Finding the right chair for your business
Fast-growth businesses require more than capital to be successful – they need an experienced team who can navigate the challenges of rapid expansion and open doors to new growth areas. This is where a high-quality chair is especially valuable, says Bevan Duncan, a member of the Value Strategy team at Livingbridge, as they can bring experience and a new perspective to the senior team.
We invested in the fast-growing restaurant group, Bistrot Pierre in 2015. Led by an ambitious management team, including two founder owners, it planned to roll out the French bistro chain across the UK. To support these plans, we introduced John Derkach as Chair. With 10 years at PepsiCo, experience of leading the growth of several well-known casual dining brands, plus being the driving force behind the growth of Costa from 500 stores to over 2,500 in 26 countries over the course of just six years, his expertise and multi-site roll-out background made him a perfect fit for Bistrot Pierre.
Fast-forward to today, and he has actively supported the delivery of the growth strategy. Since investment the business has expanded from 14 to 21 sites in just under two years and Derkach has provided valuable input in helping identify and execute new restaurant openings. In addition to the market insight, he is a real partner and mentor to the management team, helping them grow into their new roles as the business has got bigger.
This is just one example of how bringing in the right Chair can add demonstrable value to a fast-growing business. At their best, Chairs are great facilitators that help accelerate the growth of the businesses in which they are involved. They bring a wealth of experience that can shape management thinking, pre-empt issues before they arise and open doors through their network of contacts.
Yet for many growing businesses, bringing in a new chair can be a big step. It is important to think carefully about the kind of person the business needs and exactly what role the Chair needs to fulfil.
At Livingbridge, our in-house talent team supports portfolio companies in building out their teams where necessary, including helping to source world-class Chairs. Based on our experience, there are five key questions companies should ask when seeking to hire the right Chair:
1. What does your business need? Think about where you want the business to be in the next five years. How you will achieve this? Conduct an open and honest appraisal to identify where there may be gaps in the management team’s skillset. Having a clear view of this from the outset will help ensure that a new Chair can complement your Company’s existing capability.
2. Does the potential Chair have experience of building and growing great businesses? While attracting a big-name Chair may add an element of prestige, the hands-on, practical experience of what it takes to grow a business can bring far more value. A good Chair for a rapidly expanding company can offer strategic input while also understanding the nitty gritty of areas such as product and service development, customer attraction and retention, supply chain development as well as helping ensure the company has the right talent on board to drive growth and value.
3. Will this person support and challenge the team? Building a high growth business isn’t easy and there will be tough decisions and challenges to navigate along the way. The right Chair will help management constructively and critically evaluate the big calls. They will also provide perspective and guidance when things inevitably don’t all go to plan.
4. Do we need sector experience or should we look more broadly? For some companies, long-standing experience in their sector is a must-have, but this isn’t always the case. We have many examples of innovations and improvement sparked by Chairs with a different perspective on products, services and operations from experience picked up in other sectors.
5. How much does he/she care about what you want to achieve? A good chair will bring energy and passion to your business that goes well above and beyond simply attending monthly board meetings. A really engaged Chair will be excited about what you are trying to achieve and devote the time and effort to help you get there.
For our recently closed fund, Livingbridge 4, we hired 13 chairs into businesses to accelerate their growth. To find out more about how our in-house specialists have helped identify market-leading Chairs for fast-growth SMEs, visit our website.