Turning marketing into an engine for growth is the dream of today’s private equity backed mid-market companies. Chief Outsiders is doing just that — offering executive leadership from top C-Suite marketing professionals to kickstart business growth into a new gear.
By Daniel Coats, California Business Journal
It is the best of times — and the worst of times — for today’s private equity (PE) firms. On one hand, there is more funding available and more deal transactions than ever before. On the other hand, the stratospheric cost of buying a company and the demand to drive top-line revenue to get a profitable exit has never been higher, which is where many mid-sized firms struggle.
Art Saxby, principal, CEO and founder of Chief Outsiders, assists PE and mid-market firms with the marketing leadership they need to get ahead of the game and thrive in today’s competitive environment.
“Today’s private equity firms are faced with the challenge that purchase price multiples require them to act differently than in the past when PE firms focused on professionalizing the capital structure and driving operational improvements of portfolio firms,” he says.
Today’s purchase price multiples require significant top-line revenue growth in order to drive desired exit value. However, as Saxby says, most mid-sized companies are effective at operating the company but challenged when it comes to strong strategic sales and marketing growth.
“In the past, to drive growth they could hire another salesperson and hope they got a good one,” he says. “Driving the amount of growth required today to get a good return requires a different skill set. If it took 30 years to grow a company to $30 million — and now that they sold to private equity they need to double that in the next three to five years — they are going to need to do something significantly different.”
Integral to the solution for PE firms is strategic and intelligent marketing.
“The job of the CEO is to run the company, the job of the CMO is to grow it,” Saxby says. “Marketing is a logical, linear process — something that can be run and measured.
“Often what we see in companies is what we call ‘random acts of marketing,’” he adds. “They have very dedicated, skilled people, but when it comes to marketing, they just do it randomly. They go to trade shows and have a website, they do the things they feel they need to do, but it is not tied to a strategy.”
Utilizing the expertise of 65 former CMOs and vice presidents of marketing, Chief Outsiders works to develop a repeatable asset, an engine for growth that portfolio companies can invest in and build, propelling them to focused, deliberate and purposeful growth.
“We offer our lower mid-market and mid-market clients C-suite-level experience working as part of the company’s leadership team, without the expense or risk of investing in such a person as a full-time team member,” Saxby says. “PE portfolio firms need someone with industry know-how who can walk in day one with a playbook to handle their particular problem and ultimately building their engine for sustained growth.”
CMOs from Chief Outsiders often work as a part-time or fractional member of the company’s leadership team on a flexible month-to-month contract often lasting 6-12 months.
“Most lower mid-market and mid-market firms don’t need a C-Level marketing executive full-time or forever,” Saxby says. “The skills to build and start an engine for growth are different than the skills to drive it once it is running.”
Yet this initial period of top-of-the-line strategic leadership and mentoring is what it takes for most firms to get on the right path.
“Once we create this engine and it’s driving, we help them identify the skill sets they need long term and pave the way as they bring in a marketing director or mid-level executive,” Saxby says. “Our role is to get in quickly without rocking the boat, make big things happen, and then transition the running of the engine for growth to their current team or help identify the types of skills they need long term going forward.”
Perhaps surprisingly, Saxby has found that some of the most positive results have come when supporting client companies who are not in what would typically be considered marketing-driven fields, such as industrial manufacturing firms, or clients in industries going through a major consternation, such as retail or health care firms that must adapt to the multi-channeled approach expected in the digital age.
Even for companies in industries more traditionally affiliated with marketing, Saxby recognizes the benefits of looking at what other industries are doing to gain a holistic understanding of what it takes to succeed. In May of 2018, Chief Outsiders was on the management team of 97 companies in a huge variety of industries. This breath of active customers allows Chief Outsiders’ resources examine what entities across the business world are doing to optimize everything from lead generation and digital integration to product development.
Following the Passion
For Saxby, a career in marketing began with traditional roles in such top companies as Frito-Lay, Kellogg, Coca-Cola and Compaq computers. But he has found the greatest fulfillment and accomplishment in assisting mid-market companies in launching a versatile marketing strategy that they could not otherwise attain.
“I found that I had the greatest fulfillment and impact working for these mid-size companies that couldn’t afford to hire a full-time CMO,” he says. “We are now building a company and a culture that attracts the world’s best marketers focused on making big things happen for our clients, while constantly learning from each other. We help our CMOs take a whole career’s worth of experience and apply it to a company that has never had such resources before.”
Chief Outsiders has been on the management teams of portfolio firms from more than 35 PE firms. Saxby is also co-author of the Amazon No. 1 best seller, The Growth Gears, along with other e-books, blog posts and audiovisual resources available from Chief Outsiders to assist businesses in their transformation.
“The idea of growth gears, and the logical, linear approach to marketing, is to start out with insights into the customer, which will lead into the business strategy, and the marketing actions will come out of them,” he says. “Start with the insights in how the company will generate superior profits based on the market needs. Then you can focus on how to activate it through marketing and sales.”
His vision for Chief Outsiders is far from fulfilled. Within a decade, he foresees expanding operations into international markets, while achieving $100 million in revenue.
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Art Saxby, CEO, Founder and Principal