Category: Human Capital

In the Know: Organizational Design & Effectiveness

September 14, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Private Equity Consultant, Ryan Perkins, shares why the inflation-driven recession has caused firms to prioritize bringing in organizational design & effectiveness resources, and what types of those resources are being utilized the most.

Learn more by watching the video below.

Interested in connecting with interim CHROs, HR-focused consulting firms, or org design consultants? Contact us now to get quickly connected to the exact-fit, PE-grade resources you need.

 

Video transcript:

The inflation-driven economic downturn has created a complex environment, causing private equity firms to take unique action, balancing right-sizing before the storm with retaining and recruiting key personnel. With human capital being a strong input for ensuring success through this downturn, PE firms are bringing in specialized third-party resources to resolve organizational design and effectiveness needs. Here are a few specific resources that we’ve seen our clients engaging on.

Number one, Interim CHROs. Bringing in experienced interim CHROs with deep industry knowledge is a great way to ensure the human capital needs of your portcos are in steady, expert hands. An effective interim CHRO can steer the HR ship during a recession, ensuring your portco will have the right people in place to get through the downturn and position your portco for growth moving forward.

Number two, HR-focused consulting firms. Specialty firms are a great tool that private equity firms utilize to gain expertise on corporate structure and talent output, without adding personnel directly into a portco. Consulting firms that have experience working with private equity-backed companies can be extremely advantageous when making decisions around comp and benefits, staffing needs, restructuring projects, and expansion requirements during an economic slump.

And number three, organizational effectiveness consultants. Process optimization is essential to keeping up with the pace needed to thrive in times of uncertainty. Organizational effectiveness consultants ensure that processes within your portcos will help them run towards the storm by evaluating them as they currently exist, and suggest any required changes according to their industry expertise.

For private equity firms, uncertain economic times should be treated as times of opportunity. Ensuring the organizational design and effectiveness of your portfolio companies can be the difference between generating momentum versus treading water in a recession. At BluWave, we have the private equity-grade resources to position your portcos for growth, no matter the economic landscape. For information on how to get connected with best-in-class, organizational design and effectiveness groups, or any other third parties you may need, contact us today at info@BluWave.net.

 

 

 

Human Capital Forum Recap | August 2022

August 24, 2022 Leeanna Nelson

Every quarter we bring together top PE human capital and talent executives to discuss current industry topics and to offer talent leaders in private equity the chance to discuss critical topics of the day. The PE human capital role is rapidly evolving as the private equity industry increasingly invests time and cash flows into human resources.

The BluWave Human Capital Forums follow Chatham House Rule, so our takeaways herein are kept at a high level. Are you in private equity and interested learning the details by joining fellow leading PE professionals during our next Human Capital Forum?  RSVP for our next event on November 2nd.

In our most recent Forum, we discussed many topics including:

  • The private equity industry is seeing the ongoing downturn as a unique talent hiring opportunity.
  • Human capital leaders are working closely with their portfolio company leaders to accumulate best practices and share them across their portfolio for the good of all.
  • The private equity industry is actively polling its portfolio companies to understand the voice of their employees and improve engagement and retention.
  • Human capital leaders are spending significant time bringing additional skills and talent to new portfolio companies and supporting the development of their teams.
  • The PE industry is using data and objective assessment tools to improve portfolio company performance.
  • In the days ahead, human capital leaders are looking to spend more time enhancing culture, supporting leadership development, and sharing best practices during rapidly changing times.

We thoroughly enjoyed these thought-provoking conversations that occurred during this recent gathering of PE human capital professionals. If we can be of assistance, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

In the Know: Positioning for Growth in a Recession

August 16, 2022 Delaney Walker

We’re sharing real-time trending topics we are hearing from our 500+ PE firm clients as we combat ongoing recessionary and inflationary pressures. One of our Private Equity Strategic Account Executives, Cydney Dicken, talks about why and how leading PE firms are taking action to increase their portfolio’s equity value during these uncertain times.

Learn more about what PE firms are doing as they prepare to run towards the storm by watching the video below.

Interested in addressing competitive opportunities, optimizing profitability, or recruiting and retaining the right talent? Contact us here. You can also learn more about the specific ways we drive value for PE firms by connecting them to the exact-fit resources they need by reading our case studies.

 

 

 

Hunt Scanlon 2022: Human Capital in Private Equity

June 21, 2022 Leeanna Nelson

Last month, our team had the chance to attend Hunt Scanlon’s private equity recruiting conference in New York. At the conference, our founder & CEO, Sean Mooney, had the opportunity to sit on the panel, “The Art of Building Private Equity Leadership Teams,” alongside  Jimmy Holloran of ParkerGale Capital, Amanda Roberts of L Catterton, Michelle Nasir of Arsenal Capital Partners, Kit Cooper of Signal Partners, and Adam Zellner of Business Talent Group. There were many value-filled panels throughout the day, allowing for hundreds of PE leaders to discuss and share their thoughts with one another on the current state of strategy, culture, and talent.

The pandemic has both accentuated and accelerated PE’s greatest challenges, and human capital is challenge #1. PE human capital leaders have quickly become the busiest people in the industry, demonstrated by our BluWave Activity Index which shows that 42% of PE projects in Q1 ‘22 were related to human capital, which was up from 36% in the previous quarter. Our key takeaways from the conference below share how talent leaders are staying busy and how they are creating efficiencies to drive more value while they are in such high demand:

1. The Need for a Data-Driven Approach to Talent

  • Business leaders are increasingly recognizing the importance and value of quickly getting the right talent in place across all organizations. According to McKinsey, organizations that get talent right in the first year see 2.5x ROI on their initial investment. Getting talent right is not just a necessity for the C-suite, 90% of critical talent needs in a company lie below the C-suite.
  • With so much at stake if you get talent wrong, many PE firms and proactive businesses are taking a data-driven approach to human capital in order to have best practices to track against.

2. Talent-to-Value

  • Not only does getting the right talent in place quickly improve ROI, it is also crucial to enable companies to deliver on their value creation plans. One way firms are ensuring they get the talent they need is by developing great relationships with their recruiting firms. This allows recruiters to gain a sense for what “talent for that specific firm” looks like.
  • While human capital is critical to value creation, everyone is fishing in the same pond for talent, creating difficulties in getting the talent you need. One solution to this is to take a holistic approach to talent identification & recruitment in which you identify the key targeted areas for value creation in a portfolio company and then systematically focus and prioritize solving the talent that will have an impact on the biggest value creation opportunities. This has been called the “Talent to Value” approach.

3. Growing Emphasis on Culture and DE&I

  • There is a growing emphasis on culture and DE&I in private equity
  • On the DE&I side, each firm needs to take a personalized approach that works for them. A good starting point is to take an initial framework and gather data internally to make sure everyone is included and heard. Then, needs should be measured on a quarterly basis to see how you are improving over time.
  • On the culture side, a focus on internal company culture will help with recruitment & retention efforts, which ultimately, will help you advance your value creation plans. One way to do this is to assess what currently sets your culture apart and then build on it from there. Additionally, interviews should be assessing if candidates have cultural alignment, as much as they are assessing if they have skill and will.

Balancing the art and science of connecting talent to value, amidst a tight market will be the key driver to success as we head into the second half of 2022. If we can be of any assistance, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

 

May 2022 Roundup: BluWave Client Insights

June 9, 2022 Leeanna Nelson

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with pre-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on digital transformation, PE management, human capital, and more. 

The continuous digital transformation of our world has completely changed the way consumers interact with retail brands. In this article, Macquarie dives into how new direct-to-consumer strategies are enabling brands to create personalization at scale, fundamentally changing the future experience of e-commerce.

Read more >>>

Ever since private equity was “institutionalized” about 40 years ago, this thriving ecosystem has grown from roughly 20 PE firms to over 5,000 in the US alone. New Mountain Capital (NMC) CEO Steve Klinsky shares NMC’s growth story, style, and path to success. Klinsky outlines a $5.7B gain from just one company and a replicable process to create value for both businesses and the economy.

Read more >>>

Monomoy Capital Partners investment team members, Matt Farrell (VP) and Charlie Johnson (Associate), sit down to share a little about themselves and what it’s like to be with the organization. This interview shares a peek at their company culture and the investment team.

Watch the video >>>

In honor of May being mental health awareness month, MiddleGround Capital’s Founding and Managing Partner John Stewart announced their strategic partnership with BetterHelp, the world’s largest therapy service. MiddleGround Capital is working towards ending the stigma surrounding mental health by providing these professional resources to their employees.

Watch the video >>>

ParkerGale Operating Team Partner, Jimmy Holloran, is joined by Ted Bililies, Managing Director at AlixPartners, on this episode of The Private Equity Funcast to discuss The Great Resignation, the rising prominence of talent recruitment and retention, and more.

Listen to the podcast >>>

 

Here’s what some of our clients had to say last month about retail industry news, ESG, and CEO perspectives.

 

Event Recap: PEI Operating Partners Forum 2022

June 7, 2022 Houston Slatton

Last week, I had the pleasure of moderating  the “Unlocking the Transformative Due Diligence Imperative” panel at the PEI Operating Partners Forum in San Francisco. The panel included operating partner leaders Deborah Gallegos of Palladium Equity Partners, Drew Scielzo of ACON Investments, and Sheheryar Shah of ZT Corporate.

It was refreshing to be back in person with hundreds of PE ops partners to learn from their first-hand perspectives. Key takeaways included:

Executing value creation means that human capital remains a top priority for PE firms.

  • Ensuring the right management team and board leadership are in place allows for efficient execution against the value creation plan. Resource scarcity has had an immense impact on firms’ abilities to implement and execute plans. Industry leaders discussed tips for how PE firms can source and retain the right people at our recent human capital forum.

Leveraging technology to increase efficiencies is non-negotiable.

  • The aforementioned human capital challenges have tremendously accelerated digital transformation plans. PE firms are laser-focused on leveraging technology to increase efficiencies and reduce manual tasks to align with value creation plans. This allows portcos to reallocate resources to higher impact areas and rely on technology to solve for the monotonous, repeatable workflow.

Building trust with portcos’ management teams early on is essential.

  • Trusted partnerships between PE firms and their portfolio companies are vital to a successful investment. Building executive buy-in earlier on in the diligence process with a people-centric approach puts PE firms in a win-win situation. When the (right) management team has ownership in the decision-making process, this creates invaluable efficiencies between the PE firm and portco leadership teams.

If you’re interested in learning more about any of these, contact us here. You can also check out some of these resources:

In The Know: Executive Search

May 25, 2022 Delaney Walker

As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, we discuss why leading PE firms are choosing to engage specialized executive search firms over larger generalist recruiting firms.

Learn more by watching the video below.

Interested in connecting with a specialized recruiter or any other type of third party? Contact us here. You can also learn more about the specific ways we drive value for PE firms by connecting them to the exact-fit resources they need by reading our case studies.

Human Capital Forum Recap | May 2022

May 10, 2022 Delaney Walker

Every quarter we bring together top PE HR and talent executives to discuss current industry topics and to offer talent leaders in private equity the chance to gather, share intel, and decompress with one another. In our most recent event, we discussed many topics and listed our top takeaways below. 

These forums follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow leading PE professionals during our next Human Capital Forum? RSVP for our next event on August 24th.

Resource scarcity:

  • All firms are facing the impact of this in some way.  Here are a few ideas for addressing this challenge:
    • Lean into interim execs to professionalize certain business areas immediately post-acquisition, steady the ship while a more permanent search takes longer than it has historically, and/or serve as a “try before you buy” resource.
    • Get clarity on the “must-have” vs “nice to have” qualification of candidates from the hiring teams (portco execs or deal team).  Everyone wants LeBron, but would you settle for Kevin or Steph? Evaluate possibilities to reassign work elsewhere in the business or settle with a 9/10 fit candidate.
    • Line up third-party resources as early as possible to ensure they aren’t booked.
    • Streamline the recruiting process, especially when you know the candidate may receive multiple offers.

Developing current talent:

  • Given how hard it is to get top talent in place, many firms and companies are trying to solve for it by developing more junior talent to step into exec roles.
  • Human capital teams are creating development and training plans that are broadly applicable to all portcos and can be tailored based on the company, position, and makeup/structure of the exec team.
  • Each business is unique, but there are common experiences in talent development that can cut across groups. Listen to employees to determine what type of development they want (coaching, training, continuing education, etc.).

Managing relationships with specialized recruiters:

  • In BluWave’s recently published Q1 Insights report, specialized recruiters were a top use case on the BluWave Value Creation Index, emphasizing the importance of partnering with recruiters who already know the top players with the right skills for their specific needs.
  • Sometimes it may be helpful to consider a recruiter directly adjacent to the industry/functional area you are seeking, as they may approach the search differently.
  • Additionally, when presenting search firm options, it is helpful to share multiple options with the hiring manager, so they can find the best fit for them.

We thoroughly enjoyed the fruitful conversations that occurred during this recent gathering of PE human capital professionals. If we can be of assistance during this busy time, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

ACG InterGrowth 2022: Dealmaking Trends

May 4, 2022 Leeanna Nelson

ACG InterGrowth 2022, known as the premier dealmaking conference, was conceptualized to build and strengthen relationships between private equity firms and investment banks. This annual conference allows PE industry leaders to gather and discuss key trends. Last week was filled with cybersecurity, DE&I, and supply chain thought leadership conversations, plus some Las Vegas style poolside networking.

As hundreds of private equity professionals and investment bankers filled the ARIA Resort & Casino from April 25-27, 2022, our team was able to re-connect with familiar faces as well as meet new ones.

“You could feel the eagerness to be back in person the moment you arrived. From founders to deal teams to business development professionals, the atmosphere was engulfed by ideation and excitement,” says Michael Mahan, BluWave Account Management Director.

Here are some of our team’s top takeaways from our largest conference back in person:

  • Quality Deal Flow Challenges
    PE firms broadly shared that activity is slower compared to last year at this time. Our data confirms this as due diligence projects have declined YoY, from 28% of the BluWave Activity Index in Q1 2021 to now 22% in Q1 2022. While overall deal flows are beginning to increase, deal teams expressed that quality deals are hard to come by.
  • Lights, Deals, Action!
    While ‘digital transformation’ remains a top buzzword, we know that top-performing, proactive PE firms and their portfolio companies are looking to transform their businesses, not just optimize them. Industries such as manufacturing and supply chain are dependent on new technologies to scale growth and meet the industry demand post-pandemic.
  • Market Differentiation
    Building brand equity to differentiate your firm is important in today’s crowded landscape. With less quality deals in the market, it is mission critical for firms to remain top of mind with investment bankers. PE firms are finding creative ways to do this through utilizing specialized resources that can help them with their internal branding, & more.

ACG InterGrowth 2022 exceeded our expectations, and it was great to have the opportunity to connect with so many individuals in person. If you were unable to attend the conference, but are interested in connecting with us, contact us here.

BluWave Account Manager Morgan Murphy concludes, “This year’s conference was instrumental in continuing to build our relationships with PE firms face-to-face. Until next year!”

Event Recap: PEI Operating Partners Human Capital Forum 2022

April 6, 2022 Delaney Walker

Our team recently had the pleasure of sponsoring the 2022 PEI Operating Partners Human Capital Forum in New York. In the below video, Katie Marchetti, BluWave Managing Director, recaps her key takeaways from the conference as a whole as well as the panel she moderated. Key takeaways include:

  • CHROs are on the rise at both the portco & firm level
  • Human capital leaders are working with deal teams more in diligence to ensure alignment
  • Many firms are leading with data on the human capital front

We support more than 500 leading private equity firms in their human capital needs by placing interim CHROs, connecting them with specialized recruiters, introducing them to HR diligence providers, & more. To learn more about how we support PE human capital needs, visit our PE Human Capital Resources hub.

If you have a human capital need or any other need we can support, contact us here. Additionally, if you are a PE talent professional, be sure to join us and other leading PE talent professionals at our next virtual PE Human Capital Forum on May 4th by registering here.

Human Capital Forum Recap | February 2022

February 7, 2022 Leeanna Nelson

Every quarter we bring together top PE HR and talent executives to discuss current industry topics and to offer talent leaders in private equity the chance to gather, share intel, and decompress with one another. In our most recent event, we discussed many topics and listed our top takeaways below. 

These forums follow Chatham House Rules, so listed below are high-level takeaways only. Are you in private equity and interested in joining fellow leading PE professionals during our next Human Capital Forum? RSVP for our next event on May 4th.

Talent identification & recruitment:  

  • As firms continue to struggle with portco executive talent identification & recruitment, firms are having particular success exploring non-traditional recruiting tactics in a supported way, i.e. hiring from non-PE backgrounds but providing support to skill-up the newcomers.
  • Firms are using the assessment process to understand what drives and motivates candidates and then leaning into these aspects to not only identify candidates’ strong points but to also sell the job prospect without having to lean 100% on compensation. Another tip we heard on successfully closing the deal was to provide candidates with transparency for what happens post-exit, such as having successful case studies ready to show the candidates where past execs moved after a sale.
  • Using data – firms are exploiting their CRM by skill-coding candidates and having them on-hand when perfect-fit roles open.
  • Timing is key and shortening recruiting cycles seems to be the most assured way to increase the hiring success rate. PE firms are recommending that portfolio companies implement applicant tracking systems to help standardize and streamline recruiting processes.
  • One human capital leader recommended reading “Who” by Geoff Smart.

Assessment, onboarding, & setting executives up for success: 

  • Clarity and coaching are key. Set expectations from the beginning by showing the good, the bad, and the ugly with the portco. Then, share how the firm will support the exec and what the firm expects from them.
  • Provide the exec with the tools needed to hit the ground running—internal resources, systems, supplements to their development points, etc. and then give them the space to do the job. If PE ownership requires another 40% of their time at the outset, consider external resources to do the upfront heavy lifting.
  • One participant recommended providing new hires with an internal company culture “river guide” to help them understand and navigate the unique cultures of a given company.  This is particularly helpful for new CEOs who are tasked with being change agents.
  • One human capital leader recommended reading “The First 90 Days” by Michael Watkins.

Development & retention:  

  • Use transparency in showing portco executives their development path and opportunities.
  • Firms vary on the resources they rely on for training on organizational health, leadership development, and other skills.  Many are (at least beginning) full talent reviews of exec teams of portcos and increasingly implementing this practice with internal PE fund talent.
  • Employee engagement surveys are critical to understanding cultural and organizational health over time. How to get it started? Find a partner who buys in, start with baby steps, and show measurable success.

We thoroughly enjoyed the fruitful conversations that occurred during this recent gathering of PE human capital professionals. As noted in our 2021 Annual Insights Report, human capital remains one of the top initiatives in PE, with HR-related activities surging to 39% of all PE activity in 2021. If we can be of assistance during this busy time, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

December 2021 Roundup: BluWave Client Insights

January 7, 2022 Leeanna Nelson

BluWave works with over 500 PE funds from around the globe, connecting them with pre-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news you can use.

Check out the latest, curated collection of reports, insights, and musings from a handful of our PE fund clients on everything from differentiated investments in 2022 to The Great Resignation, cloud security, and sales enablement.

As a wrap-up to 2021, Joe Zidle from Blackstone reflects on differentiated investment opportunities in the coming year. He shares why certain global economies will weather coming headwinds better than others, why he predicts that the ability to generate alpha will increasingly drive outperformance in the US, and more.

Read more >>>

In this episode of the Private Equity Funcast, Jimmy discusses the macro trends that are driving The Great Resignation and how it is specifically impacting the middle market with Tim Schumm of Lucas James Talent Partners. They share why the middle market may be feeling the impacts of this phenomenon more acutely and tactics these businesses can implement in order to ensure they have the talent they need.

Listen to the episode >>>

Permira talks about one of their recent investments in the cloud security space and explains why enterprise workloads are increasingly moving to the cloud infrastructure. They also explain the concept of containers in the cloud and how that is forcing businesses to rethink their cybersecurity tools.

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Katja and Kunal from TCV share their key takeaways from a recent episode of the Growth Hacks podcast, where Scott Santucci shared why the main lesson he advises his clients to do is simplify their sales processes. They talk through the value of the commercial ratio, tips for aligning organizational economic value with the needs of your customer base, and more.

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Read what some of our clients had to say last month.