Advice for CEOs

Newport Board Group, Susan Kearney and Lynn Lednicky, presented to an audience of business founders and CEOs. The topic for that portion of the webinar was the event or other catalyst that leads an entrepreneur to take action, as their business grows and becomes more complex, to build or augment their management team.

In a webinar on April 27, two partners of Newport Board Group presented to an audience of business founders and CEOs. The topic was how owners of emerging growth companies that have gotten off the ground and are trying to grow to scale should think about expanding and upgrading their management team.

Acquisition of a company that can be a platform or foundation to “roll up” or “bolt on” complementary acquisitions is a long standing strategy for private equity and other investors. Technology-based tools and metrics programs to support realizing synergies and economies of scale in these situations are more powerful than they have ever been. Our firm has partners who as executives have executed rollup strategies successfully and are ready to advise others in doing so. Such strategies are particularly promising in market spaces where there is excess capacity due to stagnant growth or even market shrinkage. In these markets efficiency and low operating costs--rather than innovation--is the best path to profitability. There has been a lot of talk that, with deals becoming ever scarcer, private equity firms are drawn to bolt-on strategies. But--what is actually happening in the marketplace? We asked some of our partners to weigh in.

Especially since the recovery from the Great Recession, one frequently hears—from company executives, business news shows, and local Chamber of Commerce meetings--some version of the following: “Companies have many open positions they need to fill to grow their business, but just can't find the qualified talent."

Newport partners have decades of experience running companies. We interviewed a number of them and asked them to articulate some basic principles about management that their experience has taught them.