How Operating Partners Win: Inside Apollo's Playbook with Aaron Miller

WEBVTT
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Leadership's a function of who you put in the chair, not just for private equity,
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it's across the board. There's a lot of people that love to be leaders,
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but there's very few people that love leadership.
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On this episode of Executive Edge, Simon is joined by Aaron Miller,
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a private equity legend and partner in Apollo's private equity business.
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Operating partners are gonna have to become technology enabled.
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Technology, I think for a long time in the operating partner world has been
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something that's been done on the side.
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Aaron breaks down how consulting shaped his mindset, the evolution of operating
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partner roles, and how culture, leadership, and technology, especially AI,
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are reshaping private equity.
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In the operating role, you can have a board seat, but you're also providing advisory support.
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How do you kind of balance between those multiple roles in a way that's effective for the portfolio?
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You're not balancing the role, you're really fulfilling a certain role.
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I always frame it as this, when you're the operator, you're responsible for
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doing all the work and you're accountable for that outcome.
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Hi everyone, welcome to another episode of Executive Edge. Very excited to have
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with me an OG, someone who is highly respected and somewhat of a legend within the operator world.
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Economy and ecosystem, but very specifically within private equity, Aaron Miller.
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So excited to have you on, Aaron. Thank you for coming on. Thanks for having me.
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For anyone who doesn't know who Aaron is, Aaron is a partner in Apollo's private
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equity business and the chairman of Apollo Portfolio Performance Solutions, APPS for short.
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Apollo, again, for those who don't know, It was a very well-known American asset
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management firm within the private equity industry.
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Primarily invests in alternate assets with $840 billion of assets under management, AUM.
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Prior to joining Apollo in 2019, Aaron was the chief operating officer at Catalina
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Marketing, covering Europe, Asia, and the US.
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Prior to that, was the operating director at Berkshire Partners.
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Aaron spent over a decade at Bain & Company, and another senior partner from
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Bain & Company, someone I interviewed earlier this morning, another recording
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that will probably come out right before Aaron's.
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Early in his career, Aaron also held key product and operations leadership roles
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with companies such as General Mills, Serial Partners Worldwide,
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joint venture between General Mills and Nestle in the U.S.
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And in Latin America. Aaron served on the board of several Apollo Portfolio
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companies, which is standard for an operating partner within PE.
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But some of those companies include McGraw-Hill Education, Tech Data Corporation.
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Aaron received his MBA from Wharton, University of Pennsylvania,
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and has BS in chemical engineering.
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And anyone who hasn't done that, it is up there with aeronautic engineering
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as one of the most complicating technical degrees out there.
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From Northwestern University.
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And he is also fluent, not just obviously in English, but also in Spanish.
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And Portuguese. Thanks again for coming on Aaron. Thank you, appreciate the intro.
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So your experience as an operator, someone with an operator mindset,
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you know, consulting with clients, working in operations yourself all around
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the world, and then moving into the private equity industry.
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I've got my perspective, but I'd really, really be interested in hearing yours.
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Like what did you take from consulting?
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Really helped in being an operator and
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potentially what kind of conflicted like
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what did you have to unlearn from those skills in order
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to kind of be effective as a as a leader in industry and
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then in MPE yeah I think there's a couple things
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my consulting spirit was a little different than most I did the traditional
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strategy consulting role for about half the time I was at Bain and And I think
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that was tremendous with respect to teaching me how to structure ideas and to
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provide deeper thinking around a variety of issues.
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Back then, we were all pretty much generalistic things.
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But I spent five of those years, we created a separate legal entity called Bain
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Corporate Renewal Group, in which we were turning around distressed private equity assets.
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And I think that combination really forced me to really think more deeply about
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how to execute, you being strategic, but at the same time, how to execute with speed.
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And the phrase common phrase i use now people's running
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water through the pipes it's sort of how do you quickly develop
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a strategy but then quote-unquote run the waters through the pipes even in your
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head and with your teams so that when you start to execute you have a tremendous
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amount of confidence that you can execute with speed and accuracy and i think
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the combination of those two experiences where you know i got to serve as a
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coo of a couple of companies during that time that were private equity owned,
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but in very difficult financial straits.
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And at the same time, working with years before and years after large clients
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with strategy issues that required a little more deep patience and deeper thinking,
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I think the combination for me was unique and prepared me well for private equity.
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And in your roles that you've had recently as well, there's quite an interesting dynamic within...
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Being an operating partner, right? Because if you're a board member and it's
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a public company, perhaps there are certain roles, right?
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You don't generally take to be an investor. You've been hired into that board position.
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You could be a consultant, a senior advisor. You're then also independent.
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In the operating role, you can have a board seat. You can be connected to the
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team that made the original investment decision and perhaps decisions for later capital injections,
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but you're also providing advisory support to the C-levels to help them through
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some challenges that they might be facing.
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How do you kind of balance between those multiple roles in a way that's effective for the portfolio?
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Well, I think the first part for me, and I think this has developed over the
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course of time, I think the roles, you're not balancing the roles,
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you're really fulfilling a certain role.
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And that I think there are operations roles, and I always frame it as this.
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When you're the operator, you're responsible for doing all the work and you're
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accountable for that outcome.
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If you're an advisor, you're just responsible for doing work and giving advice.
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I see the operating partner role as what I call a steward.
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You're accountable for the outcomes. But if you do no work, hypothetically,
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hypothetically, no, I mean, it's not that people are looking for a deck from you.
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They're not looking for a set of materials or a set of analysis from you.
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They're looking for an outcome.
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And so you orient yourself in the operating partner role towards the outcome
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more than you orient yourself towards the advice.
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At the same time, you have to acknowledge that the operator is responsible for
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delivering that work and you're jointly responsible for the outcome.
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And I think when you step back and view it that way, you're not really striking a balance.
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You're letting all the players in the ecosystem play the role that they're supposed to play.
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You have a part, they have a part, and then let's not forget investment teams
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because investment teams have an oversight role in many regards,
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and they ultimately are responsible for the outcomes even at the same level
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as the management team and the CEOs.
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So once you understand that balance, then it's
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a matter of where do you fit yourself in and where can
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you add the most value and i think most of the time for
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me it's been a little much heavier leaning
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than purely advisory when i'm actually in the
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operating partner role and so i don't i don't find it difficult and i think
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people who really understand that this is what this job is don't necessarily
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find it that difficult either and has has that approach and then also the structure
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of as apps has has how's that evolved since you first got involved?
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Is that the significantly larger teams of the arm's length versus accountable
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kind of approach to oversight and support for the Portco's changed?
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It hasn't really. I think what's changed, the team has clearly grown.
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When we started, we had a team of five people.
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Most of those individuals we've had to, over the course of time,
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switch out. And so we have a team of 35 to 40 today.
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The team has really, the ethos and the psychology around the team hasn't really changed.
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We truly attempt to be partners to both the management team and to the investment
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teams. and the phrase we often used was it's a climber guide relationship.
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We are the guides. We have, whether it's technology expertise,
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it's operations expertise.
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It may be that we have expertise in certain areas of talent,
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or we may be generalists that help guide the team.
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But our job is to guide those executives up the climb and to put them first
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along with the investment team.
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And that ethos has remained today, which means we've had really highly,
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highly talented operators in our team across all sectors.
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Generalists, technology, talent, sourcing, but all who come to the table with
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this idea of being guides to others that are climbing.
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And I think that has been the common thread throughout.
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I think that also allows us to lean in a
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little more because we understand that
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we are not necessarily the ones that are
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responsible at the end of the day for making it happen but gosh darn it we better
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make sure that others are as prepared as possible to make that client so that
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that has not changed at all team is bigger functions we have eight functions
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today versus starting with one two.
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And the team now works in an integrated fashion. So if we need to address a
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really complex ESG issue, it may be that we're doing that in coordination with our data team.
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Or if we have a complex sourcing issue, that it may be our technology and our
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generalists who are working together in an integrated fashion.
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That has remained the same since day one. For me,
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it's a fascinating difference really behind private equity as a source of capital
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versus, you know, all the other groups out there, right, from venture capital
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to just traditional funding and banking.
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You know that added value that aligned
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interest right vested interest and also
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the leveraging of expertise within the advisory
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operating partner group that model i think is you know one of the reasons that
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private equity is has grown from you know straight to strength in the last few
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decades and especially the operating partner role and group you know has grown
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as well i mean we were reminiscing before we hit record about, you know,
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conferences like private equity, international PEI, right?
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I don't know how many other, how many years ago it was when you first attended
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that operating partner conference, but, you know, significantly smaller than it, than it is now.
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And that's, I don't just, not just a reflection of how well those guys have
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done building up a great conference, but also just a reflection of the growth in the industry, right?
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I think the industry officially probably started in 2001 with the creation of Capstoke.
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Which is KKR's group. Prior to that, there were other, there were operating
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partners. Bain and Company had them.
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Carlisle had them, but formally established. And I say that we went through
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this progression over the next 20 years in which early on in those 2000s,
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there was more players in the NBA than there were operating partners.
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Sort of take 12 players and multiply by 32 and you get the number there.
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And then you progress towards the end of the decade, but you still had more
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players in Major League Baseball.
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You sort of take 30 there, 30 cities multiplied by 26, but there were still
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more players in major league baseball than there were operating partners.
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And you probably progressed to around, you know, nobody knows exactly,
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but 2015, where at that point you crossed, and it's really incredible.
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The number of players in the NFL and operating partners were somewhat in the
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same ballpark as, you know, 15, 50 times 30, about 1500.
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Now we've exploded to thousands and thousands of operating partners,
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but the industry as it's formerly been established is still 25 years old,
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but didn't really explode until the last five to 10 years.
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And so it's really interesting when people think about it as this established
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entity that exists forever, but it's incredibly young. It's marginally older than Facebook.
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So, or meta as we want to call it. So it's, it's not that old.
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Yeah. I worked with, I don't know if I think of the names, but you know,
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Todd Cooper, Adam Fless back at Capstone.
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I don't want to say 20 years ago, probably 18 years ago,
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but that was really my first foray back when I was 80 into the operating partner
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world and what that group meant within a private equity organization.
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These guys really cared. They were really there to partner with the firm.
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Everything they were doing was focused on results and being effective they cared
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about you know just extremely authentic and and a very fast paced moving but
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you know but respectful um
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mindset was just yeah it really really changed
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my my view you know all those years ago and both
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great guys as well let's let's step
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back a little bit just just to you because i think
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you know beyond the role and the industry that you work in i think you know
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your background is is is impressive and fascinating enough as well let's talk
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about the being multilingual as an example i mean i know that you've traveled
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all over the world but how's that helped you i mean is that Were you naturally
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fluent in Spanish or Portuguese,
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or is that something that you've kind of picked over the last few years?
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And have you used that to your advantage?
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I mean, it's... I don't know if anybody's naturally fluent unless you're born
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or raised in an environment, and I was not.
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I was... I'm an English speaker. I think the only thing I had was...
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My parents were Jamaican.
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At least we came from the same, I guess, kingdom, you and I,
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at one point in time, for lack of a better word.
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But my parents were Jamaican. And I took an interest in Spanish probably when I was at General Mills.
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It led me to pursuing a role in Mexico. Pursued the role.
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Wound up in Mexico turning around plants. It's where I happened to also meet my wife.
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I immersed myself culturally. And I think the same thing when I went to Brazil.
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I spent some time at the Lotter Institute at Wharton, the AMBA program there.
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And that's where I learned Portuguese.
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But I think, you know, when you, you learn a language, you have a choice and
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you're either going to learn the language devoid of the culture.
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You're going to learn the language and understand the culture,
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or you can learn a language and you can become part of the culture.
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And I think the times that I spent in definitely in Mexico for a time,
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and I became part of the culture.
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I immersed myself in ways that I probably didn't anticipate.
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I think when I went to Brazil, I
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understood the culture. It was a shorter period of time that I was there.
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But both of those experiences made me far more empathetic when I came back to
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work in the United States.
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And it made me a more effective leader because I started to understand that
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my point of view wasn't the only point of view.
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And not only point of view, my paradigm, the context in which I saw things wasn't the same.
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And when you start to think about the context that others live in and the context,
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even within your own country,
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even within your own quote unquote home, it allows you to see problems in different
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ways to lead people, I think more effectively, but also to develop organizations more effectively.
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And I think it's been critical for me, that experience in Mexico,
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in Brazil, and then subsequently, you know, running teams across Asia and Europe
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as, as made me a stronger, much better leader.
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So it goes far beyond the question of language and extends into the question of culture.
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I hope, right, with, you know, the speed at which translation tools are evolving and getting better and,
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you know, to use your meta reference, there'll probably be, you know,
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translation embedded into the Ray-Ban meta glasses to the point in which you'll
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just be able to, I mean, I even think that testing,
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beta testing, some of this now, you can hear another person talking in a different
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language and it will provide a transcript,
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you know, on the lens and the screen. that allows you to see that.
00:17:08.853 --> 00:17:10.873
The danger of that, even though it does...
00:17:11.779 --> 00:17:14.719
Kind of streamline communications and allows people to you
00:17:14.719 --> 00:17:17.599
know to communicate more effectively quickly maybe you lose
00:17:17.599 --> 00:17:20.799
a bit of that magic right of actually forcing yourself to be
00:17:20.799 --> 00:17:23.559
you know embedded you know and kind of
00:17:23.559 --> 00:17:26.679
learn from scratch and maybe even learn the meaning behind
00:17:26.679 --> 00:17:29.559
some of the words and and the pronunciation that allow
00:17:29.559 --> 00:17:32.339
you to see to see their culture from from their
00:17:32.339 --> 00:17:36.799
side and maybe hold back from not feeling you need to integrate and and actually
00:17:36.799 --> 00:17:40.579
travel to that location i mean do you think that there's a there's a danger
00:17:40.579 --> 00:17:46.219
that people or lose that edge that you picked up from learning the language
00:17:46.219 --> 00:17:50.319
from scratch and without growing up in the native town?
00:17:51.099 --> 00:17:56.139
Look, I think it'll always be a choice. I think it'll depend on what you're
00:17:56.139 --> 00:17:58.199
trying to do. I think there's going to be definitely a place.
00:17:58.359 --> 00:18:03.579
I think people who are going to be able to fly out of country and sit and engage
00:18:03.579 --> 00:18:09.079
in a dialogue with a group of native speakers when they may be the only native
00:18:09.079 --> 00:18:11.179
speaker, I think that's going to be incredible.
00:18:11.932 --> 00:18:16.552
I still think there are people that will make the choice to immerse themselves
00:18:16.552 --> 00:18:22.992
culturally elsewhere and understand the nuance of a culture far beyond the language.
00:18:23.412 --> 00:18:28.312
And I think that, I don't think that can ever be lost unless we become monolithic
00:18:28.312 --> 00:18:32.712
culturally worldwide, which pretty tough for that to happen.
00:18:32.712 --> 00:18:36.312
I think you'll always be able to make that choice in terms of how much do you want to grow as a person.
00:18:36.732 --> 00:18:40.872
And I don't see that ever ending. I read something, I'm not going to be able
00:18:40.872 --> 00:18:46.932
to quote the exact statistics, but there is thousands of languages that are still practiced today.
00:18:47.672 --> 00:18:53.372
And it's like 90% of them are spoken by like less than, I don't know, 200 people.
00:18:53.612 --> 00:18:57.332
So that to me is just mind boggling, right? Just outside the main languages
00:18:57.332 --> 00:18:59.712
that everyone operates in today.
00:18:59.712 --> 00:19:05.632
But to your point that, you know, there are still similarities across culture
00:19:05.632 --> 00:19:10.112
and it's tapping into those respectfully and with, you know,
00:19:10.212 --> 00:19:15.832
with empathy that allows you to see things from their point of view and,
00:19:15.972 --> 00:19:20.052
you know, and hopefully be more effective in operations, which I think is cool.
00:19:20.052 --> 00:19:26.552
So, I mean, you've lived in a lot of places around the world and I'm sure traveled as well with work.
00:19:27.692 --> 00:19:30.692
Is there a certain part of the world that you might...
00:19:31.071 --> 00:19:34.151
Retire to or is there a place that you you're really fond of
00:19:34.151 --> 00:19:37.051
that you go back to on a regular basis well i mean like most people
00:19:37.051 --> 00:19:39.831
think i already live in atlanta i'll probably retire to
00:19:39.831 --> 00:19:42.651
atlanta but okay i'm most fond of rio
00:19:42.651 --> 00:19:45.631
de janeiro okay the experience in
00:19:45.631 --> 00:19:48.451
rio it was fun most people might
00:19:48.451 --> 00:19:53.171
think i know why i lived rio but it really was i think a place that challenged
00:19:53.171 --> 00:19:58.851
me culturally challenged me artistically it challenged me on every single dimension
00:19:58.851 --> 00:20:04.211
you could possibly imagine and really diving into Rio and all that it was.
00:20:04.211 --> 00:20:06.291
It's a place that's so rich in history.
00:20:06.751 --> 00:20:10.251
Many people think of it as Carnaval or think of it as beaches.
00:20:10.651 --> 00:20:14.511
And it's so rich in terms of history, in terms of, you know,
00:20:14.751 --> 00:20:16.851
everything you could possibly imagine.
00:20:16.991 --> 00:20:22.371
I was fortunate enough to spend a semester there studying philosophy and supply
00:20:22.371 --> 00:20:24.391
chain, if you can think both of those at the same time.
00:20:24.531 --> 00:20:27.951
And I think I will never forget that experience. And in addition to doing a
00:20:27.951 --> 00:20:31.511
couple of deals there around the document storage business early in my career.
00:20:31.631 --> 00:20:35.071
So, and then working on an airline there. So I've been to Brazil so many times,
00:20:35.111 --> 00:20:38.511
but I've actually had a chance to live, work and study in Rio,
00:20:38.711 --> 00:20:41.231
which is other than the United States, the place I've done all three.
00:20:41.791 --> 00:20:48.371
No, that's fascinating. So are you at some point going to do guest lecturing?
00:20:48.551 --> 00:20:52.131
Is that something that professors will reach out to you on? I mean,
00:20:52.251 --> 00:20:55.491
I think you'd be fantastic at it, but is it, you know, is that,
00:20:55.571 --> 00:20:58.651
is that a desire at some point or? It's something I already do.
00:20:58.951 --> 00:21:02.691
So I'll be at Wharton next week. That's next week.
00:21:03.471 --> 00:21:09.171
I do some small sessions at Harvard once a year. I do probably three or four
00:21:09.171 --> 00:21:11.271
sessions at Wharton every year.
00:21:11.431 --> 00:21:13.771
And, you know, we'll see how that goes over the course of time.
00:21:13.851 --> 00:21:15.071
We never know where life takes us.
00:21:15.191 --> 00:21:20.111
I do enjoy it. And I think I enjoy being attached to individuals or having the
00:21:20.111 --> 00:21:23.311
opportunity to be in front of individuals who are hungry to see a different perspective.
00:21:23.531 --> 00:21:29.371
And so that time at Wharton has been increasingly fun each year that I do it.
00:21:29.431 --> 00:21:31.691
And we'll see what that ends up happening over the long haul.
00:21:32.413 --> 00:21:36.653
Which professor's sessions are you generally guest lecturer in?
00:21:36.753 --> 00:21:41.073
Have you bounced around, or is there one? I have bounced around most recently
00:21:41.073 --> 00:21:44.873
Professor Burku with private equity.
00:21:45.473 --> 00:21:47.193
Yeah, of course. That makes sense.
00:21:48.093 --> 00:21:53.233
Students are very lucky to be able to get you to... Listen, here you speak in
00:21:53.233 --> 00:21:56.813
real time, be able to answer questions off you.
00:21:57.193 --> 00:22:00.673
I know a ton of them, at least on the East Coast,
00:22:00.673 --> 00:22:03.453
getting into private equity or at least they have that as
00:22:03.453 --> 00:22:06.733
a target career path and you know there's a lot of anxiety around
00:22:06.733 --> 00:22:09.813
how that might evolve and you know the opportunities etc
00:22:09.813 --> 00:22:12.693
and so i can i can imagine it's
00:22:12.693 --> 00:22:16.193
a well-attended class for sure and then
00:22:16.193 --> 00:22:19.393
on the on the private equity side are you any
00:22:19.393 --> 00:22:22.753
predictions for the industry in the next 10 to
00:22:22.753 --> 00:22:25.973
20 20 years i mean a lot more of the same just
00:22:25.973 --> 00:22:28.673
continued growth or you know do you
00:22:28.673 --> 00:22:32.053
see any kind of fundamental transformative changes
00:22:32.053 --> 00:22:37.373
happening in the in the near term 20 years a long time so i'm not i'm not sure
00:22:37.373 --> 00:22:40.293
i'd have been effective if i'm predictive at predicting what's going to happen
00:22:40.293 --> 00:22:43.293
20 years from now then there's a lot of things i would probably be doing right
00:22:43.293 --> 00:22:48.533
now look i think that private equity you can read any report you want to read
00:22:48.533 --> 00:22:50.393
there's there's plenty of capital in the world.
00:22:51.309 --> 00:22:58.349
And there are fewer deals, and the ability to create positive outcomes or attractive
00:22:58.349 --> 00:23:00.309
outcomes on the deals is becoming increasingly hard.
00:23:00.569 --> 00:23:05.129
So I think almost anybody you ask, and I think that's been one of the things
00:23:05.129 --> 00:23:08.089
we focused on heavily at Apollo over the last six or seven years,
00:23:08.589 --> 00:23:13.989
is that the ability to drive value from operations will become more and more important.
00:23:14.309 --> 00:23:19.949
And those that can do it systematically, programmatically, configure solutions
00:23:19.949 --> 00:23:24.509
for companies efficiently effective, which I think we're doing at Apollo and
00:23:24.509 --> 00:23:28.729
we're becoming more effective every day at it. I think those companies will win.
00:23:29.069 --> 00:23:31.609
Operating partners are going to have to become technology enabled.
00:23:32.429 --> 00:23:37.469
And that has been something technology, I think for a long time in the operating
00:23:37.469 --> 00:23:40.209
partner world has been something that's been done on the side.
00:23:40.349 --> 00:23:43.169
And I think you're going to see it integrated in the model.
00:23:43.289 --> 00:23:48.689
I think we've done that effectively At Apollo, we don't even just have one technology group.
00:23:48.829 --> 00:23:53.009
We've split our groups into technology, infrastructure. We have data,
00:23:53.529 --> 00:23:55.129
digital, product, and AI.
00:23:55.369 --> 00:24:01.529
So we're covering the full gambit with expertise across the board and integrating
00:24:01.529 --> 00:24:06.809
that effectively into other aspects and other functions.
00:24:06.809 --> 00:24:12.229
So whether it's our ESG function, integrating data, whether it's our sourcing
00:24:12.229 --> 00:24:17.589
function today, I think we, we use AI within our sourcing function.
00:24:17.769 --> 00:24:23.469
We have a $60 billion spend cube that we manage using AI to read contracts in
00:24:23.469 --> 00:24:27.669
order to identify leakage that occurs across our value chain.
00:24:27.849 --> 00:24:32.369
Those are, those are very unique things that I think that we are doing that are exceptional.
00:24:33.089 --> 00:24:36.689
I think that is going to become much more of the norm.
00:24:37.089 --> 00:24:40.589
And in the absence of that, I think firms that aren't doing that will suffer.
00:24:40.809 --> 00:24:41.689
That's super interesting.
00:24:41.949 --> 00:24:46.509
It really is. Fascinating to get your perspective again. I think the reflect
00:24:46.509 --> 00:24:50.949
on the past 20 years and how much the industry has changed and also the operating,
00:24:50.949 --> 00:24:56.589
you know, kind of partner structure the next 20 years, who knows where it's going to go for sure.
00:24:56.749 --> 00:24:59.889
But I think that's interesting that you're already adopting those technologies,
00:24:59.889 --> 00:25:04.169
you're driving them. While, you know, the size of AUM that you guys have and
00:25:04.169 --> 00:25:06.029
people, when people look at private equity firms, they're like,
00:25:06.089 --> 00:25:10.009
that's hundreds of millions and billions of dollars, but the port co's themselves
00:25:10.009 --> 00:25:11.629
aren't necessarily that large, right?
00:25:11.689 --> 00:25:15.069
There's several hundreds of millions, sometimes on the low billion side.
00:25:15.269 --> 00:25:20.029
So, you know, they do need advice on the latest technology. They don't necessarily
00:25:20.029 --> 00:25:25.529
have the large tech teams that some, you know, public companies and fortune 100 funds will.
00:25:25.789 --> 00:25:29.129
So them being able to lean on a center of excellence, you know,
00:25:29.209 --> 00:25:32.229
especially around a discipline that's evolving so
00:25:32.229 --> 00:25:35.089
quickly and you know do they spend money on it do they not
00:25:35.089 --> 00:25:38.269
how can it be used effectively i think is is critical
00:25:38.269 --> 00:25:41.129
to the to the industry are other groups doing
00:25:41.129 --> 00:25:44.049
that are you hearing you know the same from from the
00:25:44.049 --> 00:25:48.789
other cohorts that go to pei or i think the conference the conference this past
00:25:48.789 --> 00:25:55.829
couple days is heavily focused on ai what i think is key though is you you and
00:25:55.829 --> 00:26:01.309
i could both choose to focus on technology the differentiation comes when I can develop.
00:26:02.301 --> 00:26:09.161
Patterns and clear playbooks for action that are flexible enough so that I can
00:26:09.161 --> 00:26:10.821
apply them across multiple situations.
00:26:11.721 --> 00:26:17.061
And I think, I can't speak to say that a firm is effective or less effective,
00:26:17.061 --> 00:26:21.821
but as an industry, the industry has historically focused on just doing projects,
00:26:22.001 --> 00:26:24.501
doing projects within an individual portfolio company.
00:26:24.661 --> 00:26:30.341
When you get to the point that you can execute repeatedly across a series of
00:26:30.341 --> 00:26:36.561
companies and with fewer people using third parties that can sort of rinse and repeat,
00:26:36.761 --> 00:26:40.961
that's the point in which you can really drive accelerated value creation.
00:26:40.981 --> 00:26:44.601
I think we are starting to do that across with respect to AI.
00:26:44.981 --> 00:26:48.961
We've done that already with respect to when we do a carve out,
00:26:49.161 --> 00:26:55.341
I'm not going to say it's flawless, no carve out flawless, But the repeatability across our carve-outs,
00:26:55.581 --> 00:27:00.121
the repeatability in which we deploy data platforms, the repeatability in which
00:27:00.121 --> 00:27:05.021
we're now executing, whether it be pricing or whether it be a series of other initiatives,
00:27:05.281 --> 00:27:08.021
it's accelerating almost exponentially.
00:27:08.521 --> 00:27:12.881
So I think there are many other firms that are trying to follow and do that.
00:27:12.881 --> 00:27:17.481
There's a few that are doing that effectively, but I think it's one of those
00:27:17.481 --> 00:27:21.481
things that there will be leaders and there'll be followers and there'll probably
00:27:21.481 --> 00:27:23.721
be four or five or six firms that really lead.
00:27:24.081 --> 00:27:27.481
And the other will see that example over the course of time and follow.
00:27:28.273 --> 00:27:32.233
I think we're leading. Pretty sure we're leading. I like it.
00:27:32.313 --> 00:27:36.793
That's a good call for action in some competition out there.
00:27:37.053 --> 00:27:40.953
Before we wrap up, Aaron, I wanted to ask you kind of a broader question as
00:27:40.953 --> 00:27:47.073
well around just generally leadership and some of your lessons from your experience
00:27:47.073 --> 00:27:48.733
and maybe some of the blood,
00:27:48.893 --> 00:27:52.733
sweat, and tears in what's effective and what's not.
00:27:52.973 --> 00:27:56.213
Love to hear of you. I think it's one of those things.
00:27:56.333 --> 00:28:00.453
I think this is probably along with talent, but I think, you know,
00:28:00.713 --> 00:28:04.693
talent is leadership's a function of who you put into the chair is one of the
00:28:04.693 --> 00:28:06.673
most important things, not just for private equity.
00:28:06.813 --> 00:28:10.753
It's just, it's, it's across the board. And there's a phrase that has started
00:28:10.753 --> 00:28:14.973
to come to my mind often, which is there's a lot of people that love to be leaders,
00:28:15.113 --> 00:28:16.833
but there's very few people that love leadership.
00:28:17.587 --> 00:28:25.367
And that is, I think that is a something, forget as a country in the US and
00:28:25.367 --> 00:28:29.867
probably globally need to worry about, but it's, I think it's increasingly important.
00:28:30.487 --> 00:28:35.427
I definitely look for it when I hired my teams, whether my teams are private equity or otherwise.
00:28:36.007 --> 00:28:39.487
We look for it, starting to look for it more and more when we hire in the portfolio.
00:28:39.927 --> 00:28:45.107
But the idea of individuals who have a set of firm principles to guide their
00:28:45.107 --> 00:28:51.287
leadership and their thinking, because what you often get when you have a leader
00:28:51.287 --> 00:28:54.827
that does enough leadership is you get a manager, you get a facilitator.
00:28:55.547 --> 00:28:59.767
And regardless of whether they've been a CEO before, regardless of whether they've
00:28:59.767 --> 00:29:02.887
been they've been on top of a large organization.
00:29:03.387 --> 00:29:06.527
When an organization really needs to inflect,
00:29:06.787 --> 00:29:13.307
truly inflect, there has to be someone there who is willing to remove the friction
00:29:13.307 --> 00:29:17.987
that's associated with that organization inflecting and provide the energy that's
00:29:17.987 --> 00:29:19.887
necessary for the organization to do so.
00:29:20.207 --> 00:29:24.407
And I think more and more, not more and more, I think people are starting to
00:29:24.407 --> 00:29:28.887
recognize that definitely in private equity and identify people who are leaders
00:29:28.887 --> 00:29:33.087
who love leadership more than just managers who sit on top of organizations.
00:29:33.527 --> 00:29:37.907
And so I think it's something that I have found interesting over the years,
00:29:37.927 --> 00:29:41.747
and I've probably become more, less compromising over the course of time in
00:29:41.747 --> 00:29:42.767
finding those individuals.
00:29:43.267 --> 00:29:50.067
Interesting. So it's not just a mindset, but also a capability to flip, right?
00:29:50.167 --> 00:29:56.307
Be agile, be a wartime, as well as a peacetime CEO, depending on the environment
00:29:56.307 --> 00:29:58.467
in which you're having to operate. Is that? Yeah.
00:29:58.767 --> 00:30:02.327
And I think it's, it's step into the breach for lack of a better word.
00:30:02.467 --> 00:30:06.767
The phrase I use, I've used recently for those that love American football is
00:30:06.767 --> 00:30:08.447
stay in the pocket. Right.
00:30:09.107 --> 00:30:12.267
There's, you know, when you, when we think about, and I'm not a lover of the
00:30:12.267 --> 00:30:17.107
Patriots, but someone like Tom Brady, it's, it's, can you stay in the pocket and deliver the strike?
00:30:17.966 --> 00:30:21.806
And regardless of the circumstances around you and regardless of what's going
00:30:21.806 --> 00:30:24.546
to happen, I think those that, it's a common, it's common. I mean,
00:30:24.646 --> 00:30:26.266
I tend to hire a lot of people from West Point.
00:30:26.526 --> 00:30:29.786
I tend to hire a lot of people who've been from academies of leadership.
00:30:29.786 --> 00:30:34.226
And the reason for is they have a deep understanding of that and what it really means.
00:30:34.606 --> 00:30:38.226
And I think the more you can build your organization with leaders throughout,
00:30:38.506 --> 00:30:42.166
not just at the top, the stronger your organization is over the course of time.
00:30:42.706 --> 00:30:45.906
Yeah, no, I love it. That's extremely telling. And I think there's,
00:30:45.986 --> 00:30:53.146
you know, there's a limited number of people that have that broad insight, right?
00:30:53.346 --> 00:30:58.626
Because you're not just hiring, you're also operating with, you've been making
00:30:58.626 --> 00:31:02.286
changes, you know, across multiple organizations, right?
00:31:02.546 --> 00:31:08.246
At any time in any given year and seen it over, over, over a couple of decades.
00:31:08.246 --> 00:31:12.346
So that, that view is, you know, I think is, is worth its weight in gold.
00:31:12.486 --> 00:31:15.766
It's extremely important so yeah i appreciate you sharing that thank you uh
00:31:15.766 --> 00:31:18.526
it's fantastic to to chat with you erin i
00:31:18.526 --> 00:31:21.286
really appreciate your time and you know i know
00:31:21.286 --> 00:31:24.446
for anyone who's in pe themselves maybe
00:31:24.446 --> 00:31:29.146
a smaller firm or you know is an operating partner or even even a deal partner
00:31:29.146 --> 00:31:33.666
i think on the finance side will uh hopefully find the conversation interesting
00:31:33.666 --> 00:31:37.586
and uh you know if you post any images or there's any video from some of your
00:31:37.586 --> 00:31:40.366
guest lectures i know people would be interested in seeing that,
00:31:40.386 --> 00:31:41.926
um, out on, uh, on LinkedIn.
00:31:42.186 --> 00:31:44.466
So just want to say thank you again for your time on Friday.
00:31:44.806 --> 00:31:48.986
Um, yeah, it was great to see you. So appreciate it. Appreciate it. Thank you very much.