Private Equity Leaders Are in the Fight of Their Lives
Leaders in the Private Equity sphere are in the fight of their professional lives given the current environment. Navigating financial uncertainty is not new territory for many. However, doing so under the compounding layers of a global pandemic, economic uncertainty, social unrest, and an election year… that’s a whole ‘nother ball game. Success or failure lies not in sound financial decisions alone. It’s a leader’s perspective that makes all the difference.
Start by answering this question: Is the current crisis happening TO you and your organization or FOR you?
If it is happening TO you and your team, you are simply at its mercy and any moves you make are strictly defensive, centered around protecting the organization. If this is happening FOR you, the current crisis could be the catalyst for immense growth, transformational change, and never-imagined success. There is a reason why so many of today’s industry leaders were born out of a crisis – challenge forces innovation.
Here’s what leaders can do to survive and thrive.
Take a deep dive into your organization
Hernan Saenz and Dunigan O’Keeffe of Bain and Company encourage leaders to “Act now to protect and run the business today, and plan now to retool the business for the future.” Taking a deep dive into your organization’s core business, looking at effectiveness and efficiency, is a powerful way to accomplish the first. Danielle Mathis, Practice Director for TurningPoint Executive Search, shared this, “The entire ecosystem has been turned on its head. Buyers expect to interact differently with sellers; suppliers must look to other sources for products; and sellers must learn to pivot away from face to face interactions, relying instead on virtual platforms to make the case for their products and services.” Developing cross-functional teams tasked with focusing on solving problems, increasing efficiency, exploring the benefits of existing procedures, and the functional impact of the organization allows organizations to cut costs where possible and make the best use of existing resources. Additionally, leaders who make these types of short-term decisions have the long view in mind and can better ensure sustainability for their organizations and its people. By taking both this offensive and defensive position in a time of crisis leaders have “opportunities such as accelerating innovations, expanding ecosystem relationships, anticipating changing market structures, and creating new business models,” according to Punit Renjen at Deloitte.
Get the creative juices flowing
We’ve all heard about the significant pivot companies like GM and Nike have made to adjust their business model and production to assist in and thrive during the COVID crisis. They are not alone. Through our own research we found, 32% of the organizations we spoke to launched entirely new products or services in the last 6-8 months. For some, these changes were originally made to survive the outbreak. Now, they are long-term, if not permanent, enhancements to their business model. Managers, Directors, VPs, and C-Suite Executives are at the doorstep of a truly unique opportunity to evolve in this change environment. Leveraging cross-functional teams to search for opportunities outside the existing core business, developing new streams of revenue, and generating ideas about which business lines can pivot will ultimately expose currently untapped growth.
Sustain and engage your people
Strong leaders prioritize the wellbeing of their people naturally. Now, it’s even more important than ever. Psychologists describe “ambiguous loss” as losses that are inexplicable, outside one’s control, and have no definitive endpoint. This is the type of loss your employees are shouldering while attempting to manage their workload – all while balancing their family and work life from the same kitchen table or home office. You can help alleviate some of this burden through authentic conversation, which includes delivering truthful messaging and real-time feedback, according to Deloitte Insights. These conversations are not always easy as they often address difficult situations such as business closures, layoffs, and furloughs, as well as sometimes unpopular decisions and courses of action. However, there is an overarching lack of trust in leadership permeating our current culture. Your willingness to be a reliable, transparent, and trustworthy leader will instill confidence in your team and eliminate some of the uncertainty that is driving their anxiety. Ken Schmitt, CEO of TurningPoint Executive Search, reminds us that “The mindset of every employee has changed as a result of covid, sales in particular. Even high performing salespeople are no longer willing to travel 70 – 80% – and frankly, their customers no longer expect to see them in person. Engaging with your sales team about their comfort level in a post-covid environment will dramatically increase the trust and engagement.”
Your employees aren’t the only ones under immense stress. As a leader, you have the added layer of managing the stress, productivity, and satisfaction of your team in addition to your own. This is why it’s so important you are also checking in with yourself. Leaving your own emotional and personal stress unchecked is bound to carry over into the workplace. During this exceptionally tumultuous time, pay close attention to your basic needs. Prioritize quality sleep and take breaks throughout the day. Stay physically active and eat well. Most importantly, schedule downtime to get a mental break from work and take part in the things you enjoy- a round of golf, a walk on the beach, watching a movie with your significant other. Again, our friends at Deloitte said it best. The question to ask yourself as a leader is, “Am I walking this road alongside our people, our clients, and our ecosystem partners, and mirroring their needs?” If your answer to this complicated question is ‘yes’, your leadership skills are on point. If not, explore ways you can fill the gap as a leader. “When leaders exhibit empathy, their employees feel safer, work more creatively, and perform better,” says Jamil Zaki of Harvard Business Review. This is why your mental and physical health is so important as a leader. Without it, your ability to empathize and connect with your team is impeded.
In the end, leaders have a choice. They can approach the current climate as happening TO them or FOR them. Choose wisely as your team and your organization are looking to you for direction.