Great people create great businesses. Freddy West, Managing Director for Portfolio Talent, discusses how the right talent drives returns and how a data-driven approach to human capital can give mid-market businesses a competitive edge.
What role do people play in the success of businesses?
Though financial metrics dominate private equity reporting, people are usually the most critical factor in portfolio company success, as the data shows. Up to 45% of a company’s performance traces back to the CEO alone. When you look at culture, 66% of global private equity investors now rank it above strategy in driving returns. And, perhaps, most tellingly, portfolio companies that prioritise talent are 80% more likely to hit their first-year targets.
It cuts both ways. The right team accelerates growth, but the wrong hire can be equally damaging.
All told, having the right talent isn’t just a nice to have, it’s a key driver of success for a business.
How does Inflexion’s focus on people differ from other private equity firms?
Inflexion places a disproportionate emphasis on people and culture, both in our portfolio and within our own walls. Our internal culture blends ambitious drive with genuine collaboration.
This approach pays dividends beyond friendly office dynamics. Our culture is how we win deals, build lasting partnerships, and successfully expand internationally. The CEOs in our portfolio often share these qualities, which is why our partnerships flourish – we’re drawn to leaders who combine commercial ambition with emotional intelligence, and they to us.
How does Inflexion approach talent within a business?
Due diligence isn’t just about the financials for us – the people behind the business are equally critical. Talent considerations can absolutely make or break a new investment.
When evaluating leadership teams, two questions stand out: can we build a productive, collegiate partnership that will thrive over years? And does this team have both the appetite and capability to go on the accelerated journey with us?
Post-investment, the approach becomes more focused. We’re strategic about adding capability where it supports the growth plan. Sometimes that means enhancing finance functions or strengthening commercial teams. Other times, it’s bringing in specialised expertise in areas like data, AI, M&A, or technology. The key is precision – adding exactly what’s needed at the right moment.
How do you adjust company structure during rapid growth?
Growth introduces complexity that can create issues for a company if it doesn’t evolve. A structure that worked perfectly at €10 million EBITDA in a single geography rarely serves a business once it hits €30 million EBITDA with international operations.
This is why 25% of private equity portfolio companies undergo substantial reorganisation during the investment period, with another third making targeted structural adjustments to accommodate this growth. The right backer can help with this.
Inflexion is proactive about this organisational design. We don’t wait for problems to emerge – we use our significant experience in working with over 120 businesses to anticipate when a company’s growth trajectory will demand structural changes, and get ahead of them.
How important is culture to business growth?
The most successful private equity portfolio companies approach culture management very consciously, rather than as an afterthought. They begin by clearly articulating values and a purpose that drives strategy and can withstand growth, while establishing scalable systems to reinforce these elements.
The best performers don’t view culture as static. They regularly assess cultural health through employee feedback and adapt practices to support evolving business needs, while preserving foundational elements that maintain their competitive advantage.
Can data play a role in hiring decisions?
Absolutely, and it should play a much bigger role than it typically does. It’s striking how many companies apply tremendous rigour to financial forecasting or tax structures but rely on gut feel for their most important asset: people.
At Inflexion, we’re enhancing our data-driven decision-making in this area. We look at a wide range of metrics ahead of hiring and create our own insights through assessments. After an appointment, we then track talent metrics across the portfolio to spot patterns of success.
It’s about building a complete picture using multiple lenses. The more data you have, the better your decisions around team design, structure, and composition, which in turn drive stronger returns.
Inflexion focuses on helping portfolio companies design stronger organisations, build better boards and management teams, create effective performance management and incentives, and improve overall organisational health.
Each investment, regardless of size or stake, has full access to Inflexion’s value acceleration support which includes international expansion, M&A, digital enhancement, talent management, commercial effectiveness and ESG strategy.
