When leaders must have the right skills
A private equity firm was struggling to find suitable candidates for an operating partner role. The firm wanted candidates who possessed deep expertise in a specific industry and who knew how to create value from the companies they ran—but that wasn’t all. The firm expected all of its operating partners not just to run companies but also to source and originate buyout deals.
Individuals who can fulfill both ends of that mandate are rare. Even the few who combine operating and deal-origination skills tend to be considerably stronger in one area than in the other. But the PE firm believed that finding the ideally qualified candidate was crucial: the right person could generate outsize returns for the firm, and the wrong one could undo years of painstaking effort. The PE firm called in AlixPartners to oversee the search and evaluate the most promising candidates. Recognizing that the perfect candidate might not exist, the firm also asked us to identify skills the candidates would need to develop further and to estimate how long that development would take.
An advanced screening process pinpoints the best prospects
Our first move was to interview the PE firm’s CEO to gain a thorough grounding in the firm’s culture, which the operating partners would be expected to exemplify and reinforce within the firm (cultural misfit is a prime derailer for most senior executives). We also worked with the CEO to define clear and measurable expectations for the operating partner role, including revenue, EBITDA, and deal volume targets. We used the information we had gathered to identify two standout candidates. Next, we assessed their cognitive abilities, strategic and tactical acumen, personality traits, values and motivations, and—of course—fit with culture. We took pains to understand their learning styles so that we could customize their development plans and judge how long the development process would take. We had to weigh who was the best performer now with who could grow into the best performer, obviously within a relatively short period of time. These investigations yielded a trove of data about the candidates and enabled us to rate them on their leadership potential, learning speed and agility, emotional intelligence, and alignment with the firm’s culture. Following a second round of analysis, we identified the skills and capabilities each candidate would need to strengthen to excel in the role, and we estimated the length and likely effectiveness of the development process.
When it really matters
Drawing on our assessments and analyses, we presented the CEO with in-depth predictive reports of both leading candidates. We explained their strengths and risk areas and offered suggestions for mitigating those risks. We strongly recommended one candidate for the role, while rating the other as questionable because of the time it would take to close his capability gaps. The CEO told us later that our assessments were extremely accurate and strongly influenced his ultimate hiring decision. One year into the hire, our predictions have proven accurate. The CEO subsequently asked us to conduct other hiring-and integration-related assignments, and is a very satisfied client.