Operating Partners Archives

4 04, 2018

How to Solve CEO Turnover in PE Companies

By Doug|2018-08-07T10:48:36+00:00April 4th, 2018|Operating Partners, Private Equity Value Creation|

A majority of the CEOs tasked with transforming PE portfolio companies into lucrative exits are instead being replaced within the first two years of the investment, thereby putting both the reality of those plans and their timetables in real jeopardy. Meaning that solving CEO turnover in PE companies is critical to industry success.

That is the consensus of a recent PE industry survey, which also suggests that much of this executive churn could be avoided through a more intelligent approach to due diligence, planning and managing the relationship between the CEO and ownership.

To those of us with significant PE-CEO experience, what’s most surprising about the survey isn’t its results but rather that anyone should be surprised by them at all. Replacing a portfolio company CEO may be a necessary evil but the IRR implications for PE funds are significant.

The Risks of CEO Churn

Today’s high asset prices are placing increased pressures on PE investments, requiring focused, steadfast approaches to value creation that quite naturally depend on an effective CEO and leadership team. Which is why […]

26 03, 2018

Michael Hejtmanek Joins Mainsheet OP as Partner

By Doug|2018-04-02T16:13:22+00:00March 26th, 2018|Operating Partners|

Mainsheet OP, which provides operating partner services, announced today that Michael Hejtmanek has joined the company as Partner. Hejtmanek, formerly of Hasselblad Inc., is a highly experienced chief executive with a track record of identifying and delivering value at privately-owned mid-market companies.

“I am delighted that Michael is joining Mainsheet OP and enabling growth in our fractional Operating Partner model,” said Simon Jones, founder and CEO of Mainsheet OP. “Michael has a proven track record as CEO of a privately owned international enterprise but, just as important, he clearly has the social intelligence skills required to deliver value as an Operating Partner for our clients.”

“Working across portfolio companies at several private equity firms is exactly the challenge I have been looking for,” said Hejtmanek. “The breadth and depth of exposure will give me the ability to provide best-in-class advisory services to Mainsheet OP’s client base – from providing investment theses and due diligence, to management advisory services throughout a portfolio company’s ownership lifecycle. I’m excited to be working with a renowned expert such as […]

15 06, 2017

Using Customer Focus to Simplify Operations

By Simon|2018-06-05T10:15:19+00:00June 15th, 2017|Operating Partners|

Spend a few hours picking the brain of virtually any senior executive today and I can almost guarantee two of the topics that will come up: simplification and customer focus. What you are far less likely to hear, however, is the inherent synchronicity linking these two concepts.

To most executives, simplification is specific to an internal activity practiced by a project team. Conversely, customer focus is deemed an externally focused activity and usually the domain of marketing or sales. Why the missing link between these two all-important practices? From my experience, it’s usually a reflection of the little time senior executives spend with their customers and, by extension, the value they put on such efforts.

The point being, this is a significant area of value creation that most companies are ignoring.

Ask most customers or suppliers for their perception of your company, for their insights into how easy you are to engage or to do business with, and the insights you receive will invariably be more useful and actionable than any internal assessment or outside consulting […]

12 06, 2017

The Additive Manufacturing Revolution: Ready or Not

By Simon|2018-06-05T10:14:12+00:00June 12th, 2017|Operating Partners|

My professional life began in earnest in the 1980s at the very same time that the Just-in-Time (JIT) revoluti on emanating out of Japan was really beginning to hit its stride. Borne out of the vaunted Toyota Production System, JIT rocked manufacturing industries large and small and gave rise to new modes of competition that remain as potent today as they were 30 years ago.

A cornerstone of JIT was ‘batch of one’ production, an innovation that resulted in low inventories, faster factory throughput, and for obvious reasons, stronger business results. Alliteratively speaking, JIT was a hit.

I offer this by way of explaining why I think we may be on the cusp of another major paradigm shift in the world of production, this time through a process known as Additive Manufacturing (AM).

Over the previous 5 years or so I watched as ‘the maker revolution’ sprang to life in garages and sheds and workshops around the world. I saw, too, how phenomena like ‘rapid prototyping’ were radically changing the design […]

6 01, 2017

The 7 Lessons to a Successful Product Launch

By Simon|2018-06-05T10:13:57+00:00January 6th, 2017|Operating Partners|

Given just how important new product launches are to the value creation process, I thought it worth sharing seven of the most important lessons learned during my years in the trenches, as a CEO, and as a consultant.

To make things easier, I’ll use a recent success story to help illustrate these lessons – each of which played a significant role in the launch of a new platform.

Some background: the company in question already enjoyed broad-based adoption of its sophisticated electronics. But the rapid evolution of technology being what it is, a market disruption prompted the need for the wholesale reengineering and national field replacement of a complete product range on an extremely ambitious time table – the existing suite of products would be obsolete (non-functional) in 42 months.

Encompassing six products covering multiple end applications, closer inspection revealed a number of issues that had to be addressed, including:

The existing products were poorly designed and expensive to produce
The engineering team was overwhelmed with multiple projects and shifting priorities
The commercial team was increasingly […]

19 10, 2016

Operating Partners: Friend or Foe?

By Simon|2018-06-05T10:14:59+00:00October 19th, 2016|Operating Partners|

In the very earliest days of a newly acquired portfolio company, “I’m from corporate and I’m here to help” is probably one of the worst things that a leadership team can hear, particularly coming from operating partners. While that “help” can be of immense value, the initial reaction is usually one of defensiveness.

The role of Operating Partner within the PE world is very much a live issue, but if you have chosen to pursue that route it’s worth considering how to maximise the effectiveness of the role and, frankly, give your Operating Partners a fighting chance of adding value.

It’s a truism to say that the relationship between a portfolio CEO and the Operating Partner needs to be built on trust but it’s worth exploring how to get there. This powerful graphic is useful in explaining how we see this issue.

Assume that the starting point is ‘distrust’ (we’ll discuss how to make the starting point a different place in a later article), which means the CEO thinks […]