Plunder: the Problem with Private Equity

 Brendan Ballou brings a lot of experience and research to the mechanisms and effects of large private equity firms in his upcoming book, Plunder. Much of the book catalogs the incentives and the resulting problems for acquired companies and their employees—and in the field of healthcare, their patients/clients and families. At the end of the book (ironically, in Chapter 11) he gives solutions to prevent acquired enterprises’ bankruptcies and collapses. Some we can do but most that need regulatory and legislative efforts.

Though he painstakingly describes what’s happened in a few industries by the 800-pound gorillas of the private equity world (e.g. KKR, Blackstone), he attributes a lot of the consequences to malicious intent. I doubt this is the widespread case. Only insane people would sabotage their investment even if they’ve recovered their initial capital outlay. Also, reading this book, you’d think all private equity firms are “evil” and bad for companies, and society. Many investment firms are often prescribing to the hold, secure and grow acquisition model and then sell if the capital is needed elsewhere or there’s an obvious strategic buyer. Though Ballou highlights a few industries and regional markets where PE investments have been detrimental, many more industries have survived and thrived with PE infusions.

Team Habits: A New Book for Org Leaders

 It didn’t take long for me to fall in love with this book--Team Habits by Charlie Gilkey to be published August 2023--as soon as I saw Gilkey’s citation of Amabile’s and Kramer’s book, The Progress Principle—a must read for any manager or leader. Of course, this book’s title “Team Habits” is also attractive since so much of business and organization life is conducted through habits (see The Power of Habits by Duhigg). We make a decision “once” and stick with it until there’s a disruption to our processes, policies, strategies, etc. Leaders and teams operate the same way. We conduct ourselves through routines that are hard to change, just like any habit. Gilkey’s book helps disrupt those “trances” by providing takeaways at the end of each chapter and, more importantly, practice ideas to implement and start creating new habits. A leader will do well to reinforce new behaviors and find ways to put obstacles in the path to “the way we used to do it” (ala the fable of Cortez burning his ships or sending them back to Spain, so that his conquistadors were forced to march forward and no chance to quit). For anyone who’s tried to create change in organizations, this is important and Gilkey provides a service to us all with his book.

Since decision-making is one of those habits that interferes with team performance/excellence and overall motivation (see Kohn’s Punished by Rewards in which he shows giving employees choice is important, and its iteration in Daniel Pink’s Drive), the author’s broad treatment of how teams and leaders make decisions is vital. I once had a CEO ask me how he could get his staff to be more empowered. I advised that his staff would continue to be “disempowered” as long as he continued to behave (i.e. handle decision-making) as he always has. The team would continue to defer to his judgment and look for his approval of ideas. He needed to decline attendance at meetings. If he did attend, he needed to put on his best “poker face”: no non-verbal cues as to his interest or dislike in any of the proposals, no raised eyebrows, frowns, sighs, smiles, drumming fingers, sitting back/forward, etc. Until he changed the decision-making process, the team was going to be stuck. Gilkey would teach this CEO about which decisions he needed to retain, which ones he should seek input before deciding and which ones the staff could decide. (What I have learned and taught as discerning when to tell, sell, consult and join your team in the decision-making. The differences are determined by urgency, responsibility and how much team ownership in the decision is evident or desired.) Gilkey’s material would also coach that team in how to make and implement decisions. 

There is a lot more here than just decision-making, but I find it’s often overlooked in team-building materials. Gilkey also covers the “traditional” topics of team structure, team composition, team dynamics and so on.  

Even team-building, team-leading veterans will glean something from this book.