When looking at building a senior leadership team for a Private Equity backed business, it’s very different from that of a plc or large corporate. From my experience, a Private Equity backed business typically has a timeline of 3 to 5 years to deliver significant results for the PE fund. Accordingly, the leadership team, and the CEO, must develop and deliver strong business results quickly.
When I joined Crosscard back in September ‘19 for example, one of the first things I did was assess the existing management team to ascertain if adjustments were necessary in order to transform the business and to then grow quickly.
I generally use a few key principles to guide me in structuring a business leadership team and these are as follows:
From past experience I have learned that you can’t compromise on building the strongest possible performing team. The demands and pace of a PE-backed business perhaps makes this first principle even more important. Getting the right person, with the right talent, every time, is a mantra I repeat to myself to reduce the risk of falling foul of a classic recruitment trap i.e. responding to the immediate pressure of what needs to be done versus ensuring you have the right talent for the long term.
The desire to have the best possible team in place can be further complicated when you inherit a team. It may be the case that the team is not structured or built with the right skills to really grasp what needs to be done to drive the performance and growth of the business. Often this means bringing in new talent and fresh thinking; talent that have the necessary vision and skills and who are prepared to work hard at working together.
Not compromising means making the hard calls to get the team right and is a difficult part of the job. As a leader of a PE-backed company, you can’t compromise on the vision set out to investors and therefore you can’t compromise on having the right person in the job; even when that means that, on occasion, people have to leave the organisation to make way for new talent.
As CEO my role is to use every opportunity to enhance the talent in our team and continually add to that talent by hiring the very best; my learning in my career has been to never compromise on this.
Experience is essential
In a regulated PE-backed financial service company finding the right talent with the requisite experience is crucial. There is lots of complexity, detail and things don’t go right all the time – you need a team who are not fazed by the various business challenges. They will pretty much have seen it all before. As CEO, I don’t have the time to wait through a long adjustment period for management to find its footing or develop into their roles. With the right leadership in place, I can be more confident in delivering the annual return and ongoing growth that investors expect.
Having said this not all experience is relevant and not all experienced leaders fit the team. This can be a challenge, especially where someone has a history of success in their career. Setting clear goals and expectation, giving regular feedback is crucial. As experienced senior leaders, I call on them not only to get their job done but to also, coach, mentor and teach the talent within the company so as to accelerate their experience and ability too.
Be open to the difficult questions and let them get on with it!
When you have the right people in place, who know more than you do frequently, it aids in the overall momentum of the business. You can give them clear goals, get out of their way and simply let them do their jobs. A good friend of mine uses the 3D rule of management – Decide, Delegate & Disappear! I don’t do the “disappear” bit but I do like to actively delegate and let my team focus on delivery. I also strongly encourage different opinions and to ask questions that are difficult to answer. This challenges me and ultimately provokes more valuable discussion; improving the team and my overall performance.
Consider your Succession Plan
Lastly, as CEO, I believe that it is imperative that you think about your succession plans and develop emerging talent so that they can potentially step up to more senior leadership roles in due course. As CEO, I don’t only want to create opportunities but ensure that talented colleagues are ready for that opportunity when it happens. Keeping an eye on the future line-up is part of maintaining a strong leadership team.
Hopefully, you have enjoyed this short read about the few key principles that I have used in building leadership teams, particularly in demanding PE-backed businesses. Perhaps in different types of businesses, a CEO may have a longer development timeline or may not be under the same pressure for results each month or quarter. Certainly, when I worked as CEO in a plc business unit, there were always options to move people to other parts of the wider Group where their skills were perhaps better suited. However, a PE-backed business is particularly demanding and hence why, as CEO, I am guided by these principles. They have served me well to date!