Case study
A development finance institution: assessing organisational effectiveness pre-investment
The client
A globally operating private equity firm with a strong reputation for backing successful ventures. As the firm sought to improve its already high success rate, they recognised the need for more structure, data, and discipline in their investment process.
The brief
The firm was on the brink of making a multi-million-dollar investment. After exhaustive due diligence, they faced one final, critical question: could the organisation and its team deliver the projected growth? The firm understood the importance of leadership capability, culture, and alignment with strategy but questioned whether these elements could be effectively measured. They brought in ig to assess the human capital component of the deal.
“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.”
Investment Consultant, Human Capital Team
What we did
Rapid, in-depth assessment
With only two weeks to assess the target business, ig was tasked with delivering nuanced insights into leadership capability, quality of relationships, strategic and structural alignment, cultural fit, and the CEO’s external influence. The investment team had identified some of these elements independently but sought ig’s expertise to provide a comprehensive and cohesive analysis.
Coaching and capability building
The brief extended beyond providing a set of recommendations. The private equity firm’s Human Capital (HC) team aimed to build sustainable internal capability for future assessments. ig combined coaching with organisational effectiveness workshops to establish a baseline capability. This collaborative approach allowed the firm’s team members to learn directly from ig’s methodology during the assessment process.
Building a bespoke toolkit
ig developed a custom toolkit for the firm to use in subsequent investment projects. This toolkit was designed to ensure that the insights and skills gained during the project would be sustainable and applicable to future investments.
Understanding the system
The project required a holistic understanding of the target organisation as a system, where changes in one area could impact others. ig employed a full range of organisational effectiveness tools, aligning investment goals with strategic imperatives. Individual capability assessments were aggregated to evaluate the senior team, psychometrics provided insights into key person risks and organisational culture, and operational analysis highlighted process risks and potential structural changes.
“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.”
Associate, Assessment Team
Navigating uncertainties
A key aspect of the project was the ability to answer the investment committee’s critical question: could the prospect deliver the anticipated growth? ig’s expertise enabled the team to explore various scenarios, respond to “what if” questions in real-time, and shape the investment response accordingly.
The results
Real-time insight
ig delivered a comprehensive report and set of recommendations, which were essential to the investment decision. More importantly, their ability to navigate the complex dynamics of the target organisation and provide real-time insights helped the investment team make informed decisions.
Client satisfaction
The head of the investment team expressed satisfaction with ig’s balanced approach, stating that ig successfully combined objective assessment with a sensitive handling of the firm’s relationship with the target organisation. The project was seen as the beginning of a broader effort to formalise and articulate the firm’s approach to assessing human capital in future investments.
What our client had to say
In summary
ig’s involvement in this critical investment decision provided the private equity firm with the necessary insight to assess the target organisation’s potential for growth. By delivering a thorough and nuanced analysis within a tight timeframe, ig not only met but exceeded the client’s high expectations. The project laid the groundwork for developing a sustainable approach to human capital assessment in future investments, with ig continuing to support the firm’s long-term goals. The client was impressed with ig’s ability to combine rigorous analysis with a human touch, ensuring a promising start to their ongoing collaboration.
