May 13, 2024
This mirrors my earlier experience at the United States Golf Association (USGA), the sport's governing body, where I joined as chief people officer in early 2014. Despite its status as a sought-after career destination, the business and workplace of sport lagged in leadership and team performance development. I found this ironic, as these elements are central to building and sustaining winning teams and athletes on their respective “field” of competition. During my tenure, we made significant changes to strengthen leadership and team performance in our own organization.
The good news is that private equity (PE) is evolving, too – although perhaps not as quickly as growth-stage companies need. Increasingly, firms recognize the potential for increased ROI by investing in talent as a critical value creator, and key differentiator for future employees and prospective investees.
The PE 'human capital' equation consists of two parts: recruitment and performance. The role of "talent partner" in PE firms prioritizes executive search and onboarding of critical capabilities to accelerate post-investment growth. And in a highly competitive market for talent, firms implement their own approaches to assess and select for fit, potential, and skill.
However, it is the focus on leadership and team performance which remains an area with significant room for development, representing greater impact and measurable gains. Edison Partners is distinct in its laser focus on enhancing and sustaining leadership performance through targeted coaching of Founders, CEOs, and executive teams.
To support sustained value creation through a people-first approach, Edison has implemented various leadership initiatives, from pre-diligence to the first 180 days post-investment, all the way through the hold period. The firm blends active, intentional, or situational coaching and strategic use of performance and personality data to guide those individual and team interventions:
For Portfolio Leadership Teams: the firm utilizes the AIIR Team Effectiveness Survey, and 6 Team Conditions Diagnostic survey and framework to assess cultural, system, and behavioral factors that impact sustained team performance. Contextual elements such as industry, market conditions, and growth objectives are always factored into evaluation. There are also regular function-specific roundtables across GTM, finance, product/tech, and HR, and an annual head-of-function leadership development conference.
For Portfolio CEOs: a culture of shared learning and community is crucial. Edison offers opportunities for portfolio CEOs to engage in peer coaching through quarterly CEO cohort sessions, an annual CEO Summit targeting strategic leadership and team skill building, as well as periodic 360-degree feedback sessions. Our Governance Center of Excellence and Edison Director Network also help our CEOs create a board that is not only a strategic weapon, but one that is relational vs. a performative dog-n-pony show.
One initiative that highlights the firm's commitment to leadership and team performance came after the Fall 2024 CEO Summit. Edison, in partnership with Bespoke Partners, a leading search and talent advisory firm, engaged two dozen portfolio CEOs to complete a full Hogan assessment, and through their results learn about and apply traits and behaviors that are situationally appropriate, and rooted in a deeper understanding of their motives, values, and potential derailers – all crucial factors to adapt and lead their companies and leadership teams more effectively.
The value of this personality and predictive data will serve the firm at both ends of the recruitment + performance equation from the assessment of future founder investees, profiling for future searches, and benchmarking traits and behaviors against current company performance.
As many growth-equity firms appreciate, founders/CEOs are characterized by higher levels of risk tolerance. They are often energetic, passionate, and charismatic evangelists of their companies. They are driven and competitive, comfortable pivoting, iterating, and failing fast to achieve their desired result.
Still, there are variances in current and future growth potential often hindered by a lack of personal and team leadership sophistication. As such, some Founder/CEOs perceived as emotional and reactive may struggle to execute and bring their ideas to fruition, or take on too much at once, or get bored with implementation and return to ideation. They may need help to prioritize and stay focused on the imperatives that will move the needle.
Finally, they may struggle to scale with the business at some point, experiencing challenges relinquishing control and shifting from a founder to an executive mindset.
And this is why Edison believes strongly in the power of a people-first approach as a differentiator and value creator.
For future Edison portfolio CEOs and investors, the path to sustained growth and success lies in embracing a holistic approach to developing and strengthening leadership and team performance. By prioritizing self-awareness, team awareness, and health, CEOs and their leadership teams will have a stronger foundation to achieve and sustain business growth, and deliver the ROI sought by key investors and stakeholders.
To hear more about Edison’s people-first strategy for growth-stage companies, listen to this fireside chat between myself, Managing Partner Chris Sugden, and Partner, Edison Edge Casey Myers.
