The private equity landscape has become increasingly competitive over the past decade. Since 2010, the number of private equity firms has almost tripled. Companies are jockeying for investment opportunities, and the pressure to stimulate growth in assets is high.

This gives executive search firms an inherent sense of urgency. The longer a C-level position for a portfolio company remains empty, for instance, the longer it will take for the business to perform and, ultimately, for the private equity firm to exit.

When clients within private equity come to us, they are typically anxious to get a leader in place to start driving change. But more often than not, finding the right person can take time — and in these cases, it is more important than ever to follow the correct process. As a search firm, our role is to balance the desire to fill a vacancy quickly with the need to go through the proper procedures for executive selection.

A Challenging Search for a CFO

In 2021, a private equity firm and long-term client approached Townsend Search Group. They had recently acquired a California-based telecommunications business and were looking for a chief financial officer (CFO) to modernize and professionalize its finance and accounting functions. The candidate would need to hit the ground running, creating best-in-class processes that would position the company to scale as it integrated new businesses.

Initially, the client felt an experienced candidate from a different industry could be a good fit. This was significant because, while the portfolio company was headquartered in a city, its surrounding area was predominantly rural and sparsely populated. The talent pool was limited, and competition for qualified candidates was fierce.

We focused on the local market for the first phase of the process. However, after several months, it became apparent that a broader scope was necessary. As a result, we decided to open the search to cities accessible via direct flight, prioritizing identifying a candidate with the right set of skills.

Adjusting Search Parameters

At the same time, the portfolio company was going through its first-ever annual accounting audit. This process revealed some substantial issues specific to the telecommunications industry and prompted the private equity sponsor to re-evaluate the candidate profile. It was now clear that the company would need a CFO with telecommunications experience.

After working with the client company to adjust the parameters of the search, we quickly found a suitable candidate. They had a robust telecommunications background and were able to promptly resolve the auditing issues. In doing so, they uncovered several million dollars of earnings before interest, taxes, depreciation and amortization (EBITDA) that had not previously been accounted for, thus paying for themselves almost immediately.

Building on that success, we went on to hire an additional four people to build out a hybrid finance and accounting team for the company.

When Process Pays Off

Finding the right candidate starts with a robust, well-designed framework. All parties must have a comprehensive grasp of the company’s strengths, weaknesses, history, culture and needs. The talent pool should be large enough to allow for a competitive selection process. And, as the search narrows down, the hiring team must understand who each candidate is at a deep level. That means leaving sufficient time for interviews, research, background checks and references.

Executive positions have an outsized impact on an organization’s direction and decision-making. Selecting the wrong candidate can have far-reaching implications — ranging from a slow but steady pattern of declining results to an obvious and immediate failure that forces the company to begin the search all over again. As such, getting an executive search right the first time is vital, and that means following a thorough process.

In the case of our California client, the company could have simply filled the vacancy and moved on. However, based on experience, we knew that we needed to alter our methodology to hone in on the right candidate. The client company trusted our guidance and worked with us to make the necessary changes — an approach that paid dividends.

At Townsend Search Group, we pride ourselves on our ability to listen, adapt and personalize our solutions to each client. Rather than just seeking out a standardized list of qualifications, we appreciate the nuance of identifying the right person for the right seat at the right time. That process requires trust and patience. But by taking the time to recognize what a client needs and build relationships with the teams we serve, we place leaders who transform the trajectory of a company.


If your organization is ready to place change-making talent, get in touch with any of us on the Townsend Search team and experience The Journey to placing top executive talent.