How are private equity leaders passing the torch to the next generation? Panelists from last week Rising Stars of Private Equity SPEAK event expressed his view on the potentially competing roles that institutional culture and forecasting future technical capacity needs play in the training of new business leaders.

One point of contention: the extent to which talent development can be systematized.

“I would be lying if I said ’23 years ago we had a succession plan’,” says Cyprium Partners founding member and partner Michael conaton. “But after 23 years, you learn a lot and you evolve. And so today, integrated into our LP documents and other management agreement documents, we certainly have the structure and model for the technical aspect of the succession.

While panelists generally agreed that development involves some degree of transmission of company culture, the extent to which this process is sufficient for talent development puts panelists on a spectrum. Is succession planning about determining who will be next to bat based on cultural affinities, or do new challenges require an evolving screen for future leaders?

“When you think about succession, you really think about the capabilities you need for the future, and then you develop, build, or buy those capabilities and make sure you integrate them into the organization,” explains Capital of the Arsenal talent director Michelle nasir. “We have been very successful in seeing human capital as a central dimension of our playbook. When I think about succession and how we create leaders for the future, I see it as an iterative and continuous cycle. . And so I think it’s about the technical abilities to develop, thinking about new abilities to add, and making sure that you continue to foster values ​​and behaviors.

A testament to this approach’s ability to shape employee skill trajectories, Nasir adds, is Arsenal’s strong list of internal promotions.

“Another outcome of having a succession plan is creating that DNA of development within the company,” said Nassir. “The practice of making this plan also puts the leaders in mind that we are developing the next generation. “

Conaton agrees that development is an iterative process that improves over time, reflecting his company’s approach to prioritizing culture.

“In our experience, building a culture of communication happens over time,” says Conaton. “And with that experience, a big part of that succession planning is keeping those lines of communication open with the entire firm.”

See the full panel here: Video: Negotiators pass the leadership torch.

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