Andy Thompson is founder and CEO of Notch Partners, a boutique executive talent consultancy retained by leading private equity firms such as Advent, Charlesbank, Warburg Pincus, and AEA. Notch Partners creates competitive advantage for PE firms by “cultivating high-impact relationships that result in superior returns for investors and transformative career opportunities for executives.” They source industry-specific CEO-level talent as well as executive-led investment theses. Founded in 2002, the firm maintains a network of 40,000 executives and works with later stage investors purchasing control positions in mature companies. We are grateful for the niche knowledge that Andy shared during our recent Expert Insight Series interview. 

Top 4 Takeaways: 

  1. To increase their opportunities to work with PE firms, executives should be proactive and prepare industry-specific investment briefs. PE firms are interested in “executive-driven ideas”. 
  2. PE firms interested in hiring or collaborating with veteran executives should maintain a deep bench of talent (internally or through partners) so that when the opportunity presents itself, they can access the right executive at the right time.  
  3. Economic recessions present a good opportunity for PE firms to partner with experienced CEOs to unlock value by identifying temporary dips in acquisition multiples.
  4. Don’t underestimate the impact of dashboard reporting. Having good data, ideally in a somewhat standardized form, provides PE firms and portfolio companies alike with the data visibility they need to monitor performance and drive timely decision-making.  

Watch the full interview,  listen to the podcast episode, or read the highlights below:

Access the transcript here: full transcript.

 

How Executives Should Approach PE Firms 

Notch Partners is frequently contacted by current or recently retired CEOs interested in working with PE firms. These executives are often in the later stage of their career looking to apply their talent and experience to help turn PE deals into big successes, but are sometimes not sure of the best way to get engaged. 

If an executive has experience in an industry and ideas for value creation aligned with a PE firm’s investment profiles, Notch Partners advises them to develop an original, industry-specific executive-led deal thesis for PE firms’ consideration. As part of their service offerings, Notch Partners will support executives in creating single-focused investment briefs, and this mutually beneficial approach has proven to be a valuable strategy for building relationships between PE firms and executives.  

How PE Firms Should Approach Executive Advisors 

Having worked with PE firms for 20 years, Andy advises investors to be straightforward in two ways when engaging with potential executives: 

  1. Firms should not be hesitant to approach an executive with experience running a much larger business than the one they’re considering buying. Executives often grow their experience as their businesses grow. A CEO who successfully led a $500M business, is often the person who grew it from a $100M business originally.  
  2. Firms should not be afraid to engage an executive in an area they may not already have deep expertise in. After some research, they should initiate a conversation with the executive, saying, “Here's what we think is going on in your industry. Here's why we like that for this opportunity.” A long-time industry veteran may think the conclusions or investment thesis are not quite on the money, but they generally welcome the opportunity for discourse and a mutually beneficial relationship can develop through that dialogue.  

“Don’t be afraid to stick out your neck.” - Andy Thompson 

Invest During Economic Headwinds 

With the current inflationary headwinds, Andy observes that good investors find the high-quality deals where there has been a downtick in price, while the rest of the field may be stalling due to uncertainty.  

Taking a cue from Warren Buffet’s quote, “[B]e fearful when others are greedy, and be greedy when others are fearful,” Andy suggests investors consider the full investment lifecycle before adopting contractionary fiscal measures. If investors are not at the end of a fund cycle, they are usually willing to be patient for two or three months as the downturn develops to find opportunity to get more with their dry powder.  

Andy reminds our audience that private equity funds are sticky, and downturns have not historically impacted deal volume for sustained periods of time. When markets rebound, organizations that have invested during recessions outperform those who have not (Harvard Business Review, 2020). 

Additionally, particularly during times of economic recession, data visibility helps stabilize operational spending and powers good decisions. Per Bain & Co., "To support better decision making, a key part of scenario planning involves creating high-resolution visibility on spending and the other key recession response areas" (2022). 

Growth Through Data Visibility 

While PE firms will proudly tell you that they do not interfere with management teams, they still require regular visibility into portfolio company performance. Firms may own or oversee up to 50 portfolio companies and need to stay abreast of operations. Dashboard reporting provides an effective tool for oversight and keeps the board informed without micromanaging portfolio company executives. Furthermore, a single source of truth prevents overseers from “spinning negative stories” that may not match reality, and drives good decision-making. The benefits of data visibility are hard to exaggerate. (Listen to Blue Margin founders, Jon and Brick Thompson, share their experience as PE-backed executives without data visibility on this podcast episode.) 

Like leading PE firms, Notch Partners uses data visibility to drive good decision-making. After implementing dashboard reporting about five years ago, they transitioned from slow-growth to medium-growth. Additionally, data visibility powered more effective management meetings. Andy estimates that good BI will likely deliver 5x the amount of value you might initially expect. He reflects that companies often grossly underestimate the value of digital transformation. “Having the right data was integral to us having meaningful and efficient management meetings and making efficient, good decisions about the business.” - Andy Thompson 

 

Contact Notch Partners 

If you’d like to contact Andy or Notch Partners, you can do so through their website notchpartners.com/contact. If you are a PE firm interested in how to build an internal or external executive arsenal, Andy would be happy to talk with you. 

If you'd like to explore how Blue Margin's team can help you use data visibility to drive growth and data-driven decision making, contact us below. 

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Full Transcript 

Jon Thompson: 

Hi, folks, welcome to Blue Margin's Expert Insights Series. We're glad you joined us today. This series was established for mid market executives and PE partners who want to use data analytics and dashboards to put growth plans into action and increase the value of their companies. Today we have a very special guest, Andy Thompson. He's my brother and also CEO of Notch Partners. Hi, Andy.

Andy Thompson: 

Hello.

Jon Thompson: 

You're in Manhattan just now?

Andy Thompson: 

I am.

Jon Thompson: 

Excellent. Nice to see that's not a fake background.

Andy Thompson: 

No, not a green screen.

Jon Thompson: 

So impressive. So before founding Notch in 2002, Andy was managing director for Primedia Ventures. His early career also included a stint at McKinsey and Co. Notch Partners provides C-suite talent to private equity firms to help them develop proprietary deal flow, industry insights, place experienced management teams, board members, etc. We'll get into that in some detail. Welcome to the show, Andy.

Andy Thompson: 

Thank you glad to be here.

Jon Thompson: 

I'm interested in your work and school experience and maybe how that led up to Notch Partners. I understand that you're Harvard man. I'm curious if any of your three brothers are also ivy leaguers?

Andy Thompson: 

That's an awkward question.

Jon Thompson: 

Yeah.

Andy Thompson: 

No, they're... I'm all for show. They're all for go. I'll put it that way.

Jon Thompson: 

They're state school guys. So you must be proud of that. That's fantastic. But tell me in all seriousness, your background, how did it lead up to your business thesis, your value creation plan? How did it lead to Notch Partners?

Andy Thompson: 

In 2002, I was investing. I was co-managing a small venture capital fund. We were part of a media company, we were part of a magazine company, actually. And that was about the time when print media had its come up as the new media, now known as the internet, was taking over all of the ad revenue and turning the entire industry on its head. As a result, my parent company was basically out of money. And we were done. Despite having really good investment returns, we were, it was time to find a new opportunity. My partner and I at the time, both had experience therefore in private equity. And our recognition was that there were lots of good ideas out there, both at the venture stage and the later stage. And there was plenty of money. Actually, it's dwarfed by how much money there is out there now, but there was plenty of money at the time. What was lacking was believable, bankable management teams, and managers with insight that would give investors the confidence to go forward with investments. At the increasingly inflated prices that private equity started seeing even that far back. So if you like, you can think of three major ingredients deal flow, money, and talent coming together to make good deals happen. We were addressing part of the talent equation, we thought there was a big opportunity there. We refined our focus a bit, but remained focused on private equity talent to drive deals.

Jon Thompson: 

That's great. Can you give me a little more about the profile of your company, the different departments, and so on?

Andy Thompson: 

We have about 30 people. We're organized by industry verticals. So we have, for example, a consumer group, an industrials group, business services, etc. Each of those teams has four or five people. We have about 25 clients that have us on long-term retainer. And each of those clients will tap into, usually at least two or three of our five industry vertical teams. The clients themselves are all later stage investors usually what we would call control investors (used to be called LBO investors), but private equity investors in the later stage, buying control positions in mature companies. And they'll manage anywhere between, say a $400 million fund at the low end of our client base up to one of our clients just raised over $20 billion in funds. So we serve some of the largest in the world.

Jon Thompson: 

And is your secret sauce, if you will, the industry expertise of your staff or is it really that cadre of executives that you maintain the network of?

Andy Thompson: 

So we have a good network of executives, we maintain a network of about 40,000. Primarily CEOs that we have a relationship with and an understanding of, but you know, finding executives is really not all that hard. That is highly commoditized. And in fact, anybody with a LinkedIn account, can find pretty much anybody. That's in contrast to where we were 20 years ago, when knowing where the bodies were buried was actually a source of value that service firms could bring. No, our talent really, our unique capability, is dealing with this somewhat mercurial, somewhat difficult animal, which is the very high achievement later stage, CEO level executive, who has achieved everything that they need to achieve to prove to themselves, their value, and anyone else around them their value, and is now in a stage where they can do whatever they want, including nothing. Many of our execs, I would call most of our executives, semi-retired for now by choice.

Jon Thompson: 

In other words... sorry, sidebar, why aren't they just collecting shells and playing golf and stuff? Typically? I mean, what do you see there? I'm just curious.

Andy Thompson: 

It's a really good question. And we've I've seen 1000s of these executives, so I feel qualified to answer. I'll paint with a really broad brush, because you know, no two people are alike. And you don't want to generalize. But overall, these executives are people who have all the money they need, and have tried being retired, they're anywhere between say 55 and 75 years old, typically, I'd say 50 and 75. And they've tried being retired, and what they have discovered, for the most part is that they've built their second home, it took twice as long and took twice as much money as they expected. And they're sort of tired of it. Their grandchildren don't have as much time for them as they have for their grandchildren. Their golf game didn't get better as they thought it would. And their backs can't take 36 holes a day. And they've realized the privilege for which they thought they were working. And that to retire is actually sort of an anti-reward, the thing that they've really enjoyed is the thing that they've excelled at their entire lives, which is leading businesses, whether it's as actually operating a business as a manager, or simply being a thought leader. What we are doing with these executives is not presenting them an opportunity to get rich, because frankly, they already are. We're presenting them an opportunity to engage in a business situation where there's a high bias for action. That's the way private equity firms are, they've just done a deal or they're about to do a deal, and then want to make things happen in two, three years. So they can look at a good exit in four or five, or as early as four or five, high bias for action, where their expertise is highly valued, where they're not going to be engaged forever. They can sort of see the light at the end of the tunnel, and where their contribution is highly valued, even without being the CEO themselves. So these are we call them CEO level executives, but their contribution to private equity investors is often as an advisor, board member, Chairman, or sometimes an interim executive.

Jon Thompson: 

So is their unique or valuable profile related to their retired and you know, advisor by choice? Or is it something that you guys do to help them cultivate? Here's how you can really package and deliver the wisdom that you carry and bring ideas and so on? How does that go?

Andy Thompson: 

There are, if one of our clients is working on a specific deal, then an executive who has longtime experience in that industry as a leader, as a CEO, but is far enough outside of having been in the industry that their non-competes are no longer an impediment. Any one of those executives can be interesting. However, executives who want to be interesting in that way, are really sort of passive with respect to getting into a relationship with private equity firms. They need to wait until a private equity firm says here's a deal that touches your background, and we'd love to get you involved. Executives who are truly determined to get involved with private equity, we advise that they do so by leading with their ideas that can sound like shorthand for "bring a deal and a private equity firm will pay attention to you." That's certainly true, but most private equity firms don't actually expect you to show up with a proprietary deal in your pocket. And particularly not firms that are of any reasonable size where pretty much every deal is going to go through an auction. They are, however, looking for executives who come in with a point of view about how to create value by deploying capital in a private equity context, in an industry where they have experience. If they're able to articulate a thesis for how to create value in their industry of expertise, private equity firms will listen to them all day long. And they have basically got carte blanche to talk to any private equity firm that's even remotely interested in that industry. Even if the private equity firms they talk to vehemently disagree with their perspective, they respect the experience and they value that somebody's sticking their neck out and saying, Here's what private equity should be doing in this industry to create value." So being proactive, being thoughtful, being organized in your thinking, as an executive will get you 10 times the access as sort of sitting back and waiting for somebody to call you, regarding your expertise.

Jon Thompson: 

And you culture that with them. I assume you don't do that across 40,000 people.

Andy Thompson: 

That's right. pretty much every executive we talked to, and we probably contact about about 4000 new executives per year. So that 40,000 is a is an asset that's been built over time, we will have a conversation with pretty much every one of them, which at some point in the conversation includes the question, "How do you think private equity should be thinking about your industry?" Some executives (a very small portion, 2 or 3%), will have an immediate, clear, crisp answer. They'll say, "This is where they should be investing. These are the kinds of companies they should be talking to." And some small portion will even say, "And I think that this particular company is a very attractive asset." Probably double that number, so maybe 5 to 10, 5 to 8% of all executives, if pushed, and if coached a little bit are able to quickly articulate a similar point of view. So we work to identify who the executives in that small set are, and then to cultivate the slightly larger group. But most executives carry habits from a long career of being highly talented people highly sought after, and they're they're somewhat more reactive or passive with respect to private equity opportunities.

Jon Thompson: 

Yeah, that makes sense. Quick question. Is there typically a counterpart in your average PE firm, that's the profile size that you work with? That does what you do, but to a smaller scale with less expertise and focus? Are you filling a niche that's that's often a void?

Andy Thompson: 

Private equity firms have for many years (for longer than than we've been around), have cultivated executive relationships. And many have touted the differentiating value of their particular executive networks. 20 years ago, that was most often manifest as an operating partner cadre that would be anywhere from half a dozen to 20 executives, many of whom had been CEOs in a previous portfolio company for that firm, who were considered friends of the firm. Some were on a very formal relationship, most were more informal. And the theory was that between those half dozen to three dozen executives, or there would always be somebody who could add value and give the unique insight needed on a specific deal. I think what we've seen is and our clients are seeing is that they need to be much broader than that, and much more nimble than that, about tapping the right talent at the right time. So we encourage our clients to maintain a bench of upwards of 100 executives, and to have us on call to access one of 1000s of others at just the right time.

Jon Thompson: 

That's great. One, one more sort of structural thing, and that is, how does the breakdown of your services sort of percentage wise? I'm just curious what what the appetite is for the various needs that you fill are in the PE community you work with. How does it break down? What's the bulk of it and what are the smaller pieces?

Andy Thompson: 

So our clients' number one most exciting thing to hear from us or from one of our executives is, "I have a deal idea that I think you can invest in and be differentiated due to my insight and due to your relationship with me." So that, depending on how you want to look at it, that constitutes 90% of our clients' appetite. However, they know a couple of things. One, those executives are few and far between. And two, it's very hard to get an executive to want to bring that to your firm versus any other firm. And so having other ways of interacting with executives to cultivate those relationships over time, is what leads you to that very important but rare and elusive byproduct, which is an idea-driven executive, or really an "executive driven idea" if you like. So while that is the most valuable thing, it's the least common thing that we deliver. More common would be a client coming to us. And this is about 50/50, a client saying to us, "We think there may be some opportunities to invest in industry X (let's say the carwash industry), over the next couple of years, and we would like to start identifying executives and targets with whom we can go after that industry. Can you help us build our executive network and identify one or two bankable senior executives in the industry?" That's about half. The other rough half is when a client says, "We have a specific deal, it's usually an auction that we think we want to get aggressive on, where we want to bid aggressively, (and let's say again it's a carwash company), but we don't have any really good carwash executives on our side of the table helping us to understand whether or not this is a good target, and how we might create value after buying this thing." So we do a lot of both of those. And in doing each of them, we're constantly looking for the executive driven idea that our clients are really excited about.

Jon Thompson: 

And then to round it out, you also read up briefs on different sectors and various analyses proactively with your internal staff.

Andy Thompson: 

The briefs we do are all about a specific deal thesis built around an executive. So I told you about the 3% of the executives who have an idea immediately, we get that down on a piece of paper. Because typically those executives are they have a lot more to say than anyone has time for. And they have a lot more expertise than anyone could absorb in an initial meeting. So we help them to consolidate their thoughts organize their thinking, to make it presentable to our clients. And then there's this slightly larger group that ought to have those ideas and we help them to form their thoughts and get it onto a piece of paper. And then we use that as an opener with our clients and to help them have very efficient conversations with executives. There is a little bit of a danger with some executives who, you know, do you have any ideas, they say "I got a million of them!" And, and our clients usually don't appreciate the somewhat undirected or multi-directed conversation that results from that kind of mindset. So we help we help focus the conversation.

Jon Thompson: 

Yeah, PE partners are busy I've discovered. Next question, this might be patently obvious that or it may not be at the center of sort of where you guys deal. Just speaking to our PE partner, audience, any thoughts on assessing an investment? Are there certain essential ingredients for a successful investment? Again, feel free to punt on this one, because I got a follow-up, if it's not really useful to the average PE partner.

Andy Thompson: 

I sort of will punt by saying that that's what they do for a living. And that's what they do far better than I do. What we are good at is finding the executive who can help them think through. Not how to do the private equity analysis of an industry or a company. But the specific insight on a specific company and specific industry that only an operator from the industry might bring,

Jon Thompson: 

Okay, then for, let's say, PE firms that aren't working with you. What advice would you have for them when thinking about an executive to help assess a deal to put on the board maybe even placed on the team? What are some of the pitfalls that you have discovered that maybe were not intuitive? Were a surprise to you, as you've done this for quite a while. How many years you've been in business?

Andy Thompson: 

20 years. One, I guess one that jumps to mind is that private equity firms should be unafraid in two ways. One, they should not be intimidated by an executive who ran a much larger business than the one that they're going after. Typically, that executive will have grown up through the size that they are typically looking at buying now. There's certainly a The point at which and executives size makes their insight on a smaller target irrelevant. But an executive who ran a $500 million business is often just the right person to consult, to accompany, or to a firm that's looking at buying a $100 million business. After all, they're looking to get to 500. They're looking to exhibit the successful attributes that that $500 million business did. And the executives are not turned off by that at all. I think when we're hiring someone we often think about, I need to give this executive a slightly larger opportunity than the one that they came from. But when you're looking to bring on an advisor and collaborator, they're not nearly as focused on building their resume, they're much more focused on how can we turn this ship quickly, and create a lot of a lot of value for everybody around the table. The other thing, the other thing that I would encourage private equity investors to not be afraid of is to not be afraid to stick their neck out and to say to a longtime industry veteran, here's what we think is going on in your industry. Here's why we think we like it. The longtime industry veteran will certainly have some insight that will shape the thinking further. To put it a little more succinctly, the longtime industry veteran may think that the investor is wrong, but they're always going to respect that the investor stuck their neck out and say, here's what we think is going on. And they relish the opportunity to engage and correct the thinking or shaping the thinking of the private equity firm, the private equity firm that is afraid that they're going to look stupid, sits back doesn't say much hoping that everyone will maybe think that they know more than they do won't fool the executive. And, and certainly won't be the one that stands out in the mind of that executive as the firm that they want to partner with.

Jon Thompson: 

Yeah, that's great, helpful. Question regarding the current headwinds, this, these rumors of inflation that I think are unsubstantiated, etc. This might also be you know, this is what these PE partners do for a living do better than I do. But curious, from your perspective, your vantage point anyway, how PE partners should be thinking about the investment environment to climate strategy. If you have any thoughts on exactly where the Dow is going, I'd love to hear because

Andy Thompson: 

(Haha) What is the thing that the job that somebody said that they've they've predicted the last five recessions? And on three of them, they were right, or something like that? I mean, you know, there's there's always one coming around the corner. I'd like to look that up. Because it's, it's actually funny. I will tell you so the last significant downturn that we saw that we all saw was COVID. And we like everybody else that wasn't "this might happen". That was suddenly overnight, "This is happening." And we like everybody else sort of wondered what was going to happen. Let me tell you what happened in our client base for about two months, they were very focused on housekeeping with respect to their current portfolio companies. So there were some supply chain issues, there were there were a number of issues that faced certain portfolio companies. And they immediately had to focus on those, there was almost no investing going on. Because there was a bunch of uncertainty both for buyers and sellers. And so everybody froze. And then almost every single one of our exec, sorry, of our clients at about the two month mark into COVID, said to us in a somewhat confidential tone, you know, "While everybody else is freaking out, about COVID, we are looking aggressively to invest capital" and as if they were maybe the only ones. But we heard that from every single one. I think it was Warren Buffett who said, "when everybody else is is getting greedy, you should get scared. And when everybody else is scared, that's time to be greedy." And I think that's there's some wisdom there that can be applied. Now, if everybody else is freaking out about Ukraine war or global warming or inflation or recession, that's the time to be thinking carefully about where can I deploy some capital when everybody else is scared? The other thing about private equity in this I'm not telling your private equity audience anything they don't know. The funds that they raise are relatively sticky. They don't go anywhere. When there's a big pull back, in private equity investing, the committed funds that they have from their LPs typically aren't going anywhere. And as long as someone is not at the very end of their fundraising cycle, sorry of their funds cycle, they've got some dry powder. They usually are willing to be patient for three or four months, let sort of the markets settle out a little bit. And hope to use or hope to experience the pending downturn as an opportunity for some downtick in pricing, so that they can acquire more advantageously. So these downturns don't tend to, in a sustained way, impact deal volume for a long period of time, sometimes as long as a year, but usually not much longer.

Jon Thompson: 

And with your broader perspective, are you seeing a recovery a soft landing yet? Do you have any thoughts on that yet? As an economist?

Andy Thompson: 

Oh, no.

Jon Thompson: 

okay.

Andy Thompson: 

I've given up I've absolutely given up predicting. One thing I will say, though, I mean, maybe there's a prediction inherent in this. For our part, we don't pull back on staffing at all, when we see these things happen. In part because our clients when when the auction deal flow dries up, and that may have happened, and whether that may be turning around, I don't know. But it does seem like a lot of the deals kind of went away while people were trying to figure out what was going on. Our clients get busy getting creative about other sources of deal flow. And executives are a really important source of non traditional or non auction source of deal flow. So they get very interested in executives, just when the deal flow dries up. So we have a little bit of a self correction going on for our business that keeps us busy.

Jon Thompson: 

Yeah, great, thank you. If we could just switch to data analytics and dashboards and then we'll we'll wrap up here. I appreciate the extra time. Maybe first thinking about the current climate and headwinds and so on thinking about the PE world and turning a successful investments with a portfolio company and bolt ons and so on. How do you view data analytics, dashboards, visibility into metrics and so on in their world? I don't know if you have any unique insight from your vantage point or just general opinion, but whatever you have.

Andy Thompson: 

So I will say that our involvement tends to be very heavily pre-deal. So my understanding of how they use data in their, in their portfolios, is a little a little bit more distant. But I can confidently say that private equity firms, most of the ones we deal with, will proudly tell you that they don't interfere with their, their management teams. They largely let them run on their own, they try to hire really good management teams, and then let them do their thing. At the same time, they never want to get caught by surprise. So they, they want really good data about what's going on in their portfolio companies so that they can identify problems early on and and frankly, make management switches as early as they can, when the problem boils down to leadership. The same time, they don't want to hassle their management teams, and they don't want to impede them and slow them down by data requests. So having really good data, often in a relatively standardized form that they can digest quickly. So they can assess the four or five portfolio companies that each individual that are at a private equity firm is most focused on is of high value to them. So that's yeah, on the private equity firm side, for my firm...

Jon Thompson: 

I was just going to add, I think it goes without saying that, that hands-off the you know, the proud stance of, "Hey, we put in the right team, and we let them do their thing" goes away the moment there's a downturn or in the company, or if they can't see what's happening. I mean, if you're in the fog of war, if the base of human nature fills it with suspicion, and anxiety, and that goes out the window. So I you know, I have the sense working with several PE firms that the more the board's informed, the more hands-off they can be, I think that's more or less what you're saying,

Andy Thompson: 

Oh, I think I think you're 100%, right. And I can reflect on that just as a leader of my, my micro company, when I don't know what's going on in a department, or with a group, or with one of our clients, I start to spin stories. And they typically aren't, aren't the most rosy until I look at the actual data. And I know do I actually have a problem or not? And usually it's it's more optimistic looking at the data than my mind will spin the story.

Jon Thompson: 

Almost always. So in your case, we've developed some dashboards with you, and that's fairly recent. So you've gone From pre-BI, Excel run business to BI dashboards. Any lessons learned you can share with fellow executives, etc.?

Andy Thompson: 

Sure, I mean, I think that to whatever extent you think you might want to slightly formalize your data and your approach to it, you're off by, I don't know, a factor of five, maybe. We sort of... and I think business leaders make this mistake, commonly, you probably know better than I do... ff you had asked me four years ago, say, pre pre-BI, pre-dashboards, how good a handle do you have on your company data? I would have said, "Pretty good, pretty good." I'd say I'm looking at 80% of the data that I need to to make the right decisions for the company. Now that I have much better visibility into the data, I would say that I'm looking at five times the data, that I was. Five times the meaningful data that I was. So at best, I was looking in that previous life at 16% of the data, but I really shouldn't be looking at.

Jon Thompson: 

That is good math, keep going.

Andy Thompson: 

Yeah, I think that might have been good math... 80 divided by five is what I was going for. So I would say you probably underestimate that if you're if you're going intuitively. And then the other thing I would say and I'm a data point of one, but for what it's worth, we went from a low growth company to a decently moderate growth company, almost exactly when we went to more formal business intelligence through Blue Margin. You know, we're, it's always hard to trace exactly the causes of those things. And we're trying to do a lot of things right, but having the right data was integral to us having meaningful and efficient management meetings and making efficient, efficient, good decisions about the business. And our business can only scale so fast, because we're not a software company. You know, we are an expertise company. So even getting to this moderate growth is a real win for us. And we credit, just better data with a big part of that.

Jon Thompson: 

Yeah, I would, I would say it was pure causation. Two more things. One is, you've seen a few leaders - 40,000, at least - do you is your theory (if you have one) that those folks are, if you will, born with innate qualities that make them great? Or is this a skill that anyone can learn? Like, public speaking, etc?

Andy Thompson: 

You know, I guess my observation would be that good managers build good managers, right. So if they're very good, well managed companies like let's say, Danaher is an example that's often used in the industrials context. They've got great managers, and they grow great managers, that would lead me to believe that great managers are can be taught great management can be taught, when you talk to the really good managers about what they did and how they did it. Very performance oriented, very data driven, very supportive. I would say, not quite heartless, but but very cut and dried with respect to the people who are performing, the subsidiaries that are performing, the products that are performing, support the heck out of them, but make quick decisions to move on from those that are not performing. I don't think that that is I don't think that's a magical quality to be able to do that. I think seeing other people do it, and gaining conviction that it works is probably a much more reliable way and a much more common way of arriving at that capability. So I don't think it's a matter of being born with it.

Jon Thompson: 

And hopefully showing up without too many demons to exercise. And then lastly, thinking about it, this will be something relevant to me at some point, transitioning from owning a company. I mean, you've made a lot of these executives, you talked about the irony of getting the reward and it was sort of an anti reward to have all the time you wanted nothing to do with with real purpose. Any any advice is executives approach that part of their life. Think about retirement versus staying engaged, how do they sail off into the sunset and not lose their sense of purpose, that kind of thing?

Andy Thompson: 

No, I might my short version of that is retirement doesn't work. That's my that's my three word way too simplistic statement. Granted, the people that I work with are, there's a selection bias there, there are people who, who want to keep doing things, but I see executives who retire and really go into what we think of as traditional retirement, like heavy on the leisure, very low on the structure seem to age fast. And if they can pull out of it, within two or three years of quote, retiring, they are greatly relieved, after about two or three years, it can be hard to pull out of it, because they start to become less relevant, less sharp, their their their reflexes, their their muscle memory is starting to fade with respect to, to how to operate effectively, in the business world. That being said, I think, if you can maintain sense of purpose, while allowing more whitespace to show up on your calendar, that's the when I don't think vast, you know, sort of months in a row of whitespace on the calendar. That's what I have not heard work for anybody. People say, you know, I decided to take a year off. And, you know, after two months, I was ready to jump back in is kind of the common refrain. So I'm all for vacations. I'm all for delegating like crazy. Developing the capabilities of people around you. I'm all for rethinking your role, reducing your hours, and getting more whitespace on the calendar. But you know, think about it in terms of hours and days. Don't think of it in terms of months. That's where it seems to go wrong.

Jon Thompson: 

Yeah, it's the fallacy of marketing that vacation, by definition is a change of pace. And it doesn't work when that's your only pace. I mean, it drives me nuts, although I see see some people do it. And I think how, how do you do that non stop. So there are some exceptions. Okay, great. Thank you so much. What's next on the horizon for you? And how can people get a hold of you and connect with you if they want to?

Andy Thompson: 

You know, we're at the stage now, where we have, I'm very fortunate when I've got a senior team that has been with me, for the better part of the last decade, they really know what they're doing. I've been able to elevate my game quite a bit as a CEO, because I've got people doing what I used to do and doing it much better than I used to do it. So we are we are looking to continue to grow our client base. If private equity firms are interested, what I would say is this private equity firms who are interested in how to build an executive arsenal. I'm an evangelist for it. And I'll talk to anybody about it. Will I throw in a pitch for Notch Partners? Sure, I will. But if somebody came to me and said, We don't want to work with Notch Partners, but we do want to build this capability internally, can we talk about it? I would spend an hour with any private equity leader who's trying to figure that out. I think it's an important part of our economy. It's a fun challenge. We've learned a lot. And I'd be happy to kind of share my view executives who think they want to work with private equity, and don't quite know how to get a toehold should certainly reach out to us and our website directs them how to how to get connected.

Jon Thompson: 

That's great. Okay, thanks so much, Andy. It's a pleasure to chat with you and see you face to face, and see you in person soon.

Andy Thompson: 

It was fun. Yeah, thanks, Jon.

Jon Thompson: 

Yeah, talk soon.

Jon Thompson and Suzanne Rains

Written by Jon Thompson and Suzanne Rains

Jon Thompson is co-founder and Chief Strategy Officer at Blue Margin Inc. An author and speaker, Jon sheds light on how businesses can take advantage of a revolution in business intelligence to become data-driven and accelerate their success. Suzanne Rains is a communications specialist at Blue Margin Inc. With a MA in Human Resources and BAs in Marketing and Management, Suzanne unites an understanding of human nature and a keen interest in industry research to author thought leadership articles for today’s business leaders.