The responsibility for delivering a Value Creation Plan rests squarely on the shoulders of C-Level Portfolio leaders, often referred to as the ‘C-Team.’ There are differences in the nature of the Business Imperatives (Targets) and the required capabilities for achieving success. Progressive PE firms define these targets, and intentionally evaluate the degree of readiness of the C-Team to achieve them. Taking a holistic view of the skills required across a team while considering their respective roles can be like playing chess. However, gaining a deep understanding of the team members’ roles, the organization’s specific strategy (such as its value creation plan), and assessing how well these leaders align with that strategy will ultimately offer a competitive advantage.
We often encounter regrets stemming from delayed actions in removing C-level underperformers, especially when such actions would align with the business’ needs. However, PE firms that take decisive actions grounded in sound scientific data tend to achieve more progress during the early stages of their investment holding.
The typical business imperatives for most mid-sized companies balance growth (organic and in-organic) with operational excellence and talent. This ‘three-legged stool’ of high impact performance needs constant tinkering, oversight, direction, and redirection.
Growth predictions and strategies
Growth predictions and strategies need to be reset against current market realities with proactive foresight and agility. Effectively utilizing data alongside intuitive decision-making for redirection necessitates both strategic agility and efficient time management. These skills are essential for maintaining the right focus and making well-prioritized decisions. In conversations with CEOs, we often hear that it is “hard to be strategic when your hair is on fire.” Effective C-Teams create space and time for reflection and strategic reprioritization.
Operational imperatives, when aligned with strategic growth and optimization priorities, require ongoing oversight. This necessitates attentiveness and a deep awareness of how strategies are being executed by those responsible, or “translation dexterity.” The execution challenges that C-Teams face hinge on how well team members are able to hold their position with responsible attention, and have countermeasures ready for high-risk areas. Objectives that were operational imperatives during COVID may now need to be de-prioritized to fully leverage assets.
Talent optimization is an ongoing need to ensure alignment, engagement, and skill-readiness of those responsible for execution. Most C-Team leaders of mid-sized companies direct a group of 5-7 leaders who are essential linchpins for success. A capability gap in any one of these positions can wreak havoc and cause tremendous pain, disrupting execution impact.
In our experience, Lodestone has found that highly effective C-Teams need to collectively have the capabilities (knowledge, experience, skill, and personal attributes) to successfully address business imperatives. These capabilities will ideally need to be in the collective skillsets, and seamlessly orchestrated through effective C-Team work.
Strategic re-setting and reprioritization is an implied need as PE firms acquire and leverage new organizations. Most mid-size companies do not have the resources or time to thoughtfully support the resetting and repositioning of C-Suite Capabilities. Proactive and foresighted PE firms are taking steps to provide their C-Teams with tools and processes to navigate current circumstances with flexibility and dexterity.
Organizational success depends on having a high functioning C-Team. At Lodestone, we clearly see the challenges that many of these teams face, and provide a range of services to help enable their future successes.