Making the Strange Familiar: Inside PE-Backed Businesses with Dr. Andrea Burr

• Vista Insight Advisors
• The Speed of Trust by Stephen M. R. Cove
• The Diplomat (Netflix)
• The Americans (FX)

Full Transcript

Aaron Sheehan: Welcome back to the B2B Uncut podcast, sponsored by OroCommerce. I'm your host, Aaron Sheehan, and I'm joined today by Dr. Andrea Burr.

Now, I want to make it clear that she did not insist I call her doctor. But I saw on her LinkedIn that she has a PhD, so out of respect for all the work, and the considerable contributions to somebody's alumni fund that probably went into getting that degree, I want to give her the recognition she deserves.

Andrea is a managing partner at Vista Insight Advisors. If you don't know what that is or what it means, you're about to find out. It's super interesting if you're in the B2B space.

But I'll stop talking. Andrea, why don't you introduce yourself and tell our listeners what it means to be a managing partner at Vista Insight Advisors?

Andrea Burr: Yeah, thank you, Aaron. First of all, thank you for having me on the podcast today. I've been looking forward to our conversation.

As you mentioned, I have my doctorate. I spent a good chunk of my career in highly regulated industries, including medical devices, food, and pharmaceuticals. Then I took a break, got my doctorate, and went back into industry, but in a very different role.

I started working with portfolio companies in the private equity world, and for the last 10 years, I've been more focused on manufacturing and distribution.

People often say that working in private equity is a badge of courage or a badge of honor, and how many times you've done it counts, too. I'm on my fourth, and this time as a managing partner of my own company.

I'm a co-founder alongside Jennifer Hagge. We met at our last portfolio company, discovered we had a lot of complementary strengths, and decided to go out on our own and form a boutique consulting firm.

We focus on private equity, working with firms in the middle-market space. Typically, we're talking about portfolio companies around $1 billion or smaller, sometimes up to $1.5 billion.

That's where we find our services are particularly relevant. We work on growth strategy and corporate strategy, taking the investment thesis behind an acquisition and figuring out how to put it into practice.

So we sit down with the leadership team and say, "Okay, here's the thesis. Now let's develop the strategies and build roadmaps across the commercial, operational, and finance functions to execute on it and realize that value."

And, by the way, we're going to help you do it. We're also going to help the organization learn how to do it.

Because what you often find is that a company has been acquired, and it has a ton of great people who've been there for years. But they may not always have the reference points for what's required to operate effectively in a private equity portfolio company environment.

And that's typically a very compressed timeline.

People often describe it this way: a day feels like a week, a week feels like a month, and a month feels like a year.

That's because you're driving a lot of change, and you're driving it in parallel across the organization rather than sequentially.

Aaron Sheehan: That makes complete sense. And I know you work with a lot of the types of companies that we work with at OroCommerce, a lot of distributors especially, I think.

You mentioned earlier your PhD, your background, and I love the scientific background that you bring to this. Because you talked about behavioral economics as kind of how you're approaching the job that you just described, which is fascinating.

A lot of times, behavioral economics gets thought of as almost an advertising dark art, which is sort of like, how do I convince people to buy something? You're, I don't want to say convincing people how to change, but it is sort of like convincing people how to change and applying some rigor to that.

I'm curious, what does it mean to apply behavioral economics to organizational design, organizational change?

Andrea Burr: Yeah, great question, and I appreciate the lead-in. Let me give a little background. It takes just a moment to answer the question.

I was first exposed to the idea of behavioral economics through a book early in my career by Covey called The Speed of Trust. I don't know if you've heard of it.

The premise of the book is that trust is a hard-edged economic driver versus a soft skill within organizations. I found that very compelling and fascinating, and it gave lots of examples of the ways in which that is true.

And especially when I think about applying it to a portfolio company, one of the case studies in the book was that when companies are built out of acquisition, you will often find that you have the group of legacy employees that have been there five years or greater, and then you have the new folks that are just coming in.

And you've got that cultural gap, if you would, to say, okay, those are the Season 1 folks, the five-year-and-more folks, versus the folks that are coming in, or maybe now the Season 6 folks. And so you're bridging that gap.

That is part of what makes trust an economic driver, because it becomes important for the organization and those groups to come together, with their very different perspectives, to align and then deliver.

And so if you think about that, and this is where my PhD comes in, it drives the system, right? How do you do that across a system, organizationally, socially, or economically?

Thinking about the ways that those sociocultural drivers are true economic drivers, how do you take them to influence the ways in which people work, the ways in which people perform, the ways in which a business as a system performs? Or a series of business units come together and perform?

And how do you create that kind of cohesive experience to ensure that, one, it's what I would call a solid, positive experience that yields great performance, as well as taking the best of the culture and helping bridge and evolve the new teams with the current or legacy teams?

And so if you think about that, the human element becomes that key part. Helping to get there, studying those factors, and then kind of nudging them.

Think about nudge theory and the ways in which you can use a lever such as a project or a digital initiative. We were talking about ERP systems earlier. Cleaning up master data, improving operational performance through data cleansing or through business process optimization, or taking the network as a whole and optimizing that through a center of excellence approach.

There are many levers that you can use to nudge the organization and to influence the outcome of not only the way that the organization, down to the individual, performs, but then the business as a whole.

Taking that strategy and operationalizing it to achieve the revenue and value creation targets.

So, really long way to answer your question.

Aaron Sheehan: No, it makes sense.

Now, thinking about that speed of trust, you were connecting that to, I think, economic reality, maybe business performance as well.

I'm guessing that in an environment where there is high trust, basically, change is cheap in the sense that people trust each other's motives, they trust each other's competencies, and so you can do more with less because people generally understand what the shared goals are and believe that the people alongside them have those.

High trust basically means the speed of execution goes up.

And I guess the inverse of that would be that low trust means that it doesn't.

There's always, in my experience, when you go through any kind of merger, an acquisition, a holdco coming in, that trust has to be built. And generally, people have biases, maybe, as to what they perceive the purpose of the merger was. Like, what is the actual goal?

Is that pretty accurate, or am I misunderstanding something?

Andrea Burr: No, I think that's accurate.

I do think, too, there's an additional bias that's seen consistently, and we work to help level-set.

People will say, "Well, this particular company, it's crazy here. The pace is so fast, decisions are changing all the time, and it's very iterative, and it's very entrepreneurial. This is not what I'm accustomed to."

A lot of times, folks will associate it with a particular company, as opposed to, this is the norm for a private equity portfolio company because of the structure around it.

We've got growth targets, we've got an exit strategy that's tied to an investment thesis. Here are your guardrails, but you need to go.

And so helping folks overcome that bias, it's taking the strange and making it familiar, and the familiar strange, because they feel very much like they almost came into the middle of a conversation and missed the first part.

So overcoming that bias oftentimes involves sense-making and helping them to understand. It's still the same place. It's just that this is the business model, and it's an industry business model as opposed to a particular company's business model.

Aaron Sheehan: Yeah, totally understand.

A lot of what you're doing, then, at Vista is providing, to some degree, that outside perspective on the interior of the business to help them understand what it is they're actually doing.

Because I think sometimes, in established businesses, especially those Season 1 folks, they're doing the things they're doing because that's what they've always done. That's how they were trained, or that's the playbook that was established three, four, five, ten, fifteen, twenty years ago, depending on the age of the company.

And so helping somebody see through fresh eyes, basically, their own business is, I think, an underrated part of what a PE firm can potentially do.

Have you ever seen one of those pre-existing biases sink a transformation? Like, cause problems in the alignment? You don't have to name any names.

Andrea Burr: No, no. So where I've seen it the most is folks work very hard to get the company sold. The exit happens, NewCo comes in to own the portfolio company, and there's a step change involved.

The team just spent all that time and energy to get where they are today, and the expectation is that it's going to continue on. And that's typically not the reality.

There are three approaches: stage, accelerate, or delay, when they're doing an acquisition or integration. And the approach is driven by the investment thesis.

It's pretty seldom that it's delay, and it's often stage and accelerate.

And so with stage and accelerate, people feel like, "Okay, wait, I hear what you're telling me, but this is what I understand to be true."

And so bridging that gap and overcoming the bias of what the previous organization's goals and objectives were, and helping to bridge to that change, becomes very important.

It's almost like a translation gap, is the best way I can explain it.

And it's time well spent educating the team on what's next. That's part of not only the time leading up to the acquisition, if they're able to disclose it, but then that first 90 days becomes very critical in terms of assessing talent, capabilities, and helping to do the translation work so that folks are aligned, as opposed to feeling like they're on the outside.

They're the Season 1 folks, and Season 6 is coming in to make it happen.

Aaron Sheehan: Right.

Andrea Burr: You really want everyone to work closely together to execute. And that's where tools like OroCommerce become so important.

Because a lot of these companies, it's legacy folks, but also legacy technology, or a mix of technology, depending on the type of portfolio company it is.

So you'll see where they may have the latest version of NetSuite in one business unit, and they have IBM iSeries barely running in another. Or they have a very old version of Dynamics 365 that they call DAX. Or they may have an AS/400, or you pick it. Or a small local firm developed their ERP system, and they're still working in those systems.

And a lot of times, what you'll see is that one of the things that relates to the investment thesis is around systems and digital transformation, and the ways in which they can optimize across commercial operations, finance, and IT to deliver value.

Aaron Sheehan: Yes, absolutely.

I think there's always a "better together" story that is part of the overall, you've used the phrase investment thesis several times, but the idea that we're going to get efficiencies, but we're going to have to change to get those efficiencies.

And that's going to touch the digital, it's going to touch personnel, it's going to touch operations and sourcing and data and governance and all of those things.

So I want to roll back a bit.

Something that I know a lot of our listeners are curious about is what the timeline or story of an investment looks like from diligence to post-close.

Because you've talked about the investment thesis, so at some point, someone has come in and said, "We have capital, we want to deploy it in a productive way."

To your stage-and-accelerate example that you were using, the PE firm is not buying the business simply to own the business. They're buying the business because they think it can do more. Ergo, there is a thesis for the investment.

So what does the arc of that process look like from the beginning of the due diligence, when you're trying to decide who you're going to buy and how much you're going to pay, all the way through to after the close?

And I've always been curious, when does that thesis get tested? Do you wait until the very end to find out, or are there gates along the way? How do you approach that?

Andrea Burr: Yeah, great question.

Think about it this way. A given firm will do rounds of fundraising, or they'll have capital, and they'll decide to deploy a certain amount of capital, let's say a billion or two billion dollars, within a year or 18-month time period.

And depending on the firm, some firms will be very diversified. Other firms will be very much like, "We only want manufacturing companies in these industries, and we're looking for this size of company or companies, and we're looking for this sort of profile of the type of company."

Whether it's privately held, typically, or it might be publicly held, but it's small, it's ready to scale. We think we can invest and help it scale, as well as gain all the efficiencies and so on.

So they'll come up with a range of profiles that they're looking at, and they'll start to develop that investment thesis at that time.

And typically what they'll do is, in whichever space it's in, they will go in and take a look at what's potentially available. They'll reach out to companies to see if there's interest, even though they may not be advertising that they're interested in being acquired.

And at that point, once they start the conversation, they will enter into an agreement and begin providing quite a bit of financial information, organizational information.

And so that due diligence period goes from the initial assessment and, can we take some of the early findings that we thought we knew, that we supposed, and put some financials around, and let's validate that.

As they're progressing through the diligence period, they move into a phase where they're doing a letter of intent or some other formal documentation, and then they're paying to go into a time period of exclusivity.

At that point, they're agreeing to terms of the deal, and again, doing some fine-tuning on the financials, validating.

They may ask for everything from, what's the roadmap for commercial revenue for the next five years, to what are the digital initiatives you've got that will accomplish XYZ, to what's your acquisition strategy to continue to grow your business that we can help support?

I mean, it can be a range of scenarios.

And so once they get to the point where they're agreed upon, they pick a closing date and do all the financial work, and then day one is announced.

And then they begin to take that investment thesis, and now they've got the company, and they're diving in to say, "Okay, now we need everything."

They'll often bring in a PwC or another company to do a third-party audit prior to closing, but then they'll come back in along with the team and do that heavy lifting around, "Okay, here's what we need to be true. Now how do we go make this happen, and what does that look like?"

So it can be fairly compressed. It can take sometimes up to a year or more, but typically not that long. And then they're ready to go.

Typically, the exit period is three to five years, whether that is through transforming and then selling, growing the business, flipping, or if they take the company public. That's kind of one of the other options.

And there may be quite a bit of transformation along the way.

A company may look like a particular type of business at the beginning, but through strategy and acquisition, may look very different at the end, and may be a completely different size at the end.

So it may start out as a $500 million business unit and grow to a billion dollars within a given set of time period.

Just depends on the strategy.

Aaron Sheehan: I was going to say, hopefully that's the product of starting with a strategy and then making the right operational decisions and strategic decisions to see the results of that.

And it's not sort of a surprise that we ended up with a billion-dollar company.

Andrea Burr: Yeah, no, it's very well...

Aaron Sheehan: And all the money! Made a lot more money.

Andrea Burr: Yeah, it's typically very well thought out, very well mapped out, for sure.

But as with anything, economic conditions can influence the outcome. There's just a range of factors that go into that.

And so one of the questions that you had asked is, how do they take the investment thesis and ensure that it translates well to strategy and that it survives economic conditions, leadership changes, organizational turnover at a range of levels, and the like?

Typically, what they do is they do it structurally.

So they put it into the revenue targets, they put it into the organizational KPIs, they take it from everybody from the management team, leadership team on down.

They operationalize it into their daily work, and they put all the metrics in place to ensure everybody's working in the same direction.

But then you also need that cultural piece. You can put it on paper, but you want to ensure that the performance is there.

And so sometimes that is why they do make leadership changes, because they want to ensure that the organization moves forward, and the folks that got them there are not always the folks that can take them to the next level.

Figuring that out is typically part of that final phase of due diligence and into the first 90 days, maybe into the first six months at the longest.

And they'll make some choices around that.

And what I've found to be true is it's gone from being a little bit of a "maybe, maybe not" to now organizations getting much better about transparently figuring that out with that team.

And so you may see people, instead of leaving the organization, shifting roles.

There's a continuity aspect of that that they now are much more cognizant of, as opposed to "rip the Band-Aid off and let's just go make it happen."

I think they've become much more structured in the way that they handle the organizational side because of the influence on the overall results and the timing.

Because you lose all of that knowledge, and you're almost starting over. And even if you bring someone in that's plug-and-play, there's still a learning curve involved.

And so you're making choices, you're making trade-offs related to that.

Sometimes your companies are better served by evaluating the range of choices and what those changes would bring about, and the trade-offs associated with those changes.

And we see that much more intentional, maybe, than it was before.

I think there was a... You have companies like GE, et cetera, that have a very different approach to manpower and headcount, but they're so large. Microsoft's so large, hundreds of thousands of employees, or approaching a six-figure number of employees.

Versus these are very small companies with oftentimes less than 2,000 employees.

And so those roles become almost what they call center-of-gravity roles.

It's pretty critical to think through what change means related to that role and what those trade-offs are.

Aaron Sheehan: No, that makes sense.

So we're now on to, I guess, leadership continuity as a question.

You mentioned that investment thesis. We keep using that phrase, but it has to be embedded in the new leadership team, let's say, and the culture.

And people are going to come and go. That's life, and it may or may not even be related to the acquisition activity.

So what does embedding the thesis actually mean in practice?

If I was to operationalize that, is that kind of like a mural on the wall in the break room? Like, you put your principles, or is it a...

Andrea Burr: So they do do that.

Aaron Sheehan: You can do that, right?

Andrea Burr: Yeah, that's part of it. Messaging around it to create that understanding.

Aaron Sheehan: Is that a metric, though? Is it sort of like a bunch of habits, specifically?

When you say embedding the investment thesis in the culture, what does that look like?

Andrea Burr: So it looks like everything from aligning the revenue targets, aligning the overall business targets, and how do they scale over that time period, over the three to five years, whatever it is.

And then what's that strategy to grow? And aligning all of those adjacent or underlying activities, depending on what it is, to ensure that when they're going to hit the revenue targets, the EBITDA targets, the SG&A targets, all of those things that run a business, that all of the initiatives, the value creation initiatives that are going to drive growth, drive efficiencies, and so on, are also baked in.

So they're not just something on a piece of paper, but they're truly operationalized in people's goals, their objectives.

You've assigned owners, there's accountability, you've got the RACI clear across the organization, and as I mentioned earlier, it's translated and codified into everyone's job.

Not only from their performance objectives, but what they're doing every day.

And they understand how it links from, "I'm a staffer out on the warehouse floor. I understand how my work every day translates into helping the organization achieve its revenue targets and its customer satisfaction goals," and so on.

Aaron Sheehan: Yeah, no, that makes complete sense.

You mentioned RACI. It's responsible, accountable, consulted, informed. There's one with an S in it that's supportive, I think, or something like that.

Andrea Burr: Yeah, that's right.

Aaron Sheehan: And some organizations are big into OKRs and KPIs and things like that.

Something you said was interesting to me, which is making sure that the investment thesis, the measurables of the investment thesis, are embedded into people's goals.

I hear that as comp plans or business targets that they need to hit to be bonus eligible, and things like that.

And I think that's, going back to the behavioral economics at the beginning, something my dad taught me when I was very young is that what is rewarded is what will be done.

And I think that is a very, very accurate thing.

I'm curious, I can imagine a world where there's been an acquisition, and there's an investment thesis that is being used to justify the acquisition, but that piece doesn't happen.

The tying together of the goals of the thesis, let's say the business output that we're supposed to see, doesn't actually happen with the team that's supposed to execute it.

And the comp plan or the business targets are measuring something different.

Do you ever see that, where there's misalignment in how the business is measuring itself versus how the PE company is measuring the business?

Andrea Burr: So yes, there can be a disconnect.

We touched a little bit a few moments ago about market condition impact, or they were looking to grow through acquisition but hadn't been able to execute on that.

So there are certainly times when that occurs, and it doesn't always result in heads rolling.

It oftentimes results in the leadership team going back in, rolling up their sleeves, understanding what, if anything, they can do to recover the situation, which typically there are quite a few levers that they can pull.

And then what more or different should they be doing?

And one of the things that I find very interesting is, how do you almost forecast where you're seeing the risk, and then how do you account for that and manage that as a scenario?

And say, "When X happens, we're going to do Y," instead of waiting until you miss.

And so those are some of the things that we bring into clients with our firm, to say, "Hey, we're going to set up a performance tracker. This initiative is set to deliver this, but we're going to measure it for the next 12 months, and we're going to take corrective action when we see these things happen early, as opposed to waiting for it to start to not achieve."

Aaron Sheehan: Yeah, no, makes complete sense.

I mean, you see this in IPO docs and things like that. You'll see a very long list of, "Here's all the things that could go wrong that would invalidate the market's thesis."

I've been in those exercises before, and they can be a little alarming to go through.

You have to put on your pessimist hat and go through, where are the actual risks to the business?

And you realize pretty quickly how many of them are not necessarily in your direct control.

And it's just, what do I mitigate? What do I have in my span of things, levers that I can pull, to your point?

I'm curious, how does a leadership group then deal with that changing market and retest, revalidate the thesis without it just becoming a circular analysis paralysis exercise?

Where you do the meetings, and you're thinking about all the things that could go wrong and what could go right, and you're like, "I don't know. Let's meet again. Let's circle back. Let's circle back and come back."

How do you get people out of that posture and into something more active?

Andrea Burr: Yeah, so from a portfolio company culture perspective, there's typically not a whole lot of breathing room for that.

You have to make a decision and go. That's kind of the nature of it.

And so they don't typically hire folks that are risk-averse as a result.

So you're talking about a culture that's maybe more consensus-oriented, consultative with one another.

It's collegial, and it's professional, but there's a lot of constructive, solid discourse that happens, and then decisions are made and action is taken.

That is one of the table stakes related to portfolio companies.

And again, back to that, folks need the translation to say, "This is how you operate well within this environment."

Aaron Sheehan: That's okay, that makes a lot of sense.

That puts an interesting shade, too, on the value of the private equity company in this sense, which is being so experienced at assessing risk, a hypothesis, and validating it, and then operationalizing it.

So that you're much more comfortable with rapid change and a possibility space of outcomes than most, I would say, privately held businesses are comfortable with.

Because there's simply no reason for most businesses to operate in that kind of mentality.

But if it's where you live, that's just Tuesday for you.

Andrea Burr: It is just Tuesday!

Andrea Burr: It is just Tuesday! So I'll give you a real example.

One of the big changes that we see is around software as a service, especially associated with ERPs, and the premise that you have to go through this endless upgrade cycle and you have to get to one ERP.

And, well, here comes AI, right?

With most companies, we touched on it earlier, they don't have a system. They have multiple business units, they have multiple systems. They may have one business unit with six different ERP systems because they were locally developed at the site. It's distributed, they don't talk to each other.

And so previously, leadership would be bogged down in terms of, one, how do we improve that situation?

Originally, the answer was, get to one system, which is, as you know, fraught, expensive, time-intensive, and so on.

And then data lakes and Power BI came along, and they're like, okay, we can put it all in a data lake, and the systems don't have to talk to each other, and so we have a path here, right?

Fast forward to today, the enabler becomes AI, right?

One of the key things that we're seeing is that you no longer have to change out those legacy systems or upgrade them at any given period of time because you can make them the system of record, and all of the adjacent transactional activities can go into an AI system that sits on top of them, that's modern, that's nimble.

You're talking about organizational change, right? And helping bring out the best in the organization and how to do that.

Unburdening the organization from all of that human touch tax that you've got, those transactions requiring people to touch an order 10 times, or people to touch things out on the factory floor multiple times, or across the lifecycle of an order, or any given purchase order, customer order, financial transaction, and so on.

Suddenly, you have created this groundbreaking experience for the staff because they're no longer chained to these old legacy ERP systems. They're working rapidly in these AI systems that are talking to each other, and they create an ERP-like system with smart tools that, oh, by the way, make them much more effective, productive, and as an employee, they're bringing their best every day.

I mean, it's just a game changer.

And we've seen this with OroCommerce. OroCommerce itself is a great tool for B2B, B2C, but then you think about the smart tools that are being rolled out and the capabilities in both the customer-facing part of the system, as well as the internal-facing back-office part of the system. Just a game changer for both the customer as well as our internal employees.

Start to think about extending that across the organization and integrating it, and suddenly, you have a very different experience end-to-end.

From the delighted customer having a frictionless digital experience and leaving it open all day long, so you're creating that customer stickiness, to the employee who can rapidly respond, and very little triage needs to happen because they're no longer hamstrung with those really old systems that they have to babysit everything through every step of the way.

Aaron Sheehan: Well, I mean, that was an amazing testimonial to Oro, so I appreciate it.

We didn't really identify it, I think, at the outset, but you are working with an OroCommerce customer and have been for, what, a year and a half? Two years? Something like that, I guess?

Andrea Burr: It's been over the last year, and I will tell you, we look forward to it.

Again, it's kind of the first foray for the organization into that new world. And so then taking that idea and operationalizing it, and making it to be true, and then being able to extend it out with other tools, it makes the strange familiar.

Aaron Sheehan: Yeah!

Andrea Burr: You know, the strange.

Aaron Sheehan: That's a great tagline. I think we may make that the show title, actually.

Let the production team know, because we have a team of dozens producing these podcasts.

So, one of the things that comes to mind here, and everything you're saying around commerce, or AI-powered commerce engines, let's say, as kind of a stable layer above the ERP, makes a lot of sense.

And these are things I hear from a lot of our customers as well.

One of the questions I've always had, though, on the technology side, since you transitioned this beautifully into that, is obviously, if you're on the PE side, you're never, I assume, just doing one acquisition at a time.

There's more coming, right? They don't just serially lay themselves out in 24-month gaps between one another, so you have plenty of time to relax.

What do you do? How do you handle it when the deal velocity outruns the integration capacity?

What happens when somebody has a new investment thesis and they want to close that, but the last one isn't... you're still in the oven. The other one has not finished baking.

Andrea Burr: So they typically assign different teams, is what they do, so they can run in parallel, right?

And when a portfolio company is doing the acquisition work, typically the PE firm is providing one of those deal teams as support to the portfolio company so they can scale and manage through all of that.

But then it depends on the size. So a $10 million acquisition in a $500 million company should be less intense than a $100 million or $200 million acquisition for a $500 million company, right?

Aaron Sheehan: We hope.

Andrea Burr: Yeah.

Aaron Sheehan: I have found that smaller companies don't mean less work all the time.

Andrea Burr: And that's true. That can be true, yes.

So I think they work to help the portfolio companies have those capabilities, and they plug in. It's almost like staff augmentation from the private equity firm to help support the team.

And they provide guidance, playbooks, ways in which they do the work, so it's not a black box to them.

They've typically hired leadership folks who have done it many times, so you've got that capability, and then they're helping the organization come along with them.

Aaron Sheehan: No, that makes sense.

I want to ask one... this is a question I love to ask people, no matter what their area of expertise is.

The people who are listening to this podcast largely are manufacturers and distributors.

Assuming that somebody is listening to this podcast, Andrea, and they're thinking, "Gosh, I really would like to get acquired," or maybe I'm going through the process of diligence right now. Maybe I've got a prospectus out there, tender bids.

What's one piece of advice you would give somebody in this space to successfully execute that or minimize the risk?

What should they be doing? What should they be thinking about in their business today to prep it for a successful exit?

Andrea Burr: For a successful exit, it starts at the beginning.

I want to say you go back to probably the most critical step, which is the organizational assessment prior to close, and then right after.

Make sure that the folks who got you there are the folks who can take you through to the exit. And if not, what are the gaps?

Close those gaps, whether they're knowledge, organizational, cultural, professional, you pick it, right?

But it starts there, because if you don't have the right folks to lead through all of the change, and we just talked through the intensive nature of working in a portfolio company, they have to be comfortable doing that.

You're rolling up your sleeves every day, even at the highest levels. So you're tactical, you've got to do the strategic, you have to be able to do it all, and you have to be able to do it very well.

And so it starts there with that leadership team, and the team supporting them. Do you have all of the right capabilities and, culturally, the right folks that fit to be able to go and deliver?

Aaron Sheehan: Got it. No, that's know yourself, right? Before you embark on the change.

Andrea Burr: Indeed.

Aaron Sheehan: So I've got one last serious question, the bonus for a million dollars.

You approach, I think, all of this in a systems-thinking way, I guess is how I would put that, where all things are interacting, both on the organizational design, the technology choices, how they inform what the organization looks like, and then, of course, the culture and human change management pieces of it.

How much of that systems thinking transfers to evaluating the business transformation itself?

Because I see this as a mix of, there's a human psychology element to this, obviously. There's a marketing element to this as well, both internally and externally. There's a therapeutic, maybe, element to this as well.

How does your doctorate, your academic training here, transfer directly to working with, let's say, an HVAC company in the Midwest that probably doesn't think of itself in the same way, maybe, that you do?

Andrea Burr: Yeah, great question.

It's how I operate.

For me, coming in, I understand the landscape of the business, understand the way the business operates, but certainly look at it from a different lens by being a systems thinker and a behavioral economist.

Think about things in ways that maybe aren't always obvious from the context of the folks who are much more embedded in it.

And that's some of the value of being an outsider, or objective, or a third party coming in.

But even when I was working for a company, that's just the way that I operate, to be able to say, "Have you thought about it from this perspective?"

And when I look at this, this is not a series of different projects. This is a program and a large initiative. And what's the financial value? Is it really going to yield... all those questions, right?

And you start to partner and collaborate with the organization to share that knowledge, to share that perspective, and to help them look at it differently and think differently about the ways in which they engage with their work and the ways in which it drives value into the organization.

And trust but verify. You have to validate, is it really going to bring the value that we think it is?

I mean, it's one thing to say it's going to drive $10 million of value. Let's get into the numbers, and let's really figure this out. And then let's look across the system to see what else.

Aaron Sheehan: Do you question the investment thesis sometimes? Is that a...

Andrea Burr: Yeah, I mean, you have to, right?

You have to look at it. What were all the key assumptions? You understand it, and then you help to validate it, and then update it, because it should be a living, breathing document.

It shouldn't be where it's carved in stone, because if anything, we should be able to improve upon it, right?

Because they built it prior to, and now that we're in it, what more can we do?

And so that should be the art of the possible related to that.

Aaron Sheehan: No, that's an excellent answer.

I have one final question for you, and it's the question I always ask all of the guests on this podcast as the final. And it's not taxing at all, I hope.

Is there one piece of media that you have read or watched, listened to, a podcast, a TV show, a movie, a book, a magazine, that you've enjoyed, that you would recommend to other people?

It can be absolutely serious and related to everything we just talked about. It can absolutely be not.

People give all kinds of different answers to this question, but this is your chance for product placement.

Dr. Andrea Burr, go.

Andrea Burr: Too funny.

So, I love a good political thriller. We have not watched the fourth season yet of The Diplomat, but loved the first three seasons on Netflix.

Amazing show, well done. So that would be my recommendation.

Aaron Sheehan: I have heard good things about this show. I have not seen it.

Is that Keri Russell?

Andrea Burr: It is, and she's great.

Aaron Sheehan: Yeah, she was great in The Americans, which was another...

Andrea Burr: Yeah, she's just great.

Aaron Sheehan: Yeah, that's an excellent recommendation. It's been on my list, so now I'll have to go watch it, as you've reminded me.

I very much appreciate your time. Thanks for coming on.

I know we will talk again more in the future, but until next time, appreciate it so much.

Andrea Burr: Yeah, thank you so much. It's been great having the opportunity today, and always appreciate connecting.

Aaron Sheehan: Thanks, Andrea.