47: How Consulting Firms Scale Under Private Equity with Karen Thomas-Bland

What really changes when a consulting firm takes on private equity, and how should founders prepare for it?

Karen Thomas-Bland shares practical insights from working across private equity-backed consulting firms, transformations, and integrations. She explains that the biggest shift post-investment is not capital, but discipline: more rigorous reporting, structured governance, and collective decision-making. Founders must adapt from autonomy to accountability, while also managing cultural transition as firms move from “family” environments to scalable businesses.

The discussion explores the metrics that matter most in consulting firms, including client concentration, pipeline conversion, sales cycle length, and pricing discipline—often an underdeveloped lever in boutique firms. Karen also highlights the importance of sequencing value creation initiatives, focusing on a small number of priorities, and building operational infrastructure without over-scaling back-office costs.

The episode also covers integration strategy, arguing that firms should “transform first, integrate second” to avoid compounding weaknesses. Finally, Karen outlines how leaders can build a strong market presence through focused, insight-led content, emphasizing clarity, consistency, and relevance over reach.

In this episode you will learn

• Why private equity introduces discipline, not just capital
• The key KPIs consulting firms should track before and after investment
• How to avoid common mistakes in pricing and margin management
• Why focusing on 2–3 priorities drives better value creation than long lists
• The importance of transforming businesses before integrating acquisitions
• How to scale sales beyond the founder and embed a firm-wide sales mindset
• Practical advice for building a credible and effective LinkedIn presence

Follow Karen on LinkedIn: https://www.linkedin.com/in/karenthomas-bland 

Follow Joe on LinkedIn:
https://www.linkedin.com/in/joeomahoney/

Follow Joe on Twitter:
https://twitter.com/joeomahoney

Visit Joe’s Website:
https://www.equitysherpa.com

Prof. Joe O'Mahoney helps boutique consultancies scale and exit. 

Follow Joe on LinkedIn:
https://www.linkedin.com/in/joeomahoney/

Follow Joe on Twitter:
https://twitter.com/joeomahoney

Visit Joe’s Website:
https://www.equitysherpa.com

Transcript

Welcome And Guest Introduction

Joe 0:00

Welcome to the Consulting Growth Podcast. I'm Professor Joe O'Mani, CEO of Equity Sherpa. We help owners of consultancies quadruple the equity value of their firms over a two to four year period. If you'd like to know how we do this, visit equitysherpa.com. Okay, welcome back to the Consultancy Growth Podcast, everyone. Um I I've I've followed our guest here for some time on LinkedIn, and I would encourage you to do so. I find her insights, I mean her experience is fantastic, but her insights, especially in this these days of AI slop, her insights are fantastic, intelligent, and are clearly based on a long period of deep experience. So I've got the real pleasure of um welcoming Karen Thomas Bland. Um Karen, welcome to the podcast.

SPEAKER_00 0:54

Oh, what great to be here, Jo, and thank you for that very kind introduction about my LinkedIn.

Joe 1:00

Well, I did I I I I genuine I genuinely mean it. I you know, I I I'm keen on evidence-based insights, and you certainly provide them. Um now you you you you've had an interesting career and have an interesting CV. So rather than me mash it up, I was wondering if you could give us a little introduction to yourself and how you got to where you are today.

SPEAKER_00 1:25

Yes, absolutely, Joe. Well, I'll I'll work my way backwards, which is probably easier. So for the last 15 years, I've been operating independently and I've operated really in two tracks. So one is private equity, non-exec, um, and chair roles. And they would be uh in the mid-market, classically B2B services and technology, but particularly consulting businesses, which is my heartland. And the second track is I go into perhaps larger CAP PE and the listed world and take businesses on a transformation or integration or carve-out journey. So classically, they're buying another big business and want someone to come and integrate it. Or they say, we want to go on a value creation or transformation journey. We're currently here. They may have thought about where they want to get to go and want someone to make that happen, or they may not have thought about where the end game is, or they're classically saying we want to carve this business out. And my clients have ranged, yes, from private equity to listed businesses. Prior to that, I was in the US, I was in IBM, um, doing actually a relatively similar role, um, either integrating businesses, so did 10 acquisitions during that time, or I was running as the general manager those businesses. And classically, it was a combination of consultancy, data, and technology. Took me all around the world. I did a stint in Dubai in our growth markets, a stint in Brazil, uh, doing a classic kind of turnaround. So it was one of those global roles, uh, fantastic, build a lot of experience. Prior to that, I was in KPMG here in the UK. Um, it had sold its consulting business off to Atos, and like all good uh businesses where they sell off, they decide to rebuild that consulting practice again. So I went in very early to build out uh strategy and transformation practice there. And then before that, I was in uh smaller consultancies. Um, I have a very unusual background for what I ended up doing. I trained as an organizational psychologist, so I still had two years doing a psychology degree and master's, two years of practitioner in training, and you apply and become a chartered psychologist. Um, so that's not the usual route. Normally people come through a business or or finance background, but I did specialise in the organizational side of uh psychology, so the people side of a lot of change, or development, assessment, and that personality uh kind of discipline actually really does help you along uh the way as you navigate challenges. But yeah, that that's that's the background in a nutshell.

Joe 4:07

And just just just as an aside, that that psychology background. Now, I I I I wanted to be a an organizational psychologist, and I did do a little bit in that area. Did did you do much quant side or was it primarily soft stuff?

SPEAKER_00 4:22

No, it's a it's a good discipline. Uh, I'm not here to sell this to anyone listening, but it's a good discipline in both. So it's a good discipline for research statistics, that real analysis around problems, it gives you that, and and you need a good, you know, numerical background to be able to take that on. Um, but it also then gives you the uh what's often classically referred to, as you say, as that's that softer side, that empathy, that understanding. But the most important thing it gives you is how to go in and diagnose personality. So whoever you're working with, you can build a good understanding and orientate your own style in how you might work with people. And let's be honest, Joe, you know, the further up in an organization you go, the higher likelihood you will be to get to work with, you know, higher conflict personalities. It's just part of the game, right? So it's good for that as well.

What Changes After PE Investment

Joe 5:15

Yes, there was that wonderful piece of research about 20 years ago that correlated um uh sociopathic behavior with the higher you got in the organization. Um I think that would be a generalization, of course, but um there was some correlation there, I think. Yeah, yeah, brilliant. Okay, listen, that's fantastic, Karen. So so obviously, you know, a lot of listeners to this podcast are have have been been through that process, you know, selling their firm and have been come out the other side, but many of them haven't um and and would like to. Um, and you know, PE, especially these days, as you know, is a much bigger force than it was 20 years ago. So I'm interested in the difference between what you would see um prior to uh a sale to PE and post. So uh other than the cash that you've got splashing round that you can you can invest in different things, what are the big changes that occur either through the PE board um or the board member, someone like yourself being involved? Um uh and and how should owners prepare for that, I guess?

SPEAKER_00 6:30

Yeah, look, Joe, I think it's a great question. Look, I think if you're a founder, you've not got P backing or any other finance at the moment. The biggest difference you'll find is not the cash, I say, but the clock. So as a founder, you're empowered. You make your own decisions on your own time frame. You perhaps you know have a management team meeting, whatever frequency you've deemed to be appropriate for that. P investment comes with much more operational discipline in the business. So prepare yourself for a monthly board, I always say. Um, and that board in advance, you will have sent a detailed pack of information, a lot of financial information, get him better and put him a lot more operational and people in position. But classically, they want to know how the business has traded and how is it likely to trade over the next um month. So I think that's definitely one thing. Yeah, to reporting expectations change. You are now being held to account. And for founders who've done their own thing, that that is a shift to kind of make. Um I think uh decision rights is another one. So so classically, my experience of uh founder-led consultancies, you are as one fantastic founder often who will have made ultimately the apex for all of the decisions. Suddenly there's a board now with P on. You've perhaps got one or two independent non-execs, you might have you definitely have your CFO, made the others of the management team. So suddenly decisions are now being made in a collective, not as an individual. And for a founder, that can often feel challenging. In many ways, it feels good. You know, I've got a broader sounding uh body here, but you were once used to making it on your own and and now you don't. I'd say from a people perspective, Joe, the other thing is, and I hear this often as the way the business is described, often the term we're a family is is often used in these smaller firms. And it's great because everyone knows each other. The founder probably recruited most of them, um, and it feels like a kind of cosy um space. Not to say performance is not there, but it tends to have a different feel. When P come in, it suddenly becomes about scale. So that founder family now becomes scalable business. And again, that's a um a shift to be made. And I always say, look, I think the first, if I think about the founders I've worked with, I would say the first six to eight months is probably the most challenging because you're in that period of now operating in a different way, being accountable, having more KPIs that are being looked at. Um, it does tend to then find its rhythm. You sort of settle in and it becomes the new normal. Um but the other thing I would say is be mindful of that flight risk. There are some people who are intuitively drawn to these very young entrepreneurial businesses, and they carry with it, you know, a lot of fun, a lot of risk, a lot of reward. Some people are not the right people for that next phase of a more formula um kind of driven journey where there's more uh bounds put around. And look, I think we should always be open and honest about that with people. It's not you you might love a certain phase a business goes in, and a scrappy startup can really appeal to someone with that next phase of growth. So I'd say to any founders, you know, uh you might not yet have the team that's going to be right for your next phase of journey.

The KPI Set PE Expects

Joe 9:57

Yes, I think that's so important. It was a major talking of psychology, it was a major self-discovery of mine that I I'm not a scale person. I I love starting things up, I love growing them to, you know, however big, but yeah, it's uh and and and that self-knowledge is important, and ideally you'll have had that prior to to so so that you've got someone in place who is the right person to scale it. Yeah, great. And and you mentioned KPIs. What what are the now we will both have had experiences where you look at reporting and you think, oh my god, there's nothing here that you know I I really want? But but um in terms of the uh major KPIs that perhaps founders aren't aware that they should be reporting on at that senior level, that you would probably insist on at post-transaction. What might some of those be that most founders or many founders might not be reporting on prior to the transaction?

SPEAKER_00 11:09

Yeah, no, great, great question, Jo. Look, I think um there perhaps are thinking about it, but I would really be measuring employee attrition just by what we've just said. Your flight risk in the first months after deal really will tell you some people will will start to leave the business. And so you're really saying, you know, how um how risky is this um going out? So I'd say employee attrition, uh particularly as often there's deep seated relationships. Um client concentration. I don't think I've been through a P due diligence where uh the client concentration measures not looked at. Again, I'm not saying not everyone would look at this, but um often we find a great customer and we do a lot of work with that customer, it's fabulous. But P look for have you done that and replicated it with three other customers to show that you can, you know, sort of scale. So say that is another uh pipeline conversion. So uh again, perhaps you are looking at this, but how much of your actual pipeline? Are you good at being able to say what's hot in that pipeline and what's not? And how much of that pipeline do you actually um convert? Again, P will be very interested in that um conversion percentage. Um, also the length of your sales cycle. So again, um often that is not looked at in my experience. How long is the deal or potential deal sitting there? Um, and it tells you a lot about how quick again you are to um convert and how long decision-making cycles might be. And I think everyone on this call who's in consulting knows that in difficult times decisions do get delayed further and further. So one to definitely be looking at. Um gross margin, I would say. So looking at gross margin by client, by service line, by geography. Um, utilisation's always hot, but I think in consulting that does tend to get pretty well tracked. Um, it might not get as tracked. So PE will look at um utilization classically by band, um, and how is that tracking? Um, again, revenue per head is another one. Again, some businesses don't tend to look at it at the granular individual um level. And then you've got your eBid DAR bridge and synergy tracking. So not just current performance, but over the course of the deal, how is your EBITDA tracking? Um, and it's always a tough one because really you don't want to be taking too much out of the business so that you haven't got a great culture. Um, but equally, and and I'd say the one, Joe, I think I find if I'm saying universally across boutiques, perhaps a little bit unfairly, it is that price in discipline. So um we have a tendency, I think, to not want to charge too much. And so we price our um rate per day of people at a relatively conservative, lower than sort of big players. Um, and and that holds our bit downright at a certain level. Perhaps, you know, that journey a business goes on through from pricing per person delivering a job to on an outcome, as in what is the value this is going to do for a business, that tends to be a journey that businesses need to go on.

Joe 14:27

Yeah, that I I really like that point about pricing. And and I I'm not sure about your experience, but my I I have no data behind this, but as a gut feel, I would say that pricing, in terms of levers for eBit DA improvement, yeah, pricing is probably the least evidenced in boutique firms. So I don't know if you would chime with that.

SPEAKER_00 14:49

100%.

Making People And Culture Board-Level

Joe 14:50

And and often when I talk to founders about their pricing, it will be, well, we've we've always priced it like this. Or sometimes they'll say, Well, that's what the market pays, but on the basis of no evidence or a few conversations. It's interesting, yes. Um, okay, good. So, right, um, so uh I'm I'm a I'm a founder, I've I've gone through the process, um, I've been successful, I've come out the other side. Now, you and I will both have seen um situations where PE investment has failed. Um and sometimes that might be something to do with what they've bought and the founders and just bad luck, you know, the founder might leave early or, you know, um the client concentration, you know, they lose a couple of big clients. But then they're sometimes it's the PE, the issue might be with the PE themselves and how they manage it. And one of one of the concerns I hear from my own clients is that they're worried about the traditional reputation of PE. Um, that and perhaps that they're more used to tech and SaaS than they are to people businesses, and they're worried that the founders are going to end up, you know, working uh 150 FTE uh themselves and everyone's gonna be under the screw. So what what I guess there's two things. What differentiates PE approaches that work with people firms?

SPEAKER_00 16:24

Yeah.

Joe 16:25

And I guess the other way of looking at that is if you had a message to give PE firms that were moving more into the people space now, which many of them are, what advice would you give them about treating people businesses differently?

unknown 16:41

Yeah.

SPEAKER_00 16:42

Joe, I think it's a great question. I think you hit on it right. Um, interest in management consulting and people-based business firms has gone wildly up. Um, so every PE house is is chasing these kind of deals. Look, I I think the things to talk to them about, what one is exactly what you said. Um, a lot of the value sits within the people themselves. And so uh the conversations need to move away from just talking about trading updates to let's have a concentrated. So, one of the things we did on one of my boards, and and we also brought the HRD on onto the board, is um have a whole section around people and culture on your board meetings. So, talk about retention, talk about culture, and if you've got a diagnostic, what is that telling us? You know, talk about succession, um, talk about development and training. A lot of people put a lot of uh store, particularly in these businesses, on how are you going to train and evolve and develop me to the next kind of roles, talk about all of that and promote your potential. So I think make it a central part of the governance that P understand and align on those few people metrics uh that really move the dial. Retention would be one, succession would be another, culture and climate would be another. So that P are looking at a broad set of um KPIs that perhaps they wouldn't necessarily orientate to. And it is a bit of a journey to get them on that. And they'll often say, Oh, can you go through the people bit a bit quicker? or but intrinsically you've got to remember these are this is where your value sits. It sits in those um individuals. So I look, I think, and and pre-deal, and I was actually having a conversation with a founder who's about to get P backed last week, and I said, you know, it's really encouraging that actually the private equity house was saying, tell me about your current culture, what are people really valuing? It people are starting to recognise that, yeah, in those businesses, we do need to ask the same questions we've always asked about EBDA revenue, but we also need to ask about what our most valuable asset that we're buying is thinking, feeling, doing, and wants to, you know, achieve. So look, I think it's happening, and I think P is also switching on to the fact that they need to need to play a broader role in hiring. So, like in one of my um roles last year, you know, P came on to an interview process for like a senior role. So they were taking more interest in who is the people coming in the door. Because we both know, like you get a hire wrong, particularly a senior hire in your boutique, it actually has quite a catastrophic effect on culture, on profit, on you know, you name it. So I think they're starting to recognise those hires really matter and if they can help and be part of that decision process. Because classically, PE would just say, right, at a certain clip level, we need to approve the hiring, but that would become a binary yes-no. Whereas now I see them more coming as part of that decision making and part of meeting the individual and sussing them out. So, look, I think encouraging all of that behaviour that makes them much more into that people um conversation is the right one for me. And and not being afraid for anyone who's chairing or being on a board out there, um, put the people piece on the agenda, have your HR director ideally come and stand that up or even be part of the board. Because also I think it's part of saying as well, who do we really need in our board setting? Because classically P was like CFO, CEO.

Joe 20:13

Yes, yes.

SPEAKER_00 20:14

That was the mode. Whereas now, you know, I've seen more openness to let's put the HRD on the board, let's maybe put the POOO or the client director so we get some direct client feedback. That is all changing, and I think we can play a role in helping change.

Playbooks Versus Tailored Value Creation

Joe 20:29

Yeah, that's great. That's great. It's really good advice. And I thought I I would, you know, push anyone, anyone who is listening to this, who is thinking about scaling, whether you've got P or not, to you know, to really think about the people side of things and having as a standing board um item on the on the agenda. Um yeah, really, really interesting. And and just as an aside, uh I've so I've recently been going through my interventions over the last 20 odd years with with boards and trying to get some type of standardized methodology that I could show to other people and say, look, if you're going to be a board advisor or if you're going to be trying to increase eBit DAR, these are the uh you know 50 steps that you should do if you're if you're new to uh and I found it uh quite hard um because uh obviously uh there's a lot of flexibility with different types of firms. So I guess my question to you would be how much of your intervention is playbook? You know, here you know, you know 20 things I I do every time, and how much of it is dependent on the firm and the the people involved, I guess.

SPEAKER_00 21:48

Yeah, Joe. So I I see it as the 80 20 rule. So only 20% I would say is standard. The w the way I think about it is the the 20% standard is the things you know you're always going to need. Do you're always going to need a board pack? You're always going to need to monitor these KPIs. You're always going to need a value creation plan and a hundred-day plan. And all of that is routine, mechanistic, you know, your 20%. The 80% actually can look different per firm. You might be working on similar value creation type activities, but that element is very much tailored to that particular business. Look, I think I think we're if we're good consultants, we're not imposing this straight jacketed approach and saying, you know, it's follow A, B, C, D. But yes, there's a 20% that, you know, you you roll out, and that that is standard stuff. Um, but no, the rest, I think, is really, you know, what is the journey this business is is on. I mean, one business I worked on, it was all about our international expansion to the US. Um, the last business that I exited was no international expansion in that business at all. We were all about organic growth, building out our accounts, building out our service lines, doubling down on a few sectors. It's different depending on the journey that that particular business is on. And, you know, I'm yeah, I would lean away from it as to be this thing. But I think having like sounds like what you're creating, which is, you know, think about all these dimensions of your business. It's very useful to have, to go as a list and go, right, which one should we pick up? My my other big thing is don't try and do too many things to any founder at once. You know, pick three, four things that you're working on at any one time and do those really well. Where value creation tends to go bad is when they say, right, there's there's 25 things on our list uh and we're working on all of them, which tends to mean somebody's kind of got it on their radar, maybe doing something about it.

Sales, Pricing, Systems And Key Hires

Joe 23:52

I wish I'd heard that advice 20 years ago when I started doing a board advisory work because my my approach used to be here is the long list of things you need to do. And of course, you know, you end up doing everything badly um and and losing momentum and faith and all the rest of it. Fortunately, I've learned that lesson, lesson now. Um, Karen, I was I was reading uh your CV and you know some of the other podcasts that you've done, and you you've had a lot of success in something that is going to be very close to most founders' hearts, and that's margin and sales.

SPEAKER_00 24:27

Yeah.

Joe 24:28

Um how do you go about improving those very, very important metrics in the kind of boutique consulting firms that perhaps the listeners might be a part of?

SPEAKER_00 24:43

Yeah, look, I think if we take um sales Joe first, perhaps so uh you're classically as a founder the person who's doing most of the sales, and you do it very well, and naturally you were orientated doing this work because you were fab at business development. It cannot all reside in the founder as you scale up. So you're looking for hires who have that potential to sell on a similar scale to you. They may also be your successor, it may not. So that that is one that sales does not all kind of come together just in the founder. Who can you bring across that so that everyone uh plays a role? The second thing in consultancy, and this was very much IBM training, was everyone is in sales. So even if you're a person down in the delivery of the business, can you spot those opportunities? Can you ask those questions in whatever you're delivering that opens the door for other things? Doesn't mean you're the person then that has to take that forward. So I think that mantra of everyone is in sales, everyone can spot opportunities is another one. And obviously, as we talked about, broaden your sales. The second thing you're probably thinking about is your service line and sector growth plan. So most businesses start singular sector, perhaps in in one domain. What are those natural extensions? So if you started in FS, you know, do you have a natural play in insurance? Is that an adjacent sector that you can go and talk about FS and it'll still be relevant and credible in that? So the second is you're thinking about how do you um kind of improve and move beyond your current sectors. And the same with service lines, you might start deep in, I don't know, CRM, um, but then you might branch out into marketing transformation and others. So you look for those uh adjacent lines as well.

Joe 26:37

And just on that, Karen, do you like to see triggers for expansion? So so a couple of firms I've spoken to have been who've done this very successfully, for example, won't um shift to another service line until they've hit eBitDAR of a certain amount and or at least gross margin and a certain growth rate. And then they'll then they'll shift. Do you do you look for those triggers or is it more of a gut feel?

SPEAKER_00 27:04

Yeah, look, I think so, Joe. I think you do look for triggers, but those triggers might be market driven. So it might be interest from another. It doesn't necessarily have to be we need 10 million revenue and a million of EB dying financial services before we move to insurance. I think often you get market triggers and signals that might take you there. It might be, you know, an inbound inquiry, it might be that you just made your next grade hire and they add a you know capability in that. So I think triggers, yes. Um I think a lot of founders do have good instincts. So I wouldn't want to say this is purely like binary. They often have good instincts around where they would um play as well. The other piece to think about is your account management model. So early stage businesses have a deal mentality typically. They win a deal, they deliver that to the best possible way, they go on and that deal mentality can carry you so far. Um, but it's the account management model that gets you into that scale. So let's say you sold a piece of work at Barclays, how do you take that one deal at Barclays and really expand that so that you're doing a much bigger footprint in that organization? And again, a lot what a lot of um founders then do is think about account leadership. So, do I have someone who sits at an account level and is responsible for the revenue and profit in that account and everything that that happens? It tends to be under a, you know, a sort of growth office. Um we talked about pricing discipline, so you know, won't go over that too much. But I think that journey, as we talked about from day rate pricing, time and materials to outcome-based is another journey um to go on, which would often lead to you know good margin improvement. We also perhaps need to talk about the operation efficiency of the business. So um again, what I find in these smaller businesses very normally is um either they've got tools that they're not using well, often the sales tools, or they haven't got standardized processes yet. So everything is, you know, is not as efficient as perhaps it could be. Um, the other challenge we have is whenever we hire someone in a back office role, one consultant can sometimes have a bit of tissue rejection. That's not a billable uh role. So, how do we think about that? And it's important to get the right ones, but it's important also not to build out such a big back office that you've got this cost space that you've got to maintain too early. And there are certain roles you absolutely need, but it's a journey to build those out. The downside is, of course, when you hire someone senior, they want to build a team. Um natural instinct, we all would do that. So it's that's just one piece to watch as well. But you're you've got the right roles in your back office, you've got streamlined processes, you're using the systems that you put in place, or you're replacing them for something better that would enable you to scale. But keeping that lean and cost efficient is bringing that P disciplinary.

Joe 29:57

Yes, yeah, I'm I'm laughing because so much of this applies to me. I love a tool, I love a tool, and um, and um unfortunately I often pay for it in in a way that is uh almost makes it invisible the cost. And um, yes, I've recently decided that the I I've recently discovered the nine 99% of HubSpot's uh functionality I'm not using. And so um yeah, and they're not they're not inexpensive, you know, they're they're they some of these tools can be quite expensive, especially once you add all the seats on.

SPEAKER_00 30:31

Yeah, yeah, no, absolutely. So yeah, just get disciplined around your back office, but I'm not advocating not to hire those roles. The time I've had conversations about should I hire a people lead? Yes, in a people-centric business, you need a people lead uh to support you on that journey. You also need someone who's gonna own finance, and if you want to move PE back, that role comes under a lot of pressure. So make sure you've got that finance lead who's bringing that discipline um to the business who'll be credible with PE and who can drive that, you know, big, big important role. So certain roles don't compromise at all.

Joe 31:06

Yes, yes. But I'm guessing I'm guessing that's of a certain size. So um I'm I'm guessing that with the HR and the serious CFO, as opposed to somebody that is accounting qualified and call themselves a CFO. I'm guessing that post-transaction the CFO is is obviously more more important. Um what when do you like to see uh uh a CHRO involved? Is is that a typical size or a typical maturity that you get to and you think, right, now's the time, or do you like to see that role evolve over from start-up to growth to scale?

SPEAKER_00 31:45

Yeah, I've seen both actually work. I've seen it where they will have an HR person in post, but it certainly won't be, you know, a chief human resource officer. But it would they'll they'll grow the role with the maturity of the business. Or I've seen that hire that role. So, in like the last business, take that one as an example. We hired a people director post-investment. So we'd got P investment to our first P run, and we hired that role about eight months in, having been through a serious process to get that, and we recognized that um what we'd be at about 60 people at that point, so still relatively um small, but we recognized that that was an area that we really needed to dial up. We were hiring very specialist skills, um, we needed to make sure we'd got succession plans in place, we needed to make sure we were retaining people in what was a very hot data analytics kind of market space. So, look, I think it can be both. I think you can either evolve that role as as you scale, and naturally there are things to look out for of when to buy that role. Or if you haven't had any people based in the role, or maybe you've relied on a uh, you know, an independent firm who's maybe providing you with a bit of advice here and there, I think seriously look at it once once you've got investment is probably a good trigger because yeah, all your value sits in the people. Why wouldn't you have someone caretaking? It also depends on you as a founder. So I've known founders who are incredibly love that side of their job. They very much like all of the people side of things, but I've equally worked with founders who are fabulous out in the market, creating new work, and the idea of dealing with that element is just not in their DNA. So it's also a bit about you and what where you orientate to. If your orientation is, I love being out in the market, I love winning new work, then play to that strength. That's very important, and not a lot of people do love that. So let then someone else caretake some of those operational people issues that you won't naturally feel an orientation to.

Transform First Then Integrate

Joe 33:53

Yes, yes. I think I think that's great, a great insight. And and of course, you get to a stage as a as a people firm where it's not just attention to people that's important, it's the competence frameworks, it's the training structure of the academy, and and and that's obviously if you're getting on an experience, you know, HR director, they're gonna have that. Hopefully, they'll have that in their back pocket, um, which will save time and and and all the rest of it. Um okay, so I I I as I said, I I did um I've done a fair bit of digging. Uh there's so much I could talk. Maybe it's another podcast, but yeah, there was something you said in, I think it was a a different podcast, which was you said transform first and integrate second. And I think that, and that's I think um uh advice post-transaction. So when when what do you mean by that? So it is that is that advice for the PE firms themselves, or is it advice for the the firm that's been bought?

SPEAKER_00 34:59

Yeah, it's a bit of both, Joe. Look, I think I've been I've done 51 now MA deals, right? And I think Yeah, 51st was last year. I look, I think there's a couple of things that that go on. Firstly, MPE, there's obviously this speed and the clock that I that I talked about. So how fast can we now bring two assets together is often the question, right? And perhaps less is put on are those independently good businesses to bring together. Because if you bring a broken business into a, you know, you're gonna end up with a broken mess. So my approach to integration is saying are the things within each business we need to fix first before we start to naturally bring those those together. So if I take an integration I did last year, um, you know, the intent the intention was right, let's quickly now bring all of the business units together, let's put the back office functions together without thinking about, okay, but one's got a broken finance system and one's got an okay finance system, but not currently big enough for the combined entity. So perhaps what we need to do is think about what are the processes that we want. So it's that mindset of thinking what do we need to transform or transform or put in place first before we suddenly rush to go, let's just bolt two things together, and then it looks like we've uh integrated. And then the natural instinct, and of course, there's nothing wrong with this, it's the human nature of right, we've bought two things to crash together, let's just quickly bring them together. But it rarely works unless it's thought through as a transformation. It's genuinely good questions to ask is what bits do need to be integrated, what do we perhaps need to fix first on each business before you start to think about okay, let's let's bring these two assets to together. Because naturally, you know, there's processes to fix, there's procedures to fix, there's technology to fix, there's the cultural dynamic of how these are going to work together. So that's just my one take, Joe. Perhaps I learned over the years that yeah, don't be in such a hurry that it has to, because inevitably that probably leads you into a less good place.

Joe 37:10

Yeah, great, great. And and when you do the the value planning, so when when when the when the company and and the boards do the value planning, how do you decide? Because that that long list that we talked about earlier, what I guess two things. One, what does it look like in practice? So obviously you'll have done the due diligence on the firm, so ideally the value plan will have been built, you know, quite quite early on. But how do how do you get to those priorities? So the the three or four things that you were really going to focus on that year.

SPEAKER_00 37:50

I mean, you pitch, Joe, on like what I think is one of the main challenges, right? We we find it hard as humans to say what are the few things we're going to do really well, don't we? We we're tempted to say the list out all the things we want to do. I think you're right. Look, as a founder, if you've got through due diligence, um, and a number of areas will have been identified, you know, expand into ex-service line, get an account management model, invest in one or two more industries, maybe find one international footprint, whatever it might be. There's a process to go through to say, right, what what's the sequence? What's going to give us our best bang for our butt initially? And what do we maybe put further down the line? And what are the trigger points we would get to? You raised that already. What are the trigger points we might get to to decide whether to, you know, expand internationally or do buy another company? So I think it's that. I think it's saying what's easy to do and we can do now, and is very adjacent to where we start. Because remember, PE also brings this risk mentality there where they don't want to see a thousand things, they just want to have what's the two or three things we're going to do first. Get them under our belt, do them really well, get them into a rhythm and cadence, and then look at the next one. So it's not about saying no to things, it's about saying what's the prioritization and sequence. And again, one skill to bring is that whole business case. So, again, in the past, founders, you probably were like, yeah, good idea to go and invest in Stockholm. We'll we'll do that. And again, it came down to you. There's a discipline of bringing a business case to a board and saying, look, we really believe there's an opportunity in the US here, and this is what we think it would take. Uh, this is our and and do you agree? And having that discipline of doing business cases whilst can feel tedious if you're needing to write them, is good discipline because it's forcing you to say, what is the return? When would we get it? That kind of discipline P likes. And and so it's structuring those in a way and not just making all your bets uh at once. You wouldn't have the capacity anyway to absorb it. That's the other challenge, right? You can have intent, but unless you've got the people who can then go and execute that. Um, so I would say and and start small, just pick two or three things at any one time um that you're really doubling down on, and the next can come in your next wave.

Joe 40:19

Yeah, great, great, fantastic. Okay, there's some wonderful nuggets of advice will hit hit here, some real gold. Um, I I had two final questions. So one of them is if you were going to give one piece of advice to a founder and an owner that was going into a PE transaction, what would that advice be? I realise it's going to depend on bits and pieces, but if you had a hundred of them in a room and you said, look, one thing to take away from today's talk is what would it be?

SPEAKER_00 40:51

I'd say, Joe, build the discipline before PE comes, and then it won't feel as stark a contrast. And I would say this: look, if you're a founder out there and actually you just say, I don't want P investment BT, I don't want to take it, fine, but try and bring some of that discipline into the business that you start anyway. You don't need PE to have a good board pack, track the right metrics, have good decision making, bring an independent advisor on board, even forget getting PE. Uh, you can do this on your own, you can scale this business without it. Just bring some of the great discipline that PE would bring. So I I would say pre even going there, bring that discipline in place already, because then you're already operating in that mindset and you may or may not need the cash. Um so that that would be my biggest one because that's great. Yeah, you're not, you're not uh you're not about to come into what feels like quite a big transition.

Joe 41:48

Yeah, it's it's so interesting. So I I uh so I primarily deal with you know sell side or you know, prior a few years prior to the sale. And and sometimes founders will say, you know, I'll be chatting to them about their future plans, they'll say, Well, you know, we don't really want to sell, you know, it's not on our radar. And I always respond, well, regardless, a good company is one that has these systems, you know, PE and buyers, strategic buyers, want to want uh a good business. And so this is what a good business looks like. So if you want to scale by yourself, it's what you should be aiming for.

SPEAKER_00 42:24

Yeah, exactly.

Joe 42:26

The final thing I just a slight said segue um is your LinkedIn presence. So you're very, very visible. Um, and it's something that I really urge consultancy leaders and boutique leaders to to do, and there's lots of evidence that it works, but there's still either a lot of resistance or a lot of bad examples of it happening. I think you've built up a great uh visible presence that really demonstrates your expertise, both on LinkedIn and elsewhere. Um, what advice would you give you know, partners, directors, founders that wanted to develop a serious, visible presence of the type that you've built up?

SPEAKER_00 43:14

Yeah, look, I think again, Joe, I uh my advice is probably again start small. So I would find a topic that you're really passionate about and that you're well placed to uniquely own. Right. Whatever that is, double down on that. Don't don't the worst advice is when you try and be everything to everyone, right? Your audience can be very small. If they're your buyers and there's only 10 of them, go for them, right? And I would write in the style that you're almost writing for that one person. So if you're selling to financial services, um, write for a financial services director in a firm that you would have as your ideal customer. Imagine that person and imagine you're writing for them. And talk about what the problem was, how you solved it, what the outcome was. Was very tangible impact, which consultants can often not do. Talk about the difference that you made. And don't worry if, in the first post that you write, only your mum and you know your best friend write it. Please don't worry.

Joe 44:14

It takes a while, doesn't it?

SPEAKER_00 44:16

It does. It takes a while. And you know the good thing about that, Joe? In the beginning, you're not that good at writing like I wasn't. And so I didn't need much of an audience because what I was using it for was to get better at it. And your audience grows with how good you get at it. So that is absolutely fine. And I would say don't shy away from it because you can get a lot of leads through writing crisp, articulate posts. So it is a lead generation channel that's out there. There's so many people on LinkedIn as if that's the one that you choose. And just start small and build from there. And don't just make it about you, you know, comment on other people's posts. Just start that journey, and you know, eventually you one day go, oh yeah, I did build that audience, and it started small. But again, you don't need to be appealing to the masses here. Right, write for your audience is my biggest takeaway. Yes. And they flock to you.

Joe 45:17

Yes, yes, it is true. And I and I think I think one of the one of the uh the um insights from from what you said there is that you don't need to dumb it down. If if you look at what a viral post that hits you know 20,000 people, it isn't that difficult to write, but it's not necessarily that useful to you. And I I would very I and we were talking before before the podcast about the amount of slop that's out there. And I would urge people to perhaps ignore what AI says about creating a viral post that goes out to a hundred thousand people and focus more on the hundred people that you really want to talk to.

SPEAKER_00 46:05

Yeah, it depends on your objective, but if your objective is to find more leads, is uh you know, just talk to your audience, and your audience can be quite small. Um, and and I would just to our our point, um, whilst you might use AI to enhance your post, and that is very good instinct to do that and to do some of the research, at least in the beginning, I would make these posts yours, your ideas, your flow. Enhance it by all means. But I wouldn't start by just going, hey Chat GPT, what should I write about? Yeah, CRM systems. I I would err away from that because it's also a bit of a discipline you want to build yourself anyway, so that you do know how to bring AI in. But I wouldn't my orientation wouldn't have been to start there.

Joe 46:50

Definitely, definitely, and and I think that's especially true in this age of AI because you want to be distinctive, you don't want to be the same as everyone else. And if everyone else and their dog can use AI to generate posts, they're all going to be very, very similar. And so the more you can get your voice and your experience into it, I think the better.

SPEAKER_00 47:11

I agree. But don't be shy, I always say, like, as long as you're not writing anything controversial or that would damage, you know, the brand or the firm. Um, it's good discipline to be talking about and writing about because you build ideas from others.

Joe 47:24

So brilliant, Karen. Thank you so much for your for your insights. There's so much here that people, I'm sure people listen to this two or three times. Um, you've shared your wisdom freely, and we all really appreciate that. Where where can people find you, Karen?

SPEAKER_00 47:40

Well, I think linked to our conversation, linked to this copious play. So uh feel free, do please connect to me on on LinkedIn. Yeah, I love to follow great people, follow your journey. So yeah, I love to love to connect.

Joe 47:53

Brilliant. There's a great I would encourage everyone who can to connect with uh Karen. Her insights are fantastic. Karen, thank you so much for your time.

SPEAKER_00 48:02

Brilliant. My pleasure, Joe. Wonderful to be here. Thank you so much.

Joe 48:05

Take care.