Private Equity CEO Accelerates Exit

CHALLENGE

While gearing up for exit, a private equity-owned manufacturer faced a leadership challenge … the long-time CEO’s announcement of his retirement. Keenly aware that the announcement could possibly derail the exit, the PE owners needed to demonstrate strong, stable leadership to attract a viable buyer.

Their decision? Promote the CFO to president. Entirely competent and capable, the former CFO still faced transition challenges … both personally and professionally.

Personally, as the self-proclaimed “numbers guy,” the new president needed to change his mindset from “profitability” to “growth” while sharpening his communication skills to engage the team. In addition, he was now tasked with being the “face” of the company throughout the sales process – an entirely new role for him.

Professionally, a new hierarchy had to be established between the new president, his former peers and a newly transitioned CFO. The leadership team also needed to change its long-standing focus on profit, to a focus on growth opportunities leveraging new technologies, new channels and new markets. This was a complex, high-stakes transition. Timelines were tight and failure was not an option.

ACTIONS

  • Established leader confidence and credibility by developing and implementing an internal and external communications plan with one-on-one coaching checkpoints
  • Secured the president in his new role by facilitating a “new leader assimilation” workshop that seeded messaging and clarified roles and expectations – leaving no questions unanswered
  • Aligned team around critical growth initiatives and empowered them to make trade-offs to rank priorities
  • Accelerated team confidence and momentum by introducing an “early wins” process, driving tangible results on internal issues that had languished in the past, such as new product development strategy, service improvements and key customer plans
  • Re-energized the leadership team by facilitating a role sort process to redefine, develop and assign roles

RESULTS

The new president’s transition was highly successful… gaining acceptance by the executive leadership team, board members and, ultimately, the prospective buyer. A cohesive leadership team was re-energized and effectively produced the following results:

  • Business sold within six months of the new president’s appointment
  • Sale transpired one year sooner than expected
  • Valuation $700 million greater than original investment – equaling a 4x ROI for the investors
  • President promoted to CEO (upon previous CEO’s retirement) nine months into new ownership
  • Business results remain strong with new product innovation driving growth


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