Three years leading and transforming a private equity backed investment
In September 2015 the ASX listed Board of the Affinity Education Group gave Anchorage Capital Partners their unanimous support for the private equity firm to acquire the group and take it into private hands.
In October 2015, Adrian Belle, Managing Director of Allura Partners personally had the pleasure of calling Tim Hickey and advising him that Anchorage Capital Partners had decided to appoint him as the CEO to lead and turnaround their new investment.
Three years on, Adrian sat down with Tim over a couple of glasses of wine and asked him some questions regarding his journey to date:
1. Can you give us insight into your first few months in your new role leading a newly acquired private equity backed investment?
It was mayhem but exciting. There was significant dysfunction and cultural rot. Importantly I had the backing of my PE partners to get in and make real change quickly. It’s empowering and exhilarating to drive bold change through an organisation.
2. How did you shift the culture, performance and output from being previously ASX listed to the requirements of the new private equity owners?
The best way to get a quick win is to come in and create positive change quickly. Break down old barriers, bureaucracies and red tape. The good people in the organisation love this and join the fight. The bad ones resist and must be dealt with quickly. This shifts mindsets and let’s everyone know that “they are no longer in Kansas Dorothy!”
3. What were the biggest challenges you faced transforming and turning around the Affinity Education Group?
It felt like changing the tyre on a moving car. We were executing the most ambitious and unique change program the industry had seen, during the toughest conditions the market had experienced in a decade. This is not for the faint of heart but good people love this sort of challenge and enjoy being stretched beyond their comfort zone. Creating a robust and compelling operating model in this environment is extremely satisfying for the team.
4. A factor influencing the success of any private equity portfolio company CEO is “getting stuff done” especially in a fast paced, dynamic and demanding environment. How did you prioritise the needs of the business and “get stuff done”?
By having a clear, coherent strategy. By being very decisive and by being extremely disciplined. Our Private Equity partners are outstanding at supporting their organisations with a framework of disciplined follow up that helps to create fast, high quality progress.
5. No doubt a factor in your success has been motivating and leading a large geographically diverse team of childcare workers; no easy feat. Can you give us insight into how you have achieved this?
Our Managers, Teachers and educators are amazing people who are genuinely purpose driven. They understand how important their role is in the development of our future generations. They want to know they are valued and supported by the above centre teams and we make sure that our “centres are the centre of our universe”. There are many elements that go into making this a reality vs a bumper sticker but suffice it to say, our staff turnover is now half the level of the industry. The Affinity Way operating model and culture has created a powerful and compelling point of difference that is built specifically to optimise a dispersed network.
6. In September 2018, Anchorage Capital Partners pulled the sale process of Affinity Education; no doubt disappointing news, especially considering how hard you and your team has worked. How did you respond to keep your team firing?
The timing worked against us with the new rebate creating a lot of noise in the industry at the time of the proposed sale. Having said that, it was a really gratifying process for the team because we realised what we had built and how good the platform really is. Sometimes it helps to sell something to truly understand how far you have come. Our time will arrive but there is no rush, we have built the best engine in the industry and we are all looking forward to unleashing it at top speed in 2019!
7. What advice would you give an executive currently considering a transition from an ASX listed group to private equity?
If what I’ve said above excites you and resonates….get in and have a crack. If not, stay where you are or perhaps get a Government job.
If you are an executive currently considering a transition from corporate to a career in private equity, Allura Partners can assist. For a confidential conversation please contact Adrian Belle, Managing Director on +61 2 8821 7301 or visit www.allurapartners.com.au