Growing Lean
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Growing Lean
From Military Intelligence to Private Equity: A Conversation with Kit Lisle
Ever wondered how military intelligence skills can be honed into a sharp business strategy? You are in for a treat! We had the privilege of speaking with Kit Lyle, founder of Acclaro Growth Partners and The Operators, LLC. who has successfully made that transition. He takes us on a thrilling journey from his military intelligence roots, right through to his current role in strategy consulting. Kit's comradeship with private equity-backed executives and his innovative take on networking and collaboration through The Operators LLC are the focal points of this enlightening discussion.
In the latter part of our chat, Kit emphasizes the role of strategic partnerships, sharing how his collaborations with Slade, Chief Outsiders, and Private Equity Info have been instrumental in his business growth. His advice for up-and-coming business owners in the private equity space is worth its weight in gold. Above all, he stresses the importance of creating relationships beyond transactions. Kit rounds off this insightful conversation with his approach towards collaboration, networking, and creating a brighter business world. He encourages listeners to reach out to him directly, promising a wealth of knowledge and experience for anyone involved or interested in private equity. Don't miss this riveting dialogue!
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Welcome back to another episode of the growing Lean podcast sponsored by Lean Discovery Group. This is your host, dylan Burke, also known as Deej. I'm very happy to be here with Kit Lyle, founder of Aclero Gross Partners and the founder of the operators. Welcome, kit.
Speaker 2:Thank you, dylan. Appreciate the opportunity to be here.
Speaker 1:Amazing. So, to start us off, can you tell us a little bit about your background and how you ended up in the business you're in today?
Speaker 2:Sure. First job after university was as a military intelligence officer in the United States Army. From there, I joined a strategy consulting firm that did a lot of work with the global 1000 brands, but they had a few clients that were private equity groups, and those private equity groups interested me enough that I started my own consulting firm, called Aclero Gross Partners, to focus on private equity groups, but, more specifically, to focus on the operators, to focus on the portfolio company executives of businesses that private equity invested in. It just so happened, though, that the private equity groups themselves became the real client, and I never really had much of an opportunity to do value creation or growth strategy with those portfolio companies. So, exactly one year ago, in September of 2022, I started working on the operators to target them with some services.
Speaker 1:Amazing, and what exactly did you do for your clients? Can you run me through that, yeah?
Speaker 2:So you know, when I started out, I naively asked a few questions of operators, private equity backed executives whom I found on LinkedIn, and I would ask you know, does the term private equity culture shock resonate? Why is there no association or society or nonprofit or club for private equity backed executives to share or ask or find best practices or network? Is this a good idea or not? Maybe there's reasons that it doesn't exist and essentially unanimously, the feedback was we want that it doesn't exist. Thanks for stepping up to the plate. Go, make it happen.
Speaker 2:So I created the community. The operators LLC, which is the website, is the operatorspe, but I'd say the main activity that we're involved in are roundtables or moderated discussions on both topics of common interest to operators. But also the second service is really the peer advisory council concept. So, in summary, we solve strategic growth cases or dilemmas, questions, quandaries, concerns, challenges as a group. So members join because they're private equity backed executives Number one, number two they join because they have a question or quandary or concern or challenge that they acknowledge Maybe not be a fit for the board, but nevertheless it sits on their shoulders week after week, month after month and they want some help figuring that out, so I'll pause there, see if all that makes sense though.
Speaker 1:Okay, 100 percent? No, it does for sure. And how do you measure the success of the businesses that you help? Do you have any specific metrics or KPIs that you use?
Speaker 2:No specific metrics or KPIs, but because each month we are solving at least one case and again the definition of a case is a question quandary, concern, challenge, idea, opportunity. We therefore, at the end of each month, there's one or two or three of these cases that are solved, and then the next month we start each meeting with. You know what's an update, you know how did things work out. We solved the case. You had to go do something, mr CEO. How did things work out after you went and did that? Let's hear an update, but I guess you know, honestly, dylan, another way of answering your question is I belong to LX Council. That's where I received my training and certification. They've surveyed their groups of facilitators. I'm a facilitator or moderator, and the feedback is that the return on investment of all the facilitators that they've trained is 5 to 6X. So in other words, if members are paying $1,000 a month or whatever it is they are seeing, their members are seeing a return on that investment of five or six times.
Speaker 1:Okay, 100%. So let me rephrase the question to how do you measure the success of your business?
Speaker 2:Aha, very good, very good.
Speaker 2:I don't think that there is a tangible quantitative way that we're measuring success other than, obviously, revenue and number of members that are showing up. But you know, I guess the subtle, informal, qualitative measure of success is the degree of enthusiasm that members have in being a part of the group. They come back, they rejoin, they participate actively, they have cases, you know, not necessarily every month, but they if they still show up without a case, because the members depend on one another to solve each other's cases. So if you don't have a case in the month of September, you still show up because your peers, your friends, your colleagues are almost like family eventually are depending on you to listen and then ask questions and then help solve. So the answer to your question is just the degree of interest, enthusiasm, participation, membership is really my definition of success. I started 2023 out with a very clear written-down goal and that was to be a net giver and I feel that I'm living up to that aspiration by giving back to people that have a need or have an interest, you know.
Speaker 1:Okay, I love that. That's amazing. And how do you, where do you find your clients, or where do they find you?
Speaker 2:Yeah, so that's a good question. It's pretty simple and you know there's it's interesting. Linkedin is the answer, so we'll start there. Okay, but if there are roughly, let's say, 80,000 private equity backed executives in North America, only about 5% of them identify themselves on LinkedIn as a private equity backed executive. So we've done a little bit of outreach using we have a relationship with private equity info, which is great. They have a database and we're a member, we're a subscriber of private equity info. But there are other databases and lists and so forth that you can subscribe to, and so we've done some targeted emails. But most of the activity starts in our LinkedIn group. So once we've connected with someone on LinkedIn, we invite them to be a member of our group, which is private equity backed professionals and our private equity backed executives I think it is and we post things and share things and sometimes there's chats and polls and questions and a lot of best practices are shared there and that sort of starts the dialogue.
Speaker 1:Okay, amazing. Yeah, I'll chat to you a bit offline because we're using some tools for LinkedIn at the moment that are just crazy, but we can talk after the recording. So, since you started, have there been any specific challenges or obstacles that you faced, and how did you overcome them?
Speaker 2:Well, you know, I believe in full transparency and disclosures and this is, I'd say, a little bit more than a hypothesis, a little bit more than a test and a little bit less at this stage, one year in, than a thriving, successful business. So, you know, my misstep, candidly, was I really wanted this to be a membership based community, an online community in which people everybody would pay a small monthly due or dues, and in reality I don't think my community was quite ready for that. So we had to take a couple steps back. And another example of a misstep was we wanted to have a live event. I plan to have our first live event here in September and sort of had to back away from that because the community just wasn't quite ready for that. So, while the business is successful from a transactional standpoint, I've got a certain number of members paying a certain monthly membership.
Speaker 2:We'll use that word do again, but it's specifically for participating in the roundtable or mastermind group or peer advisory council, whatever you want to call it, as opposed to being a part of a big membership. So we'll eventually get there, to the point where there's enough value of being a participant in the member in the community for people to pay a small monthly due. But we're not there yet.
Speaker 1:Okay, 100%. So In the next five or so years, where do you see your business being?
Speaker 2:So there's a lot of value that is created automatically when you put a group of people together with like needs and interests. So I'll give you a few examples and then we'll go from there. So the very first tangible value offering was the development of some virtual career day events. So we invited some private equity groups to meet with some executives that were in career transition mode. So we could continue to do that. After that we started doing strategic growth council, the peer advisory council that's focused on solving strategic growth dilemmas. So we've got the career transition council, we've got strategic growth council and then we started the middle market M&A ecosystem council, which is designed for trusted advisors, service providers that are relatively small shops, so an investment bank or a law firm or accounting firm. They have visibility, they have enough people that they solve their dilemmas internally. But if you're a small company, you really don't have enough visibility or enough people to be able to solve internal dilemmas. So these small service providers or trusted advisors are members of our middle market M&A ecosystem and there's a lot that we can do with service providers and operators.
Speaker 2:Next, we are starting this week the independent sponsors council. So one aspect of the private equity, one subset, asset class within private equity is the independent sponsor community. They're going out on a limb, kind of as a jack of all trades and they're not masters at everything that happens in a traditional private equity fund. So it's very beneficial to them to understand what a neighbor appear in the end of sponsors community is doing proactively, whether it's fundraising or business development or due diligence or operational improvement. They need help, they need advice, so we're doing that.
Speaker 2:And then, lastly, is the, the operating partners within private equity groups. They're in a council or they will be in a council. We're starting that soon and the reason for that is that in a private equity group you're either administrative or you're a deal team member and the operating partners are neither. So they're not really an operator because they're not currently CEO or C level executive in a portfolio company. So their roles are a little ambiguous and sometimes they're on the board, sometimes they're not. So they have some needs, interests, their interests of sharing best practices.
Speaker 2:So the in summary, dylan, the answer to your question about five years from now, where do we want to take this? I think you know, ideally this would be a member based community. We'd have all these councils going, but the councils are really just sort of the, the crack in the door. So we'll be serving private equity groups, we'll be serving operating partners, we'll be serving the most importantly, the operators, and then, lastly, we'll be serving the, the executives, the private equity backed executives, and so when you bring them all together, for example, in a conference or an event, to discuss things, lots, lots of powerful things can happen. It could be career related, could be solving a best practice or a dilemma, a topic that is of common interest. Anyway, I'll pause there.
Speaker 2:I've got lots of ways for this community to grow.
Speaker 1:OK, amazing. And are you planning on having it as a live community or an online community, or both?
Speaker 2:Well, certainly both Online communities do well, but you do have to have an event in a physical place that brings people together for the purpose of getting to know one another in ways that you can't develop or forge those friendships virtually. So we'll do them both ways Okay.
Speaker 1:So would you do live events in multiple locations, or are you going to be targeted for a specific area?
Speaker 2:What I envisioned happening. Who knows how it'll pan out, but I envisioned there being chapters, so we might have a Boston chapter, a New York chapter, an Atlanta chapter and so forth, and those communities would thrive and blossom on their own as people get together. You know, maybe a particular night of the month, maybe on a monthly basis, they get together at a cocktail reception or a restaurant or what have you to get together in person, and then we might have a singular live event for the entire community.
Speaker 1:Okay, awesome, that sounds good. So have you have there been any partnerships or collaborations that have helped you to get where you are today, not necessarily in this current business, but throughout your life? I'd love to hear about it.
Speaker 2:Yeah, well, you know the first. The first two that come to mind are so Slade, co-brand of chief outsiders, really is the person that came up with the concept of PE culture shot at least you know, I learned of the terminology PE culture shot from Slade, and Slade suggested that a peer advisory council consisting entirely of PE backed executives might make a lot of sense, and he was right. So chief outsiders became a sponsor or a partner of the operators and forging that first strategic growth council and then, as I mentioned, private equity info has been very helpful with their database and they've volunteered some time and some some insights for us as well. So those two come to mind. And then, of course, a clara growth partners is where you know that's the business that I own but I'm not actively involved in. They've been helpful certainly.
Speaker 1:Okay, 100% and in your day to day. So we're a software company that sponsors this podcast. I love to hear about the different tools that you use on a day to day. If you do use any. Can you speak of any tools that you use on a daily basis?
Speaker 2:Well, in addition to LinkedIn, I'd say you know, what I've got constantly open is my CRM tool. The CRM tool that I have is easily customizable, so I was afraid you would ask the name. The name of the CRM that I use is probably the worst aspect of the CRM itself. The name of it is less annoying CRM. So if you go to lessoncom you'll see it. But the point was they wanted to create something that's a bit more user friendly than the big, the big names in CRM tools.
Speaker 1:Okay, awesome, amazing. And what advice would you give to other business owners looking to succeed in your industry, or even PE-backed operators?
Speaker 2:Well, two answers come to mind immediately. For PE back to operators, I have the utmost respect, admiration and perhaps even from time to time, envy for the situations that they find themselves in, the opportunities that they have to create value in the companies. However, I honestly can't think of a more challenging role than being a private equity backed executive. The level of stress, the timeline, the urgency, the personalities sometimes that are involved are just overwhelming. And the average tenure of a private equity backed executive in one role is about a little less than three years. So if you decide that this is the career path for you and you want to continue to be in private equity and you're successful, you can expect that every three years you'll be unemployed, quite likely for some period of time, and that's challenging. So my suggestion is avail yourselves. Don't be on an island all by yourselves. Don't try to go it alone. The board is relevant for the most urgent and important quandaries that you have, but not everything that sits on your shoulder. So take advantage of peers and private equity backed executives. Reach out to them for advice and feedback and best practices and by all means join a peer advisory council if you can. In terms of entrepreneurs that are sort of in the same space.
Speaker 2:I recently had a bit of an epiphany that I'll share, and that is that when you're developing relationships with essentially your customers or your clients or prospective members of your community, you really should not treat those prospective members of your community as in or out, yes or no, members or not members.
Speaker 2:That's very transactional, that mindset is very transactional. So, rather than would you like to be a member today and if no, then I'll circle back in a month or six months or whatever, that's the wrong mindset. I think the right mindset to have is if you provide a service that's relevant to your prospective member and they are not receiving that service elsewhere, then embrace them, bring them into the community, whether they're a paying member or not. Find ways to create value, find ways to take advantage of that Maybe that's the wrong way to put it Provide ways for them to share their knowledge, insights, best practices with your community. Give them outlets, give them opportunities to share and ask. So that's the way I look at it. If you're providing something of value that they're not getting elsewhere, then bring them in and embrace them 100%.
Speaker 1:I love that and I think that applies to pretty much everything in life. Just provide value and embrace people. What's the saying? You've got to light other candles with your flame to make the world a brighter place. I love that one.
Speaker 2:I like that.
Speaker 1:Yeah, there you go Exactly. Well, look, we are out of time on the show, but I've really enjoyed this and thank you so much for giving us your time Before we sign off. What is the best way for people to reach out or follow Kit Lyle, in case you have any inspiration or any offers that they can take advantage of?
Speaker 2:Well, thank you, I appreciate it. The website is theoperatorspe, as in private equity, and my email address is kit K-I-T at theoperatorspe, so I welcome questions or networking opportunities. And thanks again for the opportunity, dylan, appreciate it very much.
Speaker 1:Amazing. Thanks so much. Take care.