Accenture, Google and now CEO of Marlin equity-backed Beyond

Join me in the Deal Room at Google Studios as I sit down with Alan Paton for a candid conversation on leadership, growth, M&A and what it takes to run a buy and build in IT Services in the AI era.

Transcript

SPEAKER_00 0:00

This is probably the most human thing I've ever done. You are buying about the hearts and minds and the spirits of someone's dreams.

SPEAKER_01 0:07

Welcome to the deal room, the show that takes you behind the scenes of some of the most significant software and technology founder buying outs in the market. We go beyond the headlines to unpack founder motivations, high stakes and negotiations, everything that truly goes into getting a deal done.

SPEAKER_02 0:25

Welcome to the deal room powered by PCB Partners here at Google Studios. I am very pleased and honored to be joined by my good friend Alan Payton. Welcome to the Deal Room, Alan. Hello, Ben, great to be here. Alan, why don't we start from Accenture, your time there, how you grew up there, what you've done since. But most importantly, let's talk about what we've done together in MA.

SPEAKER_00 0:49

Well, first of all, let's be clear, I've known you for about 20 years, which doesn't seem possible because you still look the same as you did all those years ago. Yeah, I had a really great time. Accenture was an incredible experience. And actually, the alumni from that has really shaped my career since I left. And actually, still today, I was just in California last week at a Google event, and um it was wall-to-wall Accenture alumni. It's absolutely hilarious. Uh, I suppose a company of 700,000 people has a lot of reach.

SPEAKER_02 1:16

Um But it's also because of the talent and the DNA of the Accenture legacy and what that will continue to.

SPEAKER_00 1:22

Yeah, I mean it's a different company today to the one I worked in. I'm sure it, you know, these things change organically. Uh, but at the time it really employed some of the most intelligent, smart, dynamic people I'd ever had the privilege to work with.

SPEAKER_02 1:35

And then you took the leap into a vendor? Yeah. Into Google.

SPEAKER_00 1:41

Look, I how has that changed for you? Totally different. Yeah. Completely different. Uh Accenture is super structured, uh, is very um has a very clear way of going to market. Google at that stage was the third cloud provider and was quite a long way behind. And they brought in a new bunch of leadership, and I was part of that that wave of change. Um, that meant that they were looking to people like me and others that they hired for direction. So it was a great shaping opportunity. Um, they had an unbelievable success in the first uh period I was there, signing some absolutely enormous contracts, particularly in financial services. Uh, most of those are public domain. Um around the world. And that was was just sort of game-changing. Um, it was a you know a really incredible time to be part of an organization like Google. Um, Google was going through a bit of a cultural change at the time, and I think it's still ongoing. Um, you know, it has an incredible ads business, which is super successful, global leader by a country mile. Um the cloud business, I said, was not the premier cloud business at that time. Um so they had to differentiate, they had to be nimble, they had to be fast. Um, and that was really interesting to be to be part of that. You know, we would have 80, 90, 100% growth a year. I mean, it was it was unheard of. I mean, essentially, you know, 10, 15%, you're you know, it's really exciting. But this was this was something very, very different.

SPEAKER_02 3:10

And you must have stayed and remained passionate and believe in the Google ecosystem for then to have departed Google to go and join a private.

SPEAKER_00 3:21

Well, I did I did have a I did have a short stay at a um Big Four. So I did become a partner at PwC for uh just over a year. And was that within the Google? Yeah, that was also within the Google ecosystem, but also in the sort of financial services arena. Um for me though, I I I need to be in a company which is really on a growth agenda. If you work in sort of these big organizations, it's you know, it's it's well paid, it's very comfortable, um, and you know, you you you can change some things, but actually you're not really a needle mover. You go to work for a smaller company, and you know, we're circa sort of 7, 50, 800 people uh today, um, probably nearer to a thousand by Christmas. Um what you do, every action you take, has a demonstrable impact on the outcome. And I absolutely love that. So it it's something that has been life-changing for me. Um, our relationship, which I'm sure we'll we'll touch on, has been a big part of that. Um, being able to acquire companies, being able to open new offices, set direction, um, change talent. Um, and and it's, you know, in a in a company of our scale, if you don't take action on talent really quickly, it can have a massive impact. Everybody must be on the same message. We must be driving in the same direction. We've all got to believe. And if you have doubters or the or people that are just not committed, if they're just not good enough, you have to take action quickly and you have to move quick to get that done. That's not really the same in a much bigger organization because you know there's space for people. Um, in smaller companies, you you've just really got on with it. People and talent's so important.

SPEAKER_02 5:05

And it's interesting observing your career for all these years, you're running these large businesses for very large corporations of real scale, and now you're at the sort of mid to end of your career, and now you're running around. I was trying to split some mid to deploy to end. Yeah. Uh you are at the pinnacle of your career, and you're running a smaller business, circa a hundred million-ish. Yeah. But it sounds like you've never had as much fire on your belly as you do today.

SPEAKER_00 5:33

Yeah, I think it's because um, I think as I was saying, it's you know, you you really are a change maker in these organizations. And actually, it it's you you can really set an agenda. So you can really like I I decided, and we talked about this, you know, as part of our strategy, we wanted to go for it in the US. And, you know, British companies uh that there is a lot to have tried to break that market and been unsuccessful. Um, we took time and we hustled and we found a great partner, thank you for that, um, which we acquired and it has been an absolute showstopping success. Um Let's talk about that.

SPEAKER_02 6:13

Let's talk about that particular deal and all the deals you're doing, yeah, and the MA you're doing, because you know, you were always a part of it at previous companies, you absolutely own it here, and you know, we felt very honoured that you brought us onto your board, PCB Partners, and obviously myself personally as a shareholder of your company. MA is such a big part of your strategy, yeah. Uh particularly being private equity backed. Um, but it's the chase, right? It's the whole beauty parade and the storytelling, and you know, you're kissing a lot of frogs.

SPEAKER_00 6:46

Well, it's old school selling. So if if you don't have a big brand, then what you gotta do is you've got to sell a story, right? And I think the combination of the two of us are pretty good storytellers. You're dealing with people who are founders. I mean, you're a founder yourself, right? So I'm not a founder, I'm nowhere near that level of risk taker. So when I look at um founders, these are people that have sacrificed perhaps corporate jobs, perhaps, you know, other types of um, you know, salaries to go start a company in their kitchen. I remember when you first started very back in the day, a small little rented office with a telephone at the desk and a pad and a pen, let's go to work, right? Good days. By the time I show up, there are a couple hundred people, they've got revenues, they've got some great clients. Why would they give me the reins of their business? Now you would think that it's to do with money, but actually, in the founder's case, actually money is the secondary thing. What's important is a safe harbour for their people and actually an appreciation of what they've built and a joint love of what they've created. So I learned very quickly in acquisitions in our space is that we have to be able to tell a story. And the story is that together is better and that the people will have the access to bigger customers, more interesting work. Now, the duty of care for a professional service business like ours is access to the world's best work. Because that's the differentiator. If you work for ours over someone else, you're going to be working for the greatest institutions on the planet, doing some of the greatest work at the frontier of technology. And I think that is a magical story to tell people. Where I think, you know, we've had the success is because that's resonated really well, and we've delivered it. Um, and that continues to be our message. The uniqueness with PCB, and this is something we've massively appreciated, is you've got us in the door with these people. And in many cases, and we've got a we've got a couple that we're about to announce, we can't say too much at this point, but on those two, no one had access. But it was through your personal relationships, friendships, that maybe five years of work to get to that point, why us? And then together we're able to tell to tell that to tell that story.

SPEAKER_02 9:00

We can we can always open the door given our history of winning the hearts and minds of different stakeholders and highly ranked people over the years. But then, of course, we take the horse to water, it's back over to you. Yeah, and I think whilst you've come from a corporate background, you understand the psyche and the the EQ of these founders, and certainly the two we've done this year alone, with a couple more to come, will being well, they've settled in and they feel like they're still running their own business, but they've got an army of capability, a bigger brand, a bigger um balance sheet, and they're having a great time because of that.

SPEAKER_00 9:37

Yeah, I I think I I I spend a lot of time trying to put myself in the shoes of these people. So, what what do founders really worry about? They run out, they worry about running out of money. So they really worry about it's you know, when you work for a mega corporation with billions and billions of dollars worth of revenue, if someone doesn't pay you on 30 days or even 60 days, you know what? No one dies. In smaller companies, it can be critical, particularly if they're a large client and they don't pay you in time and you've got to make payroll. And I see that in the eyes of these founders, right? They they are they they're burnt by that for years because really you never get to a scale that really that ever becomes not a problem. Also, that caring for their baby. Um I I I watch it, you know, with some of the larger when we're competing, the one we did recently was quite competitive. And I was watching some of the our competition, and the competition was super quick to criticize and call the baby ugly. And I didn't really understand that as a strategy because yes, there may be some challenges with these businesses, but actually I always try and focus on what the the real benefit of two plus two really makes a better outcome.

SPEAKER_02 10:49

And what they've done so well and make them feel proud and recognize.

SPEAKER_00 10:53

Yeah. I I think you underestimate just how hard it is to get in the room, though. You you guys, you know, you do make it look quite simple. I'm sure there's much more to it than that. I mean, one of the benefits that you have as a firm, and I I don't think this necessarily is emulated at other places, is your background as a firm, you as an individual, means you have the biggest network. I mean, you know everyone. It's actually a little bit scary. But certainly within IT services and IT in general, you know everybody.

SPEAKER_02 11:23

And that's from years of of building my previous companies, you know, swapping the shirts of people like you for so for such a long time and doing it successfully.

SPEAKER_00 11:32

But you know, which means the doors are the doors are wide open. Also, when we have to get counsel from people, I mean this this network of counsel I think is kind of interesting, advisors. So, you know, it's not just you know PCB, it's also the affiliates of all the people that you know. And we can take counsel on these things, which I think really helps. Because, you know, money's hard to come by. And when you buy a business, I mean you it's got to be successful, right? So there's a couple of things that are really, really important about when you buy a business. Number one is no one leaves because you buy a professional services business and everyone leaves. Now, in previous employers, I'm not going to mention any names, but they became famous for buying companies and 12 months later everyone had left, right? We can probably name a few of them. Uh that doesn't work in our scale. So we buy one of these businesses and everyone leaves, this is a disaster. Number two, it's really understand the nuances of businesses, what is special. Some businesses are have a, I don't know, on people's birthdays, they send them a bottle of champagne or something, right? Whatever, whatever it might be. The minute you forget those things, culture dies. And uh, you know, uh i it it's very easy to make sweeping, you've got to be corporate, make everything very corporate. That doesn't necessarily work in in smaller businesses. And you guys have been super good at helping to identify those things. Um, and uh, James on your team, I find particularly interesting because James takes a lot of time and effort to brief me and help me understand those nuances. So when I interface with people, the things that are super important to them, I I already understand before I'm in the room, and that is different than others.

SPEAKER_02 13:12

Yeah, and that counsel and coaching, I think that attention to detail again derives from the backgrounds of the partners in the firm. James, of course, is the only person I brought from my previous organization again. But his innate DNA is is relationships, so he's he's wired that way. But then you've got your corporate finance people, the post-merger integration people you're now working with, um, the finance people, the private equity people.

SPEAKER_00 13:36

So anyone can present numbers. Yeah. Anyone can present numbers. And I've become a numbers master. I wasn't before, I am now. I could understand it every which way, upside down, inside out, but it's a set of numbers. It's the personal human interaction, particularly in a founder-based business, that makes all the difference. If you've got a good business, you're at the frontier of technology with great clients growing with strong EBITDA, there's 50 buyers for that business. Why are you going to sell to me? And it's not going to be because I give you a couple of thousand more than someone else. That is not going to be the difference. The difference is you believe in the story, you want to work with me, you want to be part of this dream and this adventure, and that in in a future time, the combined efforts will be worth more than the single entities. And that story, that message, that enthusiasm has to come through in in spades for us to be able to make this work. And PCB adds that uniqueness. I I get the privilege of spending a lot of time with lots of different firms who are very good at presenting numbers or very good at presenting obviousnesses. So if you're this or this or this, you'll be much more valuable. This is what you need to be. Well, I kind of know that. What I really need is the inside, inside track. And, you know, there's some deals that didn't work, right? I can remember, I'm sure he's if watched this video, he'll know who I'm talking about. I can remember walking around a casino in Las Vegas with a business that I really wanted to buy and happened to be at Google Next, and we spent a couple of hours wandering around talking, and we couldn't get to a couldn't get to a deal that was satisfactory for both parties. Um to even be in the room with that company was exceptional. Um, we've gone on to be someone I really appreciate, and I think he's you know could be a friend. You know, not every deal works. Um PC Big though gives us a unique insight which is different than others.

SPEAKER_02 15:23

And and to viewers out there listening or watching, when they're about to make their next acquisition or then or they're making an exit and they want their own event. How important do you think it is, Alan, to have a firm like us in the middle as their council, as their content, as their substance? All of the things you've just called out.

SPEAKER_00 15:42

I mean, I think it's incredibly important, I think it's essential. Uh look, people do business with people, that's something that's been said a million times. Um, but in reality, you've got to trust the people that you're with. Like I say, I'm not a founder, but if I'd spend 10 years building a business to the point where somebody wants to buy it, or I built a business and I want to sell it, I've got to really believe in this person that I've appointed because it's not, it's an opaque world. Valuations, what is the post-merger integrate, what's my role gonna be, how is this gonna work? You know, you know, it's funny, some of the founders will say to me, What are you gonna do with these four or five employees? They've been with me since the start, you're not gonna let them go. You know, they're they really care about um and I think if you just look at paper and you don't have that trusted relationship. So so for us, the reason I wanted you is because I trust you. I can't bottle that. I don't know how you put a price on that. Trust is really important, and you know, look, we've had our ups and downs during the takes years and years that trust, right? It it it does. Some people haven't got years and years, so they're gonna have to either judge you who you are. I think the success you've been having is because you have the big enough network that do trust you. You've done things for us which have been superb, more to do. Need to go a little bit faster, Ben. But um, you know, one of the acquisitions we were talking to, it was quite interesting. They said to us, are you just another company that's just gonna spin the wheels with us? Are you actually able to do a deal? The fact we've done three deals in seven months and we'll do another two in the next two months. I mean, five and twelve months. I I don't know what's an industry benchmark, but I think that's pretty much on the curve.

SPEAKER_02 17:30

It's up there, it's up there. And you know, I was at the Google um event in the ASG region only recently in in Zurich in Switzerland, and we had a chat about how important it is for Cadet to have presence in the ASG region. And what have you gonna do? Go on.

SPEAKER_00 17:47

Well, we haven't we haven't decided we haven't decided it, but maybe by the time this video comes out, it'll it'll it'll be something that we can be.

SPEAKER_02 17:52

I think it's that ability to move at pace, you've got the private equity backers that that understand that have backed you, that trust your judgment because of who you are. I think all of that helps. It's not merit, it's you know track record. Uh, and not everyone has that. In fact, many people that have rum pee about businesses have come from very different places to you. Yeah, so I think there's a real chemistry there which helps. But if we can do four or five in the first 12 months, I mean you've got to do well to better that.

SPEAKER_00 18:20

I I agree. In different continents, in different languages and different currencies, you know, it's extraordinary. It is extraordinary. You know what's interesting about this business though, is how much advice you get from people that have absolutely no subject matter expertise. So what I always find funny is people all say to me, Well, I wouldn't have bought that company, oh, you got them at a good price, or you know, I think P is a really interesting world at the moment. What experience do you have of buying and selling companies? Or how do you value company? Like, I find it staggering how much advice I get from people about, you know, well, I think you made a mistake buying them, but based on based on what? Or, you know, I would have definitely got that company if you could have done uh, you know, this is a human, probably the most human thing I've ever done. You are buying the the hearts and minds and the spirits of someone's dreams, and you are taking it from them, and they're passing that care over to you. And let's be clear, in most of these cases, the financial responsibility passes from them to me. They're still very committed to the future. Most of the businesses that we buy, we do it in a way where there's a financial future for them too, right? So this isn't like we buy something and they run away. We're we're wedded, and they have to believe that our business is better with their business combined. And without companies like PCB, we would never be able to get to that. I don't know how I would pick up the phone and call call them. I don't see how that works, right?

SPEAKER_02 19:43

We've had a good time together, but again, I think it's based on trust. Our our access and following is you know what's helped build the firm in the last seven years, but it's also our ability to guide and mobilize and get deals done. Yeah um, and you know, without the support and belief of of businesses like yours, it wouldn't, it wouldn't happen. The the one question on on everyone's minds, right, and and and you're in a great position to comment when we think about generative AI, yeah, headwinds, tailwinds, particularly with IT services businesses, do you see it as a threat? Are you embracing it? How how are you or Kadair thinking about that?

SPEAKER_00 20:23

You're buying businesses with inherent AI capability, but look, I think if you're doing very generic consulting work, I would be super worried. Because I think generic is going to be very difficult. I think if you're the I mean, we won't mention some of the customers we're working with today, but you know the kind of scale of work we're doing with some of the global uh clients that we've got and at big scale, I think bringing AI to life for those and those type of customers, I think there's 20 years of work for companies like ours. I think if I was selling risk frameworks, I'd be super worried about what my future looks like. Um and I think there's a lot of consulting companies trying and you can tell because the phone rings, right? People say to us, Are you you know, are you interested in selling? Would you be interested in we're not today? We're we're not. Um and I think that's because we have a and we continue to build a unique brand and that brand continues to to grow. And as we acquire companies, the additive they help with that. Um and I think that's uh that's strong. Is AI, in my humble opinion, going to change the world dramatically? Yes, but I personally think it's going to take a bit longer than you know a couple of years. But changes, changes here, generic, consistent patterns of work, processes that are done in a structured way, are going to be hugely affected and actually can be automated.

unknown 21:59

Um

SPEAKER_00 22:00

Um, you know, it's funny, um, a lot of people ask me, what should I ask my son or daughter to study at university? Because I'm worried about the impact on their career. Should they go into law or accountancy? How are those type of professions going to be impacted? I think the question is, the answer is, I don't know, because I'm not I'm not here to speculate. But vastly, I think is the answer. Um, even today, I mean, both of us probably use genitive AI in every day of our lives. Which I never thought would happen, right? And we've become reliant on it in just the last 18 months. I mean, if I need to write an acquisition paper and look at a target and build a case for it, it really helps me. That's something I might have used an agency to help me with, and it could have cost me tens of thousands of pounds comeback. Today it's three minutes and it's probably 95% of the way there. That is speaking volumes. Alan Payton. Ben Daltis.

SPEAKER_02 22:56

Thank you for your time and your partnership and your trust. Watch this space, everyone. There's more to come. And thank you for coming to the deal room. Pleasure.