Brad Gerick, Author at BluWave

Interim Executive Best Practices: Trends in Short-Term Leadership Roles

October 16, 2023 Brad Gerick

Why should a business use an interim executive?

It can be a great way to bridge the gap between full-time hires, give a potential long-term hire a “tryout,” train up less experienced candidates, guide a company through a crisis or even prepare a business for sale.

Whatever the case, interim CFOs, CMOs, CHROs, COOs and the like can be money well invested.

To get the most out of these temporary executives, though, businesses need to have a plan.

Hire an Experienced Interim Executive

BluWave’s Richmond Donnelly discussed the best practices of using interim C-suite talent on a webinar with Mark Steenhoek, Managing Director, Operations, of The Stephens Group and Bryan West, Managing Director, Talent at Resurgens Technology Partners.

Here are some of the actionable insights you can apply to your business’s interim executive strategy.

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When, How To Work with Interim Executives

While there are many situations in which an interim executive might be a good fit, the panelists outlined the most common ones their firms face.

“There’s good reasons and bad reasons that we would hire. I’d say that we find ourselves more in the camp with the bad reasons, and I’d describe those as two,” Steenhoek said. “It’s a crisis situation. Somebody leaves…or it’s a situation where we started looking in this a little bit more post-COVID in that we would have an open CFO role and then it takes nine to 12 months to fill it just because the market was so tight and difficult to find that perfect fit.”

West added that he is a big fan of the “try before you buy” approach. He said he’s encouraged by the number of his peers who are like-minded.

“That was actually reassuring,” he said. “That’s a great way to build a relationship and we’re always open to that.”

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Top Interim CXO Use Cases

Whatever the use case, interim leadership is consistently one of the most-used services in the Business Builders’ Network, according to BluWave’s quarterly insights.

Based on the proprietary data collected from working with hundreds of private equity firms and thousands of leading businesses, the two most-used interim executives are CFOs and CHROs.

Read more about how each of these crucial roles is used:

Based on a live poll of webinar attendees, most PE firms fill multiple interim executive roles per year, taking 3-6 months to do so.

At BluWave, however, we connect you with a short list of exact-fit candidates within a single business day of your initial scoping call.

Why Hire an Interim Executive?

Beyond broader use cases, PE firms and their businesses usually have a specific set of tasks they need this temporary hire to complete.

“We’re able to go in and very specifically orient to on a project basis like, ‘Hey, does this person have experience or the skills to knock out kind of a more tactical list of things?’” West said.

He said that while the overall goal may be the same as when you bring in a full-time C-suite hire, the selection criteria is “quite different” based on what needs to get done.

Echoing BluWave data, Steenhoek said interim CFOs are their most common interim executive hires. The tasks each one is expected to accomplish tend to be the same, with variations depending on the company’s industry.

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Interim Executive Criteria, Selection

Moving beyond the to-do list of items to accomplish, what is it that the world’s top PE firms and businesses look for in interim executives themselves?

West said that having done so many hirings in the past makes it easier to pick up on red flags in candidates. Beyond that, he relies on experience to choose the right person.

“We need somebody that’s been there, done that,” he said. “We don’t want to burn six months of time or three to six months of time on building a function.”

Steenhoek agreed, saying that is his top priority, too.

“I think the second would be, especially if it’s a leadership thing…radical transparency,” he said. “You’re just going to be able to really work together hand-in-hand, which equates to low-ego. They know what they’re there for.”

Learn More: Specialized Executive Recruiters

Setting Interim Executives Up for Success

Once someone is in the seat, the team that hired the individual plays a significant role in their success. How do these leaders set their interim hires up to get the job done?

“There is the team integration and the business integration [and] the CEO is the primary quarterback there, assuming it’s a direct report to the CEO,” he said. “But as far as project-managing the task list…that more often than not happens at our level.”

Steenhoek added two things that he believes are essential in these situations.

“I think really clear communication around what you need and alignment that they’re oriented and really focused on what you tasked them to do,” Steenhoek said. “The second is just being really clear on alignment related to, Are they interim? Are they permanent?”

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BluWave is here to connect you with best-in-class, niche-specific interim executives to help with crisis management, leadership transitions, “try before you buy” and other relevant scenarios.

“Reach out to us at any point if we can ever be supportive with anything you all need,” Donnelly said. “We’re here to help you win.”

Contact our research and operations team to scope your needs and get quickly connected with the service provider you need in less than one business day.

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How To Raise Prices Strategically with Sales Team Buy-In

October 12, 2023 Brad Gerick

When input costs increase, businesses must adjust their pricing strategy accordingly. But it’s not as simple as passing along those costs to the consumer.

First, the sales team must buy in to the new strategy. (This can be particularly challenging for private equity firms and their portfolio companies.) Secondly, you must do so in a way that doesn’t scare off the customer.

But as BluWave CEO and founder Sean Mooney discussed with ParkerGale’s Cici Zheng on the Karma School of Business podcast, those fears are often unfounded when you dig a little deeper.

Listen to the Full Episode

Let’s learn more from these two about how to strategically raise prices, whatever business and industry you’re in.

Challenges of Raising Prices

Sales Team Buy-In

“I think our portfolio companies might be hesitant to think about price increases or think about value-based pricing,” Zheng said.

Mooney agreed, calling it the “number one area that’s underutilized” by private equity firms that BluWave supports.

Quarterly Report: More Pricing Insights

“In part because it gets the most resistance from the portfolio companies, particularly from sales leadership,” he added. “Because it’s really scary if you’re a head of sales and you say you got to raise price.”

Zheng said this is best overcome by generating belief in the company’s products or services.

“If you think about the amount of investment that we’re putting in, in an ideal world, your best-fit customers are also valuing what that is and you’re able to get a value-based price for it,” Zheng said. “At the end of the day, it comes back to, if we really feel [that] the types of companies we invest in have great products, great NPS scores, great retention scores.”

Retaining Customers

Related to resistance from the sales team is often a fear that customers will be scared off by a higher price point. And the thought of being the one to share that increase can be daunting.

But once again, belief in the product is a great weapon in this situation.

“What are our product managers and heads of engineering and engineering talent doing? They’re continuing to invest in that product,” Zheng said. “Hopefully we’re able to convey this to the sales team who have to be at the front line to convey it to the customer of like these are not price increases for the sake of price increases.”

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Value-Based Pricing

The beauty of value-based pricing is that businesses attract customers who are willing to pay for a superior product. Portfolio companies owned by ParkerGale and like-minded private equity firms aren’t courting bargain hunters anyway.

Zheng said that this high-quality approach “justifies what we think this product actually provides to you. And if you were really looking for the cheapest price, then we wouldn’t be having this conversation because that’s usually not the positioning that we have.”

After all, if the business is working so hard to create a quality product or service, why wouldn’t they expect customers to be willing to pay more?

“We’re going and improving the products and updating the modules and features and all these things,” Zheng said. “Are we on the flip side also making sure we’re getting that value-based pricing from our customers?”

Knowing that pricing isn’t the top priority for their target customers gives portfolio companies more flexibility, dousing the fear of scaring them off.

Access Pricing Strategy Resources

Data-Driven Pricing Strategies

No matter how much a business believes in its products and services, it can’t blindly adjust its prices and hope for the best. They must make data-based decisions.

One way to do this is by paying close attention to macroeconomic factors.

“We’re thinking a lot more intentionally about pricing and making sure that we’re not just staying flat, we’re looking at what’s going on in the market,” Zheng said.

There are other metrics that can influence a pricing strategy, though. According to Zheng, NPS scores and retention data are strong indicators of whether a business has a “very solid product.”

For private equity firms, much of this crucial research can be done before a company is ever acquired.

Zheng said that during the commercial due diligence phase, ParkerGale often deploys voice of customer studies to learn what are customers’ top three key purchase criteria. Pricing seldom makes the list.

“Especially when we’re selling enterprise software, these are mission-critical tools and products,” Zheng said. “The customer is not looking for the cheapest one.”

READ MORE: What is Commercial Due Diligence?

In-depth analysis can also help companies learn when they have taken their increases too far, allowing them to adjust back down.

“I would argue if you’re never losing on price, then you’re priced too low. You should be losing a certain percentage of your deals on price,” Zheng said. “But if you can collect the data on the other side, if you’re doing win-loss analysis and calls like that, then you should be able to say, ‘OK, we are hearing now that we have enough actual data, not anecdata, to say we are actually losing on price too much, and so therefore we need to adjust.’”

Benefits of Pricing Consultants

As meticulous as private equity firms and other top business leaders are about their companies, a world-class pricing strategy often requires world-class help.

Mooney mentioned how underutilized pricing resources are, but that’s not because they’re in short supply.

The Business Builders’ Network is full of pricing experts who work on an industry-specific basis. They know the questions to ask, the data to analyze and the levers to pull to make sure you’re setting prices with confidence.

Listen to the Full Episode

“We’re in contact with the service providers in our network nearly every day,” Co-Head of Research and Operations Keenan Kolinsky said. “Before clients even reach out, we already know which providers will likely be best suited for their pricing project. That way, we can hit the ground running as soon as we scope a client’s need.”

These third-party resources are experts in segmenting customers, identifying value drivers, developing measurement tools and pricing structures, conducting sensitivity analyses and more.

They’re on standby to help you determine your target customer base’s key decision factors, willingness to pay, preferences and perceptions.

Lastly, they’ll present this information – with speed and accuracy – in a way that’s actionable for your business.

Start Your Pricing Project

Contact our research and operations team today, and tap into the same invite-only network that the world’s best PE firms – from ParkerGale and beyond – use to set their pricing strategies.

Within a single business day, you’ll be connected to a shortlist of options that will be chosen for your exact situation and vertical.

What Makes a Commercial Due Diligence Firm ‘Specialized’?

October 11, 2023 Brad Gerick

Private equity firms face fierce competition for new deals. Even when the economy is strong, there could be dozens of groups vying for the same target.

When the deal market is stagnant, though, it can seem impossible to find a viable acquisition, let alone have the winning bid.

BluWave founder and CEO Sean Mooney encountered this challenge in his nearly 20 years in private equity.

“As the competitive tension of supply and demand intersected in private equity with more and more capital under management, chasing the same supply of deals was causing pressure for me to say, ‘I can’t just be a market taker anymore,’” Mooney recently shared. “’The surplus is being skimmed. I have to see something that no one else can see.’”

Mooney since started the Business Builders’ Network to help other leaders solve this very problem. He recently spoke with Andrew Joy, partner at Hidden Harbor, about how PE firms use specialized commercial due diligence providers to cut through the noise and rise above competitors.

Access the Webinar Replay

So how do the world’s top private equity firms distinguish themselves in this cutthroat environment? One way is through commercial due diligence.

Bald, white business man working hard on his notebook and tablet early in the morning in the board room, concentrating and deep in thought while being productive.

What is Specialized Commercial Due Diligence?

Specialized commercial due diligence can only be performed by firms that have deep experience in the target’s specific industry and are ready to go well below the surface to provide exclusive insights.

At a high level, a commercial due diligence project usually involves looking at a company’s market size, its total addressable market, conducting a competitive analysis and performing a voice of customer study.

READ MORE: What is Commercial Due Diligence?

“The goal of commercial due diligence is to validate the story that the target’s telling or to identify the reality of the marketplace out there so they can make an informed decision,” according to Don Jenkins*, the founding partner at one of the specialized diligence firms in the BluWave network.

While the details of the process are much more nuanced, a world-class CDD firm will be able to get up to speed faster, give private equity firms a deeper understanding of the business and equip them with a significant competitive advantage over other PE firms that conduct more general due diligence.

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Looking Beyond the Acquisition

When PE firms consider buying a business, they aren’t just thinking about its present-day value. They’re also evaluating what an exit will look like and how much value they can create long-term once the company is no longer in their hands.

That’s why it’s so important for them to thoroughly investigate every potential target. Mooney said that PE firms have moved beyond a “trust but verify” mindset and are looking even longer term than they may have been a decade ago.

“You’re not building for the next five [years] because if nothing else, if you’re going to sell to the next person, there’s got to be some cream left to build it,” Mooney said. “If you’re only thinking three to five years ahead, you’re playing a chess versus checkers game.”

Specialized CDD Resources

Differentiated Data

“As information and data have become more commoditized and more accessible, it’s becoming harder and harder to really find areas where you have a competitive advantage,” Joy said. “We like to say, ‘What’s our angle on this target or deal?’”

Mooney noted that investment banks do a great job exposing as much value creation as possible within a company. But PE firms that don’t dig deeper are going to be working from the same perspective as everyone else.

“The undifferentiated commercial diligence firm is calling the expert networks to get the insights about the markets that they’re sharing,” Mooney said. “Odds are if one over the other is not using a specialized group that sees something that the expert networks don’t, everyone’s getting beta. They’re spending hundreds of thousands of dollars on the sell-side study, which is calling two or three market network expert networks.”

Joy said that when PE firms use the same tools as everyone else, “that’s just the ante to get into the game.”

He added: “You really have to then figure out how this target or this opportunity fits within an angle that you can play. Whether that’s operationally, whether that’s commercially, so that you can justify to your committee why we think this asset is more valuable and we’re going to be the winning bid.”

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Closing with Confidence

When commercial due diligence is done right, private equity firms can make acquisitions with confidence.

“By the time we close on a transaction, we have a really strong hypothesis around what are the value-creation levers that we are going to pull over our whole period to create outsized market returns,” Joy said. “And that’s informed by the commercial due diligence.”

When Hidden Harbor is deciding on a target, Joy said they like to ask where the company’s right to win is, and how they can get there.

“It’s amazing to see sometimes and that when you do a full cycle of investment from closing to selling and you look back and you say, ‘What were the three biggest value-creation drivers of our return?’ And you’re able to say, those were the three that we identified in diligence. That’s pretty powerful to have that amount of conviction and be right about that and being validated.”

BluWave has a close relationship with a deep bench of world-class, specialized commercial due diligence providers.

Each one has been vetted before joining the invite-only network and is re-vetted before they’re matched with private equity firms.

When you contact our research and operations team, they’ll connect you with a shortlist of service providers – with industry-relevant experience – in less than 24 hours.

Start your project today to get the differentiated insights that a specialized commercial due diligence provider can uncover.

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*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.

Manufacturing Momentum: Challenges, Opportunities in the Modern Landscape

October 10, 2023 Brad Gerick

Manufacturing businesses are faced with evolving challenges, especially amid an uncertain economy, constantly pressured from different angles by policy decisions and global events. BluWave sees this every day in the projects it supports for hundreds of private equity firms and thousands of businesses.

Whether in human capital, operations, growth strategy or technology, today’s business leaders have their hands full.

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In a recent webinar, Co-Head of Research and Operations Keenan Kolinsky discussed with Product Manager Ryan Perkins the challenges and opportunities in this industry.

An man in a hardhat stands facing yellow industrial equipment, like backhoes, in a warehouse.

The Rising Importance of Human Capital in Manufacturing

The manufacturing sector was once driven primarily by machinery and raw materials. But now it’s recognizing the importance of its most valuable asset: people.

In fact, 74 percent of manufacturers say that “attracting and retaining a quality workforce” is a top challenge, according to the National Association of Manufacturers (NAoM).

Interim executives have emerged as a pivotal solution in this landscape. These temporary business leaders bridge critical leadership gaps, ensuring that companies don’t lose momentum during transitions.

“Interim executives can help businesses keep their foot on the value creation pedal,” Kolinsky says.

Their role is especially crucial in a volatile economic environment where leadership vacancies can’t be left open for extended periods.

But it’s not just about filling gaps. The recruitment process itself is undergoing a transformation. The emphasis is shifting from generalist recruitment approaches to specialized, industry-specific strategies. Manufacturers are realizing that to drive growth and innovation, they need the right people in the right roles, making executive searches a top priority, too.

Manufacturing Resources for Your Business

Operational Excellence: The Backbone of Manufacturing Success

Turning toward a more traditional problem, nearly half of manufacturers identified supply chain issues as a top challenge, per the NAoM. Even with the peak of the COVID pandemic disruption behind us, this issue persists.

“With manufacturers…experiencing a variety of economic and even geopolitical pressures, manufacturing operations and supply chains simply have to be tighter than ever to achieve desired margins and outcomes,” Kolinsky said.

In response, many manufacturers are turning to expert third-party resources to optimize their supply chains. From right-sizing inventory to reducing lead times and optimizing supplier networks, the focus is on efficiency, cost savings and performance.

Beyond the supply chain, there’s a broader push toward operational excellence. Lean Six Sigma principles, rooted in the Toyota production system, are being adopted to streamline processes, identify bottlenecks and drive efficiency. The goal? Faster, more efficient production with greater precision.

Watch the Replay Now

Strategizing for Growth in a Competitive Landscape

A weaker domestic economy can poses unique challenges. During those times, growth strategy becomes the north star guiding manufacturers. But how do they chart a course for growth amid such turbulence? The answer is data-driven strategies.

“Markets shift often and they shift quickly,” said Kolinsky, who emphasized the importance of real-time insights. “Base your strategy or plan for growth on current market data and dynamics.”

READ MORE: Analytics, Data & AI Resources

By leveraging data analytics and visualization tools, manufacturers can gain actionable insights, track KPIs and make informed business decisions.

With the advent of more accessible artificial intelligence tools, many businesses in the manufacturing industry and beyond have been focusing on essential pre-cursor activities focused on data hygiene. These will lay the groundwork for a more seamless integration once they’re ready to use AI to accelerate growth.

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Embracing Technology: The Future of Manufacturing

The digital revolution is reshaping the manufacturing landscape.

According to Alithya, 43 percent of manufacturers came into 2023 planning to increase their year-over-year spending on technology. it’s clear that the industry is gearing up for a tech-driven future.

“The manufacturing industry is really digitizing rapidly and in more ways than one,” Kolinsky said.

From IT strategy to system selection and implementation, manufacturers are recognizing the need to align their technology tools with broader business objectives.

But it’s not just about adopting the latest tech solutions. Effective change management is crucial. As manufacturers transition to modern systems, they must ensure that their teams are well-equipped and trained to leverage these tools to their fullest potential.

BluWave is here to help you connect with best-in-class, niche-specific manufacturing resources to help with human capital, operational excellence, growth strategies, technology and more.

Contact our research and operations team to scope your need and get quickly connected with the service provider you need in less than one business day.

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Joe DeLuca of NewSpring Capital: Navigating Challenges with Empathy, Strategy

October 4, 2023 Brad Gerick

Joe DeLuca recently joined the Karma School of Business podcast to talk private equity. The operating partner with NewSpring Capital spoke with host Sean Mooney about the significance of building genuine relationships during crises, the evolution and adaptability of NewSpring’s value creation model and the unparalleled power of collaboration, drawing parallels from the Manhattan Project.

Their insightful conversation sheds light on the human-centric approach to business and the pivotal role of adaptability in the private equity landscape.

Here are some of the top takeaways from their conversation.

Listen to the Episode

3 Takeaways from Joe

1. Building Relationships in Crisis

In the face of unprecedented challenges, such as the onset of the COVID-19 pandemic, DeLuca underscored the importance of human connection and understanding.

“I tried to understand what the people that were working at our business, just what was going on so that we could relate to each other,” he said. “Then I could ask of them, ‘Hey, OK, we really need to do X.’ And then there was some empathy and some relationship building in the first week that I just felt was really critical because it was all happening real-time.”

This sentiment is not just about business strategy but about genuine human empathy. By taking the time to understand the personal challenges faced by employees, leaders can foster a sense of unity and shared purpose.

“People are really what drive these companies,” Mooney added.

In an era where technology and automation are at the forefront, it’s a poignant reminder that at the core of every successful venture are the people who make it run.

2. Evolving Value Creation Model

Adaptability is a hallmark of successful businesses, and NewSpring’s evolving value creation model is a testament to this.

“We started several years ago with what we call the value creation team,” DeLuca said. “The concept was, ‘w’Well, let’s get somebody from each of the disciplines. Let’s have a finance person, a marketing person, an HR person, an IT person.’ You sort of get the idea. ‘And let’s have them on tap to call on them and add value where and when needed.'”

This shift from a broad, external expert-based approach to a more focused, strategy-specific model highlights the importance of being nimble and responsive to the unique needs of each investment.

“The biggest single use case we see in private equity is people,” Mooney said. “It’s every quarter, and it gets bigger and bigger and bigger.”

The emphasis here is clear: while strategies and models are vital, it’s the people who execute them that truly drive value and success.

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3. The Power of Collaboration

The story of the Manhattan Project, as recounted in “The Making of the Atomic Bomb,” serves as a powerful metaphor for the importance of collaboration in achieving seemingly insurmountable goals.

DeLuca drew attention to the unlikely partnership between General Leslie Groves and Robert Oppenheimer.

“These guys pulled it off, and they were completely opposites,” he said. “They were like the stereotypes.”

This collaboration between two starkly different individuals underscores the idea that diverse perspectives can come together to achieve greatness.

“If you work with great people, you kind of understand the situation, come up with a plan,” Mooney said. “If you’re tenacious and you’re going to find a way, and I think that so much just reflects the whole conversation that we’ve had here today.”

The underlying message is clear: with the right team and a shared vision, any challenge can be overcome.

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DeLuca’s insights on the importance of understanding and connecting with employees during challenging times, the adaptability required in the ever-evolving world of private equity, and the lessons drawn from historical collaborations, make his episode well worth a listen.

When you’re done listening, head to the main BluWave podcast page for more conversations with business leaders.

What is Commercial Due Diligence?

September 27, 2023 Brad Gerick

Private equity firms perform commercial due diligence (CDD) to evaluate the growth and profitability of a potential target acquisition.

A process that was once reserved for large cap funds with extra capital to spend on evaluating the soundness of the investment, CDD is quickly becoming a necessary standard operating procedure for all proactive PE funds.

WATCH: Due Diligence Webinar Replay

“Each deal’s different and may require a different slate of providers to get the most out of each diligence phase or diligence stream,” says Keenan Kolinsky, head of research and operations at BluWave.

Private equity firms have discovered that in order to drive alpha in a sea of beta, smaller, more specialized commercial due diligence providers can provide them with more unique insights quicker.

What is Commercial Due Diligence?

Commercial due diligence is a systematic evaluation of a target company’s commercial viability before making an investment decision. It’s an extremely thorough process that, when done well, leaves no stone unturned before papers are signed.

“Commercial due diligence is a term of art for a market study. It’s typically provided by market strategy firms,” BluWave founder and CEO Sean Mooney shared on a recent webinar. “It is standard operating procedure by the best private equity investors in the world.”

It comes as no surprise, then, that CDD is consistently No. 1 due diligence category in the BluWave Activity Index.

That’s why the invite-only network of third-party resources is loaded with world-class diligence providers, such as Don Jenkins* of CommDil Inc.

“When you think about commercial due diligence, there’s often a fairly typical set of objectives,” Jenkins says. “Those will include understanding the market size, how big is the market, how is it segmented, what are the key segmentations or different types of businesses that constitute that market.”

From start to finish, it usually takes weeks, if not several months, depending on the target’s size and complexity.

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Specialized Due Diligence

Any consultant can provide intelligence on a target’s total addressable market, prospects for growth, competitors, risks and other vital information through initial industry research. But specialized consultants with pre-existing industry knowledge don’t have to waste their time to gain a sense for the industry.

Instead, they can provide a heightened sense of value by using their base knowledge to dig deeper and therefore provide more in-depth insights in the same amount of time.

These steps give investors a deeper understanding of the target company’s business model, financial performance, competitive landscape, and operational and legal risks.

A benefit of specialized commercial due diligence providers is their ability to get up to speed faster. Because they aren’t being run to with projects across various industries, their recent experience primes them to hit the ground running. Generalist firms, on the other hand, will run expert network calls to get smart on an industry.

“We have thousands and thousands of projects, tens of thousands of their quals built into this cognitive engine that we’ve built, and then we’re constantly checking with them on a capacity,” Mooney shared on the webinar of BluWave’s matchmaking process. “By the time the PE firms calls, we already know who they need, why they need it, what their quals are, what their availability is, and then have the ability to compel them to bring the A team to our clients.”

WATCH: CDD Webinar Replay

How is CDD Performed?

Kolinsky says there are several variable diligence factors to consider, “such as the target’s industry, the deal size, target technology or operational nuances, timing and more.”

BluWave supports private equity clients by connecting them with the diligence providers whose functional capabilities, expertise and experience account for these different factors.

Here are the four key steps the service providers in the BluWave-grade network take when performing commercial due diligence:

1. Comprehensive Market Analysis: Size

This is where the target company’s market position as well industry trends and growth potential are analyzed.

“We’ll be doing market forecasting, understanding the headwinds and tailwinds that affect growth,” Jenkins says. “We’re looking at trends that exist out there, whether it’s technology trends, regulatory trends, just other emerging competition.”

On the commercial due diligence webinar hosted by BluWave, Andrew Joy of Hidden Harbor talked with Mooney about the importance of looking beyond a private equity firm’s holding period when evaluating a business.

“It’s answering the fundamental question of, ‘What do we believe this business will grow at over our whole period and beyond?'” Joy said. “[The scope is] more 10, 20 years because just as important as the next five years’ growth is what matters just as much as the growth beyond that as you think about your exit and the exit multiple.”

2. Comprehensive Market Analysis: Total Addressable Market

Here’s how Scott Bellinger, BluWave’s head of sales, defines this step:

“Of the overall market, how much is currently addressable by the target? What else could they do to get into new markets and increase their total addressable market?” Bellinger says.

He added that businesses that already have a high penetration rate may need for new markets if they want to continue to grow.

Joy shed more insight on this stage in the webinar.

“By the time we close on a transaction, we have a really strong hypothesis around what are the value creation levers that we are going to pull over our whole period to create outsize market returns,” he said. “What adjacent markets should this target enter…and how do you capitalize on that?”

3. Competitive Analysis

Bellinger says there are key questions to answer at this stage: “Who does your business compete against? How are they viewed in the market against competitors? Who else has taken up market share? What’s the differentiation between your business and others?”

Jenkins agrees, and noted that this is a fundamental part of hits firm’s commercial due diligence exercises.

“Typically we’re looking at understanding the competitive landscape that the target company is competing against, and how they’re positioned in terms of share and their offering, and how they position themselves in the marketplace,” Jenkins says.

Read More: Hire the Right Temporary CFO

4. Voice of the Customer

Finally, PE firms and other acquirers need to know how current and potential future customers view the target business.

That’s why Jenkins says “there’s usually a voice-of-the-customer piece.”

There are many ways this can be done, but getting first-hand information from clients and customers is essential to understanding the business. Expert third-party firms will not only know which tactics to use for specific industries, but also how to connect with the customers in a meaningful and insightful way.

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We have recently seen many firms turn to more specialized providers due to the valuable insights gained.

In times where other PE firms are struggling to get the right information on the timeline they need, equipping yourself with unique data quickly will provide you with competitive edge.

“The deal process is laborious and it’s fatiguing, but really taking the time upfront to find the right group that will answer the critical questions that you’re really have to will pay dividends,” Joy said on the webinar. A lot of groups that’ll say yes to the project, but the ones that will provide real value is a lot smaller.”

The expertly vetted service providers in the BluWave network have performed countless commercial due diligence analyses for hundreds of PE firms.

“In private equity, one size does not fit all,” Kolinsky says.

We vet each resource before they’re admitted into the network, and again before connecting them to you. After your initial scoping call with our research and operations team, you’ll meet the two or three “best fits” within a single business day.

Tell us about your project now, and we’ll get started with selecting your tailor-made solution.

WATCH AGAIN: Commercial Due Diligence Webinar

*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.

A Wave of Deals is Coming: Commercial Due Diligence Webinar

September 20, 2023 Brad Gerick

The private equity deal market has been slow in 2023. There are signs, however, that that could change soon.

In fact, BluWave founder and CEO Sean Mooney believes PE is ready to “call a bottom” based on proprietary internal data. That means that firms must have their due diligence resources lined up ahead of the anticipated wave of deals this fall and beyond.

Mooney was recently joined by BluWave Head of Technology Houston Slatton and Hidden Harbor CP Partner Andrew Joy to discuss the intricacies of commercial due diligence on a live webinar.

Watch the Webinar Replay

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Here are some of the top takeaways from their conversation:

Understanding Target Markets

The panel touched on how commercial due diligence is pivotal in assessing market conditions.

“The definition of commercial due diligence in my mind is a synthesis of all factors, both historically and in the future that affect the growth and the competitiveness of the target in that particular model,” Joy said.

This “synthesis” involves myriad factors, from end-market demand drivers to regulatory inputs and global competition. The goal is to understand not just the immediate future but to project growth and trends 10-20 years ahead.

“Commercial due diligence is a term of art for a market study,” Mooney added. “It’s standard operating procedure by the best private equity investors in the world.”

READ MORE: What is Commercial Due Diligence?

The Role of Due Diligence in Bid Strategy

The competitive landscape of private equity demands a unique approach to bid strategies.

Mooney said private equity firms aim to see something unique in their investment targets that others don’t.

“One of the big trends is investment bankers are starting to put sell-side commercial due diligence studies in the data rooms,” Mooney said. “The incentive may be for private equity firms, ‘Oh, this is great, I can rely on the money that they’ve spent and I’ll just take their word for it.’ “But a newsflash is, if you’re buying the market study, you get to pick what it says so you can frame it.”

He added that that’s one of the reasons the private equity industry still uses its “own source of truth.”

Joy elaborated on other challenges PE firms are facing.

“I think as information and data has become more commoditized and more accessible, it’s becoming harder and harder to really find areas where you have a competitive advantage,” he said.

Finding that unique angle in a saturated market can make all the difference for a firm.

Choosing the Right Commercial Due Diligence Provider

The choice of a due diligence provider can make or break a deal.

Mooney emphasized the importance of team experience and relevance.

“When you’re vetting your group, I’ll show exactly how we do it. It’s ‘What is your experience in the defined industry you’re exposing? Which projects have you worked on in this industry?’ When did they work on it? Who is the team that worked on it?”

In the end, he said, it comes down to ensuring that the diligence team has relevant experience with the target, the market and the industry.

“I think it’s really finding the right team that has the most relevant experience and just knows the market cold,” Joy added.

Mooney also warned against trying to pull an up-market firm down to your budget. Because of scarcity of resources, this could mean they don’t put their best team members on your project.

Commercial Due Diligence Resources

As the PE world braces for influx of new deals, having your diligence sources lined up ahead of time is key. To learn more about how to prepare, you can watch the webinar on demand.

If you would like to hear about the commercial due diligence resources in the Business Builders’ Network, contact our research and operations team to scope your need.

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Panelist Bios:

Sean Mooney, BluWave Founder and CEO
Houston Slatton, BluWave Head of Technology
Andrew Joy, Hidden Harbor CP Partner

Matt Cole’s Route to SBJ Capital ‘A Bit Circuitous’

September 15, 2023 Brad Gerick

Matt Cole recently joined the Karma School of Business podcast to talk private equity. The managing director at SBJ Capital spoke with host Sean Mooney about data-based decisions, how he got his start in PE and much more.

Here are some of the top takeaways from their conversation.

Listen to the Episode

3 Takeaways from Matt

1. An Unconventional Route to PE

When asked about his path to the world of private equity, Cole said his journey was atypical.

“Mine is a bit circuitous,” he said. “I feel like it’s a more well-trodden path now and people have to take certain steps and so forth and that was definitely not the case for me.”

Starting in investment banking, Cole transitioned into operations, focusing on understanding the intricacies of making a company successful. His entry into private equity was more opportunistic, stemming from a relationship with a colleague.

He emphasized the importance of his diverse experiences: “It was the right combination of experience that I had to bring banking and operating set of experiences to PE.”

2. Value Creation with a Human Touch

Value creation is at the heart of SBJ Capital’s approach. Matt emphasizes the importance of working closely with family and founder-owned businesses and understanding their unique challenges and opportunities.

“These are family- and founder-owned businesses. They are not looking for someone with necessarily the shiny bulge bracket Wall Street resume to come in and tell them what the next opportunity is with their company,” Cole said. “I think it makes a big difference both in actual experience to be able to say we’ve walked in your shoes and in demeanor and approach for how we present ourselves to these companies and we call them partner companies for a reason.”

For SBJ, value creation revolves around professionalization and accelerating growth. Cole, however, is quick to point out that they approach this with respect and understanding.

“We’ll never come in pretending to know more about that business after a few-month diligence period than the people that have been there for extended periods of time or started that business themselves.”

Data & Analytics Resources

3. Data and Decision-Making

Cole also stressed the importance of being prepared and adaptable. He highlighted the significance of data in driving business decisions and the potential of emerging technologies like AI.

“Part of the value creation story that I didn’t touch on as much before is the use of data and how are you using data? How are you implementing systems?”

Mooney added the importance of sharing information within a company, especially in founder-owned businesses.

“A lot of times the senior member of the teams don’t even know the revenue of the business or certainly don’t know the full P&L or the balance sheet or the income statement,” he said.

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Cole’s transition from investment banking to operations and his adeptness at navigating the complex terrains of the business world make his episode well worth a listen.

When you’re done checking out his episode, head to the main BluWave podcast page for more conversations with business leaders.

Manufacturing in the Modern Age: Data-Driven Insights into Challenges, Solutions

September 11, 2023 Brad Gerick

The manufacturing sector, historically a cornerstone of economic prosperity, is going through a transformation. As we navigate the intricacies of this evolution, data is our compass.

Industry professionals grapple with sourcing specialized talent, particularly on a geography-specific basis. They’re also navigating complex supply chain dynamics, which require both regional and global considerations, and are affected by disruptions and economic fluctuations.

There’s also a pressing need to balance operational challenges with long-term strategic growth, all while integrating technological advancements and ensuring optimal production processes.

Since 2021, BluWave has seen an increase from 61.3 percent of manufacturing activity in value creation (versus due diligence) to 78.6 percent – the highest it’s been since 2017.

Let’s dive into some of the trends driving this and other changes.

World-Class Manufacturing Resources

The Talent Conundrum in Manufacturing

The manufacturing landscape is shifting, and with it, the demand for specialized talent. A staggering 74 percent of manufacturers cite “attracting and retaining a quality workforce” as a top challenge, according to the National Association of Manufacturers. As the manufacturing sector becomes more specialized, the demand for niche talent has skyrocketed.

Human capital activity is at an all-time high within the manufacturing activity index, accounting for 45.5 percent of all industry projects in 2023. That’s a more-than 500 percent increase since 2017, due to use cases like interim executive searches and specialized recruiters.

Beyond the numbers, there’s a qualitative challenge, too. It’s not just about filling positions but hiring visionaries who can lead in an era of rapid change while balancing granular details with a broader strategic perspective.

In the face of these challenges, manufacturers are seeking partnerships with specialized firms, emphasizing the importance of regional expertise and industry-specific knowledge. The goal is to secure leaders who can drive innovation and navigate the complexities of the modern manufacturing world.

WATCH REPLAY: Manufacturing Webinar

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Navigating the Supply Chain Labyrinth

Supply chain disruptions have become the bane of the manufacturing sector, with 45 percent of professionals identifying it as a top challenge, per NAM. The intricate dance of sourcing raw materials, managing inventory and ensuring timely deliveries has become even more complex.

Supply chain management is one of the top use cases BluWave sees within manufacturing operations, with make up more than 18 percent of industry activity.

Effective supply chain management is no longer just about logistics; it’s about ensuring a seamless flow of materials, information and services, all while mitigating risks.

Supply chains have evolved into intricate global networks. Data indicates that disruptions, whether due to geopolitical tensions or unforeseen global events, can have cascading effects. Manufacturers are now tasked with not just managing but optimizing these complex systems, ensuring resilience and adaptability.

The emphasis is shifting from reactive measures to proactive strategies. By leveraging data analytics and predictive modeling, manufacturers can anticipate disruptions, adjust in real-time and ensure that the supply chain remains a strength rather than a vulnerability.

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Economic Realities: The Balancing Act

In a world where 56 percent of manufacturers (per NAM) are wary of a “weaker domestic economy,” economic agility is paramount. Manufacturers must be adept at navigating economic headwinds while capitalizing on opportunities. The insights from BluWave’s client interactions reveal concerns ranging from revenue challenges to market dynamics.

That makes agility paramount. With fluctuating markets and the ever-present specter of global events, manufacturers are in a constant state of adaptation.

By understanding market trends and leveraging data-driven insights, manufacturers can identify growth areas, optimize production and ensure they remain at the forefront of industry innovation.

The Digital Transformation: Beyond the Buzz

The future is digital. A significant 43 percent of manufacturers planned to ramp up their technology spending in 2023, according to Alithya. From optimizing operations to strategic decision-making, technology is reshaping the manufacturing landscape. The emphasis on IT strategy and diligence in client interactions underscores the sector’s tech-driven trajectory. Manufacturers that fail to embrace this digital shift risk being left behind.

Among the top technology-related manufacturing use cases we’re seeing are system selection & implementation, and IT strategy and diligence.

Successful digital transformation, however, requires a holistic approach. It’s not just about technology but about aligning organizational goals, processes and culture with these digital initiatives. Manufacturers must ensure that their teams are equipped with the skills and knowledge to leverage these tools effectively, driving both efficiency and innovation.

Growth in the Face of Uncertainty

Growth remains a top priority for manufacturers, but it’s a goal fraught with challenges. Data highlights the importance of strategic expansion, ensuring that growth is sustainable and aligned with broader market trends. In an era of uncertainty, it’s not just about growing but growing smartly.

Strategic partnerships play a crucial role in this growth narrative. By collaborating with experts, whether in technology, supply chain management, or market research, manufacturers can tap into specialized knowledge, ensuring their growth strategies are both data-driven and future-focused.

The manufacturing sector is at a crossroads, shaped by technological innovations, economic challenges, and global trends. But with challenges come opportunities. By leveraging data-driven insights and forging strategic partnerships, manufacturers can navigate this complex landscape, driving growth and innovation.

For a deeper exploration of how data-driven insights can shape your manufacturing journey, reach out to our team.

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Scott Becker of McGuireWoods: Insights from the Mind Behind Becker’s Healthcare

September 8, 2023 Brad Gerick

When Scott Becker speaks, the healthcare and private equity sectors listen. As a partner with McGuireWoods and the founder and publisher of Becker’s Healthcare and Becker’s Hospital Review, Scott’s insights are invaluable. Recently, he shared his journey and perspectives on the Karma School of Business podcast, hosted by Sean Mooney.

Listen to the Episode

3 Takeaways from Scott

1. The Evolution of Becker’s Healthcare

“I started it literally 30 plus years ago,” Becker began, “trying to develop a reputation as somebody who knew the business and legal issues around, at that point, surgery centers, better than anybody else.”

This drive was not just about establishing a brand but about creating a niche in a saturated market. Scott’s vision for Becker’s Healthcare was rooted in his legal background and his desire to provide thought leadership in the healthcare sector.

Over the years, the focus of Becker’s Healthcare expanded. While it was initially centered around surgery centers, it now revolves around hospitals, health systems and health IT, among other areas. This evolution showcases Scott’s adaptability and his keen sense for market needs.

2. Recognizing and Capitalizing on Opportunities

“A lot of it is not brilliant. It’s following what’s working and doubling down on it as a constant business imperative,” Scott emphasized.

This approach is not about reinventing the wheel but about recognizing what’s effective and enhancing it. Scott’s success is a testament to his ability to identify emerging trends and strategically position himself and his ventures to benefit from them.

Mooney, echoing this sentiment, added, “If you’re the smartest person in the room, you need to find a new room.”

Healthcare Resources

3. Challenges and Trends in Healthcare

Scott delved deep into the current landscape of healthcare, highlighting several significant trends: “Challenges with margins, labor shortages, especially in the physician and nursing sectors, and the increasing involvement of various players in the healthcare space.”

These challenges are not isolated but are interconnected, shaping the future of healthcare. For instance, as healthcare sites increase, there’s a projected shortage in certain specialties, like anesthesiologists. This, in turn, affects patient care, with many unable to access their doctors promptly, leading to a resurgence in ER visits.

Scott’s insights provide a comprehensive overview of the challenges and opportunities in the healthcare sector, offering a roadmap for professionals navigating this complicated domain.

READ MORE: Specialized Healthcare Recruiters

Becker’s keen insights offer a deep dive into the intricacies of healthcare and private equity. His journey from attorney to entrepreneur and his ability to recognize and seize opportunities make him a voice worth listening to in the industry.

When you’re done checking out his episode, head to the main BluWave podcast page for more conversations with business leaders.

Mastering Board Recruitment: Strategies for Attracting Top Talent

August 22, 2023 Brad Gerick

Strategic leadership forms the crux of organizational development and success. Just as the driving force of a car is its engine, so too is a high-performing board the engine of an organization, guiding strategic decisions and growth.

The assembly of a board requires careful selection of individuals, each possessing diverse expertise and perspectives that complement one another, fostering a rich ecosystem of leadership. This is where the concept of board recruitment becomes essential.

“Bringing on a board member who comes from that industry and can bring in-specific experience is a value add to any organization,” says Scott Bellinger, BluWave’s co-head of research and operations. “They can work closer to the management team and give outside insight of someone who’s been there and done that previously.”

It’s a process that goes beyond filling seats. It’s about attracting the top talent that can steer your business. For organizations looking for professional support in this crucial process, BluWave is ready to connect you with industry-specific resources that can guide your process with expertise and precision.

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Defining Your Board Member Needs

The journey toward effective board recruitment begins with understanding your unique needs. An assessment of the specific gaps in your current board composition and identification of skill requirements helps direct the recruitment process.

By aligning the desired attributes and expertise of potential board members with the organization’s strategic goals and challenges, you can ensure the recruited individuals will provide the most value.

Job Description

When beginning your board recruitment journey, a comprehensive job description serves as your map. By clearly outlining the board’s purpose, responsibilities and expectations, you set the course for attracting qualified board candidates.

A well-crafted job description, complete with the organization’s mission, board member roles, committee involvement and time commitment requirements, helps filter in individuals who align with your needs. To maximize impact, use concise language, focus on essential qualifications and illuminate your organization’s unique value proposition.

Benefits, Responsibilities and Skills

The board position comes with a wealth of benefits, including opportunities for personal and professional growth, networking and the privilege to make a significant impact on an organization. These benefits should be presented upfront to attract motivated individuals.

Board members shoulder several responsibilities, such as fiduciary duty, strategic planning, risk management and providing guidance to the executive team. Ensuring these duties align with your organization’s needs and strategic direction helps attract the right talent.

“They can be a great outside partner to the CEO – and it’s a portco, the PE firm – to ensure everyone is growing in the same direction and on the same page,” Bellinger adds.

Term and General Duties

Board member terms typically have a defined duration, and adopting staggered terms brings a mix of continuity and fresh perspectives into the proceedings. General duties could span from regular attendance at board meetings and active participation in committees to fulfilling fiduciary responsibilities. Clear articulation of these expectations can help potential members better understand their role.

Time, Legal and Financial Commitments

Time commitments for board members can range from regular board and committee meetings to additional engagement requirements. Alongside time, potential board members should be aware of any legal or financial obligations, such as adherence to regulatory compliance, potential liability issues and the expectation of making personal financial contributions or securing sponsorships.

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Strategies to Find Potential Board Candidates

Sourcing potential board candidates requires a multifaceted approach. Utilizing board posting programs and matching platforms, such as LinkedIn and Executive Search Firms, can offer access to a pool of qualified board candidates. Local Chambers of Commerce can also serve as valuable resources for finding candidates.

Oftentimes, though, you can save time and resources by connecting with a service provider who already knows exactly who you need and where to find them. The Business Builders’ Network from BluWave is full of exact-fit third parties who know how to do just that.

Word-of-Mouth and Referrals

Existing networks and relationships form a treasure trove of potential board candidates. From board members of other organizations and industry leaders to professional associations and community influencers, your network contacts can be a rich source of referrals. Clearly articulating your organization’s mission and the specific qualifications you seek in potential board candidates can help garner more suitable referrals.

Publicizing Within Network and Local Community

Promoting board opportunities within your network and local community allows you to target individuals already familiar with your organization or industry. Email newsletters, social media platforms, industry events and community-based publications can be effective channels for publicizing these opportunities. A compelling announcement combined with engaging storytelling can pique interest and attract potential board members.

External Promotion

Expanding your search beyond your immediate networks through external promotion can attract diverse candidates. Digital platforms and industry-specific networks can reach individuals with the desired expertise who might not be in your immediate circle. In addition to LinkedIn, Twitter and Facebook can be effective platforms.

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Screening and Selecting Board Members

Choosing the right candidate requires a structured process. An efficient application process, including resume, cover letter and reference submission, can facilitate the evaluation of potential board candidates. Initial screenings through phone or video interviews can help narrow the candidate pool. Utilizing behavioral-based interviewing techniques and strategic questions can further help assess the qualifications, values, commitment and potential contributions of board candidates.

Short-listing and Final Selection

The final stage of board recruitment involves short-listing and selecting the ideal candidates. Reviewing candidates based on predefined criteria and qualifications ensures an objective selection process. Thoughtful deliberation among board members, consensus-building, conducting reference checks and considering overall board dynamics can further aid in the selection of the right candidate.

“The main thing is getting someone who’s willing to be an active board member and not just meet once a quarter, but actually help with some value creation plans throughout the period and stay engaged between quarterly meetings,” Bellinger says.

A successful board recruitment strategy is a meticulous process. It doesn’t have to be an uphill task, though. BluWave’s research and operations team can be your ally in this process, connecting you with exact-fit service providers. Connect with us here to start your journey to master board recruitment.

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Best Practices for Board Recruitment

August 22, 2023 Brad Gerick

An outstanding board is invaluable to an organization. The power to make strategic decisions, the ability to drive innovation and the capacity to inspire stakeholder confidence is all within its power. Having helped countless businesses with this very process, BluWave has a unique perspective into the fundamentals of the board recruitment process and the best practices that make it efficient and effective.

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Working with one of the expert third-party resources in the Business Builders’ Network can save you time and money while ensuring that you make the right selection for your company.

Let’s take a deeper look at the details that go into this critical decision.

Understanding the Board Member Recruitment Process

Board member recruitment goes beyond the confines of structured interviews – it is a crucial facet of organizational governance. A well-executed process determines the structure of leadership, influencing decision-making and strategic oversight.

“We’re starting to see some PE firms look for those board members during due diligence to help with some of those diligence opportunities as senior advisors then convert post-close to board members,” says Scott Bellinger, BluWave’s co-head of research and operations.

Industry-specific third parties not only know how to run the process for your business, they’re also connected with the most qualified candidates for your specific situation. Access to these resources can save businesses from the headache of sifting through unknown or unproven options.

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Best Practices for Recruiting Board Members

Identifying Desired Board Member Attributes

First, you must identify the qualifications, skills and diversity that board members need to possess. These attributes should be aligned with the objectives of the organization, facilitating its growth trajectory.

Developing a Comprehensive Recruitment Strategy

A clear blueprint and timeline form the foundations of a robust recruitment strategy. Tapping into various channels – from professional organizations to networks and referrals – can greatly enhance your reach to potential board members.

Navigating these channels can be intricate, though, highlighting the need for expert third-party resources to guide the process.

Implementing an Effective Screening and Selection Process

The backbone of successful board recruitment is a comprehensive screening and evaluation process. The stages – ranging from interviews, application reviews, reference checks, background investigations, to skills assessments and board observations – require careful execution. Thorough due diligence, particularly during reference checks and interviews, should never be rushed or downplayed.

Utilizing a Board Recruitment Matrix

A board recruitment matrix can be a game-changer. This visual tool evaluates the current composition of the board, unveiling gaps that need to be addressed. The matrix ensures that new board members are appointed based on the required skills, expertise and diversity, fostering a team that’s well-equipped to navigate organizational challenges and stimulate success.

So what does a great board member look like?

“Someone who has scaled a business in the same space at a larger size company,” Bellinger says. “Someone who knows what best-in-class looks like in this industry.”

BluWave is prepared to connect you with an exact-fit service provider, equipped to streamline and optimize your board recruitment process.

When you’re ready to elevate your board recruitment process, get in touch with us. Our research and operations team will scope your needs and provide best-fit candidates for you to evaluate within a single business day.

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