From ExecuThrive CEO, Sara Martin
Over the past year, developing a thoughtful talent management strategy for portfolio companies in private equity has gained significant attention—and for good reason: effective leadership in these companies can impact market valuation by 30% and financial performance by 15% (more on this in this article published by Stanton Chase). In the past year, as interest rates rose, and debt capital deals became more costly, operating performance has become increasingly important at PE-owned companies. Given these compounding factors, PE firms are doubling down on talent strategies, including acquisition and retention of portco leaders (HBR and Hunt Scanlon Media).
However, portco leader turnover remains a major concern. About three out of four CEOs leave after a PE acquisition and in 54% of these instances the CEO turnover is unplanned and can cause huge disruptions. Forty-six percent of PE firms say that unplanned CEO turnover challenges the rate of return on their investments and 83% say it lengthens investment hold times. While multiple complementary human capital management strategies are necessary to effectively protect PE firms’ investments in new companies and ensure continued leadership and operational strength, being armed with a retention strategy is critical. “Organizations and PE firms often face challenges in retaining talent due to factors including limited career advancement opportunities, lack of work-life balance, or inadequate compensation,” shared Matt Hamlin, Managing Partner at executive search firm PierceGray. “Identifying the right candidate poses its own unique challenges; however, retaining talent is just as important as recruiting talent.”
ExecuThrive has been supporting PE portfolio leaders since our inception and we are committed to supporting executive health and well-being across every dimension. We are excited to extend access to some of our richest insights via a brand-new offering launched this past month. Our complementary diagnostic report helps investment firm leaders understand the risk profile of CEOs in their portfolios across three dimensions: executive health, burnout risk, and leadership performance. This report will help answer questions such as: What percent of your portfolio leaders are at risk of burnout? What gaps exist in critical leadership skillsets? See a sample report hereon our website.
If you are interested in receiving this free report for your portfolio, please reach out to me at sara.martin@joinexecuthrive.com.
Headlines We’re Talking About
Here are some recent workplace well-being headlines we’re talking about right now:
Company Leaders Discuss How They Can Support Employee Well-being
At the Fast Company Innovation Festival last month, leaders from Rare Beauty, Pie, and Ikea took the stage to discuss how leadership can better support employee well-being. An article published by Inc.com synthesized three key takeawaysfrom the panel: establish strong values, have transparent dialogue, and incorporate education.
While these recommendations are important for company leaders to consider, our experience at ExecuThrive supports the position that executives cannot be expected to uphold strong company values around well-being if they are not prioritizing it themselves. Companies must invest in their leaders so that their ability to sustain a positive company culture of well-being and health is secured.
Leaders as Company Role Models
…And there is evidence that workplaces are grasping the importance of elevating leaders as role models for well-being and health within their organizations. In a session called Mind Matters: Addressing Mental Well-being at the World Economic Forum’s Sustainable Development Impact Meetings, one key takeaway was that leaders need to role model vulnerability. The World Economic Forum cited a study published by Headspace, finding that a majority (89%) of employees in 2024 say their leaders talk about their own mental health, compared to just 35% in 2020. This signals a marked improvement in how leaders view their role in promoting workplace well-being. However, without continuing to provide leaders with the resources to meaningfully care for their own well-being holistically, companies risk adding to their leaders’ responsibilities without giving them the tools to be successful.
WHO and TikTok Partner to Share Well-being Resources
WHO and TikTok recently announced a partnershipaimed at leveraging social media to share reputable information about health and well-being. While many people turn to social media platforms like TikTok for news and information, misinformation remains a critical concern. The new collaboration hopes to address this by promoting evidence-based content and encouraging positive health dialogues. The partnership between WHO and TikTok is the latest example of how we must consider new and innovative ways to engage people and communities in meaningful dialogue around well-being and continue to provide resources and tools that can be shared to improve approaches to instilling better practices and values.
