#391: How Private Equity Think About Value Creation: Winning Moves with Dan Cremons
Intentional Growth
Navigating Effective Hiring and Leadership in Private Equity
This chapter focuses on the vital role of effective hiring practices in private equity firms and their impact on investment returns. It discusses the balance between structured interviews and rapport-building while highlighting personal experiences in leadership and team alignment. The conversation emphasizes the importance of transparency and individual strengths in fostering performance and satisfaction within teams.
In today’s episode, we dive into the nuanced perspective of private equity (PE) on value creation, featuring Dan Cremons, a seasoned PE expert turned CEO and advisor. Dan shares his extensive experience in fostering "people-powered performance" in PE-backed companies, emphasizing the strategic importance of aligning human capital with business objectives. The discussion navigates through the core principles of PE value creation, actionable strategies for operational excellence, and the pivotal role of leadership and culture in driving sustainable growth. Whether you're a business owner, investor, or enthusiast, this conversation sheds light on the intentional, proactive approaches essential for outperforming in the current "Value Creation Era" of private equity.
THREE BIG IDEAS FROM THE INTERVIEW:
- Strategic Alignment and Operational Excellence: Dan highlights the criticality of aligning leadership teams and operational strategies with the broader goals of equity value creation. He shares insights on how Private Equity firms assess potential investments and the systematic approach to enhancing operational efficiencies, driving revenue growth, and optimizing cost structures.
- Human Capital as a Pillar of Value Creation:A significant part of the discussion is dedicated to understanding the impact of "people-powered performance," and how it relates to value creation. Dan discusses how cultivating a robust leadership team and fostering a culture of excellence can accelerate value creation, emphasizing the need for strategic talent management and development within PE-backed companies.
- Adapting PE Principles for Broader Application: The conversation also explores how the principles of Private Equity value creation can be applied to non-Private Equity-backed companies aiming for accelerated value growth. Dan shares his "6 questions model" for intentional growth, offering listeners a framework to align their teams and strategies towards achieving sustainable success.
ABOUT DAN:
After starting his career in operations management and wealth management, Dan Cremons—an author who detests writing about himself in the third person, but will try to make you think that someone else wrote this—landed in the private equity space in 2007 thanks to a few strokes of luck and a little elbow grease. Since the early days (the first month of which he spent trying to figure out what EBITDA stood for), Dan has led investments, served on numerous boards, built out portfolio operations and human-capital capabilities, and led within several private equity-backed companies as a CEO and CXO.
Perhaps most notably, he was the proud champion of his previous firm’s 2011 and 2012 cornhole tournaments (though he has since lost his touch) and took first prize in its 2015 plank competition.
Along the way, Dan realized that although there were investors far better than him at the deal-making part of private equity investing, his greatest contributions came, as he puts it, “after the wires cleared”—during the value creation phase.
Recognizing this, Dan launched Accelera Partners to help ambitious private equity firms accelerate what he calls “people-powered performance” in their portfolio companies. Dan helps portfolio companies’ leadership teams define their winning future, get clear on the stepping-stones in that direction, and ensure they have the right team and culture in place to get there.
When he’s not serving awesome private equity clients and their leadership teams, Dan enjoys endurance sports, kicking back on the nearest body of water, reading any non-fiction he can get his hands on, attempting to homebrew, and spending time with his amazing wife Courtney, their fun and happy little guy Ollie, and their sweet but lazy adopted (dog)son Wally.
RESOURCES:
Get “Winning Moves” on Amazon!
Connect with Dan on LinkedIn!
“Buffett: The Making of an American Capitalist” by Roger Lowenstein
“The Snowball: Warren Buffett and the Business of Life” by Alice Schroeder
INTENTIONAL GROWTH™ RESOURCES:
- Intentional Growth™ Podcast Archives: Archive of 367+ episodes and counting. Get access to the entire library HERE. We'll be adding a searchable tagging feature later on this year.
- IG Financial Scorecard: Get your Intentional Growth™ Score that grades you on how well you are viewing - and running your business like a financial asset. Get your results and 5 case study videos HERE.
- Intentional Growth™ Academy: 71 Videos, 9.5 hours of content, 20+ exercises. $995 for subscribers [normally $1,495] HERE
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