Delivering on Specifics: Making the Move from PE Investor to CEO

Tomás Chubb spent 14 years in private equity (PE) acquiring, transforming, and selling businesses before ‘going to the other side’.

Now, as the chief executive officer (CEO) of a business owned by PE, he’s immersed in the day-to-day activity that comes with leading a business from within – and he’s loving it.

But the interesting thing is, he didn’t expect the cultural shift to be so big – or so good. While on the private equity investment side he was working “with generalists in the mid-market, pretty much targeting businesses across all industries of a size anywhere between a couple of hundred up to about a billion dollars in value”.

“We would buy a business with a particular plan in mind, hold it for somewhere between three and seven years, typically effect change, improve operations, and then look to sell it onto a new owner.”

During those 14 years Tomás said he was exposed to a range of businesses: everything from mining services to egg production, retail, pharmaceuticals, gyms and even paper merchanting.

Unlike some PEs, he and his colleagues were actively involved in the companies they invested in, regularly interacting with management and often getting involved in projects alongside people in the business.

And it was this level of involvement that gave him the greatest professional satisfaction and motivated him to find a role that offered even more.

“As you get more senior in private equity, you end up stepping further away from the businesses and focussing more on deal origination and deal doing. And that was not what I was most interested in – I really liked effecting change within businesses and working with broader teams. I felt like after 16 years of school and university then all those years of practical learning in the workforce, it was time to actually get on with something. So I decided to move into full-time management.

A Natural Transition

Tomás said he made a “very natural transition” from investing when an opportunity arose in one of the businesses he had helped acquire, and had been a director of for a number of years. The initial role was in strategy and corporate development for a residential aged care business, and “it was a fairly quick journey” to the top.

Within nine months he was appointed chief commercial officer and soon after, when the CEO had to step back, “I threw my hat in the ring and was appointed to the position”.

When that business sold, Tomás moved on to become CEO of The My Homecare Group – another private equity owned business.

Not Part of the Plan

Tomás said when he first transitioned from PE investment, he wasn’t necessarily thinking about becoming a CEO.

“I'm someone who likes to be confident that I know what I'm doing rather than necessarily jump three or four steps ahead and get caught out. But I soon discovered that the most effective way to get things done is as the CEO of the business, so I jumped that fence.”

And with that jump came some serious skills development.

“They say you can't be taught the CEO role. You can only learn it. And I think that's because there are so many different things that you have to react to and respond to and think about that you can't possibly plan in advance. But what you can do, is you can develop a tolerance and ability to manage change. You can develop the skill of liaising with all sorts of different people who probably want different things,” Tomás said.

“In PE I’d been used to working in a team of two or three, and all of us with similar backgrounds and capabilities. There was a mindset, which was all about knowing what the answer is, and driving through to the end result, even if you had to push people out of the way a little bit to get there.”

As CEO he said it would be easy to continue with the same mindset. “You think if I’m good enough to be CEO, then I must know what to do and have everything under control. But I’ve realised that it's almost the opposite. I needed to draw on the experience and knowledge of the team around me.”

With the support of a business coach Tomás adapted a collaborative management style.

“We spent a few sessions working through some of the issues that would arise and how to handle them. It was about learning to be vulnerable – allowing myself to stand up and say, ‘I don’t know what the answer is, but I do know how we might work together to find out what it is. Let's run through that process’,” he said.

“And I realised that working through others as opposed to working by myself to achieve outcomes can be very effective.”

It was seeing the impact of team work that that became the most rewarding aspect of his new life as CEO.

“A lot of people in PE and those sorts of industries aspire to achieve things on their own and get a good feeling from that. But I’ve realised that as a team, you can achieve more than you could have done by yourself, and for me, that is the biggest benefit – or attraction – of the role. And I'm not talking about measuring achievement in terms of dollars in a bank account; that would be very simplistic. It's about outcomes – about building a better business.

What personally motivates me is working out ways to do what we’re doing to a higher level of quality, to become more efficient to save time, and to achieve the same results at a lower cost.

Do it Again?

If he had his time again, Tomás said he wouldn’t hesitate to “jump the fence” from PE investment into management.

And for others?

He cautions that it’s important to think carefully.

“In simple terms, I would thoroughly recommend it, but provided you understand what the pluses and minuses are.

One of the big differences is the pace of business. In private equity, it’s definitely fast-paced but you can go through phases where there’s really not a lot happening. As CEO, I'm never sitting here thinking, oh, I've run out of things to do. There's always something useful to be done, but rarely something that absolutely has to be done today. And so that rhythm may or may not suit people.

“Something else to think about is how the role of CEO within a particular industry will fit in with your life overall more broadly.

“But probably the one question I'd ask is, do you want to have a bit of an influence on a whole range of things, which is the role of private equity, or do you really want to own and deliver on something specific? Because that is the role of CEO.”