I recently counted up the number of Operating Partner searches I’ve been involved with over the course of the last 10 years. It’s just about 45 in total. Interestingly I would also say that there have been 45 different experiences related to the on-boarding of those Operating Partners once they joined their respective employers. This is definitely an area where PE needs to improve.
Unfortunately, on-boarding inside of Private Equity is a pretty archaic process. This is one area where it is rare to see much thought put into the actual experience. As many of you know, Private Equity firms themselves are often relatively small companies with small employee headcount, and where the human resources function is an afterthought. Couple that with Deal Partners who are frenetically busy and you have a recipe for an on-boarding process that feels quite disjointed.
The Firm managers might simply assume that because you are a seasoned operating executive you will figure out the on-boarding process on your own. The inherent problem in that approach is that an Operating Partner’s success is tied very closely to the relationships that are built inside the firm and inside the portfolio companies. And like it or not, relationships can be disproportionately affected by a first impression. There needs to be a streamlined and well thought through process for getting things out of the gate in the right way. People’s confidence in a newly hired Operating Partner will be in direct correlation to the conviction they see for that individual coming from the Firm’s leadership.
I have seen situations where a newly hired Operating Partner basically hangs out at the firm’s headquarters for a few months trying to figure out the right way to get integrated into both new deal flow and the portfolio companies themselves. You would think that because of the significant investment that the Deal Partners have made in the Operating Partner there would be more deliberation put into the 100 day plan. Unfortunately, that is not always the case. Thus, it is important for an Operating Partner to “assume the worst” when coming in to a new situation. There should be considerable conversation about on-boarding which occurs during the interviewing process. Be sure not to let this wait until after the fact.
A couple of recommendations may be in order: