How to manage the priorities between the executive team and the investor

In this episode of the Raw Selection Private Equity Podcast, Alex Rawlings speaks with Christina Haxton about the relationship between private equity firms and portfolio company leadership teams.

They discuss how trust, communication, alignment, and culture impact execution during periods of rapid growth — and why many businesses struggle not because of strategy, but because of leadership friction and organizational disconnect.

Timestamps

00:00 – Introduction to Christina Haxton
01:27 – Common execution and leadership friction points
03:14 – Managing PE expectations vs operational reality
05:10 – Early warning signs of leadership misalignment
07:32 – Why strategy must be co-created
09:27 – Building trust between CEOs and PE firms
11:44 – What makes a compelling company vision
17:34 – Scaling quickly without burning out teams
21:12 – Why speed without alignment creates fragility
23:02 – The importance of constructive conflict
24:53 – Leadership resources and practical tools
29:32 – How to connect with Christina

Key Takeaways
Execution issues often come from unclear accountability and avoided conversations.
PE firms and executive teams need alignment on goals, timelines, and expectations.
Strong culture and trust are essential for sustainable growth.
Vision must emotionally engage teams — not just focus on financial targets.
Speed without alignment creates stress, confusion, and burnout.
Resources Mentioned
Scaling Up by Verne Harnish
The Five Dysfunctions of a Team by Patrick Lencioni
BE 2.0 by Jim Collins

Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success.

🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/

🌐 Visit Raw Selection www.raw-selection.com

Transcript

00:00
Welcome back to the Raw Selection Private Equity Podcast. Joining us today is Christina Haxton,  founder and chief executive of Center for Sustainable Strategies.  She works with executive teams  on the intersection  of strategy  and leadership. What we're going to dive in today is the balance of the relationship between the private equity firm and the portfolio executive team  and

00:28
how to support a business as it scales through a massive,  fast-paced growth, consistently changing and churning, and how to reduce the amount of stress and problems that sit with the team as a result of it. Let's dive in. Christina, if you could share it as a brief insight into you, please. Well, thank you, Alex. Thank you for having me. So  my focus is  on basically  following or finding patterns that show up in growth and transition environments.

00:58
particularly in PE-backed companies. And what I've noticed is where strategy can be sound, that execution really starts to slow down well before it shows up in numbers. And I've also noticed that there are some friction points when strategy isn't working and it's not because of lack of effort. There are really kind of four areas that I've noticed. And one area is when

01:27
Decision rights are really unclear. There's weak accountability.  There's leadership misalignment.  And  number one I also see a lot of is when conversations  are not had. So difficult conversations are avoided  by the team. So  my background is a little unconventional.  I was uh trained in systems and human behavior.

01:52
And then I moved into executive advisory work, like executive coaching, and then some team coaching, and then transitioned from there into helping teams and companies create a strategy that was executed and owned by all. So I've spent about 20 years working with teams. I've also noticed, you know, that there are common patterns that show up.

02:18
When I first started facilitating strategic planning, think we can put that in air quotes. Many years ago, I would get called in by the company to come in and do yet another strategic plan. And I noticed that it was like 50 first states every time we started the strategic planning process. Because it was like we were here and nothing got executed. So I realized that also what companies needed was not only an executable strategic plan,

02:48
But the people who are responsible for executing also needed support. So  I really work at the intersection of strategy and leadership now. Well, I think  everyone who kind of  has a coach,  stops having a coach,  and then after a year realizes that they need a coach again, and they've stopped the accountability, et cetera. And we've all been through that path many times. So how do you?

03:14
manage the balance between the private equity firms expectations or how do you support the executive team in managing the balance between the private equity firms expectations and then the kind of realistic nature of what's happening in the executive. It's that old conversation between private equity, investor style conversations and actually the executive team and what they can see and both sometimes are very different. Absolutely. It's like almost speaking two different languages. Like we start speaking the same language and then we start to drift.

03:43
So,  you you manage that Alex or we do, I do, by really treating it as, you know, assuming that we're going to have an alignment and a translation problem, right?  Not  a  problem about, you know, well, they're not bought in or, you know, they're motivated by something we're not motivated by. You know, people start the two, the two groups will start telling each other a story about the other. And then we start to split, you know,  so.

04:13
When that happens, erodes. When that happens, communication gets guarded  and then execution really starts to wobble. So  we see,  you know,  the problem, the way the problem shows up when that misalignment begins to happen are, you know, decisions get reopened time and time again. So unclear decision making or  that we end up making the same decision. We find that we're making the same decisions over and over again.

04:42
uh Ownership gets fuzzy. Who's owning what? The CEO ends up solid times. The CEO is the one who's kind of the translator, right? Between the sponsor  and the team.  That person kind of ends up being the bottleneck. Oftentimes, I kind of liken it to, you know, some of the early warning signals that that's happening. We have this misalignment is it's kind of like the low  tire warning light. Like I have a car that has a low tire warning light and.

05:10
Honestly, I have thought I should probably get that looked at  because  I don't know which of the four tires is going to go. But guarantee if I get a flat, it's not it's going to be at a bad time. So we really want to start early with that between  the sponsor and and the CEO and the team. And we get really concrete on four things. And one thing is goals. The other thing is metrics. The other thing is timeline.

05:38
And think one of the also the most important thing in some come, you know, some people call it vision. I think vision's great. But also when it comes to goals, we want to get super clear on what does done look like not only for the sponsor, but also for the team. You know, it's like the cart in in cartoon bubbles. You know, you have a cartoon and you have the thought bubble above each person's head.

06:05
We really want to make sure they don't remain thought bubbles. We want to really make sure that's super clear between and co-created between the sponsor and the executive team. what conversations are you having with these guys to kind of get? Because everyone's got a different perspective. The investors just think you need to do X, Y and Z. And then it comes out the other end regardless of the market. The executive team's thinking, is the investor asking me for all this data, all this information, all this info that

06:34
we haven't needed before, or depending where the exposure and experience of the  executive team is with regards to private equity. What's the  beginning shape of that? And you said the CEO plays  the middle person in all of that. Well, I think eliminating  those two  facets and bringing it literally, it's a very co-created and collaborative effort and an inclusive process. So instead of having,

07:03
Somebody talking over here, here's the sponsor who's private equity sponsors, like this is what our expectations are. And they create that in a vacuum.  And then you have the CEO and the leadership team creating a strategy in a vacuum. Instead of two vacuums, let's bring everybody together from the beginning  and talk about why. Why are we doing this? Why are we partnering? Literally, I'm assuming this is a relationship that can be described as a partnership.

07:32
Why are we partnering? Right. What's our why  and what's our end result? Right. And really have these conversations  before you even do that. And I think I may have heard this is  one of your guests on one of your previous episodes. It was fantastic. Apologize, but not remembering the name of the gentleman, but he talked about culture and making sure we have, you know, clarity alignment.

07:57
Well, clarity alignment action is  our framework. So make sure we have clarity about what our why is, why we're doing this,  right? Make sure that we have alignment with respect to culture between the private equity firm and the company. Because this is in the... These are for people who are in it for the long haul, right? So I think that's really essential to make sure that  we're aligned,  not only with respect to culture and values, but also

08:27
with respect to what are our outcomes? Like what's the best possible outcome for both? And then backwards planning that into and what does that look like? Now that doesn't mean the sponsor dictates the how.  I think the sponsor's responsibility  is, is having clear expectations, but also providing those resources for  the company to grow. Right.  So we're working alongside each other. And the other piece is I think,

08:57
frequent communication.  And  even before all that, you know, we've talked a little bit earlier, but even before all that, we have to build trust. We have to have that foundation of trust between the two organizations  or else  it's like building a house on sand. You don't want to build a three story house on sand  quickly or slowly, but that's what's going to happen  if we don't start with that foundation of trust, with clarity about what we're doing, why we're doing it, alignment.

09:27
between the two organizations in alignment with respect to what our goals and metrics and what does it look like and then action, meaning we know we're taking the right action. You mentioned the building of trust and getting alignment there. What do you advise the chief executives do to start to build that trust with private equity when there maybe that's a new relationship or that started to break down?  Be a little bit specific about that if you could, a little more specific.

09:56
Let's say we've got a new private executive firm that's just acquired a first-time PEBAT business. Obviously, the executive team, it's a brand new relationship, brand new conversation. You mentioned about the importance of building that trust. What would you advise the chief exec does with the PE firm to begin to build the trust with his management team, with his senior management team, junior management team, and obviously himself with the PE firm?

10:20
Absolutely. I think is post acquisition. So pre acquisition and due diligence. That's all that's another ball game that that can be really interesting thing to navigate bullets post acquisition. I think one communication is key, but also bringing people together. I don't know how feasible it is sometimes, or how people think it's not feasible to literally bring the sponsor into a meeting with the, with the entire executive team so that

10:49
they can understand what we're doing so  we can have conversations.  We can have conversations about concerns,  ask questions. um And  I think  that's where we start.  We all come together. I'm not an advocate, especially initially, of having the CEO be the go-between all the time.

11:16
and cutting off the communication. think having like, for example, when we do strategic, when we do that vision values, purpose statements and clarity around that, um bringing the sponsor into those meetings,  ideally is what I like to see happen instead of trying to do damage control because there's been a lack of communication or there's confusion or there's speculation or gossip or any of that starts.

11:44
I like to head things off with the past as much as possible.  for the vision value purpose statements, again, well overused by  lots of different companies and businesses that go on about such scenarios, but realistically, usually sometimes not very good. What's your...  Difficult question probably to answer, but I'll try it anyway. What's your take on how you know if you've got a good vision? How you know if that kind of...

12:14
the cornerstone of the bridge, so to speak,  is  solid.  What does  it look like when that works?

12:24
Some of that is what  it feels like. I was brought in  to work with a company just prior to due diligence  and they  had a pretty good strategy, although there were way too many priorities  and they had taken a run at their vision  and it became really clear to me that the CEO's vision was not articulated enough. Well, let me say it differently.

12:52
The CEO's vision was about, well, I'm going to make it up. Obviously I don't want to disclose anything specific, it was like, you know, being a  hundred,  no, they were already at a hundred million. don't know. We'll say being a billion dollar company. had,  it's, the vision was dollars.  And, and when we, when we got to, there was some trust issues. I'll just say.

13:17
And when we got through the trust issues and we built a foundation of open and honest communication, it was clear that the executive team was not aligned with the vision that the CEO had of being a billion dollar company. And he couldn't understand why. And that was pretty clear.  He was like scratching his head, like, isn't that exciting? And everybody's like, not really.  And not only that, but our direct reports are going to find it very exciting either. So we need to come up with something else. So we started.

13:45
brainstorming and storyboarding it and came up with a story that had an emotional component to it that made people's stomach go, ooh.  So like it was exciting. It was like,  I don't know if we can do that, but we can kind of see it. Right. And so when the CEO  shifted from this vision of dollars,

14:10
And you could see it and I could see it in the team and I could feel it in the team. They became excited about it. They could state it. They were excited to go back and tell their teams. Here's what we're doing. I think they called it something like a moonshot.  And  the product that  they had, that they were a distributor for, it was something to do with the number of miles from the earth to the moon. mean, so the numbers were relevant and they had nothing to do with dollars. I mean,

14:40
If you look downstream, yes, it did have something to do with the bottom line and the EBITDA, but it wasn't, that wasn't the goal. So it really is, when we know the vision is hitting, people get a little butterflies in their stomach, that's a good sign. And you could just see it on their faces and they're excited to talk about it. They're not dreading like, how am I going to communicate this downstream? It reminds me of feedback I got from one of my mentors actually, which was

15:09
centered around me, have this goal, and then we promote this kind of journey to 10 million as our first milestone.  And which is interesting because I've given this feedback to people as well. And it's interesting when it comes straight back at your face and you're like, yeah, I've given that out. Nobody cares. nobody's angry. Talk about the journey. And you're like, oh. about what it will make. So we created this whole, and we put it onto our EVP employee value proposition of what that will be for people and how we'll go on that journey. And even now I'm thinking about it, I'm thinking I probably haven't had that home enough.

15:38
We haven't talked about that enough. We haven't pushed that journey enough. We haven't pulled the narrative. And then you've got to be constantly looking at that. yeah, job of a chief executive is never done. So that's yeah, really interesting is to the, I love the story and the narrative around kind of building now and getting alignment and being more than a number, which I think is private equity can be definitely a victim of going, Hey, goal is this, EBITDA is this. Let's go. And everyone's like, don't care. It's not compelling. Not compelling.

16:08
Yeah. Mm-hmm. A quick break from the podcast to introduce Chief Outsiders. Chief Outsiders help private equity firms and their portfolio companies accelerate revenue and increase enterprise value fast. Their bench of seasoned growth executives  aren't career consultants. They're strategic operators who've led sales and marketing inside real businesses. They embed directly into portfolio companies to drive growth from insights

16:37
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17:06
Chief Outsiders have partnered with hundreds of private equity firms and even more than 500 portfolio companies to drive billions in revenue growth. If you're looking to accelerate value creation across your portfolio, visit chiefoutsiders.com. The Chief Outsiders growth starts here. So  looking at different sides, so P, private equity demands speed, private equity demands...

17:34
hey, we want to achieve these numbers, these revenues, and hopefully achieve executives, positioning that from a vision perspective differently than just, hey, we want to hit these numbers and guys, I've got a big equity payout when it happens and you guys will be along for the ride. How do they, especially with private equity back, first founder business, founder led, founder owner type businesses, slow typically, how do private equity firms that demand speed, how do they build and how do the executives team build a culture?

18:04
that can move quickly without the old adage of just basically shifting through its people, killing its people because of that constant. And when I say that for everybody listening,  it's not the  pace that kills people. Not metaphorically, obviously.

18:22
It's the change and constant change and pointing in different directions, in my opinion, where you go, hey, this is the thing we're doing this week and now we've done that. Now we want to be doing this thing. And the guy's like, God, I've got 7,000 different jobs all in this  period of a year. And that for me is what causes the problem of  disengagement and people not believing in  the vision. So how are you working with teams to try and navigate that? Because  certainly we've been a victim in the business here of  kind of doing that and you just end up

18:51
burning through and burning people out, think is probably the phrase used nowadays too quickly. Yeah, it's a, it's a,  I have a lot of experience in, in helping  executives and CEOs and founders of  recover from burnout way back when. it's  always less expensive to prevent it. Right.  You know, we, we spend more time at work than we do at home. And because we spend so much time at work, I think it's critical that

19:19
We have an, you know, as the CEO of a company, the culture is a hundred percent their responsibility. It's their opportunity and it's their responsibility. When you create a culture of whatever you decide, you're going to create your culture. Cause if you don't decide in your culture and do it, your employees will decide it for you. And it's really difficult to recover, recoup that. em You want to create a culture where

19:46
People are, and we use the word engaged and engagement is the debt by definition, your emotional connection to work.  And it's funny because I  grew up in a time where when I was working actually, when I was working  in, I was never worked in corporate, I worked in organizations, but I remember the old adage, you know, kind of being leave your, you know, leave your problems, leave your person, your human at the door. From a neurological perspective, that is

20:15
That is incredibly impossible.  So we can't leave our person or human at the door.  So, well, so we can't do that. Then why not make the workplace some place that people love the hell out of what they do instead of going home and I don't know if I can say bitching, but you can  edit it if you want  bitching, moaning and complaining to the partner about how awful work was and how it sucks and how, you know, et cetera. Wouldn't it be wonderful if we got to come home and

20:43
and talk to whomever we talk to  at home, which is,  I had a fantastic day today.  I was recharged and energized instead of drained  and constantly frustrated.  I think, know, owners,  business owners and CEOs have a wonderful opportunity to create that in the workplace since we spend so much time there.  So why not? Right. So I get it. know, burnout, unfortunately, is a one overused term. It's actually a clinical term, but

21:12
You know, we don't want people even having  start to  have those symptoms because it does affect the bottom line. You know, that's that's proven.  So I get the P.E. demands speed, right? I'm all for speed, but you can't build a three story house on sand. And if you try to move fast  without that solid  foundation, Alex,  you don't get speed. What you get is fragility.

21:41
And fragility is expensive. Right. So. First of all, here, what does that look like? You know, speed with with fragility looks like everyone's busy. Right. I'm busy. I'm busy. That seems to be a badge of honor. Some people where everything's urgent. The same issues keep resurfacing. Handoffs break. Small problems become dumpster fires. Leaders start to get disengaged, you know.

22:11
You know, just copying me on everything. And when a, when a manager is disengaged, not, not even leaders, but when managers are disengaged, that actually is contagious to their direct reports. So there is, and that affects people's engagement, right? Somebody's perception of their manager being burned out  actually has an, cause emotions are contagious. So  it has a direct effect on their direct reports. So all that said, that's anxiety. That's not speed.

22:41
Right. So what creates real speed, you know, to answer your question  is trust um and truth early transparency,  open and honest and constructive conflict, not destructive conflict in the room. When we are.

23:02
facing a difficult situation, let's just say with another person or amongst a team, oftentimes people,  they just naturally avoid, right? That's our go-to move. Under stress, we naturally avoid, or if we don't have the skills to have a difficult conversation, or if the culture says, we don't talk about that, right? They'll follow those unspoken rules. So,

23:27
When we have constructive conflict, when we can be open and honest and we work through that conversation, we actually create connection and bonds with other people, just human to human, in person. And when we do that, we, turns out we make better decisions. We, we take appropriate risk. We get energized. We get motivated.

23:56
and we strive harder. uh Now we have a culture of trust,  So it happens conversation by conversation. So,  you know,  that's number one, what we want to do. And I'm going to go back to kind of my framework, which is, you know, clarity, alignment, action. When we have clarity about what we're doing and why, when we have alignment at the top and from the bottom up,

24:24
and the top down and then across the organization, we're all rowing in the same direction. We don't feel that friction, that tension. And if we do feel the friction and tension, we have the tools to lean into it, work through it, and then get stronger as a result. And then action, we know what we're doing and why we're doing it. Right. So.  the,  and I find, you  know, I'm thinking about my own business and how we're trying to grow that at this point. And  you mentioned about the, the pushing that EVP and thinking about

24:53
A lot of this comes down to communication, how we're framing things, how we're positioning things. Especially from an executive of where the focus is coming, where the return on investment, where the wins are coming. find that that also helps. If anyone's listening to this and thinking, where do I go to try and get more information in regards to this? would be some of the... I know from our dialogue prior to this, you're a big fan of Scaling Up, which is, I'm a big fan of that book. I think it's phenomenal from the different stages in the...

25:23
The cross variants that book has were my favorite authors, Patrick Lenshoney, and I know obviously you referenced him as well in our email dialogue. Where would you recommend that people go in order to try and get better, improve their executive skills to become a better executive leader and to begin to start to consume more around this? Well, so I'd like to add two, I don't know.

25:48
a resource and I write a lot about this on our blog and it's the Center for Sustainable Strategies, all one word, Insights. And I love giving practical tools that people can use right away. CEO could go read it and he could say, oh, I can implement that tomorrow. Right. So I'm going to give you an example of just two tools and then I'll mention a couple of books that if you're looking for those kinds of resources.

26:17
So  one is two quick wins. So  a weekly execution friction check-in. I love using this tool. So instead of having just kind of a status update, like a weekly standup meeting,  know,  goal achieved, yes, no, or goal not achieved, and here's all the excuses why, let's just not even focus on that. So a real super quick weekly execution friction check-in, like so if there's friction.

26:44
So we don't talk about status. We talk about where are you stuck?  What have you tried? Is there support that you need around that? Let the other team members, you know, weigh in on that, like being open to suggestions,  making sure that every priority has a clear ownership. Cause sometimes we get that ownership drift. if you had, you know,  excuse the saying, but one throat to choke is always better than.

27:11
then more than one, right? You need to have one set of eyes to look into to see who owns this and make sure that we don't have any bottlenecks. So that's one quick way to implement that. Another thing I like to suggest is called the stop doing rule. And you probably have heard about this, which is we never, first of all, we don't add a priority without agreeing to stop doing something else. Otherwise people get

27:41
too many things to do. We don't know. And did you know the word priorities is actually not a word. We actually have made that word up because we can't have multiple priorities. That's like jumbo shrimp. Right.  So priority getting really clear and focused and people start to drift what that priority is and  what are we going to stop doing if we do take this on.

28:05
So those are two quick wins. A lot of other quick wins on the blog and certainly can sign up for an insights, but every three weeks or so we, we offer some real challenge and some practical tools for that.  With respect to the books, I like the book BE 2.0 beyond entrepreneurship 2.0 from a  leadership and management standpoint. I think it offers very practical

28:32
tools and strategies and  also it talks about the leadership component. A lot of your management books don't talk about. Yeah. So those are the two that I'd recommend that and Lindsay only five dysfunctions of a team. And I believe there's another one. Alex, what is that? There's kind of a compliment to that.  No, that wasn't quite it, but it's like the compliment to five dysfunctions. It's the opposite of that.

29:02
You know, five things,  you know, highly functioning teams do, but I apologize about not knowing that.  I've got literally all of his books and I can't think of the titles, but there's a peppy of them. think my favorite for me is the motive. I don't know you've read that, but I think it's all, it's also from a private equity lens as well, which makes it ultra more interesting from my perspective, but it's around basically being a good chief exec. mean, the guy who's in it's not, thinks he is and finds out that the person that acquires his business in the end is the right chief exec to acquire it. And he was.

29:32
being pretty rubbish throughout. but no, all valuable stuff and I'm sure all comes after this one. What's the the book title is? How does anybody reach out to you? Christina post this podcast should they wish to do so, please. Oh, thanks for asking. I'm happy help. Email me directly. Christina at sustainable dash  leaders dot com. Certainly go to the website center for sustainable strategies dot com  and also on LinkedIn.

30:01
uh Christina Haxton  and I'd love to connect. Oftentimes I am very visible on LinkedIn also.  lots of tools and strategies and tactics, not only on my personal page, but also welcome to follow our company page, Sustainable Center for Sustainable Strategies. So thank you for having me. I really appreciate the opportunity. Absolutely. Well, thank you very much for coming onto the podcast and

30:27
Thank very much for all those, all of our listeners today for tuning in yet again to the Private Equity Podcast. Till the next time, keep smashing it.