What’s Next for Talent Management in Private Equity

June 28, 2021 – Private equity has been among the fastest recovering business sectors, due in part to its history of successfully executing turnarounds. “Private equity has historically been about the numbers and driving earnings before interest, taxes, depreciation and amortization (EBITDA) to increase the value of a company,” said Dan Hawkins, founder and CEO of Summit Leadership Partners. “However, talent management is now essential and a central factor in how private equity makes its money. Private equity has come to realize, just like the rest of us, that talent matters and the sector, as a result, will focus heavily on it in the coming years,” he added.

Mr. Hawkins said his firm’s technology and healthcare clients “are in a talent war like I have never seen before, and this is exacerbated by reduced requirements to relocate, an exodus of technology companies away from the West Coast, and the rapid growth of digital healthcare.”

Succession planning, he said, has always been an important process at top Fortune 500 public companies, but now it is starting to become a serious focus for the private equity community and their portfolio companies. “Future valuations are a top priority for private equity firms, and those valuations will only increase if there is a solid, stable management team in place.” Private equity CEOs are looking for guidance in this area, he said.

Learning Something New

Diversity, he said, including proper DE&I training, is also gaining as need across the private equity sector. “Historically, companies have simply ticked a box when it comes to diversity. Now, we are seeing a greater emphasis put on preparing leaders and hiring with diversity in mind is at the top of the agenda,” Mr. Hawkins said. “Leaders have a greater influence on attracting diverse talent and making people want to be there.” This also ties into culture, he said. “Shaping culture starts at the top. That makes it critical to lead from the front regarding diversity, equity, and inclusion in order to create a fearless and open organization where people can be themselves. Leaders coming into the portfolios of private equity firms are allowing themselves to learn something new. It is refreshing,” he said.

“Our experience, along with our latest research, proves that one of the most important decisions a board or company ever makes is selecting and preparing the right talent for the most critical leadership positions in the company,” Mr. Hawkins said. “The need to find the best talent for the role is only going to increase as businesses navigate a very unclear future. Taking a strategic approach to identify baseline strengths, gaps, alignment opportunities and barriers to team execution will be essential going forward,” he said.

Summit Leadership Partners advises boards, investors, CEOs and senior leaders on scaling business through talent and organization assessment, coaching, executive team effectiveness, leadership development and organization performance improvement. The firm has office in Austin, Charlotte, Dallas, Denver, Nashville, New York; and San Francisco. Nearly three quarters of its business is with private equity and venture capital investors.

Mr. Hawkins founded Summit Leadership Partners in 2014 to help growth-oriented companies and business leaders scale and improve performance. Since forming Summit, he has advised numerous boards, investors, CEOs, and senior leaders in a myriad of industries. Mr. Hawkins brings 25-plus years of experience as a chief human resources officer, global HR vice president, and other senior leadership roles with high performing global companies, including Asurion, Ingersoll Rand, MagneTek and Hoechst Celanese.

New PE Webinar

As businesses seek best practices to navigate the post-COVID-19 environment, join Summit Leadership Partners on June 29 at 11 a.m. EST for an interactive webinar supported by Hunt Scanlon Media as the Summit launches the results of a new private equity study surveying 200 portfolio company CEOs on the current state of their businesses’ human capital management practices, executing talent goals and retaining key talent, management team burnout, DEI strategies, and succession planning.

During this free, 45-minute interactive webinar, Mr. Hawkins will kick off the discussion with the results of the report and then take a deeper dive with a group of A-list panelists – including Courtney Hagen, chief talent officer of Littlejohn & Co., Steven Maxwell, SVP portfolio human capital at Audax Group, and Michael Anderson, operating partner at One Rock Capital Partners – to explore their thoughts on private equity’s biggest post-pandemic human capital business transformations. This discussion will provide business leaders valuable insight on how best to prepare for the major talent shifts coming as we exit the pandemic. There will also be an opportunity for audience members to ask their questions to panel members. Join the webinar.

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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