How Going Private Changes Exec Talent Essentials

Technology and InnovationTechnologyArtificial IntelligenceTechnology, Data, and Digital Officers
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December 15, 2023
3 min read
Technology and InnovationTechnologyArtificial IntelligenceTechnology, Data, and Digital Officers
Executive Summary
Executives need a value-creation mindset, long-term vision, flexibility, innovation, and expertise in private equity dynamics. Transition requires strong leadership.
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A wave of take-private transactions are revolutionizing business operations, reshaping strategies, and significantly impacting executive talent requirements, bringing a storm of fast moving leadership opportunities to the market.

The transition from public to private fundamentally alters the playing field, presenting a fresh array of challenges and opportunities for C-suite and board executives. But, how does going private influence executive talent requirements? And what are the essential skill sets needed to standout in this transformative environment? Our advisors lay it out.

1. Value-Creation Mindset

Private ownership emphasizes the importance of value creation over short-term financial metrics. Executives must have a value-oriented mindset and a strong grasp of how to create sustainable growth and resilience, even if this requires what may appear as short-term "value-destructive" ch strategies. They need to focus on long-term value drivers, like market share expansion, operational efficiencies, and strategic partnerships. Additionally, the transition to private ownership often brings changes in governance structure, including the composition of the board. Executives may need to drive change at a faster pace and work closely with the board to align strategic objectives and implement necessary transformations.

2. Long-Term Vision and Strategic Acumen

Going private allows companies to take a longer-term view of their strategies and operations. Unlike their publicly traded counterparts, private companies are not beholden to quarterly earnings reports or the constant pressure to meet short-term financial expectations. This shift requires executives to possess a deeper understanding of long-term planning, strategic thinking, and the ability to execute transformative changes. They also need the vision to set a clear direction for the company's future and the strategic acumen to navigate complex market dynamics.

3. Flexibility and Innovation

Private ownership provides an environment that fosters innovation and agility. Executives must be ready to navigate more radical operational reorganizations and strategic pivots. These changes may not always align with traditional business models, and thus, executives need the agility to adapt, take risks, and drive innovation, while also driving a culture that embraces change to stay ahead of the competition.

4. Expertise in Private Equity Dynamics

Executives navigating the private realm must understand the nuances of private equity, including how to work effectively with sponsors and investors. This expertise and ability to span both public and private environments are increasingly valuable to building a long-term career and board-ready portfolio. Executives need to understand the expectations of private equity owners, the financial and operational levers that drive value creation, and the importance of timely and transparent communication with stakeholders.

The transition from public to private ownership is not just a financial maneuver; it's a transformative journey that reshapes the talent requirements for executives at the highest levels – and it often means that companies need to take stock in the leadership they have and benchmark it against the leadership they need. As companies take this step, they require leaders who have a value-creation mindset, can envision long-term success, drive innovation, and understand private equity dynamics. If this sounds like the right opportunity for you, set up a conversation with our advisors.

Until next month, enjoy the insights below.

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