Coley Andrews could never have anticipated when he cofounded Pacific Lake Partners, a search fund investment firm, in 2009, that he would spend as much time managing people as he would the firm’s investment strategy. Pacific Lake had grown its portfolio to include 30 operating companies plus 30 active search funds in the six years since its launch, and Andrews interacted regularly with many of the CEOs, either as a board member or as an informal advisor. Though several of Pacific Lake’s transactions involved complex financial structures, Andrews had learned that few issues were more difficult than some of the interpersonal challenges that confronted him from time to time.
In the first vignette, Andrews learns that a searcher with whom Pacific Lake has made a soft commitment to invest has falsified part of his resume. Andrews and his partner, Jim Southern, decide to withdraw their commitment from the searcher and send a letter out notifying the investor group of the news. Andrews must prepare for how to respond to what will inevitably be an onslaught of calls.
In the second vignette, Andrews learns that a fellow board member has withheld knowledge about serious indiscretions committed by the CEO, including sexual harassment and relations with a female employee. Andrews must decide how to best confront his board member with this disturbing news.
The learning objective of the case is to help students, in the role of CEO or manager, prepare for and practice difficult conversations with key employees and important stakeholders where they often must deliver unwelcome or unpleasant information or help them navigate through challenging situations. The students must make important decisions around tone, content, setting, and talking vs. listening to help them guide the conversation to the best outcome.