Why Every Expanding Company Needs an Access Panel

When companies expand into a new market, they usually appoint internal employees to take care of it. Sometimes, that’s the CEO, sometimes a management team member.

In any case, there is often a lack of network contacts, market knowledge and best practices. This inevitably leads to expansions progressing slower, more unexpected issues arising or the expansion failing entirely.

Why would you invest millions in an expansion project without doing everything in your power to ensure its success?

The Private Equity Perspective

I recently watched this phenomenal talk from David Rubenstein on private equity and the challenges of the industry.

Some of the key challenges he outlined for the PE industry were sustainable returns and the industry image.

Returns before the last crisis seemed to be far better than today and one of the main reasons so many investors ventured into private equity was the superior return rate compared to the public market. Sustaining that superiority is absolute key for the industry to keep growing.

Private equity has come a long way from bootstrapping to what it is today. The industry image is certainly better than it used to be, especially because most PE companies today care about actual value creation. However, there is still much to improve when it comes to the long-term success of portfolio companies even after they are sold.

That’s where the Access Panel model has the biggest impact.

Breaking Into New Markets vs. Accessing Them

An Access Panel is a group of chief executives who provide access to networks, knowledge and skills, that make expanding to emerging markets faster, easier and more likely to succeed.

In many cases, the private equity company replaces the CEO of the portfolio company within the first two years.

However, one person alone can only do so much. The CEO has a certain responsibility in the company to make things happen on the highest level.

However, having the best CEO is only valuable if the people around him integrate seamlessly.

Let’s say a company is expanding to China. In this case, the CEO could relocate for a while to better understand the new market and make contacts.

In the best case, the PE firm hires a CEO who has led a similar expansion already before and has some market knowledge and contacts.

However, the CEO is often so involved in the business, that it’s hard to keep an outside perspective and focus on the highest level strategic work.

An Access Panel can not only provide that focus on access to contacts, market knowledge and best practices but also the outside perspective to avoid making the wrong decisions.

And because it’s a panel, you don’t rely on just one person. You can gather the top leaders in the key areas you need the most support and then have them work side by side with the CEO.

Investor Returns and Long Term Sustainability

At the center of every private equity firm are its investors. Without them, none of the investments would be possible.

Therefore, PE companies are constantly looking for new ways to improve the ROI for their investors.

With an Access Panel, you can get the portfolio companies up to speed much faster than having the CEO to do it alone.

Sure, it’s a bigger initial investment but when done right, the returns far exceed the investment.

On a broader scale, it also has the potential to ensure the success of the portfolio company even after it’s sold. 

This creates a more positive brand image of the industry and demonstrates the long term value of private equity.

A More Human Way of Doing Business

At the end of the day, accessing new markets instead of breaking into them is a more human way of doing business.

I believe in todays business world this is essential, as we’ve come a long way from barbarians to conscious business practices.

Understanding a culture like China before trying to do business there does not only increase your likelihood to succeed. It also ensures that you can look yourself in the mirror and be happy with how things were done.

Learn more about how Access Panels create value here.

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Daniel Jordi is a Catalyst for Visionary Leaders, on a mission to bring humanity back into business.

On that journey, he has advised hundreds of leaders and entrepreneurs on building trusted relationships with CEOs, industry leaders and other key decision makers to create remarkable business opportunities.

He’s also the founder of LeadersBridge.org, which enables leaders and organizations to connect for growth & contribution opportunities.

If you’re looking for a more effective and authentic way to connect with key decision makers, download these 23 Mental Triggers That Make Busy People Say YES.