This post is based on remarks IntelliVen CEO, Peter DiGiammarino made about what Private Equity Operations partners do for portfolio CEOs at a National Private Equity International Operating Partners Forum Panel Discussionin Sentry Center, New York City.
Panel Topic
A view from the portfolio company CEO on:
Management autonomy and sponsor inclusion; striking the right balance.
Engaging with the General Partner over the life of the transaction.
Opening Remarks
Beyond getting deals done and setting up financing, there are three things an operations professional counts on from their private equity investor:
Governance– i.e., provide a consistent point of accountability to report on: what we said we would do, what we did, what happened, what we learned, and what we plan to do next; we count on you to ask good questions to push up our thinking and give us your best advice.
Focus– i.e., help us clarify whose problem we solve, how, and how well and clarify our roles to verify they make sense and that we, individually and collectively, actually do what we say we do.
Access– i.e., help secure the money, people, partners, clients, best practices, knowledge, etc. needed to be successful.
A team is a group of people working together to achieve a common goal. If everyone sinks or swims together the investor team and the operating team aggregate to form the deal team.
Growing private companies often encounter challenges in establishing an effective board of directors. Typically, boards comprise well-meaning individuals who meet periodically, usually for a few hours up to a couple of days. However, these meetings frequently become sessions to celebrate company successes rather than critically examining company performance against its board-approved plans and strategic initiatives for the year.
For these companies, it’s vital to have a diverse board, including external directors who offer unbiased insights and prevent family / founder / owner dominance. Establishing clear governance policies and procedures is essential, as they define the roles and responsibilities of each board member. Moreover, regular board meetings focused on progress towards strategic goals, rather than on operating details, are crucial.
This post outlines best practices for efficient private company board meetings, ensuring that your time together is well-spent. We also provide a template for an effective board meeting agenda.
The Board Agenda – Your Roadmap to Efficiency
Preparation is Key
The board chair should distribute a draft agenda 4-5 days before the meeting, soliciting upgrades and additional topics.
Agendas must be clear, concise, and focused on performance metrics, strategic goals, and pressing issues.
Best Practices for Productive Meetings
Limit meetings to three hours to maintain focus and energy.
Introduce new items for information only, with decisions deferred to subsequent meetings after thoughtful review.
5-min: Adjournment and reminders of meeting Action Items, Decisions, and Insights
This template is flexible and can be adjusted to fit the unique needs of your board.
Conclusion
Setting up and managing an efficient board for fast-growing private companies is both challenging and rewarding. By adopting these best practices and using a structured agenda, boards can offer valuable guidance and oversight, enhancing their collaboration with the management team.
Click the figure above for a summary of Accountability Board Support Characteristics
About The Author
David Halwig, IntelliVen Co-Founder and President of Mid-Atlantic Region, provides strategic management consulting and advisory services to leaders whose organizations are at critical inflection points. David helps improve governance, leader development, strategic planning, and risk management. He also has substantial experience with merger and acquisition strategies, valuation, and transition approaches.
“It’s easy to make great progress when you aren’t doing much in the first place,”
when commenting on the lift in performance experienced after tweaking the approach to running his organization’s weekly Operating Meeting.
The motivation was to stop wasting countless hours discussing philosophical and theoretical matters that had little-to-nothing to do with operations and that kept them from getting important work done in their operating meeting up to that point.
The point of his Haiku-like phrase is that it is not hard to run an organization better…but you do have to work at it.
Every meeting needs to be thought through to get clear why it is being held, what it is to produce, how it will be accomplished, and what outcomes are to be generated (see: How to Run a Great Meeting).
A good approach for Operating Meetings is for the organization’s leader (e.g., CEO, unit leader, initiative leader, project manager, etc.) to have each functional leader (e.g., head of engineering, head of marketing, etc.) present in literally just a few minutes:
When top leaders are informed, thinking critically, and engaged enough to provide guidance and direction, things tend to go pretty well. That is, things get done better, sooner, and more smoothly when leaders pay attention. This note describes an efficient way for top leaders to get and stay up-to-speed, see and understand what is going on, ask questions and think critically, develop a point-of-view, and provide advice and guidance on their organization’s most important functions, projects, and initiatives.
Nearly all of the things that cause activities and initiatives to go off track (see Kotter’s list of eight reasons initiatives fail) could be averted if someone in a position of authority had been involved enough to give guidance along the way. It is hard, though, for leaders to stay sufficiently engaged even in the most important activities and initiatives because it takes time and focused attention that is easily diverted to other urgent matters.
It Pays to Pay Attention
There are a lot of reasons why a given activity or initiative might be considered important. For example, it may be relatively large; risky; involve skills, technology, and methods that are new to the organization; have the potential for great leverage in terms of intellectual property development, revenue generation, cost savings, or skill development. When an activity or initiative is important, it is also important that the effort stays on track, on time, and on-budget!
The best way to ensure on track, on time and on-budget performance are for top leaders to regularly review with those responsible for completing the activity or initiative how things are going. Doing so provides an opportunity for:
Activity and initiative leaders to step back from the press of day-to-day in order to pull together a consolidated picture of what they are doing to share with others in a safe environment, to challenge their thinking, and to provide advice and counsel on strategy, focus, next steps, and to provide guidance, ideas, and resources that can be brought to bear so as to increase the odds of success.
Top leaders to stay in touch with what is going on with frontline activity. Any important activity (e.g., delivery, sales, development, marketing, strategic initiatives, etc.) should be reviewed regularly to keep leaders informed about what is going on and for leaders to efficiently provide guidance and direction, consolidate insights across activities, and to drive cross-sharing of resources, insights, and ideas in the best interest of the organization as a whole.
Informal communication on progress is not enough. Neither are occasional one-on-one chats. It is important that those in charge of the function or initiative need to be asked to prepare to brief others on their efforts in a scheduled forum where the activity or initiative is the only agenda. Even better is when others from across and outside the organization with a stake in performance or with relevant past experience and knowledge are also in attendance.
Review Agenda
what we said we’d do
what we did
what happened
what we learned
what we plan to do next
Leaders set the tone for reviews to ensure that they serve their intended purpose (see: Review POAD) and that they are not done just for the sake of it and to be sure they do not become a “show and tell” exercise. Reviewers must make it safe for those whose work is being discussed to embrace the process and seek input from participants because what is being reviewed is what the organization does and deserves input from the best the organization as to offer.
Leaders ask questions to:
Draw out clarity
Give advice
A review is an efficient and smart way for leaders to keep close to what is really going on and to increase the odds that important work gets done well. Reviewers must not look to find fault or assign blame. Instead, they strive to understand what is really going on and to find the best way to improve performance and learn the most.
Reviews also:
Provide visibility for key staff.
Create high-stakes circumstances that push up performance.
Create a forum for executives to model the behavior they want others to emulate.
Reveal important lessons and insights to share with other teams and initiatives.
Reviews are successful when:
The Project Manager (PM) and the project team feel:
They have successfully stepped back from the press of the usual day-to-day to pull together what they are doing into a consolidated whole and shared it with a team of supportive professionals who themselves have reviewed advance materials, showed up, paid attention, participated, and supported the team by challenging its thinking, offering the best advice, and providing access to resources that can be helpful (such as written materials, outside experts, training, and time that will help improve performance).
That the preparation process, the review meeting itself, and the follow-up will help them achieve project objectives better, faster, and more smoothly.
Management is enlightened with respect to what was reviewed; specifically, what is working, what is not, and what needs to be done and learned as a result
The organization’s best ideas, thinking, resources, and skills have been brought to bear.
Participants feel:
Supported, appreciated, enlightened, engaged, heard, and respected.
Appropriate next steps have been lined up in the face of the realities and understanding reached.
The PM understands and internalizes:
The group’s best thinking in terms of what can be done to most improve performance and/or lower risk and is committed to making that happen
The top few actions necessary to follow through
What others will specifically do to support these efforts.
An open discussion of status leads to the fertilization of ideas across the organization.
Top leaders collaborate in support of the PM on front-line work.
The work is completed successfully or it is going so well that reviews are no longer needed to ensure success!
When it is time to start planning but the top team is maxed-out just keeping up with operations, outside help may be just the thing. But what kind of help is best to get? Continue reading Four Kinds of Help→
David Halwig, IntelliVen Co-Founder and President of Mid-Atlantic Region, provides strategic management consulting and advisory services to 
