Smart connection between Private Equity, Venture Capital and Executive Search

Having the right people in place can make all the difference to a company, especially in the fast-paced and competitive environment of private equity and venture capital.

Indeed, human capital is the most valuable asset of any organization. Without a team of talented individuals working together, it is difficult for a start-up or growth company to succeed, even if it has a great product or service.

The leadership dilemma is increasingly present in private equity and venture capital firms. It is the new key criterion!

Companies that are able to access this talent have a clear advantage over their competitors.

Connecting Private Equity & Venture Capital with Executive Search

This is where Executive Search firms come in: they help private equity firms and their portfolio companies recruit the talent they need at this critical stage - and at various levels: from investment managers to fund managers to board members throughout the life cycle of the company: creation, development, support, transmission.

The Boundaries are blurring

These three types of specialists, private equity, venture capital and executive search, have always been linked at the intersection of value creation and human capital.

But sometimes the boundaries between them become blurred. Indeed, some private equity funds acquire or create their own executive search functions. On the other hand, executive search firms are also starting to get involved in the venture capital sector, launching their own funds.

A still centralized niche market – a real challenge for Executives Search

In France for example, this niche market is mainly focused on Paris and Lyon. It operates more discreetly in the regions, mostly through partnership with the local economic network, often as advisors to managers.

The challenge for Executive Search is to attract talent from other decision making centres.

Power tends to corrupt; absolute power corrupts absolutely. 

Toxic leadership exists in too many organisations – indeed we have seen it here in the UK at the very top of government. Unsurprisingly, the result has been a loss of trust by colleagues and the general public in their leaders, and with it trust in the organisations they lead.

A toxic leader is often hugely charismatic, effectively hiding their toxicity – indeed grandiose narcissists often emerge as powerful leaders and are considered as ‘rockstars’. Power quickly becomes consolidated in the hands of a few people who report directly to the toxic boss and anyone who questions them are quickly removed.

Edelman’s Trust Barometer (2021) indicates that “... none of the societal leaders we track — government leaders, CEOs, journalists and even religious leaders - are trusted to do what is right, with drops in trust scores for all.”

In some cases, toxic behaviour is actually a way of mitigating self-doubt, but they still create a culture of fear. In fact, toxic leaders don’t typically have a lot of self-confidence and they attempt to overcompensate by constantly elevating themselves at the expense of others; such organisations tend to have a high employee turnover.

Toxic Culture is Driving the Great Resignation

A toxic corporate culture is the single best predictor of which companies suffered from high attrition in the first six months of the Great Resignation. The failure to appreciate high performers is another element of culture that predicts attrition. Compensation and burnout also influence attrition, but other aspects of culture appear to matter more.

Traits of a toxic leader:

There is insufficient accountability in many organisations for unethical and amoral behaviour of leaders. Indeed, we often reward financial results over the well-being of people, or the planet.

As well as focusing on good character and virtuous behaviour as the prime criteria for leader selection, we often recommend a more forensic approach in the appointment of executives with judicious psychometric profiling.

Metamorphosis of education

In a society where we are constantly told that everything is uncertain and volatile, where companies are transforming and acquiring more agile and digital management models, where unicorn companies dominate, where there is a lack of raw materials, of scenery, of leadership, where we compete with global talent (GIG economy), where projects without purpose no longer make us fall in love, and data is the DNA of any profession...

What do we do to survive? We educate ourselves.

While we run as if we are ants living the present and not thinking too much about the cold winter, we are lucky enough that there are some cicadas who are doing their best to bring up real and lasting solutions that solve the long term while being very adaptable to the short term. These cicadas have a major purpose - more than us or even our companies’ - they are interested in adding, helping transforming and improving our society, and above all they want to provide the necessary tools to students and professionals to be self-employed and have employability (sustained over time) in a global market.

There are many professionals, vocationally or "by chance," working in educational projects, increasingly demanding more competition, more demand for a complex user experience to find hybrid or digital models - and thanks to these new figures that appear in the educational environment (along with the value that their teaching and research team have always had in these institutions), good practices from the professional world are being implemented and a real disruption is being generated when it comes to learning.

The education sector has finally got its act together. A sector (by some) poorly defined as the 3rd sector, slow, regulated and obsolete, a generator of ideas, applied research, thinkers and value. A sector that the smartest have identified as one of the engines of change, profitable in real transformation, with incredible human capital, technology and pedagogical models capable of making everyone learn and understand.

Given the evidence that there is a greater need to renew knowledge throughout professional life - Working Adult - with specialization programs, reskilling training, today there are countless possibilities and we are evolving to the concept of democratization of education, with quality options for all, in terms of content, format, duration and price.

To give this response to the market, organizations have also had to transform themselves and attracting talent in private institutions is one of the essential objectives. Without a good management team it is impossible to carry out this transformation, and above all it is impossible to carry it out on time.

Today, the executive committees of large educational institutions are nurtured by professionals with expertise in sectors such as consulting, health sciences/insurance or consumer goods.

Agile and very executive minds know how to recognize the rhythms of the labour market, the demand for talent, decision-making processes, expansion strategies and above all what they project inside and outside: what the labour market will demand and what a student needs to ensure successful learning.

In addition to this commitment to a more professional human capital, there is a need for technology as a management tool, as a learning channel and model, and as a guarantee of a personalized experience.

This situation is now driven by the entry of investment funds in private educational groups (schools and universities) that are "concentrating" the operation to have a greater offer and are driving a strong accelerator for change.

In this new scenario, the demand for a different-professional-types arise, to lead the operation in the investees, headquarters, or spin offs of these groups -  managers with a 360º vision who are responsible for the income, and although they do not have experience in the sector, this allows an objective view.

In this area, the Business Development and Marketing Manager continues to be a sought-after and recognized profile. Private institutions thrive on their enrolment, so the effort to create a brand, attract the best students and be able to generate value innovation and obtain a positive response from the increasingly global market is essential.

B2B business development or Institutional Relations profiles are becoming more and more in demand. There is a need for constant learning as professionals, and companies are key in this mission by offering their employees quality training.

From the academic point of view, the figure of the Dean is essential. An academic and responsible manager with vertical knowledge, being able to value the area of knowledge by promoting research, partnership with companies and international educational institutions. They must ensure that their faculty is at the forefront of innovation because their future student employability is essential, not only to ensure the growth of the institution, but to harness the reputation and prestige of the faculty and therefore of the Institution.

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