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Published On: Thu, Jul 28th, 2016

The secret sauce of Sun Capital companies

Earlier this year the Sun Capital co-CEO, Marc J Leder, conducted an interview with the Huffington Post. As is the case with a lot of interviews with high profile business professionals, there were a lot of revealing points and it will be of keen interest to anyone who takes interest in the general business press.

One of the big questions which was asked of him was what was the secret sauce for Sun Capital. In other words, what was the reason why most of the companies they buy become much more successful than when they were initially purchased.

Marc J Leder SUn CaptialUnsurprisingly, the first part of this answer focused on the operating tools which the company have at their disposal. Having now reached a stage as one of the most reputable private equity groups in the world, it goes without saying that they have knowledge, tools and just general expertise of a lot of industries. In a lot of cases, they can use this to their advantage to transform a company.

However, there was perhaps an even more intriguing answer he gave. He himself admitted that its often overlooked but claimed that a company culture is one of the most important factors in allowing it to progress.

Sun Capital actually perform a study for every portfolio company. They found that after making improvements based on this study, companies significantly improved. As such, each and every acquisition is subject to this.

While the study itself could be quite detailed, it actually has a fairly basic backbone. It’s based on four separate attributes:

Adaptability

As Sun Capital have revealed on numerous occasions, they will attempt to make an operational difference in any company they acquire. As such, a team needs to be able to adapt to deal with such change. Additionally, as the elusive plan is for the business to expand, management need to be in a position where it is able to grow with the team during this period.

Mission

This is one of those attributes that should be present within any business, regardless of whether it is Sun Capital-owned. If a management team is unable to stay with the mission, it’s going to be very difficult for it to progress. Deviating away from this mission will cause problems and mean that the business is going to struggle to meet the plan that has been created for its development.

Involvement

This has been highlighted as the most important attribute out of the four. It focuses on the orientation of a team and generally improving their capabilities. Additionally, there’s an element of empowerment – allowing a team to have more power. Of course, some teams won’t be in a position to handle this at the start, and this is why the culture study is so important so improvements can be made.

Consistency

Suffice to say, a team has to perform consistently. It’s one of the most obvious factors in any team, in any industry, but the management team needs to perform at a stable level that doesn’t drop for it to be successful.

Guest Author: Lolita Di

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