Change rapidly to succeed a LBO

Summary

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The diversity and complexity of the fields involved in the management of a Leverage Buy Out require the use of experts with extensive experience in this type of operation, especially in financial, tax and legal assistance.

The management of human resources should also be treated as an expert and specific part of a LBO. Crucial to its success is to :

  • Create a management team capable of driving the LBO, and to ensure that it operates as a real team ;
  • Choose executives and key people with the characteristics needed to succeed in key positions or in critical positions ;
  • Build up the management package of executives and managers involved in the LBO ;
  • Select the management teams responsible for implementing the LBO and changes ; to develop the leadership of these management teams ;
  • Define and to communicate the long-term vision, the values, the project, the strategic objectives of the company ;
  • Identify the change priorities, to set up the agenda and the change roadmap ;
  • Establish or reinforce a culture of performance and results ;
  • Involve teams, to make sure that each employee’s objectives are actually aligned on company objectives ;
  • Establish indicators needed to drive individual and teams’ performance ;
  • Develop and implement policies and methods of compensation to reward the real performance and involve all employees in the LBO profit ;
  • Give meaning to change, to communicate regularly on the results, progress, battles won ;
  • Establish a climate of trust and cooperation with the social partners to facilitate the implementation of necessary changes.

ESSERE ASSOCIES brings its expertise in compensation package for executives, management of human resources and operational experience of LBO.

ESSERE ASSOCIES helps you in the main steps of an LBO :

Step 1 : Set up the LBO

  • Evaluate and choose the executives, build the management team ;
  • Proceed to compensation and benefits diagnosis, analyze the work contracts ;
  • Define the remuneration packages of executives taking part in the LBO ;
  • Establish a pool of sweet equity in order to integrate other key people later ;
  • Prepare due diligence concerning Human Resources.

Step 2 : 180 days to carry out change

  • Define and communicate the vision and values, business plan and strategy ;
  • Define and develop the organization, clarify the responsibilities and roles ;
  • Make the choice of the target work culture necessary for an efficient functioning of the organization, assess differences with the current culture, identify priority actions needed to reduce those differences quickly, establish with management teams the roadmap and the agenda of change ;
  • Identify critical leadership competencies to manage teams and changes, assess managers and develop their leadership ;
  • Build a real management team and develop its efficiency (Team Building) ;
  • Proceed to the re-engineering of key processes to improve their efficiency ;
  • Align the objectives of all employees on the priority objectives of the company (Balanced Score Card), develop a culture of performance ;
  • Establish the indicators (KPI’S) to measure and monitor individual and team performances ;
  • Make a diagnosis of the remuneration packages (internal consistency and external competitiveness), develop systems of variable remuneration (bonus, share) needed to pay the actual performance.

Step 3 : Implement the LBO

  • Support the management team to implement the roadmap for change, coach teams to develop their efficiency ;
  • Carry out an audit of the Human Resources function, redefine the role of HR Department and its organization enabling it to promote the desired changes ;
  • Proceed to the realignment of human resources management in order to integrate values, work culture and requested professional behaviors ;
  • Implement a remuneration policy that supports the culture of performance and the development of requested professional behaviors ;
  • Install the performance management process that allows to cascade corporate goals at all levels of the organization, to align goals of all employees on the priority objectives of the company, to drive individual and teams performances and to promote the culture of performance (Balanced Score Card method) ;
  • Identify behavioral competencies, factors of performance, for the key roles of the company and integrate them into HR processes ;
  • Establish the recruitment process that would integrate the new employees with specific skills that the company needs ;
  • Clarify the organization and roles, build ladders and career paths, set up job mapping, in order to build the foundation of human resources management ;
  • Assess and develop talents, promote mobility, ensure key management continuity.

Step 4 : Prepare the liquidation of the LBO

  • Establish the management team responsible for ensuring continuity ;
  • Define the new compensation packages taking into consideration the next step : secondary LBO, stock exchange quotation, acquisition by another company ;
  • Manage the departures of some executives or key people ;
  • Optimize their final stage of career in the event of retirement, validate the potentially vested entitlements when international career, repurchase the opportunities of retirement entitlements ;
  • Optimize the compensation packages in the event of breach of contract ;
  • Prepare the due diligence concerning Human Resources.