In a recent survey of Private Equity professionals, “more than 90 percent of respondents said that waiting too long to take action on talent issues had resulted in portfolio company underperformance in the past five years. Certainly, having the wrong leadership, particularly the CEO, can come with a heavy price.”
However, making immediate talent changes upon the acquisition of a portfolio company is not recommended. Perhaps the right leadership team is already in place, or maybe it just needs subtle adjustment to align with the goals and strategy of the PE firm. It’s best to start with a robust evaluation, defining the ideal experience requirements of the leadership team. Think about what’s most important when defining the preferred candidate. Must they have matching industry experience? A particular set of skills? Certain personality traits or leadership style?
To read more about the Importance of Leadership Teams in Portfolio Companies, click here.