Ever wondered why some Private Equity firms achieve 3-5X returns while others struggle? Here’s the secret: In the fast-paced world of PE, mastering transitions with key stakeholders is the path to success.
When a PE firm acquires your company, change is inevitable, even with the most collaborative partners. Check out this visual below that says it all:
3-5X returns = Grow volume, increase velocity, and boost margins (all at the same time!) – all within 4-5 years. What could go wrong here?
Let me take you back to my early career days at H&Q, a tech powerhouse acquired by Chase Manhattan Bank for $1.4B in cash in 1999. Initially, we were told, “nothing will change.” For a year, it felt like business as usual. But on day 365, everything flipped, and we all became quickly part of JPMorgan Chase.
Looking back, we realized the importance of proactively managing transitions through leadership transparency, communication, and alignment on a strategic plan with clear goals and roles to execute on that plan.
It’s the simple things that matter. Embrace change, align with a clear plan for success, and watch your investments thrive. In the world of financial services, relationships are the key to 3-5X return dreams.
As we integrate AI further into work tasks and roles, while constantly toggling between IRL and remote work, we continue to need clarity and feedback from other humans about what we are doing and how well we are doing it.
That’s because humans are driven by our fundamental needs for achievement, approval and belonging. So, the best of the classic tools and frameworks for organizing people and activities in the workplace to achieve specific performance outcomes remain at the top of the charts today.
But where did the goal-setting imperative come from?
Many people have learned to set OKRs (Objectives and Key Results) and SMART goals (Specific, Measurable, Achievable, Relevant, and Time-based). These goal-setting tools were developed in the 1970s and 1980s and can be traced back to Peter Drucker’s MBOs (Managing by Objectives) from the 1950s.
But the pioneers of goal-setting psychology are Edwin A. Locke, an American psychologist, and Gary P. Latham, a Canadian psychologist. The theory they began researching and developing in the late 1960s is that effective goal-setting motivates and drives people’s performance in the workplace.
The theory is that to motivate performance, goals must be clear, challenging yet achievable, committed to, and regular feedback must be provided to individuals regarding their performance on those goals. (The caveat is that when goals refer to more complex tasks, they need to be broken down further.)
What better antidote to workplace malaise is there than being highly motivated by other humans to achieve a clear set of challenging goals and receiving ongoing feedback to learn and adapt along the way?
It sounds simple, and it is really. What’s critical is building the capability throughout an organization to do goal-setting and performance feedback well, along with the workplace routines to do them regularly and often. The capability has to be designed to fit the organization, and that can incorporate AI as well as a hybrid workweek.
While AI and the hybrid workplace continue reshaping our jobs and our workplaces, the human motives and behaviors that drive performance in the workplace remain constant. We must continuously adapt and adopt the best of the classic tools and frameworks to effectively motivate and coordinate people in the workplace to achieve outstanding results.