When is the right time for a company to enlist the expertise of a Chief Transformation Officer (CTrO)? The answer is EARLIER! Gaining operational focused insights before a close is at the forefront of strategic discussions for Private Equity (PE) firms and their portfolio companies as they grapple with the complexities of today’s unpredictable and often unforgiving market.
A recent article by Bain & Company, “The Chief Transformation Officer: Your Navigator for the Uncharted Waters Ahead,” focuses on the significance of the CTrO role as a guiding force through turbulent times. Although Chief Transformation Officers can often solely associated with a turnaround — resulting from external headwinds and internal decisionmaking — companies and their PE-backers need to realize a CTrO should be hired NOT once the alarm bells sound but more consistently and earlier in the investment life cycle. Rather than attempting a financial, operational, IT, or other impactful change alone and, in all likelihood, ill-equipped, PE firms and their portfolio C-Suite should hire a CTrO that understands what change is necessary and how to undertake it effectively – all from historic experiences.
Over the span of several years, we have witnessed an exponential increase in Chief Transformation Officer placements and a desire to onboard them earlier and earlier in the ownership lifecycle. Slowly but surely, top PE firms have realized that CTrOs are not just the turnaround hires but play a crucial role in creating the game plan for growth and, ultimately, steering organizations towards sustained success. In other words, Chief Transformation Officers have become synonymous with creating differentated alpha.
At Lancor, we understand that effective leadership is a cornerstone of successful business transformation. Having placed several CTrOs and VPs of Transformation in 2024 already, let along over the past several years, we know that every company’s transformation need is unique, requiring a hire with the right background, skills, and mindset. Regardless of what kind of transformation is neeeded, a Chief Transformation Officer plays a pivotal role in revolutionizing operational processes and achieving desired increases in efficiency and market competitiveness. Thus, the question of when to engage a Chief Transformation Officer is not just a strategic consideration; it is a fundamental decision that can shape the future of a company and your investment.
Bain & Company. “The Chief Transformation Officer: Your Navigator for the Uncharted Waters Ahead.” Bain & Company. Accessed February 2, 2024. URL: https://www.bain.com/insights/the-chief-transformation-officer-your-navigator-for-the-uncharted-waters-ahead/.
McKinsey & Company. “How to gain and sustain a competitive edge through transformation.” McKinsey & Company. Accessed February 2, 2024. URL: https://www.mckinsey.com/capabilities/transformation/our-insights/how-to-gain-and-sustain-a-competitive-edge-through-transformation.
