Mix of Operational Vs Financial Acumen in a PE fund

This is a topic that has been close to my heart. If you were coaching an athlete to win an Olympic medal, which would be more critical ? Honing at the technique or the mind. What is more important in a product ? Form or function ? Packaging or substance ? Obviously, there are no easy answers for these.

During the glory days of 2006 or 2007, there was very little attention paid to "portfolio management" as a science, not just in India, but across the world. I recently walked into a couple of investment bankers who said the only division that is making money in the Western markets these days is the "Work-out" division that looks after restructuring and divesting LBO assets which have run into trouble.

With these lessons starting to sink in, a larger chunk of the investing community is starting to pay heed to the idea of having in-house personnel who have significant operating experience. I would tend to ascribe the following objectives to this :

• Identifying market trends ahead of time and helping build organizational competence towards tapping opportunities that succeed the same
  
• Facilitating Organizational evolution & unravelling vision
  
• Sounding board for planning and monitoring execution - eg., help draw up KRAs, performance monitors

The above brings me to the point - "therefore, what ?". So what skill sets would be critical in a role similar to the aforesaid. There are the obvious trade-offs :

• Ability to influence quiet, progressive change: Driving through the middle path of change management is an extremely tricky affair that requires patience to wade through resistant waters (in the form of organizational inertia - "if it ain't broke, why fix it ?"), getting emotional buy-in from all stakeholders (getting logical buy-in is often easy but temporal) and relentless focus to drive through to the end.
  
• Flexible yet strong character and personality that can take on "different roles" at different points of time: Often people take one role - that of an insider or an outsider and stick to it through a long time. Being a mentor to a SME business requires you to slip in and out of multiple shoes much like parenting a child - forgiving when mistakes are done the first time, stern when an important message needs to be conveyed, appreciative when progress is swift and exacting when it comes to monitoring.
  
• Ability to understand "key tactical levers" of the business: I would like to lay stress on the word "key levers"- it is not the operational levers, it is not the strategic levers (which are often easy to spot as an outsider). It is a cocktail of understanding and appreciating the organizational DNA with an acute understanding of the market minutiae (in terms of how opportunities in the market can be tapped)
  
• Bias for action: Jack Welch said "A well-executed half idea is infinitely better than a poorly executed whole idea". Period. The sooner you get to the market, the better your chances are.
  

So what would you look for in a person like this ? pedigree ? prior entrepreneurial experience ? prior professional experience ? thought leadership ? out of box thinking ? process orientation ? Financial caution ?. What would be roles that fit this cause best ?

Will try and address this in a consequent post. Would love to hear anyone's views on the above.

~Varadha