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When working as a project manager, transitioning to a private equity (PE)-funded company can bring significant shifts in how projects are managed, measured, and executed.
Unlike traditional businesses, private equity-backed companies often operate under heightened financial scrutiny, aggressive growth expectations, and a relentless focus on maximizing value within a defined timeframe.
I have over 7 years of experience working within private equity (PE)-funded companies, specifically in Software-as-a-Service (SaaS) companies, where I led PMOs and was embedded within business operations units. Managing a PMO, leading a team of PMs, or overseeing projects in a PE environment presents unique challenges but also offers significant opportunities for advancement and professional growth.
Shown below are 6 key changes that I experienced when working for a private equity-funded company and how to navigate these shifts successfully.
1. Increased Pressure for Results and Speed
One of the most noticeable changes in a private equity environment is the intense pressure to deliver results quickly. PE firms typically invest in companies with a clear exit strategy in mind, often within a 3-7 year time frame. As a project manager, this means:
Aggressive timelines: You may find that project deadlines are tighter than usual. Speed is critical because PE firms want to see quick wins that increase the company’s value.
Focus on efficiency: Projects that streamline operations, reduce costs, or increase revenue will be prioritized. Your ability to demonstrate immediate results will be scrutinized closely.
Frequent performance reviews: Project milestones and deliverables may be reviewed more frequently to ensure the company is on track to hit financial targets. Expect more reporting and updates to senior management and investors.
How to adapt: To succeed in this high-pressure environment, sharpen your ability to manage scope, timelines, and resources. Clear communication and proactive risk management are key to keeping projects on track and addressing issues before they escalate.
2. Greater Emphasis on ROI
In a private equity-funded company, every project must demonstrate a direct link to the company's financial goals. Return on investment (ROI) becomes the primary metric for evaluating project success, and you may face more scrutiny when justifying project costs.
Justifying project investments: You will need to demonstrate how your projects contribute to revenue growth, cost savings, or improved operational efficiency. Projects with unclear ROI may struggle to gain approval.
Data-driven decision-making: Expect to work in an environment where decisions are made based on numbers and financial models. You may need to provide detailed financial projections, break-even analyses, and cost-benefit assessments.
How to adapt: Learn to speak the language of finance. Understanding key financial metrics like EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), cash flow, and margin improvement will help you align your projects with the company's strategic goals. Make sure to quantify project benefits wherever possible.
3. More Strategic Project Selection
Private equity investors typically focus on building a streamlined, high-growth business model. As a result, projects that directly support these goals will take precedence. This could mean a shift in how projects are selected and prioritized.
Focus on high-impact projects: Low-impact or "nice-to-have" projects may be deprioritized or eliminated altogether. Only projects that significantly improve the company's value proposition, scalability, or profitability will be given the green light.
Portfolio realignment: You may need to reprioritize ongoing projects to align with new business strategies, often dictated by the private equity firm's growth or turnaround plan.
How to adapt: Develop a strong understanding of the company’s long-term goals and the private equity firm's investment strategy. Stay flexible in how you manage your portfolio, and be prepared to pivot your project focus quickly to meet strategic shifts.
4. Cost-Cutting and Operational Efficiency
One of the first steps private equity firms often take is to optimize operations and cut costs. Projects that contribute to these objectives will be prioritized, while non-essential spending may be eliminated.
Cost-cutting initiatives: Projects focused on automating processes, reducing overhead, or improving supply chain efficiency are common in PE-backed companies.
Lean project management: You may be required to do more with less. Budgets will be tight, and your ability to manage resources efficiently will be crucial.
How to adapt: Focus on lean project management practices and look for opportunities to improve operational efficiency in your projects. Learn to deliver more value with fewer resources, and be prepared to make tough decisions when it comes to cutting costs or reducing scope.
5. Closer Collaboration with Executive Teams and Investors
In private equity-funded companies, the leadership team works closely with the investors. As a project manager, you may find yourself collaborating more frequently with the C-suite and even directly with PE firm representatives. Your projects will be scrutinized for their contribution to the company’s overall growth strategy.
Direct access to decision-makers: You’ll have more opportunities to present your project progress and outcomes to senior executives and private equity stakeholders. Be prepared for a more hands-on management style from leadership.
Tighter control and governance: Private equity investors are often highly involved in the day-to-day operations of the company, especially in the early stages of ownership. This means more frequent reporting, reviews, and potentially higher expectations for governance and transparency in your projects.
How to adapt: Develop strong executive presentation skills and learn to present project outcomes in a concise, results-driven manner. Be comfortable with higher levels of oversight and embrace transparency in your project reporting.
6. Cultural Changes and New Priorities
When a company is acquired by a private equity firm, it often undergoes cultural and organizational changes. You may experience shifts in company values, decision-making processes, and overall work environment, especially as new leadership or restructuring initiatives take place.
New priorities: You may need to adapt to new business priorities that focus on scalability, profitability, or restructuring. The previous company culture may shift to be more performance-driven.
Team alignment: You may face challenges in keeping your project teams aligned and motivated during periods of organizational change.
How to adapt: Be an advocate for clear communication and help your team navigate the transition. Maintain a focus on aligning projects with the new priorities and make sure your team understands the big picture.
Conclusion
Managing projects in a private equity-funded company brings unique challenges, but it also offers opportunities for growth and success. By understanding the key changes in expectations, focusing on efficiency and ROI, and aligning projects with strategic goals, project managers can thrive in this fast-paced, results-driven environment.
The ability to adapt quickly, make data-driven decisions, and deliver measurable value will be critical to your success as a project manager in this setting. Embrace these changes, and you’ll position yourself as a key contributor to the company’s growth and transformation.
About the Author
Lori Schoenhard is the Founder and Principal of Athena Project Consulting, LLC.
Lori possess two decades of IT leadership expertise, building and leading Project Management Offices (PMO), managing complex global enterprise programs across cross-functional teams, spearheading change management initiatives, and providing coaching to program and project managers. She has worked with Fortune 500 companies, SaaS companies, digital agencies, and SMBs to deliver impactful results.
Lori holds several project management and industry certifications: PMP, CSM, CSPO, SAFe, ITIL. Lori holds a Masters Degree from Boston University in Computer Information Systems and IT Project Management.
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