ThoughtSpark has just released a new report on the skills levels in private equity-backed companies. The report reveals the collective view of top PE firms on skills in the companies in which they invest. The report reflects PE professionals’ views across the recent global pandemic period, as well as anecdotal comments from leaders of PE-backed companies.
The study found that some skills are well-developed – including product innovation and sales. This is perhaps not surprising where many invested companies are being run by entrepreneurial owner managers. Digital transformation, transparent performance management and financial skills were seen to be distinctly average, requiring sharp scrutiny from PE investors. The ability to develop talent, achieve growth at scale, and implement effective marketing and communications were all seen as typically weak areas demanding urgent attention.
The current economic situation makes it even more important that all key operating skills are in place to offer the best chance of successful rapid business development in PE-backed companies. Any significant operating skills gaps increase risk of failure.