However, in a business sale, very often this X-Factor leader is leaving (as generally, their leaving is the purpose of a business sale in the first place). But who is going to fill the ‘leadership void’ that is created? Is it one of the current management team? Very often managers are not X-Factor leaders, they only work for them. Usually, an X-Factor leader will not work for another X-Factor leader for long, they will leave to start their own project. So when you have good managers that have been in place for a long time, generally they are just that…good managers. In our observation, the important point is simply to recognise that this potential ‘leadership void’ (versus management) that may occur when the Seller leaves exists and needs to be addressed as an integral part of the deal structure. And also to avoid the pitfall of thinking that the day-to-day operating managers will be able to ‘lead’ the business without this leadership void being addressed in some way. But this void must be filled somehow and often this is the catalyst of why they want to sell the business. Their time has come to leave and they need someone else to come in and continue and grow their legacy. So very often this is one of the main criteria for being a good Buyer is being able to fill the leadership void with one or more strategies. Filling the X - Factor Leadership Void There are several ways in which we have observed this leadership void being addressed that can work (in fact being in denial that this is an issue is the biggest problem in our experience). The Private Equity Approach - Private Equity companies generally ‘do not run businesses, or so they say. The Private Equity firms are very good at identifying existing management team members who have potential and then surrounding them with an experienced, generally non-exec, leadership team. This will typically mean a chairman who is
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