CEO Connection Magazine (Fall 2019 Issue)

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Fall 2019 M&A ADVICE FROM MIDMARKET CEOS PAGE 4

M&A DEAL KILLERS & HOW TO AVOID THEM PAGE 12

Introducing THE CEOC M&A CONNECTION NETWORK PAGE 21

MERGERS & ACQUISITIONS

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IN TH I S I SSUE

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Photo: Taylor Rabow

ME RGE RS & ACQUISITIONS

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M&A ADVICE FROM CEO CONNECTION MEMBERS & PARTNERS

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BY GEORGE: WHAT CEOS MUST DO TO AVOID THE 83% OF MERGERS AND ACQUISITIONS THAT FAIL

By George Bradt

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M&A DEAL KILLERS & HOW TO AVOID THEM

By Robert Logemann

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ANNOUNCING THE CEOC M&A CONNECTION NETWORK IN CONVERSATION WITH CEOC STRATEGIC PARTNER SIBSON CONSULTING M&A Insight

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C E O CON N E CTI ON

Photo: Taylor Rabow

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LETTER FROM THE CEO

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2019 CEO CONNECTION MID-MARKET AWARDS

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MEMBER PROFILE Sharon Watkins, CEO, RadiusPoint

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CEO CONNECTION PARTNERS

WELCOME NEW MEMBERS

CONNECT WITH A CEO Dr. Kathryn Ritchie, Founder & CEO, Ignition Institute

2019 MOST INFLUENTIAL WOMEN OF THE MID-MARKET PARTNER PROFILE Ollen Douglass, Managing Director, Motley Fool Ventures

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M AGAZINE STAF F Publisher Kenneth Beck Editor-in-Chief Brenda Kissko Editorial Contributors George Bradt Robert Logemann Copy Editors Elizabeth Hauser Lucie Lawrence Shanna Smith Designer Jenn Martins Ad Sales Teresa Bacal

CO N NE CT W I TH U S General inquiries info@ceoconnection.com Questions about membership membership@ceoconnection.com Sponsorship opportunities sponsorship@ceoconnection.com To join a committee committees@ceoconnection.com CEOC events events@ceoconnection.com CEO Connection 338 Jericho Turnpike, Suite 381 Syosset, New York 11791 T 800.244.4719 F 646.292.5129 OfficialCEOC @CEOConnection

ABOUT CEO CONNECTION

CEO Connection (CEOC) is about relationships and access. With more than 17,000 CEOs in our community, CEOC is the only membership organization in the world focused exclusively on mid-market CEOs and their companies.

Our mission is to help those individuals and their companies succeed by connecting them with each other, connecting them with the people, information, resources and opportunities to which they would otherwise not have access, and representing the interests and perspectives of the mid-market.

LETT ER F RO M THE CE O

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hen George and I created CEO Connection, we knew there was a need for mid-market CEOs to connect with their peers. We both personally experienced the challenges of leadership and greatly valued the advice we received from our counterparts. We learned that 40% of CEOs fail in their first 18 months. It can be lonely at the top. At that time, though mid-market companies accounted for 30 million jobs and one third of the $30 trillion annual gross receipts in the United States, there was no organization designed specifically to help the leaders of these mediumsized businesses. As such, CEO Connection (CEOC) was born.

The whole concept of CEOC is to give members access to people, information, resources, and opportunities that you would not be able to get on your own—and we do it for you! That’s the real value. It’s no longer who you know; it’s about who we know, and who our members know, and sharing that information.

CEOC has grown from our first CEO Boot Camp in 2005 to a community of more than 17,000 CEOs with access to curated connections, unique business opportunities, remarkable talent, exclusive member-to-member discounts, and an array of other benefits specifically designed for you. And now, we are going to share the stories and learnings, ideas and expertise of your fellow members through our brand-new CEO Connection Magazine.

Our goal is to share useful content gleaned from more than 14 years of working with remarkable people, bundled in a publication that you will keep on your office shelf to use as a reference tool (or at least read once and recycle).

This inaugural issue is dedicated to mergers and acquisitions. Inside, you’ll find M&A advice and insight from fellow CEOs. You’ll learn what they wish they would have known before the deal and their top advice to avoid costly mistakes. We’re also announcing the brand-new M&A Connection Network (page 20).

In the meantime, we will convene for the seventh time at the Mid-Market Convention (Sept. 22-24, Philadelphia), to co-create ideas to help each other and change the world. There, we’ll present the Mid-Market Awards® (page 10). We’re also recognizing the Most Influential Women of the MidMarket (page 15). Hopefully you are reading this in Philadelphia sitting next to another CEOC member! Either way...

CEO Connection is your organization. Use it and stay connected.

Speak to you soon.

Kenneth Beck Kenneth Beck CEO

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WELCOME NEW PREMIUM MEMBERS Joined January 1–July 29, 2019

Denise Conroy (CEO, Iconic Group, Inc.) Iconic Group, Inc. (formerly Event Photography Group) is an international digital solutions company that provides professional photography services at 10,000 events and 30,000 shoot dates, capturing many of the most defining moments in consumers’ lives. iconicgroup.com CEOC Member Since 2019 David Ficca (President & CEO, The Baltimore Life Insurance Company) Established in 1882, The Baltimore Life Insurance Company has served seven generations of policyholders; and today, insures more than 300,000 individuals, families, and businesses in communities across America. baltlife.com CEOC Member Since 2019 Sharon Rossi (CEO, FoodScience Corporation) For over 40 years, FoodScience® Corporation (FSC) has led the human and animal health industry with extensive nutritional research and product development. foodsciencecorp.com CEOC Member Since 2019

Pradeep Saha (CEO, Signature Systems Group LLC) Signature Systems Group LLC manufactures and distributes highquality industrial composite matting, turf protection systems, and temporary event floors, carpets, and fencing. signaturecorp.com CEOC Member Since 2019

Adam Sherman (Group Managing Director, Air Business Limited) Air Business Limited is the UK’s leading global distribution and subscriptions management partner serving the publishing, memberships, associations, and e-commerce sectors. airbusiness.com CEOC Member Since 2019

Evan Smith (President & CEO, Hypertherm Inc.) Hypertherm designs and manufactures plasma, waterjet, and laser cutting systems for use in a variety of industries such as shipbuilding, manufacturing, and automotive repair. hypertherm.com CEOC Member Since 2019

MI D - MARKET ACT I O N CO M M I T T E E AN D ADV I S O RY B OAR D C HA I R S The purpose of these committees is to focus on the most impactful ideas and funnel CEO Connection people, information, and resources into group, individual, or corporate actions. Serving on these committees enables you to connect with other mid-market CEOs, create opportunities for your company, and shape the midmarket perspectives on the issues which are important to you, all while collaborating on ideas to help change the world.

Education Committee Jon Whitmore, Former CEO of ACT, Inc. CEOC Member Since 2011 European Expansion Committee Adam Warby, CEO of Emeritus of Avanade CEOC Member Since 2012 Government Relations Committee Paul Decker, President and CEO of Mathematica Policy Research CEOC Member Since 2015 Healthcare Committee Doug Robinson, Former CEO of Heka Corporation CEOC Member Since 2013 Innovation Committee Ron Totaro, Former General Manager, Global Financial Services of Pitney Bowes CEOC Member Since 2014 Social Impact Committee Jostein Solheim, Former CEO of Ben & Jerry’s CEOC Member Since 2013 Talent Management Committee Jeff Kiesel, CEO of Restaurant Technologies, Inc. CEOC Member Since 2013 Most Influential Women of the Mid-Market List Advisory Board Kathryn Ritchie, Founder and CEO of Ignition Institute CEOC Partner Since 2014 If you’re interested in joining one of these committees, email us at: committees@ceoconnection.com For inquiries regarding sponsorship ads, please contact: ads@ceoconnection.com 800.244.4719

Send us your accomplishments and big announcements—we’d love to brag about you in a future issue of CEO Connection Magazine! editor@ceoconnection.com CEOCONNECTION.COM

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MERGER & ACQUISITION ADVICE FROM CEO CONNECTION MEMBERS & PARTNERS Robert Wallstrom, CEO of Vera Bradley CEOC Member Since 2019

Robert Wallstrom joined Vera Bradley in November 2013 as President and Chief Executive Officer. He also serves on the company’s board of directors.

Wallstrom combines his passion for merchandising, design, customer service, and people with more than 30 years of retail experience focused on building teams, enhancing company cultures, and driving financial results. Since joining Vera Bradley, Wallstrom has spearheaded the development of the company’s comprehensive long-term strategic plan designed to drive improved financial performance and shareholder value over 4

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the long term, while also enhancing and strengthening the Vera Bradley brand.

Vera Bradley is an iconic women’s lifestyle brand known for its innovative designs and distinctive patterns, offering a wide assortment of handbags, luggage and travel items, fashion and home accessories, and unique gifts.

CEOC: Tell us about your M&A experience.

RW: In July 2019, we completed the acquisition of a 75% ownership interest in Pura Vida, a rapidly-growing, digitally native, and highly engaging lifestyle brand with a differentiated and expanding offering of bracelets, jewelry, and other accessories.

CEOC: What did you learn through that process?

RW: It is critical to have a group of skilled partners on both sides of the transaction (bankers, lawyers, and other advisors) who can offer advice and

resolve issues quickly.

CEOC: What do you wish you would have known before going through the process?

RW: This was Vera Bradley’s first M&A deal, so we had a steep learning curve.

The biggest lesson I learned is to have a tight group who is 100% focused on completing the deal. We had senior leadership driving the deal and therefore the pace was a bit slower than we anticipated.

CEOC: In your experience, what was the most difficult part of the process? What could have made it easier for you?

RW: The financial diligence was the most challenging. Often, small non-public companies don’t have the desired level of sophistication or best practices in such areas as finance and legal, so diligence can take more time than would be expected of a public company.

CEOC: What is the biggest benefit you’ve realized as a result of the merger or acquisition?

RW: There have been a lot of immediate benefits along with a list of potential long-term benefits. In the short term, the deal is expected to be accretive to sales, net income, and stock valuation.

The acquisition has also sparked best practice sharing and new ideas along with generating excitement from our stakeholders (shareholders, associates, partners, and customers).

CEOC: What’s your number one piece of advice you have for other CEOs looking to go through a merger or acquisition?

RW: Build a team dedicated to the process.

Build a personal and open relationship with the target principles. You will need to help resolve issues one-on-one. Lastly, success is

Denise Conroy, President & CEO, Iconic Group, Inc. CEOC Member

Photo: Taylor Rabow

Since 2019 Denise Conroy is President and CEO of Iconic Group, Inc., a direct-to-consumer retailer rooted in technology and rich consumer experience. Denise oversees all corporate direction and strategy for Iconic’s operations, leading with an emphasis on Iconic’s greatest asset: its people. Denise joined Iconic Group in 2015, bringing 25 years of expertise in sales, marketing, and strategic partnerships. A renowned change agent, her focus is on unrivaled growth through rapid and meaningful innovation. Under her leadership, Iconic has achieved historical revenues and profits. Denise received the Eberly College Distinguished Alumni Award from West Virginia University.

Iconic Group, Inc. is a multi-brand, international leader in education, endurance sport, and retail photography.

dependent on culture alignment.

CEOC: What resources do you use to integrate the companies after the deal?

RW: We have a strong internal platform and strong external partners to support our integration. However, this transaction is not a synergy deal, so the integration work is not as heavy as a synergy deal.

We do not want to allow integration pressures to negatively impact the hypergrowth plan of Pura Vida.

CEOC: Is M&A part of your growth plan?

RW: We never comment on future capital plans. We are focused on our core business and a successful integration of Pura Vida into our company. Our combined company will continue to have strong free cash flow characteristics so we should have a lot of growth options in the future.

CEOC: Tell us about your M&A experience.

DC: Iconic Group is the product of 17 acquisitions. Our previous private equity sponsors, Raymond James and Friend Skoler, saw an opportunity to consolidate the college graduation photography market. They acquired two leading companies with significant footprints. After that, they rounded out the business with several smaller, tuck-in acquisitions. These tuck-in acquisitions have been the lifeblood of our business.

I’m working on one right now that has tremendous upside for a premium segment of our business.

About a year ago, I led Iconic Group through a successful exit process.

We had been owned by two private equity sponsors for about a decade.

After a robust sale process, we were acquired by a strategic buyer, American Achievement Corp. (AAC) at a 7x EBITDA multiple. AAC participates in the class ring, yearbook, and graduation regalia segments and is the parent company of Balfour, Art Carved, and Taylor Publishing.

They added Iconic Group to their

CEOC: How do you decide if a business is a good target?

RW: The ideal target would have the right: ••Financial Characteristics: the potential for double-digit top- and bottomline growth, strong cash flow, and a double-digit profit margin. Ideally, a target would be large enough to positively impact the combined results but not so large that it puts risk on the combined company.

••Business Model: A digitally native brand.

••Customer: Highly emotionally engaged customer following that is multigenerational.

••Culture: A purpose-driven organization.

••Leadership: Founders needed to be willing to remain as the CEOs of their company after the acquisition and grow the business for at least the next five years.

portfolio because of our complimentary business in college and high school graduation photography. We were a very attractive acquisition from both a strategic and profitability perspective— which is reflected in the multiple they paid to acquire our business.

The transaction was unique in that it was two-pronged and extended. We were initially acquired by the identical investor group that owns AAC. The original plan was to keep our two companies separate for two years, allowing Iconic Group to continue growing and AAC to innovate and course correct. In the process, our board hoped that our companies would learn how to collaborate and expose natural synergies. Plans are nice, but we all live in the real world and that requires flexibility. AAC embarked on a refinancing earlier this year, and that dictated that our two companies merge sooner than expected. The refinancing and merger were completed in May of this year.

It’s also worth mentioning divestitures as a Continued on page 6 CEOCONNECTION.COM

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MERGER & ACQUISITION ADVICE FROM MID-MARKET CEOS

Continued from page 5 critical part of an M&A strategy. It’s one that doesn’t get discussed nearly as often, but it’s critical for maintaining strategic focus. So many holding companies hold onto the wrong business for nothing more than pride and a lack of will.

For the last decade, Iconic Group has owned businesses in the commencement, endurance running, and holiday photography segments. All are solid businesses, but the commencement photography business is a runaway success with stellar margins, an evergreen value proposition and ample upside. In order to focus on the opportunities in commencement photography, we decided to divest our holiday and endurance running businesses. We divested Worldwide Photography, our holiday photography business, last October. And, our marathon photography business, MarathonFoto, will be divested by the end of September.

Both of these transactions have provided tremendous shareholder value and streamlined our organizational focus.

CEOC: What did you learn through that process?

DC: These processes reinforced how to juggle a lot of critical projects at once and the importance of surrounding yourself with the very best people. A merger, acquisition, or divestiture is like running a separate business in and of itself. Yet, “the show must go on” as usual in the core business. Failure is not an option. That’s especially true in a seasonal business like ours. We bring in over 75% of our revenue in May and June. We closed the first Iconic sale transaction last May, right in the middle of our spring graduation season. It would have been easy to get distracted with the sale process. I’m proud to say we didn’t.

My executive team stayed focused and disciplined, taking a compartmentalized approach to what amounted to two very demanding full-time jobs. At the 6

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end of it all, we had a wildly successful sale process and an historical spring graduation season.

DC: Undoubtedly, it’s the synergies that occur when you become part of a larger organization. New worlds open up, and new talents are revealed.

That takes me to the second thing that CEOC: What’s your number one piece of was reinforced for me: surrounding myself advice you have for other CEOs looking with the very best people—and getting to go through a merger or acquisition? out of their way. I’m a big believer in DC: You have to be a having a smaller “glass half full” person organization and to be successful at paying people well. these sorts of deals.

My C-suite embodies They’re all about that philosophy, mindset and fortitude. and they proved All of the fortitude their worth in the in the world won’t transaction process compensate for a and graduation negative mindset. season last year.

Conversely, being a Similarly, my board —Denise Conroy true believer in the of directors was deal can make the exceptional during deal. The CEO has to be the ultimate the transaction. They were supportive, coach and set the tone. Setbacks are to trustworthy, and experienced. As a firstbe expected. With that mindset, nothing time CEO embarking on her first exit, I can stop you. appreciated that.

“You have to be a “glass half full” person to be successful at these sorts of deals.”

CEOC: In your experience, what was the most difficult part of the process? What could have made it easier for you?

DC: I found it disappointing that I was often the only female in the room. Before becoming a CEO five years ago, I didn’t give much thought to my gender.

I had often worked in male-dominated industries, and I enjoyed it. But, once I got to this level, I started to notice the lack of female voices—especially in industries serving a female consumer. Women make the vast majority of purchasing decisions, and we’re still under-represented in private equity. It can make deep strategic discussions about purchasing behavior, trends and vision shallow and unfulfilling.

In contrast, discussions were robust in the rare meeting with a woman on the other side of the table.

CEOC: What is the biggest benefit you’ve realized as a result of the merger or acquisition?

CEOC: Why did you decide to upgrade your CEO Connection membership? What benefits are you most looking forward to taking advantage of?

DC: As a first-time CEO, I was looking for an organization that would help me grow in this very unique role. I liked the midmarket orientation of CEO Connection as well as an inclusion of private equity.

Companies backed by private equity come with their own bag of opportunities and challenges, and I wanted a professional development partner that understood those nuances. As a new member, I’m very much looking forward to the annual conference, as I believe it will be a good opportunity for learning and networking.

So far, I’ve participated in the CEO Bootcamp and “How to Get on a Board” Workshop. I’m so impressed with the caliber of the instruction, content and other CEO participants. It’s definitely time well spent.

Photo: Taylor Rabow

Connect with a CEO/ CEOC: What’s the best business advice you’ve received?

KR: Self-insight—it is crucial to know how you impact others around you and to take responsibility for this. This extends to knowing the role you are best suited to play in your organization and more importantly, the roles you are not. Also; Do what’s right, don’t run out of money.

CEOC: What recent success are you most proud of?

KR: The upcoming release of my first book, “We Have Ignition Vol 1,” a reflection of my life’s work.

Dr. Kathryn Ritchie, Founder & CEO, Ignition Institute CEOC Partner Since 2014

rapidly evolve.

••Competing for talent: Organizations compete for talent against many alternatives.

••Working across different generations.

CEOC: What’s on the horizon for Ignition Institute?

KR: Technology development to support sustained transformation.

CEOC: Who inspires you?

KR: My grandmother was an incredible businesswoman. She and her sister were my principal mentors.

“It is crucial to know how you impact others around you and to take responsibility for this.”

CEOC: As a kid, what did you want to be when you grew up?

KR: A shoe shop owner selling red shiny shoes, then a barrister. Not necessarily in that order. Red shoes still feature heavily.

CEOC: What do you foresee will be the biggest challenge to CEOs of mid-market companies in the next five years?

KR: CEOC: Anything else you’d like to add?

••Addressing cultural alignment: Aligning KR: CEOs often look at various aspects culture to truly affect strong execution of their organization in isolation and don’t because speed efficiency and efficacy look at the whole system ahead of the of execution is going to be critical curve. They need to be constantly looking to performance. The changing factor at it as a system. Additionally, rather than —Kathryn Ritchie is speed and continual disruption with looking for mechanisms to overly control technology and new market entrants. the organization, they need to put controls Businesses are being outdated at an extraordinary pace. in place to ensure compliance and to shape the organization ••Driving digital transformation: The technology as well as the so it is aligned behind their strategy. It is all about shaping necessary processes and behaviors—and then sustaining change. the system so that it performs optimally. Using a controlling ••Staying in touch with the needs of the marketplace as they approach tends to stifle and block the performance system.

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What CEOs Must Do To Avoid the 83% of Mergers And Acquisitions That Fail

By George Bradt The number one job of a CEO is vision and values. That is true for mergers and acquisitions (M&A) as well. Owning the vision means making sure the tactical merger & acquisition choice matches the overarching company strategy. Owning the values means making sure the merger or acquisition is culturally accretive.

Since 83% of mergers & acquisitions fail, we know most CEOs don’t get this right.

Coupling that with knowing that more than 70% of value creation for growthoriented private equity firms comes from inorganic growth leads to the conclusion that those that do get this right reap oversized rewards.

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OWN THE VISION If you as the CEO have M&A as a strategy, you don’t have a strategy.

Mergers & acquisitions are not strategies.

They are tactics. To be fair, they are very powerful tactics to accelerate through a strategic point of inflection. But if they aren’t tactics in service to an overarching strategy, they are doomed to fail—as is the case 83% of the time.

As described in my book, “Point of Inflection,” there are only four overarching strategies: design, produce, deliver, and service (see diagram).

The only viable path to a successful

merger & acquisition runs through one of those strategies.

••If your strategy is design, target mergers & acquisitions that enable design.

••If produce, target mergers & acquisitions that enforce production.

••If deliver, target mergers & acquisitions to enroll others in delivery—knowing that strategic alliances often work better here and always have less risk.

••If service, target mergers & acquisitions to enhance your customers’ experience.

You’re all nodding your heads thinking, “of course.” Virtually all of the 17% of successful mergers & acquisitions start here. At the same time, one of the

Photo: Taylor Rabow

BY GEORGE

Flexibility

STRATEGY Culture ORGANIZATION CEO OPERATIONS

DESIGN

SERVICE

Independence (& Flexibility) Learning & Enjoyment SPECIALIZED Enable – Principles FREEING SUPPORT

Flexibility (& Interdependence) Purpose & Caring DECENTRALIZED Experience – Guidelines GUIDED ACCOUNTABILITY

Independence

STRATEGY Culture ORGANIZATION CEO OPERATIONS

Interdependence

Purpose

PRODUCE

DELIVER

Stability (& Independence) Results & Authority HIERARCHY Enforce – Policies COMMAND & CONTROL

Interdependence (& Stability) Order & Safety MATRIX Enroll – Team Charters SHARED RESPONSIBILITY Stability

Point of Inflection Strategic Framework, Bradt

leading causes of failure for the 83% that fail is strategic misfit. So at least some of you are going to forget this lesson when offered an exciting merger or acquisition opportunity.

CEOs that forget this lesson get suckered in by pitches like: ••“Complementary strengths”—which, almost by definition means they have a different strategy.

••“Gives us scale”—valuable only if the scale fits your strategy.

••“Access to new markets”—valuable only if the markets fit your strategy.

•• “New products”—valuable only if they fit your strategy.

Get the point? As CEO, own the vision.

Own the mission. Own the strategy.

Merge or buy only if it fits your strategy.

(Of course, the equation is different if someone’s merging you in or buying you in. If your firm doesn’t fit their strategy, expect a value transfer from their shareholders to yours—and make sure you cash in your shares as soon as practical before the merger or acquisition fails, as it likely will.)

OWN THE VALUES As I’ve written before, when you merge cultures well, value is created. When you don’t, value is destroyed. The root cause of every merger’s success or failure is culture. The good news is that the path

to merging cultures well is rooted in the strategic choice. So, if part I is targeting mergers & acquisitions that enhance your strategic choice, part II is targeting organizations that have a culture that matches both the strategy and the culture.

At their essence: ••The most effective design-focused organizations have cultures of independence, learning, and enjoyment.

Lead them with principles as the chief enabler.

••Production-focused organizations have cultures of stability, results, and authority. Lead them with policies as the chief enforcer.

••Delivery or distribution-focused organizations have cultures of interdependence, order, and safety.

Lead them with team charters as the chief enroller.

••Service-focused organizations have cultures of flexibility, purpose, and caring. Lead them with guidelines as the chief experience officer.

Merge the cultures as soon as practical.

If you don’t think you need to integrate them, you shouldn’t be merging them in or acquiring them in the first place. Of course, this merger or acquisition will help you evolve your overall culture. You need to do that to lead through a strategic point of inflection. But do it deliberately, owning the new vision and values

yourself. That’s how you avoid the 83% of mergers & acquisitions that fail.

George Bradt has led the revolution in how people start new jobs. He and his colleagues accelerate transitions so that leaders and their teams fulfill potential. After Harvard and Wharton (MBA), he progressed through sales, marketing, and general management roles around the world at Unilever, Procter & Gamble, CocaCola, and J.D. Power’s Power Information Network spinoff as chief executive. Now he is a Principal of CEO Connection, Chairman of PrimeGenesis executive onboarding, author of seven books on onboarding, 550+ columns for Forbes, and twelve musical plays (book, lyrics, and music).

Visit primegenesis.com/ new-leaders-playbook for a list of Bradt’s Forbes articles and a summary of his book on executive onboarding: The New Leader’s 100Day Action Plan.

The above article originally appeared on Forbes.com and was published here with the author’s permission.

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2019 CEO Connection Mid-Market Awards ® The CEO Connection Mid-Market Awards® are a critical piece of a larger strategy to ensure the mid-market receives the attention it warrants as a job creator, a force for economic growth, and a driver of social impact. The Mid-Market Awards® honor three mid-market leaders and one company that have demonstrated leadership, creativity, generosity, and other qualities that represent the true spirit of the mid-market. Awardees will be honored at the Mid-Market Awards Dinner Tuesday, Sept. 24, during CEO Connection’s Mid-Market Convention. Look for a full convention recap in the next issue.

Company of The Year For the mid-market company that embodies the highest standards of leadership in both business and society.

Social Impact Award For the mid-market CEO who has had the greatest impact in public service, social enterprise, and/or philanthropy.

1-800-FLOWERS.COM, Inc. 1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help customers express, connect, and celebrate.

The Company’s Celebrations Ecosystem features all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets. com®, Cheryl’s Cookies®, FruitBouquets. com®, Harry & David®, Moose Munch®, The Popcorn Factory®, Wolferman’s®, Personalization Universe®, Simply Chocolate®, and GoodseySM. They also offer top-quality steaks and chops from Stock Yards®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across the portfolio of brands, 1-800-FLOWERS.COM, Inc. strives

to deepen relationships with customers.

The company also operates BloomNet®, an international floral wire service providing a broad range of products and services designed to help professional florists grow their businesses profitably; NapcoSM, a resource for floral gifts and seasonal decor; and DesignPac Gifts, LLC, a manufacturer of gift baskets and towers.

1-800-FLOWERS.COM, Inc. received the Gold award in the “Mobile Payments and Commerce” category at the Mobile Marketing Association 2018 Global Smarties Awards. In addition, Harry & David was named to the Internet Retailer 2019 “The Hot 100” list. Shares in 1-800-FLOWERS. COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.

Stanley Middleman, Freedom Mortgage Corporation Stanley is well known for his commitment to nonprofit organizations within the communities Freedom Mortgage serves, as well as fostering a community spirit among its employees. Stanley’s strong commitment to giving back is reflected in Freedom Mortgage’s Team Freedom Cares, which is an employment and corporate giving program. Team Freedom Cares is well known for helping military families and working to fight hunger through food drives, and sponsoring the local summer meals program for children.

originations through retail, wholesale, and correspondent channels. As the nation’s fifth-largest mortgage provider, licensed in all 50 states, Freedom Mortgage is renowned for providing world-class service to its clients, borrowers, and partners. The company was founded in 1990 and is headquartered in Mount Laurel, New Jersey.

About Freedom Mortgage Corporation Freedom Mortgage is a non-bank, full-service mortgage company that provides mortgage loan servicing and 10

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“I am honored to be recognized for this award. While our mission at Freedom Mortgage is to foster homeownership, supporting our communities, customers and colleagues are woven into the fabric of our company’s culture. An award like this is a validation of our good work and empowers further growth of our community spirit.”

—Stanley Middleman

Young Leader Award For the mid-market executive, who early in his or her career; has shown the greatest potential for leadership and lasting impact.

Cesar Carvalho, Founder & CEO of Gympass CEOC Member Since 2018 Cesar Carvalho is the Co-Founder and CEO of Gympass, a corporate fitness program that gives employees an opportunity to find an activity to love by offering an affordable membership with unlimited access to a global network of more than 30,000 different gyms and fitness facilities in 13 countries.

About Gympass Gympass was born out of a problem Cesar had while he was working as a consultant at McKinsey & Company in 2011.

He was constantly traveling to new cities for project assignments and had trouble

CEO of the Year For the mid-market CEO who embodies the highest standards of leadership in both business and society.

Susan Salka, AMN Healthcare Services Under Susan’s leadership, AMN has become known as the innovator in healthcare workforce solutions and the largest and most diversified healthcare staffing company in the nation. Susan is an active industry spokesperson in the healthcare and investment community, and has been one of the driving forces behind the company’s strategic and operational success since joining the company in 1990.

Susan is passionate and actively involved in the areas of corporate social responsibility, diversity and inclusion, and gender equality. She personally participates in many of the company’s community initiatives, including the annual medical and community development mission trip to the most rural and

finding a local fitness option that wasn’t expensive or time-consuming to access.

A year later, during a stint at Harvard Business School, he was sitting in a Strategy class when he conceived a solution for the dilemma—a shared economy for fitness facilities. With the help of former colleagues, Cesar put together a business plan and managed to secure enough investment to drop out of Harvard and make this idea a reality.

No matter how busy he gets, Carvalho lives out the Gympass mission by playing tennis every week and discovering new activities that he loves, like boxing and cross-training.

impoverished regions of Guatemala.

About AMN Healthcare Services Managing workforce effectively is crucial to an organization’s success. AMN’s comprehensive Workforce Solutions include executable Managed Services Program (MSP), Recruitment Process Outsourcing (RPO) and Consulting Services that enable facilities to reduce complexity, increase efficiency, and improve patient outcomes.

“It is a privilege to be recognized for helping healthcare organizations solve workforce challenges so they can provide the highest quality patient care and outstanding patient experience. We are honored to be recognized among other dynamic and innovative companies.”

—Susan Salka CEOCONNECTION.COM

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Photo: Taylor Rabow

M&A Deal Killers & How to Avoid Them

By Robert Logemann, CEO, The Tyden Group

Mergers and acquisitions (M&A) are a frequent and significant occurrence in business-based consolidation. Given the potentially numerous variables in play and at stake—including any number of structural and cultural adjustments—these processes must be navigated carefully to ensure success for all involved.

That said, here are some preemptive solutions for common M&A pitfalls:

Accounting Errors Accounting failure is a seemingly avoidable, yet consistent M&A deal breaker. M&A financial success is contingent on having a proper deal structure in place; this makes it possible to adequately incorporate tax information, regulatory approvals, cost levels, and the ways costs will factor into time spent on bringing the deal to fruition. Therefore, it is critical to employ sharp, efficient accounting to avoid putting yourself in an early financial hole—potentially without even knowing it.

Typically, to circumvent such issues, involved entities enter into transition service agreements (TSAs) to cover and streamline invoicing, IFRS reporting, consolidation, and accounts both receivable and payable.

Tax Errors M&A companies should also be 12

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meticulous in preventing tax-related errors during transactions. In addition to properly managing tax registrations and compliance considerations, companies and involved tax executives must account for all other tax technical operations—including memos, checklists, work plans—and for all deal-related tax technical aspects, operational needs, and process changes impacting employees inevitably bound to the transaction. If these areas are botched, small as they may seem at the time, they can quickly snowball and create an adverse scenario that may jeopardize the entire operation.

To mitigate tax problems, be sure to involve tax professionals at an early stage; this will only add clarity to the projected integration lifecycle, unfold upcoming key business decisions, and assess the overall readiness and viability of involved entities leading up to day one of the transaction.

Hiring Errors The previous section in mind, it is key to hire and empower proper M&A-related personnel before taking matters outside the company. This mistake is seemingly one of the smallest in the spectrum of common M&A offenses, but it can have disastrous consequences including, but not limited to a drop in shares, an overall failure of the transaction in question, and a subsequent series of

issues lingering beyond the transaction.

Necessary personnel may include an M&A-literate lawyer (to discuss plans and options), a strong accountant (as previously noted, to effectively handle transaction-related financial matters), communication teams (to establish and maintain transparency and fluid correspondence during the transaction), and PR professionals (to ensure the transaction is accurately managed and reported on a broader level).

Robert Logemann is a CEO and board member adept at growing revenues globally while restructuring businesses and attaining rigorous balance sheet management. Mr. Logemann currently serves as the Chief Executive Officer for the Tyden Group, a private equity owned holding company headquartered in Atlanta, Georgia.

Tyden is the only global pure-play provider of consumable and permanent track & trace solutions. As CEO for Tyden Group, Bob overseas three separate operating companies: TydenBrooks, Telesis Technologies, and Brooks Utility.

CEOC Member Since 2018 The above article originally appeared on robertlogemann.com and was published here with the author’s permission.

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2019 MOST INFLUENTIAL WOMEN OF THE MID-MARKET The Most Influential Women of the Mid-Market recognizes the women who are influencing change, innovation, and standards for excellence within mid-market companies (with revenue between $100 million and $3 billion). Honorees are evaluated by annual revenue, number of employees, first impression on social media, and community involvement.

Frances Allen

Debra Cafaro

Frances Allen, CEO, Boston Market Frances has a proven track record of brand revitalization and growth in the restaurant industry. Under her leadership, the restaurant is embracing new buying demands of their customers.

Boston Market has donated more than $5 million to Give Kids The World, an organization that fulfills the wishes of children with life-threatening illnesses.

Debra Cafaro, Chairman of the Board and CEO, Ventas Inc. Ventas, Inc. is an S&P 500 company

Donna Carpenter

Inga Carus

and real estate investment trust that owns approximately 1,200 healthcare, life science, and senior living properties in North America and the United Kingdom.

Debra set and oversaw the execution of a long-term strategy that has driven Ventas’ market capitalization from $200 million when her leadership began in 1999 to its peak of $26 billion.

Donna Carpenter, CEO, Burton Donna joined forces with her husband, Jake Burton Carpenter, to create a powerful partnership in outdoor sports.

Burton has grown beyond snowboards into a full lifestyle brand under Carpenter’s vision of inclusivity and sustainability.

Jane Elfers

Inga Carus, Chairman, Carus Group Inc. Inga has held multiple leadership positions within Carus Group Inc., a multinational business based in Peru, Illinois, that manufactures products that clean drinking water, wastewater, air, and groundwater.

An accomplished leader, she continues to reinvest and focus on development within the Starved Rock Country Region (a region 75 miles outside of Chicago).

Jane Elfers, CEO, The Children’s Place Inc. Jane set The Children’s Place’s strategic vision as a leading global, omni-channel Continued on page 16 CEOCONNECTION.COM

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2019 MOST INFLUENTIAL WOMEN OF THE MID-MARKET

Cate Hardy

Julia Hartz

Continued from page 15 children’s apparel brand, and developed its four key strategic growth initiatives— superior product, business transformation through technology, global growth through channel expansion, and optimization of its store fleet. She has been the CEO and president of the company since January 2010.

Cate Hardy, CEO, PCC Community Markets CEOC Member Since 2015

As the CEO of the nation’s largest grocery cooperative—founded in 1953 as Puget Consumers Co-op—Cate oversees an enterprise encompassing 11 stores, nearly 1,500 employees and more than $300 million in revenues this year. She plans to grow PCC Natural Markets to over 15 stores by the end of 2020 to promote its social and environmental mission.

Julia Hartz, CEO, Eventbrite Inc. Julia co-founded the online ticketing startup in 2006 with her now husband, Kevin. Under her leadership, the company has become a global ticketing and event technology platform that powers live experiences in 170 countries around the world and has received multiple awards for workplace culture.

Hartz has been honored as one of 16

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Whitney Wolfe Herd

Rebecca Howard

Fortune’s 40 Under 40 business leaders, Inc.’s 35 Under 35, and Fortune’s Most Powerful Women Entrepreneurs.

Whitney Wolfe Herd, CEO, Bumble In 2018, Whitney was named to TIME Magazine’s 100 Most Influential People, Forbes 30 Under 30 list, the Bloomberg 50, and InStyle’s 50 Women Who Are Changing the World. She was recently on the cover of Fast Company, Forbes, and WIRED magazines. In less than five years, her vision has led to Bumble’s growth of over 65 million users worldwide in 150 countries.

Rebecca Howard, Co-Founder & CEO, PayLink Direct PayLink specializes in providing interest free payment plans for the purchase of vehicle service contracts and other finance and insurance products, and is the largest specialty finance company in the country with more than $770 million of assets as of December 31, 2018.

Rebecca structured the merger/acquisition of OmniSure, PayLink’s largest competitor.

Helen Johnson-Leipold, Chairman & CEO, Johnson Outdoors Inc.

Helen Johnson-Leipold

Helen is the first woman in five generations to lead a Johnson family enterprise. She joined SC Johnson in 1985, where she held a variety of marketing and management positions until 1999 when she was elected Chairman & CEO of Johnson Outdoors Inc. Johnson Outdoors Inc. has experienced strong performance reaching sales of $544 million in 2018, up from $433 million in 2016, displaying great growth in revenue and profitability.

Lynn Jurich, CEO & Co-Founder, SunRun Sunrun is the nation’s leading provider of home solar, battery storage, and energy services in the United States. With co-founder Ed Fenster, Lynn invented the business model “solar as a service” that unlocked consumer demand for clean, affordable energy direct from home rooftops. Today with more than $3 billion in installed solar systems across 22 states, the District of Columbia and Puerto Rico, Sunrun is revolutionizing how Americans power their lives.

Margaret Keane, President & CEO, Synchrony Financial Margaret led Synchrony Financial’s successful initial public offering in

Photo: Taylor Rabow Lynn Jurich

Margaret Keane

July 2014. Her passion for emerging technology and employee development has solidified Margaret’s reputation as a leader. She has been recognized as one of American Banker’s “Top 25 Most Powerful Women in Finance” for 11 consecutive years and one of Fortune’s “Most Powerful Women” for the past three years.

Bonnie Kintzer, President & CEO, Trusted Media Brands Inc. In 2015, Bonnie led a bold rebrand of Trusted Media Brands to transform it into a digital-first, multi-platform media company with a portfolio of brands consumers trust. Under her leadership, the media and direct marketing company has doubled its digital reach to more than 50 million monthly unique visitors and launched new direct-toconsumer products.

Anne Laraway, CEO, Nurture Inc d/b/a Happy Family Organics Anne is the CEO of Happy Family Organics, a mom-founded and parentoperated premium organic food company, and the largest organic baby food brand in the U.S. During her

Bonnie Kintzer

Anne Laraway

tenure, Happy Family Organics has more than quadrupled in size, and she has overseen the launch of more than 150 new products. She was promoted to CEO and General Manager in 2018.

Danielle Lisenbey, Global President, Broadspire Broadspire provides customized, integrated claims solutions to clients across the globe. Danielle has been with Broadspire and its predecessor since 1992. She was selected as a member of the Insurance Business America`s (IBA) Hot 100 List, was named “Claim Executive of the Year” by the New York Claim Association, Inc., and was chosen as Female Executive of the Year at the Silicon Valley United States Women World Awards.

Sheila Lirio Marcelo, Founder, Chairwoman & CEO, Care.com Sheila founded Care.com in 2006. Today, the company serves more than 34 million members in over 20 countries. Committed to building a company that can be both profitable and mission-based, Sheila drives innovation across Care. com’s platforms and services to enable families to find care, and caregivers to find meaningful work, while leveraging

Danielle Lisenbey

the company’s data and reach to drive systemic change across the care economy as a whole.

Daina Middleton, CEO, Ansira (Former CEO) Shortly after joining Ansira in 2017, Daina led a corporate exercise resulting in the creation of a unique strategy differentiating the company from many competitors in the digital marketing space. Under her leadership, four companies were acquired by Ansira in 2018. She led a corporate-wide integration process in 2018, solidifying the quality and integration of previouslyacquired assets and aligning them to the newly-formed strategy.

Pam Petrow, President & CEO, Vector Security Inc. Pamela began her career at Vector Security in 1982. She is the current president of the Central Station Alarm Association and received the Association of PublicSafety Communications Officials’ President’s Award for her outstanding contributions to the electronic transmission of signals between central stations and 911 dispatch centers. In 2014, she was presented with an Ernst & Young Entrepreneur Of The Year™ Award in the Western Pennsylvania and West Virginia program.

Continued on page 18 CEOCONNECTION.COM

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2019 MOST INFLUENTIAL WOMEN OF THE MID-MARKET

Sheila Lirio Marcelo

Daina Middleton

Continued from page 17

Beryl Raff, Chairman & CEO, Helzberg Diamond Shops Inc. Beryl began her career in the jewelry industry in 1975, holding positions at R.H. Macy & Company, Zale Corporation, and J.C. Penney. In 1999, the Women’s Jewelry Association named her to its Lifetime Hall of Fame, and in 2009 Beryl was inducted into National Jeweler’s Retailer Hall of Fame in the majors category. In 2013, she was honored with the American Gem Society’s Lifetime Achievement Award.

Martha Samuelson, CEO, Analysis Group Inc. Martha is an expert in antitrust, finance, and valuation, combining more than 25 years of experience applying economic and financial analysis to complex legal disputes with five years of experience as a practicing trial attorney. Martha was named one of Global Competition Review’s Women in Antitrust 2016, and she is frequently included in the International Who’s Who of Competition Lawyers and Economists and Euromoney’s Guide to the World’s Leading Competition and Antitrust Lawyers/Economists.

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Pam Petrow

Beryl Raff

Lynsi Snyder, CEO, In-N-Out Burger In-N-Out Burger owns and operates, as of August 2019, 344 popular burger restaurants located in six states, primarily in California. Lynsi became president of the family business in 2010 and it continues to grow under her leadership.

She ranks as the No. 1 female on Glassdoor’s list of highest-rated CEOs and In-N-Out has been consistently rated as one of Glassdoor’s Best Places to Work since 2013.

Gillian Tans, Chairwoman (Former CEO), Booking.com, Ltd. As Booking.com’s Chairwoman, Gillian advises the company’s leadership on the long-term vision and operations for the business as well as key growth initiatives. She has held numerous leadership positions at Booking.com, including President & CEO. Under her leadership, Booking.com has advanced its operations and sales across more than 225 countries and territories around the world.

Koel Thomae, Co-Founder, Noosa Yoghurt, LLC Since co-founding Noosa Yoghurt in

Martha Samuelson

2009, Koel has grown her business into a $170 million company that sells yogurt in major grocery stores across the U.S. Noosa Yogurt is committed to helping local communities in many ways and alongside her co-founder, Rob Graves, she helps mentor local startups and speaks at events around the country.

Additionally, they support the Pollinator Partnership.

Melanie Whelan, CEO, SoulCycle Melanie has increased SoulCycle’s footprint to more than 90 studios in 20 markets. She oversaw the launch of their media division (which brings SoulCycle to life through music, digital programming, and experiential events), as well as the brand’s first proprietary retail collection (Soul by SoulCycle), and subsequent launch of the brand’s direct-to-consumer eCommerce platform. Melanie has been named Fortune’s 40 Under 40, Fast Company’s Most Creative People in Business, and is a Marie Claire New Guard honoree.

Livia Whisenhunt, CEO, PS Energy Group Inc. Livia has more than 30 years of experience in purchasing and marketing fuels for transportation and production and is responsible for setting PS Energy

Photo: Taylor Rabow Lynsi Snyder

Gillian Tans

Group’s strategic direction and leading its growth. Under her leadership, the company has become one of the topdiversified and women-owned companies in the nation. Livia has earned much regional and national recognition.

Koel Thomae

Melanie Whelan

The Most Influential Women of the Mid-Market are listed in alphabetical order. To view past winners or nominate a Most Influential Woman of the Mid-Market for 2020, visit: ceoconnection.com/influential-women.

Livia Whisenhunt

CEOC Partner Profile

Ollen Douglass, Managing Director, Motley Fool Ventures Motley Fool Ventures is an early stage, technology-focused venture fund focused on Series A companies.

Prior to joining the Fund, Ollen was CFO of The Motley Fool Holdings, Inc. for 14 years.

During that time, he was responsible for the overall financial health of The Fool and helped guide the company through periods of major growth, contraction, and market volatility. Ollen’s oversight duties included The Fool’s finance and accounting groups as well as legal, benefits, sales, business development, real estate, business intelligence, international and asset management. His financing experience spans the full spectrum from bank financing to venture financing. During Ollen’s management of the pilot program, Motley Venture Partners, he and the team compiled a portfolio of private companies that will be contributed to the Fund. Today, Ollen serves on the board of Eyrus, InHerSight, and Young Artists of America. He has been a recipient of the Motley Fool Founders’ award and Favorite Fool award. He was twice nominated for Greater Washington CFO of the Year and is a member of the 2019 class of Greater Washington Minority Business Leaders. Prior to joining The Fool, Ollen worked in mortgage banking, focusing on mortgage servicing, fair lending and risk management. He was also an auditor for KPMG and is a CPA (inactive). Ollen graduated from the University of Baltimore with a bachelor’s degree in accounting and lives in the Washington area with his wife and three sons.

CEOC Partner Since 2019

“Limited Partners”/”LPs”) in approximately eight months. The fund exceeded its $100M target by 50%, was over 80% larger than the median new fund in 2018, and was raised 40% faster than the average fund. We have LPs in 45 of 50 states and have close to 200 women LPs. Motley Fool Ventures is believed to be the largest debut fund ever that was led by an African American.

CEOC: What recent success are you most proud of?

OD: I’m most proud of the launch of The Motley Fool’s inaugural venture fund. We made a conscious decision to turn the typical venture capital playbook upside down, and instead of courting large investments from a few institutions, we leveraged The Motley Fool community to raise relatively smaller amounts from a large number of retail investors. Launched in 2018, Motley Fool Ventures went on to raise $150 million from over 800 investors (or

CEOC: Is M&A part of your innovation plan?

OD: As a new and lean organization, Motley Fool Ventures is very open to an objective view on build versus buy decisions.

We are more likely to acquire technologies to accelerate growth than to acquire fund assets. One of the many benefits of operating in the startup world is being surrounded by innovation, which makes the difficult seem doable and the “never been done” feel like the next logical step.

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CEOC: What’s your motto?

OD: At The Motley Fool, we have six core values. The first five are the same for everyone: collaborative, innovative, fun, honest, and competitive. The last is “Motley,” and each employee is encouraged to choose their own as a way to personalize the core values. Mine is “purpose and profit.” I am energized by seeking to do good and do well, without compromising either.

CEOC: How do you keep your company in front of trends, customer needs, and your competitors?

OD: Motley Fool Ventures is a strong believer in community and interacts with our customers through regular digital communications, surveys, and live events. With a stakeholder approach, we focus on collaboration and building win-win relationships with our customers, employees, business partners, and shareholders. That approach exposes us to a wide spectrum of priorities and perspectives. We believe there is room for many in our space, which diffuses the need to focus on companies as competitors—there can be many winners.

Announcing the CEOC M&A Connection Network The critical actionable idea that came out of the “Innovation: Make, Buy, Partner to Build Your Pipeline� breakout session at the 2018 Mid-Market Convention was for CEOC to provide a matchmaking service for companies looking to expand through partnerships and acquisitions.

As a result, CEO Connection is proud to announce the creation of the CEOC M&A Connection Network.

THE VALUE PROPOSITION:

Curated, unique access to M&A opportunities and the resources to make them successful.

THE RATIONAL:

Each step of the M&A process (planning, sourcing, assessing, and structuring to postacquisition operational and cultural integration) is complicated and requires expertise and resources that are not necessarily readily available. CEOC is in a unique position to connect its members to vetted deal flow and pre-approved unique resources that they cannot get on their own. There is strength in numbers. Why reinvent the wheel?

THE CALL TO ACTION:

If you are interested in selling your business or acquiring other businesses, call 800.244.4719 or send an email to m&a@ceoconnection.com.

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In Conversation with Sibson Consulting: M&A Insight CEO Connection sat down with Dan Fries and Fred Hencke of Sibson Consulting, a Partner to CEO Connection for 14 years, to gain helpful insight on mergers and acquisitions. Here’s what they had to say.

Dan Fries, Senior Vice President & Managing Director of Sibson Consulting / Chair of The Segal Group’s Acquisition Committee CEOC Partner Since 2005 Mr. Fries joined the New York office in 1988 and has held various leadership positions within Sibson Consulting. He has expertise in a wide range of human resource disciplines, including leadership and performance management, board governance, executive and broad-based pay with special expertise in the areas of benefit design. Mr. Fries has led numerous acquisitions and spinoffs at the firm, as well as played the lead on a number of client acquisitions and as a member of the integration team.

CEOC: If you’ve been through a merger(s) or an acquisition(s), can you briefly detail what took place?

Dan: We can answer this question from two perspectives that as a company who has acquired businesses and learned from the process on how to improve it, and as a consulting firm that helps our clients in both mergers and acquisitions.

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Sibson Consulting (sibson.com), a member of The Segal Group, provides strategic human resources and other business management solutions to corporate and nonprofit employers and professional service firms. Sibson’s services include employee and executive compensation, benefits, talent and performance management, communications, board structure and governance, and change management.

Fred Hencke, Senior Vice President of Sibson Consulting / Senior Contributor to Sibson’s Mergers & Acquisitions Client Service Team CEOC Partner Since 2005 Mr. Hencke is responsible for large, strategic opportunities in the corporate market and has more than 30 years of experience in multiple industries. Before joining Sibson Consulting, he was a principal and strategic accounts manager across the North American Markets at Buck. Mr. Hencke has led more than 20 human resource transformations, built more than 200 shared services solutions, and led the design, development, and implementation of the first process manufacturing and workforce scheduling system.

In the first situation, we built our business and expanded into new geographic areas over the last 80 years in part due to acquisitions. In some of these earliest cases, we acquired skills and services we did not already have, and, in others, it was simply to increase our footprint.

We started as a relatively small firm in our earliest decades, and so it was easy to adapt as necessary to the new

influences and requirements needed to make each acquisition a success.

Often, the people and the skills were complementary, and our staff recognized the common mission.

Then, about 20 years ago, we saw a shift: we were still able to acquire smaller firms as needed, but larger acquisitions became a challenge in

terms of integration. Up to this point, we had managed to fly by the seat of our pants, adjust course as necessary and reach our desired destination. The first acquisition of a significantly-sized firm showed us that we needed a wellthought-out process that anticipates issues and has solutions, paths to solutions, or contingencies in place. It proved to be crucial to have a goal in mind—what we hope to have happen, whether a financial metric, a people metric or both, by a certain date after the deal closes.

the skilled attorneys and accountants understand this well.

The second bucket is ever changing and becoming more complex each year. It is to some degree driven by technology, which is both helped and hurt by security concerns. These concerns include incursions by competitors both domestic and foreign. Then, add to that malicious incursions—hackers, thieves, etc.—and you have to realize that doubling the size of an organization can multiply the threat.

Last and most overlooked is talent.

Few mergers or acquisitions calm We have brought all that we learned the people on each side. Rather, and more to our work with our clients. these transactions can detract from Mid-sized and larger organizations performance, and should have a that disruption can process in place to last for months or consider and then longer if employee vet each acquisition concerns are not opportunity, as well answered quickly. as a model process that can form the Abating this basis of the godisruption requires forward plan to bring a combination the organizations and of well-designed their people together. communications Part of this must be conveying accurate some visualization and confident of the ultimate goal —Dan Fries messaging and for the acquisition or detailed preparations merger. to be ready to face each challenge. For the average CEOC: What did you learn through that employees, areas such as current process? and future compensation, health and retirement benefits, career pathing, Dan: There are three broad buckets succession planning, and long-term to consider in each M&A situation: organizational planning are all on the what you can capture from a financial table and need to move from unknown perspective on the spreadsheet, what to known. Answers as vague as, “It is outside factors can complicate the under consideration,” or “We are looking merger or acquisition, and how you will into it” amplify employee fears and align the now larger talent pool. detract from their performance.

The first bucket is the one that usually Fred: Let’s delve into this last bucket gets the most scrutiny, and that is a little deeper. Some key lessons understandable. Due diligence requires organizations often learn are: that you find out early in the process ••Initial synergy targets listed in the about all of the liabilities as well as the merger or acquisition planning often true value of all of the assets. This type miss the multiplicative effect of of discovery and analysis probably does bringing two organizations together not change much year over year, and

“Abating disruption requires well-designed communications conveying accurate and confident messaging.”

and generally concentrate only on economies of scale and reducing redundancies.

••Policy harmonization (where possible) is more challenging than it may appear initially.

••Data integration can be quite challenging if either organization has not utilized good data management practices along the way.

We have seen planned employee reductions in force (RIFs) delayed months because employee pension or 401(k) data needs to be cleansed and verified first.

••Converting the acquired company to the acquirer’s systems and processes without first understanding and appreciating the acquired company’s capabilities could miss opportunities to improve overall business performance, market differentiation, or customer value.

••The question of centralization versus de-centralization of operations (e.g., supply chain, procurement, etc.) needs to be addressed thoroughly up-front.

It can be a major source of business disruption if not handled properly.

••Job titles and compensation are often out of alignment between the two organizations, especially if one of the organizations has more levels than the other and used promotions as a retention strategy. With new laws in place in many states and others coming, pay equity can be a significant hurdle.

CEOC: What do you wish you would have known before going through the process?

Dan: You never know for sure how a merger or acquisition will turn out, and wishing for that crystal ball is impractical.

It also can lead to a feeling that there is only so much that you can do—a sort of “good enough” attitude—because “fate” will intervene for good or for bad.

Because most of these M&A situations require secrecy and discretion, it is hard Continued on page 24 CEOCONNECTION.COM

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In Conversation with Sibson Consulting:

M&A Insight Fred: Almost as challenging as integrating people is integrating processes, technology, and governance. Together, these comprise where the heavy lifting occurs, and it takes time. Sustainable synergies and additional value are only possible if these areas are addressed properly through architecture, design, detailed planning, and rigorous project execution.

Continued from page 23 to take the true pulse of the workforce regarding their feelings and fears of a potential transaction. I think that reliable and informed data on employee attitudes and concerns would be an extremely valuable data point both for assessing a potential transaction and for informing the steps in the integration planning.

in giving extra effort, and what level of risk is acceptable. Bringing two organizations together is a seismic event relative to culture and should not be treated as a “tactic” only; it is much more than a box to check.

The one window that comes close to capturing a predictor of the success of the integration is organizational culture— will the cultures of the two organizations clash or can they find common ground.

When we work with a client on a potential transaction, we make sure that a comparison of the two cultures is discussed early in the process.

The executive leadership team not only needs to sponsor these activities, they Dan: There have been examples where need to actively a client has called monitor progress and us in to help in a proactively assist with transaction only removing obstacles after much of the and barriers to initial discovery and progress. planning discussions are far along. It is CEOC: What is difficult at that point the biggest benefit to catch up as well you’ve realized as a as to convince the result of a merger or client to pause, even acquisition? when we believe a crucial consideration Dan: By far, the has been —Fred Hencke biggest benefit is overlooked. When the influx of new that situation has ideas and skills. It happened, it almost is amazing how quickly organizations always has been that a deep enough can become shielded or guarded in dive into the talent considerations had their thinking, especially those firms not occurred. with long, stable histories. These organizations should be collecting The role of human resources is crucial lessons from competing against other for success. We have seen a marked firms, as well as staying active in their increase in the times where HR has a peer space. However, bringing together seat at the table, and, more recently, two functioning groups with different that the CHRO is either co-leading perspectives can jump start new ways or even leading the process. If you of thinking or allow the two groups to acknowledge that talent can make or create something better from the best break a transaction, then you should parts of both organizations’ experiences. also acknowledge that HR is in the best position to evaluate and implement the Fred: Continuing with that thought, talent portion of the transaction. In our new ideas and competencies increase ideal world, before the first serious M&A the value proposition for current and transaction conversation takes place, future customers. Done well, a merger an organization that cares about the success of the transaction needs to figure or acquisition should be a win-win for customers. That is precisely how the out if its HR function is up to the task.

Fred: If the two organizations’ cultures are noticeably different, one of three basic approaches or strategies can be used: ••Transform the acquired company to the acquiring company’s culture, ••Blend the two, or ••Allow each organization to maintain their current culture.

None of these approaches is easy, and each has its issues. For example, effective transformation of the acquired company’s culture takes much longer than people realize. Blending needs to be carefully managed and communicated or both groups can feel like they have lost something (and, in an ideal situation, the best business results often results from the two groups feeling positive about the transaction). Allowing two cultures to exist may only work if the acquired company maintains much of its independence.

At the end of the day, culture impacts how decisions are made, how work ultimately gets done, how innovative and creative ideas are acted on, whether or not people feel incented and supported 24

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CEOC: In your experience, what was the most difficult part of the process? What could have made it easier for you?

“Almost as challenging as integrating people is integrating processes, technology, and governance.”

CEO CONNECTION

IDEA EXCHANGE transaction should be communicated to customers.

CEOC: What’s your number one piece of advice you have for other CEOs looking to go through a merger or acquisition?

Dan: Never forget about the importance of talent and culture on the potential success of a transaction. Even when the goal may be to re-staff, the current employees of the acquired firm likely will be in place through the transition, and their cooperation will prove invaluable.

In the process, the acquiring company may learn through close observation that initial decisions to re-staff may be worth reevaluating.

Fred: I would also say that it is important to be clear on why you are considering an acquisition. Define the attributes of an ideal acquisition candidate, and this will add clarity throughout the process, as well as to help avoid wasting too much time on the wrong acquisition.

CEOC: How do you decide if a target has potential?

Dan: As we said earlier, there are a number of factors. Because we recognize that our firm has a very strong culture, the culture of the potential acquisition is one of the first factors we consider.

We have walked away from transactions where all other factors show promise— assets, liabilities, skills, etc.—when we realized that the cultural shift for them or for us would be too great.

Fred: Remember that culture is more than just a gut feeling. Does the potential target have clear mission and value statements, and do they actually live them? Words on paper are not nearly enough. A balanced approach will also speak to client value, long-term growth potential, and risk mitigation.

The CEO Connection Idea Exchange allows you to directly reach the entire CEO Connection community— more than 17,000 mid-market CEOs and their companies.

Get ideas, useful information, and explore opportunities.

Help CEOs find answers. The Idea Exchange can be viewed on the official CEO Connection LinkedIn Group or on the secure CEOC Member Website.

R EC ENT R EQ UE STS P OSTED I N THE C EO C I D EA EXCH AN GE: CEO SEEKING PEER INSIGHT ON BECOMING A B CORP. CEO is seeking insight on the process and the reporting on becoming a B Corp., as well as how it relates to CSR, engagement, culture, etc. Looking for people with expertise and experience with this process.

CEOC MEMBER SEEKING PRIVATE SECTOR BOARD POST A veteran leader in global marketing and development, experience in trade access policy and regulations, and a passion for aligning corporate social responsibility with corporations business and employee engagement objectives.

CEO CONNECTION MEMBER SEEKING INSIGHT ON HOW TO REORGANIZE A BOARD CEO Connection Member and CEO of a major non-profit with 50+ board members is seeking advice on reorganizing to be more effective.

CEO CONNECTION MEMBER SEEKING INSIGHT ON POST TURNAROUND MANAGEMENT CHANGES CEO Connection Member and President and CEO of a major non-profit is seeking insight into how to change management style and effectiveness post turnaround. Company has 3 times the people and 2 times the growth, as well as global expansion. What does management need from its board and its execution to keep the company on track?

CEO CONNECTION MEMBER IS LOOKING TO CONNECT TO OTHER MID-MARKET COMPANIES IN THE MARYLAND & WASHINGTON DC AREA: CEO Connection Member and CEO of $150M Office Design company, is expanding business in these areas and would like to discuss industry trends as well as general peer networking.

If you can help, or know someone who can help, please email pcc@ceoconnection.com.

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T HE VA LU E OF M E M B E RSH I P By combining the resources and networks of our 17,000 members, CEO Connection provides you with customized and personalized exclusive access to people, information, resources, and opportunities that you would not be able to access on your own.

You become part of a proactive peer network where the connections are made for you.

••A far-reaching community of people who have reached the same level in their careers as you.

••It’s no longer about who you know. It’s about who we know and who our members know which we then put to work for you.

It’s all about relationships, not selling.

••Mid-Market CEOs helping Mid-Market CEOs.

We do it for you.

••Picture a team of people working and advocating on your behalf to connect you to people you should know based on your criteria.

There is strength in numbers ••We help you scale through points of inflection.

Photos: Taylor Rabow

IT’S LONELY AT THE TOP… NOW YOU CAN BE ALONE TOGETHER!

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CEOC MAGAZINE FALL 2019

JOIN OR UPGRADE NOW For more information: MAG1@ceoconnection.com 800.244.4719 x 111 ceoconnection.com/join-ceoc Code: MAG1

The Impact of Membership

CEO CONNECTION MEMBER BENEFITS INCLUDE: PERSONAL CEO CONNECTOR (PCC): Each premium Member is assigned a PCC whose sole responsibility is to leverage the organization on your behalf to ensure a tangible return on your investment.

CURATED AND PERSONALIZED CONNECTIONS: Get personally connected to other CEOs and experts.

••Proactive Connections and Customized Support ••Introduced to CEOs ••Connect to Experts ••Resolve Challenges CORPORATE RESOURCES: Corporate members receive exclusive access to people, information, resources, and opportunities usually only available to Fortune 500 companies.

••Business Development Program: Leverage CEOC to grow your top line.

••CEOC M&A Connection Network ••Mid-Market Corporate Mastercard® ••Performance and Cultural Alignment Assessment ••Private Jet Program Powered by Delta BOARD OPPORTUNITIES: Find boards seats or board members.

••One-on-One Support ••Intensive Hands-on Workshops ••Invitation to Board Connection Reception ••Access to Open Board Seats ••Community Support and Exposure For a full list of member benefits, go to ceoconnection.com/membership

YOU DO GREAT THINGS ON YOUR OWN...

WE CAN DO EVEN BETTER THINGS TOGETHER.

JOIN OR UPGRADE NOW For more information: MAG1@ceoconnection.com 800.244.4719 x 111 ceoconnection.com/join-ceoc Code: MAG1

SOLVE A PROBLEM A CEOC member who runs a $350-milliondollar manufacturer wanted to meet CEOs of luxury goods companies whose boards are controlled by family members.

We connected him to: ••Three CEO Connection members who had similar experiences, ••A CEO Connection Strategic Partner who was able to connect him to CEOs of larger luxury goods companies, and ••A Wharton alumnus who was CEO of a major luxury goods retailer.

MAKE MONEY A CEOC member who runs a $600-million publicly-traded company in the oil & gas field machinery industry was looking to expand their investor base outside the USA. We connected him to: ••The CEO of a member company listed on the London Stock Exchange, ••The senior partner of a billion-dollar international law firm, and ••Subject matter experts at the right investment bank.

SAVE MONEY A CEOC member who runs a $260-million printing company was looking for benchmarking information regarding staffing and other insights into the process. He was connected to: ••Three CEOs who had similar experiences, and ••The expert in outsourcing who had previously served as the corporate controller of a $500-million network communications company.

For more examples go to: ceoconnection.com/success-stories

OUR GUARANTE E We make sure you receive value.

CEO Connection is your advocate.

We look out for you and your company.

If we believe the people, information, resources, and/or opportunities that you, your company, and your team receive do not potentially pay for your dues, we will extend your membership until they do.

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CEOC Member Profile

Sharon Watkins, CEO, RadiusPoint RadiusPoint solves problems that its clients experience with managing telecom, utility, and IT invoices and expenses, utilizing its team’s vast experience and proprietary software, ExpenseLogic.

Sharon Watkins is the CEO of RadiusPoint, a 27-year-old telecom and utility expense management firm. Sharon founded the company in 1992 and manages the sales and marketing aspects of the company.

She has been instrumental in working with the software development team to create ExpenseLogic, the telecom and utility expense management software that has less than ten competitors worldwide. From Sharon’s experience with clients, the software developed into the tool that can satisfy the needs of any organization that has multiple sites and numerous employees to manage. Sharon has successfully signed and retained clients ranging from Fortune 50 to small local county governments.

RadiusPoint and the employees stand apart from competitors by achieving ISO 9001 standards in September of 2002. RadiusPoint is SSAE 18 (formerly SAS 70) certified and continues this certification with an annual audit. RadiusPoint also was awarded a GSA contract vehicle in 2018 for Schedule 70 IT services.

RadiusPoint, formerly TSG Enterprises, LLC, won the prestigious Top 50 Minority/Women Owned Businesses in Tennessee and was named a Top 100 Fastest Growing Companies by Fast Company Magazine. Sharon received the 2006 Enterprising Women of the Year award, and RadiusPoint was named one of Inc 5000 fastest-growing companies in 2015. The Orlando Business Journal named Sharon Business Owner of the Year in 2015 and CEO of the Year in 2019.

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CEOC: What recent success are you most proud of?

SW: There are a few recent successful milestones that I have accomplished at RadiusPoint. First, we celebrated 27 years in business in January of this year. That’s phenomenal for our industry. Second, we were awarded the GSA Schedule 70 IT Contract vehicle, which is a government contract award that is very hard to achieve. We actually achieved this in record time— five months. The GSA told us that it would take over a year to get this award if we were awarded. Third, we just rolled out our eighth generation of ExpenseLogic, our proprietary software which continues to aid in client retention.

CEOC: What action did you take early in your career that you feel most helped you obtain your CEO position you hold today?

SW: Vision in 1996 to create a software that did not exist for an industry that was just starting to emerge: telecom and utility expense management.

CEOC: What do you foresee will be the biggest challenge to CEOs of mid-market companies in the next five years?

SW: Keeping up with the constant changes in technology and retaining exceptional talent.

CEOC: How do you keep your company in front of trends, customer needs, and your competitors?

SW: Research, research, research. You have to be able to cut through the mountains of information to identify what is truly going to retain your clients and keep them satisfied.

ST RAT E G I C PA RT N E R S It is no longer about who you know. It is now about who we know and who our members know, which we then put to work to help you. The quintessential example is our special relationships with our Strategic Partners.

Our Strategic Partners are top organizations in their respective fields, distinguishing themselves through business excellence and exemplary corporate governance. They provide CEO Connection members with extensive thought leadership and industry expertise, while creating unique relationship opportunities.

CEOC Partner Since 2018 Results-driven counsel in litigation, business and finance, real estate, intellectual property, and public finance.

CEOC Partner Since 2014 Promotes the growth and global competitiveness of businesses owned and operated by minority entrepreneurs.

CEOC Partner Since 2015 A tactical resource used by high performance organizations interested in rapid and sustainable performance improvement.

CEOC Partner Since 2019 Multimedia financial services company providing advice to investors.

CEOC Partner Since 2015 The only private jet operator powered by a global airline.

CEOC Partner Since 2005 Accelerate Business Performance During Leadership Transitions

CEOC Partner Since 2019 Leadership Programs and Executive Coaching Services.

CEOC Partner Since 2016 The leading provider of audit, tax, and consulting services focused on the middle market.

CEOC Partner Since 2019 EDGY: Unconventional Revenue Growth for Mid-Market Businesses

CEOC Partner Since 2005 Sibson Consulting is the human capital planning division of The Segal Group.

CEOC Partner Since 2014 Recognized for intellectual leadership and ongoing innovation across every major discipline of business education.

CEOC Partner Since 2013 Recognized for intellectual leadership and ongoing innovation across every major discipline of business education.

To connect with our Strategic Partners, email partnerships@ceoconnection.com.

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338 Jericho Turnpike, Suite 381 Syosset, New York 11791

CEO CONNECTION MID-MARKET CONVENTION OCTOBER 4–6, 2020 · PHILADELPHIA, PA

JOIN US FOR TH ESE CEO CONNECTION UPCOMING EVENT S

CEO Lunch October 16 New York, NY, United States

CEO Dinner November 18 Amsterdam, Netherlands

CEO Dinner October 28 New York, NY, United States

CEO Boot Camp November 19 Amsterdam, Netherlands

CEO Boot Camp October 29 New York, NY, United States

CEO Dinner December 10 Fort Lauderdale, FL, United States

CEO Lunch November 13 New York, NY, United States

How to Get On a Board Workshop December 11 Fort Lauderdale, FL, United States

For a full list of events and more details, visit: ceoconnection.com/events

Photo: Taylor Rabow

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