You spent your pre-MBA career at A.T. Kearney, leaving after almost two years to earn your MBA at London Business School. What prompted you to pursue your MBA at that point, rather than later (or never)?
I realized that the earlier I left for my MBA, the lower the income I would be giving up for the time it took to complete it. Pursuing my MBA relatively early allowed me to minimize the cost of not working. Additionally, I really enjoyed the academic environment. Even when I joined A.T. Kearney, I had been considering staying in school to earn a Masters or PhD in Economics, so by the time I left for business school, I was looking forward to getting back into that atmosphere.
After business school you made the decision to return to A.T. Kearney. Did you know going into business school that you wanted to continue to work in consulting?
When I went to business school I wasn’t sure that I wanted to continue working in consulting. I planned to use that time to reaffirm my commitment, and I was certainly open-minded to trying new things. I explored some other options via clubs and information sessions, then did a summer internship with an entrepreneurial start-up that involved a bit of work in the UK and a bit of work in South Africa which was a great experience I could hardly have created on my own.
Then, at the end of my first year, Enron imploded and the tech bubble burst, making the recruitment situation pretty dire. Additionally, A.T. Kearney had sponsored my MBA so it was logical to return to the firm.
After another year with A.T. Kearney, you took a role with AlixPartners. What was it about AlixPartners that appealed to you?
After another year at A.T. Kearney I began to feel the need for change. I was too comfortable and not finding enough new challenges. That’s when I moved to AlixPartners. At that point, AlixPartners was a small, growing, boutique firm. They focused on more urgent situations. They did bankruptcy work, but even their non-bankruptcy work usually involved an imperative need for change as opposed to longer term projects.
While A.T. Kearney had large project teams and a traditional pyramid team structure, AlixPartners used smaller, more senior teams. Smaller teams meant more individual responsibility. Since you might only have one Associate shared among a few Directors, it meant doing more of your own work, at all levels. It came with a lot of latitude to manage yourself, manage your own team, and work more directly with the client’s management team. In short, it was more “hands on” in every way.
You spent nearly seven years at AlixPartners, leaving as a Director in 2010 to join KKR as a specialist in Direct Materials Procurement – a transition many consultants find very attractive. What do you think elevated your career experience prior to KKR so that you stood out from everyone else who wanted your job?
I think the unique model of AlixPartners meshed pretty well with what the private equity industry looks for. They typically value a senior self-motivator who doesn’t rely on a pyramid of staff to execute, and who has the ability to do raw analysis as well as go into a board meeting, and everything in between. They want someone who is willing to roll up his or her sleeves yet also has the ability to handle management and stakeholders at all levels. A lot of traditional consultants have great skill sets but rely on that pyramid model, which makes it tougher to transition to a much smaller, more focused team like you find in many private equity operations groups.
What does a consultant need on his resume to make him a more appealing candidate for a private equity role?
A combination of industry experience and consulting experience is pretty powerful. Being personally responsible for an outcome in a non-consulting context (whether that’s P&L responsibility, line management, account management, etc.) is a big strength.
If the person has been a career consultant, it’s a bit different. When a private equity operations team is recruiting, they want a fairly senior person – the challenge is that senior people at large consulting firms tend to be more focused on sales. Ideally a consultant who is still on site with the client 2-3 days per week and who has real responsibility for delivering the project is a good fit. Career consultants interviewing for a private equity role should be able to demonstrate day-to-day delivery and implementation accountability for a project while still meeting sales objectives.
What skills or qualities were the most important to get your private equity role, and which ones became important once you were there?
When exploring any role, I always try to be myself. If it’s not a good fit, it won’t be a happy marriage. In getting in the door, I think it helps to be personable and humble yet also confident in your ability – and that’s a delicate balance to strike. Those qualities remain important once you’re there, because when you’re dealing with executives at portfolio companies, you don’t want to be perceived as someone who is coming in with all of the answers. You want to be perceived as smart and capable, yet as a partner who is willing to learn and willing to listen. That combination is key to success in both consulting and private equity, but perhaps even more so in private equity where you are involved with these companies over the course of several years.
Some of our readers will want to know – how is your job different from consulting? Can you give an example of a client impact you have made with KKR that is different than what you would have done at AlixPartners or A.T. Kearney?
In some cases with consulting, you’re on a 4-6 month engagement where you have to focus on immediate execution, and then transition out of the assignment. The duration of the project is much different in private equity, where you’re involved in the ownership group of the company and can put in the time and effort to do a much longer-term project.
As an example, there was one project where we started off with some procurement work – typical strategic sourcing, requests for quotations – and we completed that. But in the course of that work we identified an opportunity to do what we call “value engineering,” which is working with the engineers to redesign product specifications, and actually take cost out of the design of the product itself. This is a slower process that takes 12-18 months (depending on the market and the company) before you start to see results, and that’s where it can become different from consulting. We were dealing with supplier workshops and competitor product analysis. We had to really understand the cost makeup of the product, and then do engineering and testing work to look at alternatives. And then if the products were successful, we piloted them in the market and rolled them out.
Though they take more work up front, those longer-term activities might have a bigger reward at the end of the day. Sometimes that’s not an ideal model for consulting because not many clients would have the patience to wait 18 months to see results.
What is the most common misconception that PE hopefuls have about the industry?
There is a perception that you can walk into a company and just do what you think needs to be done on your own accord. That isn’t the case. Our portfolio management teams run the companies, and when we think there is an opportunity, we work very much in partnership with the management team. No person is an island, even in a private equity context, and you still need to fully involve and align the management team with what you think might need to be done. It has to become a collaborative effort. You need to build a partnership, build a business case, and communicate continuously.
What have been the greatest positives of your PE career?
I like being part of a small team. Even though it’s part of a large company in terms of financials, KKR Capstone itself is around 50 people globally – our team in Menlo Park is a fraction of that. It also feels good to plan, build and eventually see the positive impact on the portfolio companies.
Perhaps the greatest positive of private equity is seeing and sharing in the success you have created. We are all shareholders in these companies via KKR, which means we all have an incentive to make these companies successful financially. There is an “eat your own cooking” element to the job that I very much like, because it demands intellectual honesty in the work you do. Making it look like you delivered value isn’t going to help anybody, including yourself. If we actually deliver value, we benefit because we are shareholders, which makes it directly satisfactory.
Do you see yourself staying in private equity for the long haul?
I am never sure what “long haul” is! I’m in my third year at KKR and I don’t see that changing anytime soon. I still have a lot to do. There are exciting things happening in the portfolio that make me feel like there is a lot of room to grow, both in what I’m doing personally and in what we’re doing as a team and as a firm. I like the direction the firm is going, so I feel that as much as you can say in the world today, I have a long runway ahead of me here.