What we hold to be true.

τὸ οὗ ἕνεκα

The final cause comes first

To hou heneka, "that for the sake of which"

Aristotle explained a thing by asking what it is for. We begin every engagement the same way. Strategy, structure and capital are only means, and a means cannot be judged until the end it serves is clear.

In practiceOur first conversation is about ends, not numbers.

οἰκονομική

Stewardship over accumulation

Oikonomikē, the art of managing a household

In the Politics, Aristotle separates the management of a household, which uses wealth toward a good life and so knows a limit, from money-making pursued for its own sake, which knows none. We hold capital to the first standard. Money is an instrument of the enterprise, never its purpose.

In practiceWe judge a return by the health of the company that produced it.

φρόνησις

Judgment over formula

Phronēsis, practical wisdom

Aristotle taught that practical wisdom deals with particulars, and that we should seek only as much precision as the subject allows. Finance invites false precision. Models inform judgment; they do not replace it.

In practiceWe show our assumptions and say plainly where the numbers end and judgment begins.

τὸ μέσον πρὸς ἡμᾶς

The mean relative to us

To meson pros hēmas

Aristotle's mean is not the arithmetic middle. Six pounds of food, he observed, is too little for Milo the wrestler and too much for a beginner. The right measure of leverage, growth or risk is particular to each company, and is found, not imported.

In practiceNo two of our structures are alike, because no two companies are.

ἕξις

Excellence is a habit

Hexis, a settled state formed by practice

We become just by doing just acts, Aristotle argued; character is formed by what is done repeatedly. So it is with companies. Excellence is not an initiative or a launch. It is a habit built into how the work is done every day.

In practiceThe changes we make are designed to outlast our involvement.

ἔργον

Know the work only you can do

Ergon, characteristic function

For Aristotle, the good of a flute-player lies in playing the flute well. A company's advantage lies in the work it alone does well. Strategy is the discipline of doing more of that work, and less of everything else.

In practiceWe look for the distinctive work first, and protect it.

φιλία

Partnership of character

Philia, friendship

Aristotle distinguished friendships of utility, which dissolve when the usefulness ends, from friendships between people of good character, which last. We choose partners, and hope to be chosen, on the second basis. An alliance that holds only while it pays was never a partnership.

In practiceFounders and managers keep the helm; we earn our place beside them.

εὐδαιμονία

Flourishing over a complete life

Eudaimonia, flourishing

“For one swallow does not make a summer, nor does one day.”

Aristotle judged a good life over its whole length, never by a single day. We judge companies the same way, by a decade of flourishing rather than a quarter of performance.

In practiceOur horizon is measured in the life of the company, not the life of a deal.