The Dance of Organizational Development: Leading with Purpose and Precision

Audie Penn, Vice President, Business Development and Service Delivery

What exactly is development?  The root of the word develop, to unwrap, converges on a specific point.  For example, when I unwrap something, a gift for example, I find something specific.  A gift, if it is thoughtful, has meaning and importance.  The added benefit of unwrapping a gift is the association of the gift to the sender.  Now I have a permanent association of the gift and the giver, but the value of the item, if it is a good gift, still has significance to me.  I needed and wanted it.

The idea of general development gives me pause.  General development is like an unwanted gift that has no value to the recipient.  Why do I need this?  Do you notice something that I don’t?  Is this something you think I need in my work?  Are you disappointed in my performance?  What is it that I am missing? 

To avoid creating this spiral of negative thinking and worry, we must be precise in our development work. Development has a purpose, but we must be cautious with the idea of purpose.  A shared purpose is best; one that you and I both agree is necessary and desired (need and want from above).  If one suggests it is needed, but the other does not want it, the spiral is downward and lands in coercion.  However, if there is agreement and desire, the upward spiral has unending value.  What we learn in development creates its own forward momentum, and a continuous surfacing of opportunities and one learning leads to another and another and another.  This really is the fundamental power of continuous improvement or operational excellence. 

The dance between function and relation can be beautiful if the lead knows the dance.  Like the elegance of a dance partnership, the lead guides the partner to opportunity and watching the partner drift into intuitive interpretation of movement and purpose can be mesmerizing to those observing and can immerse the dancers into flow. Mihaly Csikszentmihalyi explores the 8 ideas of flow:

  1. Complete concentration on the task
  2. Clarity of goals and reward in mind and immediate feedback
  3. Transformation of time (speeding up/slowing down)
  4. The experience is intrinsically rewarding
  5. Effortlessness and ease
  6. There is a balance between challenge and skills
  7. Actions and awareness are merged, losing self-conscious rumination
  8. There is a feeling of control over the task

There is also a relationship between flow and innovation.  When we slip into a flow state, we can easily see relationships within our work that were impossible to notice when not in that state.  When the development process is working, and what we are learning we are also loving, the dance begins, the state of flow has opportunity to exist, and the innovations come more naturally.  As a leader, it is my responsibility to create these environments to release the potential of my team members and create a community in which everyone can flourish more fully.  When communities flourish together, immeasurable value is created.

Are we Deal Killers or Deal Enablers? Our Role as Consultants for Operational Efficiency in Buy-Side Deals

In private equity, successful acquisitions are not just about the numbers; they hinge on a thorough understanding of the inner workings of a target company. Operational consultants play a crucial role on the buy-side, providing operational diligence to private equity firms seeking to make informed investment decisions. At a recent networking event, a question arose: Are operational consultants like The ProAction Group deal killers or deal enablers? Let’s explore the impact of operational diligence on the delicate relationship between the seller and the buyer.

Understanding the Dual Role:

We are neither deal killers nor deal enablers in a simplistic sense. Instead, our consulting role is to uncover the intricacies of a company’s operations, highlighting both its strengths and challenges. This dual approach ensures a comprehensive evaluation, allowing private equity firms to make well-informed decisions that go beyond the surface-level due diligence.

Building Relationships:

One key aspect of our consulting role is to establish a strong rapport with the seller. By acknowledging the complexities and obstacles in the operational landscape, we connect with the seller by understanding the value they provide in meeting customer demand. We strive to demonstrate empathy and understanding. This builds a foundation of trust and openness, fostering a positive relationship between the seller and the buyer.

Recognizing Strengths and Challenges:

As operational consultants we don’t just focus on problems; we also celebrate the strengths of the seller and their management team. By acknowledging areas of strong commitment, effective processes, and impressive results, we seek to create a balanced perspective. Moreover, calling out the unique challenges the company faces demonstrates a deep understanding of the seller’s world.

Maintaining Discretion:

A crucial aspect of operational diligence is discretion. We refrain from discussing improvement opportunities with the seller, leaving the decision to share such insights to the buyer, typically post-closure. This approach ensures that the buyer retains control over when, how, and if they choose to communicate potential enhancements to the seller.

When we fulfill our role effectively, the buyer gains several advantages:

  • Meaningful Connection with Leadership: A thorough operational understanding provides the buyer with a significant advantage in connecting with the leadership team on a deeper, more meaningful level.
  • Clarity on Risks and Capex: We offer clarity on stability, potential risks, and the capital expenditures required to mitigate them. Armed with this information, the buyer can make informed decisions, potentially seeking relief from the seller during final negotiations.
  • Uncovering Hidden Value: We document opportunities for unlocking hidden value. This clarity aids the buyer during final negotiations, and managing concessions requested by the seller, fostering a mutually beneficial deal.

As consultants for operational efficiency we are integral to the success of private equity buy-side deals. Our nuanced approach, balancing recognition of strengths and challenges, builds trust and facilitates open communication between the buyer and the seller. We rely on our experience to provide a broader understanding of a company’s operations, empowering private equity firms to make strategic decisions that go beyond mere financial considerations, ultimately contributing to successful and mutually beneficial transactions.