From Idea to Endurance: Competence Drives Competitiveness
Management Competence Might be the Startup Advantage No One Talks About
In the startup and funding ecosystem, the impact of management competence is often underestimated and undervalued. It is a common failure of judgment that plagues many underinformed and overly optimistic angels and venture capitalists. Over more than 20 years of working with startups, I’ve also seen many founders who undervalue management competence—most of them went on to ‘lead’ floundering organizations.
In my experience, management competence is just as important as a strong market opportunity and defensible competitive differentiation, especially at the stage in a company’s life cycle when it has moved from building traction to scaling its market presence.
How to Identify Management Competence
Management competence refers to the ability of an individual or organization to effectively oversee resources, make strategic decisions, and lead teams to achieve objectives. At its core, management competence is a leader’s ability to balance vision, execution, and adaptability to sustain organizational growth and success. It is a fundamental skill for any leader working to build and sustain durable competitive advantages. Leaders who exhibit management competence encompass a blend of “visioneering”, organizing and leadership skills, technical knowledge, emotional intelligence, and problem-solving abilities. Making it even more powerful, these leaders typically also possess a deep commitment to continued organizational and personal improvement.
With these hard and soft skills in place, a competent manager has the resources necessary to navigate challenges and opportunities. They adapt to dynamic business environments, motivate teams to achieve stretch goals, and ensure operational efficiency while fostering continual innovation and employee engagement.
The Management Competence Skill Set
Sense of Purpose: A unique understanding of customer, employee, and investor needs fuels a deep commitment to the reason why their organization exists.
Strategic Thinking: The ability to develop and set goals, analyze market trends, and develop short- and long-term plans.
Tight Feedback Loops: Proficiency with developing systems to receive information, become better informed, and make decisions with the best information possible.
Decision-Making Skills: Capability to assess risks, evaluate options, and make sound choices.
Leadership & People Management: Skills in motivating, guiding, and communicating with teams effectively, and holding team members accountable for results.
Operational Efficiency: Knowledge of processes, financial management, and resource allocation.
Adaptability & Innovation: Ability to respond to change and drive creative solutions.
Ethical & Sustainable Practices: Commitment to responsible and fair management, a deep commitment to servant-based leadership.
Demonstrated Self-Awareness: Balance of passion and impulse control, continual self-reflection, and a knack for building trust with team members by remaining open to feedback.
Conversely, incompetent managers struggle to set vision, drive execution, and adapt to dynamic market conditions. Their deficiencies prevent them from being able to create durable competitive advantages. But deficiency is not just an issue of missing one or two of these skills. Startup success requires competency across all these areas. A great vision will fail if the leadership lacks the acumen and proficiency to execute against that vision. Many times, we have seen founders come up with a great idea and set a great vision, only to flounder when they needed to marshal a team to execute. The leadership gap eventually erodes any competitive advantage the company has built.
Competitive differentiation is rarely durable, meaning that it seldom lasts for long unless it is nurtured and adaptive. Great management focuses on extending the organization's competitive advantages by designing and deploying advantages that extend their uniqueness and value. The best management achieves that by thoughtfully combining a set of targeted strategies that work across the organization.
Elements of Sustainable Competitive Advantage
Innovation: Developing new products, services, or technologies that disrupt the market and attract customers.
Branding: Crafting a strong, recognizable identity that resonates emotionally with consumers.
Quality & Reliability: Delivering superior products or services that customers trust and prefer over competitors.
Pricing Strategy: Offering competitive pricing—whether through cost leadership (lower prices) or premium pricing for high-end value.
Customer Experience: Providing exceptional service, convenience, and personalization to build loyalty.
Operational Efficiency: Streamlining processes to reduce costs while maintaining high performance.
Unique Distribution Channels: Using exclusive partnerships, direct-to-consumer models, or innovative retail strategies.
Niche Targeting: Focusing on specific market segments and addressing unique needs that competitors overlook.
Sustainability & Ethics: Emphasizing eco-friendly practices and social responsibility to appeal to conscious consumers.
Technological Advantage: Utilizing cutting-edge tools like AI, automation, and analytics to improve operations and decision-making.
Companies with competent management tend to deliver noteworthy financial benefits, competitive positioning, and operational metrics. Heightened profitability results from the leader’s ability to optimize resource allocation, cost control, and strategic investment in growth opportunities. Their strong decision-making reduces financial risks and enhances return on investment, leading to higher revenue and shareholder value. Perhaps most importantly, they continually manage the company’s ability to adapt to market changes. They innovate effectively and maintain customer loyalty through the company’s evolution, which secures their competitive advantages, market share, and brand strength. Inside the company, competent managers also tend to enjoy higher employee productivity, lower turnover rates, and top customer satisfaction ratings—metrics that directly impact financial performance and long-term stability.
Developing Management Competence
While some of the leadership qualities of a competent manager are ‘soft’ skills, the good news is that management competence is a developable skill. The process takes intentionality and time, but we have seen firsthand that it is possible. Moreover, once a startup can leverage strategic planning, operational efficiency, and leadership excellence, it is well-positioned to sustain superior financial health and agility in an evolving business landscape.
Knowing that management competence is critical to a company’s success, the BIP Ventures team is professional and direct with the founders and startup leaders who entrust us as their partner. Drawing from experience (and hopefully, wisdom) as operators and startup leaders, and from the founders and management teams we have backed over the past two decades, we have built a ‘Performance Engineering’ system specifically to help leaders rapidly advance their managerial capabilities.
Everyone in our organization who guides portfolio companies has employed this process in our own development, so we understand and appreciate its rigor. We also remain receptive to the new brilliance our founders and startup leaders bring to the table. This combination of diligence, guidance, and openness has led to industry-leading consistency in developing successful startups.
The Performance Engineering Framework
Communication and idea-sharing are critical for developing management competence. With that in mind, one of the Performance Engineering frameworks we incorporate into monthly discussions with startup management teams is Start-Stop-Continue. This exercise provides a regular, iterative method for highlighting the good actions that founders and managers are demonstrating, while allowing us to provide actionable feedback in areas that require attention (e.g., augmentation or elimination).
We support every framework and growth process with deep data and detailed reporting frameworks. Nothing is worse than generalized, rote musings about how a company or its leadership is operating and competing. It’s disrespectful to a founder’s unique startup. (Been there, done that. 🤢)
Every market—and the dynamics within it—is distinct and ever-evolving. About the only generalization we can make is that there is rarely, if ever, a shortcut to building companies that sustain competitive advantages and yield great outcomes. If there is, it’s making sure that at the top of the org chart, a competent manager is setting the direction and leading the charge.
Contact us if you want to learn more about our process of developing Management Competence and the results it produces.
Mark Buffington is the co-founder and CEO of BIP Capital and the Managing Partner of BIP Ventures. Since launching BIP Capital almost 20 years ago, he has led the firm to become one of the most consistently active and recognized venture capital brands outside of Silicon Valley.
Under Mark’s leadership, BIP Ventures has established a reputation for delivering exceptional returns to investors, consistently outperforming public market equivalents and top-quartile Venture Capital benchmarks. (1)
With decades of experience as an entrepreneur and operator, Mark is deeply committed to helping founders and portfolio company leadership teams build category-leading companies and drive premium exit outcomes.
He has developed some of the industry’s most innovative platforms, including a private equity Evergreen BDC, a proprietary deep-data AI platform, and a Performance Engineering framework that drives repeatable, high-growth outcomes for founders. The results of these efforts speak for themselves. Founders who partner with Mark and the BIP Ventures team achieve more life-changing outcomes than when they work with other VCs. Across six vintages of funds, more than 60% of capital invested has returned gains, and over half of all investments have achieved a 3x return or better. (2)
Since 2006, Mark has led investments in more than 150 companies spanning growth stages and sectors, including Healthcare Tech, Digital Media, EdTech, Enterprise SaaS, FinTech, and Advanced Computing. Notable investments include Vendormate, Ingenious Med, QA Symphony/Tricentis, PlayOn, Huddle Tickets, Tropical Smoothie Cafe, Cypress.io, ConnexPay, REACH Health, Trella Health, Shareholder InSite, ChartSpan and Aspirion Health Resources. (3)
Mark holds an MBA from Tulane University’s A.B. Freeman School of Business and a B.S. from the Georgia Institute of Technology, where he was also a varsity letterman in baseball. He serves on the boards of several companies, including NFHS Network, Rhyme, ShiftMed, AchieveIt, Trella Health, PlayOn, ChartSpan, and the BIP Advisor Acquisition Fund. He is also active on several nonprofit boards, including the Buckhead Coalition and the Metro Atlanta Chamber Executive Board.
Connect with Mark on LinkedIn.