CCELERA

PARTNERS

A FREE GUIDE FOR GROWTH-STAGE INVESTORS

3 TRIED-AND-TRUE PRACTICES FOR

GETTING THE RIGHT LEADERS
INTO THE CRITICAL ROLES

TALENT TALENT TALENT

ASSESSMENT ALIGNMENT ACCELERATION
 WE HELP TALENT-FOCUSED INVESTORS CCELERATE RESULTS THROUGH

AMAZING PEOPLE & TRANSFORMATIVE LEADERSHIP.

HOW WE DO THIS

TALENT SSESSMENT TALENT LIGNMENT TALENT CCELERATION

Right people, right roles... On the same page... And bringing their best stuff.

People power performance. So, When your port-co leadership Most companies are tapping into
do your portfolio companies teams aren't on the same page, it only a fraction of the capabilities
have the right people in the will slow value creation, hinder that their people have to give. And
critical roles? growth, and eat into returns. productivity suffers as a result.

We help investor-backed We help investor-backed We help investor-backed

companies hire the right leadership teams to companies to create cultures
leaders into the critical roles get aligned, get focused, and and develop leaders who
with confidence & consistency. start winning as one. bring out the best in people.

IN THIS GUIDE, WE SHARE 3 TRIED-AND-TRUE PRACTICES THAT CAN HELP

INVESTORS AND THEIR LEADERSHIP TEAMS TO ENSURE THAT THEY HAVE
THE RIGHT LEADERS IN THE MOST CRITICAL ROLES.

CCELERA
PARTNERS
OVERVIEW OF TALENT ASSESSMENT
WHAT'S THIS ALL ABOUT?
assessment
[əˈlaɪnmənt] noun

1. A proven method for helping talent-focused companies identify candidates that will
excel in critical leadership roles. Finding the square peg for the square hole.

Until some future date when robots rule the world, fundamentally, people are the fuel that powers
your portfolio companies. They craft your strategy. They develop and execute your plan. In this way,
people are everything the success of your portfolio companies.

But research has taught us that "the most common failure [of a senior leader] is not having the
right people on your team. Fewer than 14% of all leaders excel at this." (Source: Power Score)

Smart leaders & investors recognize that ultimately, talent is the differentiating factor between
teams that win, and those that don’t; between investments that are wildly successful, and those
that aren't; and by extension, between funds that outperform, and those that don't.

Yet the data—some of which we'll share on the next page—bears out that hiring great talent with
consistency and confidence isn't a core competency within many growth-stage companies, nor
among their financial sponsors. And when investors and their companies aren't able to get the right
team onto the field, it can result in lower productivity, lower profitability, and poorer returns.

We help ambitious growth-stage leaders and their investors to drive people-powered performance by
ensuring that your companies have the right people in the right roles to power your investment
thesis. We do this throughout the deal cycle:

PRE-CLOSING FIRST 100 VALUE CREATION

CLOSE WITH CONFIDENCE FAST-START FIRST 100 DRIVE PEOPLE-POWERED PERFORMANCE

Does the target company have Identify areas where Help you hire the right leaders for
in-place the talent and people changes are the critical roles, and teach your
leadership to power your needed to create a high- companies to hire well—with
investment thesis? performance team. consistency and confidence.

In this guide, we'll share 3 tried-and-true practices that investors and their portfolio companies
can use to get the right leaders into the critical roles with more confidence and consistency. But
first, let's acknowledge and learn from the troubling reality that many companies face today.

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
OVERVIEW OF TALENT ASSESSMENT
THE TROUBLING REALITY
Despite the fact that it is widely understood how important it is to get the right people into the right roles,
the reality is: many companies struggle with this. And the cost can be substantial.

Appx 50% of new leader hires fail within 18 months.

50% What if your production line had a 50% failure rate? Or your service
delivery? Or your software? A 50% failure rate is unfathomable in
those areas… yet one of the most important business processes—
hiring— experiences a 50% avg failure rate. (SOURCE: ghSMART)

Appx 40% of manager promotions fail.

40% Its not only new hires we have to worry about. Nearly half of newly
promoted managers and executives fail within 18 months of starting
a new job. (Source: Manchester Inc.) This is due, in large part, to
struggles in assessing a potential manager's readiness for the role.

The cost of a mishire can be 5x+ the annual salary.

5x Lost time. Lost talent. Lost revenue. Opportunity cost. Collateral

damage. The cost of making a mishire is astronomical, and when we
factor that over 50% of hires are mistakes, the tax on businesses can
be substantial. And these are real dollars that chip into returns.

75% of hires are based on gut, not fact or data.

75% According to a study by AllenVision, 75% of the decisions that are

made during corporate recruiting processes are made by humans
relying on gut intuition, rather than data or fact. This is a big
contributor to the 50% failure rate above.

For investors and their portfolio companies, success is directly dependent on how consistent and effective
they are at getting the right leaders into the critical roles. But the research we've cited above is clear: many
smart investors and business leaders struggle with this—some unknowingly.

Case-in-point: 90% of operating executives believe they are above average at hiring; but as we saw above, 50%
of executive hires fail to deliver on the expected results. Translation: many overestimate their hiring skills.

In order to get critical hires right with more consistency and confidence, we first have to examine: when our
hiring practices fail, why is it?

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
OVERVIEW OF TALENT ASSESSMENT
WHY DO OUR HIRING PRACTICES FAIL?
In order to avoid the astronomical cost of poor hiring practices, it is crucial that we first
examine: when hiring decisions fail, why is it? Our meta-analysis of the research, coupled with
firsthand experience working with dozens of growth-stage companies, lead us towards 4
primary contributors to failures in hiring:

"I'M A GREAT JUDGE OF PEOPLE!"

1 ...Said most leaders. We all think we’re hiring geniuses, even when the data tells
us that the average among us is, in fact, not. This is a classic cognitive trap that
many leaders fall into: our abilities don't always match our self-confidence. This
OVERCONFIDENCE
overconfidence bias can lead to costly errors in critical leadership decisions—
BIAS like, in this case, who to hire.

A FAULTY PROCESS... OR NO PROCESS

2 Too many hiring managers are running the “wing it” hiring playbook. They run
unguided, unstructured interviews which meander through random details about
a candidate's history… what they thought about working for [fill in the company],
A FAULTY and how they liked living in [fill in the city]. Or hypotheticals like, “Which animal
PROCESS best exemplifies how you work?” But the problem is: the data shows us that
these processes are terrible predictors of actual on-the-job performance.

GUT-BASED INTERVIEWING AND DECISIONING

3 According to Allen, 75% of the decisions that are made during corporate
recruiting processes are made by humans relying on intuition, rather than data or
fact. The problem is: neuroscience teaches us that our brains are faulty, and
SUPERFICIAL relying on intuition is a recipe for failure. But meanwhile, in other parts of our
INTERVIEWING businesses, we are getting really good at applying data to decision-making.
What's possible when we take a fact-based, data-driven approach to hiring?

CURSORY REFERENCES
4 Even when we execute a high quality interview process, we have to remember: (1) in
most cases, you have a singular source of data in that hiring process—the candidate,
and (2) that source is biased. Enter: reference checks. But as this phase, research
FAILURE TO shows that companies tend to fall into one or more of these traps: (1) they don’t do
VERIFY references, (2) they don’t do them effectively (ask wrong questions, only check on-list
references, etc.), (3) they don’t weight them heavily in the decision process.

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
OVERVIEW OF TALENT ASSESSMENT
WHAT DOES GREAT LOOK LIKE?
WHEN IT COMES TO DRIVING PEOPLE-POWERED PERFORMANCE
IN YOUR PORTFOLIO COMPANIES, WHAT DOES "GREAT" LOOK LIKE?

A team of 90%+ A-Players—right people, right roles—mapped

1 directly to the growth strategy and value-creation plan.
You have a clear sense for the growth strategy and value creation plan, and your
"people plan" maps directly to that. You have intentionally and systematically mapped
people to the critical priorities in the business, and have 90% A-players (high-
likelihood of delivering on the expectations) in those critical roles.

An objective & repeatable process for attracting, hiring, and

2 onboarding great people; widely utilized in the organization.
The stats tell us that too many hiring managers are running the “wing it” playbook for
hiring. But great, talent-focused companies use a proven process for predictably
hiring great talent, and that process is widely understood and used in their
organization. The company has built a robust talent pipeline.

Objective process for evaluating caliber and performance of team.

3 Promote, terminate, recast decisions are made quickly.
You have a process for knowing how each person is performing relative to your
expectation (eg. Skill/Will matrix; performance management system). Decisions are
made proactively and quickly when it comes to promoting, terminating, and/or
recasting based on that. Underperformers are removed or repurposed quickly.

This team of A-players are positioned to succeed and grow in their

4 roles. They are well supported and developed.
People are in roles that align with their talents and passion. i.e. They have the skill,
and the will. Expectations are clear re: what success looks like in each role. People
are given the resources to deliver. A "development culture"—complete with coaching,
training, and feedback—fosters the team's growth.

For investors and leaders who are serious about hiring better, there are 3 practices you
can start using today to unlock people-powered performance in your portfolio companies

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
THE SOLUTIONS
3 PRACTICES YOU CAN USE TODAY
1 Get clear on your investment thesis and value creation plan.
Then, map talent needs directly to that plan.

EXAMPLE: INVESTMENT / GROWTH THESIS

ABC Co. will continue to leverage Talent Implications: Channel management is a

A its existing distribution critical capability to continue to expand
relationships to acquire 100 new existing distribution relationships. Need top-
customers by 2025. notch channel managers to grow relationships.

ABC Co. will drive expansion Talent Implications: Shift from reactive account
B revenue within current accounts management to proactive customer success
by selling more widgets to model, with CS team that is capable of and
existing customers. incented to expand current customers.

ABC Co. will move into new Talent Implications: Need sales leadership and
C geographies by expanding AEs with a track record of opening cold new
salesforce, and deliver $Xm in markets (vs. harvesting markets ABC has had a
new market revenue by 2025. longstanding presence within).

ABC Co. will improve customer Talent Implications: Need top-notch customer
D retention to 95% annually, success org to proactively ensure client health
preventing $Xm of revenue & happiness. Need CS leadership that is
churn by 2025. proactive, commercial, and tuned-in.

WHAT IS YOUR INVESTMENT THESIS? WHAT ARE THE TALENT IMPLICATIONS?

WHAT ARE THE KEY DRIVERS OF THAT WHAT CAPABILITIES ARE NEEDED TO
THESIS? WHAT DOES SUCCESS LOOK LIKE? POWER THE INVESTMENT THESIS?

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
THE SOLUTIONS
3 PRACTICES YOU CAN USE TODAY
2 Based on that definition of success, clearly define what's needed
in each key role by creating an outcome-based Scorecard.

EXAMPLE: INVESTMENT / GROWTH THESIS

ABC Co. will improve customer Talent Implications: Need top-notch customer
D retention to 95% annually, success org to proactively ensure client health
preventing $Xm of revenue & happiness. Need CS leadership that is
churn by 2025. proactive, commercial, and tuned-in.

BASED ON OUR VALUE CREATION PLAN, WHAT ARE THE KEY BUSINESS OUTCOMES WE
NEED IN CUSTOMER SUCCESS? THEN, WHAT COMPETENCIES AND ATTRIBUTES DO WE
NEED IN ITS LEADER TO HAVE CONFIDENCE THAT THOSE OUTCOMES WILL COME TRUE?

SCORECARD:
HEAD OF CUSTOMER SUCCESS

OUTCOME #1: IMPROVE CUSTOMER RETENTION TO 95% BY 2022.

RESPONSIBILITY 1A: Transition to proactive customer success model by 2021.

COMPETENCY NEEDED:
ASSESSMENT
Process for and track-
record of hiring high-
performing customer
success team.

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
THE SOLUTIONS
3 PRACTICES YOU CAN USE TODAY
3 Use data-driven method for evaluating the fit between role scorecard,
and the person occupying (or being assessed for) that critical role.

SCORECARD:
HEAD OF CUSTOMER SUCCESS
HOW DO I ASSESS THE FIT BETWEEN THE
OUTCOME #1: IMPROVE CUSTOMER RETENTION TO 95% BY 2022. ROLE... AND THE LEADER OCCUPYING—OR
RESPONSIBILITY 1A: Transition to proactive customer success model by 2021.

COMPETENCY NEEDED:
BEING CONSIDERED FOR—THIS ROLE?
ASSESSMENT
Process for and track-
record of hiring high-
performing customer
success team.

5 QUICK TIPS FOR ASSESSING TALENT

Past performance tends to be the most reliable predictor of future performance.

Has the person demonstrated success in the responsibility areas in which your
scorecard calls for them to deliver? The best predictor of whether someone can do
something is: whether they have successfully done it before.

Use data to validate past performance.

Rely not on anecdotes, but data (including performance data, KPI data, trend data,
performance review data) to validate—or invalidate—their past performance.

Using vetted, predictive questions that are actually relevant to the role.
Stay away from hypotheticals and brainteasers.Even though they are fun questions
to ask, questions like “How many ping pong balls can you fit inside of a
Volkswagen?” haven’t been shown to be predictive of on-the-job performance.

Where possible, use simulations and work samples.

These are high-efficacy ways to gauge a candidate’s suitability for the role, and
among the most predictive of on-the-job performance among all assessment tactics.

Do references. And the best way to determine, objectively, how someone has
performed in the past is to get a sampling of those who have worked with and
experienced that person before.

CCELERA HELPING INVESTORS ACCELERATE TALENT

PARTNERS PEOPLE-POWERED PERFORMANCE ASSESSMENT
 CCELERA
PARTNERS

GET THE RIGHT PEOPLE

IN THE CRITICAL ROLES
People are the fuel that powers growth-stage companies—and by extension, your
investment returns. Logically then, ensuring you have top-notch people in the
critical roles is among the most important responsibilities for investors and their
leadership teams today.

This can be tough. And the research suggests that this is not a core competency
of many leaders or investors.

But when we get critical hires wrong, the cost can be substantial. Poorer
business results. Slower value creation. And ultimately, weaker returns.

We help private equity investors and portfolio leaders to select and onboard the
right leaders into the most critical roles with confidence and consistency... so
that portfolio companies can grow faster, exit better, and generate amazing
returns.

But unlike other assessment firms, our role doesn't stop when we hand you an
TM
assessment report. We help investors go from Resumes to Results .

LEARN MORE ABOUT

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