Our team had the chance to attend and sponsor the Hunt Scanlon September 2022 PE Conference in San Francisco – Driving Growth & Value Through Effective Leadership. Along with listening to thought leaders share their insights on a variety of panels, our Founder & CEO, Sean Mooney, also had the chance to sit on a panel hosted by Jennifer Perry of FMG Leading. The panel covered the topic of identifying and developing non-c-suite roles that have an outsized impact on value creation and included fellow thought leaders Raj Karanam of Sun Capital Partners, Kate Berkeley of Gryphon Investors, Darcy Casarella of New Enterprise Associates, Kevin Kernan of JM Search, and Valerie Frederickson of Frederickson Partners.
It was great to gather with so many thought leaders in the private equity human capital space at the Hunt Scanlon event. Here are some of the key takeaways we gleaned from Sean’s panel & the others:
Human capital continues to be a growing priority in private equity. A common theme from fellow attendees was recognition that talent-focused conversations weren’t prominent in PE as recent as 2 years ago, and many human capital leaders are either new to private equity, or to the human capital function. This was a topic we also discussed at our August 2022 PE Human Capital Forum (RSVP for our upcoming human capital event here).
A strong human capital function has 3 key components: people, processes, & technology.
People: Firms are taking a more proactive approach in getting the right people in place internally to assess and facilitate talent decisions.
Processes: Human capital leaders are ensuring they have effective processes in place for building/managing networks, talent pipelines, and interview processes.
Technology: In order to support their people and their processes, firms are leveraging technology to help them.
Talent to value is more important than ever. While getting the C-suite right remains the top & most critical priority, understanding what talent below the C-suite generates outsized value to their role, and then getting that talent right, is of growing importance in turbulent economic times. Identifying & assessing these roles is helpful immediately post-investment and if right sizing needs to occur.
Talent is becoming increasingly integrated with value creation plans. Leading firms are incorporating talent strategy into value creation plans from the get-go to ensure there is alignment.
PE firm has critical need for pre-close recruiters for a target company
An investment executive at a large cap PE firm came to us with a critical need to source trainers and university recruiters for a target company in the engineering industry. Prior to closing on the target company, the PE firm wanted to explore the available selection of talent they would have if the deal closed, and they chose to expand the UK-based company into the USA market. The investment executive urgently needed a PE-grade pre-close recruiter who could source the trainer and university recruiter candidates – both of which required a unique skill set and background.
BluWave has in-network, PE-grade recruiters with industry experience
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade pre-close recruiter needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of non-executive recruiters that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria. Then we connected the client with the select pre-vetted recruiters from our invitation-only Business Builder’s Network that fit their exacting needs.
The firm was equipped with the proper talent sources to proceed with their deal
Within less than 24 hours of the initial scoping call, the PE firm was introduced to a PE-grade non-executive recruiter that specialized in sourcing trainers and university recruiters for engineering technology roles. The client selected the presented provider and was able to confidently and quickly move forward in their diligence process, equipped with the necessary insight on the available talent they would need to drive value post-close.
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.
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, Private Equity Consultant, Ryan Perkins, shares why the inflation-driven recession has caused firms to prioritize bringing in organizational design & effectiveness resources, and what types of those resources are being utilized the most.
Learn more by watching the video below.
Interested in connecting with interim CHROs, HR-focused consulting firms, or org design consultants? Contact us now to get quickly connected to the exact-fit, PE-grade resources you need.
Video transcript:
The inflation-driven economic downturn has created a complex environment, causing private equity firms to take unique action, balancing right-sizing before the storm with retaining and recruiting key personnel. With human capital being a strong input for ensuring success through this downturn, PE firms are bringing in specialized third-party resources to resolve organizational design and effectiveness needs. Here are a few specific resources that we’ve seen our clients engaging on.
Number one, Interim CHROs. Bringing in experienced interim CHROs with deep industry knowledge is a great way to ensure the human capital needs of your portcos are in steady, expert hands. An effective interim CHRO can steer the HR ship during a recession, ensuring your portco will have the right people in place to get through the downturn and position your portco for growth moving forward.
Number two, HR-focused consulting firms. Specialty firms are a great tool that private equity firms utilize to gain expertise on corporate structure and talent output, without adding personnel directly into a portco. Consulting firms that have experience working with private equity-backed companies can be extremely advantageous when making decisions around comp and benefits, staffing needs, restructuring projects, and expansion requirements during an economic slump.
And number three, organizational effectiveness consultants. Process optimization is essential to keeping up with the pace needed to thrive in times of uncertainty. Organizational effectiveness consultants ensure that processes within your portcos will help them run towards the storm by evaluating them as they currently exist, and suggest any required changes according to their industry expertise.
For private equity firms, uncertain economic times should be treated as times of opportunity. Ensuring the organizational design and effectiveness of your portfolio companies can be the difference between generating momentum versus treading water in a recession. At BluWave, we have the private equity-grade resources to position your portcos for growth, no matter the economic landscape. For information on how to get connected with best-in-class, organizational design and effectiveness groups, or any other third parties you may need, contact us today at info@BluWave.net.
Every quarter we bring together top PE human capital and talent executives to discuss current industry topics and to offer talent leaders in private equity the chance to discuss critical topics of the day. The PE human capital role is rapidly evolving as the private equity industry increasingly invests time and cash flows into human resources.
The BluWave Human Capital Forums follow Chatham House Rule, so our takeaways herein are kept at a high level. Are you in private equity and interested learning the details by joining fellow leading PE professionals during our next Human Capital Forum? RSVP for our next event on November 2nd.
In our most recent Forum, we discussed many topics including:
The private equity industry is seeing the ongoing downturn as a unique talent hiring opportunity.
Human capital leaders are working closely with their portfolio company leaders to accumulate best practices and share them across their portfolio for the good of all.
The private equity industry is actively polling its portfolio companies to understand the voice of their employees and improve engagement and retention.
Human capital leaders are spending significant time bringing additional skills and talent to new portfolio companies and supporting the development of their teams.
The PE industry is using data and objective assessment tools to improve portfolio company performance.
In the days ahead, human capital leaders are looking to spend more time enhancing culture, supporting leadership development, and sharing best practices during rapidly changing times.
We thoroughly enjoyed these thought-provoking conversations that occurred during this recent gathering of PE human capital professionals. If we can be of assistance, please let us know.
Additionally, you may be interested in checking out some of our human capital specific resources, which can be found here:
Firm comes to BluWave with executive recruiter need for portco
A D.C.-based LMM firm came to us with an executive recruiter need for one of their portfolio companies. This hospitality-focused portco had just acquired assets from one of its largest competitors and was moving into a larger warehouse. The firm urgently needed to place a CEO with deep distribution experience so that s/he could lead the business in implementing a new transportation system, re-branding the organization, and onboarding new employees from the recent acquisition. The firm had already executed an extensive search for an exact-fit CEO to run this $200M business and being 24 months away from an exit, the client was eager to identify candidates that matched their search criteria needs.
BluWave connects client with BluWave-vetted specialty executive recruiters
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade specialty executive recruiter needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of specialty executive recruiters 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 BluWave-vetted specialty executive recruiter from our invitation-only Intelligent Marketplace that fit their exacting needs.
Within the same day of the request, the PE firm was introduced to two exact-fit global providers that specialized in executive search. The client then selected their top choice and was able to begin working with a provider that was a 10 out of 10 fit. The agile provider was able to surpass the client’s expectations and placed a full-time CEO to lead the helm of the portco.
VP immediately needs a top interim executive for portco
A large cap VP came to us with an immediate need for a 3-month interim executive to set up a procurement office at one of their portfolio companies. Focused on healthcare technology, the portco didn’t have an existing procurement office. They were procuring technology from a variety of vendors and were ultimately looking to achieve a 10% savings opportunity with creating a procurement function. The firm was looking for the interim executive to set up quarterly business, inform potential cost optimization, and identify near-term wins and opportunities on this cost saving initiative.
BluWave identifies interim executive to fit exact criteria
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade interim executive needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of interim executives 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 BluWave-vetted candidates from our invitation-only Intelligent Marketplace that fit their exacting needs.
The firm connected with presented provider to start procurement initiatives immediately
Within a couple of days of the request, the PE firm was introduced to three exact-fit providers. The client then selected their top choice that had led five previous PE-backed procurement initiatives. The provider was able to start the project immediately, integrated the team right out of the gate, and started working towards the client’s objectives and setting up the procurement office.
