When a private equity partner invests in a portfolio company, they are often investing in innovation.
Innovation fuels tremendous economic growth, but it also comes with some pitfalls. One of those pitfalls is the lack of established precedent. The leadership team required to execute innovative strategies relies on the right executive talent decisions, and one of the most devastating mistakes to make is the wrong choice in executive hiring.
It is hard to understand what behaviors we are looking for when we do not have a historical baseline of what behaviors have driven past success. Most elements of private equity rely on data, but without that data, common outcomes include decision paralysis or a misinformed choice.
There are some generalized behaviors that are table stakes when we are talking about RevOps, revenue generation, finance, and just about any other segment of a business. But what are the behaviors that make a candidate a specific fit for your growth-oriented portfolio company leadership team? How can you be sure that you’re making the right choice when you’re dealing with private equity executive recruiting?
Behavioral interviewing starts with Predictive Behavioral Modeling
Predictive Behavioral Modeling is used in conjunction with standard psychometric benchmarks, such as IQ and EQ assessments. Predictive Behavioral Modeling (PBM) serves as a guide for the interviewer in preparing behavioral interviewing questions.
These questions are then specific to the candidate, their experiences, and married up to the goals, culture, and fabric of the Portco. In short, PBM enables a deep insight of the candidate to understand their leadership talent fit to specific roles, making the process of executive hiring a bit more data-driven.
Getting predictive behavioral modeling wrong at the outset will result in bad hires. A Private Equity firm working to hire executives cannot afford bad hires that result in disruption of time-to-market results. Poor time-to-market results will cost you money and jeopardize the entire investment. Time equals money always, and private equity executive hiring is no exception.
The Two Categories of Behavioral Interview Questions
- Questions designed to understand how you have performed.
- Questions designed to understand how you might perform.
The questions used for a behavioral interview use an approach to dialogue to get to those two answers. For example:
- Talk to me about a time that you made an investment in an organization that did not pan out the way that you wanted it to. Tell me what went wrong, what you did to steer correct, and the outcome you saw.
- You are the CRO for XYZ. Your objective is 25% growth in revenue. It is May and you are tracking at 10%. It looks as though if you hold that pace you will miss the mark. What do you do?
One type of questioning is easier to prepare for and draws upon past experiences. The other is more of a seat-of-the-pants line of behavioral interviewing that will assess whether or not the candidate has the right mix of problem solving skills. While the skills of the interviewer are also crucial to the process, equipping them with this framework simplifies and quantifies some facets of the executive recruitment process.
Intuition as Part of Executive Hiring and Recruiting
How do you feel about intuition? Some leaders think intuition is a form of magic that some people have and others don’t. They feel that you can’t hire for it and it isn’t predictive behavior.
In reality, it is a science that defines how hunches are processed in the subconscious mind and filtered through past experiences and cumulative knowledge.
Behavioral interviewing will help drive out the depth of a candidate’s past experiences. IQ testing will determine their ability to identify solutions to problems. Cumulative knowledge is not the same as education.
Lastly, we need to understand where the softer skills fit in.
Soft Skills in Executive Recruitment
Emotional intelligence plays a crucial role in leadership. Great leaders possess self-awareness, self-regulation, empathy, motivation, and social skills. These skills enable leaders to connect with others, manage their emotions, and create a supportive work culture. Much of the impact of the recruited executive will come down to their ability to make the most of these soft skills, and to lead by example in implementing them within the company.
The intersection of raw intelligence and emotional intelligence is understood with well architected behavioral interviewing. These approaches intimately understand what behaviors the organization wants to model and help assess if the candidate possesses these.
Getting this wrong will cost you money.
Leverage predictive behavioral modeling and interviewing techniques to assess and augment your portfolio company leadership teams. Gain deep insights into how candidates will perform under pressure to drive performance. Make the right choices in private equity executive recruiting, and you’ll reap the benefits.
About Glengarry Consulting
Cortado Group is proud to partner with Glengarry Consulting to provide our clients with access to world class talent recruitment and advisory resources. Here is an overview of Glengarry:
Headquartered in Toronto, Canada, Glengarry is a high touch talent sourcing firm dedicated to delivering an exceptional hiring experience for both our clients and our candidates. By operating within a boutique model, we ensure that our clients experience a personalized approach that quickly maps their hiring objectives and corporate strategies to targeted candidate profiles. We work quickly to bring the best talent together with the best opportunities that align with their career goals, while feeling supported throughout the entire process. Glengarry specializes in partnering with well capitalized small to medium size businesses with aggressive growth mandates. The only way to accomplish hypergrowth is with the best people. Let us help you build your winning team.
