The 3 main reasons your business is holding on to under performers

The 3 main reasons your business is holding on to under performers



hi it's Alex from Royal selection biggest threat I see to private equity venture capital and portfolio companies right now is not the impending recession it isn't the fact that deal flows incredibly competitive it's actually their portfolio companies senior executives and hiring and keeping underperforming talent within your business so what makes me say this a lot of private equity venture capital firms and also the chief executives of portfolio companies that I'm speaking to right now are concerned about the level of talent that they have in their business the level of experience they have the track record that they have within different organizations previous organizations and that experience have been able to take your business drive that business to growth drive that business to an exit or drive that business through the various series rounds that venture capital firms need now this is a really big threat for these businesses because if you think about a private equity firm you've got between three to eight maybe years of a whole period on typical average to take that business from X to Y and get the best return for your investors best return for you yourself and your carry but also the best return for the firm in order for that to be able to continue with further fund raises as we go into potentially unknown financial times so here are the three key reasons to help you understand why you're holding on to these people number one is the fear of not being able to replace this individual was somebody better going out and recruiting is difficult going out of finding the right people who have a private equity track record within portfolio companies who grown businesses to exit who've got the experience of of M&A who've built in businesses who've gone through a buy and build strategy can be perceived as difficult don't get me wrong there is actually a ton of these people out on the market looking for new opportunities of scale businesses and 30 million to 1 billion of one candidate was speaking to you right now and various different degrees of that in between there's tons of people out there and you can find them these cells you can use people like me you can use adverts you can use all sorts of different processes to get these right people into your organization so that shouldn't be a concern for you and that should be something you have confidence in yourself that you can bring the right person on board and that you can secure that individual into your organization and grow your business number two unfortunately this is actually your own ego when you make a decision to hire somebody most people feel emotionally attached to that individual because it was their decision it was your decision to hire that person unfortunately that person not working out you do feel or may feel that is actual reflection of your ability to hire your ability to bring the right people into the business now everybody makes mistakes there's a great quote from Gary Vaynerchuk with you liking whether you hate it doesn't matter there's a great quote from him hiring is Bill no firing is knowing everybody in business or business leaders managers excesses have all made mistakes or at least they should be in in hiring it shows that you willing to go the extra mile to grow a business it shows a business and organization is growing and people do appear different in interviews than when they are in the business you culture could be wrong their skill set a track or the experience could be incorrect you've got to make sure that when you've got a shortlist for the best possible candidates but do not allow your own ego to sit in front of that and just decide that it was a mistake put it down to experience communicate sit well within the business have the conversation with the key employees and come together once that decision has been made and make sure that everybody is well informed and what happened they will already know your top performance within your business may already be consider leaving because you're holding on to the wrong people within your organization it's just absolutely critical that you make sure that you get that right point number three your belief that they are actually the right person or that you believe that they will get better now I see this a lot within firms where we've given them an extra six months six months for an individual let's say for example the chief financial officer it's not going to make a difference if they haven't got record and the experience of building and buying businesses they haven't got your track record of working then a fast growth organization that's gone from five to you know 50 million whatever it is that that person is missing it's unlikely that will appear in the six months if you've given them enough efficient time and most people do then it's time to make a change fast it's time to make a change quickly and do not hold on to the hope that this person will turn around if you've given them the platform and the tools and everything they need to seek you to succeed then absolutely there have been given every chance if you have failed in some way and there is some kind of emotional attachment there that you feel that something's gone wrong there's different circumstances with everything and obviously this isn't a one style fits or however in most cases people have been given the opportunity to do it right and then there's somebody else out there that it is be able to help you and take our business to the next level so if you have seen people in your business that are underperforming you need to make a change you want to do that confidentially or you've already made that decision please reach out to me it's alex dot are at rule selection Kota you can be delighted to help your private equity portfolio company venture capital portfolio company in securing a player talent into business driving those businesses through the series rounds to exceptional growth or taking that business there's private exit backed from X number to Y number and getting your fantastic exit multiple please reach out to me it's Alex dot are at real selection car UK all the best with the growth of your portfolio companies thank you very much for watching please subscribe hit the bell for notifications and you'll get all of my content right delivered into your inbox thank you

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