Keys for Partnering with Private Equity to Find the Right Portfolio CEO

When acquiring a business or serving as a majority stakeholder, it is important to conduct a thorough and extensive assessment of the acquired entities’ leadership team. According to Ravi S. Ruprai, CEO of boutique recruiter RSR Executive Search & Leadership Advisory Consultants, it all starts with a personal approach.

November 9, 2021 – When acquiring a business or serving as a majority stakeholder, it is important to conduct a thorough and extensive assessment of the acquired entities’ leadership team, according to Ravi S. Ruprai, chief executive of RSR Executive Search & Leadership Advisory Consultants. “I have seen many examples where private equity firms sometimes fall short at assessing the one asset that is the key to their investment’s success, talent,” he said. So how does he do that? “Firstly, we understand the broader business goals of the investors, and then align their human capital strategy with that end-goal,” Ravi said.

“Of course, for the most part we know that the typical life cycle of an investment is between three to five years, but there’s more to it than just that,” he said. “What’s the culture like? Do we want to change that? The D&I strategy, is there one in place? How does the existing team operate together while working remotely? Once we have the answers to these key pieces of information, we can then assess the executive leadership team against the agreed business goals,” he noted.

Often, the result is that there is a need for new leaders within the organization, either because the existing team self-selects out (as part of the acquisition agreement) or they ask to leave after being assessed.

Timing is Key
Knowing when to replace a CEO is key. “I experienced this situation with a private equity firm. The existing CEO had fixed the product portfolio but was not experienced at taking the newly innovated product portfolio to market, hence the need for a sales/ go-to-market oriented successor,” he said. “Knowing it is time for a change and taking action is vital.”

Mr. Ruprai said that too often search partners are focused on a ‘fast start.’ “But search processes are not straight-line projects and if a search process goes off the rails, weak partnerships can quickly turn sour.” So, how does his search firm solve for this?

“We set expectations early. We clearly communicate to the key stakeholders. And, most importantly, we partner with them as trusted advisors and collaborate to execute flawlessly,” he said. “When multiple stakeholders are involved, it is vital to build alignment upfront, and the quicker the better. We, as search partners, need to assemble a list of key questions for the decision-makers, such as prior CEO experience and have they served as PE portfolio chief executives before. What is the industry relevance? What is the size of their P&L experience? And we look at early foundational expertise such as sales/ go-to-market versus product/engineering, and domestic vs. international operating experience.” It is complicated, he said.

Once the questionnaire has been built out, he and his colleagues then interview each of the stakeholders to build out a feedback grid. “If we are lucky, we can see a pattern emerging, and approximately 75 percent have aligned on what the critical competencies need to be,” he noted.

Contact Ravi Here

So what about the remainder?

“We often massage the requirements during the search process, and this is where a great search / leadership advisory consultant will separate themselves from the many,” said Mr. Ruprai. “In my experience, it is rare to get 100 percent alignment at the beginning of a project, no matter how straight forward it may look from the onset. More often than not a curve ball comes into play during the execution phase. We deal with that curve ball and each situation as they come up. Experience teaches the search partner on how to handle each one. Once there is broad consensus, we go out and build a draft position specification, while concurrently agreeing to a sector and company target list.”

Assessing prior experience can be the most contentious criteria for the selection committee, he said. “As a search and leadership advisory consultant, I have often seen that while there is comfort in hiring an executive with prior CEO and industry experience, the first criteria can often narrow the pool of what is the most competitive talent market we have seen in decades,” he said.

Proven Experience
Ravi S. Ruprai is a global executive search and leadership advisory consultant. His firm, RSR Search & Leadership Advisory Consultants, operates below the radar, almost  ‘stealth like.’ Ravi and his team work with a very small number of select clients at a time, with a focus on flawless execution when delivering executive search (VP+) and leadership advisory work. The ability to operate in this nimble and dynamic way has given his firm the opportunity to offer a truly focused and high-touch approach to a handful of clients at any one time, delivering talent solutions for private equity clients, covering enterprise software, telecom, fintech, health-teach among others.

Mr. Ruprai is from London and over the last 20 years has worked in London, Chicago, New York and for the last 10 years in the San Francisco Bay Area. He holds a Bachelor of Engineering degree in mechanical engineering, majoring in aero-fluid systems and international marketing from the University of the West of England (UWE Bristol) in the U.K. He also holds an executive education certificate obtained from the Stanford University Graduate School of Business. Mr. Ruprai is a board director for the Leukemia and Lymphoma Society for the Bay Area chapter.

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