Management Due Diligence

Before: Lack of Management Due Diligence Hides Potential of Leadership Team

"My private equity firm purchased a consumer products company which was mired down after a series of private equity ownerships and leadership changes. A relatively new CEO faced a number of operational challenges including a strong but largely ineffective core business and critical new product projects that required flawless execution to succeed. Management due diligence was lacking since none of the previous owners had ever conducted a comprehensive talent audit. The current team was an unknown quantity made up of old and new team members cobbled together in a haphazard fashion by the boards of earlier private equity companies.

"I called in RHR International to conduct an overall management appraisal. I needed a global company with a proven management due diligence process which would help me design a leadership team that was capable of delivering on the organization’s profit potential."

After: Management Due Diligence Puts Company on Profit Heading
 

"After reviewing the new owners’ expectations, RHR interviewed the portfolio company management team and created a customized leadership profile based on the talents and behaviors needed to meet the PE firm’s goals. As part of the management due diligence process, each team member was assessed against the profile. Tactics to address findings from our management appraisal were woven into the 100 day business plan.

"Based on our talent audit, the current CEO was retained, given his progress in bringing together a fragmented team. One president and the head of engineering were terminated, since they no longer fit the new strategic focus. Three high potential executives were reassigned so their unique talents could be better leveraged.

"The new owners stated that the management due diligence information provided by our consultants allowed them to take quick action to move the company forward towards profitability."