Private equity firms chase DM skills

It seems it is not only adland which is courting direct marketing skills, private equity houses have also joined the rush, after revealing that many of the firms they buy have a huge skills gap in accountable and measurable marketing.
A research project, carried out by ThoughtSpark, interviewed private equity houses based in the UK with assets under management of over £2bn.
They were asked to rate a range of skills in companies they acquire or fund. On a scale of 1-100%, where 100% is the optimal skill level, accountable and measurable marketing was rated at 44%; second only to only IT management on 48%, while professional. This compares with much stronger skills, such as new product development (71%) and sales (69%).
The increasing role of private equity in developing British business is not simply a matter of contributing development capital. Private equity and venture capitalist firms help acquired businesses develop the key skills needed to drive rapid growth in the funded venture.
This study therefore provides an important barometer of where skills enhancement is most needed among newly acquired firms, ThoughSpark maintains.
Poor marketing skills mean business development funds are misapplied so that an effective pipeline of sales leads is not generated, and market awareness fails to be built.
In short, sub-par marketing skills can significantly reduce a businesses’ ability to go to market, target the right audience with the most effective messages and generate effective sales growth.
ThoughtSpark founder and managing director Paul Lindsell, of Lindsell Marketing fame, said: “Understanding the skills gaps in acquired companies is a key factor to ensure rapid sustainable growth. It is not surprising that start-ups focus on financial management and product development since incompetence in these areas would stop them from even getting off the ground in the first place.
“However, there is evidently a startling lack of capability in both marketing and IT as firms move to second stage growth. Leaving these skills undeveloped is likely to be disastrous for business managers and investors alike. In fact, there is little point in making a private equity investment in the first place if these key skill areas are left unattended.
“Addressing these two clear gaps in their skillset of newly acquired firms is key to transforming start-ups into market leaders.”
The study is further evidence of John Watson’s recent assertion that direct marketing skills are some of the most valued in the business world. In May, Tim Hipperson became the latest former DM agency chief to be courted by adland, when he took up the role of chairman of Fearlessly Frank.
He joined the likes of Marc Nohr, who recently took up a top post at Fold7, and Phil Andrews, the former chief operating officer at Engine, who have been wooed by ad agencies. It is a path which was first trodden by industry veterans Ivor Samuels, David Payne, Colin Lloyd. Miles Young, and John Farrell.
Meanwhile, many UK agency chiefs – including Wunderman’s Mel Edwards, Ogilvy’s Annette King and Havas Helia’s Tash Whitmey – have been promoted to top international roles within their groups.