In private equity, transformation is the key to differentiated alpha, and essential to generating top quartile returns. But how do you actually create that transformation to drive growth? The Private Equity Value Creation Podcast with Nick Creasey and Scott Estill answers this crucial question by talking to those who have done it successfully. 

Catch up on our first seven episodes with a few highlights and links to listen to each 20-minute podcast in full. 

EPISODE 01

Al Morales

Chief Transformation Officer 

AmerisourceBergen, Tech Data, and TD SYNNEX

“I’m a part time psychologist, a part time cultural anthropologist, and a full time agent of change.” – Al Morales

KEY TAKEAWAYS

• What is the role of a Chief Transformation Officer? A good CTO needs to challenge, push, reward, and add stress to an organization that needs to act differently. The role is designed to create discomfort.
• A CTO’s main action goals are to drive more efficiency and efficacy on the cost side, on the SGNA line, and to look for opportunities for growth and margin expansion. The focus is optimizing the operating model to fit the strategic directive of the business. 
• The CTO needs to keep up momentum with quick wins, communicate those wins to everyone on the larger team, and create a reward system for those wins.
• A good CTO has to have the ability to turn detractors into allies and to build trusting relationships with the management team. 

In this inaugural episode, we discuss how to look for and analyze opportunities for value creation via transformation, and how a successful CTO creates change in an organization. We examine how PE and Operating Partners should be thinking about deploying Transformation Officers into their portfolio companies to achieve differentiated alpha. Listen to the full episode here. 

EPISODE 02

Chris Moye

CEO, Board Member

McKinsey, GA Goods, Warburg Pincus, Crossmark

“The first phase of the playbook is to get people to say ‘Where is the economic juice in this business?’” – Chris Moye

KEY TAKEAWAYS

• Performance infrastructure to implement change in a company, translates to larger cultural change within that company. The key components of larger cultural change are behavior, processes, and mindsets.
• Currently, supply chain intensive businesses are seeing disruption. There is success with digital forecasting to put limited resources to better use.
• Digital transformation can be summarized as applying digital tools to drive process improvements that will fall into two categories. 1. Taking as much cost out through automation and digitizing so that people aren’t doing mundane tasks. 2. Optimization through forecast analysis .
• Digital transformation is new and not everyone knows what it means, if it will actually help them, or how to implement it. The key is having a CEO understand the benefits, so that leadership can incrementally fold in new digital strategies and get everyone on board. 

To hear more from Chris “The Professor” Moye including how to determine the right transformation framework, including digital transformation, to achieve growth, click here.

EPISODE 03 

Mark Tarchetti

Founder and Growth Strategist 

Alchemy-Rx

“The clearer you are on the strategy, the clearer you are on what doesn’t matter, and that’s where your savings come from. What you don’t do is pull the savings out of the things that really matter to the brand and to the customer.” – Mark Tarchetti

KEY TAKEAWAYS

• Most companies don’t have a clear strategy, much less a strategist to come in and work with them. However, a strategist doesn’t have the limitations internal management has, which helps the firm overall.
• There are benefits to activity-based management over thematic-based management. Testing ideas before they’re followed through with, costs money, but ultimately it saves money. 
• Cutting costs is easy, but growth requires a different mindset. 

For the past few years, markets have been facing disruption from insurgent brands and the scale of online growth. This growth is fundamentally changing the business landscape, not just in retail. On the podcast, Mark walks us through some very successful playbooks to not just buy your way to scale, but grow your existing business. Learn more here. 

EPISODE 04: 

Don Mershon

Founder and CEO 

BetterProtection 

“It’s a fallacy that you can be an entrepreneur and not be accountable to anything. You work for your clients, otherwise you won’t be working.” 

KEY TAKEAWAYS

• Selling a private business to a PE firm requires a deep understanding of the qualities in others that you seek to work with.
• For a business owner, winding down the business and walking away offers them nothing. On the other hand, a working understanding of private equity, allows a business owner to see that there’s a profitable way out or a different option to continue.
• It’s important when you start a business to develop your own strong thesis on the purpose and operations of the business, and then find someone who backs that ideology.

Don Mershon is part of Lancor’s L.A.B program and a perfect example of taking an idea through the LAB process. Lancor’s Advisory team collaborated to leverage his professional experiences and went from an investment idea to five acquisitions and growing (all single digit purchase price multiples). 

He grew his private business over the course of almost three decades, then sold to a PE firm (twice) and is continuing to refine the process with another PE firm. On the podcast, Don discusses how earlier PE backing could have achieved the same level of growth in five years (not 30), and how to pick the best PE firm to work with if you are looking to do the same thing. To listen to this great case study for business owners and PE firms click here. 

EPISODE 05 

Paul Stansik

Operating Partner 

ParkerGale Capital

“Everything we do is designed to uncover what the company, its product and its people, already look like when they’re at their best. Then, we have them do that a little more intentionally and a little faster.”

KEY TAKEAWAYS

• ParkerGale’s in-house consulting team helps train teams, position products, monitor performance, and build strategy.  
• The companies they invest in have been around for 5-20 years so their work is not hypothetical but a regression. It can bring back/amplify the best parts of a business, to return the company to previous success and increase further success. 
• The key is not trying to invent a new strategy but rather to focus on what the company does best.

This episode spends time with an Operating Partner walking through the specifics around evaluation and execution of PE investment opportunities.  Paul Stansik highlights what he has learned at consulting firms and then put into practical application.  If you are an executive, operator, or investor looking to think through growth, marketing and overall leadership, listen to Paul here. 

EPISODE 06 

Joshua Fennig

General Manager 

FI Consultants

“I love to be around people. I love to help people, and most of all, I love seeing people prosper and grow. And I think those things helped me gravitate to situations like turnarounds.” -Joshua Fennig

KEY TAKEAWAYS

• Josh is another PE savvy executive that is leveraging historic experience and Lancor’s Advisory Business (see the earlier podcast with Don Mershon).
• Contrary to common business advice, emotions should be a guide for intuitive decision making, not ignored.
• The stressful part of middle management is that you’re enacting decisions from superiors, often with less initial input than you would have liked. Finding the courage to object when you disagree, makes you a stronger team member and actually helps connect you to leadership. 
• Josh’s best pieces of advice would be to stay connected with your team, whether that involves proactively addressing how adversity will be handled or ensuring mistakes are understood as a normal part of business.

Josh is currently working with the LAB to shape his investment thesis for his next opportunity. Josh’s consulting  approach is a fresh one in the business world and one of the reasons he is so in-demand with E-mobility and Industrial manufacturing companies. To hear more about his approach, listen here. 

EPISODE 07 

Sean Mooney

Founder and CEO 

BluWave

“It used to be a one or two note song, now it’s this symphony of motion between the internal deal teams, the internal op teams, the external third parties, and they’re all working together to transform the company.” -Sean Mooney

KEY TAKEAWAYS

• The big trend is value creation. PE firms are realizing the importance of investing in human capital to drive higher returns. It’s not just about replacing leadership, but updating everything across the board. 
• The key to value creation is seeing something that no one else sees in that book that’s going to 150 other private equity firms. You need alpha. It’s not just about trying to lift revenue a little bit. It’s determining how to lift revenue, optimize costs, change strategy, bring in the right tech and the right people. Before you even invest you know what you will do on day one. 
• AI is going to impact every company in the world. Every company should be using it right now, from writing emails to LinkedIn posts it’s a tool you should be using. 

After spending a few decades in Private Equity as an investing professional, Sean thought there must be a better way to help the industry drive higher returns more quickly. Sean developed a way to bring in specialized consultancies to fit the precise needs of a PE portfolio company every time – while being better, faster, and cheaper. Hear more about Sean’s approach here.