What do you do when a lot of money and your reputation is tied up in a deal, but the data you have is only part of the puzzle?
“Private equity folks expect a lot. A very good outcome is when you meet their expectations. IG did this – solidly.”
Our client was a private equity firm operating globally. It had a great reputation for backing winners, but a higher success rate called for more structure, data, and discipline in the investment process.
The missing piece of the puzzle
We were called in at the sharp end of a multi-million dollar investment decision. After months searching for a business with the potential to scale, and exhaustive due diligence, the investment team was grappling with one final question – would the organisation and the team be able to deliver?
The investment team knew capability, culture and the alignment of people with strategy was important. They had a good ‘eye' for what a well set-up management team looked like. When we talked to the investment team they told us:
“For us, the clearest markers of future success are the numbers. Of course we understand the importance of leadership capability, culture, and organisational design, but our concern was whether they can be measured.”
We had two weeks to get in and out of the target business and deliver the insight.
“We wanted IG to help us understand the nuances of the organisation’s potential: leadership capability, the quality of relationships, strategic and structural alignment, cultural fit and the CEO’s external influence. We could pick up bits and pieces of these ourselves, but we were looking for a fluency and cohesiveness to combine all these aspects and get a solid sense of the status quo, and the scope for growth.”
Inside and out
But the brief wasn’t about simply delivering a set of recommendations. The Human Capital (HC) team were clear that while they needed help in the short term, the long-term goal was to create sustainable capability internally.
We combined coaching with organisational effectiveness workshops to build a baseline capability. Then we co-delivered the OE assessment.
“We sent a member of the investigative team with IG for two reasons. Firstly, we wanted to see how IG interacted with the organisation, and keep tabs on our presence there. Secondly, and more importantly, we wanted our team member to pick up some of what they were doing, to put the development work IG had done for us in the first stage into practice.”
We built a bespoke toolkit for the organisation that would live on in subsequent investment projects.
Have faith in the system
Work like this needed us to get our arms around the whole organisation; to understand it as a system. When one thing changes, it causes shifts in other areas. There’s an interconnectivity and an internal life of the organisation which makes it more than the sum of its parts.
We would need to use all the tools in the IG organisational effectiveness toolkit. Investment goals flowed into strategic imperatives. Capability assessments at individual level rolled up to an evaluation of the senior team as a whole. Psychometrics gave insight into key person risks and organisational culture, while an analysis of the operation showed process risks and the need for structural change.
When you really get the system, you are able to explore a variety of scenarios. We needed to be experts with enough insight that we could roll with all the “what if” questions from the investment team.
Answer the question
When it came down to it, the client needed an answer: can the prospect deliver growth?
And that’s when we get into it with investment committees. A solid report and set of recommendations is important. But what really makes the difference is the ability to understand commercial options in real time and shape the investment response.
The head of the investment team said:
“We met with a lot of other consultants before going ahead with IG. They struck the balance between an objective line of assessment, and a very human approach to our delicate relationship with the prospect. They navigated the uncertainties of the relationship professionally and with ease. This type of work is a fundamental part of the investigative process, and one that we hope to develop as time goes on – with the help of IG. We want to start to formalise and articulate a house approach and style to interrogating the human capital. This was a promising start.”