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 Strategic Partners usually serves on the Board, bringing the perspectives gained from a highly successful career in operating leadership.