Use the Private Equity Playbook: Act More Quickly on Your Decisions
Faster decisions aren’t always better decisions.
But once the decision is made, acting quickly is often your best bet.
The reason we don’t act quickly, of course, is because the action we need to take is challenging in some way.
Logistically complicated. Emotionally draining. Possibly causing chaotic ripple effects.
Terminating an employee is all three.
I say this with the utmost empathy for how hard it is to let someone go—I’ve had to move on from team members I loved dearly, even close friends, as well as toxic employees:
You will not regret firing someone sooner.
You will often regret that you let things drag on too long. Everyone ends up unhappy; the business suffers.
But acting quickly in this situation? While difficult, it’s the best possible thing you can do.
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I learned this lesson years ago, but recently, I relearned it in a whole new light.
Our firm currently partners with several private equity firms to support their portfolio companies.
PE firms aren’t using their business as a vehicle for retirement. They aren’t trying to establish a legacy for their future. Like it or not, a PE firm is usually looking at a 5-year timeline to exit, which is a short window for generating results.
And even the “nice” PE firms (there are plenty) are laser-focused on running their companies with the best possible talent available.
If someone doesn’t fit the bill—because they can’t do the job, don’t embody the company culture, or are just in over their head‚ they’re gone.
Not in 6 months. They’re gone next week, because once the decision is made, there’s nothing to be gained by waiting.
Surprisingly, these companies don’t implode when terminations happen quickly. The team regroups, brings in someone new, and moves forward.
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The short, well-defined window for PE companies to achieve success accelerates their decision-making.
Once you know the right answer, you act. Because choosing the right answer today is more economical than choosing it 6 months down the road.
The difference between PE-backed companies and other businesses isn’t just the greater ability to spend. Yes, money is a part of it, and it makes those organizations fiercely competitive for hiring top talent.
But it’s also speed to action that contributes to their success. That’s a choice every entrepreneur can make.
Acting on your decisions quickly doesn’t require additional funding.
It only requires fortitude.
