In my line of work, employees at all levels of organizations tell me things that they don’t tell others. Just recently, I was chatting with someone who worked as a mid-level employee for private equity firms her entire career. She mentioned that she was almost finished reading my book. Then, unsolicited and with great ferver, she recounted multiple stories when leadership teams or mid-level managers failed to lead well.
She looked at me and said, “It’s amazing how simple the tips in your book sound, but how infrequently leaders follow them. They just don’t do it!”
Then, she said, “In most cases, private equity is only paying attention to the top two C-suite executives maybe the CEO and CFO. If those two executives tell them what they want to hear, they don’t bother to look beneath the surface.”
I found this sad and peculiar, but not a surprise. Despite the sector, mid-level and front-line managers are often allowed to exercise unchecked authority. This has devastating impacts on the culture and the long-term success of the venture.
Several years ago, this employee recalled to me how one organization was the most sought out company to work for. Then, private equity leadership brought in completely new company leadership, and the culture began to take a dive. When that happened, their best people left along with their top customers. They went bankrupt.
This same employee remembers working with a senior geologist at a different company who was a control freak and a micromanager. She had to be in on every meeting; she wanted everything to go her way. No one reprimanded her for her behavior. One day, this senior geologist decided to intimidate one of her direct reports by doing something creepy. She denied any wrongdoing. After an investigation, they found out that she did do it. Finally, they let her go. By then, many good employees left the company. The private equity leadership ignored early warning signs in favor of positive revenue numbers.
Personally, I worked for an organization that was acquired by private equity. I was a Director-level employee, and don’t recall any interaction with anyone from the private equity firm. They never took the time to preview the culture of the company or even audit it pre or post acquisition. Beneath the surface, there were some deep cultural issues, a lack of collaboration and trust and no real customer adoption. If they paid attention to what was happening to the people inside the newly merged culture, their results could have been different. Instead, they had to lay off many people and mistrust was all around.
As I stood listening to this long-term private equity employee describe her experiences and saw how my book struck a nerve with her, I realized that my work is not done. I was re-affirmed in my mission to help organizational leaders listen more effectively to the voices of their people and to act strategically and intentionally to create more positive cultures. Private equity leaders are no exception.
If you are reading this, I hope that you will pass it on, and or learn from my experience as well.