Dear Leah,
I’m Chief Financial Officer at a company that was bought by a private equity firm 18 months ago.
The PE partners promised they’d be “hands-off” and focused on “strategic support,” but the reality is constant pressure for cost cuts and aggressive growth targets that feel impossible to achieve sustainably.
Our CEO is caught between the PE firm’s demands and the leadership team’s concerns about what we’re being asked to do. Last month, they pushed us to cut 15% of our workforce while simultaneously demanding a 25% increase in output.
When I raised concerns about burnout and quality issues, the PE partner said, “That sounds like an execution problem, not a strategy problem.”
Our best people are leaving, customer satisfaction is dropping, and I’m genuinely worried we’re being set up to fail so they can blame management and bring in their own team.
The CEO seems paralysed by the pressure and keeps saying, “We just need to make it work.”
How do I protect the business and our people when the owners seem determined to squeeze us until we break?
- Squeezed by Success
Dear Squeezed by Success,
You're living the private equity nightmare where "strategic support" means strategic suffocation. Your PE partners have confused value creation with value extraction, and now everyone's paying the price.
DIAGNOSIS:
This is classic private equity overreach disguised as performance management. They're treating your business like a spreadsheet instead of an organisation full of people who need to deliver that impossible 25% increase. The "execution problem" comment reveals everything - they believe good people can magic results from thin air. Genuinely.
THE ROOT OF THE PROBLEM:
Your investors are managing to their fund timeline, not your business reality. They need quick wins to justify their investment thesis, so they're applying maximum pressure and hoping something gives - unfortunately, what's giving is your talent and your customers.
THE PATH TO RESOLVING IT:
Present them with hard data about the actual cost of their approach. Calculate the replacement cost of departed talent, the revenue impact of dropping customer satisfaction, and the productivity loss from burnout.
Then propose a sustainable (and realistic!) growth plan that protects their investment whilst keeping your business viable.
YOUR ROLE GOING FORWARD:
Protect your people where you can: be transparent about the pressures whilst shielding them from unrealistic demands
Document everything: when this goes wrong, you'll need evidence that you raised concerns
Build alliances: work with your CEO to present a united front about what's actually achievable
Have a contingency plan: unfortunately, some PE relationships are doomed from the start
Sometimes the bravest thing you can do is tell investors that killing the goose won't improve egg production.
