This document discusses human capital risks that investors face. It notes that while financial, technical, and market risks receive more attention, human capital risks are equally important but more difficult to assess and manage. The root causes of most business failures are people and culture issues, yet investors typically only address human capital risk by hiring or firing the CEO. The Dawson Consulting Group offers solutions to help companies manage human capital risks related to strategy implementation, organization design, culture optimization, and executive effectiveness. When a company's execution capabilities do not support its business plan, it increases investment risk.

1. Proprietary Material Do Not Copy or Distribute
©2008 Dawson Consulting Group
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2. Investors face many risks in seeking an above-market return:
– Financial, Technical, Market risk get the most attention
Human capital risk is no ‘less’ a risk, but commonly assigned less importance
– Only because it is less easy to assess and manage, not because it is truly less of a risk
– People and Culture are the most common root causes for business failure – yet
investors typically address this entire universe of risk with a single, simple tool: hire or
fire the CEO
Dawson Consulting Group offers proven, research-based solutions in the human
capital space in the area of: strategy implementation, organization design, culture
optimization, individual and team executive effectiveness
When execution capabilities do not support business plan requirements, risk
increases:
How many ‘A-players’ do you have managing your investment?
–
Is the right team culture in place to execute the ‘pitch’ you bought?
–
Are performance metrics and rewards aligned with execution objectives?
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Does the leadership team have a disciplined execution roadmap?
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Is the executive team functioning as a high performance team?
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©2008 Dawson Consulting Group www.DawsonConsult.com

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4. Values & Strategy Drift
Misalignments in Structure,
Culture, Process Requiring
Leadership Continuity Significant Transformation
Following Founder Exit
Mergers, Acquisitions,
Culture Re-Alignment with Divestitures
New Business Challenges
IPO Accounting and
Process Rigor
New Talent for Different
Business Challenges Acquisitions
Executive Transition,
Search, and Integration
Operational Processes,
Team Optimization
Infrastructure & Metrics
Culture Definition
Focus on building strategic
Goodness of Fit in organizational capabilities
Organization Design Hiring Key Players
Role Definition Stable Structures
Performance
Strategic Roadmap
Talent Selection
Liquidity Re-Assessment and
Human Capital
transformation
Roadmap Linked to
based on external
Strategy Return on
Scale Up realities and vision of
investment for initial
new leadership
investors
Stable Production capability
Founding team
and execution
transition or exit
Momentum
Formation Formation of
competent team well
New venture suited to product
requiring launch
business plan &
leadership
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©2008 Dawson Consulting Group www.DawsonConsult.com
team

5. Phase Formation Stable Scale Up Liquidity Performance
Momentum
Challenge
•Leadership •Product offering •Production •Investor ROI •New strategy
Business
validated by capability
•Business Plan •IPO? or new •New offerings,
Challenge sales growth •Reliable accounting rigor markets
•Funding
execution •Acquisitions? •Merger/acquisition
•New growth •Innovative growth
Design •Execution •Process •Define & fill new
Human •Org •Functioning
team discipline discipline executive
•Role Definition
Capital required for competency
•Building stable
•Performance
•Right Talent
Challenge public scrutiny requirements
management capabilities
•Key Metrics
•Founder •Define revitalized
•Defined culture •Professional
transition & exit or blended M&A
management
culture
•Missing •Tolerance of •Failure to •Complacency •Missing capability
Investor
capability mediocre talent develop or about raising the or executive talent
Risk replace bar for the new
•Wrong talent •Increased team
executive talent strategy
conflict •Mismanaged
•Fuzzy metrics
•Unmanaged founder exit •Unintegrated
•Misaligned
executive acquisitions
culture •Bad or chaotic
transition acquisitions •Transformation
failure
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www.DawsonConsult.com

6. RE-INVENTION
Resilience
Maturity
Value
INFRASTRUCTURE
Stability
Creation
GROWTH DECLINE
Arrogance Dominance
Scalability Structures
Loss of Complacency
Discipline
“The Chasm”
Go-Go Sales
Security
Risk Aversion
Infancy Survival Eclipse
Startup
REVENUE & SIZE
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©2008 Dawson Consulting Group www.DawsonConsult.com

7. Start-Up Infancy Go-Go Scalability Stability
Phase
Challenge
Growth Creation
Concept Survival Sales Planned Value
Business
Challenge
Family culture Action-oriented, trap – ‘one to of major
Founder’s Transition Systematization
Cultural
opportunity-driven man show’ professional organizational processes
Entrepeneurialism
Challenge organization
Few systems or bottleneck Process discipline
Delegation
Labor of love
rules Conflict between
outstrips Clarification of mission
Revenue
Negative cash flow
‘new’ and ‘old’ cultures
Management by infrastructure and vision
Everyone does
crisis Values crisis
Reactive marketing Performance focus
everything
Get it done and sales Focus on profitability
Fluid & ambiguous
and sustaintability
People more Problems become
roles
important than crises rapidly
processes
Entrepreneur, Deal-maker Hard-Driver, Delegation, planning, Executive level
Entrepreneur, Deal-maker Hard-Driver, Delegation, Executive
Leadership
visionary competitor and process managerial skills
and
Alliance
Competencies management
partnerships Leadership style
Product Decisiveness
development Strategic focus – out dependent on strategy
Active involvement clarity and
Role
of the tactics
selling in all parts of the differentiation
Persuasive
business Professional
Professional
Personal energy Selecting the right
management
people – talent
upgrade Team selection &
leadership
©2008 Dawson Consulting Group
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www.DawsonConsult.com

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©2008 Dawson Consulting Group www.DawsonConsult.com

9. Founded in 1989 – Silicon Valley, California
Value Proposition: Increase shareholder value through application of research-
based human capital tools and methods
Pragmatic, business-oriented, not touchy-feely. Rapid-cycle engagements
Seasoned, senior professionals with background in psychology and human
resources. Average 20+ years of experience as trusted advisors to C-Suite
Office locations in Honolulu, Silicon Valley and New York
Services:
Strategy implementation
–
Organization Design
–
Culture Change
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Individual and Team Executive Effectiveness
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©2008 Dawson Consulting Group www.DawsonConsult.com