As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE firm clients. In our most recent installment, Jeremy Yoder, a BluWave Strategic Account Executive, shares how to action BI & Analytics experts, detailing the different use cases firms and other proactive companies have for bringing in data & analytics experts. Learn more by watching the video below.
In our increasingly digital world, business intelligence and analytics is a growing input factor for companies to measure their level of growth and for private equity firms to evaluate the success of their portcos. PE firms come to BluWave with needs for data and analytics specialists who can help drive effectiveness and efficiency within their portfolio companies. Here are just a few of the most common use cases we see for why a firm brings in data and analytics specialists.
Number one, developing more measurable metrics at the portco level. The first step to making data-driven decisions is having the right metrics and reporting measures in place. Many companies are lacking this when their first PE sponsor comes into the picture, so our clients equip their new portcos with specialists who can help companies build a solid metrics and reporting foundation. This gives the PE firm visibility into how their portcos are tracking against those set goals.
Number two, data diligence. For companies with large sets of data on products and customers like companies in the B2C sector, there is often hidden value hiding within these datasets if they aren’t being analyzed. When companies aren’t actioning the data available to them, leading PE firms bring in specialists to uncover what stones are being left unturned and help glean risks and actionable opportunities from the data that already exists.
Number three, cleaning and assessing data. The most forward-thinking PE firms are using specialists to clean and assess their portcos data so that they can improve the precision of their evaluations and more deeply inform the health of their organizations. We have a deep bench of business intelligence and analytics providers at the ready for a variety of niche needs. To get connected to the PE-grade,exact-fit provider you need, contact us at info@bluwave.net.
The CEO of a residential services portfolio company came to us with a critical need for a recruiting firm that could source a Head of Sales for the company. The business’ primary focus was equipment rental, waste management, and construction; therefore, the CEO needed a candidate who was well versed in the sales cycles of these specific sectors. Looking to make the hire quickly, the company urgently needed a best-in-class specialized recruiting firm who already knew strong candidates in this field and would be capable of leading the company’s sales department and overseeing the account managers.
BluWave has exact-fit recruiting firms in network
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing best-in-class talent sourcing needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of specialized recruiting firms that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria, and then connected the client with the select pre-vetted providers from our invitation-only Intelligent Network that fit their exacting needs.
CEO engages specialized recruiting firm with industry background
Within less than 24 hours of the initial scoping call, the portfolio company was introduced to two PE-grade recruiting firms that specialized in the construction and waste management sectors of the residential services industry. The CEO selected their ideal choice and was able quickly source a top Head of Sales to lead the department, thanks to the recruiting firm’s specialized expertise.
As part of an ongoing series, we’re sharing real-time trending topics we are hearing from the hundreds of PE firms we work with. In our most recent installment, Erez Schnaittacher, BluWave vice president of client coverage, shares the importance of interim CFOs and why they are a vital resource all PE firms should be taking advantage of. Learn more by watching the video below.
Interested in connecting with interim CFOs? Contact us here to quickly get connected to the exact-fit interim CFO you need.
The CFO role is one of the most critical seats in a business. The position plays a key role in ensuring that a business is strong and if PE-backed, that the investment is successful. Because this seat is vital to a company’s success, it is important that it is not left open, and is also filled by someone who possesses the right skillset to execute on the demands that come with being a CFO.
To ensure that both of these are always the case, PE firms often turn towards interim CFOs. At BluWave, we equip our private equity firm clients with interim CFOs for various due diligence, value creation, and prep-for-sale needs. Here are some of the most common use cases for bringing in interim CFOs:
Number one, unanticipated departures. When CFOs unexpectedly resign, it can leave a company’s finance function in chaos. We help PE firms combat this by providing them with exact-fit interim CFOs who can quickly step in, fill the shoes of the role, and keep the ship steady while the search for a permanent placement kicks off.
Number two, longer than normal hiring processes. Even when a CFO seat is expected to be vacant within a certain timeframe, sourcing a candidate to step in at the exact time you need them to can be challenging. With hiring processes taking longer than normal, interim CFOs can help bridge the gap, giving you extra time to ensure you hire the best-fit person for the job.
Number three, professionalizing new portcos’ finance functions. We are supporting many PE firms as soon as a deal closes, by supplying them with interim CFOs. These firms are bringing in these individuals to help new portcos’ finance functions understand what it means to be PE-grade, and help them get the right monthly performance packages in place to ensure that the PE firm is getting the info it needs.
And finally, number four, prep for sale processes. Our clients bring in interim CFOs to respond to diligence requests, assess data, and pull reports prior to a sale. By bringing in an extra set of hands to take care of the extra workload that comes with a sale process, FTEs are freed up to maintain focus on keeping the daily routines going, without causing a delay on the sale process. The modern-day M&A process is fast and furious, valuations decline the second you have to hit the pause button, making it crucial to keep the momentum.
Interim CFOs are one of the most versatile and useful resources available to private equity firms. Hundreds of leading firms come to us with their interim CFOs because of our ability to know before they need, hone in on individuals that meet their specific, unique criteria, and quickly connect them to the select few that are exact-fit.
If we can support your interim CFO needs, please contact us at insights@bluwave.net.
Every quarter our team analyzes the projects we work on with our 500+ PE firm clients to get a birdseye view of the market. We recently compiled our Q3 findings into our Q3 2022 BluWave Insights Report. Request your copy.
Key findings from Q3 ’22 include:
Value creation activity has increased 11% YoY.
Human capital remains PE’s primary area of focus at 36% of all Q3 activity.
BluWave serves a trusted role with more than 500 of the world’s leading private equity firms and thousands of proactive businesses by connecting them with the best-in-class third parties to help build value with speed and certainty. From our unique vantage in the private equity landscape, we’re able to glean insights into how and why the best business builders in the world are assessing opportunities and building value in their portfolio companies. Here are some of the top takeaways from the BluWave Activity Index during Q3 2022.
First and foremost, value creation remains key in private equity. Despite the unsteady economic landscape, PE firms are equipping their portfolio companies with resources to maintain the momentum of previous value creation efforts. The BluWave Value Creation Index shows a more than 11% increase in Q3 value creation activity year over year. It is evident that PE firms are running towards the storm, treating economic uncertainty as an opportunity rather than a setback.
Number two, technology is surging as digitization continues to be embedded in the post-COVID world. Private equity firms are equipping portfolio companies with data and analytics capabilities to enable data-driven decision making and workflow automation. We’ve seen technology activity rise from 8% of all activity in Q3 2021 to 15% of all PE activity in this past quarter, and we expect to see technology activity remain high as firms continue to invest in subscription-based software companies due to their stability during volatile economic times.
Lastly, human capital remains private equity’s primary area of focus accounting for 36% of all activity in the BluWave Activity Index for Q3 2022. Firms continue to take strides to ensure the teams in their portfolios are top notch and well-equipped for success. This quarter we saw a surge of PE firms bringing in “wartime generals” with specialized skillsets equipped for the “new now” that can help guide portfolio companies to success in the current economic environment.
It is our hope that the information in the Q3 BluWave Insights Report will give you incremental edge as you build the best businesses in the world. If you’d like to learn more and get the report, please contact any member of the BluWave team or follow the link below. Onward.
Strong interim CHRO needed to lead HR in healthcare services portco
A proactive healthcare services company came to us with a critical need for an interim CHRO. With the current head of HR leaving and the recruiting process taking longer than normal, the healthcare services company needed a strong HR leader with role and industry expertise to come in and provide support during the interim, an expected time frame of 3-6 months. Already with ~1000 employees and additional acquisitions on the horizon, they urgently needed a local HR leader that could be boots on the ground in HQ during the pandemic.
BluWave responds to niche need by providing top interim CHRO candidates
Leveraging our experience working with thousands of proactive companies, we have extensive frameworks for assessing interim CHRO needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of experienced HR leaders that uniquely meet the highest standard. We interviewed the company to understand their specific key criteria, and then connected them with the select pre-vetted interim CHRO candidates from our invitation-only Business Builders’ Network that fit their exact needs.
The company selected their ideal choice and filled the role with a top hire
Quickly after the initial scoping call, the healthcare services company was introduced to four top-notch interim CHRO candidates that specialized in healthcare services. The client selected their ideal choice, allowing them to quickly retain this critical role without wasting time or cost. The candidate ended up being such a great fit thanks to their background, that they were flipped to the organization’s permanent position after only three months of serving as an interim resource.
Consumer products portcoin critical need ofdata consolidation and analysis
A portfolio company came to us with a critical need for a business intelligence and analytics provider to consolidate data for their consumer products business. With sales data coming in from their distributors in different manners, they had a critical need to gather and interpret the information they received into usable insights on consumer behavior, sales conversions, and product success. The portfolio company required a business analytics expert to outsource this task to that could quickly consolidate, analyze, and help them visualize their data into information they could action.
BluWave identifies two exact-fit business analytics providers
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade business intelligence and analytic needs for proactive companies. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of business analytics providers that uniquely meet the private equity standard. We interviewed the portfolio company to understand their specific key criteria, and then connected the client with two select pre-vetted business intelligence providers from our invitation-only Intelligent Network that fit their exacting needs.
Company confidently engages both PE-Grade providers
Within 24 hours of the initial scoping call, the portfolio company were introduced to two PE-grade business intelligence providers that specialized in consumer goods. The client engaged both providers to help with two different aspects of the data project at hand. The portfolio company was able to confidently engage the pre-vetted providers and quickly move towards their goal of value creation through data consolidation and insights.
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.
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.
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.
I get asked a lot of questions about how to build a business, and how to do it with as few headaches as possible. Not that I’ve totally figured it out, but I’ve certainly made my fair share of missteps and gratefully have learned something along the way. From investing, to hiring, to reducing headcount, to managing the ups and downs of an economic recovery period—one thing remains unchanged: leadership matters. And if you’re talking about key leadership positions, the one that companies most often get wrong is the CFO.
Why? Well, the answers are as varied as the reasons they fail, but it generally has to do with asking the right questions from the beginning. In other words, the interview process is often to blame.
I wrote an article for CFO Magazine about “hiring the right interim CFO” and how to ensure you set your company up for success when it comes to hiring one of the most important positions. Whether you are looking for an interim CFO (who can move into a full-time position) or looking for a full-time financial executive, here are some things you should know before you greenlight your new hire:
8 Things To Know Before Hiring An Interim CFO
If you are a PE-owned company and need to bring in a short-term finance chief, find someone who has worked for a PE-backed company before.
The interim executive needs to have a track record of wins. That generally means a significant tenure at multiple companies.
Find someone with industry experience, because it’s much easier to stand at the finance helm of a manufacturing, healthcare, IT, or services company if you’ve done it before.
Similarly, the interim CFO should have experience working for a company of similar size and scale.
It’s not enough to understand the numbers (sales, revenue, overhead) — you need someone who understands what the numbers mean.
For the best results, find a pro who has a high IQ and a high EQ (emotional intelligence), because the interim CFO needs to quickly gain favor from others in the organization to gather information and build a story around the numbers.
Be sure to have conversations with key stakeholders in a candidate’s prior roles. Choose the references; do not use the references the candidate gives.
While enthusiasm is a wonderful aspect of a new leader, a short-term executive should have a stabilizing effect, not a disruptive one.
For more details and to read the full article in CFO Magazine, click here.
