True story - I was once on a business pitch and waked into a company that had been taken over by a multi-national private equity firm that shall remain nameless. One of the things that blew me away was that as we walked into the lobby, the PE firm had the "new values" in a big display in the lobby - at least 25-30 feet high.
Anyway, we went to the pitch and it was obvious that the private equity firm was making a lot of changes - many that needed to be made - on the people side. The change to a more performance-based culture was on thanks to the PE firm.
The problem? The private equity firm had the right idea related to meritocracy and many other people ideas. But one thing they got wrong was they took a sleepy little company that had people who probably weren't competing as hard as they could and they created a sweatshop of sorts - creating the expectation that people had to stay until 7pm or after or risk being outed as "non-competitive", etc.
Oh yeah - on the ride down the elevator, the doors closed to show the values on display again - this time on the inside of the elevator. My travel partner and I looked at each other - the value "meritocracy" had been scratched by keys repeatedly.
I tell that story to share this - when private equity firms look for the upside of investing, they're often looking for bloated costs they can take out of the company to ensure they make money on their investment. But what they're also looking for is bloat on the people side - not just too many people, but performance processes that are non-existent and full of bloat and non-focus they can exploit.
That's why I loved this case study from Marc Effron and The Talent Strategy Group:
"The rules for avoiding a bear attack are simple, clear and repeatedly reinforced to anyone visiting bear country. But, with regularity, people ignore those rules and are injured or killed by bears.
The rules for your company avoiding a private equity attack are similarly clear and violated even more frequently. Companies worldwide tremble as they consider a PE bear attack but then act in the ways most likely to attract a hungry carnivore.
We use the case study of 3G capital – acquirer of Heinz, Burger King, Anheuser Busch and others – to show you how to bear-proof your company. We don't expect that you'll follow this advice, so don't blame us when bears eat your company.
Download the article here."
As an HR leader, you might think that a private equity firm's decision to take over your company is all driven by financials. You'd be wrong. Go get this case study and read up - it might serve as great justification to get the buy-in from your leadership team you've needed to get meaningful change in areas that are important to you.