Episode 78: Jon Nuger of Berkshire Partners on
the Strategic Impact of Prioritizing Culture

Episode Transcript  

Shiv: Alright Jon, welcome to show. How's it going?

Jon: It's going great, Shiv, it's great to be here. Thank you for having me.

Shiv: Yeah, excited to have you on. So why don't we start with an introduction about yourself and Berkshire and let's take it from there.

Jon: Sure. My background, Shiv, I joined Berkshire about 13 years ago in 2012. My background prior to that, I started my career, actually lived abroad for a year after college. I taught English in the Mekong Delta in Vietnam, which is not the most natural segue into private equity, but an interesting and terrific learning experience. I spent some time at Bain & Company as a consultant and then spent a few years at Golden Gate Capital in San Francisco on their private equity team. And then I was a product manager at a tech startup in San Francisco. I then went to business school and made my way to Berkshire in 2012 and have been here since then. My path to Berkshire was largely centered around finding a group of people and a culture that I was excited about. I had gotten to know Berkshire before I joined the firm. I like to say my interview process took six years. I first met the firm in 2006, interviewed for the associate role, met them again when I was in business school. And within Berkshire, I co-lead our tech and communications team and spend all of my time in and around our, primarily our software portfolio companies.

Shiv: And what would you say is your focus in terms of the types of companies that you're investing in, in terms of stage, revenue, life cycle, et cetera?

Jon: Yeah. Yeah. So I think of us as growth focused buyout, Shiv. So what that means in terms of profile and archetype within tech, it's typically companies that are 50 to 150 of revenue, typically, you know, moderate growth. We're not typically buying sort of hyper growth. So we're typically buying companies that are, you know, anywhere from 10 to 30 % growth and typically at least break even to slightly profitable would be kind of the typical archetype. And we're looking for good end markets, so end markets that have growth tailwinds, digitization, adoption, software penetration curves, and companies that are winning. So some degree of differentiation that we can identify and that we believe is durable. Those things sound simple and as you know, in practice, it's really hard to find companies that hit those all dimensions.

Shiv: Yeah. And so how do you go about separating yourself? Because there's a lot of PE firms that focus on companies with that type of profile. So what really helps Berkshire stand out?

Jon: Yeah, I think a couple of things that really help us stand out, Shiv, and some of these, a lot of our peers do, and then a couple I think are differentiated. I'd say one, we're very targeted. So we build very deep expertise in a relatively small number of targets that we then develop as our most, our highest priority targets. And so we'll spend years getting to know a subsector, a business, we'll have know, several meetings with the CEO or the team over the course of several quarters before the deal is actionable. We're pretty thematic. So we tend to be picking subsectors or companies where we've identified not only a team in a business that we think are winning, but a set of industry or subsector attributes. Those are all well and good. A lot of our peers are doing those same things as well. I would say for us also that the relationships and the culture and the reputation that we bring to it really do matter.

You know, our core values at Berkshire are really deeply held. Relationships matter, the power of teams, and winning the right way. It's a hard thing to bring to life, Shiv, but for us it is not just words on a page or on a website. It truly is a way of life and something that we hold very deeply in terms of how we operate and partner. 

It emanates from the way our firm is designed. We have a set of incentives within our system around how people are compensated, how we make decisions. We have a highly transparent culture. We have everybody sits in the room on every investment decision that we make. Nobody is compensated at the specific deal level. Everybody is compensated at the fund level or at the overall performance level. The result of that is an organization where people are extremely low ego, extremely truth seeking in terms of how we just try to solve the problem and do the best thing and extremely collaborative with how we go about doing that. The reason I start there as a way to answer your question Shiv is that carries over into how we partner with CEOs, with founders, with management teams and with other sponsors. And a lot of times when we get into deals or win deals or get the introductions in the first place, what carries us over the line is that reputation, is that approach, is that low ego collaborative way in which we partner with folks. As CEOs reference us, as other GPs reference us, they find very consistently that we just behave differently. The way we partner with management teams to set priorities, solve problems, get to the right answer, get the right people on the team, get the strategy right. The way we partner with other private equity firms when we're in a co-control or a partnership deal, which is an increasing number of deals, it's different. And so that alone doesn't make a good investment. But everything we do in this super competitive industry, it's just a game of inches and it matters. And if I look at every deal we've won, having that relationship and that reputation has played a role in winning that deal.

And if I look at the investments we're in, having that ability to build that trusted relationship, that collaborative relationship with the CEO, with the management team, it's a difference maker. And in particular, when things don't go perfectly, I think everybody behaves well when things are up and to the right. Not everybody behaves well or the same when you hit a bump and inevitably you hit a bump. So we have found over time that is more differentiating than you might think in an environment where most of our peers do 95 % of things the same.

Shiv: Yeah, you opened a lot of threads there and I want to jump into all of it. But let's start with the culture piece because that's something that I'm super passionate about as well. One of the ways we run our firm here is super transparent. We put our financials in front of the whole team every Monday. There's a ton of conversations when any big decision is being made and people are being looped into critical decisions for the company. So talk more about that because we often talk about how PE firms are partnering with their portfolio investments but we don't talk as much about the business of running the firm and raising capital, having the team that's actually going out there, chasing deals, having cohesion there and all that. Talk about that a little bit more. So what is the culture and what are the core values? And from hearing you speak, sounds like you're a Patrick Lencioni fan as well. So we're gonna kind of hear about some of that stuff and then we'll go from there.

Jon: Yeah, so thank you for that. A great question, Shiv. Let me start with the how and then the why. So the how. So Berkshire's been around for about 40 years. Our founders did a couple of things very specifically to set the foundation for this culture 40 years ago. One, they were five equal founders. None of them was the CEO. None of them have the firm named after them. None of them sits in a corner office. That's important thing number one. Two, they all agreed that they were going to share the ups and downs equally. So no deal specific or related compensation related to what they do. Everybody was going to share in the value creation equally. Three, there's no perpetual ownership of our GP. So the founder set it up so that as partners retire or leave Berkshire, their ownership goes back into the pool. There's no buyout. It never gets capitalized. Everything we do, everything they set up was so that the leaders of the firm are stewarding the firm for the next generation. So that's sort of important thing, number one. 

As the firm has grown, other ways that that's been calcified into our model are, one, the transparency and inclusion of our investment decision-making process. Our ICs are open, so our investment committee meetings, everybody participates, everybody votes. We are very significant co-investors. So the partners and employees of Berkshire are nearly 10% of our funds. And so that's compared to an industry average of I think 2 or 3%. And so everybody from our founders all the way down to our brand new associates, people are writing really meaningful co-invest checks in every deal, whether it's their deal or not their deal.

And then just we have a culture internally that really rewards collaboration, resource sharing, idea sharing, honest debate. When you sit in one of our investment committee meetings, it's not confrontational. It's collaborative. That doesn't mean it's not heated. That doesn't mean people aren't passionate about it, but it's passionate about getting to the right answer, not about somebody defending an idea and somebody trying to argue against the idea. So there's a real subtle but important difference in that whole ethos of the firm. That has led to a system where over time, the individuals who choose to join Berkshire opt in to that system. It's people who want to be in a system where it's team competitive, not individually competitive. They want to be in a culture that's low ego. It's a firm where nobody's ever going to be the hero. We're never going to have a single person who does a deal and spikes the football. It's all shared successes. And some people love that and other people, you know, that's not for them. But that means that everybody here becomes self-reinforcing of the values, of the ways of doing business, of the way we engage internally.

Shiv: Yeah, and there's something to be said because I've been in companies where what you're describing is not true. And as I'm sure you have, and I've also been in companies where that is true and it just feels different, right? Where you have everybody that's kind of bought in to what the broader vision is. I think you mentioned transparency. There's a couple of things you brought. One is just transparency. I think transparency is very underrated because when everybody has as much of the information as possible then decisions are understood from the top of the organization all the way through to the bottom. And everybody understands the why behind the decision. And I think inside of a lot of companies, the why is not understood. And so not everybody's making the most optimal decision. And there's these like political games that end up being played or status games that are being played. So I think there's something to that. And I would love you to kind of expand on that piece. And then the other thing that I appreciate you saying is just this co-investing piece, because I think in organizations like this where there is more transparency, there is more of this like even playing field for everybody. It creates a better wealth creation opportunity or wealth creation vehicle for more than just some of the core stakeholders inside the organization.

Jon: Yeah. Yeah. So on the first question, Shiv, you know, it's interesting. I am - one of the things I've noticed about Berkshire is when when people reference us, whether it's a potential new hire or a CEO or another or an LP, people always remark, you know, wow, when we talk, when we reference you, everybody describes the culture the same. And one of the one of the learnings I've had in my career is one of the clearest signals of an aligned organization is when you ask people separately, independently to describe their culture and their priorities, but in particular, the culture, do you get the same answer or different answers? And whenever you get the same answer, it's more rare than you think. And it's a hard thing to do where it's, again, it's one thing to write it down to say it, but when you really live the values and everybody is aligned around those, that's different. It feels different.

Everybody knows what the culture is. Everybody understands what the mechanisms for reward and success within Berkshire are, and they're very aligned with that culture. I'd say number two, look, it sounds really nice to work in a culture where everybody's collaborative, everybody's low ego, everybody tries to help each other out. And it is. That's not the main reason we do it. We do it because we believe it helps us win. And at the end of the day, culture is for us not only a way of being as an organization, it's a business strategy. We do it because we think it helps us make better decisions. We do it because we think we get to the truth better when people feel comfortable challenging each other and don't feel like they have to go to battle over their own idea. We do it because we think it enhances our reputation and helps us win deals and build more trust with the management teams that we work with. And so I think one of the reasons we've had success sustaining it over time is not only because it makes it a fun place to work and be a part of, but because people believe that it works. People believe that this truly is one of our differentiators in core competencies. And I think that's been a big part of the buy-in piece.

Shiv: Yeah, completely agree. I think, you one of the things that often doesn't get talked about enough is that culture is - culture trumps strategy in a lot of cases, right? You can have the best strategy, but if you have the wrong culture, it's going to be harder to implement it. And it shows up in a lot of ways. think one of the things is just retention. If you don't retain key people, you lose institutional memory over time and it becomes harder to do the things that really separate you or distinguish you in the marketplace. And I can definitely see that that's one way to kind of win more and win more deals, generate more alpha, all those kinds of things. And I think in a lot of firms or consulting or just private equity in general, there's a lot of turnover. People switch firms, people switch jobs, and you can lose a lot of value just by that happening. So I think just that in itself is a reason to invest more in it.

Jon: Agreed. No, look, we agree. We've been fortunate. Our turnover has been very low. And that's true both at the partner level and at the, you know, the VP and principal level. Look, I think we, our brand is clear in this respect. And so I think people who end up here are, just have a real belief in the way that we do things, both as a, what they want it to feel like when they come to work every day and also a theory of what it's going to take and what sorts of things are going to be durable in our industry over time and sort of transcend some of the more, you know, a lot of things have changed and are changing very quickly within our industry. This is always going to be a relationship business, I believe, is sort of my point of view and our point of view. And so I think people who buy into that really want to be a part of it. And because economically it's compelling because of the fact that the entire firm is owned by the current partners as opposed to some portion of it being calcified in prior partners or founders.

Shiv: How do you translate some of those core values into how people view companies? Because there's a culture or the core values that you use to manage the firm, which I understand and talked about. What about looking at companies? How do you value companies? How do you manage relationships with founders? Where do you invest? Where do you not invest? How do you vet management teams or their core values to see if it kind of aligns with you? And then how do you get our team all onboarded on that and what does your onboarding program look like just to make sure everybody understands that and is in alignment with the perspective there.

Jon: Let me ponder that for a second. So I think a couple ways I would connect our way of operating to our investment philosophy and sort of identifying companies. I would say, look, what's not different, industry quality, business quality, durability, mission criticality, growth vectors, strength of the management team, these are things that we look for and all of our peers look for. Places where it differs or diverges. Pre-deal, so in the diligence process, I'd say one, think we have a, some of the intangibles of investing are harder to capture on a slide or in an analysis. And there are some things where you look at it and you analyze the market, you analyze performance, you analyze competitive positioning. This is what it says. There are intangible factors to what a company has built, what the pixie dust is of how a company grows, operates, the culture they've built, the talent they've built, the customer goodwill they've built. I've observed over time in several of our best investments, part of what led to that investment was not only the analysis, but also a little bit of a pattern recognition around, there's some pixie dust here in this company that's helping them win. Something around the way their lead, the way employees are bought in, the way people behave like owners, the way people care for the company. So that's one, I'd say, an appreciation for something that's more intangible, but really is correlated with investment success. 

When it comes to the post-acquisition and sort of value creation, our belief is it's all around alignment and prioritization. I think one of the things we've been able to do pretty well over time is have a really open, transparent dialogue with our CEOs and our management teams around what the priorities are and what the value creation plan is going to be. This process starts pre before we win the deal. In the late stages of a deal process, we're typically sharing with the companies that we're looking at, here's our diligence findings, here's what it says, here are some initial thoughts on what we think the priorities for the next chapter might be. Are we seeing this right? Are we aligned? How does this compare to how you see it? And so starting that process before we even win the deal, by the time we get to that value creation step, we're already pretty far down the field in terms of alignment, in terms of clarity of how we're going to think about what the most important rocks are that are going to create value in the next chapter. 

And then I think the third piece is trust. I think it's a job where there are hard conversations for a variety of reasons. And I think having the reputation and being able to build trust and personal connection with a CEO or with a management team, it's really important to be able to be three months in and talk about something hard and come out of that feeling like we're aligned and your CEO feeling like they have an investor that's behind them and has alignment behind them. It's a subtle thing, but I think it matters quite a bit in terms of the team. Our job as investors, we are at the service of our management teams. We serve them, not the other way around. And one of the most important ways we need to serve our CEOs and our management teams is to debate enough so that everybody feels comfortable with the direction of travel. And then we got their back, that we have to do that well. And I think that combination of culture and trust building, the goodwill that we come in with and then that we build on in each individual deal circumstance, I think that matters and makes a difference in being able to set that value creation plan in the right direction.

Shiv: Let's say you find a company that meets a lot of the let's say traditional characteristics growing year over year, has good margins, mission critical, etc. But on the culture side, there's less alignment. Have you said no to deals based on culture fit alone?

Jon: We have, yeah, several. Yeah, I'd say we've, many times, I can think of a handful of even in the last 12 or 18 months. Yeah, we have, and that can take different flavors. It can be culture of the team. It can also be, you know, different cultures of how approaches to talent. It can be different cultures of how they treat their customers. It can be different cultures around an approach to integration if it's a business that's been acquisitive. So I can think of lot of examples where we've come out of early meetings and said, somebody's going to make money here, but this isn't our deal.

Shiv: Mm hmm. So how do you vet for that? How do you figure out if you have a cultural alignment with the investment you're making, even if all the numbers say that this is an investment worth making?

Jon: It's hard. We don't always get it perfectly right. I don't know that I have a sort of silver bullet or a sort of singular answer. I would say in general, when we sit down and have conversations around, here's what our diligence says. Here's what we think we're seeing. Here's what we think is important. Here's what we think is emerging from our work in terms of the priorities.

If there's misalignment, you feel it in two ways. You feel it on the substance of it, of, hey, we think you should zig and you think you should zag and that's not going to be there. I'd say you also see it - one place that shows up often, Shiv, is leaders who are resistant to input or resistant to collaboration, or you challenge them and they get defensive, or you ask a question and they sort of deflect the question. You know leaders who aren't inviting and open to input in that collaborative approach. Look, we know we don't know all the answers. We sort of expect people on the other side of the table to show up with that same philosophy. You know, when you see individuals or teams who are, you know, maybe a little overconfident or maybe a little bit dismissive of the competition or a little bit dismissive of some of the hygiene of how you build your business and your team and employee culture. You can see it in terms of some of the employee stats, employee NPS or employee turnover. There can be different clues in different areas that can be a signal of, not only are we not going to be culturally aligned, but more importantly and more foundationally, does this company itself have the foundations that are going to enable success over multiple chapters? There's a lot of correlation there. Look at it. We want to be culturally aligned with the teams we invest behind. More importantly, we want our teams themselves to have the foundations that are going to enable their employees to thrive and their management teams to thrive. And so often there's correlation in those things as well.

Shiv: And talk about like let's say you do find management team or a CEO or founder with whom you do have that alignment, how do you use that or or I guess get on a page where they appreciate this perspective that you're bringing which, in the PE world, quite frankly, I would say it is a bit of a refreshing perspective, where it's often all about the numbers and less about culture. So how are you communicating that and then as you're winning deals and you're building a value creation plan with them? How are you using that to kind of win more or grow the investment faster.

Jon: That's a great question. It differs in every circumstance. One way I think about it, Shiv, and I'm hesitating to say this because I don't want this to sound like we're trying to be superficial or be chameleons about it. We're not. This is very authentic to us. A lot of what we do when we're trying to win a deal is understand what's important to the people on the other side of the table. Different people have different motivations, different ways of engaging. And so a lot of what we're trying to understand, in addition to are we culturally aligned, are the values, the ethos, the durability of this team and business going to support an investment, is how does this particular CEO, how does this management team like to engage? Do they like to be challenged? Do they like to see data? Do they want to benefit from our network? What kind of board conversations they like to have? What kind of weekly conversations do they like to have? Do they want to talk about their personal interests and their families, or do they want to talk all business? And so I think there's an element of it that is frankly just kind of listening. And if you look carefully, most people will sort of tell you what really matters to them. We can figure out if that's culturally aligned with us, but a lot of it is showing up curious, showing up humble, showing up just genuinely wanting to understand somebody as a person and wanting to understand their business. And you figure out pretty quickly, how are going to connect with this team and this group of people? How are we going to show them what we bring? I think there's a substantive element to it of explaining our process. This is what it's going to feel like to go through a diligence process with us. This is how our value creation planning is going to work. This is how we're going to incorporate your voice, the voice of your teams, the work we've done. This is how we're going to identify what we don't know yet. This is how we're going to use outside advisors and board members. Transparency, telling people what to expect. People know what's coming. That's a big part of it as well. And then look, we share, I should have said this, every deal we pursue, one of the first things we do is we hand over a reference list. It's every CEO who's ever worked with Berkshire Partners. It's not curated, it's not a subset, it's not just the ones who've worked with me or others on our team. It's literally every CEO we've ever worked with. Name, role, phone number, email. And we just tell our prospective CEO partners, just call anyone. It doesn't matter who. We're not teeing up like, call this person, but not this person. We might often say, hey, call this person. They worked with me. Call this person. We went through a really hard time at that company. That CEO can tell you how we behave when things got really tough. So that transparency builds a lot of goodwill with companies we're spending time with.

Shiv: Totally, I can totally see that, especially when the stories are the same. What about post-close? Now you're building your value creation plan, you're kind of figuring out what those opportunities are in the first 100 days. How are you partnering with the founders and the companies at that stage?

Jon: I have a couple things I believe about this. Some of this will be redundant, some of it won't. First principle for me, we have to deliver value. We as investors, as a board, have to be, we have to steward the business. Obviously we have responsibility to our LPs and our investors to drive a good return. But as far as the relationship goes at CEO, we need to show up and deliver value. So, we spend a lot of time in those early weeks thinking about very specific tactical places we can be helpful. What is something I can do that will make your life easier? What is a resource I can bring or a capability we can bring to you that will help remove a blocker for where you're trying to go with the business? So that's point number one is just try to show up and make sure we've heard them and discovered what those things are and then deliver on that. So simple, do what, do what you say you're gonna do. I think that's point number one. 

Two is transparency on how the process is gonna go. We've talked about that. 

I think three is understanding that being collaborative does not mean you're not gonna have hard conversations. It doesn't mean we're gonna agree on everything. And setting early on the cadence of we're gonna disagree on some things and when we do so, we're gonna do it respectfully in a way that hears you, approaches every conversation with, look, here's what I'm seeing. I don't sit in your shoes. Tell us what you see. If there's a disagreement, let's understand it and figure it out. I think that way of engagement with great leaders, it builds a lot of goodwill and it also just moves the ball down the field pretty quickly. Those would be three things I think about.

Shiv: Do you ever find yourself in a position where you have to transform the companies in a certain way to be more aligned culturally with you or is it like post when you're at that stage you already know that there's alignment and you can focus more on value creation things like we see a lot of firms change leadership, bring in different executives like you find yourself in that position often.

Jon: Not often, but we do find ourselves in that position. Philosophically, we are not an investor who makes investments with the intention of changing management teams. We're generally looking for opportunities where we're excited to back the CEO and the team in place. We don't always get it perfectly right. Nobody does. We don't sort of envision or imagine that that should be a goal of ours.

Look, I think - so we have found ourselves in situations where we say, we do need - I'd say it comes in two forms. It can be working with a CEO to help them see that there are some management team changes or upgrades that they may need to make. And an acknowledgement that, you know, what got you here won't get you to the next, you know milestone in terms of scale and complexity. And having the approach I just described of having those conversations. I would say it's - I can't think of a time when we've undertaken a full cultural transformation. I would say if we identify something about the cultural bones of an organization that feels off, that's generally just not an investment we're gonna do. So we would have screened that out. And then again, it's sort of motherhood and apple pie, Shiv, but the basics of you treat people with respect, you treat people with transparency, you treat people with care. When you do have those hard conversations, there are ways to be in those hard situations, but still have people coming out of them like they've been treated with care and transparency. And that's, we're never gonna lose that.

Shiv: Totally. I completely agree with that. Have you ever found yourself in a position, because you are wired to kind of focus on culture, where maybe you've over-indexed on the culture side and maybe sacrificed on the business side and found yourself with a company that might not be having the kind of performance that you expected?

Jon: We have. Yeah, we have. mean, look, we make mistakes in all directions, Shiv. So we've made all sorts of. So we have. And that does happen sometimes. Look here. The most common way in which it happens, and this sort of fits a cognitive bias that's common, is when you build a really excellent connection with a CEO and a management team, and that connective tissue, that personal affection, which can go in both directions, stands in the way of seeing things as clearly as we or the CEO needs to see things. So I can think of instances where we moved a little too slowly because we were sort of - the interaction felt like we had good cultural alignment. But then when it got down to the substance of the business and the prioritization and the measurement of that, there was misalignment that emerged. We've learned over time, we've gotten better over time at not ending up in those situations by the process we talked about before. Look, I think when you're trying to win a deal, it's really tempting to be a sort of yes person. And we're always trying to toe the line of, we want to win the deal. We want to be management's preferred partner. We want to be the party that they want to work with, but not to the point of being disingenuous. And if that means we need to show up and say, look, everything's perfect. We're not going to change anything. We're not going to say that if we don't believe it. And so I think having the balance of we're going to win you over because we're going to be good partners who are going to help your business get to this next level. That's going to mean capitalizing on what you have, but probably changing some things. I think if a CEO shows up and says, I'm never changing a thing as I go from 25 to 50 to 200 of revenue, that probably tells us like maybe that's not a leadership team that we're going to be excited to back because that's the sort of, we're going to be looking to back CEOs with more openness to input and change than that. But it has happened.

Shiv: Yeah, it is also interesting, right? Because you have to, at some level as an investor, there are the numbers that you have to put in your funds behind, but really at the end of the day, you're betting on people. You're betting on the asset and you're betting on the people's ability to grow that thing. So if you connect on a cultural level or you back their vision for how they kind of see things, in a way that's safer than an investment where the numbers all look right, but then the team doesn't, right?

Jon: Yes, yes, I think that's exactly right. I think that's exactly right.

Shiv: Yeah. Last question, more just trying to understand how you go about connecting your companies. Like a lot of PE firms do portfolio summits and things like that. But do you do anything beyond that, where you're connecting with your portcodes on a human level? We talked about one of your portfolio companies when we first started, because it's a common client that we have. And you mentioned something about that person as a human. So I'm just wondering if you are doing things there to connect with folks beyond just the business side.

Jon: Yeah, do you mean amongst our companies or with each company? Yeah.

Shiv: Yeah, amongst the portfolio companies in particular.

Jon: Yeah, so we do have, as you suggested, an annual, I guess it's every 18 months, CEO conference. And then we also have an equivalent conference for other C-level executives across our companies. Get together, get in the same place, have shared connectivity. Those events are a mix of social and substance, but they probably tilt a little bit social. And we're really trying to accomplish two goals.

One is deepen the connections between Berkshire and those executives, and two, create a forum for those executives to build connections to each other. We find that's really highly valued. The other way in which we've done this is around AI. We talked earlier, within AI, we've worked really hard to build a capability set to enable our portfolio companies to bring AI best practices. This is an evolving area. We're all trying to get better here, so this story is by no means written. The way we do that is we have a working group that meets on a regular basis. That working group has participants from every single one of our portfolio companies. We have a centralized capability, and we bring to our companies a lot of best practices on, here's how you do marketing or customer support or this use case or that use case. We also find it's an opportunity for our companies to showcase to others, hey, here's what I'm doing within this use case or this area. And then that gets our portfolio companies connected for best practice sharing. So, hey, I saw that you guys did this in your business. I'd love to have a conversation. So, building that connectivity on a substantive level, we have had a lot of success with that. And then I'd say, it's a slightly different question, Shiv, but just, again, we believe so deeply this is and always will be a relationship business. And so how we invest time with the management teams we work with, investing social time, getting on a plane to go have dinner with the CFO or a CRO or whatever it is, not because there's a board meeting and not because you want anything, but just because you want to get to know that person as a person. That goes a long way. We've had good success having executives from one company come back to another Berkshire company after we exit that business. That happens over and over again and it happens across sectors. And I don't think that's an accident. I think that is a reality of being an investor that folks have been excited to work with over time and know that they're gonna be treated fairly and be supported in what they're trying to do.

Shiv: Yeah, and I think it comes back to that same point about approaching things at a human level and prioritizing culture. So I think that's great. As since there's tons of PE firms and founders that just listen to this podcast, like what advice would you give them in terms of culture and how they prioritize that within just how they run their firms and also also their investments as they're thinking about investing in other companies?

Jon: Yeah, look, think a couple things. Wherever you are on culture, it has to be authentic to you. I think part of the magic of Berkshire, and I've been here for 13 years of our 40 year history, so that's not even a third of it. The reason it works is because it's really authentically held and it's really centered. People believe it personally. People believe in it as a business strategy. People see our leaders live and embody that culture. They see it in how people behave and interact and treat each other and talk to each other. And it's tied to the business strategy. And so I think you have to be careful about culture for culture's own sake or culture as a window dressing or a mission statement or values because we need something to put in the coffee room. I always start with what's authentic to us as people and what's tied to the business strategy. And I think where I've seen the best leaders, the best CEOs get that right is they've built a culture that drives people to behave and perform in a way that really is directly tied to the products they're building, the customers they're serving. And that positive flywheel, when you get it right, is a really special thing. That's the most important thing I would say.

Shiv: Yeah, think that's a great note to leave on because it does create that virtuous cycle. And with that said, John, what is the best way, if people are listening, they want to get a hold of you or learn more about Berkshire, how can they find you?

Jon: Yeah, I think for me, I'm on LinkedIn and I welcome people to reach out and I love connecting with folks and there's a lot of really capable, smart people around this industry. I'd love to talk to as many of them as I can.

Shiv: Awesome. Yeah, with that said, John, thanks for coming on and sharing your wisdom. A very different type of episode. I thoroughly enjoyed the talks about culture and how important it is. And I think a lot of PE firms listening that invest in companies can learn a lot from it. So I appreciate you doing this.

Jon: That's great to be here, Shiv. Thanks for having me.