29Bison 2022 Summer Newsletter

Key Insights for Q3 2022 - What We're Seeing...

The Great [Reset, Resignation, Recruitment Challenge...] has many employers and investors asking, "How do we retain, attract and encourage the full participation of our workforce?"  These and other factors figure prominently for deal makers which translate into the following quarterly areas of focus:

       
• Integration.  Q2 saw many PE sponsors and portco leaders looking for ways to address incomplete integrations and opportunities for improved value creation - everything from health & welfare program harmonization, employee policy standardization, to leadership assessment and organization redesign.  A trend we see continuing to gain momentum.  
       
• Communication.  More than ever, deal makers are looking to craft comprehensive employee-facing communication programs for Day 1 and beyond.  Everything from executives' townhall scripts and frequently asked questions (FAQs) to offer letters and employee onboarding materials.
       
• Compensation and pay practices.  Investors and portfolio company leaders are seeking to understand labor availability, competitive pay practices, internal pay equity and incentive practices of prospective acquisitions early in the diligence process, not just as a post-acquisition integration item.
       
• Leadership and culture.  Never before have so many acquirers been eager to understand culture, executive leadership capabilities, and the employee experience.  Interests include diversity, equity, inclusion and belonging (DEI), employee engagement and job satisfaction.  
       

Featured Blog Post: Do You Have a Crisis-Ready CEO?    

Senior advisor, Marc Prine, PhD discusses what it means to be a "crisis-ready CEO" and why it is vital for your company to have one.     

In the last few months new challenges have cropped up.  Rising interest rates, enhanced market uncertainty, threats of inflation, domestic and geopolitical instability, to name a few. Now, key performance indicators are more reflective of publicly traded companies; focused on margins and the bottom line, lean operating principles and burn rates. Prospective investors are more careful, critically evaluating their CEOs’ abilities to execute on all the visionary statements made during their pitches. Investors are looking for a crisis-ready CEO.

Read Entire Blog Here

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Featured Podcast: Human Capital Due Diligence

Human Capital Due Diligence has become a hot topic, just in time for the summer heat.  Listen in as our founder Laura Queen discusses what human capital due diligence is (and what it isn't) with Jimmy Holloran, Partner at ParkerGale on the most recent episode of The Private Equity Funcast. 

If you're looking for more great content and human capital due diligence tools, check out this link:  Why you need human capital due diligence — 29Bison
       

‍Integration Effectiveness
          

To maximize the effectiveness of your integration planning, you need to think of it as an activity that starts as soon as you begin diligence on a transaction.  You’ve likely had the experience of working on a deal that kicks off and within weeks is moving forward at the speed of light.  There’s a rush to get everything done and the deal team is aiming for a signing date that seems impossible.  In situations like this, unless there’s an extended period between signing and close, integration planning will not get the attention it needs.

The best way to mitigate risk, is to start thinking through how you will integrate the business as soon as your fact finding begins.  Make sure that the teams looking at compensation, benefits, pay practices, employment policies, etc. are noting items that could pose an integration challenge—areas where there’s a significant difference between programs offered by the buyer and seller.  Even more importantly, have your team look for clues about the culture of the target company.  As they review documents in a data room and meet with target-company leadership, what clues can be gleaned about what makes the organization tick.  Is the target highly process-driven? Do they use formal communication styles?  Do leaders seem to have the pulse of the workforce?  Can they tell you what their employees love about their jobs?

Working on your integration plan while you're knee-deep in due diligence is the best way to get to signing with a first draft of your blueprint for integration - accelerating you along the path to value creation and long-term investment success.

Enjoy the Summer!

‍Summer Reading!
       
Private Equity Should Take the Lead in Sustainability
In this Harvard Business Review article, Eccles, Shandal, Young and Montgomery argues, "To be successful in the future, PE leaders must speak openly and often about the importance of sustainable value creation. They must recruit people who care about it in the broadest sense and aren’t joining the industry just because it can be very lucrative. We foresee three consequences if the industry fails to fully embrace ESG: Its social legitimacy will increasingly come under attack. It will no longer be able to deliver its historically high returns. And it will fail to fulfill its potential to help solve, rather than exacerbate, environmental, social, and governance problems."
       
       
People Economics: Defining and Measuring the True Value of Human Capital

"Finished reading People Economics this morning. This is a smart book ...- one that introduces new concepts and conversations and challenges your understanding. Human Capital becomes a timely and relevant topic that deserves discussion.  I found a number of insights that truly made me think.  I truly recommend this book...it is a challenging thought-provoking read - and I believe that is what we need to grow."  Gary Gregory, CAPS
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Make your summer reading a profitable investment!  

Happy Reading                                                        

Don't forget to share with friends and colleagues!