The Corporate Philosophy at Thesis Capital

Our Mission  – Be the most trusted partner for business owners seeking to sell their companies to the right long-term partners, thereby becoming the leading acquirer in the lower-middle market.

Thesis Capital is a mission-driven organization. In order to succeed, the focus needs to be interior and not on exterior competition.

Trust is hard to earn and easy to lose.  Personal integrity is the means of earning and maintaining trust.

Competition in buying businesses (that are themselves in competition with others), is a given. In other words, buying other companies is a competitive business activity. Thesis seeks not only to win but to hold for the long-term, a feat that requires strength of character and unwavering commitment to principles found in the virtues.

As such, individuals on the Thesis team should structure their lives to accommodate the mission. To successfully acquire and run businesses, members of the team must demonstrate a commitment to our company values.

Core Company values:

• The Mission Comes First
  • Team members do not seek personal gain before the best interest of the firm and our investors. Self-interest well understood means that the long-term success of Thesis is in the best interest of the individual members, member companies and our investors.
  • Team members are long-term investors, and, as such, self-interest is best understood as the long-term success of Thesis as a whole. The economic outcomes we are seeking will not be realized in a year or even two to five years.
  • Team members who seek short-term personal gain will not last in our culture.
    
• Sustained High-Performance Standards
  • A successful Thesis team requires sustained high performance.
  • Team members who do not pull their weight or fail to follow through on commitments will be removed.
  • Like any successful team, Thesis relies on objective performance standards and does not accept excuses for underperformance.
    
• Meritocracy & The Best Idea Wins.
  • We do not choose a course of action based on favoritism, or external or internal politicking. In order to succeed, we use objective metrics to select the best course of action for the company, generally tied to return on invested capital measures.
  • Team members advance within Thesis through demonstrated success.
    
• Objectivity Over Relativity –
  • Thesis affirms what is objectively true. We operate on facts that can be known. Physics is the law of the universe. A lie is a lie.
  • Our commitment to truth extends to all our operations. Performance reviews overlap with reality.

The Mission Comes First

The mission comes first at Thesis Capital because it defines the company’s core purpose and guides every action and decision. By placing the mission above all else, including personal gain, the organization remains focused on its long-term objectives and committed to sustained excellence.

Prioritizing the mission fosters a culture of integrity, trust, and alignment with the firm’s values and investors’ best interests. It underscores that individual success is inextricably linked to the company’s overall success, encouraging team members to adopt a long-term perspective and make decisions that contribute to Thesis Capital’s enduring prosperity.

Moreover, the emphasis on the mission creates an environment where performance is objectively measured, meritocracy is upheld, and the best ideas prevail, regardless of personal biases or politics.

This approach is important because it not only promotes accountability and continuous improvement but also attracts and retains individuals who share the company’s unwavering dedication to these principles and objectives.

Sustained High-Performance Standards

1. Personal maturity is required for professional success. Success requires prerequisite maturity in personal development and interpersonal relationships. Individuals who do not demonstrate integrity and resilience are not a fit for our culture.
2. The individual only wins if the team wins. As such, we expect and reward sustained high performance from all employees. Brief bursts of productivity are not enough – we seek consistent excellence over the long-term. A marathon mentality of delayed gratification for those who maintain outstanding results quarter after quarter and year after year will be recognized and rewarded appropriately with the results of time. Complacency and resting on past achievements are not only discouraged but disqualifying. Only through continuous effort to maximize our potential as individuals and teams can we achieve our mission. Sustained high performance is the only acceptable minimum standard.
3. Lying through words or actions, explicitly or by omission, will cause the mission to fail. Therefore, lying of any kind cannot be tolerated.
4. Self-enrichment does not reflect the team-oriented, long-term mission of Thesis Capital. As previously stated, when the firm wins, all individuals benefit. Self-centered, short-sighted action does not align with this mission.
5. Thesis has a culture of open discussion and direct communication. Efforts to manipulate or talk about problems unproductively do not align with the mission.
6. Personal responsibility is required. In decision-making and risk-taking, individuals are responsible for the outcomes of their actions.

Meritocracy & The Best Idea Wins

We will cultivate a truly meritocratic culture where the best ideas and top performances get recognized and rewarded; the focus is not on titles or perceived status. Accomplishments and tangible results are what matter here, not someone’s tenure, connections, or background.

Compensation, promotions, and career growth will be transparently tied to objective evaluations of each person’s work output, impact, and the quality of their ideas. The highest performers who drive measurable results and contribute the most valuable ideas will be celebrated and incentivized accordingly. Our leadership will embody these meritocratic values, ensuring the best ideas win – regardless of who presents them. This culture will unleash our collective talents and innovative thinking to fuel organizational success.

Objectivity Over Relativity  

In a business context, objectivity refers to making decisions, judgments, or evaluations based on empirical facts, data, and evidence, rather than personal biases, emotions, or individual perspectives. It involves looking at situations impartially and rationally, without being influenced by subjective factors. This goal is challenging but one that we continually strive to attain. Relativity, on the other hand, claims that facts should be viewed differently depending on contexts, individuals, or circumstances. This is not a viable standard for conducting business.

Objectivity in business

Financial reporting and accounting: Objectivity is crucial in financial reporting and accounting to ensure accurate and transparent representation of a company’s financial position and performance, adhering to established accounting principles and standards.

Performance evaluations: Objective performance evaluations based on measurable metrics and Key Performance Indicators (KPIs) help ensure fair and unbiased assessments of employee and organizational performance.

Market research and analysis: Objective market research and analysis rely on factual data, statistical methods, and unbiased interpretations to understand market trends, customer preferences, and competitive landscapes.

Decision-making: Objective decision-making processes consider relevant data, facts, and evidence, rather than relying solely on personal opinions or emotions, leading to more informed and rational business decisions.

Relativity in Business

Relativity in business is a pitfall for many businesses and can lead to poor decision-making and consequent poor outcomes. Overemphasizing relativism and dismissing universal standards has led to the downfall of several companies.

Consumer preferences and behavior: Instead of objectively studying data on consumer behavior, companies like Kodak assumed consumer preferences were relative. Kodak wrongly believed its brand prestige would keep customers loyal as digital photography emerged, failing to adapt its business model until it was too late.

Business ethics and social responsibility: Viewing business ethics through a relativistic lens enabled companies like Enron to justify unethical accounting practices as “innovative.” Claiming ethical norms were relative to corporate culture allowed Enron’s toxic business culture to fester unchecked.

Leadership styles: A relativistic view of leadership enabled CEOs like Ron Johnson at JC Penney to implement disastrous changes that were completely at odds with the company’s culture and customer base when he tried to abruptly upend JC Penney’s decades-old pricing strategy and store layout without understanding the mainstream, cost-conscious customers who were the retailer’s bread and butter.

Value propositions: Assuming customers would value physical location over convenience, companies like Blockbuster failed to recognize the universal value of convenience that allowed Netflix to disrupt its business model until it was too late to recover market share.

While some adaptation to contexts is prudent, taking a relativistic view opens the door to unethical, out-of-touch, and delusional thinking in organizations. Successful companies balance input from diverse perspectives with rigorous adherence to objective data, universal principles, and market realities. Believing rules, standards, and empirical facts don’t apply due to one’s “unique” situation sets the stage for ethical and strategic failures.

In Summary

Thesis is a group of individuals who enjoy the difficult work of acquiring and holding lower-middle market businesses for the long-term. There is joy to be found in the challenges entailed in achieving this mission. As Thesis is defined by trustworthiness, so the team members must adhere to standards of personal responsibility, integrity, and objective performance standards.