You won’t always know everything about rapidly scaling a business – but that’s ok, says our Entrepreneur-in-Residence Glenn Elliott.
So you’ve just sold to private equity. Congratulations! It’s been a roller coaster six to nine months so far, right? Your PE firm – and the others who might have bid for you too – have repeatedly told you how exceptional you and your business are. This of course is incredibly flattering to the ego.
However, constantly being told you’re exceptional can create a huge amount of pressure beyond the deal being signed. It can stop a lot of new private equity CEOs from asking for help. There’s a fear of revealing themselves and their business as being anything less than amazing.
So yes, you’ve run a fantastic business so far to get where you are, and to end up being bought by private equity. That’s absolutely true.
But, it’s also true you’re going to have to double the size of your business, or maybe more, over the next four or five years. And a private equity firm should not expect or even hope you know everything possible to do that.
Accelerated growth naturally needs support
If you’re lucky, you’ll have chosen a PE firm that has support you can lean on and that inspires you, so you really won’t be alone. At Tenzing, we have a whole growth team and structure in place. Everything from sales and HR specialists to M&A strategists, as well as our Entrepreneurs Panel, and Sherpa programme – all designed to help grow your business at pace.
In fact, our most common support requests at Tenzing are for scaling sales while keeping a lid on costs, for boosting marketing, and how to align people and culture – as well as how to build and nurture that team of people around you that’s going to help you reach your goals. They sound like simple concepts, but they’re much harder to execute, especially at scale – yet to ask for that support is also simple.
So don’t be too proud or frightened to reveal what you don’t know. Don’t let your ego get in the way of seeking help.
My whole job is about providing support. But I can’t provide support to anyone who doesn’t ask for it or let it in. No one is going to judge you based on the fact that you didn’t know something or you needed help. People are only going to judge you on the enterprise value you create which is a function of your EBITDA at exit. It’s that simple.
When we meet management teams we meet all sorts of people with different strengths, experiences and gaps. I know the ones who are open minded, curious and make a habit of asking for help and advice are never on my worry list.
The barriers to asking for support are all too common in CEOs. I get it. You’ve spent years being your company’s biggest cheerleader, as well as its biggest critic. Because of course, that drives it forward. What tends to happen after a private equity investment is the CEO carries on in the mindset of saying everything’s great. And obviously, everything will be very good. We wouldn’t have invested if it wasn’t a great business with a solid management team.
But the growth the private equity journey demands is a real challenge. Even the best leaders will learn things along that journey. Leaning on advice, support and suggestions just helps make the journey less lonely and rocky.
Overcoming that emotional hurdle
It’s not about just letting someone else take over. It’s about saying, for example, if customer service is a big part of your business, then if you spoke to several other customer service leaders, from businesses that are bigger than yours, you might uncover some interesting ideas that could be worth a try. You’re still in control. But having more inputs can expand your world. And great CEOs and leaders always keep their sense of curiosity and openness.
It’s also about being honest. A common question people ask CEOs is, “What’s keeping you awake at night?” I know all CEOs are able to answer that question without really giving anything away. You can easily respond with something like, “sales and growth”.
But this is a chance to embrace what’s really making you feel anxious. Like, “I’m worried that the pandemic has made people recruit people from further afield, and I fear I’m going to lose staff to companies I’ve never even heard of”. That’s a more honest and vulnerable worry. You could have spent years building the most amazing workforce that no one has touched. And now what you’re seeing is the potential for that to be completely rocked.
That’s where other people’s insights can be game changing. They’ll tell you what they’ve done themselves, that might warn you of unintended consequences of actions you might take. They might warn you of mistakes they’ve made. The more conversations you have with other people before you make your own decisions, the lower risks they are likely to be. In my experience, leaders who have a wall up often struggle later on. And don’t forget, regardless of how much external advice you get, it’s still your call to do what’s right for your business.
Not all CEOs have this problem, of course. We’ve got some that on day one are just beautifully open and can’t wait for us to help. We’ve got some that are in the middle. And we’ve got some that have spent a long time protecting what they’ve built, and find it really hard to let people in.
Yet they’re the ones I worry about the most – the ones you can’t get to because they’re too frightened of letting their guard down. But the thing to remember is, once we’ve signed the deal, you haven’t got to pitch to us any more. We’re legally bound – for better or worse.