Proactive transformation: hiring strategic leaders for long-term value creation

Transformation refers to the strategic moves organizations make to capture additional revenue, reduce expenses and serve customers more effectively. Over the past three years, transformation has become a priority for companies adapting to rapid changes in technology and market conditions, particularly in private equity.

Today, extended portfolio company hold times are prompting private equity leaders to prioritize operational efficiency, often resulting in “proactive transformations”—initiatives implemented before external motivators like emerging technologies affect the marketplace.

This operational shift has also expanded the scope of common transformations to include digital transformation, operational transformation and total transformation. As part of this trend, companies are hiring new leaders to oversee these efforts, typically with a management consulting and/or strategy background.

This article explores why proactive transformation is gaining traction, what makes a strong transformation leader and how cross-functional collaboration ensures these initiatives generate lasting value.

Why businesses undergo proactive transformation

Businesses undergo transformation either to address current issues or to prepare for future challenges. Technological advancements, particularly in AI, are major drivers of this shift. New AI tools have the potential to revolutionize customer experience, sales force effectiveness and marketing strategies. Transformation ensures these innovations are seamlessly integrated into core business functions, boosting value while managing costs.

Transformations are also vital during mergers and acquisitions. Leaders may choose to adapt a newly acquired company to their existing processes or initiate a complete transformation to streamline operations across both organizations. Although these efforts can be complex and time-consuming, longer-than-average holding periods help free time and resources to implement such initiatives.

Initiating a transformation proactively offers a strategic advantage by helping companies stay ahead of market disruptions and evolving customer expectations. Rather than waiting for external pressures to dictate change, forward-thinking leaders anticipate shifts in the competitive landscape and technology. By transforming early, businesses can enhance operational resilience, capture new growth opportunities and position themselves as industry leaders, ready to adapt to future trends.

Hiring considerations: consultants vs. strategists, individuals vs. teams

Consultants vs. strategists

Leading management consultancies offer detailed transformation playbooks and can deploy experts to analyze a business and develop a comprehensive plan. While businesses often rely on consulting groups to kick-start the process, many prefer hiring a full-time transformation leader/group to manage the process or supervise consultants.

Full-time strategy leaders are responsible for evaluating strategic priorities, selecting the most critical initiatives and driving them to execution. In contrast, consultants typically develop the strategy but are not involved in its full implementation. Companies seeking transformation success often opt for in-house, ex-consultant leaders who can leverage the strategic toolkit and manage the entire process end-to-end.

These strategists become integral business partners, working cross functionally and engaging teams at all levels—from the production staff to the C-suite and private equity sponsors. They also continue to add value after the transformation is complete by leading ongoing strategy and innovation efforts.

Related: The ultimate Charles Aris guide to executive recruiting

Individuals vs. teams

Larger organizations are often better equipped to build entire strategy teams to lead transformation efforts, while smaller companies may hire a single individual to run the process. The choice depends on company preference, but individual contributors can excel in these roles, especially when they have entrepreneurial backgrounds and have proven their ability to flex outside of their job title.

Related: Leveraging a one-person strategy team in private equity portfolio companies

In either scenario, successful transformation leaders must have experience operating at the fast pace these initiatives demand. Ideal candidates often have post-MBA experience in management consulting, preferably with exposure to prior transformations, and industry experience either before or after consulting. For private equity portfolio companies, someone who is familiar with private equity or an equally demanding work environment is critical.

The strongest individual contributor candidates will have experienced an exit in a prior company and be able to demonstrate the ability to work cross-functionally, manage indirect reports and influence team members at all levels of a business.

The takeaway:

Proactive transformation can be a successful tactic for staying competitive in today’s rapidly evolving business landscape. Organizations that hire the right leadership—whether an individual or a team—position themselves to not only adapt but thrive by integrating emerging technologies, optimizing operations and driving sustained value creation.

Having a dedicated transformation leader with a solid consulting and strategic background ensures that businesses can navigate the complexities of change and achieve their long-term objectives.

To learn more, contact Kevin Stemke at (336) 217-9109 or kevin.stemke@charlesaris.com.