In our latest Private Equity (PE) Leadership Survey, we sustained our focus on the theme of leadership in times of disruption. We asked PE investors and portfolio company (portco) executives about a range of topics including effectively managing a hybrid working environment.

Trust is still the common thread – now the tapestry is just more intricate

The majority – 75% of PE, and 79% of portco respondents – agree that the best way to manage a hybrid work environment while still holding employees accountable is to strengthen the culture and increase trust in employees. Building trust has always been a cornerstone of promoting engagement, supporting development, and increasing productivity. But achieving these things now more heavily rests on trusting that all employees will follow through on their commitments, given the increased levels of autonomy established through a hybrid working environment.

However, both PE investors and portco executives are still hesitant when it comes to giving their people the amount of trust that is needed to foster a positive work environment. Both groups believe that employees are making unproductive decisions while they are not being watched. A significant percentage – 40% of PE and 44% of portco respondents – also reported requiring periodic in-person meetings.

How can you move the needle?

  • Lead with trust: Come to terms with the reality that trust is not exclusively earned, it is the foundation. If you lead with trust as opposed to give trust as a reward, people are much more likely to perform at their highest capability.
  • Build trust through strengthening relationships: Trust is engendered through building your own degree of expertise and then sharing your expertise with others. This not only benefits personal relationships but benefits organizational capabilities and the development of others.
  • Identify and assess the roadblocks: 
    • What are your own roadblocks to developing trust?
    • Is there an outsized perception of self-interest on the part of leadership within your organization?
    • Do rewards and incentives align with values?  
    • Is there a culture of building relationships and fostering collaboration?
    • Has a command-and-control style previously benefited performance, though negatively impacted engagement and retention?

The need for trust has been frequently cited over the last decade, and then very aggressively prioritized over the past two years – both PE investors and portco executives must take ownership of where their current challenges may lie in terms of creating an environment of trust. If they implement new practices and strategies to address it quickly, they can reduce the chance of losing employees to the current great talent migration/resignation movement.