Supporting Private Equity-Backed Management Teams: When is it Time to Intervene?

By Patrick Jones

Private equity is increasingly bringing in third parties to help bend the time curve, deliver on value drivers, and support management in accelerating the execution of the investment thesis.

In my last article, I discussed the seven interventions that help private equity firms achieve the above goals:

  1. Coaching
  2. Diagnosis
  3. Leadership team alignment
  4. Critical issue business acceleration teams (BAT’s)
  5. Organizational alignment meetings
  6. Deep strategy to execution development
  7. Leadership development forums.

When is the right time to intervene? That’s my focus today.

The following inflection points lend themselves particularly well to the types of interventions that have boosted the success of private equity portfolio companies.

5 Inflection Points for Intervention

  1. New leader assimilation: When a new CEO (or other C-suite leader) gets hired or promoted, these interventions can help them accelerate their entry and get their hands firmly on the levers of the organization.
  2. Leadership transition and organizational changes: When leadership changes occur for whatever reason these interventions can help codify and transfer the desired leadership lessons and/or develop new ones necessary for the new team to deliver on value drivers. As leadership teams struggle to stay aligned in times of change, these interventions help them practice the individual and team dynamics that will propel the organization to a new level of performance and maintain their alignment over time.
  3. Strategy refinement, accelerating strategy to execution, specifically driving growth: Market realities, specific opportunities, and sometimes performance will require periodic adjustment to the core strategic plan. These interventions can ensure that there is strong alignment on the strategy throughout the organization, that all of the best ideas of the organization are included, and specifically that there is a tight understanding of how the team will execute on the strategy—on how the execution plan will accelerate delivery on the value drivers identified in the investment thesis.
  4. Integration of new businesses: These interventions can accelerate the value anticipated through add-on businesses, new products/services, and/or geographic expansion. This can manifest as aligning on the strategy, strategy to execution and/or explicitly defining the values and behaviors that will unify a high-performance organization. Additionally, identifying the critical issues of an integration and deploying highly structured business acceleration teams against these issues can further accelerate results.
  5. Annual goal setting/periodic alignment: As research has demonstrated, highly aligned organizations are faster, more profitable organizations. Using these interventions on a regular basis to keep the organization deeply aligned gives management the platform to develop a highly functional team. Embedding elements of these interventions transforms annual or quarterly organizational meetings from status updates or “sit an’ gets,” as we call them, to organizational accelerators that can facilitate results, alignment, and leadership development.

By supporting leadership with these types of highly structured processes at specific times in a company’s evolution, private equity firms can de-risk their investments and bend the time curve in their favor.

Brimstone has been implementing these interventions successfully for two decades. As the speed of change has increased due to globalization, new technology, disruptive business models, and—specifically in the private equity world—the pressure to deploy billions of committed capital, we have seen private equity firms increasingly utilizing these techniques to help management deliver on expectations.

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