Integré Partners Press Release:

March 25, 2010

 

 

THE RESULTS

 

Integré Partners recently conducted a survey, asking thousands of Private Equity, Venture Capital and M&A professionals to share their thoughts regarding hiring practices in a recessionary period.

SUMMARY

- Recessions do not appear to impact leadership changes, but do precipitate more changing out of other management.

- Only a third of portfolio companies have invoked hiring freezes.

- More than half of respondents felt hiring restrictions would persist into 2010.

- Most respondents are still making executive hiring decisions based on a static functional basis rather than using a dynamic leadership model.

THE SPECIFIC RESULTS

52% of respondents felt they would be MORE likely to make a leadership change in a recession, with 48% LESS apt to make such a change in a portfolio company. However, 76% felt they would be MORE likely to change other management personnel during a downturn.

For those who felt more inclined to a change, there was little difference in their ranking of possible reasons:

     2.2 - Need for Different Skills
     2.4 - Cost Savings
     2.8 - Drive Change in Culture
     2.9 - Board Pressure

Those who were disinclined to make a change, cited the following:

     2.1 - Postpone Leadership Change Disruptions
     2.4 - Send a Strong Cost Control Message
     3.0 - Save Recruiting Expense


Only 36% of the respondents had total hiring freezes in place, with 55% feeling they would not be lifted until sometime in 2010.

Survey participants were asked to choose the top factors they would look for when hiring a leader in a recession from a list of thirty-four factors studied over many years by Marcus Buckingham and Donald Clifton as published in Now, Discover Your Strengths, which we at
Integré Partners use as a selection aid. The eight strengths continuously correlated with executive success (regardless of the business cycle) are listed below along with the top eight form the survey results:

 

            Buckingham/ Clifton

Survey Results

 

       

 

 Arranger/Orchestrator

88% - Achievement Orientation

 

 

 Command Presence 

88% - Strategic Nature

 

 

 Competitive Nature 

33% - Analytical Skill

 

 

 Developer of Others

33% - Activator of Others

 

 

 Maximizer 

29% - Focus

 

 

 Responsibility 

25% - Communications

 

 

 Self-assurance

25% - Discipline

 

 

 Strategic Nature

21% - Arranger/Orchestrator

 

 

 

 

 

Of those strengths favored by the respondents, the majority (aside from strategic nature and arranger/orchestrator) are primarily skills that are applied to the execution of management functions. Research has shown that leadership is dynamic and requires a person of strong ego (self-assurance) who wants to win passionately (competitive nature) and has the personality that creates followership (command presence). The most effective leaders are almost always those who consistently develop the people around them, maximizing their ability to contribute, while simultaneously enhancing the effectiveness of the organization by balancing a host of strategic and tactical elements (arranger/orchestrator).

THE SAMPLE
 

Business:

 

Function:

 

Portfolio Size:

36%

Private Equity  

 

36%     Investing 

 

60%

Less than 6 companies

36%

Merger & Acquisition Advisors

 

29%     Financing

 

16%

6 - 10 companies

12%

Venture Capital

 

29%     Other Staff

 

24%

More than 10 companies

16%

Other

 

 

 

 

 

             

 

 

 

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