Private Equity Fund In Hot Water Deploys Interim Team

Private Equity Fund In Hot Water Deploys Interim Team

What do you do when your fund does a great job buying 5 divisions of a big publishing company spinning off assets, only to find one of the divisions starts going sideways?

First, you give the division some time to right the ship on their own.

Unfortunately, for one multi-billion dollar private equity fund, this strategy didn’t work… and the fund gave the CEO four years to get it right.

That’s a lot of patience.

Eventually, it came time to make a change, which the managing partner was dreading. He didn’t have a ready replacement and he didn’t want to further disrupt the organization, but he knew it was time. Past time. He had to make a change. He knew the senior management team loved their boss and that it was all going to come to a head at the annual planning session.

What to do?

When the fund started explaining the current situation to us, it was very clear that outside, objective expertise was needed. Luckily we had a one-two combination: a veteran HR head/organizational psychologist and an expert CEO to help with the transition.

The morning of the planning session, the fund manager let the CEO go, and entered the room of 20 managers to break the news. But he had backup. The dynamic duo of the Interim CEO and organizational psychologist were able to quickly lead the team through the trauma of losing their boss, and then focus on their forward annual plan. Things went so well over a two-day span that the fund manager asked the interim team to deploy into the business to make the plan a reality.

Progress was immediate. Within 5 days they uncovered $1 million in missing profits. Over the ensuing year the interim team reorganized most departments of the division, leading to permanent improvements in profits, performance and efficiency before eventually bringing in permanent replacements.