading a healthcare company, building an executive team, or simply navigating today’s workforce challenges, the message was clear: disciplined leadership and thoughtful strategy will always have a place in the market, no matter the cycle.

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