Creating value in today’s economy: lessons from the best for private equity 

Leadership scalability checklist

• Does my management team have the ability to scale 3x revenue?
• Do executives have the emotional intelligence to manage complex stakeholder dynamics?
• Are we building leadership depth throughout the organization?
• Are we creating a data-driven culture?
• Are we using data-driven approaches to assess leadership effectiveness?
• Are we investing in cultural integration?

PE’s new value-creation playbook

Deal evaluation

Make leadership evaluation the center of investment decision-making. Establish systematic processes for evaluating not just current leadership quality but leadership scalability. This requires data-driven approaches to leadership effectiveness assessment that go beyond resume review and gut feel.

Integration planning

In roll-ups and carve-outs, cultural integration needs to be planned as meticulously as systems integration. That includes assessing cultural fit during due diligence, examining likely areas of conflict, and making concrete plans for creating shared identity and aligned incentives. Creating a data-driven culture is especially critical when two or more organizations need to function as one integrated entity.

Continuous value creation

Rather than focusing only on operations-driven enhancements, spend steadily on leadership development throughout the ownership period. Create cross-portfolio learning networks so leaders can share best practices and work through common issues. Make succession planning a routine boardroom agenda item. Spend on leadership effectiveness at all levels, not just the C-suite.

Exit preparation

Place leadership strength and cultural health at the forefront of value drivers in the sales process. Clever buyers increasingly compare organizational capability to financial performance. Companies with evident leadership depth receive premium valuations.