When timelines are tight, it’s tempting to assume leadership will “sort itself out” post-close. In practice, slippage tends to come from a few predictable patterns – and most of them are people/leadership issues.
65% of high-potential failures trace back to leadership, roles, and decision-making
45% of leadership transitions falter within two years
46% of PE firms report that unplanned CEO turnover at portfolio companies extends the average hold period and reduces returns rates.
Here are four ‘tells’ we screen for in diligence, how to spot them, and how we handle them in a way that preserves trust and moves the plan forward.
1) Decision latency
What it is: Slow or circular decision-making – authority is unclear, choices get re-litigated, cycle time expands.
What it looks like: The same item turns up in multiple forums with no resolution; “we’re waiting on X” is routine, and big calls hinge on one diary.
Why it matters: Latency compounds across pricing, hiring, integrations, and capital allocation.
What helps:
We start by asking leaders to walk us through the last three important decisions – who owned them, how long it took, what had to be re-done. That short, honest story tells you more than a dashboard.
We then recommend a simple meeting rhythm leader can run: create space for challenge, then close the item with one named owner, a date, and what “good” looks like. For a few critical calls, we suggest watching how long it takes to move from surface → commit – just long enough to help a new habit stick. No theatre, no program weight.
2) Side-conversations (the backchannel)
What it is: The meeting says “yes”; the corridor says “maybe.” Real decisions migrate off-line.
What it looks like: Polite alignment in the room, but conflicting versions privately. “Let’s take this off-line” becomes code for “we’ll decide elsewhere.”
Why it matters: Backchannels erode trust and create execution theatre.
What helps:
We make space for challenge before anything locks: “What would make this fail?”
You quickly hear who names risk and who performs optimism. We also agree ground rules up-front (purpose, scope, attribution, confidentiality) so candor doesn’t feel risky. Senior voices need to model this: invite dissent without penalty, then help the room move on together.
3) Role ambiguity
What it is: Overlapping remits and fuzzy accountabilities. “We all own it” quietly becomes “no one does.”
What it looks like: Duplicate projects, dropped hand-offs, friction over who decides cross-functional work.
Why it matters: Ambiguity slows scale – especially in buy-and-build where interfaces multiply.
What helps:
Pre-close, we work with leaders to name the handful of decisions that move value in the next year – pricing, hiring, integrations, key customers – and assign one owner for each. Early post-close, we might recommend putting that picture somewhere visible (who decides, who contributes, who executes) and writing 30/60/90 expectations for senior roles against the investment plan. This gives the team permission to go faster without letting work fall through the gaps.
4) Brittle succession
What it is: Single-point-of-failure risk – capability or knowledge sits with one or two leaders; the bench is thin.
What it looks like: No named deputies; founder/CEO holds critical customers, product, or regulators; retention depends on goodwill.
Why it matters: An absence or bandwidth limit can stall the thesis.
What helps:
We identify roles and relationships you can’t afford to single-thread and recommend practical cover: name deputies, start joint meetings with key customers/regulators, make a short list of knowledge that must move early.
Where depth is thin, we advise targeted augmentation (e.g., Chair/NED/interim specialist) and help define how that support interfaces with the team.
How we surface these quickly (and fairly)
A two-week screen built around 90-minute 1:1s, selective Hogan (incl. HBRI) used as prompts (not labels), and a short artefact review – rolled up to a Team Leadership brief and board-ready discussion. Our approach is designed to be implemented with leaders, not to them; and leaves both investor and management with a few moves that change the first quarter.
Bringing it together
Impact leadership assessment asks for better conversations, held in the right way, at the right moment. When we slow down enough to hear how decisions are really made, where voice travels, and where work is single-threaded, the patterns become both clear and accessible. A rigorous and respectful assessment gives investors a fair read and gives leaders language they can act on next week.
The aim isn’t a bigger pack; it’s shared clarity and three or four moves everyone can own. Name the owner on the calls that matter. Make challenge safe in the room. Put role boundaries where interfaces fray. Spread continuity beyond one diary. Small, visible steps reduce early surprises and protect the relationship you’ll rely on post-close.
If you’re sitting on a live deal and want a clear, human read on leadership readiness, we can run a two-week screen and leave you with a concise team view and agreed next steps.
Get in touch on emily@indigogold.com to start the conversation.
