Customer Type: PE Firms
Hiring Remains Strong, AI is Abuzz in Q2 2023
Hiring activity remains strong, but the focus has shifted. Additionally, the AI craze is reaching a fever pitch in private equity.
These and more insights come from our Q2 2023 BluWave Insights Report. The proprietary data used to compile this report comes from the projects we work on with our 500+ PE firm clients to get a bird’s eye view of the market.
Other key findings from Q2 2023 include:
- Demand for artificial intelligence tools boosted Business Intelligence, Analytics & AI into the top 10 of value creation services for the first time in three years
- Strategy, revenue growth and technology-related initiatives are on the rise
- Deal flow remains slow, but that’s expected to change in the second half of the year
Learn more about the insights we gleaned from Q2:
We can support your value creation needs, human capital needs, technology needs, sales & marketing needs and more.
Cici Zheng, ParkerGale Capital | Private Equity Advice on Pricing, Human Capital and More
Professional Healthcare Recruiters: Specialized Human Capital Resources
The healthcare industry is in a constant state of flux. It’s a field that requires a dedicated workforce to manage patient care effectively.
With the growing demand for healthcare services, the need for specialized professional healthcare recruiters has never been higher. Especially in areas such as multi-location healthcare services and chief medical officer searches, both on the clinician and corporate side.
“Specialized recruiters will not only know the subset of candidates really well,” says Scott Bellinger, BluWave’s co-head of research and operations, “but they’ll also understand what candidates are relative for certain size companies.”
We’re going to explore why a people expert with industry experience is essential for health and medical organizations.
Benefits of Working with a Professional Healthcare Recruiter
Healthcare providers save time and money when they work with recruitment experts. An experienced talent leader will have access to a large pool of candidates and can quickly identify the most qualified applicants for your specific need.
They know how to guide employers through the hiring process, from defining the job description to negotiating compensation and benefits.
CASE STUDY: Chief Medical Officer Search for a Healthcare Services Firm
“A specialized provider will be able to more quickly identify and recruit candidates,” Bellinger says.
Job seekers also benefit from working with professional healthcare recruiters. They can match their skillset and experience to the ideal opportunity so that both sides feel like they win in the end.
What to Look For
When selecting a specialized recruiter in the healthcare industry, it’s important to consider their experience, expertise and personalized attention to your needs.
Look for a recruiter who has experience in your industry, as well as a deep understanding of the recruitment process. A good recruiter should also have the skills to provide personalized attention to your needs, offering tailored advice and guidance.
CASE STUDY: Maintaining Rapid Healthcare Services Growth with Specialized CFO
It’s also important to work with a recruiter who stays up-to-date with the latest industry trends, compensation and benefits.
“When you work with specialized healthcare recruiters, they’re focused on serving the middle market and their network of candidates reflects that,” Bellinger says.
In today’s labor market, finding the right job or candidate can be a daunting task. That’s why professional healthcare recruiters exist, and why they are such an important resource for both job seekers and healthcare providers.
BluWave has the best specialized recruiting resources in healthcare on standby. Our expertly vetted network has what you need on standby before you even contact us.
Set up a scoping call today with our research and operations team and get presented with two or three best-fit options in less than one business day.
Buy-Side Deal Sourcing Strategies: Uncovering Hidden Opportunities
Deal sourcing in private equity is all about finding hidden opportunities and maximizing investments. Effective deal sourcing strategies can greatly influence an organization’s trajectory.
When done well, the rewards can be outsized. To increase your chances of success, working with industry-specific, experienced third parties can give you a leg up.
Let’s talk about a world-class service provider’s role in buy-side deal sourcing, as well how BluWave can get you connected to the right ones.
Effective Deal Sourcing Strategies
Deal sourcing is about identifying investment opportunities, and the right strategy can make all the difference – one size does not fit all. Customization is key, depending on the industry as well as the PE firm’s investment objectives.
Comprehensive Market Research
To spot lucrative opportunities, you need to conduct in-depth market analysis. Identifying emerging trends and sectors with high-growth potential is a critical step in this journey. A data-driven approach can help you spot these gems before others do.
READ MORE: How To Analyze Sales Data
Working with an exact-fit service provider that knows how to collect and analyze reliable data can accelerate efficiency at this stage.
Networking and Relationship Building
Cultivating a robust network within your industry can give also you an edge. Contacts at private equity and venture capital firms, brokers and other industry professionals often have extensive networks and in-depth market knowledge.
When you tap into the Business Builders’ Network, you can be connected with the resources you need for your exact situation within a single business day.
Proactive Outreach and Deal Origination
Initiating dialogue with potential sellers can uncover off-market deals and hidden opportunities. Utilizing digital platforms, conferences and industry events for networking could yield unexpected results.
Deal Sourcing in Private Equity
The private equity landscape presents unique challenges that demand unique strategies. Expertise in the industry, meticulous due diligence and strategies for value creation are integral to successful deal sourcing.
Deep industry knowledge allows for better evaluation of risks and opportunities. It supports an understanding of market positioning and the development of industry-specific value creation strategies.
Due diligence goes beyond ticking boxes, though; it provides a comprehensive understanding of the target company’s fundamentals. It is an essential part of deal sourcing, as it helps identify risks and validate assumptions, making for more informed investments.
READ MORE: What is Buy-Side Commercial Due Diligence?
Leveraging Third-Party Expertise in Deal Sourcing
Finding your way through the maze of deal sourcing can be challenging; leveraging third-party expertise can save you a lot of headaches. A specialized resource brings industry knowledge, experience and proven methodologies to the table, increasing your chances of success.
This is where BluWave shines, connecting organizations with exact-fit service provider. BluWave’s research and operations team, with their industry expertise and extensive network, can help your organization uncover hidden opportunities and navigate the complex world of buy-side deal sourcing.
To reap the rewards of successful investments, it’s crucial to follow effective deal sourcing strategies. Recognizing emerging trends, building robust networks and adopting proactive outreach methods can uncover hidden opportunities. In private equity, in-depth industry knowledge, meticulous due diligence and a keen eye for value creation are key.
Although this can be challenging, you don’t have to do it alone. The BluWave team is here to support you whenever you’re ready. Reach out to us today.
David Hellier, Bertram Capital | Harnessing Data to Innovate, Differentiate and Evolve
Buy-Side Commercial Due Diligence: What is it?
Commercial due diligence is a make or break process in mergers and acquisitions.
In buy-side due diligence, the focus is on the acquiring party, rather than the target company. This makes it distinct from sell-side due diligence, which is conducted by the organization that may be acquired.
“It’s standard operating procedure for private equity firms if they’re buying a company,” says Scott Bellinger, Bluwave’s co-head of research and operations. “No matter how good a company is, if the market is bad, it won’t succeed.”
Buy-side commercial due diligence looks extensively at the target company’s overall viability. It’s typically conducted by private equity firms, investors or other acquiring entities to evaluate risks and opportunities before signing on the dotted line.
We’re going to explore the key aspects of this process in private equity acquisitions, including financial analysis, commercial viability assessment and target company analysis.
Financial Analysis
Understanding a company’s financial health is a crucial aspect of buy-side commercial due diligence.
At this stage, the buyer reviews the target company’s financial statements, including balance sheets, income statements and cash flow statements.
A qualified finance professional can be invaluable in this step.
Market Size
Market size is also an important pre-acquisition consideration.
It helps identify potential financial red flags, such as declining revenue, which could suggest a shrinking market. If too many warning signs arise, the buyer may reconsider moving forward.
Working with an industry-specific service provider can help with this, saving your firm from a bad deal, or confirming a good one.
READ MORE: What is Commercial Due Diligence?
Total Addressable Market, Commercial Viability Assessment
A successful acquisition is contingent on the future growth potential of the target company. That’s why a commercial viability assessment forms an integral component of the process.
Here, the total addressable market (TAM) for the target company’s products or services is evaluated. Understanding the TAM provides insights into the potential growth and profitability of the target company, making it a critical metric for prospective buyers to consider.
Competitive Landscape
Another important factor is the competitive landscape within the target company’s market. This evaluation gives the buyer a comprehensive understanding of the company’s positioning, its main competitors and the regulatory environment in which it operates.
A thorough understanding of the competition and industry regulations can provide valuable insights into the target company’s resilience and adaptability in the face of market changes.
Target company analysis is another aspect of buy-side due diligence, and it usually comes toward the end of the process.
While the entire due diligence process evaluates a target company, the goal at this stage is to review operations, management and culture. This is how the buyer identifies issues that could affect the acquisition’s long-term success.
Voice of the Customer
Assessing customer satisfaction, identifying potential customer concerns and understanding customer loyalty can all help better understand the target company’s potential long-term success.
An exact-fit service provider will focus on things like customer lifetime value, retention and how products and services can be improved.
READ MORE: 5 Steps to an Effective Voice of the Customer Strategy
Target Company Evaluation
While the entire commercial due diligence process involves looking into the target, firms should also take a close look at a company’s operations, management and culture.
Before signing on the dotted line, it’s important that you not only align on values, but that the teams are a good fit for working together.
This also helps the buyer – usually a private equity firm – understand the potential synergies between the target company and their existing portfolio companies.
Bellinger says that working with an expert third-party to conduct buy-side diligence can be a huge advantage.
“You can get providers who have deep experience in a certain industry or certain types of companies that can perform the study on a lower cost profile than a brand name firm who will have to spend time getting up to speed,” he says. “Our providers already know everything about that industry and have prior experience.”
Buy-side due diligence is a critical process in private equity acquisitions, enabling buyers to make informed investment decisions.
BluWave has expertly vetted commercial due diligence resources on standby to provide comprehensive support during the buy-side due diligence process.
Our research and operations team will connect you with the best fit for your project, ensuring that you have access to the right expertise at every step of the process. Set up a scoping call today.
Bellinger adds: “We have the most amazing bench of buy-side commercial due diligence providers, so we know every buy-side firm in middle-market private equity.”
Streamlining Data Insights: Creating a Real-Time Dashboard Solution
Service Area: Business Intelligence and Analytics
Client Type: Buyout PE Firm
Service Provider Type: Data Analytics and Visualization Firm
Industry: Utilities
The Need
Building a Comprehensive Dashboard Solution
A company in the field services industry faced challenges with managing and extracting valuable insights from their vast amount of data. With data spread across 15 different sources, the client lacked a centralized view and struggled to gain meaningful intelligence. They sought the expertise of an analytics and visualization firm to build a scalable dashboard solution that would integrate multiple disparate sources and provide real-time insights.
The Challenge
Unifying Data Sources and Enabling Data-Driven Decision-Making
The client required a partner who could assist in organizing and integrating data from programs including Microsoft XL, ServicesApp, Salesforce, Paycore and ARI. The aim was to create a data warehouse and develop a user-friendly, real-time dashboard that would consolidate the data and provide actionable insights.
How BluWave Helped
Connecting to an Experienced Service Provider
BluWave connected the client with a data analytics and visualization firm experienced in handling complex data integration and visualization projects. The service provider worked closely with the client to understand their data sources, requirements and desired outcomes. They developed a comprehensive plan to organize and clean the data, integrate it into a centralized data warehouse and create a real-time dashboard solution.
The Result
Enhanced Data Insights and Future Collaboration
The collaboration between the client and the data analytics and visualization firm resulted in the successful creation of a scalable and user-friendly dashboard solution. The integrated data from multiple sources provided a comprehensive view of the company’s operations, enabling data-driven decision-making. It also empowered the client with valuable insights and intelligence to monitor key performance indicators, track progress and identify opportunities for improvement.
The positive experience with the service provider led the client to consider future collaboration for the next phase of the project. The reliable and effective solution provided by the service provider demonstrated their expertise and commitment to delivering high-quality data analytics and visualization services.
We had a great experience with the service provider and we may hire them for the next phase of the project.
-Senior Vice President at the PE Firm
Unlocking Organizational Success: The Role of Leadership Coaching
Effective leadership lies at the heart of any successful business. The ability to guide, motivate and inspire teams is what separates great leaders from the rest. But these skills don’t just appear overnight; they require nurturing and development, which is where leadership coaching comes into play.
Leadership coaching serves as a compass for potential leaders, helping them navigate the complexities of modern business environments. By partnering with third-party resources who specialize in this exact service, your top managers, directors and executives can take their teams to the next level.
Let’s discuss how the exact-match third parties in the Business Builders’ Network can help you solve this exact problem.
The Benefits of Leadership Coaching for Organizations
Leadership coaching offers far-reaching benefits that ripple across an organization. It has a profound impact on leadership development, employee performance and overall organizational growth.
Enhancing Leadership Development
Leadership coaching shapes leaders to be more self-aware, enabling them to tap into their full potential. It’s not a one-size-fits-all process. The goal is to tailor the journey to each individual’s unique strengths and areas of improvement.
The personalized nature of coaching encourages deeper introspection and a greater commitment to professional growth. This individualized approach is more likely to yield effective, long-lasting results.
Improving Employee Performance
The effect of effective leadership transcends the leader themselves. It extends to the performance and job satisfaction of their teams. Leaders who have undergone coaching are better equipped to engage and motivate their teams, fostering a positive work culture and higher productivity. Leadership coaching is not just about developing leaders; it is also a vital strategy to increase your company’s value.
Driving Organizational Growth
The innovative thinking and decision-making prowess fostered by leadership coaching can be pivotal for success. Leaders, shaped by coaching, can inspire their teams to break new ground and achieve their fullest potential. This cumulative effect of individual improvements significantly contributes to organizational growth.
Strengthening Communication and Collaboration
Effective leadership coaching can significantly enhance communication within teams. It also fosters a culture of collaboration built on mutual trust and respect, leading to more productive and synergistic cooperation.
Key Components of Effective Leadership Coaching Programs
A successful leadership coaching program stands on a robust foundation of clear goals, personalized development plans, continuous feedback and accountability.
Clear Goals and Objectives
Defined coaching goals serve as a roadmap for success. These goals, when aligned with organizational objectives, provide a sense of direction and focus for the leader being coached. The clarity offered by these goals helps ensure the coaching process yields effective, measurable results.
Individualized Development Plans
Leadership coaching should not be a one-size-fits-all process. It should be tailored to individual needs and aspirations. Personalized development plans ensure that coaching interventions are targeted and effective, addressing specific areas of growth and improvement.
Ongoing Feedback and Support
Feedback serves as the backbone of any successful coaching relationship. It provides insights into the leader’s progress and areas of improvement, thus spurring further growth. The role of the coach does not end with feedback. Ongoing support and mentorship from the coach are crucial to sustaining leadership development efforts.
Accountability and Measurement
Accountability is a vital aspect of a coaching relationship. Measuring progress and outcomes helps track the effectiveness of coaching initiatives and provides a clear picture of whether goals are being met.
Strategies for Implementing Leadership Coaching Programs
Implementing a successful leadership coaching program requires a strategic approach, right from identifying coaching needs to selecting qualified coaches and establishing a supportive coaching culture.
Identifying Coaching Needs
Understanding the leadership development needs of an organization is the first step in implementing a successful coaching program. These needs can be identified through various tools, including 360-degree feedback reviews, performance assessments and employee surveys.
Selecting Qualified Coaches
Selecting the right coach is crucial to the success of the coaching initiative. Coaches should be experienced, credentialed, and their coaching philosophy should align with the organization’s culture and values.
Working with a exact-fit third-party can save you wasted time and money but connecting with the exact resource you need for your specific situation.
Establishing a Supportive Coaching Culture
Creating an organizational culture that values coaching and continuous learning can greatly impact the success of leadership coaching initiatives. Leaders should demonstrate their endorsement of coaching by participating in it themselves and sharing their experiences.
Integration with Leadership Development Initiatives
Combining coaching with other learning opportunities such as workshops and seminars provides a comprehensive approach to leadership development. This integration ensures practical application of new knowledge and skills in the workplace, reinforcing the learnings from leadership coaching.
Unlocking your organization’s full potential through effective leadership coaching need not be an overwhelming task. BluWave’s expert research and operations teams can connect you to the perfect service provider to help navigate this transformational journey. Connect with BluWave today and let us help you unlock the full potential of your leaders.
Investment Strategies, Bridging Valuation Gaps, Leveraging AI: VP Forum
BluWave welcomed a group of accomplished thought leaders June 22 for its latest VP forum.
The panel, comprised of Lauren D’Amore of Prelude Growth Partners, Mackenzie Laudel of Shamrock Capital Advisors and Yan Levinski of Trivest Partners was moderated by BluWave founder & CEO, Sean Mooney.
The experts delved into three critical aspects of the investment landscape: effective sector ideation strategy, bridging the buyer-seller valuation gaps and leveraging AI in the investment process.
Here are some of the key takeaways:
Summary Takeaways
- Investment firms increasingly employ long-term thematic exploration for ideation, aiding their decision-making process and enabling differentiation.
- The dynamic market environment necessitates innovative approaches like earn-outs to bridge buyer-seller valuation disparities.
- AI is still nascent in the investment arena, with its integration and application varying greatly across firms based on their unique sectoral needs and strategic requirements.
This event was conducted with the Chatham House Rule in place.
Expanding on Sector Ideation Strategy
The panelists stressed the importance of leveraging industry, consumer and market trends to formulate effective investment strategies. To this end, firms are differentiating themselves by immersing in a particular theme or sector over multiple years. This not only lends a unique perspective to every investment opportunity but also leads to more informed and strategic decision-making.
The panel also touched upon the importance of a focused investment universe. Some firms are moving away from a broad-spectrum approach to concentrate on mid-market, founder or family-owned businesses. This narrower focus facilitates a deep understanding of potential investments and leads to higher quality deal flow.
CASE STUDY: How BluWave Enabled Massive Turnaround of Family-Owned Business
Bridging the Buyer/Seller Gap
As the market continues to fluctuate, there’s been a shift in deal flow, with some firms noticing a lean toward growth equity deals. These deals offer more structural levers to pull during negotiations, proving to be advantageous in the current economic climate.
READ MORE: PE Market Analysis: Growth Strategy for Business
In response to sellers’ high expectations, firms have had to adapt and innovate their negotiation strategies. Earn-outs, previously less favored due to their potential complexity, are now being used more frequently to bridge valuation gaps. Firms are also exploring other attractive deal structures, such as rollovers and seeking to simplify negotiations by taking representations and warranties off the table.
Embracing AI in the Investment Process
The conversation on AI’s role in the investment process revealed a mix of approaches. Some firms have proactively set up AI task forces to explore how the technology can impact their portfolio companies and be integrated into daily workstreams.
READ MORE: AI Data Analytics: Business Intelligence Tools
But as mentioned above, the adoption of AI varies across firms. Some admitted to falling behind, expressing a need to engage AI consultants to bridge the knowledge gap. Conversely, others haven’t yet prioritized AI due to their investment in sectors where it has less relevance.
Whether you’re navigating investment strategies, bridging valuation gaps or exploring the potential of AI, the landscape of investing is continually evolving.
As these conversations unfold, BluWave remains committed to connecting you with the exact-fit resources and insights to navigate this ever-changing environment. To learn more, or to start your project, set up a scoping call with our research and operations team.
Navigating Executive Team Assessments: A Brief Guide
Understanding your executive team’s dynamics, strengths and areas for development is pivotal to your company’s success. Executive team assessments can play a crucial role in this understanding, aligning the leadership team’s skills, behaviors and performance with the strategic goals.
If you’re considering an executive team assessment, BluWave is equipped to connect you with top-tier resources to facilitate the process.
Let’s dive in to better understand what it might look like when you engage a world-class third-party to help.
The Role of Executive Team Assessments
Executive team assessments contribute significantly to crucial business decision-making processes. They help determine hiring decisions, promotions and leadership development strategies. More than that, these assessments shape an organization’s culture, fostering a climate of engagement and transparency.
READ MORE: Unlocking Organizational Success: The Role of Leadership Coaching
Understanding Executive Team Assessments
The primary objectives of executive team assessments are multifaceted. They serve to comprehend team dynamics, assess leadership performance and identify strengths, weaknesses and potential growth areas within the team and individual leaders. The insights gleaned can be instrumental in enhancing team cohesion, clarifying roles and responsibilities, facilitating personal growth, improving leadership capabilities and driving successful succession planning.
Behavioral Analysis
Behavioral analysis provides a method for understanding the behavior, motivations and interaction styles of team members. By scrutinizing these elements, companies can optimize team dynamics, improve communication and facilitate effective decision-making processes.
360-Degree Feedback
The 360-degree feedback process involves gathering performance-related feedback from an employee’s subordinates, peers, superiors and sometimes even external stakeholders. It’s an excellent way to identify blind spots, areas of strength and opportunities for development, contributing to improved performance and higher employee engagement.
Performance Evaluation
Performance evaluations involve reviewing an individual’s job performance and productivity to understand their efficiency. The results of these evaluations can inform promotions, salary increments, layoffs and training needs, offering a robust dataset for assessment.
Personality Tests
Personality tests can help you understand different personality types and how they interact. Moreover, by ensuring that the leadership team adheres to a similar set of values, organizations can maintain consistency in decision-making, operations and company culture.
Alignment with Business Goals
Assessments provide an opportunity for reflection and alignment, ensuring that individual and team efforts contribute to company goals. Through the integration of org chart planning, businesses can gain vital insights into key roles, reporting relationships and team interdependencies.
The Significance of Assessment Results
The results of an executive team assessment can shape professional development plans, improve team dynamics, refine leadership strategies and inform strategic decisions. Incorporating HCM systems software can streamline performance tracking, goal management and feedback collection, further enhancing the assessment process. The role of feedback in the assessment process is instrumental in improving overall organizational performance and fostering a culture of continuous growth and learning.
READ MORE: AI Data Analytics: Business Intelligence Tools
In conclusion, executive team assessments provide invaluable insights into your leadership team’s capabilities and dynamics. They offer a foundation for making informed decisions and fostering a culture of transparency, engagement and continuous growth.
Undertaking an executive team assessment might appear complex, but the rewards of enhanced team performance, strategic alignment and improved decision-making are immeasurable. The BluWave research and operations team is here to connect you with an exact-fit service provider to help you navigate this crucial journey.
How BluWave Enabled Massive Turnaround of Family-Held Business
Service Area: Interim Executives (CFO and COO)
Client Type: Family-Owned Business
Service Provider Type: Specialized Interim Executives
Industry: Industrial Distribution and Services
The Need
Interim CFO, COO Team for Turnaround
A multi-generation family-owned business faced significant challenges due to declining financial performance and market dynamics. The company also suffered a cyberattack that exposed weaknesses in its IT infrastructure. Recognizing the need for help, ownership sought external expertise to guide them through a comprehensive turnaround.
The Challenge
Revitalizing Profitability, Building Value Creation Foundation
The business grappled with challenges related to its profitability and internal capacity. The cyberattack highlighted the urgency of implementing an effective IT infrastructure and strengthening the leadership team. An outside advisory board, hired by the family, immediately recommended that a multifunctional team with interim CFO and COO turnaround skills was crucial. The objective was to streamline operations, reduce costs and create a sustainable foundation for renewed growth in order to rebuild value for the family and company stakeholders. Trusted advisors introduced the family to BluWave.
How BluWave Helped
Proven Executive Duo a Perfect Match
BluWave sprung into action, first taking time to understand the unique situation and the factors needed for success. BluWave then swiftly matched the family business with a highly experienced interim CFO and COO duo from the BluWave Network who understood the complexities of the company’s industrial markets and possessed a background in turnaround and operational performance improvement. Because of the ready-to-go nature of the PE-grade, pre-vetted Business Builders’ Network, BluWave was able to introduce the perfect fit executives to the company’s family ownership within a single business day.
The Result
Accelerated Profitability, High-Valuation Sale
The transformative efforts led by the interim CFO and COO turnaround team resulted in significant improvements in profitability and operational efficiency. The company quickly took action to stabilize and reinvigorate revenue and optimize human capital, which increased EBITDA from approximately breakeven to more than $10 million in less than 18 months. The cultural shift toward performance and accountability empowered the employee base, enabling them to rise to the challenge and drive positive change throughout the organization. The family was then sold the business to a top private equity firm at a nine-figure valuation.
The collaborative partnership between the family, the interim CFO and COO combo and BluWave facilitated a comprehensive turnaround, leading to increased profitability, operational efficiency and a transformed organizational culture. The company continues to thrive under new leadership, supported by the foundation laid during the turnaround engagement. In fact, the current full-time CFO and the former turnaround interim CFO connected by BluWave keep in touch to this day.
There had to be a tremendous amount of change within the leadership team because we were driving a culture of change toward performance and profitability. They were invigorated by the accountability they saw and the opportunity, and they rose to that challenge.
-Turnaround Interim CFO