During diligence, discovering a target company underreports cash to evade taxes isn't just a financial issue to be fixed. It's a clear signal of the seller's character. If they are willing to lie to the government, they will likely lie to their business partners.
PE firms often focus on the value creation plan during underwriting but neglect talent assessment. Evaluating the existing team and planning for development or replacement *before* the deal closes leads to better outcomes and avoids later surprises.
Traditional, long job descriptions create ambiguity. Distilling a role down to the three most critical, non-negotiable tasks clarifies expectations and prevents employees from justifying poor performance in key areas with success in minor ones.
PE investors and leadership teams often fall in love with their initial value creation plan. Calling it a "thesis" creates rigidity. Re-framing it as a "hypothesis" encourages a mindset of testing, learning, and adapting to market realities, which is what actually happens every time.
When evaluating talent in a portfolio company, it's crucial to assess executives based on the organization's immediate, foundational needs. Focusing on aspirational, future-state capabilities can lead to neglecting critical basics, creating significant operational and financial risks.
Before increasing marketing spend, a leader must fix the "leaky bucket" of employee and customer churn. For Boardroom Salon, reducing employee turnover from 70% to 34% naturally improved client retention, making subsequent marketing investments far more effective.
In demanding sectors like retail, middle managers are critical but prone to burnout. Instead of just offering verbal support, leaders should proactively rotate them off customer-facing duties into temporary back-office roles, providing a tangible break and protecting the business's operational backbone.