This article was originally posted on LinkedIn
The vast majority of my clients for C-level searches are at a private equity backed companies in the education sectors (K-12, higher ed, and corporate learning). While private equity partners are some of the most networked people you’ll ever meet, it is not possible to know every star, especially the rising ones. Moreover, private equity partners are often investing outside their “sweet spot” of knowledge and networks; this is one reason why they prefer to work with a search firm.
Hiring the best executive can make all the difference to the portfolio company, and eventually getting the best ROI. My team and I at BSG Team Ventures have conducted over 200 executive searches for private equity firms and their portfolio organizations. In my experience, these are five often overlooked but essential considerations when companies in their portfolios search for executives.
- Before the search, the private equity partner(s) should plan and define its role in the search. Will the partner be on every update call? Or will the partner only meet the two finalists? The answers to these questions are determined by the following:
• Is the PE partner “on the exact same page” as the current leadership of the portfolio company?
• How knowledgeable is the partner in this space and functional area?
• Is this the first search since purchasing the portfolio company?
- Make sure to conduct backdoor references. Candidates will supply their references, and those people should be contacted. But also take the time to search for other people who can share additional information. One or two backdoor references early on can spare everyone a lot of valuable time.
- Include the new hire’s future team in the interview process, but clearly define their roles and influence. Too often this step is brushed over so that the rest of the team have misplaced expectations on who is calling the shots.
- Ensure that the job description is clear, particularly in how it relates to other executive roles and responsibilities. This is a good time to audit the roles the team, and determine if they use a matrix to see where there might be overlaps, deficits, or gaps in responsibilities, skills, or experience. Too often these details fall through the cracks only to create problems in the first 90 days the new executive is on board.
- Is the current CEO an outstanding recruiter? Is she better than other CEOs representing the organization to attract outstanding talent? One of the first questions I ask candidates after meeting the CEO is whether their interest has increased, decreased or remain the same. If the answer is anything but the first one, I know I have some coaching to do.
I’d be interested in hearing from people who work in private equity or have been hired by a portfolio company about their experience with their search and interview process.