How to Drive Organic Growth in a Private Equity Backed Company

Alex Rawlings speaks with Nigel Green on why private equity firms struggle with organic growth and how better hiring, faster execution, and customer focus can unlock value.

⏱️ Timestamps & Key Takeaways

00:00 – Introduction
Nigel’s background and advisory focus

00:29 – Career Highlights

•  Two successful exits before 30 
•  Now advising PE-backed companies on growth 

01:34 – Biggest PE Mistake

•  Weak commercial operators 
•  Overvaluing experience vs. current fit 

03:05 – Growth Challenges

•  Delayed action on underperformance 
•  Lack of urgency from investors 

05:42 – Hiring Better Leaders

•  Avoid “black book” hires 
•  Focus on Character, Chemistry, Competency
•  Hire people with urgency and something to prove 

08:35 – Go-To-Market Strategy

•  Get close to customers early 
•  Avoid internal-only focus 

10:29 – The Real Competitor

•  Most deals are lost to “doing nothing” 
•  Solve customer inertia, not just competition 

12:56 – Interviewing Sales Leaders

•  Conversations aren’t enough 
•  Require candidates to demonstrate ability 

14:38 – Attracting Top Talent

•  Best candidates aren’t applying 
•  Sell the opportunity with honesty and realism 
•  De-risk the move 

23:06 – Driving Growth

•  Small tweaks > big overhauls 
•  Retention often a bigger issue than pipeline 

26:41 – Proactive Sales

•  Remove friction in buying 
•  Simplify and speed up decisions 

30:06 – Great Operating Partners

•  Must still be operators 
•  Help leaders make tough decisions 

34:29 – Final Advice

•  Consume less, execute more 

🔑 Key Themes

•  Hire for drive over experience
•  Focus on execution and speed
•  Growth comes from action, not analysis

Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success.

🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/

🌐 Visit Raw Selection www.raw-selection.com

Looking to grow your team? Check out our Hiring Guides

for proven strategies, templates, and best practices to make smarter hires. 

Transcript

00:00
Welcome back to the Rule Selection Private Equity Podcast. Joining us today is Nigel Green, founder of C-suite,  an advisory business working with private equity businesses  to drive organic growth.  Let's dive in.  Nigel, if you can give us a brief insight into you, Yeah, Alex, thanks for having me. So my name's Nigel Green. I live in Jacksonville Beach, Florida.

00:29
And I was  a  sales leader for equity-backed companies for about 10 years. Got lucky,  return on effort or return on luck as Jim Collins would say in Good to Great. I had two back-to-back exits by the time I was 30. One sold  to uh one of the largest privately held companies in the United States, Medline,  for just shy of a billion dollars cash. And I led an East Coast sales team for that business. And then the other one,

00:59
was a platform of addiction treatment facility located across the country. And we sold it to Universal Health Services, which depending on the week or the quarter, is number one or number two publicly traded hospital companies on the New York Stock Exchange. And we sold that business for 10 times revenue. And since then, that was in 2015, I have been running a small advisory practice where I advise

01:27
CEOs and commercial leaders of equity-backed companies on organic growth.

01:34
What's one mistake that you see private equity firms or portfolio companies making and what would you suggest to correct?

01:42
The most  problematic uh decision that I am seeing right now in private equity  is they don't have good operatives. um And the, what was the second part of that question, Albs? What would you suggest to correct them?  Well, yeah, well, it's pretty straightforward.

02:08
Yes, they need to hire better operators. let me unpack that.  When I say they don't hire good operators,  I'm specifically talking about commercial leaders where the revenue generation, marketing,  go to market, anything that is about organically improving the value of the business. uh They don't hire good operators. And I think that the reason they don't hire good operators is they over index.

02:36
for industry experience,  they over index for a set of previous roles and responsibilities that don't match to what needs to be true  right now in the context of this business,  this investment thesis,  this management team,  and  they hire the memory, not the moment. Okay. Well, let's dive into that. know you all submitted a book of how to hire elite salespeople.

03:05
Um, and obviously putting an executive search firm, I feel I have a little bit of knowledge at least to, uh, to talk about this. So let's go into, let's start at the start. So when a private equity firm's made an acquisition of a business, they all want organic growth. Um, obviously this is a buy and build strategy, but organic growth is, uh, is also on the cards on the table. What's the mistake that they're making before, when they're just thinking about, okay, how do we go about putting some, you know, some

03:35
free purchase business  revenue onto the books? They make the mistake of  not communicating. the  investors  don't communicate to the operators how  little time they have. And so  they tolerate or ignore for too long.

04:03
fixable interventions in their commercial strategy that because they are ignored or tolerated for so long, bleed too deep into the whole time and  suck up all the precious, expensive capital to where once they,  once it becomes untenable and intolerable, they're almost unwilling to reinvest to make up

04:31
for the time and money they've lost, observing and not addressing or intervening on a slow growth or correction path, depending on what the thesis is, whether it's already growing or it's a turnaround. They sit too long believing that that leader, that commercial leader has a plan that will eventually work.

05:00
And that's a huge expensive mistake.

05:04
So how do they go about making that decision of what will work? Who's going to be right? You know, there's plenty of data available. You know, the classic, in my opinion, and why I see private equity firms do is chase black books. Guys who've been there, done that, worn the t-shirt for another business,  and wanted them to bring their black book of contacts, logos across and hopefully win business, which I will tell you, 99 times out of 100 doesn't work. They just chase the one out of.

05:31
What's your take on what they have to do prior in order to make sure that they can, you know, they have the information they need in order to make the right decision.

05:42
They have to hire commercial leaders that are impatient and that are productively paranoid about not having a fast start. Okay. And so there's a lot of, a lot been written on the risks and the pitfalls for coming into an organization and trying to change too much.

06:10
too fast and making critical structural mistakes. uh What ends up happening is that  when they go to hire these people with black books that have been there, done that, well,  you and I both know people that have been there and done that are very comfortable. They don't have anything to prove. There's no sense of urgency.  And that's not the right fit. So you have to hire people that have something to prove. They're incredibly competent.

06:40
but they have a chip on their shoulder or they have something to prove to someone or somebody and that catalyzes them to a bias towards immediate action. And they move a lot faster than the person that's been there and done that. And so what I, what I try to hire for  is, and the book I talk about the three C's,  competency, which is the obvious one and where most,

07:11
most searches start, they start with the competency, the roles and responsibilities, the qualifications, where'd used to work. That doesn't matter to me.  It's irrelevant. What's most important is character. What do they stand for?  Do they have a set of guiding principles? Do they have a vision for their life? It's bigger than this job, meaning this job  must be successful for them because it makes the next step possible.

07:37
without succeeding in this role as chief sales officer in the next three years, they don't get to become CEO. They don't get to become a principal in a private equity group. They don't get to go start their own business. You have to find what  is this person building towards and then the chemistry.  That's  the second seed that's really important. How much do I like this person? Do I want to spend time with them outside of work? And so when you hire for the character in chemistry,

08:03
with someone that has something to prove that's productively paranoid and you can interview for this. They figure out the competency. They'll go find the advisors or the referral partners that have the black book. You don't have to go hire those expensive, uh very comfortable people. You can put them in a fractional role or induce them to make introductions. You have to hire someone that wakes up every day  scared that their identity is at risk. If they

08:32
don't produce today.

08:35
Once you have that, what about building the go-to-market strategy? So if you've got a team that fits the criteria you just mentioned, how do you then go about making sure that the strategy fits the business, fits the market, and obviously fits the customer?

08:52
So there's really only one way to do this well. And that is to get out of fluorescent in 72, get out of those big high rises and the big metropolitan areas where all the private equity offices are and get out and be with the customer. One of the mistakes that I see new commercial leaders, particularly in B2B,

09:20
They spend their first 90 days  navigating internal stuff and they never talk to  one single customer, one single prospect. uh

09:31
and they're already behind. And so even if you come from the industry, even if you sold to that same customer base, you have to get out and validate from the voice of the customer, how they experience the product. Because what happens is there's this like, feature and value drift.  What the founder or the management team believes is the value proposition or the problem that solves, then what the customer actually says,

09:59
is what it does or what it doesn't do, what the gaps are, what it does better. There is a gap that  builds over time.  And  what most commercial leaders don't understand is that uh you're selling for the most part against apathy, not against the competitor. You're selling against a customer that would probably rather do nothing than buy what you're selling. Yet you're so focused on how do we win against

10:29
this competitor or get market share from this incumbent. And you're not addressing  that it might be easier for them to just do nothing. And the only way you solve for doing fighting against a customer and a market that wants to do nothing, if you have to get out there and be with them and understand what's the cost to them for doing nothing, for delaying the decision. And how do we go back and shape our entire go-to-market strategy against

10:58
The real enemy here is doing nothing. I just finished a study where I analyzed around 700 deals for a mid-market SaaS provider. 60 % of those 700 deals that were lost have a lost reason that could be translated to did nothing. Didn't show up for the demo, added more stakeholders, pushed the decision to next quarter.

11:28
And so a lot of the  energy and effort on the commercial side is around,  how do we win against this competitor? And it's all about fighting for the small percentage of the market that knows that they need the product and knows the cost of not addressing the problem with a solution like yours.  Nobody on the commercial side is addressing that over half the deals in your pipeline are going to die.

11:58
because they found it easier or more cost effective to just keep doing what they're doing now. And that's how you fix it. You've got to have a leader that's so  scared about their own identity of not growing, that's willing to get in front of the market to understand that we will actually lose business to them doing nothing, not a competitor. So how do I go back and solve for this entire pipeline? In most cases, half of them, half of these deals will go to loss because we

12:27
didn't convince them to do something. That's how you do it, Alex. So on that basis of  now coming back to interviewing that executive, if that's a big reason  that you see, certainly  for the customer base of the do nothing basis of we'll wait and see things  played out, how do you assess that at interview level of how good people are overcoming that, turning it around and fighting that good objection? Yep.

12:56
Great question. So most executive interviews for anything in the C-suite, not just the commercial roles  are heavily conversational.  They may make you do a personality test of some kind, but you are going to have conversations with a bunch of people, everybody on the management team, a recruiter, you're going to have a...

13:25
all these different multi-step committee type interviews. The problem specifically  in  commercial roles,  every  one  of those leaders that is interviewing is better at interviewing than the people doing the interview.

13:44
They interview for a living because they're in front of salespeople or they're in front of customers. They're really good at telling you the answer you want to hear. So the first thing that you have to do  is understand that if your interview process allows for the candidate to only tell you and not show you how they do it, if there's no demonstration, if there's no exercise for them to show you the receipts of how they do what they said that they do.

14:13
You don't have an interview process. You just have conversations that make you feel good. The second thing, and this is where  you'll validate this and the work  that you do is important. Any good commercial leader is not looking for a job. They don't apply to jobs. They're too busy being successful at their current job. Why would they be looking for your job? So if you're

14:38
recruiting strategy is post a job. If you build it, they will come. If you post a job and you sift through applicants, you're going to get a bunch of applicants for sure. They either haven't done it or can't do it because the ones that are doing it aren't looking for the job. So once you understand that the leader you want to run your sales organization is already working and they're being successful, they're not looking for you. And then you go interrupt them being successful and invite them to come interview for you. If the interview.

15:08
is purely conversational, you're gonna get it wrong. You have to  make them show you how they do it.

15:16
So  I'm big believer we've got three rules of hiring here that we've reviewed top private equity firms, portfolio companies, use flyers. And one of those is actually selling the opportunity to the candidate. Now you've touched on it there. So you mentioned that the good executives, the good salespeople are not interested in applying for roles and out there.  do...

15:41
What do the good salespeople want? What do good sales leaders want to hear aside from, I want to be fairly or well compensated.

15:51
that the management team has a good relationship with reality.

15:57
That's the first thing that  has to be demonstrated if you're going to sell the opportunity. uh Does the CEO actually  have a pulse of the market? Does the CEO go and talk to customers or that they even know who the customers are? uh Is the growth plan built on hope or was it pushed down from  the equity sponsor to make the deal work? uh

16:28
Why are you, why is this role open? Why did the, why is the person that was doing the job no longer here? Like let's, let's have an honest conversation about why we're in this situation. And they're, looking for a management team's relationship to reality.  Uh, the other thing that they're looking for  is how to de-risk the decision for themselves.

16:57
And this is kind of like co-mingled in the reality piece, but... uh

17:03
If you're not prepared to help de-risk the decision to leave a job where I already have equity, I'm already performing well, to forfeit that at  the opportunity to come work in this environment,  if you don't have a comp plan that bridges the gap and de-risk that for them, then you're not going to get  the right people to do the job.

17:32
And what that looks like is so I don't just have this happen. They, um, I'm doing a, I'm helping a client of mine find a new sales leader. And they say, well, this  is this, the HR person said, this is the salary and this is the comp plan. And I just kind of chuckled and you'll appreciate this Alex. I'm like,  you don't know what the salary is yet. You don't know what the comp plan is because you haven't found the candidate that can do the job. We'll find the candidate that can do the job and then we'll know  what it costs.

18:02
And then we'll adjust the budget based on what it costs to get someone in here that can do the job.  were paying  the previous person this and it didn't work out. So we don't know if it's because it wasn't the right person or  you weren't even in the right category  of the right people.  when you flip that whole model upside down and you go after people that don't need the job, you got to be willing to meet them where they are and design.

18:32
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19:01
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19:30
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20:01
private equity, but why do we need to de-risk it for them? If they're good enough, they'll come in, they'll hit the numbers, they'll achieve what they need to achieve. We'll put a commission, we'll put a bonus on their EBITDA. What do you say to that? Well,  what I say to that is,  uh, which, what you're fighting against is your own bias with reality.  if you can't defend, you can't show with evidence that the person that's no longer here,

20:31
was able to demonstrate all the things in this model, the at-risk compensation.

20:38
How do I know if I'm the candidate that

20:42
despite my best efforts, you're not the problem.  The organization isn't going to be the reason why I can't go and hit this number. And that's,  that's where that whole line of thinking around, you know, the sitting in a sterile environment, modeling out stuff on a spreadsheet falls flat. When you are hiring people that are out doing the job and doing it well,  they're able to poke holes and say,  if it's so easy, why, why do you need me?

21:11
Like, well, you should have already solved it. If it's, it's, if there's, if it that straightforward and it's that believable, you don't even, we don't even need to have this conversation. That's the thing. That's the dose of reality piece is I think a lot of uh hiring teams and private equity don't understand. They don't have a really good relationship with em the fact that it hasn't been going well and it hasn't been going well. mean, that's, that's a pretty um widely accepted.

21:39
reality and private equity hold times are longer than they've ever been. uh There's more divesting and carving out assets and selling them off as a sliver of the package deal.  There's continuation funds. uh The candidates understand that too, that there's,  don't know how to grow organically and sometimes growing organically has less to do with the leader and more to do with the businesses unwilling to build the business for what the market wants.

22:10
So if, when you're working with your executives, with the sales teams, with the sales leaders who are building the engine, if you refer to as that, to grow that business.  Obviously there's going to be some challenging thinking to what they're doing at the moment. But how much of a pivot is it for a lot of these businesses when they're looking at putting the engine in the works that drives the growth?

22:39
How much are they getting things wrong? And I that's a bit generic, but I think it's just to get a kind of indication of the people that are listening, they're going, yeah, well, the problem is the private equity doesn't know what good looks like in order to drive a growth engine in every business. And therefore they're trying to measure the executive coming in to say, yeah, yeah, I've come very slow, yeah, no worries, but you'll have to pay me a lot of money because of this, this and this, which is fine, right? Problem is they don't know what to measure on the way in.

23:06
How much fundamental changes are being made with the businesses that you're working with from their model and the way that they go to market? Is it complete revamp, tweaks? What's the majority of time spent in which camp? Small tweaks, big complete reshuffles.

23:29
I understand the question. would say  the majority  of  my clients are  in  the camp of  small tweaks,  asymmetrical return. Okay.  And I'll give you some examples of what that looks like in reality.  Oftentimes  I get pulled into assess the sales team  and

23:59
The problem as they experience it is that we're not growing fast enough. need more leads. We need more logos. Our pipeline is... uh

24:12
empty.  We need, we need more in the top of the funnel.  And what, what I ended up finding out a lot of times, Alex is that they actually don't need more  new logos. The problem is that they haven't found a way to make the offering good enough that customers want to stay and they want

24:42
you the offering the service or product provider to become deeper entrenched into their business and help them solve additional problems. So typically this we need more growth, we need more pipeline.  What that signals to me is we probably have a churn problem, we're losing customers. And so we think the only way to fix it is go get more of them. uh Peter Drucker said,

25:10
The whole purpose of any business is to create a customer. Everything else is just an expense. And what I, I take that one step further and I say, and it's so much easier to go back to a customer you already have and get them to buy something else or pay more than it is to go get new. And so that's an example of where I come in and say, guys, you don't need to overhaul everything. But I was just on the, just on a call earlier with the CEO, they got 220 customers.

25:39
And I asked the CEO and the sales leader, said, okay, show me in the past six months, how many of those 220 customers had a proactive conversation with someone on product or customer success about how the tool works, how they're using it to solve problems.  And I don't want to hear about, this with the tickets where they had an issue that got, how many of those 220 customers did you proactively engage to try to figure out how we can do more for your business?

26:08
The answer was zero.

26:14
Okay. My take on from, you know, running processes for executives, I spent a great deal of my early career uh running  searches for salespeople, sales engineers, technical salespeople into the manufacturing, engineering products industry.  And my take on most salespeople and indeed most sales organizations, most sales  units within companies are predominantly

26:41
built around account managers, farmers, order takers, whatever you want to call them.  What does a good sales leader do to change that to being proactive rather than reactive?

26:58
changing what to being proactive than rather re-active. So for example, right? let's take for example a private equity, a private equity business just acquired a first time investment business, first time private equity bad company, found our own prior, lots of relationships, built that, predominantly built through referrals. And they wanted, and the private equity firms I write, there's an opportunity here. Every sales investment renter man, and Sim says with a practice strategy.

27:27
This business could be double, triple, three times, four times, five times, right? Classic, right? And in perpetuity, that's great, but rarely happens. What does a good sales leader do to take that business from being sleepy and reactive to proactive, outbound sales organization that wins new business outside of relationships and referrals? And we've always done work with this customer. Yeah. Okay. Um,  I get the question now.  Um,

27:58
The first thing that they have to do  is uh address friction. Okay. In every organization,  there's a friction in the buying process. The friction oh is easy to ignore or to be,  or to be blinded.  Sometimes the relationship, the proximity of those early customers that knew the founder or uh

28:25
came from the network, whatever, like those early adopters, the relationship overcomes a lot of the friction in the transaction mechanism or in the buying process.  A good sales leader that wants to get away from just that reactive  and then the referral and wants to go get those unaffiliated buyers that bought because of something other than a relationship or the expertise of the founder. They got to go remove all the friction in the buying process.

28:54
And when you remove friction, that's when you start creating value. uh Friction might  be as simple as... uh

29:07
Why do we need to do a demo? Why does the customer have to schedule a demo with the sales rep? Why can't we just record a demo video that they can watch whenever they want have uh a really good FAQ Wiki that addresses  any question that they might have about pricing integration, how the solution works, uh references. Why do we need a demo? We can just put a buy now button on the website. Unhide it.

29:36
Put a buy now button, make their money. Those are, that's an example of what a good sales leader does is to say, why do we need a demo? Let me go watch the demos. Is there something about the, the sales rep, their expertise on the offering, the ability to pivot on their foot with a technical buyer that can't be replicated in the video? I don't know. Let's go watch a bunch and figure it out. And then you get to the place where you find you don't need to do 30 minute demos. You don't need to be measuring number of demos completed or demos scheduled. You need to just.

30:06
put up a seven minute video and a buy now button. Taking the friction out of the process. it. Getting rid of the friction. So away from sales, obviously your role is advising and supporting private equity firms and their portfolio companies on that go to market sales strategy, et cetera. Commonly terms would be an operating partner if you actually work for the private equity firm. What do you think it means to be a good operating partner and to be good at the work that you do? Yeah.

30:37
The, the private equity world  doesn't really know what to do with operating partners. And if you were to ask, before we hit record, I said something along the lines of, you were to ask 10 different managing partners,  10 different private equity funds to define an operating partner, you get 10 different answers. And I would say you could probably  ask a few or handful of principles within the same  fund, what an operating partner does.  none of them would give you the right answer.

31:06
Okay. So it's a, it's a etch all title.  Um,  I've been an operating partner with shore capital since 2018. Uh, uh and I'm an operating executive with union capital and I've worked independently as a consultant for, uh, probably 12 other mid market to upper middle market private equity funds. The, what I know to be true about really good operating partners, they're still operating.

31:36
First and foremost, have to still be operating some business, even if it's just their own. They have to be operating.  They can't be, I don't think they're, you can be a good advisor and be retired, but retired already had the exit, just cashing a board check. That's not a, that's not a good successful uh model for an operating partner. The reason why they have to  still be operating Alex is that the real value is not telling that operator what to do.

32:06
It's sharing the cognitive load, the weight of what it means to be an operator on a leadership team for an equity backed asset where the board is just, they want more information. They want it now. The stuff they're asking for means absolutely nothing to doing the job. But still they want this information. They've got thoughts and feedback. They want to do all these calls. They send you, they want all this bullshit from you.

32:35
And it means nothing to how you run the business yet. You've got this day to day thing that you have to do and you can't go  and ask for too much help to the C suite or to the equity sponsor, because then you're worried about that. think I don't have it. And so a good operating partner is able to share the cognitive load with an operator  and not necessarily tell them what to do, but help them think through.

33:04
the consequences because what I think is the real problem with operators is that they don't do anything. They don't make any hard decisions.  They let the theater, they let the politics, they let  all of the distractions and the other voices and the noise, wow, their ability to make tough decisions that will never reach consensus.

33:31
And sometimes the data and the information will not help you do it, but you have to make these decisions.  Decisions like kill a product line, fire a marketing leader, uh dissolve a channel partnership, kill a demo motion  and put a buy-in out. Those are really hard decisions.  And what I've found is that most operators  know what they need to do, but they don't, they choose to do nothing.

34:01
because they don't have an operating partner outside of the organization that gives them permission to go and do what they think they need to do. And that's what a good operating partner does. It wrestles with the hard decisions, the consequences of each potential choice and helps the operator decide with clarity and conviction on what to do.

34:29
Okay. No sense. What is, um, what is something you read, watch, listen to? Uh, do you recommend that others on the listening to the podcast should check out? Um, read, watch, or listen to, I will tell you that, um, I used to read a lot and I used to listen to a lot of podcasts. Um, I would say

34:57
less. I think we're at a time where  I don't think you need to read or listen to as much. think you need to get quiet and I think you need to limit the information you're consuming and focus. So my answer may not be popular, but I think uh the answer is read less, listen to less, consume less and do the damn work.

35:27
It's something I'm a, I've got a big stack of books behind me and I would usually buy anywhere between three to five books a month. And the last three months I bought nothing. I'm literally reading very little and I'm on execution mode of what I have and the availability. And if I've got a problem, I'll dive into that and then move on to it. So I think there's a lot to be said in that.

35:49
If anybody wishes to reach out to you post this podcast, Nigel Harvester, get in touch, I'm easy to find. You can find me on LinkedIn.  My website is NigelGreen.co. oh

36:02
And well, thank you very much for coming on to the podcast, giving us insights into organic growth  and recommendations on how operating partners should structure and run their business.  So thank you very much for coming on the podcast. Thanks, Alex. I enjoyed it. And as always, thank you very much for everybody for tuning into the PrivateXU podcast. Till the next time, keep smashing it.