Scott Honour is the managing partner of Northern Pacific Group, a private equity investment group that invests in the technology, logistics, transportation, media, and real estate industries. The company takes a hands-on, collaborative approach to building great businesses and creating long-term value.
Where did the idea for Northern Pacific Group come from?
My partners and I established Northern Pacific Group with the goal of creating a firm with a strong focus on environmental, social, and governance (ESG) principles while at the same time creating excellent financial returns for our limited partners. We believe that as business leaders, we have an obligation to support multiple stakeholders and bring best governance principles to the companies in which we invest. We wanted to influence others and show that focusing on ESG principles can be, and absolutely is, symbiotic with great financial returns. Another goal for the firm was to build a great internal culture by offering our team members the opportunity and support to be influential in what they do and have a good time together while doing it.
What does your typical day look like and how do you make it productive?
Whether I am traveling or at home in Minnesota, my day starts early. I like to catch up on what has been going on overnight, so I will typically turn on CNBC to get the latest headlines and the daily news.
After grabbing coffee, I start my schedule, which is usually booked with back-to-back calls and meetings (often Zoom meetings now, given COVID-19) throughout the day, which revolves around topics such how we are doing with our portfolio companies, new opportunities, etc. Typically, there are schedule conflicts, so I look at my calendar to assess where I can be most impactful and additive, knowing that my colleagues can step in on any given situation. I ask myself, “How can I be most productive to what we are trying to accomplish?” and prioritize those items on my calendar.
Many days, I have lunch and/or dinner meetings, although not as many lately, given the circumstances.
At some point, I try to get some type of exercise. Although I am not always successful, I am lucky to have my partners at NPG drag me along with them and motivate me to work out.
Although I usually have a packed schedule each day, I make it productive by staying focused on what creates the most value for our stakeholders and prioritize my efforts accordingly. Early in my career, I was given the advice of, “Make one more call before you end your workday.” I think that is great advice because, in my experience, you never know when squeezing one more conversation into your day will lead to additional opportunity.
How do you bring ideas to life?
When bringing an idea to life, I spend time thinking about how I can make something work instead of focusing on why it doesn’t work: concentrating on the art of the possible versus all of the reasons it is challenging. That is not to say that I ignore the challenges, but I find myself being an advocate for pushing ideas along to see where they might lead. Sometimes, an idea starts as questionable or unattainable and doesn’t work, but it takes you to a good idea that can move you forward. If you had never pursued that idea, it would be a missed opportunity. I find that pushing on the theme of “what we can achieve” versus “why it doesn’t work” advances ideas.
What’s one trend that excites you?
A trend that is top of mind is the focus on sustainability and improving the environment. At NPG, we try to demonstrate leadership in climate action as a team by taking actions in our personal lives to improve the environment as well as focusing our investing efforts in ways that improve sustainability. As an example, we acquired Sungevity, which is a leading residential solar company and which has a direct impact on the environment. Most recently, we sponsored Sustainable Opportunities Acquisition Corp. to bring a sustainability theme to the public markets. It is exciting to see the latest sustainability innovations and initiatives being taken around the world.
What is one habit of yours that makes you more productive as an entrepreneur?
I make a habit of listening to ideas that may at first blush seem unlikely to be viable. For example, my brother called me in the late ’90s with a thought. He happened upon a motorcycle for sale that he wanted to buy, but he was 100 miles from home and he didn’t have any cash on him. He thought there needed to be a way to make these kinds of transactions without cash. At first, I thought, “Well, OK, what are we going to do with that?” However, we worked on it together, and this idea ultimately led to the creation of YapStone, a property payment services company. If my first reaction to my brother’s idea had been to dismiss it as unviable, it would have gone nowhere. Instead, it led to creating a large-scale business. Essentially, I try to make a habit of being open to exploring where you can go with ideas and trying not to be too smart too early.
What advice would you give your younger self?
A general piece of advice I would give my younger self (and most people, for that matter) would be to focus on your passions. There are many ways to create financial success, but you have only one chance at life, so enjoy what you are doing. Make work your play, and if you do that, you will probably have the self-fulfilling prophecy of being successful at your work.
Tell us something that’s true that almost nobody agrees with you on.
This is a local example, but I read in a 120-year-old Minnesota history book that Lake Itasca (Mississippi headwaters) was named by its discoverer by combining the Latin words veritas and caput to mean “true head.” Most believe it is a Native American word.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Check your work, as attention to detail matters. In our modern culture of fast communication, the details are sometimes overlooked. Everyone is so keen to communicate via text, in quick sound bites, in tweets, and so on, that increasingly, I see things lost in translation. A lack of attention to detail can lead to the wrong information or message being conveyed. At a minimum, this can make it look like you are not fully paying attention or being considerate of the other person.
Another saying I am fond of is, “Substance over form, but form matters, too.” You might just be sending a two-sentence email to someone, but if it’s full of typos or doesn’t come across the right way, they will assume everything you do will be that way. While the core of the message matters, the way you present it also matters. How you communicate is a reflection of everything you or your organization represents, so it is important to make attention to detail a priority.
What is one strategy that has helped you grow your business?
Take a personal and hands-on approach, and make sales calls personally. As an investor and owner of a business, you have a better understanding of the core needs of the company if you experience the customers’ perspective firsthand. At YapStone, I co-called on the very first customer to sign up, which was an apartment owner located near the University of Southern California. Understanding how the business thought about our value proposition, how the technology would be used, and hearing the questions prospective customers had about how to use the technology led to insights that changed how we ran the business as a whole.
What is one failure you had as an entrepreneur, and how did you overcome it?
Previously, I was a co-founder of a natural gas fueling business. We founded it at a time when natural gas was increasingly being used as an alternative fuel source to help lower emissions. There was a wide spread between the cost of diesel and the cost of natural gas, with natural gas being cheaper and more environmentally friendly. A few years after we started the business, the spread on that cost changed and as diesel prices came down, and natural gas was not being used enough.
Although it was still an environmentally friendly option, our sales stalled. Instead of throwing in the towel, we transformed the business and turned our natural gas vehicle-fueling business into a trucking company, hauling mail for the post office using our CNG stations. We were able to continue doing business in an environmentally friendly way but transformed the business into something vastly different out of necessity. Even though it didn’t go as planned, the attitude was to not give up and to figure out a way to turn what we had into something better.
What is one business idea that you’re willing to give away to our readers?
Smart home services are a growing trend that will accelerate. In the post-COVID-19 world, there will be even more focus on technology-enabled, energy-efficient homes.
What is the best $100 you recently spent? What and why?
As I am spending more time in my office and less time traveling due to COVID-19, I recently purchased a CNBC subscription on YouTube TV to have it running in my office during the day. It allows me to stay informed and is less expensive than cable.
What is one piece of software or a web service that helps you be productive?
I have to give two answers. Zoom has been incredibly productive in allowing for more personal interactions in the COVID-19 world. When traveling frequently for work, Concur has been a great tool for keeping expenses organized.
What is the one book that you recommend our community should read and why?
“The Righteous Mind” by Jonathan Haidt. This book highlights how we all have a similar desire to help others but that we come at that goal from different approaches. Stan Hubbard recommended this book to me when I was running for governor of Minnesota. It further solidified for me, with analysis, a perspective I have always held, which is that most people are good and care about the well-being of others but may approach how to help others from different angles.
What is your favorite quote?
“There is no limit to what a man can do or where he can go if he does not mind who gets the credit,” as a plaque on Ronald Reagan’s desk said. This quote is a great reminder to stay humble, and I keep a replica plaque on my desk in my office.
- Listen to ideas fully before dismissing them, as they could be future business opportunities.
- Take a hands-on approach when making sales calls to your leads.
- Always make one more call before the end of your day, as you never know when squeezing one more conversation will lead to additional opportunity.
- Read “The Righteous Mind” by Jonathan Haidt.