Recruiting leaders for private equity-backed healthcare organizations can present unique challenges and considerations compared to recruiting for other types of companies and healthcare delivery organizations.
“Over the years, I have found that executives with PE and VC experience are critical to the success of an organization,” says Troy Keach, vice president of executive search and private equity practice leader at Kirby Bates Associates. “Their abilities to quickly analyze data and make strategic decisions based on that data are the secret ingredients to drive growth and profitability.”
Here are five key reasons why the recruiting process differs in the PE sector:
1. Financial Performance and ROI
Private equity-backed healthcare organizations often have a heightened focus on financial performance and return on investment (ROI). Leaders need to demonstrate a strong track record of driving operational efficiencies, cost management, and revenue growth to satisfy the expectations of private equity investors who are looking for significant returns.
2. Short-Term vs. Long-Term Goals
Private equity firms typically have shorter investment horizons, aiming to realize returns within a few years. This can influence the type of leaders sought, as they need to be adept at implementing strategic changes and improvements more rapidly, often with an eye on achieving results in a compressed time frame.
“We look for candidates with a history of driving short-term results while positioning the organization for long-term success because we know that they will excel in the PE environment,” emphasizes Keach.
3. Change Management and Transformation
Private equity-backed healthcare organizations often require significant operational changes, restructuring, and transformation to enhance profitability and competitiveness. Leaders need to excel at change management, have a clear vision for transformation, and be capable of navigating potentially complex organizational shifts.
4. Alignment with Investors’ Objectives
Leaders in private equity-backed healthcare organizations must align with the investors’ strategic objectives. This may involve being comfortable with more aggressive growth targets, understanding the priorities of the private equity firm, and effectively communicating progress and challenges to investors.
5. Regulatory and Compliance Complexity
Healthcare organizations operate within a highly regulated environment. Leaders must be well-versed in navigating healthcare-specific regulations, compliance standards, and industry nuances. Private equity-backed healthcare organizations may require leaders who can strike a balance between achieving financial goals and maintaining compliance with healthcare regulations.
Keach underscores, “The candidate who can thread the needle between performance and compliance will succeed.”
Trusted Executive Search Partners for PE-Backed Healthcare Organizations
In summary, recruiting leaders for private equity-backed healthcare organizations requires a unique blend of financial acumen, change management expertise, alignment with investors, and a deep understanding of healthcare regulations.
With over 30 years of success in healthcare executive search, Kirby Bates Associates is uniquely positioned to partner with private equity-backed healthcare delivery organizations in building high performing leadership teams. To learn more or start the executive search process, get in touch with our team of experts today!