From Stressful to Strategic: How to Discuss Assessments with Management Teams

In the world of private equity (PE) and dealmaking, difficult conversations are a standard part of the job. But few are as delicate as the management team assessment conversation. Many PE firms avoid it altogether, fearing it could jeopardize a partnership, delay a transaction, or derail a deal.

However, avoiding the conversation and the evaluation itself can come at a steep cost. A thoughtful investment thesis or value creation plan without the right management team capabilities is doomed. A well-executed management team assessment is one of the simplest ways to strengthen the foundation of a deal and maximize its chances of success.

2025 shows promise for an increase in transactions, and PE firms must ensure sure they are staying ahead of the deal curve and establish the team to deliver as soon as possible. A management team assessment—whether conducted pre- or post-close—provides a clearer understanding of the leadership team’s strengths, weaknesses, and potential to create value during the investment period. These insights are invaluable in accelerating the value creation plan and ensuring leadership alignment on key goals.

Setting Up the Conversation

Bringing up the idea of a management team assessment can feel like walking a tightrope. Done poorly, it might alienate the leadership team or create mistrust. But when positioned as an opportunity for growth, insights and alignment, it becomes a powerful tool for collaboration and ongoing success.

Start by framing the assessment as a way to strengthen the partnership. Explain that its purpose is not to critique individuals but to ensure the management team is well-positioned to deliver on the value creation plan/strategy and drive post-close goals and objectives. Then highlight how the assessment benefits the team as a whole, offering actionable insights that improve leadership dynamics and performance. In addition, individual leaders will gain valuable insights on how and where they can scale the business.

Transparency is key to easing concerns. Outline the steps involved—interviews, online surveys, and performance reviews—and clarify who will see the results and how the information will be used. Confidentiality is often a concern, so assure leaders that personal feedback will remain private, with only high-level findings shared to improve team performance as it relates to the strategy. Finally, invite questions. Giving the management team space to voice concerns and seek clarity fosters trust and ensures buy-in.

In regard to timing, the old adage “the sooner the better” applies. If conducted pre-close, it can give the investor a better sense of challenges or opportunities that might influence deal terms. If conducted post-close, it might impact post-acquisition strategies and roles to hire.

Whether the assessment is conducted pre- or post-close, they give the PE firm a clearer understanding of the strengths, skills, and potential of the team. The reality is that there are very few deals that get upended by a management assessment — that is not their purpose — but having more intelligence and data on the firm you’re investing in is always a good thing.

Emphasizing the Positive Impact

Once the management assessment details and process are clear, it’s important to emphasize how the assessment ties directly to the company’s growth strategy. Management team assessments are a key lever for scaling organizations, identifying gaps, and aligning leadership with the value creation plan.

For individual leaders, these assessments offer an opportunity for self-awareness and growth. They can uncover strengths to build upon and areas for improvement, enabling executives to enhance their leadership styles. Framing the assessment as a developmental tool—rather than a judgment—can ease resistance and shift the narrative to one of collaboration.

For managements teams navigating a sale for the first time, assessments provide additional support during what can often be a challenging transition. They serve as a roadmap for building trust and alignment under new ownership, ensuring everyone is moving toward shared goals.

Addressing Common Concerns

Transitioning to a PE-backed structure can be intimidating for some leaders, especially if they’ve never gone through the process before. To alleviate these concerns, PE firms should:

• Position the assessment as a management team-strengthening tool: Emphasize its role in improving overall team effectiveness and areas to scale, rather than assessing individual performance.
• Remind the management team that they will gain excellent insights and feedback on how and where they can grow with the business.
• Clarify expectations: Make it clear that the assessment is not an exhaustive job interview (our interview is less than 2 hours), but a focused process designed to identify opportunities for growth.
• Encourage honest feedback: Stress that the best outcomes come from candid insights. Reassure executives that reluctance to engage is an opportunity to build trust and educate them on the benefits of the process.
• Remind leaders there is no guarantee that changes will not be made following the management team assessment but emphasize this is not the goal.

Ultimately, management team assessments are about alignment. They ensure that leadership teams are equipped to execute the value creation plan, scale effectively, and deliver on investor expectations.

Why It Matters Now

With deal activity poised to surge in 2025, PE firms face heightened pressure to ensure the success of every investment. The leadership team is the most critical factors in that success. By integrating management team assessments into the deal process, either pre-close or after the deal is finalized, PE firms gain a clearer understanding of leadership strengths, identify potential gaps, and make informed decisions that strengthen the foundation for value creation.

The benefits are clear, and the process is straightforward. A thoughtful, transparent conversation about management team assessments can break down barriers and set the stage for a strong, successful partnership. Don’t let a small conversation stand in the way of a big deal.