Working with Chairs and CEOs
Almost all of our work involves companies which already have investor backing or are seeking it. However, successful investors build partnerships with management and we believe we are most value-adding when we serve the interests of that partnership. In practice, that is reflected in different ways pre- and post-deal.
Pre-deal
When a transaction is being prepared, we are typically brought into the situation by an investor. But when we have a kick-off call with you as CEO we will explain that you are our client too. If we spot serious risks of course we address those directly. But 90% of our work focuses on building the team and organisation roadmap with your team, looking across individual, team, organisational, strategy and governance elements. The output of that is a plan you believe in so that is necessarily an exercise in co-creation.
It is natural to be unsure about what something often labelled ‘management due diligence’ (not our preferred phrase for our work) might mean in terms of the relationship with the investors and the atmosphere within your team. Are we being psycho-analysed? Are we being interviewed for our jobs? The answer is no, but others can probably express that better than we can:
“My advice: approach it like a benchmarking exercise that your whole management team get to learn what they excel at and areas that you can all work together to improve on”
“There is a huge amount of value to take from the process if you are open to it and honest...the insights from the process can give you clear direction and a head start if you are prepared to take the feedback on board”
“This element of the process allows an empathetic but externally experienced set of eyes give you insight into your business compared to others. Priceless”
We have provided guidance on what to expect from our this work here.
As a client, you should expect to see our findings and have a good briefing on what they mean and how they can be useful to you.
For incoming Chairs, we typically provide a briefing on our report and brainstorm approaches to establishing a healthy board agenda.
Post-deal
Our investor clients almost never push our involvement with a company after a transaction – they usually leave any decisions to CEOs and Chairs.
Since half of our work is post-deal, we spend as much time thinking how to help management teams continue their success. Our blog and document library (https://www.catalysis-advisory.com/analysis-and-reports) have various resources which reflect that thinking about navigating the mid-market transition. Some of that is more relevant to CEOs or Chairs – but all of it provides data, examples and suggestions on scaling teams and organisations successfully.
What other CEOs have to say
How worried should we be about this?
Listen, you are opening your business so you should have nothing to hide, these guys are there to see the positives and areas that you can improve on – my advice: approach it like a benchmarking exercise that your whole management team get to learn what they excel at and areas that you can all work together to improve on.
Is this just for the benefit of the investors?
Natural that you are going to think this and hard to stomach the fact that you didn’t choose to do this, and you are probably paying for it …. but if you stick with this thought and don’t look at it from a perspective of, what can we learn from this as a management team, then you will get no return from it. It's about enhancing overall effectiveness, aligning teams, identifying gaps and driving long-term success beyond immediate investor interests.
How much should we protect the wider team from this?
Transparency is key when involving the wider team. While certain details may need to be handled sensitively, involving the team to an appropriate extent can foster trust and alignment. Communicate openly about the purpose and potential outcomes of the process to alleviate any concerns.
How candid ought we to be?
It's important to be candid and forthcoming during this process. Authenticity and honesty will lead to more meaningful insights and recommendations. By openly addressing challenges and opportunities, you empower Catalysis to provide a tailored end report that truly represents your company and team.
Are we likely to get any value from this process – and can we make sure we get what’s possible?
There's significant potential for value from this process if you approach it in the right way. These guys do this with so many businesses so they offer a unique insight to best practice and areas that you could improve in. Remember if you are running a good solid business, you should have nothing to hide and investors are looking for areas that they can help you to improve on, not perfection. This process can back new strategic hiring decisions, gap management or potential reorganisational design to allow you to scale faster.
Wendy McDougall
CEO & Founder of Firefish Software
How worried should we be about this?
It’s natural to worry about it, particularly if it’s the first time you and your team have been through it. But if you approach it with an open mind there is a lot to learn, which will help you develop your business. You’ve probably got to where you are without thinking too deeply about people issues – however the next step, with an investor on board, is going to require different skills and a different way of thinking, and the process is going to give some useful insights to help with that. Nobody is expecting you to be perfect, so you shouldn’t worry about imperfections either.
Is this just for the benefit of the investors?
It’s definitely not just for the benefit of the investors. DD generally is a great opportunity to gain deep insights into various aspects of your business from external experts that you would never pay for in the normal course of business. So long as you are open to the experience there is a lot you can take from the findings to help you shape the future growth of the business.
In our case, our first PE deal fell away at the 11th hour – this was a great moment of reflection for me as to why that happened, and our approach was to take as much of the insight from the DD process onboard, including the HR side, so that the next process would go through without any hitches. We’ve continued to take that approach which is paying dividends in terms of investor confidence in our leadership team.
How much should we protect the wider team from this?
Clearly there is a limit to how wide the net should be spread, but generally I would say there is real value in having your entire SLT go through the process. It presents a learning opportunity not just for you as CEO, but for the team as a whole and for each individual. It is a good way of giving some exposure to your team of the kinds of ways in which they will need to develop individually and collectively in order to achieve growth and value creation goals.
How candid ought we to be?
Always be 100% candid – in my view there is nothing to be gained from trying to hide things or manage the flow of information. The less candid you are, the less value there will be in the process for both you and the investor. And in the long run, transparency equates to trust which is invaluable when things are tough.
Are we likely to get any value from this process – and can we make sure we get what’s possible?
There is a huge amount of value to take from the process if you are open to it and honest. The way you’ve worked up to the point of investment is very likely going to need to change somewhat in the ‘new world’. The way to think about this is that the insights from the process can give you clear direction and a head start if you are prepared to take the feedback on board.
Tom Eggleston
CEO ProofID
Ash Malhan
MD Integrated Door Solutions
How worried should we be about this?
Not at all . These type of transactions and this kind of work gives a unique chance for many CEO’s to pause and take stock of the teams they have built and the dynamics that exist within them . To be involved in a transaction at all clearly shows the CEO has built something of value and to gain an outside neutral view of it is of great value.
Is this just for the benefit of the investors?
Not at all. Whilst it will be of great help for the investor group, once progressed this information will no doubt be shared with management and allow them to explore and agree/disagree with the content but inevitably use it as they plan the forward development of the organisation.
How much should we protect the wider team from this?
This is an interesting question! Transactions can create a plethora of emotions amongst all levels of management and my view is that the CEO is seen to embrace it and encourage full and open engagement. They should emphasise that there is no wrong or right answer and that answers should be what the participant thinks not what they think the questioner wants to hear!
How candid ought we to be?
As with much of life the more you put in the more you get out. I would recommend full candour as this will allow maximum benefit but also reinforce full engagement from your potential new partner.
Are we likely to get any value from this process – and can we make sure we get what’s possible?
If you follow the above then 100% you will get value as even the best organisations benefit immensely from questioning and sense checking themselves . In much of life many CEO’s have been focused on building something of value and interest and on occasion this can preclude them from many external eyes and experiences. This element of the process allows an empathetic but externally experienced set of eyes give you insight into your business compared to others. Priceless.