When David Marchick first designed his spring term mini course Managing Stakeholders in Private Equity, he intended it to focus on how private equity firms engage with investors, governments, employees and communities to improve returns and protect a firm’s reputation. But then the coronavirus pandemic hit, the economy was sent reeling, and the priorities of the private equity industry shifted to survival and crisis management. So Marchick, a former senior executive at the Carlyle Group, shifted his course as well.
“In a normal environment, dealing with the press, employees, and government agencies is part of the normal operating practice,” Marchick says. “But in a crisis, it’s everything, so the class is going to focus intensely on that.”
The first three-hour session, which took place on Monday via Zoom, spent 45 minutes on the basics of stakeholders in the private equity ecosystem, and the rest of the time on reacting to the Covid-19 pandemic. Students were assigned one of four real-world exercises in crisis communication: helping the CEOs of portfolio companies on messaging about painful layoffs, advising portfolio companies on which government programs they might apply for to weather the downturn, advising the CEO of the private equity firm about her visibility and profile during the crisis, and advising about messaging on the crisis to limited partners. During the final hour of the session, the students heard from two guest speakers: Ron Bloom, the vice chairman of Brookfield Asset Management, and Jon Finer, a senior vice president of Warburg Pincus. Both of them are in charge of crisis response at their respective businesses.
The best leaders in times of crisis have three attributes: honesty and integrity, the ability to communicate, and a talent for innovation.
To prepare for the class, Marchick had the students listen to his recent podcast sponsored by the Center for Presidential Transition, where Marchick is running a project related to presidential transitions. In the podcast, Marchick interviewed Four-star Admiral James Stavridis and former General Motors CEO Dan Akerson on leadership in a time of turmoil. Stavridis, the Supreme Allied Commander during 9/11 and the wars in Afghanistan and Iraq, remarked that the coronavirus pandemic is the biggest crisis the nation has faced since World War II, and something akin to a combination of the 2008 financial crisis and 9/11. The best leaders in times of crisis, Stavridis said, have three attributes: honesty and integrity, the ability to communicate, and a talent for innovation.
As the course proceeds, students will have another opportunity to hear from top leaders about managing during the crisis. Since the course is being taught remotely, Marchick has been able to secure high-level guests who might not otherwise have time to visit an MBA classroom during a crisis. In a few weeks, students will get a remote visit from two titans of the private equity industry: David Rubenstein, the co-founder and co-executive chairman of the Carlyle Group, and Stephen Schwarzman, the chairman and CEO of The Blackstone Group.
“My pitch to them was, ‘The students are operating remotely, and your presence and willingness to spend an hour with them would be more meaningful than ever,’” Marchick says. “They both responded immediately and said they would do it.”