With playbooks "shredded," what's the next Flea Flicker on the horizon?
Private equity veterans are looking for new pages in their playbooks. They are recognizing the need to partner more closely with portfolio company management, which could offer benefits beyond just navigating the current chaos. Portfolio company executives can benefit from deal teams' huge collective filing cabinet of expertise, given the sheer number of very good, and very bad, companies they've dissected. Deal teams can benefit from senior executives' been-there-done-that understanding of running a profitable business. To successfully navigate current challenges and thrive in the long run, some partnerships may need to shift: from distant to engaged, mistrusting to trusting, hierarchical to collaborative, or reactive to proactive. John Wooten famously noted, "Hardship brings people closer together if you share it." It will be interesting to see whether PE firms who truly figure this out end up with short-term, and perhaps long-term, payoffs.
P.S. Please excuse the mixing of sports analogies/quotes. The quote was too fitting not to use, and the Flea Flicker was the right analogy, so just had to include both.
“I don’t think there is a playbook we can turn to from the global financial crisis or the dotcom bust or anything else,” Matt Cwiertnia, co-head of private equity at Ares Management Corp., told attendees. “You need to be paranoid now and get in early with your companies to help them navigate through this.”
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