DEALING WITH DYNAMICS BETWEEN THE SHAREHOLDERS AND THE BOARD IN REALIZING THE ‘BUY & BUILD’ STRATEGY |
Organizations dealing with Private Equity or Privately Held firms have their own dynamics.
The CEO, COO, CFO and the private equity party or family offices are given a joint responsibility for healthy growth of the organization. Private Equity parties and Family Offices are constantly looking at how they can effectively expand their portfolio. It is up to the portfolio companies to give concrete substance to the ‘buy and build’ by ensuring smooth integration. Research shows that:
- Up to 50% of investors decisions are based on the quality and integrity of the senior leadership team.
- In more than 50% of the cases M&A destroys shareholder value
- In 33% of the cases, value doesn’t change
THE CRUCIAL ROLE OF THE MANAGEMENT TEAM |
The role and the quality of the Management Team is crucial for further success and to achieve a good exit outcome. The Management Team of the portfolio company is expected to step up and deliver the upfront agreed numbers and results within a timeline of about 3 to 5 years. Strategy execution, delivering results is key and determines failure or success of the exit.
CHALLENGES IN EXECUTING THE STRATEGY |
The management team of the portfolio company needs to organize and structure the company in such a way that the growth, change or transformation objectives will be met.
80% of the execution challenges are related to people and culture issues such as:
- Absence of the right internal talent to fill key positions
- Poor team dynamics
- Unbalanced team composition
- People are failing to perform after promotion
- Cultural myopia
- A new business strategy that requires mindset and behavior change
- A disengaged leadership team and/or culture that lacks meaning and purpose
- A need for alignment of senior leaders and key contributors around a shared vision for the future
- People processes are disconnected, use different languages, and confuse managers and employees
- Senior leaders don’t view the people processes as adding value or solving their problems
- Mergers & Acquisitions Integration
- The organization has set new strategic goals and new sustainable objectives and needs implementation of the plan
- The board is questioning whether the organization will be able to achieve its goals
- Financial and commercial performance issues
MAKING BUSINESS STRATEGIES WORK |
RIVIONT helps boards with growth, change and transformation initiatives and helps them succeed through realignment of their leadership teams and organizational culture to their business strategy.
Our integrated solutions are designed to: