The Leadership Factor: Orlando Bravo Details the Formula for Portfolio Company Success
Orlando Bravo hit the nail on the head in a recent CNBC interview when he emphasized that the right leadership is key in making companies more profitable.
Orlando is founder and managing partner of Thoma Bravo, led its early entry into software deals and built the firm into one of the top private equity firms in the world.
We at Bespoke have been very fortunate to have worked with Thoma Bravo on more than 200 senior executive searches for the firm’s software and SaaS portfolio companies.
From our perspective, Orlando and Thoma Bravo have cracked the code on the role that leadership plays in value creation.
“It is so important that you focus on leadership,” Orlando told CNBC. “If you have the right CEO partner and you’re of like mind philosophically on how the companies run and operate, that is a must.
“It starts there. That CEO needs to have the right direct reports in the key functional areas of the company and they need to be on the same page.”
There are other significant factors to achieving investment success, but, as Orlando said, execution of priorities comes down to leadership and a close working relationship with the private equity sponsor.
Further, the focus should be on profitable growth, Orlando explained.
“We believe – and I feel we have proven this – that the more profitable you are, the faster you will grow. We don’t subscribe to the view that happened in the bubble years, that to really grow, you need to dip earnings and be unprofitable.”
Orlando’s comments underscore the trend we have seen throughout our own work with private equity clients, that capital-efficient growth is the key to value creation and achieving the investment thesis.
In some sectors, the “grow at all costs” strategy has beenthe fashion, with the idea of grabbing market share and letting profitability come later. But our clients have consistently focused on profitable growth and recruiting leaders who know how to orchestrate it.
We detailed the focus on profitable growth in private equity portfolio companies in the latest edition of our Private Equity Talent Benchmark Report, available here.
Following this philosophy, we have recruited more than 1,000 executives in private equity-backed software and SaaS firms. Our placed execs have gone on to execute more than $130B in exits and platform value growth.
You can see Orlando’s full interview on CNBC here.
Author:
Eric Walczykowski
Chief Executive Officer
Eric is passionate about building high-performing teams that value doing their best, working together, overcoming adversity and learning.
As a proven growth executive, Eric has served as CEO, President, Board Member, Investor and Advisor for technology companies that achieved over $4.5B in successful exits.
Eric brings to Bespoke Partners significant professional services experience from Deloitte and Andersen, as well as the high-growth client executive perspective for private equity-backed technology companies.
Eric earned an MBA from the Kellogg School of Management at Northwestern University and a BS in Business from Fresno State University.
Outside of work, Eric enjoys spending time with family, coaching baseball, travel, attending live events and sipping good wine.