You earned a degree in Chemical Engineering and spent 4 years at ExxonMobil Global Services before heading to the University of Chicago to earn your MBA. Did you always know you wanted to go to business school?
From the time I began my engineering degree, I knew I didn’t want to be a practicing engineer. I chose engineering because I wanted to learn how to solve problems. I just figured I’d have to do engineering for a few years before I moved on to what I really wanted to do.
I chose my first role at ExxonMobil because it was the only company that didn’t offer me a job as a Process Engineer in a plant, or an R&D Specialist in a lab. I didn’t want to be the guy who knew a singular piece of equipment better than anyone else in the world. I wanted to understand the connectivity between how operations worked and how the company made money. Doing sourcing at ExxonMobil helped me learn how a large organization operates and the connectivity among functions. I got to work with a variety of teams including marketing, research & development, supply chain, logistics, manufacturing plants, and our supply partners. Within two years I was managing a billion-dollar purchase portfolio and a team of sourcing specialists located on nearly every continent. By the time I left, I felt I had eked out everything I needed from procurement, which allowed me a good breaking point in terms of going to business school.
Did you know going into business school that you wanted to try consulting? How did your pre-MBA experience at ExxonMobil set you up for success in consulting?
I didn’t know much about consulting before going into business school. While I was at ExxonMobil, we had Booz Allen come in and do a project for us, but my exposure was limited to “here’s a bunch of smart folks with laptops who hang out in a room and pop out every once in a while for a presentation.” So I didn’t really know what was going on behind closed doors, and I didn’t understand it. But as I learned more about consulting, I realized it incorporated all of the aspects that I loved about my job at ExxonMobil, like working with cross-functional teams; focusing on high-value, discrete projects; and developing creative, customized solutions for a client. And it allowed me to do that without much of the bureaucracy associated with a behemoth company like ExxonMobil.
As far as preparation, my time at ExxonMobil, frankly, gave me the confidence that I could add value and advise professionals with 10, 20, 30 years on me with deeper experience in areas than I’ll likely ever have in anything. At age 24, I was the youngest in my role in the company and about 20 years under the average age in a culture that respects and rewards years of service. I came out of that trusting my abilities irrespective of age (which helps in a world where as a consultant I was closer to my clients’ kids’ age than their own) and with confidence to recommend a change in environments where conventional wisdom typically prevailed.
You became a member of McKinsey’s North American Travel, Transportation, and Logistics Practice. Did you seek that out, or did it just happen?
It kind of happened by accident. When I joined McKinsey, I told them I wanted to do anything but Energy or Chemicals because that’s where I had already spent time. I was there to learn about different industries, different challenges, and different ways to solve problems. My first full-time study was in Travel, Transportation, and Logistics, or TTL, which I really enjoyed. I did projects in a bunch of other industries but kept getting drawn back to TTL because of the people and the work.
My specialization ended up being in operational performance transformation for companies with large, fragmented networks. So the key question is how to standardize and elevate performance across a several-hundred-site network while still maintaining individual site independence and buy-in. Those are tough challenges for organizations, and I have carried that experience and those learnings into subsequent roles.
After about four years at McKinsey, you were recruited by Catterton Partners, a Private Equity firm, to drive corporate turnaround and value creation for one of their portfolio companies, Mid-Atlantic Convenience Stores (MACS). Were you looking to leave consulting? What made that a great decision at the time? Were there any other opportunities you considered?
I was not actively looking at the time. I really enjoyed what I was doing, and no external opportunities really generated any interest for me. I told myself when I joined McKinsey that as long as consulting was still challenging, still interesting, and still working for my family, I was going to stay. Meanwhile, the former Managing Director of the McKinsey Midwest Office had become Catterton’s Senior Partner on the operations side of their business. He reached out to me and described the opportunity at MACS, and I realized that Catterton and MACS were scratching an itch that I didn’t even know existed at the time.
As much as I loved the work, the diversity, and working on things that were on the top 3 of a client CEO’s agenda at McKinsey, I recognized that I was still on the outside looking in, instead of on the front lines of the decision-making. The more I explored the MACS opportunity, the more I realized I was thirsting for the ownership, responsibility, and real-world challenge of owning a P&L and driving decision making from the inside.
Had you ever been involved in a turnaround before? What was that like on a day-to-day basis? Is there anything you wish you had known prior to accepting the role?
I did a lot of performance transformation work at McKinsey, but I had never been part of one from the inside before. The major difference is on the people side. A turnaround involves change and change involves people, and people involve behaviors, feelings, and biases. So managing people, and not just the process, becomes critically important.
In my role as Chief Strategy Officer, things started out somewhat ambiguously. It was a newly created position, and my job description was basically, “Go help make things better.” On day one, I was given two analysts. Over time, it developed into a robust, in-house strategic analytics team that cascaded across all areas of the business, as well as operational ownership and P&L responsibility of our wholesale fuel distribution business, which was about 80% of the company’s EBITDA. That involved a lot of operational functional areas – everything from field operations and transportation logistics to fuel pricing, sales and business development, and PMO.
By following a consulting mindset in driving initiatives, I was able to find my way pretty easily and inherit new responsibilities. It was this great opportunity to participate in so many different initiatives across so many different functional areas. Every day was different. That was what drew me to consulting, to begin with, and was perhaps my greatest hesitation in leaving, so I have been glad to find that in my roles since McKinsey.
What would be your advice to consultants being recruited into turnaround situations? How do you know when a company isn’t “turnaround-able”? We’ve seen many people, including former consultants, sign up for a turnaround but leave within a year because it was more precarious than they anticipated or were led to believe. What are the right questions to ask?
As they say, you only have one chance to leave McKinsey, so it has to be the right opportunity. I’m a fairly risk-averse person, so in joining a private equity portfolio company, I was looking for three main things. Number one, did I believe in the investment thesis? Number two, did I see what my individual contributions were going to be, and did my particular role fit what I wanted to do? And number three, is the leadership team a collaborative, change-oriented, driven team that could get us to our goal?
The benefit that I have had at both MACS and Ferrara is that there are teams of others who have done the due diligence before me. I trust Catterton and trust their information. I’ve described MACS as having all the exciting and fun attributes of a startup without any of the risk profile of a startup. When we came in, we had to build a lot of infrastructure and create stability in the organization. We had to re-staff the organization all the way down to the junior level. We had to build IT and Finance infrastructure. We had to make this company the “big boy” company that it was at $1.5 billion in revenues and 400+ million gallons. But we weren’t starting from scratch. What gave me comfort was that we had strong assets, including an underlying real estate portfolio of over 200 properties and long-term fuel contracts. The health of the business has to be strong with the right fundamentals to generate that kind of step-change performance. That’s what I’m looking for going into these ventures. In different industries that can mean different things, whether it’s product strength or branding or technology or asset advantage, but you’d better believe in the underlying investment thesis, otherwise I would steer clear.
Your efforts at MACS were ultimately successful, and the company was sold to an affiliate of Sunoco after reaching the targeted return on equity in half the time of the original investment estimate. So was it easy?
Far from it. We often talked about our journey in three phases. The first was building stability in the foundation of the business. Under Catterton ownership, this company essentially went from a 30-store family-run business to a 300-store corporate organization and ExxonMobil’s largest customer in the United States. So we had to make sure our foundation was strong, which was a lot of hard work.
Phase two was establishing our go-to-market approach. We were a disparate set of brands both on the fuel side and convenience store side, and we really had no identity to the consumer. So we came together and crafted a series of standout programs that differentiated us from our competition, including re-branding and a total physical store transformation. We developed a reputation for being different. We took lessons from our competitors and from alternative industries, which is something I was able to bring to the table from consulting. Taking risks to differentiate ourselves was not easy.
Phase three was about growth. We felt like we had a winning platform, and now we were taking it to store and fuel sales growth. When I joined the company, we didn’t have a sales function. We created a VP of Sales and BD position that reported into me, and with the first two phases in place, we began to gain momentum. My only regret is that we didn’t have a little more time to see the fruits of the labor. We basically put it in place about nine months before the company was sold, and we were getting tremendous traction in that time.
How did your role change once MACS was sold?
Based on the complexities of an acquisition our size, I really had two main responsibilities. First was to continue exactly as we were. As a leadership team, we had an obligation to our employees, our customers, and our partners to communicate and demonstrate that it was business, as usual, going forward. It wasn’t a hostile takeover so to speak, and Sunoco recognized there was value in continuing to run the business the way we were. Second, I agreed with Sunoco upon a six-month period to help lead various aspects of the integration. That was a challenging time, but we worked to combine the best from both organizations in an activity-based integration. During that time I had the opportunity to launch a more public job search since I was no longer under confidentiality and recognized other opportunities would provide a more dynamic, exciting environment for me at this point in my career.
Since March of 2014, you’ve been Chief Strategy Officer for Ferrara Candy Company, another portfolio company of Catterton Partners. What has it been like to transition from leading strategy for a convenience store operator / retailer to leading strategy for a candy company / manufacturer?
I joke that I simply went upstream, from selling the candy to supplying it. In reality, it’s a different challenge because the functional focus areas are distinct. At MACS it was all about logistics, merchandising, and the customer experience. At Ferrara, it’s about manufacturing and branding. The two companies are similar in size and revenue, but Ferrara is a more complex organization. Our manufacturing and distribution infrastructure spans 9 plants across 3 countries. We’re a full-line manufacturer with many lines of business, including an everyday branded business, a seasonal branded business, with a large private-label component, as well as the supply of co-manufactured products and bulk products. We carry literally dozens of iconic brands in the portfolio. So we’re operating within a much more complex environment.
The transition for me has been eased by my comfort and familiarity with entering new and different environments and learning very quickly. That’s a trait I learned from consulting. And my kids legitimately love me more now that their dad is “The Candy Man.”
I imagine your office is identical to Willy Wonka’s Chocolate Factory. True?
Well, it’s not unlike that.
Earlier this year, you spoke at the Chief Strategy Officer Summit in San Francisco on building and positioning high-performing strategy teams. What do you look for as you build your own team?
This topic is very near and dear to my heart given that I’m on the second evolution of building a strategy team from scratch in environments that wouldn’t typically take on a pure strategy function. Building teams from the ground up is all about aligning capabilities within the organization and trying to map those against the organizational needs. I look at three hiring lenses, which I will admit I shamelessly stole from McKinsey: thought leadership, client leadership, and people leadership.
Thought leadership is your classic problem-solving, analytical and conceptual thinking ability. It is absolutely required in order to be able to deliver against the needs of the organization. However, that means nothing without client leadership and the ability to build trust with your client base internally and getting the rest of the organization on board from point A to point B. And people leadership is important because strategy is very cross-functional in nature. The ability to influence a disparate group of people and be a catalyst for change is extremely critical. When evaluating talent you don’t necessarily need individuals who are A+ players across all 3 dimensions. Each person should have a certain level of competency in all of them, but everyone is going to have their unique spikes. But the overall team needs to deliver against all 3 of those capabilities to ensure long-term impact.
And then there are a couple of other questions to think about: Do your needs require generalists or specialists? I typically bias toward really smart generalists who can get up the learning curve quickly, versus someone who has done a specific role or performed in a specific industry for the past 10 years. So I typically rank intrinsic skills and competencies over experience and specialization. The second question is, are the needs of the organization structured and defined, or open-ended and ambiguous? In my experience, I have been way more focused on the latter. The teams I’ve built focus on what hasn’t been done or pushed far enough, and the questions that haven’t been asked or fully answered. So comfort with ambiguity in the people you’re hiring is another aspect that I’m always looking for.