Private Equity Services
Most private equity investors agree that the quality of the management team is the single most important factor when evaluating a buyout or venture capital opportunity - and poor management is most often the reason cited when expected investment returns fail to materialize.
Making a bad hiring or investment decision around top management, whether it's for a start-up or a multi-billion dollar buyout, leads to millions of dollars in losses. When you take into account vested management options or stock, severance costs and executive search expenses, not to mention the loss of morale, momentum and growth opportunities for the company, poor decisions about company leadership can be deadly.
In spite of this, many private equity investors spend less time analyzing management as part of formal due diligence than on other issues because it's time consuming and reliable metrics are hard to come by. Instead they rely on references and gut instincts in assessing these executives.
WJM Associates, a recognized leader in the field of executive assessment and development, provides expert assistance to private equity professionals in selecting, assessing and developing the exceptional management teams critical to maximizing ROI. We collaborate closely with our clients to define requirements and success factors, while establishing the most comprehensive and strategically effective approach to evaluating and enhancing top talent.
Below are descriptions of two of our assessment and executive development programs designed specifically for private equity investors.
"WJM provides great value by bringing a critical understanding of the capabilities of key management prior to closing a deal. Not having this information can be deadly."
- Mark Suwyn, Advisor, Cerberus Capital Management
At WJM Associates, we assist private equity investors in their critical due diligence by providing thorough and rapid assessment of candidates for key positions that goes beyond the typical reference and background checks. Conducted by skilled psychologists, WJM Assess™ utilizes in depth 360* interviews with current and/or past subordinates, peers and superiors, as well as a Strengths Assessment and other personality tests to investigate:
- Capability to successfully lead the company during transition to a new configuration (small private enterprise to larger public company, division of large organization to stand alone company, pre- to post-merger, etc.)
- Cultural fit - both within the portfolio company and in partnering with the investor firm
- Interpersonal adaptability and openness to consultation and advice
- Sensitivities to ethics, laws, and regulations
- Communication skills and style
- Vision capability
- Emotional intelligence
In addition to being an invaluable component of a thorough due diligence process, WJM Assess™ provides the equity firm with a clear understanding of the development needs of key personnel prior to investing or purchasing and allows the investor to build these needs into performance parameters from the start.
WJM Assess™ is effective not only for individual executives, but also for management teams. Our team assessment process focuses on individual effectiveness, as well the dynamics, communication and trust between the executives and answers the question: "can these people effectively work together?"
Management quality has always been critical to the success of an investment or acquisition, but this is truer today then ever before. Tougher market conditions are resulting in declines or delays in exit opportunities, meaning investors are more dependent than ever on their management teams to build their portfolio companies for the long term.
WJM has provided executive coaching and The Advisorship™ services to thousands of senior executives throughout the world - from start up ventures to Fortune 100 corporations. Our approach to senior level development is a proven process that enhances the executive's value to the company and provides an attractive return on the investment in human capital.
The Advisorship™ differs from executive coaching in that WJM Advisors are seasoned line executives who have "been there, done that" and who are prepared to provide invaluable assistance to top executives who can benefit from having a "confidant" with whom they can openly discuss critical organizational concerns. A typical WJM Advisor has 15+ years of general management experience, including having held a position at the "C" level. These consultants have had exposure to corporate boards and P&L responsibility and have participated in corporate initiatives such as M&A, global expansion and other major change initiatives.
The Advisorship™ is used to address:
- Development of high-potential leaders
- On-boarding of new leaders
- Merger or restructuring
- Change in strategy
- Change in required competencies or job skills
- Change in management
- Succession planning
- Cultural alignment
- Improvement of underperforming executives
In addition to enhancing the performance of portfolio company leaders, The Advisorship™ is also a powerful tool for deepening bench strength within the equity investor's cadre of executives available to fill key positions with emerging companies.