It is also important to ensure that the target company (or your portfolio) has a second generation of senior management. Private equity firms are increasingly recognizing that they will require a long-term succession of skilled leaders if they are to survive and grow.
Integrating a succession plan that ensures a steady stream of top talent also provides reassurance for investors. This is usually accomplished through a formal succession plan tightly aligned with the business strategy.
In most organizations, 15% to 20% of employees are especially valuable; they are current and future leaders, high performers, key contributors, and those with scarce critical skills or knowledge. Apart from these, 60% to 75% will be solid performers, while the remainder will be new entrants, underperformers or those in the wrong roles. The danger is that the critical 15% to 20% of the workforce will be most at risk of leaving; they are the highly engaged self-starters who can quickly find other jobs.
Identifying and retaining key employees is a complex challenge that is critical to sustaining profitability gains. LeadFirst has extensive experience helping clients manage talent during times of major organizational change. Specifically, we:
- Audit management capabilities and bench strength
- Screen the talent pool for top performers and potential future leaders, and develop and implement retention plans for the most valuable players
- Identify gaps between workforce strategy, incentives and business objectives
- Identify key workforce risks and challenges that have material impact
- Identify and prepare the next generation of leadership through a formal succession plan
These considerations apply whether you are evaluating an existing management team, or a new one. LeadFirst’s executive talent management services help you make the right leadership decisions by addressing tough issues strategically and holistically.