What FP&A Pros need to know to be successful working in Private Equity with Jamie and Nate
In this episode of FP&A Tomorrow, host Paul Barnhurst and co-host Glenn Snyder discuss the dynamic intersection of private equity and financial planning & analysis (FP&A). With private equity firms increasingly focused on operational value creation over financial engineering, this discussion offers valuable insights into the evolving expectations for FP&A teams within PE-backed companies. The conversation covers everything from deal flow trends and building high-performing FP&A functions to the nuances of trust, alignment, and data in the PE environment.
Nate is a Senior Managing Director at Riveron Consulting, where he leads the private equity practice. With extensive experience supporting portfolio companies, Nate brings a sharp understanding of how to structure FP&A functions that drive value from early investment to exit. Jamie is Director of Financial Operations at Trivest Partners, a middle-market private equity fund. Jamie works closely with FP&A teams across Trivest’s portfolio, guiding companies through growth, transformation, and exit, with a clear focus on data-driven decision-making and operational excellence.
Expect to Learn:
How private equity firms are shifting from financial engineering to operational value creation.
Why FP&A is becoming a core strategic partner in PE-backed companies.
The importance of early investment in data, tech stacks, and FP&A infrastructure.
The difference between corporate FP&A and PE-backed FP&A environments.
What skills and traits do PE firms value most when hiring FP&A professionals?
Here are a few quotes from the episode:
“Private equity used to be all about financial engineering; now it’s about operational value creation.” - Jamie Lukaszewski
“The most successful FP&A teams are the ones that align financial and operational KPIs to tell a complete story.” - Nate Heeren
"You're not going to win many races with your legs tied together; you've got to be set up for success." - Nate Heeren
Nate and Jamie shared thoughtful and practical insights into the evolving relationship between private equity and FP&A. They emphasized the growing importance of operational value creation, the foundational role of trust and alignment, and the need for robust data infrastructure to support strategic decision-making.
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In Today’s Episode
[02:11] - Guest Introduction
[02:58] - What Great FP&A Looks Like
[04:42] - PE Trends & Market Shifts
[07:31] - Early vs. Late Stage Projects
[12:02] - PE & FP&A: Building Trust
[17:32] - Corporate vs. PE FP&A
[22:24] - Hiring: What PE Firms Look For
[32:49] - Successful FP&A-PE Relationship
[41:57] - Final Advice & Wrap-Up
Full Show Transcript
[00:00:56] Host: Paul Barnhurst: Hello, everyone. Welcome to FP&A tomorrow, where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host, Paul Barnhurst, aka The FP&A Guy, and today I have with me my special co-host, who joins me from time to time, Glenn. Glenn Snyder. Glenn, welcome back to the show again.
[00:01:16] Guest 2: Jamie Lukaszewski: Thanks, Paul.
[00:01:16] Co-Host: Glenn Snyder : Always a pleasure to be here.
[00:01:18] Host: Paul Barnhurst: And really excited to have you. So as you know, each week we're joined by thought leaders, industry experts and practitioners to share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. This week, I'm thrilled for our topic that we're going to jump into with our guests. We have, but I'm going to let Glenn introduce our topic for this episode. So Glenn, over to you.
[00:01:41] Co-Host: Glenn Snyder : Thanks, Paul. So Paul and I have been debating about what are some of these really exciting topics that are out there that we could bring to you guys. And one of the things that bubbled up to the top was private equity. Private equity is a topic that a lot of people are talking about. Companies are out there that are looking for good talent. Private equity companies work very closely with FP&A at their portfolio companies, and we thought this would be something just to connect all the dots, bring it together and share with you guys some expertise that we have. So first of all, we have two fantastic guests, and I'm going to turn it over to them to introduce themselves. Both Nate and Jamie are joining us. Nate, why don't you kick it off and give everyone a quick introduction.
[00:02:22] Guest 1: Nate Heeren: Thank you so much, Glen. It's a pleasure to be here. Thank you for the invitation. Nate Heeren I'm a senior managing director at Riveron Consulting, and I run the firm's private equity practice. So I'm looking forward to the discussion.
[00:02:35] Co-Host: Glenn Snyder : Thank you Nate. Welcome. And, Jamie, how about you?
[00:02:37] Guest 2: Jamie Lukaszewski: Yeah. It's great to be here, guys. Jamie Lukaszewski , director of financial operations with Trivest. We're a middle-market private equity fund. Uh, have been around for the better part of 40 years and deal with FP&A on a daily basis. So thrilled to connect with you guys.
[00:02:51] Co-Host: Glenn Snyder : Fantastic. So, Paul, I know you like to kick off every episode with a very special question.
[00:02:57] Host: Paul Barnhurst: I do, so we start every episode with this question. And Jamie goes to you first and then we'll go to you, Nate. What does great look like to you?
[00:03:05] Guest 2: Jamie Lukaszewski: Yeah. No. Sure. So great FP&A in my world is going to look like a shift from just traditional reporting and to really giving us the information that's going to help us pilot the business. It's really thinking about those forward looking, whether it be strategic KPIs that are really, you know, making an impact on some of the OKRs and the goals that we're having. I think great FP&A in today's day and age can be, you know, an architecture for how we, you know, build the value creation plan, how we run the businesses in the companies we have at Trivest are just incredibly invaluable. Having those FP&A leaders.
[00:03:39] Host: Paul Barnhurst: Thanks. Appreciate that Nate. What would you add to that or what are your thoughts when I say great FP&A .
[00:03:44] Guest 1: Nate Heeren: In my view with, you know, lens towards private equity? Oftentimes there's a lot of work to be had in terms of where you're starting from and where you want to finish and where I've seen the best case and the finish is better aligned KPIs and more proactive organization that is very much aligned and tied not only to the financial components of the business, but also into the operational components of the business, where you can allow yourself the ability to be more forward looking versus more retroactive. Similarly, you know, provided there's enough capital, but, you know, having a better aligned data and tech stack such that you can actually extract the information to then have some good analyzes to, as Jamie said, operate the business effectively. Oftentimes that visibility is hindered by either personnel or data or a tech stack. So with all those things aligned, I think you really advance yourself and the effectiveness of the org.
[00:04:42] Co-Host: Glenn Snyder : What are some of the trends that you're seeing right now with private equity?
[00:04:46] Guest 1: Nate Heeren: I guess I'd start overarchingly near term, starting to see people come off their hands more. We're starting to see a lot more activity. It's not necessarily localized to a particular industry space, though. Services is absolutely what I'm coming across the most in terms of New Deal flow with our respective private equity clients. I think for a long period of time, we've seen a lot more introspection towards creating a better business in the absence of some of the traditional levers on, um, you know, financial engineering or just slow deal flow or otherwise too high valuations misalignment. People are saying, okay, how can I enact other levers from organic. And so with that, you're seeing a lot more introspection in terms of how people are trying to improve their businesses. I think lastly, hopefully with some more stability upcoming in policy, in macroeconomics and in rate, you're going to start to see more of the floodgates open. But it's still a trickle.
[00:05:53] Co-Host: Glenn Snyder : Jamie, uh, are you seeing similar things?
[00:05:56] Guest 2: Jamie Lukaszewski: Yeah. No, no. 100% I we're absolutely seeing a lot of the same things there. And, you know, when I really think about just some of the trends today, you know, just to add to it, it's really moved from a world of, like a financial engineering focus into more of what are we doing from an operational value creation perspective? A lot of what we've come across in, in our world, working with family founder owned businesses at Trivest is how are we positioning ourselves as the right partner to help them through that next phase of growth? I always like to think about the quote, you know, um, what got you here will not get you there. Or, you know, the phrase horses for courses, the companies that we're working with and that we're partnering up with, um, they're having to face a different level, a different phase. They've never had to go. They've never had to go through. Right. And so, you know, having a private equity partner that can be versatile enough to help you through that world, that isn't just a one trick pony from some of that financial engineering and really has the operational chops, is winning out consistently over and over, not just in the middle market where we play, but all across the trend of PE. And so really believe in that strongly and are and are thrilled about, um, how we can keep getting better and offering more to the teams that we work with in that capacity.
[00:07:15] Host: Paul Barnhurst: Makes a lot of sense. Thank you for kindly sharing what you're seeing. And I agree, if there's some changes, like you said Nate, we could see the floodgates open. It's been pretty slow. Be interesting to watch. You know kind of the macro environment plays such a big part on deal flow for sure. But I would love to know what type of projects you are seeing from your clients today right now? Nate, what are you guys seeing at Riveron primarily?
[00:07:38] Guest 1: Nate Heeren: I would say I bifurcated into two. So depending upon where a portfolio company is in the whole period, if you're early or mid, we're seeing as noted a lot of that focus inward on a do I have visibility to liquidity? And if I don't, I need to get some better modeling in place very quickly, particularly around 13 week cash flows. How can I unlock additional liquidity via working capital levers? And then if you don't have visibility, how do I get to it? So a lot of data and analytics projects to improve flow, downstream output, etc.. And honestly germane to this discussion, how do I build an FP&A function that's effective? That seems to be a far more high demand service in the last two years. On the other side, for companies later in the whole period, we're actually seeing a lot of front endings of the sale prep process. So we've heard tons about, you know, for whatever reasons, failed processes. How do we help improve the effectiveness of a process if we're going to go sale mode? And a lot of that comes in and kind of conducts some type of a diagnostic to get through and understand what might be something that would sideline our deal. Also, just the efficiency of the process itself. Let's get the data ready. Let's get the cube set up. Let's get the outputs ready. Let's have the analytics, you know, all in line so that there isn't this huge, onerous, um, you know, project for what's already probably a pretty lean accounting and finance staff. So I'd say in those two buckets, that's the majority of what we're seeing.
[00:09:21] Host: Paul Barnhurst: Yeah I know, prepping for sale. That can be a ton of work, especially if you don't have good data and you haven't really thought about how you're going to present it. I've been caught on late nights, more than once, of trying to put something together. When they surprise you with another, you know, version of the data they want, and your systems are a mess on the back end and you're like, okay, how do we do this one?
[00:09:40] Guest 1: Nate Heeren: Right? And then also just replication for roll forwards, right. If there's some delay in the process, you've got everything cut off. And then oh geez I got to recreate all this a couple months later.
[00:09:49] Host: Paul Barnhurst: Jamie, what from your perspective, what are you seeing? Are you seeing similar needs or kind of what you are seeing from your PE companies?
[00:09:55] Guest 2: Jamie Lukaszewski: I think Nate said it really well. And across the board I would say that's like our, you know, day in and day out things that we're coming across, things that we're trying to work through with our portfolio companies. And, you know, just to double click on on a couple of things that Nate mentioned was, you know, we try to be very, very intentional about day one when we get involved with the companies is, hey, you know, how are we setting a really strong foundation that starts with the accounting side, that starts with the data readiness front making sure that, you know, we fast forward to an eventual exit, call it 48 months, 60 months, whatever the time period is that, you know, when those requests start coming in, which they will come, you know, and they're going to be robust, they're going to be intense. We have prepared ourselves, you know, for the highest degree of diligence and the highest degree of scrutiny behind it. Um, so it's a long process, right. And again, working with the teams and working with the companies, that's where I think we had a lot of value is being that river guide, so to speak, on, hey, this is what's coming. Here's how we take steps every single day to get us in a position to be successful. So a lot to dive into there though. But I think Nate said it really, really well.
[00:11:06] Guest 1: Nate Heeren: Yeah. If I might uh, Jamie, I really appreciate that. And interestingly enough, kudos to Travis probably has a lot to do with the success you've had. But, you know, a lot of other sponsors were also seeing kind of, um, front loading some of these exercises while there's some reluctance to do it because this is tough. This is tough on, you know, your new partner in terms of having gone through the buy side diligence, the legal, the I mean, all the things. But once you come on the back end of that, it's really advantageous to try and get the change management done early to put that infrastructure in such that you don't have to do it later. These crazy sell side processes. Right.
[00:11:49] Co-Host: Glenn Snyder : All right. So what you guys are talking about is really interesting. And it's kind of unique to private equity because you have a special relationship that has to happen between the private equity company and the portfolio company. So, Jamie, how would you describe that relationship and what kind of relationship do you guys try to create with FP&A at the portfolio companies you own?
[00:12:12] Guest 2: Jamie Lukaszewski: Of course. Yeah. No, it's a really good question. And, you know, you had said something earlier that I think is really important to hit on, and that's the trust factor that comes into it. And so a couple of things I would say Trivest has been around for 40 years. You know, we have a long and extensive track record. One thing that we are always really excited about pointing out is that of all the companies that we've worked with, 65 founders had such a good experience that they have now become investors and co-investors in the form of LPs with us. That doesn't happen unless you've been doing what you said you were going to do, and you're and you're creating a high degree of trust with those teammates and with those founding teams. So I just can't emphasize enough how important that is to it. And when you translate that into over what's going on tactically with the companies, you know, we've created an environment where they're saying, hey, we're looking to you try this to bring in people that are going to help push the business forward, that are going to help make us better.
[00:13:12] Guest 2: Jamie Lukaszewski: And so when that comes in with an FP&A team, you know, we always try to approach it off, hey, this isn't us just saying it. Here's the data driven reasons that are proving why this is the right path forward. Right here is all the analysis that we're doing to really make sure that we're looking at this from every single angle. And, you know, and the reality is, you know, that gets people to a place that's okay. We're looking at objectively, we're focused on the same goals. And if, if it turns out to be the right decision, awesome. Amazing, if it turns out to to not be. And it's something that we have to revisit again, that's where the trust comes in and says, hey, we all went into this together. You know, we're going to pivot, we're going to get us back on track, and we're never going to stop here until we get to that ultimate goal. So, um, trust comes a big piece of it. Data driven becomes a big piece of it, making sure that you have the right partnership. Just you just can't say enough about it.
[00:14:07] Co-Host: Glenn Snyder : Yeah. In fact, it's funny because every time Paul and I are talking about best practices and we're talking about trust, we're talking about partnership, we're talking about the importance of data. So it's certainly a lot of similarities, I think, that go across everything. Nate, I'll ask you to chime in on this as well. Um, when you think about that relationship between the parent PE firm and the Port Co and FP&A , what are you seeing in there and how important is that relationship?
[00:14:36] Guest 1: Nate Heeren: I mean, vital I think I'd approach the question with two components of the answer. First, you know something Jamie's mentioned here in terms of trust. A lot of the traditional LBO model is founded on that, right. And that creates a little bit of unspoken no mandate rule, right? Well, Travis might do it differently than, you know, ABC Capital Partners or and so on and so forth. They're still kind of an unspoken notion that even though there's control, we don't want to force things onto our new management team. So with that, you know, segue to the second piece of this, which is to me, no two sponsors do this the same way. And we've seen all different things throughout the spectrum from, you know, some sponsors that have a captive in-house FP&A team that they apply to each brand new portfolio company to help create some of the rigor, some of the structure, infrastructure that we talked about earlier and all the way to the other side of the spectrum, which is, you know, it's a founder owned company that doesn't have the capability at all and really needs support. And whether that's coming from the sponsor themself or from a third party like ourselves, uh, that's usually something we mention about getting addressed at some point, ideally earlier in the whole period.
[00:15:59] Host: Paul Barnhurst: FP&A guy here today, I want to talk about the certified corporate FP&A professional, or the FPAC, from the Association for Financial Professionals. I am often asked what makes the FPAC unique. And I respond by saying it's the only FP&A program that is a credential versus a training program with a certificate. Three key differences include: The FPAC requires work experience to enrol in the program two. The FPAC exam is closed-book and administered at a testing center. Three to keep your credential current, you have to do continuing education hours. I went through the program a few years ago, and it was a great learning experience. Not only did I learn a lot studying for the exam, but I am grateful for my membership in AFP for the networking opportunities and the opportunity I have to continue to learn through events and resources provided by AFP. If you're serious about building your career in FP&A and want an FP&A credential, I recommend looking into the FPAC program. Head on over to my website to learn more. And if you sign up for the program, don't forget to use my code to receive a discount. Those codes are the TheFPAGuy-FPAC – Exam $150 discount, and TheFPAGuy-FPACEPP – Exam prep platform $100 discount. Again, head on over to my website for those codes and to learn more.
[00:17:31] Host: Paul Barnhurst: So I'm curious, you know, we've talked about obviously trust fundamentals. Some of the things are so important between the portico and the FPA. Eight. I would like to ask you first, Glenn, and maybe we'll go over to Jamie. What do you see as some of the differences working in finance at a non owned company versus a PE owned? I know you've worked with several of both, as have I, and there's definitely some differences. So I'll talk a little bit about that. Glenn.
[00:17:54] Co-Host: Glenn Snyder : Yeah, absolutely. In fact I have kind of a unique perspective because I've worked at public companies, I've worked at a PE firm itself and PE owned companies and uh, and then also a family owned company. So to me, the biggest difference is with PE firms, you're focused really on their quality of earnings approach. Uh, a lot of the reporting needs to go back to the PE firm and how they initially did the model, when they did their purchase of the company because they want to go over, they have their forecast of where they thought the company would be, and they're going to be comparing that. If you're looking at a public company, the term quality of earnings never comes up in your discussions in FP&A . But it's all over a PE owned firm. In fact, the second thing is something that Nate touched on earlier, which is really around cash flow forecasting. And, you know, I've spent time in my career at companies like Visa and Charles Schwab. We never did cash flow forecasting. You know, when companies are sitting with billion dollars of cash on their balance sheet, they're not worried about making payroll, you know, in their next, uh, their next cycle. But smaller companies have that concern. And one thing I found is as I went to smaller companies and PE owned companies, uh, cash flow forecasting became significantly more important. And understanding some of the components of that that are on the balance sheet, such as, you know, collections from accounts receivable and how you know, what the average time it takes to pay out your, your vendors, those types of things start coming into play a lot more that you don't usually see in a large public company when you're really focused on the income statement only.
[00:19:33] Host: Paul Barnhurst: So you're saying Apple doesn't need a 13 week cash flow?
[00:19:36] Co-Host: Glenn Snyder : Probably not.
[00:19:39] Host: Paul Barnhurst: Yeah. No, I can totally relate to that, Jamie. You know, kind of similar question to yours. What do you think are some of the kind of key differences you see in FPA between maybe, you know, these PE companies and non PE because I'm sure when you bring them in when they leave that FPA probably looks quite different.
[00:19:57] Guest 2: Jamie Lukaszewski: Yeah it's a really good question. And you know I would say you know and Glenn was hinting at it and I think you know hitting on something that's really important. Pe almost has a different language. Right. You have the quality of earnings side. We're doing our 13 week cash flow forecast. You know we're looking for add backs. We're looking for add ons doing integrations like it's just a bit of a different motion. Not to say that coming from corporate is a disqualifier, because there are incredibly talented people in the FPA departments all over corporate teams. Um, so, so by no means is this saying one is better than the other. It's just different. There's a different pace, there's a different urgency. And just kind of like Glenn was pointing out there too, you go into these PE investments with a thesis, right? We have a really good plan. We have an idea. Sometimes that plan is flawless. It's perfect. There's other times where you have to effectively adjust on the fly. Right. You have to deal with the changes that come with it. And so, um, I would say because of that, like there's just a different urgency. Right. And there's a different pace that goes with private equity. Um, you know, I, I've seen people make the jump from one to the other and I've also, you know, come across people that say, hey, I prefer it on this side and not the other, and I'm perfectly comfortable with that. And so, um, there's a lot of different flavors out there for whichever one is right for you and right for the fit that you're driving your career towards.
[00:21:22] Co-Host: Glenn Snyder : Yeah. And in fact, Jamie, I'm going to chime in a little bit on what you said, because, you know, when you're at a public company, you're not thinking as much about EBITDA and certainly not adjusted EBITDA when you get into those different add backs, you're thinking about earnings per share. I have never seen anybody at a PE owned firm talking about earnings per share, because it's all about adjusted EBITDA, right? So it's a different approach and different vocabulary, but it is something that personally for me, I love the fact that I've been on both sides because it really allows me to see a more complete picture. It also, I think, helped me go from looking at talking from a, you know, at a PE owned firm about where they need to be moving towards and understanding what that next level is, I think is also something that that helps out, you know. And so here's a question that I'm asking. This is kind of a unique thing for you, Nate. I think when you're thinking about projects and you get these, you know, these calls from PE firms about these, these projects, how do you think about staffing them? Are you thinking about people who should have a private equity background, like they've worked and they've seen some of this, or does that matter at all?
[00:22:31] Guest 1: Nate Heeren: We're all acknowledging a little bit of a juxtaposition in the market, right? With bigger, more mature companies, you have a more robust, inherently fat function where you've got multiple a multitude of people. And then for private equity, you know, assets or companies, they might not have any at all. And you're trying to then create one of these departments. So a lot of the folks that are coming to them are from that public atmosphere. So going from the earnings per share into, you know, um, adjusted EBITDA. To your point and other things you're not concerned about. So the point being is for us to hire people. Usually we're hiring people that have been in industry in FP&A function, obviously vital to have the skill set regardless. But most of our best people are actually coming from, uh, those more mature organizations that are coming out of industry, not necessarily public companies, but definitely larger upper market, uh, No firms or businesses. So all to say, when we're staffing or we're looking for the right people, we're usually aligning fit to industry size. Um, and then, you know, part of the team and I would say less. So are we concerned about the, you know, did they come from a, you know, company with a private equity capital stack or not? So it's more functionally oriented in terms of the advantage versus not.
[00:23:58] Host: Paul Barnhurst: That's very similar to my background. I started with a large, you know, mature company. American Express spent eight years there. And then I went to a smaller, you know, smaller being, I think it was a $6 billion valuation when it was taken private, you know, private equity deal and spent 4 or 5 years there. And having that maturity and seeing how an organization works was a really, you know, a really good experience for going to the PE. And also it was, as you said, Glenn, night and day, right. Ebitda to nobody mentioned EBITDA. American Express, our primary shareholder, was Warren Buffett. We all know what he has said about EBITDA. He hates it. So it was never even mentioned. And that was my philosophy. But I also went to this company where it's all anyone talked about, and I'm like, I hate this. I gotta get used to this whole EBITDA idea.
[00:24:40] Guest 1: Nate Heeren: In one added comment to that is it's nearly impossible to plug or pull these professionals out of those environments because it's such a vital demand that once they're in there and they're on that kind of private equity cadence, that you can bet it's worth their while to stay economically.
[00:24:59] Co-Host: Glenn Snyder : I'm going to throw one more because Paul, I know, again, similar experience to you, I started at the large public companies and moved to a PE owned firm. The thing that stuck with me was the add backs I'd be looking at these things. What do you mean you're going to add this back? Like this doesn't really count, right? I mean, you know, some of them like, for example, stock compensation. I totally get it because stock comp is really a non-cash expense. And you're trying to get adjusted EBITDA to what's the operating cash flow. But it took me a little while to get used to that because I was like, no, this is part of everyone's regular compensation. This shouldn't be an add back. And so, uh, you do have that transition where you go from, hey, this is the way I've always done it to. Oh, wait a second. I really got to open my mind up and see this from a different lens. And it's not that one is right or wrong. It's just there's two different ways of analyzing the business. And you don't analyze a $200 million PE owned firm the same way you would analyze, you know, Procter and Gamble. Jamie, when you are, uh, when you are looking at, uh, you know, staffing your, you know, the, the PE departments at some of your port codes. Is it something that you look at? Are you looking for someone with that more PE background, or are you looking for someone coming from a more generic background?
[00:26:22] Guest 2: Jamie Lukaszewski: It's a great question. So, you know, I would say first and foremost we want to say, you know, what is the technical skill set, right? Where have they been in, in. You know, it doesn't have to be. Oh, they're coming from, you know, management consulting. They're coming from investment banking. Right. Like what we always try to look for is like, do they know what best practice is and say it differently. Do they know what good looks like? Right. If you have people that have been in situations where they've been doing top notch level FP&A work, you know, they've seen really, really strong leaders and really, really strong mentors, and that's how they've started to build their skill set. That always stands out to us, right? And you can understand it when you're talking to someone and seeing the depth that they're going into when they're describing the analysis or they're describing the projects that they worked on. Right. Did they work on this or did they just observe someone else doing it? There's a very, very different answer depending on the person that you're talking to on that side of it.
[00:27:20] Guest 2: Jamie Lukaszewski: I would throw in this is, you know, one thing that we've really found to be successful over and over again. Intellectually curious right there. Going to ask questions. They're going to dive into numbers. Sometimes they're going to go down the rabbit hole and it's going to lead to nothing. Other times they're going to go down the rabbit hole and it's going to lead to, you know, some big unlock or some, you know, some type of, um, epiphany that could help drive the business and influence the business. So, um, you know, on our end, you know, it's not just saying, hey, PE oh, that that means they're qualified for the job. That means they're the best. It's really trying to talk with those candidates, see how they're motivated, seeing how, you know, they just they want to be curious about the projects and the things they're working on, because that shows us time and time again that they'll go the extra mile, um, and help us uncover some of those things that can really make a difference in an impact in the business.
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[00:29:25] Host: Paul Barnhurst: It's amazing how often I hear on this show curiosity, intellectual curiosity, humble curiosity. Right? We want people that want to be curious. It's critical. More than PE, more than so many things, even if they don't have all the skills. If you know they're really curious, they're a smart person. They're willing to learn, they're going to ask good questions like, I can manage the rest of it. It's not rocket science to figure out a P and L or some of the other things. So I love that you mentioned that because that just keeps coming up. And when people ask me, I emphasize that again and again. If you're not curious, you shouldn't be. In fact, I mean, I'll say it that boldly. It's not a good fit for you if you're not willing to be curious. And, Glenn, I'm sure you had to have a lot of curiosity when you made that transition. So talk about that.
[00:30:08] Co-Host: Glenn Snyder : Yeah. You know, it's and it's funny because Jamie, you also you hit on something that I think is sometimes missed when you're, when you're in a large public company, you have a FP&A team of 50 or more people Oftentimes you get to that VP level and you're you're you're not really hands on in the data, right? You're managing people. You're directing people. It's more about making sure that the department's having the right kind of communications with its business partners, making the right connections, those types of things. But when you're at a PE owned firm, you have to understand everything from, you know, from all the way down in the weeds to 10,000ft up and what's going on in the industry. And it's a little different kind of a challenge. And so I agree with you. You've got to not only have that curiosity, but you've got to have the willingness to say, hey, look, you know what? I need to roll up my sleeves and get into this data and go out and maybe help my team build a better model or or dive in and ask some deep questions about how the the data is working and how the data is connecting in the system, as well as being able to sit with the CEO and saying, where are we trying to take this from? Let's go over and make sure that we have a solid plan for the future and align that with strategic planning and budgeting and forecasting.
[00:31:27] Co-Host: Glenn Snyder : And that's one of those big things. I think that when you're at a large public firm, you have a lot of different people doing these different things. So you go deeper in a way where you are deeper in subject matter, but on your skill set, it's very different where you'll have an analyst or a manager level person doing a lot of the detailed modeling and the VP's kind of directing them. I don't really see that in my experience at PE firms. You know, the largest that I've ever had, the largest FP&A team that I've ever been a part of, was at a PE owned company, was about 14 people, and that was because it was a $1 billion company. And actually it was a public company, but it was primarily owned by a PE firm. Most PE owned firms. Your PA team is five people, maybe at the most. So you have to be able to do everything from soup to nuts when you're leading the team like that.
[00:32:20] Host: Paul Barnhurst: Yeah, often they're very, very lean. You know, like I said, my company that I was at was quite large. So we probably were global. So I mean, we had 25 people globally in our FP&A . So I didn't get a lot of the corporate PE experience because I was out in the business supporting everybody. So I didn't have to worry about the adjusted EBITDA add backs or the putting the deck together for the board and the investors. I mean, I got involved in the PE some, but not as much as you do when you have that corporate role. But, you know, I'd love to know. And we'll start with you on this one, Nate. When you think of, you know, FP&A and the parent company, what does a successful relationship look like to you? What are some of the key characteristics of you if you have things going smoothly? Because we know they don't always go as planned, but when they do, what does that kind of look like?
[00:33:10] Guest 1: Nate Heeren: I'd say, you know, at risk of cliche alignment inherently in a PE setting, particularly if you're going from founder owned to to private equity, There's more stakeholders. Um, you've got your sponsor, you've got the remainder of your management team. You're looking at, you know, lender reporting requirements. Et cetera. Et cetera. So ensuring that you've got alignment and buy in with each party is utterly vital. I think secondarily, an implied value from your partner, your sponsor partner in an FP&A function. You're not going to win many races with your legs tied together, right? You have to be set up for success. And in order to be set up for success, if you're absent the tools. So budget or investment allocation in data in tech, stack in personnel, etc. to build this out, it's going to be real hard to be effective and have a best in class.
[00:34:01] Host: Paul Barnhurst: Kind of what is the successful.
[00:34:03] Host: Paul Barnhurst: Partnership? What does it look like? What are some of the key characteristics between FP and A, you know, and the FP parent company?
[00:34:10] Guest 2: Jamie Lukaszewski: The company that you're working in is going to have a lot of, um, they're going to have a lot of priorities. Right. And first things Uh, first you need to make sure that everyone within the team is aligned on what those priorities are and how every single action we're taking is to move those further along. Right. And so with an FP&A team, you know, I think those guys get a really critical piece of like they are the pilot, so to speak, on this plane that we're trying to fly together and get to this destination. So they have to give us really clear visibility into what the KPIs are saying, are we getting better? Are we getting worse? Are we trending up? Are we trending down? And then what are some of the underlying information that's, you know, causing that trend. Right. Or are we seeing a big move away from big box customers to, you know, a little bit more, you know, fragmented customer base? You know, all of those things are going to fall into the FP&A department. And then I think just one thing to call out and caution for is usually, you know, when you get into trouble on this side is when you know, there is a lot of work that goes into this, but when you start digging into the data and things don't make sense and it's not lining up with what you're seeing in some of the, you know, like experience on the operational side, I think that's when you have to pause and say, hey, we don't really know where this is headed.
[00:35:33] Guest 2: Jamie Lukaszewski: We think we're going in one direction, but we can't be certain of it. You really have to stop and pause and just kind of go through it page by page with that team to make sure you get back to a place of credibility. You know, once that source of truth becomes compromised or becomes an issue, um, it's really, really hard for the company, frankly, to make any sort of progress or any sort of headway. And then that's when you can get yourself into trouble. So we always try to kind of just start there. Is that team folks in the right way? Is this data actually lining up with what we're experiencing on the field? And if it is all right, let's proceed forward. You know, full steam ahead.
[00:36:09] Co-Host: Glenn Snyder : I mean, I think both Jamie and Nate hit on you know, they talked about alignment. Really. It's communication. Right? You have to be able to communicate. But one of the things that I've had some experience with, and I'm sure this is not unique to just my experience, is sometimes the PE firm and the executive management team, they're not aligned, and the FP&A team ends up getting caught in the middle. And so, you know, this is something that is very difficult because I've had it where my CEO and CFO are telling me one thing, and I'm getting direct phone calls from board members from the PE firm telling me to do something different. And I'm like, hold on, God, I need you to be talking to each other. And you're sticking me in the middle. And oftentimes they don't want to. They find it easier to both just kind of go to their FP&A person. So there is a balancing act that also comes into play. And I think one of the keys to being successful when you're leading in FP&A team in that type of situation is being direct, being open, and being honest. I've always found it where I would go back to the PE firm and I wouldn't necessarily say, hey, look, this is what the CEO is telling me to do. But I would say, you know, getting a little pushback because they, you know, were thinking about things in a different way. And at the same time, I'd be saying to the CEO and the CFO, well, how do we go over and make sure the PE firm gets what they want while we could still go in this direction? And you really try and bridge that gap, but it is something that's a little bit more unique that you you know, Paul, you never probably saw at American Express or when I was at, you know, Digital Realty or something that never came up because the company is typically, you know, much more aligned in management is in direct control versus here you got sometimes two different masters that you have to.
[00:37:56] Host: Paul Barnhurst: Yeah, I know I've seen it as well. I know you're talking about a PE where the CEO and the PE two were not aligned. The founder was ousted. They brought in a new person. He was not aligned. He lasted three months and they brought in another CEO. And let's just say for all of us, in fact. And the company widely, but particularly for that was a really rough time, as it was clear there was an alignment between the teams. Glenn, you know, kind of you know, they mentioned a little bit of what works. Well, anything you want to add, add there in that relationship. You mentioned one. Sometimes they're not aligned, but any other thoughts or advice you're going to offer to our FP&A audience? If they're, you know, going into a PE arrangement or they're getting acquired or whatever it might be, any other final thoughts you'd give them on how to manage it?
[00:38:45] Guest 2: Jamie Lukaszewski: So.
[00:38:46] Co-Host: Glenn Snyder : You know, and this is not necessarily unique to PE firms, but err on the side of transparency, right. If you're not sure, be as transparent as possible. So because first of all, especially when you're talking, Jamie brought this up around sometimes data. You know, you have some data issues, smaller companies. The data is not going to be as good quality as larger companies. And you have to kind of work through that with your partners, with your partners, with your executive partners to make sure everybody is aligned, and you're using the data in the same way and not coming up with multiple definitions or multiple approaches with the same data. And so I think it all comes back to, you know, again, Nate and Jamie both used the word aligned. And that is, I think, a very important term because you need to be aligned in all these different things about how you're defining it, how you're going about it. And you need to be able to openly communicate. And, you know, when we tie it all back to when we first started talking about that relationship between the two, you know, the the PE firm and the Port Co Trust was also brought up.
[00:39:50] Co-Host: Glenn Snyder : And in order for you to get that trust you have to openly communicate. You have to be transparent about what's going on. You know, you have to be careful. It's very easy to say, oh, well, I got my CEO over here who wants me to do things this way, but he doesn't want me to show it to the PE firm. You're going to get yourself in a lot of trouble. You're going to be tripping up on things. The best thing to do is just be open, honest, transparent because at the end of the day, you have to remember the PE firm wants growth and profitability for the Port Co. So does the executive management firm. You know the executive management team and that ultimately you're all trying to move in the same direction. You might be taking different approaches, but it is important I think, for that FP&A team to one, not take sides to be neutral and unbiased, and two, to make sure that you're connecting as many dots and communicating as best you can. So that would be my best advice.
[00:40:44] Host: Paul Barnhurst: Thanks. I appreciate that. Nate, any kind of final thoughts from you for our audience here that you would leave them with?
[00:40:51] Guest 1: Nate Heeren: You don't want to, you know, repeat some of what was already gone over here. But I think I would add we hit on it a little bit in terms of time frames. Right. The importance of investing in FP&A , but doing it at a point when the change management is less costly. And that's both quantitatively and qualitatively putting in the infrastructure. It always takes longer than you think it does. There's always some kind of an issue, particularly when it comes to tech. If you're going to be implementing certain things in regards to data or in regards to the stack itself. So trying to address those things early, I think really behooves a lot of private equity investors. So I mean those are probably my core takeaways.
[00:41:35] Host: Paul Barnhurst: Thanks. And I couldn't agree more on the tech stack. And there's always going to be some challenges. It's always going to take a little longer than you plan. Probably cost a little more than you planned. Ready for some bumps? If you're going to invest in that tech stack and really want to get a smooth one because it never goes easy where you just get it all done. Or again, everything goes great. There's always challenges. I think that's some very solid advice there. Jamie, any final words or thoughts from you?
[00:42:00] Guest 2: Jamie Lukaszewski: I mean, I think Glenn covered it really well. I think Nate said, you know, he had a really good synopsis. I do want to call the one thing that you had pointed out earlier, Paul, which is just around, you know how Warren Buffett looks at, you know, his opinion of EBITDA. And I think that's more of an indication of just his problem with short term thinking and losing sight of what's really important in the long term. We always try to coach our teams and say, hey, make the decision for the business as if you were not going to sell it. Right. So that's our way of trying to refocus on what is the right thing for the long term, what's the right thing for the customer? When we really think about boiling this down, let's not just try to get these short term ones and Tootsie wins that are going to cost us or cost someone else in the future. And the only way to do that, to determine what the right answer is, is a really strong FP&A department who's giving you those answers and helping shed light on this is the right path forward. And so, you know, I would say to all departments out there, don't forget how valuable this is and don't forget how valuable it is to just do the foundational basics. We want to see average deal size. We want to see a number of deals. We want to see a close rate. Those basics are done consistently right. Like that's going to provide a tremendous amount of value. It's then when you start to see an anomaly or a trend, that's when you should really start to dig in and go crazy on the analysis. Like just just, you know, do the basics. The basic blocking and tackling is incredibly valuable. And I think it's one of those things we forget to talk about. But man, it's just so important to to execute and execute consistently.
[00:43:40] Host: Paul Barnhurst: Great advice. I love the reminder of the basics right. Really get those down, get the blocking and tackling down. And then also I love that you tell your companies, look, don't make decisions based on the sell. Focus on the long term. Focus on what's best for the business. We have a healthy business that's growing and we're doing good things. The value will take care of itself at the end of the day.
[00:44:01] Guest 2: Jamie Lukaszewski: That's right. And people are smart enough today to know when you're trying to sell them a lemon, when you're trying to put lipstick on a pig. And again, those departments that we have internally, someone else is going to have a really capable team that's going to look into it and they're going to find, you know, the negative trends that you've been trying to hide or you've been trying to sweep under the rug. So just don't fall into that trap from the beginning and things will take care of itself.
[00:44:27] Host: Paul Barnhurst: Great advice. I think that's a great place to leave it off just right. Don't try to hide things. Be transparent. Have that humble curiosity. Do the basics. Whether you come from a PE background or not, you can work in PE. I think this is the message. You got to be curious. You got to know good FP&A you got to be prepared. There will be some changes and adjustments, but it's a great opportunity if you're interested and it can be financially attractive with the right PE companies. You often see people going from one to the next in PE for many different reasons. They enjoy seeing those exits and other things. So thank you Jamie. Thank you Nate, as always, thank you. Glenn. Thrilled to have all three of you with us today. Really excited to release this episode, and I hope our audience enjoys it as much as I did. So thank you for joining me.
[00:45:15] Guest 1: Nate Heeren: Thank you. We appreciate it.
[00:45:17] Co-Host: Glenn Snyder : Yeah. Thank you guys.
[00:45:18] Host: Paul Barnhurst: Thanks for listening to FP&A tomorrow. If you enjoyed the show, please leave us a five-star rating and a review on your podcast platform of choice. This allows us to continue to bring you great guests from around the globe. As a reminder, you can earn CPE credit by going to earmarkcpe.com, downloading the app, taking a short quiz, and getting your CPE certificate to earn continuing education credits for the FPAC certification. Take the quiz on earmark and contact me the show host for further details.