Newsletter: Why Purchasing Talent Alone Doesn’t Guarantee Growth
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Recent Searches We’ve Completed
Senior MD, Business Development | Middle Market M&A Advisory Firm
A lower middle market M&A advisory firm, sought a senior commercial leader to scale its sales organization and drive growth beyond founder-led efforts, scaling from $20M in annual revenue to reach $100M.
Chief Revenue Officer | Data Services SaaS Firm
Poised to scale from $25M toward $100M+ in revenue, a data services SaaS firm lacked a proven commercial leader with SaaS scaling experience. Our mandate was to identify an executive capable of building a high-performing sales organization and driving aggressive market penetration in a competitive data and analytics landscape.
Chief AI Officer | Health Technology Services Company
A private equity-backed Health Technology Services Company engaged Beecher Reagan to hire their first Chief AI Officer to drive AI transformation at scale, improving health outcomes, enhancing efficiency, and elevating patient experiences.
Want to discuss your next search for executive talent who can navigate disruption and drive growth? Get in touch with us to consult with a Beecher Reagan Partner today.
professional services trends and insights
Firms are Mistaking Purchasing Talent for Investing in Talent—Why Purchasing Talent Alone Doesn't Guarantee Growth
Private equity is rewriting the rules for professional services firms. Growth targets for most firms (regardless of ownership) are higher, timelines are shorter, and there’s little patience for slow, steady Partner development.
To keep pace and drive growth, firms do what seems logical: buy more Partner talent. It’s faster than building talent, it’s visible, and on paper it looks like predictable growth. Need an additional $20 million in revenue? Hire two $10 million Partners. Easy, right?
What we’re seeing in the market tells a different story: simply buying Partner talent does not guarantee growth.
Investing in new talent works better.
Mistaking Purchasing for Investing
There are trends emerging from our conversations with leaders in professional services firms. For example, a firm hires a new Partner, hands them a $15 million sales target, and expects near-immediate progress—even though no one in the firm has ever delivered at that pace. (Not to mention, the new Partner brings with them a thorny non-compete.)
Another firm spends heavily to hire Partners and provide integration support but doesn’t communicate clear success measures or provide meaningful sponsorship, because “you know, smart Partners will figure things out.” In both cases, the outcome is predictable: frustration, underperformance, and high failure rates.
Firms often mistake purchasing talent for investing in talent. When conversations about investing in talent take place, everyone nods along. After all, they are spending heavily to bring direct-admit Partners in the door, so they are making investments, right?
Not so fast… Yes, they are spending money on talent, but many firms stop short of making the right investments to protect those purchases.
Spending = Making the purchases to acquire new Partner talent
Investing = Intentional efforts and support to accelerate Partner performance in the role
Without the right support, even experienced hires have a 30–40% failure rate. So, either they stay and underperform, or, worse, they leave, and the sunk costs are never recovered.
From Purchasing to Maximizing ROI
Because Partners are people, not commodities, simply purchasing them with the hope that they will deliver value without support is not a winning strategy. Unlike aluminum or oil, “buyers” of Partner-level talent can directly increase (or decrease) the value of their investment based on what they do with the talent they acquire.
Firms can do a few things to drive higher ROI on their investments in new Partners:
Know what you’re looking for: Clearly define the Partner profile you need to deliver on the growth plan and use psychometric data to identify the talent that is likely to succeed.
Be realistic: Recognizing that very few candidates are perfect, be prepared to actively leverage their strengths and address their challenges. Do not expect new Partners to “hit the ground running” or you are likely to be disappointed.
Act with intention: Create personalized traction plans that detail the tactics that will accelerate performance. Combine specific performance expectations with insights gained from psychometric assessment to deliver focused performance coaching to help new Partners perform better faster.
Together, these strategies provide insurance to protect significant expenditures on new Partners, so they are likely to perform better, faster, and deliver results.
If you’re going to spend heavily to bring new Partners in the door, the real question is: how will you protect your investments and accelerate their performance?
Purchasing Partner talent may put growth potential on paper. Investing in their success is what turns it into reality.
At Kinavic, we understand the disproportionate impact Partners have on a firm’s growth and success. We work with professional services firms and PE operating groups to help them design and execute strategies to identify and develop Partners who perform better, faster.
Let’s discuss how to protect your Partner purchases to deliver the expected returns on your talent investments. Get in touch with us today to start a conversation.
case studies
Building a Succession Planning Framework to Perpetuate Growth
What would happen if one of your top executives suddenly retired? Or if a rainmaker Partner was poached by another firm? And while you might be clear on first-line successors, are you confident the talent beneath will meet your future needs?
A leading digital transformation firm was facing those questions with uncertain answers. They had identified potential future leaders, but without data-driven insights, their succession planning process lacked the objectivity and rigor needed to provide an enterprise view of succession risk and readiness.
That’s when Kinavic Leadership Acceleration was brought in.
Over the course of this project, we benchmarked nine CXOs and evaluated more than 50 high-potential leaders across multiple business units within the firm.
Through our succession planning framework and assessment process, the firm achieved:
Improved visibility into leadership strengths and readiness across its succession bench
Increased confidence in leadership placements and promotion decisions
Accelerated development, ensuring future successors were better prepared for transition and long-term success
A rigorous, data-driven succession planning framework now used to guide annual talent planning and promotion decisions
Together, Beecher Reagan and Kinavic Leadership Acceleration have built a strategic talent platform to help leading private equity and professional services firms identify, select, and accelerate the performance of executive leaders.
Whenever you're ready, here's how we can help your organization:
Get in touch with a Beecher Reagan Partner today to discuss identifying and hiring your next resilient leader to navigate disruption and drive growth.
Contact Kinavic Leadership Acceleration to discuss how to predict and accelerate the performance of your Partners and executive leadership.