9 priorities for the first 100 days: a portfolio company Chief People Officer (CPO) playbook

The human capital landscape in private equity has dramatically shifted. Here's how portfolio company CPOs must adapt.

In the wake of a deal, private equity investors are increasingly recognising the pivotal role of human capital in driving value creation. The first half of 2024 has witnessed an unprecedented demand for CPOs capable of aligning talent strategy with ambitious growth targets. Many PE firms now assert that this new performance imperative necessitates CPOs with substantial operational and value-creation acumen.

The outcome? An emerging cohort of people leaders tasked with crafting effective first-100-day agendas. Compounding the challenge for these new CPOs is the reality that sponsor priorities have evolved. Sponsors are now:

• Talent-centric: They're intensely focused on attracting and retaining top-tier talent to fuel growth.

• Culture-driven: They acknowledge the critical role of a high-performance culture in accelerating value creation.

• Agility-focused: They require CPOs who can swiftly adapt the workforce to shifting market dynamics and strategic pivots.

Consequently, CPOs must construct and execute a novel first 100-day strategy to meet these evolving demands.

The first 50 days: Address urgent matters

Step 1: Execute a comprehensive talent audit. Evaluate the current leadership team and key personnel against the PE firm's growth objectives. Identify competency gaps, high-potential employees, and retention risks. Develop a strategy to retain critical talent and address capability shortfalls.

Step 2: Recalibrate compensation and incentives. Scrutinise existing remuneration structures to ensure they're competitive and aligned with value creation goals. Design short-term incentive schemes that drive immediate performance and long-term incentives that secure key talent through to exit.

Step 3: Assess and reshape company culture. Conduct a thorough culture assessment to understand the current state and its alignment with PE firm expectations. Formulate a plan to shift the culture towards high performance, accountability, and agility.

Step 4: Refine the organisational structure. Review the current organisational structure for efficiency and scalability. Identify opportunities to streamline decision-making, eliminate redundancies, and foster a more agile organisation.

Step 5: Revamp performance management. Implement a robust performance management system centred on measurable outcomes tied to value creation. Ensure clear objective-setting, regular feedback, and effective consequence management.

The second 50 days: Establish foundational pillars

Step 6: Craft a strategic workforce plan. Develop a comprehensive workforce plan aligned with the company's growth trajectory. This should encompass hiring projections, skill development initiatives, and succession planning for pivotal roles.

Step 7: Leverage HR analytics and technology. Assess current HR systems and implement tools that yield data-driven insights into workforce productivity, engagement, and costs. Ensure the HR tech stack supports scalable, efficient processes.

Step 8: Devise a holistic talent development programme. Create learning and development initiatives that address skill gaps and prepare the workforce for future demands. Focus on building capabilities that directly support value creation.

Beyond the first 100: Transform for future value

Step 9: Spearhead a transformational people initiative. Identify a major people-focused initiative that will significantly impact the company's valuation. This could be an innovative talent acquisition strategy, a cutting-edge leadership development programme, or a total rewards overhaul that drives performance. Present this initiative to the board and sponsor with clear ROI metrics.

The initial 100 days should be dedicated to evaluating the HR function to ensure it possesses the expertise and resources to support these priorities. CPOs should assess their team, invest in HR business partners who can strategically support the business, and consider external collaborators to accelerate transformation initiatives.