Management Due Diligence
A more robust approach to assessing performance
Many Private Equity firms have relied historically on outdated technology, such as interview-only assessments. Put simply, simulation-based methods have been shown consistently to be more predictive of performance levels and potential than more traditional methods. Importantly, our assessments are about role-specific performance and results, not one’s leadership philosophy.
We begin any assignment by understanding the investment thesis in depth and, importantly, its implications on what the company will need in each of its senior executives. Sometimes this requires helping the deal team articulate what’s largely in their heads but once we understand the exact skills required we are experts at determining if leaders have these skills and the likelihood of them developing to the required level.
We evaluate skill levels and potential through a live business simulation, in-depth performance and biographical reviews, psychometrics and ‘personal style’ based interviews.
- We make sure we know exactly what will differentiate a “star” from just a “decent player” in each role
- We focus on the results people get and how they get those results, not their leadership philosophy
- Our business simulations enable us to benchmark each leader. Our simulations are data driven, in-depth business cases in which, as a CEO, they must digest vast amounts of information, ranging from P+Ls by country and line of business to investment proposals to analyst reports to customer complaints. They must get to grips with the performance of each market, meet with a country manager regarding pressing commercial and operational matters, meet two peers re: an acquisition, complete and present a strategic review of their business and propose a 12-18 month operating plan.
- After the assessment we provide a report with a clear hire/would not hire recommendation based on fit with your needs, strengths to leverage, weaknesses and any de-railers or risks. We also spell out practical steps to address any risks or weaknesses and offer advice as to how to get the best from them
- We then liaise with our client and/or hiring manager to agree depth of feedback given.
