operating-partner:-in-addition-to-his-experience,-his-added-value-is-his-neutrality-–-money

Operating partner: in addition to his experience, his added value is his neutrality – Money

The profession of operating partner, almost unknown in France before 2000, is developing at high speed. Several models coexist. One certainty: its richness lies in the fact that it is carried out by business leaders “who have already done so” and who, as a result, share the same risk culture.

Each month, appointments of new operating partners are announced. But if we are talking about appointment, it is because they are salaried. A question arises as to the consistency between the fact that he is a former entrepreneur and the status. This question is played out on two levels: is it in the DNA of the operating partner to be an employee? And does he have sufficient neutrality to fully play his role?

A little history: the birth of operating partners

Let’s go back to the story a bit. The job of operating partner was born in the United States, at the end of the years 2000, to deal with the subprime crisis. It was imagined by investment funds: in order to secure their investment decisions and ensure the growth of their holdings, they thought of mobilizing serial entrepreneurs to provide operational support to company managers. It is the legendary pragmatism of Americans and their culture of results that led them to appeal to these DNA partners 20% entrepreneur.

And it worked! 15 years later, operating partners continue to play an essential role with business leaders. With one detail: after having opted to recruit operating partners within their teams, American funds now favor the use of external professionals.

A profession in full development in France for several years

And in France? The profession of operating partner first developed within the framework of independent networks bringing together business leaders. Because France is unique in that its SME and ETI bosses listen first and foremost to their peers, ie in terms of profession as much as of status.

Then, for a few years now , the financial partners of companies have seized on this new profession. Investment funds in particular seek to offer new services to their investments while securing their performance. They quickly understood that having operating partners within their teams could nourish their project. This explains the current craze and the announcements made.

A booming profession

Whatever the model, it is clear that the job of operating partner is gradually establishing itself as a new essential player in the support of business leaders in France. The context of the crisis, which places the operational more than ever in the front line, accelerates the trend.

Because one fact convinces more every day: supported business leaders increase the chances of sustainability of their company. A study by the BGC in 2015 showed that the bankruptcy rate of companies reached 20% when they were not accompanied against 15% when they were ‘were.

Three points of vigilance to choose the right co-pilot

Once that has been said, three points of vigilance must continue to mobilize the attention of the business manager in search of the right co-pilot.

First, a successful collaboration between a a director and an operating partner are based on absolute and reciprocal trust. However, sometimes, the issues of the leaders are not necessarily aligned with those of the investors. The business manager will therefore be more daring to share his doubts and difficulties, in complete transparency, if the operating partner is not an employee of the fund.

Second, it is necessary to be able to determine if its recommendations are based on an objective analysis in the interests of the company or if they are guided more by the interests of the fund. The entrepreneur is used to taking risks. He will tend to want to think outside the box. External issues should not hinder this daring if it makes sense in terms of market opportunities and if the company has the capacity to implement it operationally.

Third , an operating partner employed by a fund monitors around 20 or even 30 investments. It will therefore not always be able to carry out an in-depth study for all companies.

Two models for two needs

Finally, both of these approaches do not meet the same need. It all depends on the priority of the entrepreneur. If he needs ad hoc expertise relating, for example, to marketing, digitalization or recruitment, the employee operating partner of a fund can meet his expectations; if his request relates more to the treatment of strategic and structural issues for his activity, then an independent operating partner will have more latitude and neutrality to work on these subjects with him.

‘Either way, being accompanied allows the business manager to meet the challenges posed by uncertain economic environments such as those they have been going through since mid – 2020 and which call for pivots, business model changes and other reversals, despite a blurred horizon on these maps of the coming game. And they are more and more numerous in France to perceive it…

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