The CEO of a struggling portfolio company resists change. How can you steer them towards success?

1 Assess Needs

To steer a struggling portfolio company toward success, begin by conducting a thorough assessment of its operational, financial, and strategic needs. Engage with the CEO and other key stakeholders to gain insights into the root causes of the company's challenges. This holistic understanding will enable you to identify critical areas for improvement and create a tailored turnaround plan that addresses these specific issues, thereby laying a solid foundation for change.

2 Build Trust

Building trust with a resistant CEO is essential. Start by acknowledging their expertise and the value they bring to the company. Then, communicate your intentions clearly, ensuring they understand that your goal is to work together towards the company's success. By demonstrating respect for their position and showing a commitment to transparency, you can foster a collaborative environment that encourages the CEO to be more receptive to change.

3 Create Vision

Creating a compelling vision for the future is crucial to motivate a CEO resistant to change. Outline a clear, achievable path that highlights the benefits of the proposed changes for the company and its stakeholders. By presenting this vision in a way that resonates with the CEO's aspirations for the business, you can inspire them to embrace the necessary steps towards transformation and success.

4 Leverage Influence

To influence a CEO who resists change, leverage your position as a representative of the PE firm. Remind them of the firm's track record in revitalizing companies and its commitment to supporting management teams. Use your authority to set performance expectations and benchmarks that align with the turnaround strategy, thereby guiding the CEO towards actions that will benefit the company's long-term prospects.

5 Implement Strategy

Once you've established trust and shared your vision, it's time to implement your strategy. Work closely with the CEO to develop a detailed action plan with clear milestones and timelines. Provide support and resources to ensure the CEO has what they need to execute the plan effectively. Monitor progress closely and be prepared to make adjustments as necessary, always maintaining open communication with the CEO.

6 Sustain Change

Finally, to ensure lasting success, focus on sustaining change within the struggling portfolio company. Encourage the CEO to institutionalize new processes and behaviors that support the turnaround strategy. Highlight early wins to build momentum and reinforce the positive impact of the changes. Over time, this will help solidify the transformation and position the company for sustained growth and profitability.

7 Here’s what else to consider

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