Page 266 - Executive Warfare

EXECUTIVE W ARF ARE

At the same time, get used to a new kind of scrutiny. Your board will
now be made up of big investors in your organization, and they are not
going to just sit back and enjoy the occasional show-and-tell from you.
They are looking for very high returns and will not wait 10 years for your
strategy to play out in order to get them. Instead, they will dip into your
business. They will send their own teams in to second-guess you. If you
are used to being in charge, this interference may be difficult to bear.
There are some very good private equity players, and there are some
awful ones. The good ones have run businesses and really know how to
improve a company’s performance. But there are other private equity peo-
ple who have never led anything except
for a fraternity party. They are simply
THERE ARE SOME financial engineers who want to slice up
VERY GOOD your organization or flip it to one of
PRIVATE EQUITY your competitors as fast as possible.
PLAYERS, AND When you’re in that whirlpool, you
THERE ARE SOME have one of two choices: Either develop
AWFUL ONES WHO an exit strategy, or make sure that you
HAVE NEVER LED are capable of delivering the returns
ANYTHING EXCEPT these owners demand.
FOR A FRATERNITY Interestingly enough, something
PARTY. equivalent to the rise of private equity is

happening at many nonprofits, too. This
has been called a “golden age of philanthropy,” thanks to the emergence
of civic-minded billionaires around the world, but it’s also a golden age
of privatization. The world’s wealthiest people are now taking on chal-
lenges like public schools and public health that were once the sole
purview of government. And if you are an executive at a nonprofit, you
may well find government support for your efforts dropping as a per-
centage of the whole, thanks to big contributions by super-wealthy donors.
These new philanthropists expect to improve lives on a sweeping scale.
And they are not content just to write checks. They are applying their busi-

246