“Progress is impossible without change, and those who cannot change their minds cannot change anything” -George Bernard Shaw

With a strategic acquirer:

Because of the needs of a large organization for standardized processes across divisions and business units, an entrepreneurial business may find that, after integration into a large organization:

  • Responsiveness to clients diminishes
  • The pace of innovation slows due to procedural requirements
  • Flexibility to offer customized solutions is limited
  • Passion for the business’ mission dissipates
  • New compensation programs and incentives reduce team motivation and alignment

Any private equity partner will likely initiate changes in a portfolio company post-investment.   At RLH, we try to keep some things the same while suggesting improvements in others.   Here are a few things you can anticipate if you partner with us:

  • A high degree of support for maintaining your unique corporate culture as the business scales up.  As Peter Drucker said, “culture eats strategy for breakfast.”
  • Increased resources for talent management, including initiatives to provide greater training and professional development for your team members, as well as a focus on attracting and retaining the best people
  • Greater focus on defining competitive differentiation and deploying strategic selling techniques
  • Additional information delivery expectations:  Timely monthly financial statements and KPI reporting, annual audits, and bottom-up annual budgeting.
  • The strategic insights of an engaged and experienced Board of Directors:  We typically aim for 5-7 members, including one or more voices other than RLH’s investment team and management.  At least one of our Operating Professionals usually serves on the Board, bringing the perspectives gained from a highly successful career in operating leadership.

 


Previous: The Investment Transaction Next: Rewards at the End of the Journey