Dry Powder: The Private Equity Podcast
Talent assessment and leadership has plagued the private equity industry for as long as I’ve known it. When I started working in private equity 25 years ago, the average change-out rate for key executives at portfolio companies stood at about 50%. We’re still seeing that 50% rate today, and it’s not for lack of trying.
We’ve seen private equity firms engage top-tier assessment firms to evaluate incumbent management teams at new portfolio companies. They’ve partnered with best-in-class executive search firms to attract and recruit diverse C-suite talent. They’ve recently hired experienced talent professionals in-house to help them figure out where the talent pipeline is breaking down, and yet, despite all of these efforts, we know that there is still significant room for improvement to get the talent equation right.
“Historically, investors have not applied the same analytical discipline to portfolio company leadership that they do to operations and finances,” says Kristin Schroeder, Bain’s global solution leader for LeadershipLink, “but actually some of the best investors out there are starting to do exactly that.”
Today on the show, I’ll ask Kristin how leading investors bring the same rigor to talent that they’ve applied to the rest of the portfolio company.
“That's exactly what we're trying to solve through Bain’s LeadershipLink solution ... taking a value creation plan and creating that very clear link between what needs to be done, who exactly is going to be responsible for doing those things, and how success will be measured.”
The Private Equity Podcast
In our podcast series, Bain's Hugh MacArthur interviews leading experts on the trends and opportunities that will redefine the private equity industry.
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First published in juin 2021