What to expect during the most drastic change in your career, and how you can take control over the outcome.
I recently counted up the number of Operating Partner searches I've been involved with over the course of the last 10 years. It's just about 45 in total. Interestingly I would also say that there have been 45 different experiences related to the on-boarding of those Operating Partners once they joined their respective employers. This is definitely an area where PE needs to improve.
Unfortunately, on-boarding inside of Private Equity is a pretty archaic process. This is one area where it is rare to see much thought put into the actual experience. As many of you know, Private Equity firms themselves are often relatively small companies with small employee headcount, and where the human resources function is an afterthought. Couple that with Deal Partners who are frenetically busy and you have a recipe for an on-boarding process that feels quite disjointed.
The Firm managers might simply assume that because you are a seasoned operating executive you will figure out the on-boarding process on your own. The inherent problem in that approach is that an Operating Partner's success is tied very closely to the relationships that are built inside the firm and inside the portfolio companies. And like it or not, relationships can be disproportionately affected by a first impression. There needs to be a streamlined and well thought through process for getting things out of the gate in the right way. People's confidence in a newly hired Operating Partner will be in direct correlation to the conviction they see for that individual coming from the Firm's leadership.
I have seen situations where a newly hired Operating Partner basically hangs out at the firm's headquarters for a few months trying to figure out the right way to get integrated into both new deal flow and the portfolio companies themselves. You would think that because of the significant investment that the Deal Partners have made in the Operating Partner there would be more deliberation put into the 100 day plan. Unfortunately, that is not always the case. Thus, it is important for an Operating Partner to "assume the worst" when coming in to a new situation. There should be considerable conversation about on-boarding which occurs during the interviewing process. Be sure not to let this wait until after the fact.
A couple of recommendations may be in order:
- Craft your own 100 day plan setting forth your vision for how to get started in the role. Of course, it will be edited and modified but having a starting point is a solid first step. (Lean on people like myself to introduce you to other seasoned Operating Partners who can provide some helpful coaching in this area.)
- Does the firm run an annual CEO or CFO conference for its portfolio company executives? This is an ideal area within which to take a leadership role. The Operating Partner should own this annual event, craft it's agenda, and ensure that it creates value across the firm.
- Many times it is actually the Principals and Directors inside the PE shop who have the clearest line of sight into the operational issues occurring inside the portfolio companies. These folks should be a warm and receptive audience for a new Operating Partner to brainstorm about value creation tactics.
- Everyone in private equity wants proprietary deal flow. Head out into your own network, let them know about your new gig, and start to plant seeds around working with them from a buyout perspective. Nothing grabs people's attention inside the firm like proprietary deal flow.
As a Partner at Lancor, Chris' practice is principally dedicated to serving private equity firms in North America and Europe. For the last ten years, he has focused on operating partner and other fund administration roles, and on C-suite roles for those firms’ portfolio companies, located around the world. He leads Lancor's Private Equity Practice and coordinates the firm’s coverage model in serving its clientele. He has spoken at various conferences on the role of the operating partner and, in 2008, BusinessWeek magazine recognized Chris as one of the “Top 100 World’s Most Influential Headhunters.”