Prepare employees to perpetuate success
While you’re evaluating what your company could gain from a partnership, you also need to pinpoint what you’re not willing to give up. Fink identified AWP’s core competencies of safety, flawless execution and on-time performance as nonnegotiable items.
“If a new partner came in and said, ‘You’re spending a lot of money on training. Do we really need all this training?’ Yes, we do; that’s made us who we are,” Fink says. “A lot changes if we’re not dedicated to flawless execution through first-rate training.”
Firmly establish those core issues upfront. Fink says you shouldn’t be timid about it — obviously the firm approves of how you’re already running the business because it agreed to get involved.
“In terms of setting the stage with your new partners, you have to let them know right from beginning the soul of the organization is not negotiable,” he says. “You set the ground rules and communication pattern right from the beginning, which says, No. 1, I don’t compromise on core issues and No. 2, if you want me to run the business, then let me continue to make the dayto-day decisions.”
After you’ve established those ground rules, stick to them. Measure every idea that comes through your new partners against your original core issues, and don’t let the measuring stick slacken because you’re excited about a new prospect.
Fink and his managers meet formally with the partners once a month. To continue to build that relationship, you need to be open with them about the company’s performance and whether you’re on track to meet goals. If you’re struggling, ask for their help.
“You have to be committed to take their advice,” he says.
For example, Blue Point recommended associations and personal acquaintances to help AWP find a professional recruiter within three weeks, after Fink had “floundered around” trying to find one for six months on his own. Now, only two months after the sale was finalized, AWP is looking at about a dozen potential acquisitions thanks to its new partners.
Monthly meetings are a good way to revisit those big-picture goals, but they shouldn’t be the only communication. Fink e-mails his partners regularly to inform them of an achieved goal or a brewing problem, especially if it needs to be addressed before the next scheduled meeting.
“They may have some insight as to how I might approach that problem or look at it in different way,” he says. “What any entrepreneur who sells a business to a private equity firm has to understand is: They now own the car, but I’m still driving. Having the authority to drive the car doesn’t mean you drive it wherever you want and however you want without some measure of consultation.”
Fink’s goal is to equip employees to run the business without his constant oversight. To do that, he encourages his senior staff members to use their direct access to Blue Point. He wants them to solicit opinions and broaden their perspectives so their decisions are not always centered on him.
“What the wise leader has to say is, in terms of perpetuating the business well into the future, that perpetuation doesn’t come strictly through the infusion of money or adding more business,” he says. “It comes through the top management of the company being able to better run the company. My top managers need to be equipped with as broad of a perspective, as much knowledge, as much information as they possibly can, and the only way they can do that is to seek out other opinions.”
Giving managers that liberty to seek advice elsewhere can be a struggle. Fink focuses on three points to keep his attitude in check during the transition of power.
“No. 1, you didn’t retire,” he says, reminding himself of the message he gave employees before the acquisition. “Now is not the time to take it easy. You need to be more engaged in your business than ever before. Even if your motivation in selling was to eventually retire, in near term, you can’t retire.”
Second, leaders need to realize that their position is no longer one of dictatorship. Phrases like, “Because I said so,” or, “Because I’m the owner,” need to be deleted from your vocabulary. Instead, you need to cooperate with new partners and old employees alike to make decisions based on all the perspective you can gather.
Thirdly, Fink looks at partnering with a private equity firm as an opportunity to develop his versatility as a leader. The experience requires you to adapt, motivate employees in a new situation and expand your vision to include the company’s well-being, not just your own.
“A marriage between a private equity firm and an entrepreneur, if done right, is a wonderful business succession strategy because it marries two very vital concerns,” Fink says. “It marries the continuity issue with the succession issue. Yes, I’m still in charge, but now there’s at least a template that if something were to happen to me, this business is secure going forward.”
HOW TO REACH: Area Wide Protective Inc., (800) 343-2650 or www.awptrafficsafety.com
