HIEC Private Equity Series, Part II: Executive Search for Private Equity, adding value through market connectivity – by Ed Fanshawe

I am often asked, “Why are executive search firms good partners for PE/VC firms looking to build management teams.”

Coming from an investment background and having built my own businesses prior to Executive Search, I had to think hard about how to compete globally with the “The Establishment”.

To me, the answer is that we don’t just hire people, the model has changed. Talent sits at the heart of finding, diligencing and exiting deals, of commercial transactions, of growth, innovation and transformation, and of achieving sustainable, scalable and genuinely impactful global businesses.

When thought of like this, it’s clear that whilst Executive Search is at the heart of what we do, it’s the proactive, intelligent market connectivity that delivers real value.

Bringing that trusted experience

To add further context, from a traditional Executive Search perspective, first class headhunters are able to advise Investors and portfolio leadership – to bring trusted experience and global perspectives, to bring an independent, impartial and holistic view. Often it’s not just about one position but the jigsaw of leadership roles.  They can work to provide incredible, considered choice of candidates and they can act to increase speed and reduce the risks associated with hiring consistently over time.

Linking Value Creation Planning to Talent Strategy

Having that trusted experience is just one aspect. According to a recent Bain & Co report, “tightly linking the Value Creation Plan to talent strategy can accelerate value creation and mitigate risk at every stage of the investment life cycle”.

Start early

Linking talent to the Value Creation Plan (VCP) can start well in advance of a transaction, making it proactive not reactive.  Consistent market presence, working alongside an included and empowered Executive Search partner supports:

  • Pipelining and choice of diverse talent and advisory networks;
  • Increasingly powerful data and market intelligence on which to base decisions;
  • Board / leadership assessment, succession planning and exit preparation (especially on IPO);
  • Faster, more effective hiring consistently over time;
  • Deeply insightful Due Diligence access;
  • Origination opportunities; and
  • Market presence and brand value.

Executive Search is fully intertwined with Private Equity when it is done well, of course when it is done badly, it’s just a process!  What makes the difference is fostering a genuine ‘insider’ working partnership with the right market connectors as early, as consistently and as openly as possible. The key bit, which is also the difficult bit, is finding a partner who understands that and can act in a like-minded way.

If you would like to discuss any of the points raised in this article, please feel free to contact Ed Fanshawe directly.