Lessons Learned from Pickleball: Insights for Private Equity
I’ve often found inspiration can come from the most unexpected places. In this case, the sport of pickleball has provided some valuable insights transcending the court and can be applied to the world of private equity. Let’s explore some of the key lessons from pickleball.
Lesson 1: Agility and adaptability
In pickleball, players need to be agile and adaptable, ready to adjust strategy based on opponent’s moves. Similarly, in the world of private equity, it’s crucial to remain agile and adaptable in response to market changes, economic shifts, and industry trends. Flexibility in planning and the ability to pivot when necessary can make all the difference in maintaining a healthy bottom line.
Lesson 2: Risk management
Pickleball, like any sport, involves an element of risk. Players must assess the risk-reward balance of their shots and make split-second decisions. In business, risk management is equally essential. Private equity must carefully evaluate risks associated with investments, expansions, and financial decisions, while also being prepared to take calculated risks when the potential for reward justifies it.
Lesson 3: Team collaboration
Pickleball is often played in doubles, emphasizing the importance of teamwork and collaboration. In private equity, effective value creation requires collaboration between various departments, such as finance, operations, and sales. Just as partners on the pickleball court must communicate and coordinate their efforts, different business functions must work together to achieve common goals.
Lesson 4: Long-term strategy
In pickleball, successful players don’t just focus on the immediate point; they have a long-term strategy. Similarly, in private equity, there’s a need to maintain a long-term perspective in decision-making. This includes prudent budgeting, sustainable growth strategies, and investment in future opportunities while keeping an eye on long-term financial health and enterprise value.
Lesson 5: Continuous improvement
Pickleball players understand the value of continuous improvement through practice, training, and learning from mistakes. Likewise, private equity must consistently review and improve their processes, whether it’s improving cash flow management, reducing operational costs, or seeking out more efficient investment opportunities.
Lesson 6: Adaptation to change
The game of pickleball has evolved over time, with changes in equipment, rules, and playing styles. Similarly, private equity must be prepared to adapt to changes in the economic landscape, such as new regulations, technological advancements, or shifts in consumer behavior. Embracing change and being proactive in adapting strategies is crucial for long-term success.
How we can help
Pickleball offers valuable lessons for private equity. At CLA, we will work with you and help you in embracing agility, risk management, collaboration, long-term strategy, continuous improvement, and adaptation to change.
Thus, private equity and their portfolio companies can enhance their resilience and position themselves for sustained success. Just as in pickleball, mastering these lessons can lead to a winning performance in the competitive arena of business.
Craig Arends is a principal at CLA and is the managing principal of CLA's private equity practice. Craig brings a concentration of experience in providing accounting and transaction structuring advice for leveraged recapitalizations, purchase accounting and SEC reporting, assessing quality of earnings, and GAAP accounting. He has far-reaching experience with critiquing financial models and reviewing target companies' financial performance to identify cost reductions and/or operating efficiencies Craig has more than 30 years of experience in public accounting serving public companies, private equity groups, and companies, including a term as principal in charge of a Big Four Capital Markets Group in Moscow, Russia. He has led financial accounting due diligence projects for private equity investor groups and venture capital funds, primarily in the technology, communications, and manufacturing industries, as well as assisting with Foreign Corrupt Practice Act matters ranging from investigation of payments made, validation of compliance with corporate policies, and review of proposed transactions to ensure compliance. When not working, Craig enjoys watching any sports, but his most favorite are baseball, football and soccer.
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