Book Review: Lessons From Private Equity Any Company Can Use

Here's a short book that carries a punch. Although "Lessons From Private Equity Any Company Can Use" is the more boring title of any book I've read lately, the content is quick, easy and informative. Here's my book review.

(Authors: Orit Gadiesh and Hugh MacArthur, Bain & Company; Harvard Business Press)

MATT'S RATING: * * * (out of 5)

WHO SHOULD READ THIS? Managers, Directors, Executive. Small business owners will learn something from this as well. I think it's a bit too analytical for the typical front-line worker.

WHAT'S THE POINT? Exactly what the title says. They try to offer "clear, practical suggestions" for implementing the ways PE firms do business in order to make your business more valuable.

WATCH-OUTS: I'm always suspect of books that use the word "top-quartile" within the first 100 words. Don't plan on some fast-reading Dan Brown novel.

SUMMARY: They cover six main lessons.

1. Define the full potential.
2. Develop the blueprint.
3. Accelerate performance.
4. Harness the talent.
5. Make equity sweat.
6. Foster a results-oriented mind-set.

Here are quick take aways that I learned from the book:

• No company can be successful when it divides it's resources among too many initiatives. I'd like to also extend this to say, an individual worker cannot do this either.
• "The prospect of being hanged focused the mind wonderfully." -Samuel Johnson
• The discipline of NOT doing things can preserve tremendous value.
• You need to be committed to your short list of key initiatives and designing action oriented plans to achieve them.
• Make managers owners of the business. Often management teams will own 10-30% of the business - sometimes through phantom equity.
• Watch cash more closely that earnings. It is the true barometer of performance.
• Use substantial bonuses to reward great performance.
• Find the entrepreneurial people in your business and harness goals to them.
• Embrace those individuals in whom the company has invested a great deal and who could know more about any outsider ever could.
• The job of a CEO is leading. And many times leading into change.
• The best communicators find new and different ways to get the vision of change and milestones across to as many different internal audiences as possible.