There's No Room for Blind Fish in your Management Buy Out Team
Many times there are Senior Executives who have been with the company a while and they know nothing other than the environment they are in. Like the blind fish, they are well fed, successful and function perfectly. Take those fish out of the cave and they are in trouble and will soon loose their way. Executives can be the same.
Very often C level executives earn their right at the board table by time served and being really very good at.....politics. They have been in the right place at the right time. Said the right things. Often they are in the background, never violently disagreeing or agreeing, staying on the fence. Quite often they are likeable and sociable.
In a Management Buy Out, however, there is no space for Blind Fish on the board. The trouble is it is really hard to spot colleagues and frame them in a different situation than the one you have always been in.
A great Management Buy Out is one with a leader and a well balanced team - a mix between operations, sales, marketing and finance. However, if you are the leader of the team you should take a long hard look at what your colleagues actually contribute to the success of the organisation. Also, in order to make the a success of an MBO there will need to be extra effort, more work, sacrifices,cost cutting, renewed investment etc.
So, if you are considering a buy out it is best to set some tasks to your colleagues and see if they are able to get out of the dark cave on their own.
One test, for example, is to ask the sales director how he could grow the business by an extra 10% over the budget. If the sales director is a Corporate Blind Fish he may say words like, "if I could do that I would have put it in the budget," or, "you know that's not possible, I don't have the support, ops can't do it." If you push him or her watch even more carefully. See if he goes to someone else, a key member of his team, to do the work. Look at his team. Are there any managers there that would do the job better than him at a cheaper cost? Remember, Corporate Blind Fish are often the easiest people to get on with, the ones who are good socially, but you'll need to put that aside for the sake of the successful Management Buy Out.
When a colleague and I were setting up a finance company with £115m investment we spent months on the business plan, putting together a team, winning over corporate finance advisors, lawyers etc. During this we put our team together and my greatest surprise what that we didn't bring over our peers from the the company we left, we had to look at lower grades, to the real workers, those with more hunger, a greater passions, more ambition, more practical skills. Whilst an MBO has an established structure, it is not necessarily the one you have to go forward with. The best advice is to advance with the team you want who can take it forward...... with one note of caution....
In a successful Management Buy Out you may have to be prepared to build a tank and create perfect conditions for some Corporate Blind Fish. You may need certain people to help you gain the agreement of the current owners and you may have to take some star fish (ugh) to wow the future investors. I could tell you a very good story about that!