Kyle Johnson, Author at BluWave

Private Equity Interim CHRO: What Are the Benefits?

January 25, 2023 Kyle Johnson

An interim chief human resources officer can be a great asset to maximize a portco’s value.

They can help a business run more efficiently by evaluating existing HR processes and aligning them with business goals.

Hire a Proven Interim CHRO

Whether going through an M&A, an internal crisis, a reorg or other situations that require a talent expert, here are some reasons private equity firms should consider temporary HR leaders.

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Increase Efficiency and Effectiveness

A human capital leader has the opportunity to improve company operations for the short time they’ll be in their role. (Usually three to nine months.) Here are some ways they can do so.

Streamlining HR Processes

They can evaluate existing HR processes at a portfolio company, identify areas for improvement and implement changes to increase effectiveness. This may include automating repetitive tasks and standardizing processes across the organization.

For example: expediting a labor-intensive employee onboarding process with new software. They could also implement a standardized performance management system so that everyone understands how they’re evaluated.

CASE STUDY: Interim CHRO Leads Complex Carve-Out in Consumer Products Industry

Improving Data Management

Temporary CHROs can also collaborate with the tech team to improve data collection, storage and analysis. This makes it easier for management to make educated decisions.

One way they could do this is by creating dashboards accessible to managers. These, and other tools can streamline analysis relevant to growing the business.

Aligning HR with Business Goals

The human resources department’s objectives must also align with the portco’s goals.

Identifying and tracking KPIs – employee turnover rate, time to fill, employee engagement, DEI initiatives – is one way to do this.

The interim CHRO interview process is a great time to determine whether the person you want to hire works well across departments.

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Reduce Employee Turnover, Increase Engagement

Conducting Exit Interviews

Exit interviews help managers understand why employees leave and identify what contributes to a high turnover rate. This information can be used to develop retention strategies and improve employee engagement.

Here are some of the questions an interim CHRO might ask a portco employee during an exit interview:

What made you decide to leave the company?
Is there anything you disliked about working here?
Do you have any suggestions for how we can improve?
How was your experience with your manager?

Creating Employee Retention Programs

Retention programs address the specific needs of employees, such as recognition programs, professional development and the ability to work from home, even in a hybrid situation.

Employees may also be more likely to stay if they have access to department-specific job training.

HR leaders can also use engagement surveys and focus groups to identify problems ahead of time.

Identifying Key Drivers of Employee Satisfaction

Speaking of surveys and focus groups, they not only tell HR leaders what’s going wrong but also tell them what employees like about a company. This information can help create targeted retention strategies and improve employee engagement.

Here are some of the top areas of employee satisfaction an interim chief human resources officer will want to pay attention to:

Clear communication and transparency
Opportunities for growth and development
Work-life balance
Recognition and rewards

Building a Positive Company Culture

Creating a positive company culture is no easy task, especially in the midst of a transition. That’s why it’s important to work with an interim CHRO experienced with tumultuous situations.

Besides paying attention to employee satisfaction, this person should be able to build consensus across teams.

“In a strong culture, employees feel valued,” according to Great Place To Work. “They enjoy at least some control over their jobs, instead of feeling powerless. Whether it’s by working from home, choosing their projects or trying out a new role, employees that feel valued and can make decisions achieve a higher level of performance.”

Providing Regular Feedback and Recognition

An interim CHRO can help managers to provide regular feedback and recognition to employees.

They can standardize feedback loops through surveys, one-on-one meetings, focus groups and other tactics. They should then be transparent about how they will use that information to improve the company.

It’s important to do this on a regular basis, and not as a one-off exercise.

Since this person will only be in their role for a few months, having monthly, bi-weekly or even weekly evaluations may make sense. Especially if they can develop a system that can be inherited by the person who will take on their role full-time.

Compliance

An interim CHRO with experience in your industry can hit the ground running. Every business has a unique set of legal challenges, and you don’t want someone in the C-suite who has to learn on the job.

Here are some specific areas where a temporary CHRO can help with legal hurdles.

Reviewing and Updating Company Policies and Procedures

This ensures a company is compliant with all relevant laws and regulations, such as those related to labor, anti-discrimination and data privacy.

This should be done in collaboration with other executive team members as well as the legal team.

Conducting Compliance Audits

Compliance audits help identify areas of legal risk and recommend corrective actions.

The head of people can do this by developing an audit plan with a clear scope. They’ll then determine risks, gather evidence and analyze the information. In the end, they should prepare a report based on their findings.

They’ll also need to implement the plan quickly to minimize risks to the company.

Providing Training and Education

Another way to protect the company as well as equip employees is to educate them on compliance and labor laws.

Here are some resources an HR executive might use for this:

Monitoring Changes in Laws and Regulations

This person should also be current on changes in laws and regulations. Company policies and procedures should then be updated accordingly.

Use the interim CHRO interview process to evaluate whether they have the knowledge to make an impact in this area from their first day.

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M&A Integration

Developing and Implementing a Communication Plan

A comprehensive communication strategy informs employees about the transaction and its implications.

The head of HR may do this with a dedicated website, by holding town hall meetings or providing regular updates. They may also work with management to develop a Q&A document and establish an employee hotline.

Managing Cultural Integration

A seasoned executive will improve cross-company integration by addressing differences in culture, values and internal practices.

They do this with shared vision and values, aligning policies and procedures and promoting cross-functional collaboration.

Mary Anne Elliott, CHRO at Marsh, talked with HBR about the importance of working with other top executives on this.

“[These] meetings are a pragmatic activity. When you’re sitting with the CEO and CFO, there’s no place for academic HR,” she says. “It’s all about understanding what the organization needs to do to drive business performance and how to align those key variables.”

Assessing and Managing HR Risks

Some typical risks associated with a merger or acquisition are employee retention, legal compliance and benefits integration.

A capable temporary people leader will know how to do each of these things efficiently.

Coordinating Benefits and Compensation

Coordinating the integration of benefits and compensation packages for employees is also important.

Health insurance, retirement plans and stock options are just a few examples.

Reviewing existing benefits packages can help them identify gaps or redundancies.

Integrating HR Systems and Processes

Finally, an interim chief human resources officer can manage the integration of HR systems and processes such as payroll, performance management and employee data management.

The new, combined organization’s HR processes must be aligned with the needs of the business.

The IT department can help in this area by ensuring a smooth transition of data and systems.

Hire an Industry-Specific Interim CHRO

Succession Planning

Identifying Key Roles and Critical Skill Sets

Some roles are more crucial to a company’s success. The interim CHRO should identify these and devise a strategy to make sure the right talent is in place if someone leaves.

They can also identify potential leaders within the company who lack professional development.

Conducting Talent Assessments

Internal assessments help identify high performers. Since these are the people most likely to leave for another opportunity, it’s worth investing time in their development.

By aligning these evaluations with company goals and leadership needs, the employees will be better equipped for a new role.

This will open the door for them to be promoted sooner as they grow within the company.

Creating Development Programs

An interim CHRO can design development programs to help high-potential employees acquire the skills and experience needed to take on leadership roles.

These are some ways they might do that:

Rotational assignments
Mentorship programs
Professional development courses
Cross-functional team assignments

Building a Talent Pipeline

While it’s important to foster talent internally, an interim CHRO can also establish an external talent pool. Outside hires often help the company by bringing a fresh perspective to a challenging situation.

Having a group of qualified candidates on standby also saves time in the hiring process.

At BluWave, we have a highly vetted group of candidates for private equity, portco and privately owned company needs on standby. That way, we can provide you with two or three exact-fit resources within a single business day.

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Developing a Succession Plan

A comprehensive succession plan will not only focus on identifying, developing and retaining key talent, but also contingencies for unexpected departures.

Along with mentoring and coaching programs, regular performance reviews ensure that employees are ready to take on new roles when needed.

If your private equity firm or portco leader needs a human capital expert, BluWave has the world’s best temporary chief human resources officers on standby. And if you’re already in a talent role, we have tailor-made solutions to support you, too.

Everyone in our network has been rigorously evaluated while also receiving multiple recommendations from other leading PE firms.

CASE STUDY: Immediate HR Diligence Provider Needed

Reach out to set up your initial scoping call with our research and operations team, and we’ll provide you with two or three exact-fit candidates, no matter how urgent your need, within one business day.

Interim CFO for a Financial Crisis

January 13, 2023 Kyle Johnson

When a company faces a financial crisis, an interim chief financial officer can make all the difference in a successful turnaround.

Whether going through a restructuring, facing bankruptcy or other challenging financial situations, an experienced financial leader is essential.

A man wearing a suit sitting at a desk with an open gray laptop, a white coffee mug and papers and folders. He's looking down and the desk and looks very stressed.

Situations for an Interim CFO

A financial crisis can be due to something within a company, external economic forces, or both.

Poorly responding to a distressing financial situation can destroy a business. A capable interim CFO, however, will know how to navigate the following scenarios.

Access Interim CFO Resources

Bankruptcy

The two most common bankruptcies a company will file for are chapter 7 and chapter 11.

When a company files for chapter 7 bankruptcy, it plans to shut down.

Chapter 11 bankruptcy, though, means a company is still viable but needs help relieving some of its debt.

While an interim CFO would seldom take on a chapter 7 bankruptcy, it’s common for them to step in and help a company try to avoid chapter 11 bankruptcy. If it’s not avoidable, a temporary chief financial officer can also help navigate the situation.

“A very good interim CFO can be a lot of help because they come in and they look at, ‘What are the things between gross profit and net earnings that are negatively impacting the business?’” BluWave controller Justin Scott says.

Cost-saving measures could include lowering headcount, cutting advertising costs or negotiating with creditors, which we’ll discuss more below.

Restructuring

While most restructuring situations are tied to bankruptcies, there are exceptions. Here are some of the more common ones.

Carveouts

An interim CFO who can adeptly perform carve-out tasks is key for organizations looking to sell off part of their company. That can mean getting their hands dirty setting up general ledger architecture or determining which employees to include in the sale.

“Let’s say 25 percent of the existing team is going with the carve-out, then I’ve got to decide ‘What’s the 25%? How are those processes going to work?’” Scott says. “Where you typically see the carve-out CFO come in is because they don’t want all of those activities to take away from the core business that the existing CFO is already managing.”

CASE STUDY: Interim CFO with Expertise in Commodities, Hedging for Manufacturing PortCo

M&A Integration

An acquisition, of course, is the opposite situation. The finance executive must determine how to integrate multiple teams in the same company.

“You likely have multiple sets of books. You have multiple systems. None of them talk to each other,” Scott says. “Essentially, you’re running parallel systems or parallel processes for everything. And then you have to manually consolidate everything and that’s just no fun.”

Ginessa Ross, who is often the first point of contact for interim CFOs BluWave works with, says lots of clients have been emphasizing M&A skills recently.

“All sides of it, whether it be due diligence, post-merger integration or prep for sale – having M&A experience, especially in private equity, is key,” she says.

Cost Savings

A turnaround CFO may be sought when accounts payable get out of control.

If the internal team has become bloated, they’re likely to partner with someone in human resources to reorganize the company more efficiently.

“It’s not typically just finance here. It’s typically that a new technology has been implemented that’s changed the field and headcount needs to be reduced,” Scott says. “How do we eliminate or mitigate the overhead expense of the SG&A of what’s happening today?”

They may also cut marketing costs or improve operations to find savings. This can be done by spending less on advertising, implementing automation tools or canceling automated subscriptions, for example.

Hostile Takeover

Although unusual, there are times when a temporary finance executive is brought in for a hostile takeover.

“It is possible to go to an interim CFO as a stopgap,” Scott says. “But it’s not a likely scenario.”

More often, the company executing the takeover will already have a CFO in place.

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Skills Needed for a Financial Crisis

What skills does an interim CFO need in a time of crisis? Accounting and finance, of course, are fundamental.

“You have to know the full revenue cycle cradle to grave,” Scott says, adding that strong management is also a key trait.

There are other things, though, that are particularly important for a chief financial officer in financially distressed situations.

Internal Communication

When managing a company’s finance team, the interim CFO must be able to communicate their plan of action. Since they’re typically in the role for around six months, they don’t have as much time to win trust and build unity.

Focusing the early days on getting to know the team helps with buy-in for the duration of the project. One component of this is alleviating fears of the unknown.

“The first day, I think, is talking to as many people as possible in the company, on the finance team, and reassuring them that things are going to get better,” says one long-time interim CFO from our network of experts.

A temporary finance executive must also be able to communicate with his or her peers and superiors. Not only do they sit in the C-suite, but they may be a direct line to a private equity firm that has a lot at stake.

“They have to be able to build credibility going both directions quickly if they’re going to get anything done,” Scott says.

External Communication

Beyond providing clarity for coworkers, a chief financial officer must also be skilled at working with clients, creditors, vendors and other outside entities.

If a company is in danger of filing for bankruptcy, the interim CFO will likely negotiate with creditors to lower their debts.

They may also ask clients to move up their timeline for accounts receivable so the organization can have more cash sooner.

In either case, being able to work well with others is paramount.

“The situations where financial executives most often fail to reach an agreement are when they don’t have any people skills, or they don’t truly want a result,” Scott says. “You have to be able to bend and give a little bit on some of these things just like in any negotiation.”

Access Interim CFO Resources

Crisis Exit Strategy – Prep for Sale

Before taking a company’s financial reins in the midst of a crisis, an interim CFO should understand if the firm is planning an exit, and if so, what the strategy is. That allows the company to get the maximum benefit out of its new executive resource.

“Bringing in somebody from the outside allows you to access a broader set of skills and brings a fresh perspective,” BluWave managing director Houston Slatton says.

Here are some differences between prepping to sell the entire company vs. just a few assets.

Sell the Entity

If someone is brought on to prep for the sale of an entire company, their job is to get it in the best shape possible for the buyer.

Not only will this make it a more attractive purchase, but the seller will extract more value, too. This process should be planned for months, if not years in advance, when possible.

The interim chief finance officer brought on in this situation should have experience improving operations, cutting costs, increasing accountability and more. They should also be well-versed in evaluating and working with potential buyers and closing the transaction.

CASE STUDY: Interim CFO Elevates Real Estate Search Engine’s Financial Strategy

Sell the Assets

Even when parts of a company are being sold, as opposed to the entire organization, many of the same skills apply.

In this scenario, though, the company remains intact, and employees are not typically part of the package.

The right executive will help an organization receive a large return for those assets, boosting cash flow.

Each interim CFO in the BluWave network has been vetted and reference-checked before we ever put them on our roster.

That way, when companies in financial distress reach out, we can provide two or three exact-fit solutions in less than one business day. Whether your company is in the nation’s capital, Atlanta, our hometown of Music City, or any other major city, we have the resources you need.

This attention to detail and our private-equity speed turnaround give organizations a greater chance of getting back on track financially.

Learn more about the select group of private equity-grade interim CFOs we work with daily.

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September 2022 Roundup: BluWave Client Insights

October 4, 2022 Kyle Johnson

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with BluWave-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our client’s musings on employee-based ownership, developing ICPs, creating an employer brand, and more.

KKR: Employee Ownership

Seeing success after implementing broad-based employee ownership programs in several portfolio companies, Pete Stavros, Co-Head of Americas Private Equity at KKR, shares his insights on the benefits of employee ownership.

ParkerGale: Developing ICPs

ParkerGale operating partners Cici Zhang and Paul Stansik speak on the importance of defining an Ideal Customer Profile (ICP) and discuss their steps to building out an ICP.

Listen to Podcast>>>

Insight Partners: Building an Employer Brand

With an increasing emphasis on talent and a push towards putting employees first, it is critical for employers to proactively work to attract and retain top talent. Insight Partner’s Talent COE, Hattie Young, identifies a 4-step process for building a compelling employer brand to attract the best talent.

Montage Partners: Questions Sellers Should Ask

The diligence process should be a two-way street. Montage Partners highlights diligence on the sell side and provides questions sellers should be asking potential buyers.

Blackstone: Dealing with a Tough Market

With recession risks in the US and global economy, Joe Zidle of Blackstone gives his insights to dealing with a tough market, speaking to inflation, a strengthening labor market, and shifting consumer demand.

Read what some of our clients had to say last month on value creation through human capital, continued recessionary pressures, DEI, digital marketing, and more.

Interim CFOs – Why Use Them?

September 19, 2022 Kyle Johnson

Interim CFOs are a powerful resource that can be used in a wide array of ways.

In this video, BluWave’s Founder & CEO, Sean Mooney, and Managing Director, Houston Slatton, discuss some of the most common uses of interim CFOs and the benefits to both the PE firm and the portfolio company.

You can learn more about the finance resources we have, including interim CFOs, FP&A experts, and more here.

Video Transcript

Sean Mooney, Founder & CEO: Hi, my name is Sean Mooney. I’m the founder and CEO of BluWave. I’m joined here today by my colleague, Houston Slatton. Today we’re going to discuss one of the most popular use cases in the BluWave toolbox, interim CFOs.

So Houston, how does your team know who’s really good and what’s needed for a private equity grade interim CFO to exceed the standards of a private equity firm?

Houston Slatton, Managing Director: Sure, yeah, it’s a great question, Sean.

First, we’ve got dedicated research teams that are constantly mapping these markets to know who’s really good, know where they’re really good, and know what their specialties are.

Secondly, we use frameworks that you developed over your time in private equity, Sean, to be able to assess them and rate them against particular skills and capabilities, but through thousands of iterations, we’ve been able to take those and take them to the next level and beyond (check out our post that covers the five things to consider when hiring an interim CFO here).

SM: I think you guys have done a great job at that. Candidly, I was pretty good at it. I could do it but I was the king of brute force and it was a craft project every single time, and so what I think you guys have done a great job is through seeing it and doing it over and over and over again, developing these tightly owned processes for assessing who’s really, really excellent at things. I think you’ve done a great job. What do you think about next in terms of other things that you do?

HS: One, we vet them specifically for every opportunity. We want them to give us the “heck, yes,” or “no,” which means really we want them to be self-aware and only tell us it’s a good fit if it really is if it’s a 10 out of 10 project. They’re proud to be in our network, so we get that honesty, but then we also hold them accountable as well, by working with our clients to collect that feedback along the way at the end of projects, to hold them accountable and make sure they’re great.

SM: I think that’s a really powerful part of what we do, is this whole circle of trust. People who are invited into this network are proud to be in it, and they do everything they can to be excellent over and over and over again because it supports their success, and our clients’ success, in this symbiotic fashion. That’s great.

Through what you’ve seen in our client base, Houston, what are some of the ways that people are using interim CFOs?

HS: Sure. I guess one of the top ones is just the unanticipated departure. When a CFO may leave for any number of reasons, it’s great to bring somebody in that can keep their hands on the wheel, keep things moving quickly and continue to make sure the company’s producing at an excellent level.

We also see a lot of groups that need somebody to come in once a deal closes to do what we call professionalize the finance function, get the right monthly reporting packages in place, make sure that the PE firm is getting the information it needs, do any conversions, transformations, things like that to make sure that the finance function of the portfolio company is really up to private equity grade.

SM: Yep, and I think that’s a great emerging use of this resource in that they not only can get things done faster with more speed and certainty, but they get to show, particularly newer CEOs and CFOs, what really good looks like at the private equity standard when a new deal kicks off? What about on the other side of the equation?

HS: As PE firms start to think about selling a company, CFOs have a lot on their plates already, and so we’ve had clients who will bring in an interim CEO or an FP&A resource that can help respond to diligence requests, assess data, pull reports, and allow the full-time employees of the company to keep things moving while keeping the sale process moving without delay.

SM: Yep. I think that is one of the other really surging use cases for interim CFOs or FP&A professionals. The modern-day M&A process is fast and furious, and the second you have to hit pause you can see valuations decline. Our best clients right now are using that so they can run at a really fast pace and not lose momentum during a sales process, so I think that’s another great thing to think about for this type of really excellent professional.

HS: Sure.

SM: I think those are some great insights around a tool that’s been around for a long time in private equity, but is being used in different ways. One of the things that I’ve learned probably most since moving from private equity to BluWave is that experience and velocity and laps around the track really, really matter. When I was in private equity, I would do things episodically and it was hard to become an expert at them.

At BluWave we’re doing things thousands and thousands of time for the very best private equity firms. We have the highest standards in the world and that helps us become increasingly better and better and better every day, and it’s gotten to the point where we’re trusted by more than 500 of the world’s top private equity firms to help connect them with the very best third parties, who we’re very proud to work with as well.

If you’d like to learn more about BluWave and how we can help you, please feel free to reach out to Houston or any member of the team or me, and we’d be happy to do anything we can to help give you just a little more excellence, a little more alpha with ease, in a way that’s supportive of your success. Thank you very much.

Interim CFO: When and Why You Might Need One

September 16, 2022 Kyle Johnson

When is an interim CFO needed?

Many businesses find themselves in a situation where they need to hire an interim CFO. This can be for a number of reasons, but it is most often due to a sudden change or growth in the company. If you are considering hiring an interim CFO, there are a few things you should know. In this blog post, we will discuss when and why you might need an interim chief financial officer, and we will also provide some tips on how to go about finding the right one for your business.

As your business grows, you will likely find yourself in need of more financial assistance. If your current chief financial officer is not able to keep up with the demands of the job, you may want to consider hiring an interim CFO. An interim CFO can help take some of the pressure off of your current team, and he or she can also provide valuable insights during a time of transition.

There are a few things to keep in mind when hiring an interim CFO. First, you will want to make sure that the individual has experience working with businesses that are similar to yours in size and scope. Additionally, you will want to find someone who is comfortable working on a short-term basis and who is open to being flexible with his or her schedule.

If you are considering hiring an interim CFO, we are here to help. We have a deep pool of interim CFO resources in our invitation-only network. We pride ourselves on our ability to match you with the exact-fit interim chief financial officer you need when you need them. You can learn more about our interim CFOs – including case studies, how-tos, videos, guides, and thought leadership here.

Key things to consider when hiring an interim CFO

Flexibility: When hiring an interim CFO, it is important to remember that this is a short-term solution. As such, you will want to make sure that the individual you hire is someone who is comfortable working on a short-term basis and who is open to being flexible with his or her schedule.
Speed: The head of finance is a mission-critical role for the business and it is a seat you do not want to leave open for any longer than you need. It is imperative that you find someone who can step into the role that aligns with your needs.
Budget: There is a wide range of rates for interim finance executives. Find a resource that fits within your budget.
Similar experience: You will want to find someone who has experience working with businesses that are similar to yours in size and scope.
Cultural fit: Company culture is core to your business. Ensure this is accounted for in your interviewing process.

What about a fractional CFO?

If you are not sure where to start your search for an interim chief financial officer, you may want to consider using a fractional CFO service. Fractional CFO services can provide you with access to experienced professionals on a part-time basis. This can be a great option if you are not ready to commit to hiring a full-time CFO.

We connect you with the third-party resources you need

No matter what route you decide to take, it is important to remember that the goal is to find someone who can help your business during this time of transition. An experienced interim CFO can be a valuable asset to any business.

We connect you with the exact resource you need. Do not hesitate to reach out and ask for help if you feel like your company is in need. You can learn more about our interim CFO offering here or you can connect with a member of our team here to get started.

August 2022 Roundup: BluWave Client Insights

August 30, 2022 Kyle Johnson

BluWave works with over 500 PE firms from around the globe as well as thousands of their portfolio companies and other proactive independent companies, connecting them with BluWave-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on value creation through human capital, continued recessionary pressures, DEI, digital marketing, and more.

ParkerGale Operating Team Partner Jimmy Holloran is joined by David Cohen, human capital partner at Kelso and Company. They discuss the various ways that human capital can impact a firm’s portfolio, the biggest value creators during the hold period, how human capital leaders can and should be thought partners, and more.

Listen to the podcast >>>

SMB founder-owned businesses often don’t have a deep pool of resources like PE-backed companies, but this doesn’t mean they can’t take a page out of the PE playbook during this contracting economy. Heartwood Partners outlines some economic indicators available to businesses, where owners can strengthen their organization during these uncertain times, cost management strategies, and opportunities to revisit a company’s financing ahead of the projected, much stronger economy.

Insight Partners’ Senior Director Portia Raphael and VP Rachel Bonds explain five key actions that all leaders, not just the human capital function, should consider with the increased attention to DE&I in the workplace. They emphasize that this will be a long-term, dedicated effort that will require thoughtful leadership, purposeful recruiting, inclusive policies, and more, so that people of all backgrounds can thrive.

Livingbridge investment team members Vernan Richards and Dave Kirby review why marketing as a business function has significantly changed over the past decade, in both B2B and B2C. Since traditional B2B marketing strategies that require face-to-face touchpoints were no longer an option during COVID, digital processes and lead generation were launched or accelerated. This has yielded very strong returns, and Richards and Kirby look at this evolving and aggressive sector.

KKR Partner Henry H. McVey and Managing Director Aidan Corcoran examine their inflation expectations, inflation volatility, current growth industries like healthcare, and mega themes such as digitalization, cybersecurity, and Europe’s energy crisis. While trimming their growth forecasts, they analyze how many European companies are “enduring the storm” much better than anticipated, a common outcome for the private equity industry during economic downturns.

Read what some of our clients had to say last month on turning current market conditions and macroeconomic challenges into opportunity, human capital due diligence, and more.

Human Capital Forum Recap | August 2022

August 24, 2022 Kyle Johnson

Every quarter we bring together top PE human capital and talent executives to discuss current industry topics and to offer talent leaders in private equity the chance to discuss critical topics of the day. The PE human capital role is rapidly evolving as the private equity industry increasingly invests time and cash flows into human resources.

The BluWave Human Capital Forums follow Chatham House Rule, so our takeaways herein are kept at a high level. Are you in private equity and interested learning the details by joining fellow leading PE professionals during our next Human Capital Forum? RSVP for our next event on November 2nd.

In our most recent Forum, we discussed many topics including:

The private equity industry is seeing the ongoing downturn as a unique talent hiring opportunity.
Human capital leaders are working closely with their portfolio company leaders to accumulate best practices and share them across their portfolio for the good of all.
The private equity industry is actively polling its portfolio companies to understand the voice of their employees and improve engagement and retention.
Human capital leaders are spending significant time bringing additional skills and talent to new portfolio companies and supporting the development of their teams.
The PE industry is using data and objective assessment tools to improve portfolio company performance.
In the days ahead, human capital leaders are looking to spend more time enhancing culture, supporting leadership development, and sharing best practices during rapidly changing times.

We thoroughly enjoyed these thought-provoking conversations that occurred during this recent gathering of PE human capital professionals. If we can be of assistance, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

July 2022 Roundup: BluWave Client Insights

July 29, 2022 Kyle Johnson

Check out the latest, curated collection of our clients’ musings on turning current market conditions and macroeconomic challenges into opportunity, human capital due diligence, and more.

Blackstone’s Senior Managing Director and Chief Investment Strategist shares an evaluation of recession indicators while considering near-term macroeconomic challenges. His sentiment is that even though a recession looks like risk at the forefront, recessions are cyclical and business leaders who understand this have an advantage in the long run. Zidle digs into current market conditions and historical examples of different recession outcomes.

ParkerGale Operating Team Partner, Jimmy Holloran, is joined by Laura Queen, founder, and CEO of 29Bison, a human capital consultancy focused on the PE space. They discuss how talent investments can unlock organizational true value and break down the human capital due diligence basics – what it is, how it’s done, and why it’s the fastest-growing of all the diligence workstreams.

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Veridapt CEO David Thambiratnam and Chief Technology Officer and Co-Founder Sean Birrell join the 2022 Macquarie Technology Summit to discuss the role of hardware and software technology in monitoring commodities while battling ongoing supply chain challenges, managing risks, and optimizing operations.

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Insight Partners Managing Director Praveen Akkiraju dives into how business builders can invest and prioritize human capital not only to survive the bad times, but to also be focused and ready to accelerate once the good times arrive. He shares why resilience plans start with protecting your human capital.

KKR Partner and Co-Head of European Private Equity Philipp Freise outlines how the major geopolitical shifts will fuel the European economy, the beginning stages of untapped digitization opportunities, and how the private economy can remain resilient and embrace these challenging times, thus driving global transformation.

Here’s what some of our clients had to say last month on creating value with digital transformation, boosting operating speeds, software delivery competence, and more.

June 2022 Roundup: BluWave Client Insights

July 1, 2022 Kyle Johnson

Check out the latest, curated collection of our clients’ musings on creating value with digital transformation, boosting operating speeds, software delivery competence, and more.

A letter of intent can vary widely from style to specificity, depending on the buyer’s style. In most cases, the buyer and seller agree that an LOI should not be exhaustive, but there are key pieces it should cover. Montage Partners outlines the five topics for your consideration that they deem essential in an LOI in order to head-off potential future problems.

The “Playing to Win” framework” allows organizations to have a faster and lighter strategy design process, leverage the integrated choice-making throughout any strategic challenge they face, and significantly boost operating speed by having a clear perspective for decision-making. Insight Partners’ Operating Partner Pablo Dominguez and GTM Strategy Advisor Matt May dive into the five questions associated with this framework and how business leaders can use them to cultivate success.

ParkerGale’s Partner Jim Milberry is joined by Mangoteque Founder and Principal, Dave Mangot to discuss all things DevOps. Having helped many distinguished organizations become “best in class” through his philosophy of “Getting Good at Delivering Software”, Mangot’s conversation will Milberry breaks down the four keys that define a company’s competence in software delivery.

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An MIT Senior Research Scientist joins the 2022 Macquarie Technology Summit to discuss the role of digital transformation in creating value and improving bottom-line performance, how leadership plays a pivotal role in successful digital transformation, how to think about digital solutions first, and more.

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Strattam Capital Co-Founder and Managing Partner Bob Morse shares his experience with “First Board Meeting Surprises”, when founders & CEOs are often surprised by actions the investment team outlines in their first board meeting post-close. Morse outlines his transparent approach to these meetings known as the Five-Point Plan that he has found successfully avoids shocking surprises and actually gets the founders & CEOs excited about the post-close action plan.

Here’s what some of our clients had to say last month about digital transformation, PE management, human capital, and more.

Hunt Scanlon 2022: Human Capital in Private Equity

June 21, 2022 Kyle Johnson

Last month, our team had the chance to attend Hunt Scanlon’s private equity recruiting conference in New York. At the conference, our founder & CEO, Sean Mooney, had the opportunity to sit on the panel, “The Art of Building Private Equity Leadership Teams,” alongside Jimmy Holloran of ParkerGale Capital, Amanda Roberts of L Catterton, Michelle Nasir of Arsenal Capital Partners, Kit Cooper of Signal Partners, and Adam Zellner of Business Talent Group. There were many value-filled panels throughout the day, allowing for hundreds of PE leaders to discuss and share their thoughts with one another on the current state of strategy, culture, and talent.

The pandemic has both accentuated and accelerated PE’s greatest challenges, and human capital is challenge #1. PE human capital leaders have quickly become the busiest people in the industry, demonstrated by our BluWave Activity Index which shows that 42% of PE projects in Q1 ‘22 were related to human capital, which was up from 36% in the previous quarter. Our key takeaways from the conference below share how talent leaders are staying busy and how they are creating efficiencies to drive more value while they are in such high demand:

1. The Need for a Data-Driven Approach to Talent

Business leaders are increasingly recognizing the importance and value of quickly getting the right talent in place across all organizations. According to McKinsey, organizations that get talent right in the first year see 2.5x ROI on their initial investment. Getting talent right is not just a necessity for the C-suite, 90% of critical talent needs in a company lie below the C-suite.
With so much at stake if you get talent wrong, many PE firms and proactive businesses are taking a data-driven approach to human capital in order to have best practices to track against.

2. Talent-to-Value

Not only does getting the right talent in place quickly improve ROI, it is also crucial to enable companies to deliver on their value creation plans. One way firms are ensuring they get the talent they need is by developing great relationships with their recruiting firms. This allows recruiters to gain a sense for what “talent for that specific firm” looks like.
While human capital is critical to value creation, everyone is fishing in the same pond for talent, creating difficulties in getting the talent you need. One solution to this is to take a holistic approach to talent identification & recruitment in which you identify the key targeted areas for value creation in a portfolio company and then systematically focus and prioritize solving the talent that will have an impact on the biggest value creation opportunities. This has been called the “Talent to Value” approach.

3. Growing Emphasis on Culture and DE&I

There is a growing emphasis on culture and DE&I in private equity
On the DE&I side, each firm needs to take a personalized approach that works for them. A good starting point is to take an initial framework and gather data internally to make sure everyone is included and heard. Then, needs should be measured on a quarterly basis to see how you are improving over time.
On the culture side, a focus on internal company culture will help with recruitment & retention efforts, which ultimately, will help you advance your value creation plans. One way to do this is to assess what currently sets your culture apart and then build on it from there. Additionally, interviews should be assessing if candidates have cultural alignment, as much as they are assessing if they have skill and will.

Balancing the art and science of connecting talent to value, amidst a tight market will be the key driver to success as we head into the second half of 2022. If we can be of any assistance, please let us know.

Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:

May 2022 Roundup: BluWave Client Insights

June 9, 2022 Kyle Johnson

BluWave works with over 500 PE firms from around the globe as well as their portfolio companies and proactive independent companies, connecting them with pre-vetted, best-in-class, third-party service providers across a variety of resource and functional areas. From information technology and manufacturing to healthcare, consumer goods, and beyond, our clients are expert business builders. In other words, they have their heads in the game and their hands on the pulse of news and insights you can use.

Check out the latest, curated collection of our clients’ musings on digital transformation, PE management, human capital, and more.

The continuous digital transformation of our world has completely changed the way consumers interact with retail brands. In this article, Macquarie dives into how new direct-to-consumer strategies are enabling brands to create personalization at scale, fundamentally changing the future experience of e-commerce.

Ever since private equity was “institutionalized” about 40 years ago, this thriving ecosystem has grown from roughly 20 PE firms to over 5,000 in the US alone. New Mountain Capital (NMC) CEO Steve Klinsky shares NMC’s growth story, style, and path to success. Klinsky outlines a $5.7B gain from just one company and a replicable process to create value for both businesses and the economy.

Monomoy Capital Partners investment team members, Matt Farrell (VP) and Charlie Johnson (Associate), sit down to share a little about themselves and what it’s like to be with the organization. This interview shares a peek at their company culture and the investment team.

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In honor of May being mental health awareness month, MiddleGround Capital’s Founding and Managing Partner John Stewart announced their strategic partnership with BetterHelp, the world’s largest therapy service. MiddleGround Capital is working towards ending the stigma surrounding mental health by providing these professional resources to their employees.

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ParkerGale Operating Team Partner, Jimmy Holloran, is joined by Ted Bililies, Managing Director at AlixPartners, on this episode of The Private Equity Funcast to discuss The Great Resignation, the rising prominence of talent recruitment and retention, and more.

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Here’s what some of our clients had to say last month about retail industry news, ESG, and CEO perspectives.

Women in PE Forum Recap | May 2022

June 1, 2022 Kyle Johnson

Every quarter we gather leading women in PE to discuss current industry topics and to offer intelligent women the chance to gather, share information, and decompress with one another. In our most recent event, we gathered to discuss the trending topics of how inflation is impacting the investment life cycle, ESG, and what the future of work looks like in PE. We have shared the themes we heard discussed across different areas below.

These forums are invite-only and follow Chatham House Rules, so listed below are high-level takeaways only. Are you a woman in private equity and interested in joining fellow leading PE professionals during our next Women in PE Forum?  Register for our upcoming Women in PE Forum here.

Inflation: Inflation is impacting every point in the investment lifecycle from capital deployment to portfolio company bottom lines.

Deal Flow: From a deal flow perspective, higher interest rates will rebalance how investors think of risk/reward, but there is still $2 trillion of dry powder waiting to be deployed. Valuations are beginning to come down on the public market side, but it may be months (or years) before valuations come down on the private side. In an era of inflation, generating top-tier returns will take old-school value creation to improve a company’s ability to generate profit.
Portco: From a portfolio company perspective, inflation is impacting labor, commodity prices, and transportation costs. To reduce labor inflationary pressure, double down on culture, embrace tiered comp structures, and lean into automation. To fight back against commodity price increases, consider multi-sourcing, supplier negotiation, and increase prices where necessary. To address transportation/supply chain issues, consider on-shoring or near-shoring to start to balance sourcing.

ESG: Expectations on ESG are continuing to evolve, shifting from a “nice to have” to a “must have.” ESG has climbed into BluWave’s top 10 use cases on both diligence and value creation in the BluWave Activity Index. LPs are now expecting firms to collect ESG data, report on it, and make meaningful progress over time. Firms are baking ESG into value creation planning and creating thorough checklists that apply to the full portfolio.

Future of Work: COVID has disrupted all dimensions of work, from the work itself, to the worker, to the workplace. Employees are now expecting remote/hybrid work. The role of the office will continue to evolve and move towards a hub for creativity, social interactions, and building culture. The work itself is also changing – more portcos are leaning into technology and automation.

We thoroughly enjoyed getting to gather with other leading women in PE to discuss these trending topics. If we can be of help with any of the above, we’d be happy to quickly connect you to the exact-fit, PE-grade, third-party resources you need.

Interested in learning more about BluWave? Check out our Introduction to BluWave video to learn more about us and how we can help you. If you have an immediate need, contact us here or use the start a project button above – we’ll be happy to help you right away.