Mastering the fast lane: A transformation leader’s guide to Private Equity (PE)

When private equity firms invest in portfolio companies, there’s a need to either transform or scale a business. This must happen fast, to ensure the business is fit for purpose at the end of the investor cycle.

Because of this, transformation talent is in high demand when it comes to PE ventures. So, what does it take to navigate this exciting environment? And are you cut out for a career in it?

We spoke to Blane Coulcher, a transformation leader that’s led transformation projects for PE-backed companies for the last 15 years. Here, he discusses the challenges, relationship dynamics, success factors and skills needed to transform a portfolio company against a tight timeline. 

What surprised you most about the private equity environment?

There’s a real attitude of, ‘let’s give it a go’. And a real energy around: ‘What products can we create? What new channels can we build? What technology investment do we need? What people capability do we need? What big ideas do you have? Let’s give it go.’ There’s willingness to pursue big-ticket opportunities, but at the same time focus on making the machine hum.

That’s not to say PE has billions of dollars to do what you like with it. There are controls in place, but in my experience it’s generally unlike private or public companies where access to funds is much harder, and decision-making is potentially much slower.

What are the biggest challenges you face as a transformation leader in a PE-backed company?

First, you have to be very aligned on the business objectives, the timing of the deliverables and what it will take to deliver on time. Then, you have to work with the CEO and executive team to deliver and maintain the fast pace.

Second, you’ve got to get your head around the fact that you’re working in an entirely different operating environment. In corporate structures, initiatives generally take a lot longer to get over the line. It’s a slower and more deliberate speed. Whereas, in PE, it’s much more about ‘giving it a go’. Because you’re looking at maybe 3-5 years for a turnaround, the first year’s all about ramping things up and releasing the untapped potential of a business.

How do you navigate these challenges?

You’ve got to click with the CEO. The relationship with the CEO is pivotal. They must see you as somebody who can help them, as they want to be able to share their ideas. Then you have to take those ideas, shape them and bring them to life. When the CEO champions the transformation, it’s far easier to manage stakeholder relationships and ensure the business meets the aligned objectives.

That’s why I always make sure I’m ‘pulled’ into the role by the CEO, and not ‘pushed’ in by the PE firm. If the CEO is pulling me in, that means I already have his or her buy-in. But that only goes so far.

Build the trust of the exec team. The other element is being able to build strong relationships with each of the members of the exec team, so you’ve got their buy-in and trust. It’s important to understand their motivations and get clear on the vision for each of their divisions. 

Next, you’ve got to decide how you’re going to work with the exec team, how you’re going to catalyse their thinking, pull together different ideas and track those conversations. So you can create a cogent and persuasive way forward for the business. Having these relationships helps you navigate any politics, agendas or resistance to change.

And think outside the square. You have to ask yourself, what else would be possible if you had access to investment funds? What could you do, or would you do? In PE, you don’t have as many of the constraints you’d find in a corporate setting, notwithstanding that it’s not a free-for-all, and business cases do have to be written and approved! So, you’ve got to get creative about how you’re going to use your resources and funding, to maximise the value of a business in a short time.

How do you measure the success of a transformation project?

There’s almost a visceral, emotive moment at the end of the engagement when you look back and think, ‘Wow! Haven’t we come a long way? Look at what we’ve achieved in the last two to three years! We’ve really turned this business around and set it on an exciting new trajectory.’

Of course, there’s all the tangible benefits, such as improving the bottom line, selling the business etc, but the more appealing element for me is the difference we’ve made as a team. Whether that’s a structural change, a motivated company, bringing in new people and capability, or systems and tools that make life a whole lot easier for people on the frontline.

What skills do you need to succeed in a private equity setting?

You’ve got to be resilient, robust and thick skinned at times. And you have to have unflagging energy. Even if you’re running out of juice, you can’t show it. You’ve got to keep up the attitude of go, go, go.

Then there’s the tech stuff, being sharp with numbers, as well as being a clear, concise and convincing communicator. You’ve also got to be a strong relationship builder so you can call things out and stick to your guns when someone challenges you or ‘thumps the table’.

What advice would you give to a transformation leader stepping into a portfolio company?

Embrace the pace. It’s probably going be a lot faster than what you’ve done before. But also, potentially more rewarding.

And make sure you’re ‘pulled’ into the business by the CEO, not ‘pushed’ in by the PE owners. You’ve got to click with the CEO (or your main stakeholder) and be quite clear that they really need your help from the outset.

If you’re a transformation leader looking to forge a career in private equity, please contact us. We will discuss tips on how to present and market yourself to PE, introduce you to our private equity network and maximise your chance of securing a new and exciting PE career.