Management Analysis for a leading Private Equity Investment company

A leading private equity investor was looking for input to assist in its decision about when best to sell a heavy earth moving equipment rental company, known in this case study as Shift. The investment company was concerned that despite a lot of structural change within Shift since purchase, they did not feel Shift were performing to their potential.

The investors were looking for:

• A review of the effectiveness of Shift’s business structures in light of the current business strategy.
• A risk assessment and individual development plans for Shift’s Operating Board members and the senior management team

Through our previous relationship with the investment company, Cardinal was invited by Shift to conduct an organisational and management review to address these points.

Putting Psychology to Work

One of Cardinal’s key strengths is drawing together teams of experts from the field of Occupational Psychology and Strategic Business Analysis. In combination, these individuals provide a neat and powerful analysis of an organisation’s people, culture and strategy. The output is a fit-for-purpose assessment of the organisation in the medium and longer term business context as well as in the current business reality.

The Cardinal team that worked with Shift comprised two Chartered Occupational Psychologists and a Strategic Business Analyst. In partnership with the main board at Shift the Cardinal team designed a Board and senior level management analysis programme that provided rigorous assessment of individual performance and development needs as well as providing an in depth understanding of the culture, structures and processes at Shift.

The Process

The entire operating board and senior management team completed a number of psychometric profiles providing insight into their work-based preferences, their critical reasoning capability and thinking styles. A 360 degree feedback process added further information from direct reports, their line manager and colleagues. Finally, a two on one interview was conducted. The interview ranged from a three hour interview with members of the operating board to a ninety minute interview with members of the senior management team.

In addition, business planning documents were scrutinised and assessed against the emerging organisational context.

The Outcomes

Shift had grown from an owner manager business starting from a portacabin to a national network of depots hiring heavy earthmoving equipment to specific industry sectors. The current MD had built the systems and processes to enable the development and management of a national network of depots. This now needed the next level of strategic development to enable Shift to optimise its strong position in the market place. The MD had to move his focus from the detail of delivering Shift’s services to customers, to focusing on business strategy and leading people firmly through change.

Cardinal generated outcomes at three levels:

First, the investment company and the main board of Shift received a ‘no holds barred’ insight into what was working, what needed to change and how that might be managed in the short and medium term.

The investors were very positive about the scope of the project and pleased with the insights gained into the people and organisational issues at Shift. They reported the content of the report was a key factor in their decision about when to place Shift on the market. Shift was subsequently sold for three times the price that the investment company bought it for two and a half years earlier. The investment company were delighted with this return.

Second, Shift’s operating board received an extremely constructive report detailing what they were facing in terms of their internal systems, what needed to change and what capability they had internally to support this change. Additionally, their business strategy and internal organisational issues were placed in the context of their marketplace, their market position and developments within their industry providing them with a clear set of strategic principles to consider.

Feedback from the MD of Shift was very positive. Whilst the message for him personally was that he needed to change his way of working, he was immensely relieved to have the understanding and constructive pointers as to how he could do this.

The key messages included:

• A change in the strategic thinking and management of Shift.
• A need to revise structure and processes to align with a nationwide operational strategy and remove internal competition.
• A restructure of the main operating board to facilitate effective operation.
• Investment in talent development.
• Explosion of some of the myths inherent to Shift and their industry.

Third, each individual who had taken part in the process received a personalised feedback report that highlighted their key strengths and development needs. Their feedback was couched in a one to two hour coaching session that supported assessment of their options for addressing the development points presented and facilitated the identification of solutions to assist them in moving forwards.