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 reach out to top-tier assessment firms to get more data to evaluate management. They’ve partnered with best-in-class executive search firms to attract and recruit diverse C-suite talent. They’ve even hired experienced talent professionals to help them figure out where the talent pipeline is breaking down. And yet, despite all of these efforts, turnover remains stubbornly fixed, and talent management remains more of an art than a science.
“Investors have thought human beings are not something historically where we can put a science behind it,” says Kristin Schroeder, Bain’s global solutions 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 apply the same analytical rigor to the talent equation that they’ve applied to the rest of the portfolio company.
“That's exactly what we're trying to solve through Bain's LeadershipLink ... taking these value creation plans and creating that very clear link from what needs to be done to exactly who is going to be responsible for doing that.”
In our new podcast series, Bain's Hugh MacArthur interviews leading experts on the trends and opportunities that will redefine the private equity industry.